Water Bill

Lord De Mauley Excerpts

Wednesday 29th January 2014 Lords Chamber

Moved by

[Lord De Mauley]

That the Bill be committed to a Committee of the Whole House.

Motion agreed.

Water Bill

Lord De Mauley Excerpts

Wednesday 29th January 2014 Lords Chamber

Moved by

[Lord De Mauley]

That it be an instruction to the Committee that they consider the Bill in the following order:

Clause 1, Schedules 1 and 2, Clauses 2 to 4, Schedules 3 and 4, Clause 5, Schedule 5, Clauses 6 to 37, Schedule 6, Clauses 38 to 44, Schedule 7, Clauses 45 to 48, Schedule 8, Clauses 49 to 74, Schedule 9, Clause 75, Schedule 10, Clauses 76 and 77, Schedule 11, Clauses 78 to 80, Schedule 12, Clause 81.

Motion agreed.

Water Bill

Lord De Mauley Excerpts

Monday 27th January 2014 Lords Chamber

Moved by

[Lord De Mauley]

That the Bill be read a second time.

[Thes Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)]

My Lords, the Government have prioritised growing the economy and improving the environment. This Water Bill contributes to both of these priorities. There are two important parts to the Bill; first, to reform the water industry to ensure it is fit for the long term, and, secondly, to provide a solution to deal with the availability and affordability of flood insurance for households at high risk of flooding.

Recent events have reminded us all just how devastating flooding is for those affected. They also remind us how important it is to help manage the financial impacts of flooding. Perhaps at this point I should declare some interests. A tributary of the River Thames runs through my farm. I have an abstraction licence, a bore hole and a recently flooded house, as well as a share in a lake. These are clearly issues close to my heart.

The Water Bill has three aims: to build the resilience of our water supplies without damaging the environment; to encourage and contribute to economic growth; and to give customers greater choice. These are important issues for noble Lords across the House and I look forward to discussing them in the coming weeks. I am very grateful to noble Lords who have already taken the time to talk to me about these aims. Their views have given me real food for thought and I will continue to work with them to try to address their concerns and answer their questions. I look forward to a similar, strong level of engagement during the Bill’s passage through your Lordships’ House. I value enormously the debate and scrutiny that this Bill will receive in this House.

First, I shall set out why this Bill is before us today, the issues we are addressing and why it is important. Water is essential to life. We need clean and plentiful water resources to supply our homes and to support a growing population and economy. Water is also critical for a healthy and flourishing natural environment. That natural environment is the essential foundation for sustaining our economy, for prospering communities and for our individual well-being.

The 2011 water White Paper, Water for Life, set out the Government’s ambitions for a sustainable, resilient and customer-focused water sector. It outlined the plans for delivering substantial improvements in the health of our rivers through improving water quality and tackling unsustainable abstraction. Let us be frank: we must acknowledge that a growing population and the impacts of climate change pose risks to our water resources and the ecosystems they support. We need to take these challenges seriously to avoid causing irreparable damage to our environment.

The White Paper set out the challenges for the water sector through to 2050. This Bill is one part of our policy response, which is designed to drive long-term changes to ensure a secure and sustainable water system. Delivering this long-term change requires action by government, Ofwat and the Environment Agency, the water sector and users of water across the economy. We have put this challenge at the centre of the policy framework we have set for Ofwat through the strategic policy statement. We are reinforcing that through the new resilience duty in this Bill.

We are driving change in water companies through our guidance on water resource management planning. This Bill includes a new power for the Secretary of State to direct in advance the level of resilience a water company must plan for. We are using the Bill to extend competition to drive innovation, bringing new players with new ideas into the sector. Competition will keep a downward pressure on the costs customers pay. This is about safeguarding our water supplies for the long-term future. Ensuring a resilient supply system will require action to develop new water resources and use them in a different way, and to manage demand.

The Bill will change behaviour and change the focus of the water sector. It will hardwire future resilience into its regulatory framework. This is resilience in a broad sense. It encompasses water networks and water resources. It includes the environment from which companies draw their supplies. Resilience was a central theme of our White Paper and is a key theme of the Water Bill. We will return to it time and again in our consideration of the Bill.

We must ensure that our infrastructure can deal with more extreme weather. The floods and indeed droughts we have experienced in recent years illustrate the risks we face. In 2012, one in every five days saw flooding but on one in every four days we were in drought, putting our water supplies under great pressure. The water White Paper recognised these challenges and set out the Government’s strategy for a sustainable and resilient water sector. This Bill is part of our plan.

Let me give your Lordships an example of action we are taking outside the Bill. Resolving the issue of unsustainable abstraction from our water resources is a priority. That is why we are taking action now, including in this Bill, and developing detailed plans for reform. We have intensified our work to tackle the overabstraction currently damaging our rivers by varying and removing licences. We will be bringing previously exempt groups into the system in the near future.

The Environment Agency has reviewed thousands of abstraction licences and has changed about 80 of them, returning 75 billion litres of water per year to the environment in England. That is equivalent to the annual average water use of a city larger than Birmingham. Over the longer term, we are reforming the abstraction regime to make it more flexible and resilient to future challenges. We published our consultation on future options in December.

The Government are absolutely committed to early legislation to deliver abstraction reform, but we have to get it right. The Government are acting in a wide range of ways as part of a strategy to secure the future of our water sector. With this wider context in mind, I should like to talk about the things that the Bill before us seeks to achieve. It will make a vital contribution to addressing the challenges that I have highlighted.

I turn, first, to reform of the water industry. The Bill will remove the regulatory barriers that discourage or prevent new firms competing in the water industry. This is not competition for competition’s sake. It will provide real choice for non-household customers and bring new entrants into the market. Competition between companies will drive improved customer service as companies will need to work harder to attract and maintain customers. As we go forward, this competition will exert a downward pressure on bills for all customers.

In the two decades since privatisation, the sector has attracted more than £116 billion in low cost investment. Privatisation of the water industry has been successful in attracting investment that has improved infrastructure and produced cleaner water supplies. The importance of the stability of this investment—the stability of the market—cannot be overstated. We must maintain the attractiveness of the water sector. We are talking about evolutionary change. We have been careful not to risk stability by forcing through sudden and dramatic changes.

The Bill seeks to build on the strengths of the current regime, using enhanced competition to drive improvements for the benefit of all customers. For example, the Bill will make it easier for water companies to trade water with each other, offering alternative sources of water to companies, which could be crucial, for example, in the case of drought.

We are making it easier for new businesses to enter the water market to provide new sources of water or sewage treatment services. We are making developing new sources of water, and selling it to water companies, easier and more attractive for landowners by creating a regulated market. We are also making it easier for innovative businesses to find different ways to treat and dispose of wastewater and sewage. This could include recycling and reusing wastewater as a new water resource, or using sewage sludge for anaerobic digestion rather than landfill.

There are some exciting and innovative things happening in our water sector. We are already seeing the first signs of a competitive market. In September last year, First Milk became the first multisite customer to switch to Severn Trent Costain. The two companies are working together to improve First Milk’s water efficiency and lower its environmental impact. These opportunities are limited at the moment because they are open only to the largest water users. The Bill is designed to encourage precisely such innovation by developing the market further.

The Bill will allow all businesses, charities and public sector customers to switch their water and sewerage supplier. This is a significant reform that will bring significant gains for multisite customers—such as hospitals and supermarkets—which could save thousands of pounds in administration costs by dealing with only one water company across their estate.

Competition in Scotland is delivering real benefits to customers and to the environment. The public sector in Scotland is forecast to save £36 million over four years, thanks to better water efficiency and discounts.

Competition will benefit the environment more widely. Water companies will offer better water efficiency advice and other services to attract customers, such as smart metering and improved customer service. This is where we expect to see knock-on benefits for householders. Water companies offering improved customer service and better awareness of water efficiency measures will also be serving household customers. All customers will benefit as the sector becomes more innovative and efficient at what it does. Householders will not subsidise the costs of increased competition. Ofwat has confirmed it has the tools it needs to ensure this. The Government’s charging principles also make it clear that the protection of householders is fundamental.

I should like to talk about affordability for households. We are all conscious of the impact of water bills across the country. It is not possible for us to discuss a Water Bill without mentioning water bills. Let us be clear. Water is a price-controlled sector. Ofwat sets an overall cap on the total amount that each water company can recover from their customers. It is Ofwat’s responsibility to ensure both that charges are fair and that the companies are able to finance their operations.

Ofwat estimates that the current price review could reduce pressure on bills by between £120 million and £750 million a year from 2015. Water companies themselves are taking action. A number of companies have already committed to keeping bills below the price cap for 2014-15. Water companies already help households struggling to pay their bills and most are planning social tariffs for 2015 that are designed to reflect local circumstances. It is important to recognise that the independent regulator is doing its job.

Water companies have reacted well, and that is the way the sector should work. Too much interference from Government would undermine the principle and advantages of independent regulation. The Government’s approach on this issue is a responsible one. A stable, independent regulatory system is critical to keeping bills affordable. Small changes to the industry’s financing costs can have a significant impact. A 1% increase in the cost of capital can add £20 to customer bills.

The Government are tackling affordability over the longer term. Our market reforms will exert a sustained downward pressure on water bills. Through this Bill, we are also taking important steps to address the affordability of flood insurance for households in areas at high risk of flooding. I know that future arrangements for flood insurance are of great interest to noble Lords. The recent extreme weather has served to highlight the important role that the insurance industry plays in helping people to get back on their feet after flooding. The measures in this Bill bring forward powers to provide affordable insurance for those at high risk of flooding. Both Government and the insurance industry recognised that there was a need to bring forward new measures following the expiry of the statement of principles agreement between Government and the insurance industry, which came to an end in June 2013.

Our preferred approach, a reinsurance scheme which is known as Flood Re, will limit the amount that high-risk households have to pay on the flood insurance element of their premiums and excesses. The effective limit on the premium would vary according to council tax band, rising for more expensive properties, which means that benefits will be targeted towards lower-income households, providing more support for those who need it the most. To fund this, an industry-backed levy would be introduced. It is initially expected to be £10.50 per policy. The Association of British Insurers has assured us that this will be achieved without increasing bills for those people at low or no risk of flooding.

The Flood Re scheme is designed to be industry run and led. Our ambition is that it will be up and running in 2015 and the insurance industry together with Government is working hard to achieve this. Insurers have agreed to continue to meet their commitments under the 2008 statement of principles until the Bill has passed through Parliament and Flood Re has been set up.

Although Flood Re is our preferred approach, we are seeking reserve powers to provide affordable cover if Flood Re should prove unworkable or prices in an open market prove unacceptable. Having a fallback means that customers can have confidence that the issue is being addressed. I also take this opportunity to draw noble Lords’ attention to the fact that arrangements for flood insurance are designed to be transitional measures. Over time, there should be a gradual transition towards more risk-reflective prices, based on robust evidence of local risk, to increase the incentives for flood risk to be managed over the longer term.

The Water Bill will prepare our water sector to face the challenges of the future. There will be greater choice for customers, leading to improved efficiency, more innovation and better levels of service. The Water Bill will put in place measures to ensure a future with resilient water resources and an improved environment, as well as ensuring that householders at high risk of flooding can access affordable flood insurance into the future. With these principles in mind, I beg to move.

--- Later in debate ---

[Lord De Mauley]

My Lords, I thank all noble Lords for their contributions to this debate. A large number of questions and points have been raised, and I had better get cracking if I am to respond adequately to as many as I can. All the points raised will be taken away and considered carefully. I know that during the remaining stages of the Bill I will have plenty of opportunities to answer any points that I do not address today.

Several noble Lords raised concerns about introducing upstream reform ahead of abstraction reform. We will not take action that would increase unsustainable abstraction. We have looked carefully at how the regulatory regime will operate to reduce this. There are strong safeguards in the existing regime to ensure that the Environment Agency and Ofwat work together to prevent unsustainable abstraction in the short term.

Noble Lords asked what environmental safeguards will be in place regarding upstream reform. In order to sell water into the public supply, all non-water company abstractors will need to apply to the Environment Agency for a change of use in their abstraction licence. They will be required to go through the same process as if applying for a totally new licence. The Environment Agency can therefore refuse a change of use request if it would lead to unsustainable abstraction or deterioration in the catchment, or it could apply conditions to ensure that this did not happen. In addition to the existing process for issuing abstraction licences and regulating change of use, there are separate licensing requirements for new entrants to the water sector. The Bill was also amended in the other place to require Ofwat to consult the Environment Agency before issuing a water supply licence entitling the holder to input water into the public supply system.

A number of noble Lords raised the issue of the resilience duty and compared it against a potential sustainable development duty. Having listened carefully to points raised in the other place, we have made amendments to the new duty of resilience. I am pleased that we have been able to respond on these important points and that some noble Lords who have spoken and stakeholders such as Blueprint for Water have welcomed the changes. This new duty is an important contribution to the regulatory framework. It will ensure that regulation of this sector takes appropriate account of the impacts of environmental pressures, population growth and patterns of demand on our essential services. Supporting reform of the aspects of the current system that institutionalise short-term thinking will help to reduce pressures on the water environment, on which we all rely.

The noble Lord, Lord Oxburgh, referred to Singapore’s experience. I lived there for five years. He is right about the growing population and demand, and a long reliance on neighbouring Malaysia. I can remember the pipes that ran the length of the country squirting water tens of metres high. That has forced Singapore to be hugely innovative, and it is quite a lesson to us.

The noble Lord, Lord Redesdale, asked: why the resilience duty; why not sustainable development? Ofwat has had a statutory duty to contribute to the achievement of sustainable development since 2005. We have also issued statutory guidance, which states clearly that sustainable development is central to everything that Ofwat does and must be fully embedded throughout its regulatory decision-making. We have thought carefully about how to change Ofwat’s duties to support action to address the long-term challenges facing the sector and encourage better outcomes for customers and the environment. The best means of doing this is to create a new overarching duty specifically designed to prioritise an enhanced focus on long-term resilience.

The noble Lord, Lord Whitty, asked whether the resilience duty included social resilience. Ofwat already has a primary duty to protect consumers, and this includes particular responsibilities to vulnerable groups. By requiring Ofwat to secure the long-term resilience of water supplies and services and the sustainable management of water resources, the resilience duty protects both current and future consumers and will help to keep bills fair for the long term.

Several noble Lords asked about metering. The Government agree that metering provides a fair way to pay. We want companies to do more to promote metering to those who would benefit, although it is important to remember that some struggling customers would see their bills rise. Therefore, water companies are best placed to find the most appropriate local solution in discussion with their customers. The costs and benefits of metering vary from region to region, depending on the level of water stress. As the noble Lord, Lord Cameron, said, and to answer the noble Baroness, Lady Kennedy, metering has winners and losers. Some bills go up and some go down. The evidence suggests that there is not a very good cost-benefit case for universal metering outside areas of serious water stress—areas where, indeed, universal metering is already possible.

My noble friend Lord Cathcart asked about a national policy statement for water, and we are continuing to keep the need for that under review. Water companies have recently consulted on new water resources management plans covering the period 2015 to 2040.

A number of noble Lords asked about retail exits. We have considered this issue very carefully, and I need to be absolutely clear about this. It is not something that we have completely ruled out for the future, but at present the risks of retail exit outweigh the potential benefits. First, we feel strongly that water companies must continue to be responsible for all parts of the supply chain. They must have a connection with their customers. Secondly, there is a risk that retail exit would be forced on the sector. That is not a risk we are prepared to take: it should be for Ministers and Parliament to decide whether or when separation should take place. Thirdly, we must not forget household customers, who will not be able to switch. If we allowed retail exit, householders could be left stranded with a water company with little incentive in investing in customer service once it had washed its hands of its business customers. This would effectively create a two-tier water market, with household customers losing out.

My noble friend Lord Moynihan said that 76% of companies support retail exits. However, there is in fact a real mix of views in the sector on this issue. The 76% figure comes from an article in the publication Utility Week. It is based on telephone conversations with 36 individuals and reflects the personal views of those interviewed.

The noble Lord, Lord Cameron, and my noble friend Lady Parminter spoke about de-averaging. This is the question of whether customers’ charges could directly reflect the specific costs associated with supplying their premises. This is instead of what we have now, where customers simply pay a share of the total costs of running the network.

We should be careful to distinguish between the different kinds of costs that are reflected in water bills. It makes sense to share the costs of maintaining the network on which all customers rely—more than 90% of water charges—across all customers, regardless of their location. The use of average pricing for such charges is common practice in comparable sectors such as gas, electricity and telecoms where regionally averaged network prices have remained the norm following liberalisation of those industries. However, I think that many noble Lords would agree that there could be real benefits from increasing the cost reflectivity of charges for different sources of water. It would reflect the environmental costs of supply, which is especially important in water-stressed areas or for business users that use large volumes of water. Our charging principles make it clear that the Government’s detailed charging guidance to Ofwat will place limits on the scope of any de-averaging of prices.

The noble Lord, Lord Cameron, and my noble friends Lord Selborne and Lord Moynihan referred to the Scottish model. The vast majority of our approach to retail competition is very similar to Scotland, but water is a devolved matter and the systems are different. Scotland has no upstream competition; the Scottish market is much smaller than the potential retail market for England; Scotland has only one incumbent retailer and one wholesaler. There are 19 integrated incumbent water companies in England and Wales. Our approach to retail competition is being developed jointly with the industry, along with the Scottish and English regulators and others. This group is well placed to identify the conditions that will work best in England, building on the Scottish experience.

On the specific issue of a no-detriment clause, the Bill already provides a general duty, in Clause 23, to ensure that water companies do not exercise undue preference to themselves or their own retail businesses. It is essential that all those who enter the markets have confidence that incumbent companies act appropriately. They must not be able to abuse their dominant positions. We have carefully considered the issues relating to discrimination in relation to the market reforms in the Bill. My noble friend Lord Moynihan raised the procedure for changes to water company licences. The issue is complex and sensitive and I am happy to discuss it further with him if he would like.

The noble Lord, Lord Whitty, asked about environmental protections for upstream. New entrants will be subject to the same environmental controls as other abstracters and those that discharge water back into the environment. The environmental regulators will be involved in the licensing and appointment of new entrants that offer upstream services to assess their suitability to operate in the water supply and waste water markets. They will also be a statutory consultee in the preparation of market codes. In the context of market reform, the noble Lord, Lord Whitty, suggested that the Bill only provides for negotiated access to the market. We are satisfied that the Bill will allow regulated access to the retail market through market codes and rules. There is flexibility to enable negotiation to allow, for example, local issues to be addressed in the upstream market.

My noble friend Lady Neville-Rolfe asked a number of questions, the first of which was to do with large-scale investment. We aim to increase resilience, included in which is planning our strategic infrastructure for years to come. Our work on water resource management plans, looking at water resources out to 2040, is part of this long-term planning. The framework we are setting for Ofwat will ensure that economic regulation of the sector supports these objectives. I am happy to commit to placing a note in the Library on responsibilities and accountabilities in the area requested by the noble Lord, Lord Oxburgh.

My noble friends Lady Parminter and Lady Neville-Rolfe asked about how we prevent the interplay of the various agencies and players now involved becoming bureaucratic and wasteful. The market operator is a company that will be set up to facilitate switching and financial settlement between market participants. It is common for such bodies to be established to simplify switching processes. The equivalent in Scotland is the Central Market Agency. Such bodies are not set up by legislation, as a general rule: they do not have any statutory powers, duties or roles.

My noble friend Lady Neville-Rolfe also asked about duties combined with the regulatory formula for water companies and whether that encouraged too much or too little capital investment in the longer term. It is the role of the regulatory system to ensure that there is sufficient investment in our essential water and sewerage services which are undertaken as efficiently as possible. Ofwat undertakes a comprehensive efficiency challenge every five years through the price review process. The Government are responsible for setting the policy and legislative framework. They also issue guidance to Ofwat to help it balance all its duties.

We have discussed the new duty of resilience in the Bill to address the specific uses relating to the long-term pressures facing the water industry. The duty makes it clear that this is not only about capital solutions; it could also be delivered through more innovative approaches, such as demand management and catchment management. It is widely recognised that such solutions have the capacity to improve long-term resilience.

There was discussion, particularly from the opposition Benches, about affordability and social tariffs. The Government take seriously the real cost-of-living pressures on households and the need to keep bills as low as possible. The average household combined water and sewerage bill in 2013-14 in England and Wales is £388 a year or just over £1 a day. The average increase in bills has been in line with inflation since 2009. That is because the price review process keeps bills affordable.

Looking forward, we support Ofwat in its efforts to ensure that consumers get a fair deal. Ofwat has estimated that the current price review could reduce pressure on bills from 2015 by between £120 million and £750 million a year. All the water and sewerage companies have developed packages to help customers with affordability issues. These include customer assistance funds, support tariffs, debt advice and water efficiency measures. Social tariffs give an extra tool.

We published social tariff guidance in April 2013. By April 2015, the vast majority of companies expect to have a new social tariff in place. The idea of legislating for a national social tariff overlooks the regional nature of the water industry. Costs are different in different regions, as are the nature of the affordability problems faced by customers. A national scheme would be a very blunt instrument. Company social tariffs allow for flexible schemes responding to local issues and are developed in consultation with customers.

My noble friends Lady Parminter and Lord Borwick, as well as the noble Baroness, Lady Kennedy, asked about the bad debt situation. We are firmly of the view that regulation should not always be the first resort of government. The effectiveness of measures to manage debt differs significantly between water companies. We want to see this change. At present, customers in some regions are paying much more than others to cover the cost of unpaid bills. We are making sure that the industry’s worst performers are challenged to match the performance of the best. The industry is already taking more responsibility in this area. It is working on a voluntary approach to sharing data and information on customers in rented accommodation through the landlord database which will be launched in March this year.

Several noble Lords, particularly on the opposition Benches, raised corporate governance and water company structures. Customers rightly expect governance standards in a regulated industry to be high. Questions about these standards go to the heart of the sector’s public legitimacy, which is why Ofwat is taking action to ensure improved standards of governance across the sector, ensuring that it leads the way in corporate governance. It is right that the independent regulator tackles these issues. The water companies’ licence makes clear that they are expected to be transparent about their board leadership, financial structures and governance arrangements.

Recently, Ofwat has consulted on new voluntary principles relating to board leadership, transparency and governance. We particularly support the drive for increased independent and customer representation on boards. For the record, I probably should say that I do not agree with the characterisation of the noble Viscount, Lord Hanworth, on the position regarding Thames Water and the Thames tunnel but he would not necessarily expect me to. My noble friend Lady Humphreys raised the Welsh water model and I welcome her comments. I note that different water companies excel at different things but no one model has been shown to have been better than any other. That model is popular with customers but I venture to suggest that the not-for-profit structure has not resulted in particularly outstanding performance on some key issues—for example, customer service or management of customer debt.

Turning to the insurance part of the Bill, I fully appreciate concerns raised in relation to those properties which are at the very highest risk of flooding or which some people have termed as genuinely uninsurable. I should like to make clear that all those properties will be included in Flood Re at the start of the scheme. However, over time, Flood Re may develop an approach for properties that flood very frequently that will help to reduce the impact of their claims on the scheme's affordability. For example, Flood Re could suggest resilient repairs and, if these were not taken up, could set higher premiums or excesses. Only in the most extreme cases would exclusion from Flood Re be considered.

My noble friends Lady Parminter and Lord Sheikh, the noble Earl, Lord Lytton, and the noble Lords, Lord Grantchester and Lord Whitty, all raised the issue of climate change and resilience and information to households. I recognise the strength of opinion on this important issue and share many of the views expressed. We welcome the constructive contribution of the adaptation sub-committee and recognise the need for Flood Re to publish a plan for transition to the free market. The Bill provides for that. The ABI has just come forward with some thoughts on providing information to householders in Flood Re about their flood risk. Discussions on the details of this and on incentives to drive the uptake of household-level resilient measures are continuing and I will provide a further update on this issue to your Lordships in Committee.

I am running short of time. Noble Lords have raised important issues about the various categories of exclusion. I hope that noble Lords will forgive me if I confine my remarks to saying that Flood Re is designed to help those who are struggling most to afford rising insurance premiums. Flood Re targets financial support to those at the lower end of the income spectrum by providing proportionately more support to those in council tax bands A to C. In designing Flood Re, a balance has had to be struck between supporting those at the highest risk and managing the impact on those at low risk. Including additional policies within Flood Re could not be achieved without decreasing the level of support going to those most in need or increasing the levy paid by all households. Perhaps we can talk further either before or during Committee about the specific issues of 2009 properties, business properties and council tax band H, which noble Lords raised.

The noble Lord, Lord Cameron, and my noble friend Lady Bakewell of Hardington Mandeville raised the issue of what has been going on over the past few weeks on the Somerset Levels. Flooding has had a devastating effect there and in other parts of the country. The Somerset Levels are among the most seriously affected and people have had to endure flood water and disruption for several weeks. It is incredibly hard for them and I know that all noble Lords share my sympathy for them. Local authorities, residents and the emergency services have been working around the clock to make sure that people are safe and to help with the clean-up.

We have been talking with local agencies about what more can be done and we have asked the Environment Agency for a detailed analysis on the proposed major dredging and any other action that can be taken to manage flood risk on the levels. A local task force has been set up comprising local partners and communities to develop a clear, long-term vision for the future of the Somerset Levels and moors. My right honourable friend the Secretary of State has been in Somerset today talking to local people, and the noble Lord, Lord Grantchester, should not necessarily believe what he reads in the red tops.

We talked about the need to keep water available and affordable and to continue to improve the environment. We also mentioned the importance of the provisions on flood insurance for the future availability and affordability of cover. This underlines the importance of the issues that we have been discussing today and will discuss over the coming weeks. For this reason, I am grateful for the many contributions today and I look forward to the debates that will follow.

I hope that in my few closing remarks I have been able to deal with some of the issues raised by noble Lords during the debate and I apologise that I just do not have time to come to them all, but I know that one way or another over the next few weeks we will do so. Once again, I commit to having further discussions inside and outside this Chamber with noble Lords on their concerns. If any noble Lord wishes to raise a concern, my door is always open. In the mean time, I commend this Bill to the House.

Bill read a second time.

Flooding

Lord De Mauley Excerpts

Wednesday 22nd January 2014 Lords Chamber

[Baroness Royall of Blaisdon]

To ask Her Majesty’s Government what measures they have in place in the light of renewed flood warnings issued by the Environment Agency.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)]

My Lords, the Environment Agency and local authorities are in the recovery phase regarding the recent flooding. This entails restoring flood defences and working hard on preparations for the next flood incident. We are reviewing procedures adopted by them and by government departments to see where our response to flood warnings can be improved. Other government departments, local authorities, electricity distribution network operators and transport authorities are undertaking their own reviews.

[Baroness Royall of Blaisdon (Lab)]

My Lords, I am grateful for the information provided by the Minister. Right across the country, families, communities and businesses in our county and coastal towns are suffering from the dire effects of serious flooding. I have recently been given first-hand reports of the damage caused in Somerset, where people on the Levels are still having to use boats. The Conservative MP is blaming the Environment Agency. I suppose that that is better than blaming gay marriage. Can the Minister please reassure the House that the flooding in that county and elsewhere has had nothing to do with the reduction in investment in flood defences by more than £100 million in real terms since 2010?

[Lord De Mauley]

My Lords, I share the great concern of the noble Baroness for the people of specific villages in Somerset, who have had a really tough time, among many others around our country. We recognise the serious impact that the current flooding is having in Somerset. The Environment Agency is working with local authorities and communities in the county to help to mitigate the situation. We are making it easier for farmers to undertake their own watercourse maintenance activities, including through a pilot scheme on the River Brue in Somerset. However, we realise that the long-term sustainable management of the Somerset Levels and moors needs careful consideration, and we are working on that.

[Lord Swinfen (Con)]

My Lords, what steps are the Government taking to discourage further residential development on flood plains?

[Lord De Mauley]

My Lords, one has to be realistic about this. Around 10% of England is in high-flood-risk areas, including large parts of cities such as Hull and Portsmouth and, indeed, central London. Development in areas of flood risk is permitted only exceptionally, where there are wider sustainability considerations and must in all cases be safe, must not increase flood risk elsewhere and, where possible, overall flood risk should be reduced.

[Lord Harris of Haringey (Lab)]

My Lords, given that the Thames Barrier was raised only twice in its first four years of existence, but in the latest four years for which figures are available—apparently figures are not publicly available for the past two years—it was raised 24 times, are the Government really satisfied that it is sensible to wait until 2070 before considering its replacement?

[Lord De Mauley]

My Lords, the noble Lord will be aware that recent incidents, like those over the past several years, indicate that there are flood risks across our country. That is a very important one, and there are many others. We are, as the noble Lord well knows, spending a large sum of money: £2.3 billion over the current spending review period, and going on into the future. All these things are crucial and we must attend to them all according to their priority.

[Viscount Tenby (CB)]

My Lords, going back to an earlier answer given by the Minister, is he satisfied that building regulations in respect of flood plains are adequately enforced?

[Lord De Mauley]

Yes, my Lords. The NPPF contains tough requirements, so we can build in high-risk areas if there is nowhere else at lower risk; the needs and benefits outweigh the assessed flood risk, taking account of mitigation measures; buildings are safe and less susceptible to flood damage; and flood risk is not increased overall and, indeed, where possible, is reduced. So, yes, I am.

[Baroness Parminter (LD)]

The Secretary of State has received assurances from the ABI that households will receive every possible support from the insurance industry. Can my noble friend the Minister say what evidence there is to show that that is happening?

[Lord De Mauley]

Yes, my Lords. Indeed, some examples of how the insurance industry has responded are that it has drafted in extra staff, including cancelling Christmas leave, to ensure that capacity is sufficient to deal with the increased volume of claims; it has deployed emergency response vehicles to flooded areas to give advice to affected communities; it has called customers in flooded areas to offer assistance; it has deployed loss adjusters to visit affected areas as quickly as possible to assess damage, begin the drying out of properties and arrange for repair work to begin; and, importantly, it has prioritised vulnerable and elderly customers.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, I am sure that the whole House is very pleased indeed with the information given to it about the actions being taken by the Government. However, to take the Minister back to the question asked by my noble friend Lord Harris, to which no basic reply was given, why have the Government decided that the review of improving the Thames Barrier should not take place until 2070? In fact, they have moved it from 2035. Can he explain to the House why they have done that and whether that is a safe act?

[Lord De Mauley]

That is an important question, and I absolutely take that. Noble Lords will be pleased, I hope, to hear that I am going out there to look at the construction myself. I might be better placed after that to answer their questions.

[Baroness McIntosh of Hudnall (Lab)]

As most people are understandably concerned about the impact on human habitation of flooding, what assessment have the Government made of the impact on agricultural land? The anecdotal evidence, as one travels around the country, is that a great deal of farmland is still under water from the rains before Christmas. There must be considerable loss to farmers. Can the noble Lord give the House any information about how that has been assessed?

[Lord De Mauley]

Yes, my Lords. More than 95% of arable land in England is either outside areas at risk of flooding from main rivers or the sea or is in areas benefiting from a greater than one to 75 standard of evidence.

Peatlands

Lord De Mauley Excerpts

Wednesday 8th January 2014 Lords Chamber

[Lord Greaves]

To ask Her Majesty’s Government what action they are taking to deliver their commitments made in the statement on peatlands by the Ministers from the Department for Environment, Food and Rural Affairs, the Welsh Government, the Northern Ireland Executive and the Scottish Government on 5 February 2013, in particular those on peatland restoration, land management policies to protect peatlands, and the inclusion of peatland restoration in national greenhouse gas emissions reporting.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)]

My Lords, we are undertaking a number of actions supporting the restoration of peatlands, including working with the International Union for Conservation of Nature on the pilot peatland code, research to determine best practice in peatland restoration, and establishing three government-funded nature improvement areas. We are also investing more than £3 billion in a more targeted successor scheme to environmental stewardship, with the potential to include peatland restoration, and we are funding research on greenhouse gas emissions from lowland peat.

[Lord Greaves (LD)]

My Lords, that was quite a positive response. Is the Minister aware of the recent report by the Institute of Biological and Environmental Sciences at Aberdeen University, which found that building wind farms on undegraded peatland will not reduce net carbon emissions, and that they should not be built there? Many peatlands are in wild, remote, often upland areas, with large stocks of soil carbon. Developing them usually involves substantial excavation and draining of peat, which offsets the gains from wind power. Will the Government take these matters into account when considering their future energy strategy for the UK in conjunction with the devolved Administrations?

[Lord De Mauley]

Yes, my Lords. Applicants for consent for major energy infrastructure projects must provide assessments of potential biodiversity and geological impacts, including the effects of locating infrastructure on peatland. The decision-making authority must take such impacts into account before making its decision. Much can be done, through project design, to minimise and mitigate impacts. However, if there is damage that cannot be avoided, it is for the planning authorities to judge whether the benefits of the wind farm development outweigh those impacts.

[Lord Krebs (CB)]

My Lords, I would like to ask the Minister about the impacts of climate change on upland peat. As he will know, the report of the Adaptation Sub-Committee of the Committee on Climate Change, which I happen to chair, reported this year that only 4% of upland deep peat in England is in active, peat-forming good condition. Furthermore, only one-third of upland deep peat has a management plan in place. Will he inform the House what he intends to do about the other two-thirds of upland peat that has no management plan in place to improve its quality?

[Lord De Mauley]

Yes, my Lords—and I should take this opportunity to thank the noble Lord for the work he does with the Adaptation Sub-Committee; it is extremely important to us. The peatland code, which was launched in September, provides a basis for business sponsorship of peatland restoration; that is a key plank in what we are doing. We are also undertaking a considerable amount of important and relevant research. Environmental stewardship, which I referred to in my initial Answer, has for many years benefited peatlands, but the new ELMS will be more focused on environmental outcomes and therefore will be more directly beneficial to peatland restoration. The three nature improvement areas that have peatlands are working hard on improving their habitats.

[Lord Cormack (Con)]

My Lords, is not the best way in which to answer the plea of the noble Lord, Lord Greaves, to ensure that these unreliable, uneconomic and unsightly wind farms are not built on land anywhere?

[Lord De Mauley]

My Lords, of course, we have to take all factors into account in these decisions, but I shall pass on my noble friend’s comments to my colleagues at the Department of Energy and Climate Change.

[Lord Knight of Weymouth (Lab)]

My Lords, as the noble Lord, Lord Krebs, reminded us, only around 4% of our deep peat is in sufficiently good condition still to be actively forming peat. That is a decline from 6% in 2003. We also know that Birmingham, Exeter, Leeds, Liverpool, Manchester and Sheffield, as well as all of Cornwall, rely on peat catchments for their water. The Peak District peatlands alone supply 4 million people. Will the Minister therefore tell us what estimate the Government have made of the costs that could be avoided if the water storage and purification services provided by upland peat were restored?

[Lord De Mauley]

My Lords, the noble Lord will not be surprised to hear that I do not have a figure for that, but the gist of his question is entirely right. Peatlands perform an absolutely essential function in ensuring that we have clean and pure water supplies.

[The Earl of Courtown (Con)]

My Lords—

--- Later in debate ---

[Lord De Mauley]

I was not quite sure which noble friend was going to ask me a question then. The point on greenhouse gas emission reporting is that the metrics and technology are at a relatively early stage. We are still working on that, but noble Lords may rest assured that it is a key focus for us, and we will not rest until we have achieved that.

[Lord Berkeley (Lab)]

My Lords, the Minister said that they were looking for sponsorship for the management of these peatland areas. Does that mean that the only new areas that will get managed will be those sponsored by McDonald’s, et cetera?

[Lord De Mauley]

No, my Lords; that is why I mentioned the new environmental land management scheme.

[Viscount Ridley]

My Lords, is the Minister aware that it is not only in this country and not only with wind farms that some renewable energy projects are proving to be worse for carbon emissions, because of their effect on peat? For example, a study from Leicester University showed that biomass production from tropical peatland forests can worsen the effect of carbon dioxide emission.

[Lord De Mauley]

That is a very interesting point, but it strays a little wide of the Question.

[The Earl of Courtown]

I have got there in the end. I am looking at a slightly different part of this Question—at the end user of much of this peat, particularly the horticultural user. Would my noble friend agree that it would be wise for Her Majesty’s Government to look at the labelling of peat products for sale in garden centres, where peat material is sold as being low in peat when at least 50% of it is made up of peat?

[Lord De Mauley]

My Lords, that is an important point, too, because that is essentially—or at least a major reason—why our peatlands have been so badly destroyed in the past. A road map or plan has been produced from the work of the Sustainable Growing Media Task Force, which sets out recommendations on how a transition to sustainable growing media can be achieved. The Government responded in January 2013. As part of that, a growing media panel was established to oversee and co-ordinate delivery of the plan and to report on progress. The policy review will take place in 2015 to assess progress.

Independent Panel on Forestry Report

Lord De Mauley Excerpts

Tuesday 17th December 2013 Lords Chamber

[Lord Clark of Windermere]

To ask Her Majesty’s Government what progress they have made in implementing the recommendations of the report of the Independent Panel on Forestry.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)]

My Lords, good progress has been made in implementing the commitments set out in January in the Government’s forestry and woodlands policy statement. An update report published in July highlighted progress in establishing a new body to manage the public forest estate, in maintaining forestry expertise in government, in supporting the forestry sector to improve its economic performance and in giving greater priority to plant health. A further update report will be published in the new year. I declare an interest as a woodland owner.

[Lord Clark of Windermere (Lab)]

My Lords, I thank the Minister for his answer. Is he aware that there are suggestions that the new forestry body will be forced to sell some of its land almost from its inception? Will he assure the House that that is not the case, and that the Government’s new forestry body will be provided with sufficient finance so that it is not forced into land sales within its first 12 months of existence?

[Lord De Mauley]

Yes, my Lords. Although the new body will be able to buy and sell land in its role as a land manager, there are no plans for it to sell any part of the estate to raise revenue to support itself.

[Baroness Parminter (LD)]

Do the Government intend to maintain transitional arrangements so that there are woodland grants until the introduction of England’s rural development programme in 2015, so that the Government’s welcome commitment to increase woodland cover can actually be achieved?

[Lord De Mauley]

Yes, my Lords. We have addressed the impact of a gap between rural development programmes by encouraging applicants who were originally considering applying for grants in 2014 to bring these forward to 2013. The Forestry Commission is presently considering applications to fund the planting of up to 2,600 hectares of woodland in 2014. The current RDP has seen over 12,000 hectares of woodland planted and funded through the English woodland grant scheme. Current applications for planting in 2014 therefore represent an annual planting rate above that in the rest of the current programme.

[Lord Hylton (CB)]

My Lords, I declare my interests as on the register. Is the Minister aware that I have a children’s forest school in one wood and much used public access in another? However, this question is not just about greenery and fresh air. Do the Government accept the report’s point about the economics of our forestry and its supply chain? What resources will they provide for adding value to British timber, not just using it for firewood and biomass?

[Lord De Mauley]

That is an important point. The Grown in Britain initiative is genuinely making a difference. Early successes show that it is already delivering results, including gaining commitment from several major corporates to buy or stock more home-grown wood products. To date, 19 major UK contractors-group companies, with a collective turnover of over £24 billion, have pledged to look into ways of procuring more British timber. Grown in Britain is also forging partnerships with businesses in the construction sector to seek good examples of projects using British-grown timber to promote as case studies for other forestry supply chains to follow. There is a lot going on in that sector, and it is important.

[Viscount Brookeborough (CB)]

My Lords, does the Minister agree that most landowners in this country who have forestry think that it makes a great contribution to their businesses? Can he explain why state-owned forestry in all parts of the United Kingdom has failed to make money over so many years?

[Lord De Mauley]

My Lords, I agree with the first half of the noble Lord’s question but the Government would not agree with the second half. The Forestry Commission is a dedicated and well run organisation. It has an important function to carry out, and the various functions that it carries out will continue to be carried out.

[The Lord Bishop of St Albans]

My Lords, as Her Majesty’s Government will be aware, there are several very serious diseases affecting trees in this country. What steps are being taken to ensure that, with the reorganisation of the responsibilities of the Forestry Commission, this important disease prevention, control and elimination work will not only continue but be strengthened?

[Lord De Mauley]

That is one of my department’s top four priorities, and we are making rapid progress in taking forward the implementation of the recommendations of the expert task force that the Secretary of State set up. In fact, this morning I attended our monthly biosecurity meeting and we are absolutely focused on both those plant health issues that are approaching us from overseas and those that are here already. We have established a prioritised plant health risk register, we are appointing a new chief plant health officer and we are engaged in contingency planning, among many other things.

[Baroness Royall of Blaisdon (Lab)]

My Lords, I declare an interest as a member of the steering committee of Hands Off Our Forest. Primary legislation is clearly needed to set up a new management organisation for the public forest estate. The Forest Campaigns Network has been told by Defra that Ministers are committed properly to pre-legislative scrutiny, so I would be grateful if the Minister could tell the House when we will see a draft Bill and whether or not it will be in this Session of Parliament. Will the Minister also confirm that the organisation’s mission will be to protect and improve the public forests, woodland and other assets held on behalf of the nation and that, however the organisation is structured, it will not be in danger of future privatisation?

[Lord De Mauley]

My Lords, we have always said that we will legislate as soon as possible, subject to the availability of parliamentary time. That remains the position and we are serious about it. Yes, we intend to make draft legislation available for pre-legislative scrutiny, but it is important to understand that we have also been focusing on making progress on all 36 commitments, and not all of those need legislation.

Badgers: Bovine Tuberculosis

Lord De Mauley Excerpts

Monday 9th December 2013 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)]

My Lords, we must not underestimate the scale of the devastation wrought on our farming industry and rural communities by the worsening bovine tuberculosis epidemic; I think most noble Lords who have spoken today have acknowledged that. It is unacceptable that in the 10 years to 31 December 2012, more than 305,000 cattle were compulsorily slaughtered as reactors or direct contacts in Great Britain. Moreover, a further 22,512 cattle have been slaughtered up to August this year solely because of bovine TB. As the noble Lord, Lord Knight, said, over the past 10 years the disease alone has cost the taxpayer more than £500 million. It is estimated that it will cost another £1 billion in the next decade unless we can use all the available tools to intensify the action that needs to be taken.

In the face of such a grave problem, difficult decisions must be made. There is no single solution—no silver bullet—so we must use every possible means at our disposal. As the noble Lord, Lord Krebs, said, strict controls on cattle movement must be applied, loopholes closed and measures tightened, a point I will come back to later. However, that alone will not reverse the inexorable spread of this devastating disease. The wildlife reservoir in the high-risk areas cannot be ignored, and it needs addressing urgently. That is why the Government have developed an ambitious and comprehensive strategy for combating the disease, with the aim of achieving bTB-free status for England within 25 years while maintaining a sustainable livestock industry. I thank my noble friend Lady Parminter for her comments on our intention to eradicate the disease.

The strategy emphasises that robust cattle controls must be combined with tackling the reservoir of disease in badgers, drawing on demonstrably successful approaches from around the world. It includes a comprehensive set of controls focused on the different disease risks in different areas of the country. The strategy also covers the development of new tools to control bTB such as diagnostic tests, alternative badger controls and, indeed, vaccination. Tackling the reservoir of disease in badgers is a key element of the strategy and we are committed to making it work. In this matter we must be guided by the experience of other countries which have successfully rid themselves of this terrible disease.

We have clear evidence from the randomised badger culling trial on the role of badgers in the spread of the disease in endemic areas. Work by Professor Christl Donnelly, to which the noble Lord, Lord Trees, referred, suggests that up to half of all cattle herds found to have TB in the high-risk area of England contracted the disease directly or indirectly from infected badgers. The evidence also shows that, carried out in the right way, badger culling will make a significant difference in reducing the incidence of TB in cattle. Other countries, such as the Republic of Ireland, New Zealand, Australia and the United States, have eradicated or greatly reduced the levels of bTB by culling infected wildlife in combination with tight cattle controls.

The results of the RBCT have been used to estimate that culling over an area of 150 square kilometres could reduce new herd incidence of bTB by an average of 16% over nine years: enough to stop the incidence of bTB continuing to increase and even begin decreasing it. We proceeded with pilots this summer to test the assumption that controlled shooting is a safe, humane and effective means of reducing badger numbers. These four-year pilots are closely managed and monitored by the licensing authority, Natural England. The independent panel of experts is now considering the information collected during the pilots. Its report to the Government in the New Year—to answer my noble friend Lady Parminter—will inform the decision on the wider rollout of badger control in those parts of England most severely affected by this disease. The report will be made available to Parliament and the general public. We have always been clear that these were pilots from which we will learn lessons in advance of taking any decisions. We expect to be in a position to take such a decision by the end of February.

Turning to questions raised by noble Lords, the noble Lord, Lord Knight, asked why the cull had been cut short in Gloucestershire. The decision that the licence for the extension should end was taken following discussions between the cull company in west Gloucestershire, Natural England and the NFU. The end of the cage-trapping season was agreed by the cull company and Natural England as a sensible point to stop activity. The decision was based on the decreasing number of badgers seen by contractors over the preceding weeks, which made achieving a further significant reduction in future weeks unlikely. Given that this was the first year of controlled shooting of badgers, it was uncertain how the winter would affect badger behaviour, but it was deemed likely that even fewer badgers would be seen due to the onset of cold weather, when they tend to stay underground for longer.

The noble Lords, Lord Knight and Lord Krebs, referred to perturbation. The RBCTs concluded that larger areas would offer greater benefits. The Gloucestershire area is 311 square kilometres and the Somerset one is 256 square kilometres. These are very substantially larger than those in the RBCTs. In the pilot culls, we were able to emphasise hard boundaries around the cull areas: sea, significant rivers and dual carriageways, each of which produces a significant challenge for badgers to cross. We are also conducting biosecurity measures, including vaccination, in the buffer zone around the cull areas. These are some of the lessons of the RBCTs on which we have been able to capitalise.

The noble Lords, Lord Knight and Lord Krebs, and my noble friend Lord King referred to population estimates in the context of a prospective rollout of culling in future years. Estimating badger populations is difficult, as is the case for all wildlife populations. However, the fact that it is difficult does not mean that we should avoid tackling disease in wildlife. When looking at lessons learnt in the pilots, we will look at how the efficacy of culling could be best assessed in future. In the RBCTs, as many badgers were removed as possible rather than having a fixed target. This approach, repeated each year for a number of years, resulted in an estimated 70% removal rate. This was not based on an estimate of the badger population in the area; instead, an estimate of the reduction of the badger population was made based on field signs and road kill over four years.

The noble Lord, Lord Knight, said that in Gloucestershire, the proportion of badgers killed was not more than 40%. It is worth saying that the most effective culls during the RBCTs had removal rates of between 64% and 76%, with an average of 70%. However, three areas had initial culls of lower effectiveness, with removal rates of below 40%. Those areas with low reductions caught up in subsequent years so that the reduction in population at the end of culling was comparable to those areas with good initial culls.

The noble Lord, Lord Knight, asked about the advice from the Chief Veterinary Officer. That advice was that a further increase in the number of badgers culled over the initial six-week period would improve the disease-control benefits achieved even further and enable them to accrue earlier. It was his view that a further significant reduction of the badger population in the first year would increase the likelihood of disease benefits in cattle over the full four years of the cull. A copy of his advice to the Secretary of State on the case for extending the culls in both Somerset and Gloucestershire was made public on 18 October.

The noble Lord, Lord Knight, asked about costs. The costs of the pilots must be put in the overall context of tackling the disease. Each TB outbreak costs an average of £34,000 and if left unchecked the disease will cost the taxpayer, as I said earlier, approximately £1 billion over the next 10 years. We must start tackling TB in wildlife to bring the disease under control and begin reducing the bill to taxpayers. We will know more about the costs of the pilots once the final figures have been disclosed and scrutinised.

The costs of the police efforts in Gloucestershire, for example, are likely to have been higher than expected. However, the uncertainty around costs provided an additional reason for the decision to proceed cautiously with two pilots before considering wider roll-out, where many of the current costs will not apply. The pilots will enable us to test our and the farming industry’s cost assumptions for areas where there is uncertainty, such as policing, and take these into account in a decision to roll out the policy more widely. As planned, costs will be reviewed after the conclusion of the pilots when all the information is available.

The noble Lord, Lord Knight, asked about vaccination. As noble Lords know, there are practical difficulties in using the injectable badger vaccine, including the cost and the fact that each badger must be trapped by a trained and licensed operator. Crucially, the vaccination does not cure already infected badgers and provides only limited protection to a proportion of uninfected badgers. Furthermore, unlike culling, we do not know what effect vaccinating badgers has on TB in cattle. Developing an oral badger vaccine remains a top priority for the Government. It is still at research stage and we cannot say when it will be deployable in the field, but we are progressing with this work as fast as possible and any additional spending will not speed the process up.

My noble friend Lady Parminter and the noble Lord, Lord Krebs, asked what we will do with the independent expert panel’s advice. The independent panel was established to provide a robust scientific peer review of the analysis of the data gathered during the pilot culls to support an assessment of the humaneness and efficacy of controlled shooting. When the panel has finished reviewing the output of this monitoring, it will submit its assessment and conclusions to Ministers. The panel will not be making recommendations about the humaneness of controlled shooting, but its conclusions about the robustness of the data will enable Ministers to make informed decisions about its use as a culling method in future years.

Measures are in place to ensure that the evidence base resulting from the pilots is robust. This is the first time a cull of this nature has been carried out and there are lessons that we can learn from the pilots. The panel’s report will be published in due course after it has been submitted to Ministers, along with the supporting evidence, and in deciding how to proceed we will consider it extremely carefully.

I have a number of other answers that I would like to have given noble Lords and I undertake to write with various answers. The noble Lord, Lord Trees, spoke about the Welsh Government providing funding for vaccination. We are providing the same amount of funding as the Welsh Government to help start-up vaccination in the annual TB testing area, and the fund will also be used to subsidise training and competence certification for staff and volunteers of voluntary and community sector organisations wishing to become lay badger vaccinators.

Although we have much to learn from this year’s experience, conducting two pilots has been a significant achievement and is another major step towards halting the spread of bovine TB. In helping us to achieve this, local farmers and landowners have undertaken the pilots in both areas, often in difficult terrain and weather, and in the face of a sustained campaign of harassment, intimidation and widespread criminal activity. I pay tribute to those undertaking the pilots for not wilting in the face of this and for showing commendable restraint in the manner in which they have conducted themselves throughout.

Controlling the disease in wildlife has to remain a key part of our TB strategy. No country has successfully dealt with TB without tackling the disease in both wildlife and cattle. Unless we tackle bovine TB in badgers, I fear that not only will we never eradicate it in cattle and free our livestock farmers of a huge burden but that we will see the disease in cattle and that accompanying burden continue to grow and spread until the disease is endemic throughout the whole of England. This Government are resolved to prevent this happening and to achieve freedom from TB in 25 years.

Committee adjourned at 6.29 pm.

EU: Regulation on Chemicals

Lord De Mauley Excerpts

Wednesday 27th November 2013 Lords Chamber

[Lord Hoyle]

To ask Her Majesty’s Government what steps they are taking to enable small and medium-sized enterprises to meet the requirements of the European Union Regulation on the Registration, Evaluation, Authorisation and Restriction of Chemicals.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)]

My Lords, we recognise the concerns, particularly of small businesses, about burdens arising from the EU regulation on the registration, evaluation, authorisation and restriction of chemicals. We welcome the recommendations for better guidance for small businesses in the recent report of the Prime Minister’s business task force. These closely reflect the work that we have been doing to bring together those interested, including the Commission and UK industry, to develop guidance that is more focused and relevant to SMEs.

[Lord Hoyle (Lab)]

I thank the Minister for that reply. I know that he is very knowledgeable and has a lot of expertise in this matter so perhaps I may ask him to spell out in a little more detail, in relation to SMEs, whether they will they be given financial assistance; whether they will be allowed to use these substances until alternatives are brought forward; how this will be licensed; and whether they will have the right of appeal.

[Lord De Mauley]

My Lords, it would take me quite a while to answer all those questions properly. However, in the context of the financial question he asked, there are two aspects to this—the first is about fair cost-sharing, and the second about fee levels. Businesses tell us that a major concern is the lack of transparent and fair cost -sharing when companies are pooling data on the same substance. As a result, that was the top recommendation for helping SMEs in the review report. There is a commitment across the board to sort that out, and we are playing a major role in it. As regards fee levels—that is, for fees payable to the European Chemicals Agency—the revised fee levels were voted through by the UK and other member states and came into force in March. They mean that the smallest companies are now eligible for fee discounts of up to 95%, which can mean a one-off registration fee of as little as €64.

[Lord Vinson (Con)]

My Lords, is this not another example of the perverse effects of EU overregulation? Thousands of products that have been with us and fully approved for many decades by our own safety regulation authorities are now to be banned; and that, in many instances, will put out of work small businesses which cannot afford the very high costs of trying to prove that something that is safe, is safe. Is this really the sort of democratic situation we want to be in—where our own Ministers can do nothing to put this matter right except mumble about trying to ease the pain in some way or another? The actual effect will be devastating on small businesses. It is a gross pity that we cannot control these affairs ourselves.

--- Later in debate ---

[Lord De Mauley]

My Lords, it might be helpful if I quote the words of the Chemical Industry Association to the business task force. It said that,

“we see REACH as a positive development and support its principles. It has made many businesses outside our sector realise that they do in fact use chemicals every day and that they also have to comply with controls. For us, this is an important step towards achieving safe chemical management and we support the scope and objectives of the legislation as a consequence. However”—

in line with what my noble friend says, it goes on to say that—

“interpreting the legislation is proving extremely complex”.

Reducing those burdens is the focus of our attention here and in Europe.

[Lord Brookman (Lab)]

My Lords, I think that the whole House is concerned about the future of manufacturing in the United Kingdom, and we are keen to see a strong manufacturing base. My noble friend Lord Hoyle has touched on a very complicated industry on which the Minister has given positive answers. Therefore, could the Minister advise—

[Lord Brookman]

No? Can he tell me then—can he tell the House—how applications from companies in the United Kingdom to use banned substances while alternatives are being developed will be judged? What will be the cost of such applications to the companies themselves? Is the Minister happy with that?

[Lord De Mauley]

My Lords, I touched on the matter of cost earlier, but the noble Lord will appreciate that this is definitively a complex area, regardless of how we regulate it. Chemicals are a complicated business and they need careful attention. However, I am now going to go into some technical language.

Adding a substance to annexe 14 is a multi-stage process involving several factors. The ECHA has recently finished conducting a public consultation on its draft recommendation. It will then consider the opinion of the member state committee in its final recommendation to the European Commission. It is important to stress that this is a recommendation. The ECHA does not have the power to ban a chemical. It is the European Commission, in conjunction with member states and the European Parliament, which decides whether to take a recommendation forward to add a chemical to annexe 14. I emphasise that if a substance is added to the annexe, it does not constitute a ban. Instead, it is the trigger for industry to make the case for continued authorised use of a chemical.

[Lord Forsyth of Drumlean (Con)]

My Lords, is my noble friend’s quote from the trade association not a classic example of how big business loves regulation which destroys small business and removes its competition? What has happened to the Government’s initiative to stop the continuing gold-plating of legislation from Europe? Is it simply to say that nothing can be done because we cannot change European regulations?

[Lord De Mauley]

As my noble friend asks about gold- plating, perhaps I may say that REACH is a directly acting regulation so there is little scope for gold-plating. However, the UK approach is in fact the opposite of that; for example, our approach to enforcement is to help companies get back into compliance. My noble friend might like to know that the Environment Agency has developed helpful tools for that process. It uses its expertise to look for illegal use of restricted chemicals, and it can then focus on suspected wrongdoing with little or no burden on compliant companies.

[Lord Cormack (Con)]

My Lords—

[Lord Knight of Weymouth (Lab)]

My Lords, there are significant consequences for small and medium-sized enterprises of incomplete registration. Can the Minister please tell us how many businesses have already been informed by the European Chemicals Agency that their registration is incomplete, and what action has he taken to ensure that businesses complete all of the agency’s registration requirements in time to avoid those significant consequences?

[Lord De Mauley]

In terms of specific numbers, no, I cannot. However, I will write to the noble Lord on his question.

[Lord Cormack]

My Lords, I will ask the question that I tried to ask. Would not the best tool be the use of plain English which everyone can understand, whether they are in small business, medium business or any other sort of business?

[Lord De Mauley]

My noble friend, as always, speaks so much sense. I am discovering, as Defra’s science Minister, that the world of chemicals does not easily lend itself to simple language. However, I will do my best for my noble friend.

Food: Food Banks

Lord De Mauley Excerpts

Tuesday 26th November 2013 Lords Chamber

[Lord Haskel]

To ask Her Majesty’s Government what is their response to the request by the Executive Chairman of the Trussell Trust for an inquiry into the causes of food poverty and the incidence of the usage of food banks.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)]

My Lords, the Government recognise the good work of organisations that redistribute surplus food to those who might otherwise struggle to access nutritional meals. However, the root causes of household food insecurity are varied and complex. We are not proposing to record the number of food banks or the potential number of people using them or other types of food aid. To do so would place unnecessary burdens on volunteers trying to help their communities.

[Lord Haskel (Lab)]

My Lords, yesterday I visited the Trussell food bank in Richmond—the third wealthiest place in the country. There the food bank distributes a tonne of food a month, up 60% on the year, to people referred to it from 40 agencies, many of them associated with the Minister’s department. Is the Minister content to leave it to charity to feed thousands of people who fall through the cracks of his department? Does the Minister agree that this food poverty must not—cannot—go on? How will the Government bring it to an end?

[Lord De Mauley]

My Lords, the gist of the noble Lord’s question was whether the Government think that it is okay to rely on the voluntary sector. The answer is no. The Government recognise the good work of charitable organisations that redistribute surplus food, but the Government also have a role. It is not the Government’s role to set prices, but we work to promote open and competitive markets that help to offer the best prices to consumers. Through Healthy Start and other initiatives, we provide a nutritional safety net in a way that encourages healthy eating among more than 500,000 pregnant women and children under four years old in very low-income and disadvantaged families throughout the UK.

[Lord Martin of Springburn (CB)]

My Lords, is it not the case that we are subjecting people—decent men and women—to great indignities by having them queue up for food at the food banks, and that we should find some other way of helping families in need?

--- Later in debate ---

[Lord De Mauley]

I agree with the noble Lord. Of course we appreciate that some of the poorest people are struggling. The best way to help people out of poverty is to help them into work. The latest labour market statistics show employment up, unemployment down and the number of workless households down. We operate a number of government initiatives aimed at helping families with food: Healthy Start, Change4Life and the school fruit and vegetable scheme; and we are extending free school meals. In addition, there are a number of other measures designed to help households in the wider context: the personal tax allowance up £235 from April 2013, 2.4 million people taken out of tax altogether, and fuel duty increases cancelled, to name a few.

[Lord Soley (Lab)]

Do the Government not understand that while the international financial crisis has hit people on low incomes in many countries, in this country we have an additional problem that the Government are not addressing, which is that utilities—gas, electricity and water—are hitting people on low incomes so hard that they are choosing between the utilities and food? That is what the Government need to address.

[Lord De Mauley]

The noble Lord makes a fair point about energy prices. Although we cannot control volatile world energy prices, we can still help people get their bills down. The best way to keep everyone’s bills down is to help people save energy, ensure fair tariffs and encourage competition, and that is exactly what we are doing.

[Baroness Parminter (LD)]

My Lords, usage of food banks is rising right across Europe, including in the relatively wealthy countries of the United Kingdom, France and Germany. In light of this, what discussions have the Government had with the European Commission in advance of its planned initiative on sustainable food?

[Lord De Mauley]

My noble friend asks an important question. We have been working closely with the Commission and other member states with regard to the communication on sustainable food. We met members of the food and drink sector before responding to the Commission’s consultation in October. We have also convened a meeting between interested parties and the Commission. It is a very complex matter but we have ensured that the Commission is aware of the many sustainability and resource-efficiency initiatives undertaken by the UK food industry in recent years.

[Lord Davies of Coity (Lab)]

My Lords, does the Minister remember that a very long time ago a man by the name of Galbraith coined the phrase “private affluence and public squalor”? In view of the increase in poverty and the growth of food banks, does the Minister believe that this country is heading for the same situation?

[Lord De Mauley]

No, my Lords, and I think I have somewhat laboured the point as to the policy initiatives that we are following.

[Lord Lucas (Con)]

Does my noble friend not take comfort from the fact that there are poor people in Richmond, that we do not live in a segregated society, and that we are not wasting all the food that is in danger of going out of date but are finding a good place for it to go? What would the party opposite do—abolish food banks and send the food to landfill?

[Lord De Mauley]

My Lords, my noble friend makes a fair point. I am not going to accept his invitation to suggest what the party opposite might or might not do.

[Lord McKenzie of Luton (Lab)]

My Lords, is it not the case that the increased use of food banks is at least in part attributable to the fact that we have a harsher benefits system, a harsher sanctions system and a harsher hardship system? In the year to June, some 860,000 JSA claimants were sanctioned; under the new three-year sanction, which we were told would apply only to a handful of people, more than 700 people were sanctioned. How healthily can you eat on £42 a week?

[Lord De Mauley]

My Lords, I think it is right to expect claimants who are able to look for or prepare for work to do so. Claimants will only ever be required to meet reasonable requirements, taking into account their circumstances and capability. A sanction will never be imposed if a claimant has good reason for failing to meet requirements, and sanctions can be reconsidered or appealed. If claimants demonstrate that they cannot buy essential items, including food, as a result of their sanction, they can claim a hardship payment. This means that no claimant should ever have to go without essentials as a result of their sanction.

[Lord Kennedy of Southwark (Lab)]

My Lords, this year the Government commissioned research on the landscape of food provision. They have had the review since June; they have been reviewing it for longer than it took to write it. Is the reason why they have kept the report and have not published it yet the fact that it shows that the recent increase in food aid provision is due to their own disastrous policies? If I am wrong, publish the report.

[Lord De Mauley]

My Lords, the noble Lord is right that we have commissioned research to assess publicly available evidence on food aid provision in the UK, including food banks. This work will be made available in due course. All government-funded research reports are required to go through an appropriate review and quality assurance process before publication. The report will be published once this is complete.

Bovine Tuberculosis

Lord De Mauley Excerpts

Tuesday 26th November 2013 Lords Chamber

[Lord Dubs]

To ask Her Majesty’s Government whether they have any evidence about the impact of artificial insemination of cattle on the spread of bovine tuberculosis.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)]

My Lords, there is, indeed, a debate among veterinarians on this matter. While the evidence does not provide a definitive answer, it is important to note that TB has been eradicated from Scotland and many other countries despite the use of artificial insemination and, furthermore, that bovine TB was already endemic throughout Great Britain well before the widespread adoption of AI in the 1950s.

[Lord Dubs (Lab)]

My Lords, is the Minister aware that I got the idea for this Question through talking to a local farmer in my valley in Cumbria? He told me that, although there were many badgers in the valley, there was no bovine TB at all, and that local farmers did not use artificial insemination. Given that there is at least some scientific basis for this, would it be right to pursue this rather than going for a badger cull for which the scientific evidence is doubtful?

[Lord De Mauley]

The noble Lord will not be surprised to hear that I do not agree with the last thing he said, but he might be interested to know that bull pedigree and TB data analysis of Holstein Friesian bulls, carried out by the Roslin Institute for Defra, have shown clear evidence of genetic variation to bovine TB susceptibility with a moderate heritability of 18%. However, no link was found in those studies between selection of bulls for milk yield and greater susceptibility to bovine TB. The study authors went on to conclude that,

“selection for milk yield is unlikely to have contributed to the current”,

bovine TB epidemic in Great Britain.

[The Countess of Mar (CB)]

My Lords, is it not the case that the bulls chosen at insemination centres are kept to the very highest health standards and are not exposed to TB in any way, and that artificial insemination is probably safer than the ordinary method of insemination?

[Lord De Mauley]

The noble Countess makes an extremely good point, and I cannot disagree with what she says.

[Lord Soulsby of Swaffham Prior (Con)]

My Lords, artificial insemination has been a practice in this country in dairy cattle for more than 30 years, and I wonder where this suggestion has come from. There is very little evidence—no evidence whatever to my mind—that AI can result in the transmission of TB to cattle. I hope that the Minister will scotch that idea, because we have an amazing health record in this country for AI and tuberculosis control.

[Lord De Mauley]

I am most grateful to my noble friend because he enables me to say, perhaps more categorically than I said to start with, that research indicates that there is no link between TB susceptibility and milk production traits.

[Lord Clark of Windermere (Lab)]

Will the Minister accept my noble friend’s point that in many parts of the country there are plenty of badgers but no TB, and that one of the dangers is not the badgers bringing in TB to the cattle but cattle imported from other parts of the country being transferred into these areas?

[Lord De Mauley]

My Lords, that is something on which we can all agree. Indeed, our strategy is based on TB being particularly rife in the south and west and moving northwards and eastwards, but in the part of the world that the noble Lord, Lord Dubs, comes from it is not yet endemic in the badger population. What we find in the high-incidence areas is that it forms a reservoir in that element of wildlife, unfortunately badgers. As I say, our strategy is built on trying to slow the spread across the country.

[Viscount Ridley (Con)]

My Lords, I declare an interest as somebody who has just sold a much loved White Park bull from Northumberland to Gloucestershire, where it promptly got TB and died. The lesson I have learnt is that in future I am going to use artificial insemination instead so as not to risk these animals.

[Lord De Mauley]

That is a lesson to us all, my Lords.

[Baroness Parminter (LD)]

My Lords, the Minister said that there is an ongoing debate about the role of artificial insemination, and therefore it could merit further research. I suggest that the Government could use the money they are putting aside to research the gassing of badgers, which was deemed inhumane by a Member of this House’s committee in the 1980s.

[Lord De Mauley]

I can confirm to my noble friend that we are indeed continuing research into AI.

[Lord Elystan-Morgan (CB)]

The Minister may well recall some weeks ago, in reply to a supplementary question which I raised, that I was told that about 50% of bovine tuberculosis was attributable to badgers and about 50% to other sources. Can the Minister tell the House roughly, in the last financial year or in any other meaningful period, how much money from public sources was spent in relation to non-badger-related bovine tuberculosis?

[Lord De Mauley]

My Lords, perhaps I should clarify the answer I gave to the noble Lord. Research by Professor Christl Donnelly indicates that up to 50% of infections in the high-incidence area are due to badgers. Bovine TB can affect a wide range of species, including pigs, sheep, goats and camelids; it can affect wildlife—for example, badgers and wild deer—and pets, including cats and dogs, and of course humans. The key thing, however, is that in cattle and badgers the infection is self-sustaining. It is thought that most other species generally only act as spillover hosts.

[Lord Knight of Weymouth (Lab)]

My Lords, the Government’s strategy is obsessed by badgers and the transfer in what is a really difficult issue for farmers and is costly to the taxpayer. What are the Government learning from the recent outbreak of bovine tuberculosis in County Durham, clearly caused by cattle-to-cattle transmission?

[Lord De Mauley]

I cannot accept the noble Lord’s first contention, but in response to his question about Durham, this is a beef-fattening unit, and it will therefore have bought animals in from elsewhere. That is why we introduced risk-based trading in partnership with auctioneers and the industry, to provide fuller information about TB status and history of selling herds to the market. Initially this is on a voluntary basis, but we will look at it again if necessary. We are also considering post-movement testing of cattle for those moving from high-incidence areas.

[Baroness Hayman (CB)]

My Lords, when I arrived at the Ministry of Agriculture in 1999, I was told that a vaccine for bovine TB was 10 years away. I was quite enthusiastic until I learnt that every Minister for animal health during the past 40 years had been told that a vaccine was 10 years away. More than 10 years further on—and I suspect that the same message has been given ever since—could I ask the Minister what the timeframe is now thought to be?

[Lord De Mauley]

That is a very interesting question, because we had the same discussion with the EU commissioner, Commissioner Borg, on that very subject and he, rather surprisingly, gave the same date. Developing both an oral badger vaccine—noble Lords will know that an injectable badger vaccine already exists—and a cattle vaccine remains a top priority for the Government. Since 1994, more than £43 million has been spent on developing a cattle vaccine and an oral badger vaccine. We have committed to investing a further £15.5 million in vaccine development over four years, but it is an extremely complex issue, involving extensive field trials and so on.