British Steel

Lord Henley Excerpts

Wednesday 24th July 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer to an Urgent Question given by my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy. The Statement is as follows:

“As honourable Members will recall, I made a Statement to the House a few hours after British Steel entered insolvency on 22 May. This was and still is an uncertain time for the British Steel workforce, their families and communities, for the customers and suppliers of the business, and for everyone who believes, as I do, in the importance of excellent steel-making and manufacturing in the UK.

In my Statement, I said that, although the independent official receiver is solely responsible for the operation and sale of the British Steel business, I would, personally and on behalf of the Government, do everything I possibly can within my powers to help secure a good future for the whole of British Steel’s operations.

Following a visit to the Scunthorpe plant the following day and to Skinningrove and Lackenby on Teesside the day after with local MPs, including the honourable Lady, we formed a British Steel support group to work together immediately and actively to pursue that aim. I chaired that group, with the Industry Minister, and it has included the British Steel management; the trade unions Community, Unite and the GMB; the Mayor of Tees Valley and the leader of North Lincolnshire Council and their officers; the chairs of the Humber, Greater Lincolnshire and Tees Valley LEPs; UK Steel; the national manufacturers’ association Make UK, on behalf of suppliers and customers; the Federation of Small Businesses; government officials and other local MPs, including the honourable Member for Redcar, my honourable friends the Member for Middlesbrough South and East Cleveland and the Member for Brigg and Goole, and the honourable Member for Scunthorpe. The support group has met eight times now, usually in Doncaster, and sub-groups on the supply chain have met separately, as have local partners.

I pay tribute to the hard work, dedication and tenacity of the group, and the extraordinary commitment of the workforce who, during this time, have performed magnificently, not only to continue but to increase steel production.

Often in insolvencies, customer orders can dry up, suppliers withdraw their services and the workforce drifts away, precipitating a rapid failure. In this instance, the opposite has been the case. The confidence that the support group has built, coupled with a government indemnity to the official receiver, has allowed trading to continue, orders to be won and production to increase. This is without precedent in my experience.

Although all decisions are for the official receiver, I have been active, as Members know, in visiting prospective buyers in many parts of the world to make it clear that the UK Government will, within our legal powers, work with a good long-term owner of these important assets to help them realise their vision for the company.

I am pleased to say that the official receiver has said that he is encouraged by the level of interest in purchasing British Steel and that his special managers, EY, are currently in further discussions with potential buyers. The official receiver has made it clear that, given the complex nature of the operations, any potential sale will take time to deliver.

I said in May that I was determined to see the proud record of steel-making excellence continue. The world needs steel, and British Steel is among the best in the world. To secure that will require, in my experience, the continued active participation of everyone I mentioned earlier, without interruption, during the critical weeks ahead. In particular, whoever stands at this Dispatch Box will need to devote themselves unstintingly to achieve that great outcome for everyone concerned with British Steel, which I believe, though not certain, is within grasp, and that is the flourishing of British Steel’s operations for many years to come”.

My Lords, that concludes the Statement.

--- Later in debate ---

[Lord Henley]

My Lords, I am very grateful to the noble Lord for his support. As my right honourable friend made clear, he was grateful for the support from all sides. That was the point behind setting up the support group, which, as I made clear in repeating the Statement, has met eight times and will continue to meet. If he listened to the Statement being made in another place, he will have noticed that those meetings have been taking place in Doncaster. The honourable Member for Doncaster even offered her house as a venue for further meetings of that group, which shows that there has been cross-party support from MPs on all sides, as well as from the unions, local authorities, LEPs and others—I need not repeat what was in the Statement.

The noble Lord also asked about the indemnity. The important point to remember is that my right honourable friend made it quite clear that he will do whatever he legally can. I cannot give the noble Lord the precise figures on how much has been spent, but, while it is possible for him to do that, he will continue to do so because the consequences of a closure are obviously very great. If we close down a steelworks, we cannot just turn it on again the following Monday. It is lost forever.

Finally, it remains the intention of the official receiver —and we also believe this is the right process—to sell the group as a whole if possible.

[Lord Fox (LD)]

My Lords, I associate myself with the comments of the noble Lord, Lord Stevenson, in that we all hope that some resolution can be found and that this business can be sold as a whole. However, this could not come at a worse time for the workers of British Steel and those companies that supply it, because we are seeing a changing of the guard. In this Statement, the Secretary of State makes very clear the level of ongoing activity that is required from government to secure the happy end we all hope for. It is not clear that those coming into the shoes of the Secretary of State have the same agenda. Can the Minister undertake that the Government will provide that unstinting effort that the Secretary of State said is required, and can he tell us a little bit about what planning is in place in the event that this business is not sold? What do the Government plan in terms of funding and rescue efforts for that business?

[Lord Henley]

My Lords, I will not at this stage speculate on what might happen if the business goes under. We are doing what we can to keep that business. My right honourable friend made it quite clear that he has put a great deal of effort into making sure that it can continue.

To answer one other question put by the noble Lord, Lord Stevenson, relating to energy, we have put almost £300 million into compensation for the whole steel sector, trying to help it make energy costs more competitive. We have also offered support, as the noble Lord knows, on the extra costs for high-energy-using businesses and will continue to do so.

Going back to the question of the noble Lord, Lord Fox, I cannot speculate on what my right honourable friend’s successor might do, should my right honourable friend have a successor—it might still be my right honourable friend; it might still be me. I do not know at this stage, but I think the commitment that the Government have made so far is indicative of the process that we would want to continue.

[Lord Morris of Aberavon (Lab)]

My Lords, the participation of the Secretary of State is most encouraging, and I welcome the news of increased production in these extremely difficult circumstances. On a general point, will the Government bear in mind that one of the hazards of steel production in all parts of the United Kingdom is the high cost of electricity? Will the Government consider what might be done further to ensure that steel is produced economically and on a level playing field?

[Lord Henley]

My Lords, the noble and learned Lord is quite right to point out that the steel industry and various other industries have high costs relating to energy. That is why I mentioned the almost £300 million that we have offered to the steel sector to try to make energy costs more competitive. It can then look to the future as regards energy reduction, trying to produce the same amount of steel using less energy and—thinking of our zero-carbon targets for 2050—doing it in a greener manner.

[Baroness Redfern (Con)]

I thank the Minister for his response and for the work being done behind the scenes. Does he agree with me that the new Government need to continue the momentum around the national industrial strategy, and that the recovery of British Steel is a top priority, as it is one of the best companies in the world?

[Lord Henley]

I can agree with every word my noble friend says. The Industrial Strategy made it clear how we want to provide support in this area, and again, my right honourable friend made it clear that he hopes to see a steel sector deal in due course, in which the steel industry itself can show how it will invest in the future, supported by the Government.

[Lord Brookman (Lab)]

My Lords, many Members of this House have had to live with the fact that in their area of work, and in many instances the jobs they had, closures have taken place in the steel industry. It is a shocking state of affairs that still remains. I am pleased with the comments that have come from the Minister this afternoon. However, for goodness sake, this Government—any Government—must ensure that the country has a steel industry for the future.

[Lord Henley]

My Lords, we are committed to having a steel industry for the future, and the Government have left no stone unturned in their support for the entire industry. We are working with the sector, the unions and with the devolved Administrations to support the steel sector. I could list a whole range of projects that we are involved with. I mentioned the £300 million or so in support for energy under the industrial energy transformation fund; I could go on. We are committed to ensuring that we have a steel industry for the future.

[Earl Attlee (Con)]

My Lords, I too am grateful for the approach of the Government in this matter. However, does the Minister agree that one of the problems that we are experiencing is that high-volume steel is manufactured to well-understood, international engineering standards and therefore is a homogeneous product, and that makes the market exceptionally competitive?

[Lord Henley]

Again, my noble friend is right to point to the competitive nature of the market, and that is true for a great many industries. However, with the industry itself and government working together, we can ensure that we have a competitive part of that industry.

[Baroness McIntosh of Pickering (Con)]

My Lords, my noble friend will be aware that we are currently under the state aid regime of the European Union. What will the position be after 31 October, if we crash out without a deal? When might we expect to see the statutory instrument before this House and the other place?

[Lord Henley]

My Lords, I cannot speculate on what legislative processes might be necessary. We are committing to get a deal before we leave the Union and we want to make sure that we have a deal that will be good for the whole country, including the steel industry.

Trade Unions

Lord Henley Excerpts

Thursday 18th July 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, I echo two of the tributes paid to former Members of the House. First, I pick up what the noble Lord, Lord McNicol, said about his late noble friend Baroness Turner. I sat opposite her far more years ago than I care to remember when I was a Social Security Minister in this House. I always admired her expertise and the good trade union negotiating skills that she brought to that side of things.

Secondly, and partly to clear his name, I refer to the late Bill Brett, whom the noble Lord, Lord Jordan, mentioned, as did the noble Lord, Lord Whitty, who shared an office with him, and the noble Lord, Lord Brooke, who referred to the fact that the late Lord Brett was a friend and neighbour of mine up in the north-west, where he lived for the last few years of his life. But the noble Lord then said that we had “an association”. I want to clear his name of any suggestion that there was a political association between him and myself, if that was implied. We were good friends and exchanged things across the Floor of the House, but the Chief Whips need not have worried any further than that. He was a great man in the international side of the labour movement.

We have had a very good debate, with a whole range of questions, which I will try to address in some part, and a whole series of challenges has been put before us. If I think again about what the noble Lords, Lord Whitty, Lord Adonis and Lord Lea, said, many of the challenges posed are for the union movement itself. I do not think they are for the Government to address, though I will make it clear that we welcome and value our relationship with the unions. We also value our relationship with the ILO, and I will make that clear as well.

We have had much history, going back over the last 100 years. This happens quite often in this House. For much of it, particularly the part of history familiar to most of us, the 1970s and 1980s—here I excuse the noble Lord, Lord McNicol, who is younger than many Members of this House—I suspect that there was a degree of rewriting, as often happens. After the passage of time, we all have our rather different views of those years. I certainly remember the 1970s and the 1980s. I remember voting for much of the trade union legislation at that time. Much of it—all of it—was very necessary, and I do not remember the incoming Labour Government repealing it in 1997. I almost wish that I had asked my noble friend Lord Tebbit to come along and take part in this debate, because it might have added to the jollity of the occasion. I will certainly pass on details of the debate to my noble friend, who I am sure will find opportunities in due course to take up the subject with those who have spoken.

More importantly, the debate has allowed us to consider the future of trade unions and wider industry representation. On behalf of the Government, I am pleased to recognise the important contribution that trade unions make to our society and to restate our commitment to continue working closely with the TUC—a commitment that I made in the debate we had a year ago to mark the 150th anniversary of the TUC, and which has been repeated by my right honourable friend Greg Clark and the Prime Minister. This year, as has been made clear on a number of occasions, we are marking the 100th anniversary of the ILO, founded at the end of the First World War, with its mission to end “injustice, hardship and privation” in the workplace.

The noble Lord, Lord Monks, asked what we thought of the ILO. I can only go back to the speech that my right honourable friend the Prime Minister made recently at the ILO centenary conference in Switzerland. I will make that speech available to the noble Lord, so he can then read it in full, if he has not already done so. She said that,

“the ILO can look back with pride at what it has achieved”,

over the last century, by working,

“with employers, trade unions and governments”.

The ILO has been instrumental in achieving safer workplaces, fairer conditions and better pay; it has been 100 years of steady progress.

Looking to the future, the UK took an active part in negotiations on the ILO’s centenary declaration on the future of work, which sets out its priorities going forward, in the context of the changing world of work. It is right that we look at the future of work, as touched on by the noble Baroness, Lady Lane-Fox, the noble Lord, Lord Whitty, and others. The changes in technology and culture that we face are already transforming workplaces. That is why, some years ago, my right honourable friend the Prime Minister commissioned Matthew Taylor’s independent review of employment practices. In response to the review’s findings, we are delivering the biggest improvement in UK workers’ rights for 20 years, including ensuring that agency workers are not paid less than permanent staff, improving the enforcement of holiday pay and quadrupling the fines for employers who break the rules.

The noble Lord, Lord Adonis, quite rightly pressed me on the question of enforcement of labour standards. We recognise the importance of that, which is why we have increased resources for enforcement over recent years. Today, we spend some £33 million on enforcing the national minimum wage, regulating employment agencies, licensing to supply temporary labour in high-risk sectors, and pressing down on exploitation and modern slavery. I assure the noble Lord that we have committed to do more, including extending state enforcement of holiday pay for vulnerable workers and regulating umbrella companies. We are committed to providing adequate funding for enforcement. We understand the importance of that, although the noble Lord will have to wait for the spending review. We will also consider the need for a single enforcement body.

That brings me to the national minimum wage. It was introduced by the party opposite when it was in government and was improved by the coalition Government and this Government. With the national minimum wage, we are delivering an increase in average earnings of some £690 for a full-time worker, and some 1.8 million workers are expected to benefit from that in due course. There are changes: they are happening and we want to press on with them.

The future of work means that it is important that we invest today in the skills that our people will need for the future. In England, we have created millions of new, high-quality apprenticeships for school leavers and are launching new advanced technical qualifications for young people.

I am pleased that the Government were successful in ensuring that UK priorities, such as the eradication of modern slavery and creating more good jobs worldwide, were reflected in the ILO centenary declaration.

Before I turn to the future of trade unions and wider industry representation, it is important that I say a few words on the important role that trade unions can play in our economy and society. Trade unions have always represented their members and lobbied for wider changes in society. They have campaigned on issues such as modern slavery, tackling child poverty and equality for all. Over the past century, they have improved the working lives of their members, and long may this continue. I shall follow what the noble Lords, Lord Goddard and Lord McKenzie, said about health and safety in the workplace. Throughout the country, trade union health and safety representatives have made our workplaces safer. This has benefitted workers and the United Kingdom economy by reducing the number of accidents in the workplace. We now have an enviable safety record, of which we should all be proud. I thank the unions for their involvement in achieving that and I particularly pay tribute to the noble Lord, Lord Jordan, for his tireless work on safety issues.

Unions have played a large part in developing the skills of their members and those working in industry. Through Unionlearn, there are some 600 union learning centres, where trade union representatives help those with low literacy and numeracy. Unionlearn projects have also helped to recruit and support thousands of apprentices.

Obviously, the issue goes far wider. The noble Baroness, Lady Lane-Fox, spoke about the importance of addressing the skills we are lacking in the new digital era in which we live. I assure her that within government we are providing additional investment, particularly in maths and digital and technical education. We are providing more money and a new national training scheme to support people to reskill and move on. This is an area where we want to work closely with the TUC. I assure the noble Lord, Lord Murphy, that we will continue to have that close relationship with the TUC and will work with it, not just in training but in all matters, and listen to its advice and that of the wider union movement on a range of issues.

Although there have been and will continue to be disagreements, to go back to the Matthew Taylor review, I believe that the TUC has played a key role in helping us shape our good work plan. I hope it will continue to play a role as we bring it forward and bring parts of it into play.

[Lord Lea of Crondall]

Does the Minister not acknowledge that I made a highly pertinent point—namely, that the future stakeholder model of the company is an alternative to the idea that a company is only the shareholders and that the workers are not members of the company? This debate is huge, and we must have it. Is the Minister not ready to say anything about that at the moment? It is absolutely central to the role of workers’ representatives in the future of the company.

[Lord Henley]

Dare I say to the noble Lord that I was in only the 13th minute of my speech; I think that I have 20 minutes. He was being a bit premature if he was asking whether I was going to sit down. I have a large bundle of answers for the noble Lord; I will try to get on to them but he will understand that I also want to respond to a number of other speakers. I might have to write to him, but I was not about to sit down. It might be that the rest of the House wanted me to but that is another matter.

I want to move on and say a word or two about the legislative position. First, the noble Lord, Lord Monks, and the noble Baroness, Lady Prosser, mentioned the Trade Union Act. I do not believe that it is about attacking workers’ rights or preventing strike action; that Act is about making sure that industrial action is taken only where there is clear support for it among union members. It therefore modernises the United Kingdom’s industrial relations framework to support better the effective approach to resolving industrial disputes.

For that reason, I want to say a word or two to my noble friend Lord Balfe about the e-balloting proposals and provide him with an assurance, since he put it to me and, indirectly, to my noble friend Lady Neville-Rolfe that they had been forgotten about. Recently, we held round-table discussions with experts, organisations and professionals—the TUC was also invited to the meeting—to discuss that matter further. We will reflect further on Sir Ken Knight’s recommendations and, again, once we have consulted the trade unions, we will issue a response in—dare I say it—due course.

We have heard many views on the future of trade unions and wider industry representation. We have also heard suggestions of what more the Government can do. I think it would be helpful if I set out our legislative position at the moment. Workers have the right to join a trade union; that right is protected under our trade union law. All union members have the right to participate in union activities; that includes members who are union officials. The right to be active in the affairs of a trade union is enhanced where the union is an independent trade union that has been recognised by the employer for collective bargaining purposes. Officials of such a union may seek time off work with pay to discharge certain union duties. Individual workers can enforce these rights at an employment tribunal. In effect, these rights amount to a right for the union, through its individual members and officials, to recruit and organise in the workplace.

Furthermore, I should add that the United Kingdom Government take the view that they should adopt a voluntarist approach to collective issues. Collective bargaining is largely a matter for individual employers, their employees and their trade unions. Most collective bargaining in this country takes place because employers have voluntarily agreed to recognise a trade union and to bargain with it. The Government do not believe that we should be in the business of forcing employers or their workers to enter into collective bargaining arrangements if they do not wish to do so. Instead, we prefer a voluntarist and democratic approach. However, where an employer refuses to recognise a trade union voluntarily, our legislation provides for a statutory recognition procedure. Unions that wish to obtain statutory recognition can apply to the Central Arbitration Committee, which has dealt with over 1,000 cases since the statutory procedure was brought in in 1999. My key point is that, if a majority of workers in a workplace want to organise and be represented by a trade union, they have the right, and the practical means, to secure trade union recognition. That is why the Government do not believe that primary legislation needs to change in this area at the moment.

As many noble Lords made clear, our economy and society are constantly changing, and unions need to adapt to maintain their relevance. The noble Lord, Lord Parekh, asked what trade unions were for. By taking the right approach, by following the TUC’s constructive engagement with employers and government, I have every confidence that the trade union movement can rise to this challenge. If unions can take this approach, I am sure that we will be celebrating their influence for another century to come.

Electricity Capacity (No. 2) Regulations 2019

Lord Henley Excerpts

Wednesday 17th July 2019 Lords Chamber

Moved by

[Lord Henley]

That the draft Regulations laid before the House on 5 June be approved.

Relevant document: 53rd Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, the capacity market is a key element of the Government’s strategy for maintaining the security of electricity supplies in Great Britain. This instrument will help maintain a strong security-of-supply position into the future. The capacity market secures the capacity required in Great Britain during periods of peak demand through competitive, technology-neutral auctions normally held four years and one year ahead of delivery. These are known as T-4 and T-1 auctions. Those who win capacity agreements—known as capacity providers—commit to providing capacity during periods of system stress in exchange for receiving capacity payments.

I will briefly provide some context before expanding on the provisions of this draft instrument. On 15 November 2018, the General Court of the Court of Justice of the European Union annulled the European Commission’s state aid approval for GB’s capacity market, introducing a “standstill period” until the scheme can be reapproved. The judgment means that the UK Government are not able to award capacity agreements or make capacity payments unless and until state aid approval is obtained. The Commission is currently conducting a state aid investigation for the capacity market, and we are working with it to ensure it can reapprove the scheme as quickly as possible.

We have taken steps, through an earlier instrument—the Electricity Capacity (No. 1) Regulations 2019—and associated changes to the capacity market rules, to maintain the operation of the capacity market, to the extent possible, while state aid approval is obtained. The steps we have taken to put in place these interim arrangements are currently subject to judicial review proceedings, which we are robustly defending. The House of Lords Secondary Legislation Scrutiny Committee has highlighted the continuing uncertainty for the capacity market resulting from these judicial review proceedings and from the Commission’s state aid investigation.

This second instrument put before the House today focuses on future auctions, which will not proceed unless and until the capacity market has state aid approval. This means the instrument is unlikely to be impacted by the judicial review. First, the instrument makes changes to enable the T-4 auction for the 2022-23 delivery year, which was postponed following the state aid judgment, to be replaced by a one-off T-3 auction. It will only be held if state aid approval has been received and would be held in early 2020. Secondly, this instrument makes changes to remove or reduce what might otherwise be unnecessary burdens on business in relation to credit cover.

Applicants seeking to enter certain types of capacity market unit—for example, those that are unproven or not yet constructed—into a capacity auction are required to provide and maintain credit cover. The instrument adjusts the credit cover requirements for a CMU entered into both the upcoming T-3 and T-4 auctions, to enable the credit cover obligations for both auctions to be satisfied jointly rather than separately.

It also extends the existing suspension of credit cover obligations, provided for by the Electricity Capacity (No. 1) Regulations 2019, to the three upcoming capacity auctions likely to take place in 2020. It makes changes to ensure that when the suspension of credit cover is lifted, following state aid reapproval, existing exceptions to credit cover requirements still operate as intended. Finally, the instrument makes changes to support the participation of certain unsubsidised renewable technologies in future auctions.

The capacity market was always intended to include all unsubsidised technologies. Some types of renewable technology, such as biomass, have always been able to participate provided they are not receiving other specified low-carbon subsidies. However, when the capacity market was conceived, wind and solar required subsidy, so were not included in its technical rules. With unsubsidised renewables now a prospect, the capacity market rules have recently been amended to allow wind and solar to participate.

This instrument supports this change by requiring state support for new-build renewable CMUs, which has been declared under the rules to be deducted or repaid from capacity payments. This enables renewable technologies in receipt of subsidies—other than those which exclude them from the scheme entirely—to participate without cumulation of state aid received through the capacity market and other schemes. Alongside these regulations, we have also laid complementary amendments to the capacity market rules, which govern the technical and administrative procedures relating to capacity market operation.

These regulations are necessary to ensure the smooth running of the capacity market in the period after state aid approval is received, and to broaden the participation of renewable technologies. I commend the draft regulations to the House.

[Lord Stunell (LD)]

My Lords, I will ask the Minister some questions, and I express some surprise that, in his presentation to the House, he did not mention demand-side response, which was the subject of an intervention I made on a previous occasion, and the reason why the state aid ruling was made by the European court. As it is absolutely at the centre of the reason why this matter has not been settled and the UK Government’s proposals were rejected, the Minister owes the House a little more detail about that, particularly because, as I understand it—he made the point himself—all the paperwork in front of us today is conditional on implementation on receiving state aid approval from the EU. At the moment, that is still outstanding.

That arose from an action taken at the European Court back in 2015 by a small company called Tempus Energy, which claimed that the system was discriminatory against those who sought to reduce electricity consumption as opposed to increase electricity generation. The outcome of that was that its claim led to the UK’s scheme being sent back for a rethink.

The way it is supposed to work is that firms bid into the auction at the price they need, either to keep existing plants open to generate electricity or to create new capacity from scratch. It does not deal adequately with the situation of companies which have come forward with a commercial proposition that they will reduce overall electricity consumption. That is surprising because, in fact, overall electricity consumption is falling, not rising. The Government itself recently took account of that, having for a long time somewhat denied the relevance of it to the whole question.

Having said all that, it is surprising that the Minister has not referred to the ECJ judgment, in particular to paragraphs 203 to 207 of it, and paragraphs 27(e) and 69 of the official guidance put in support of that judgment. Has the Minister read those paragraphs, and if he has, does he think that the plain and ordinary meaning of them could in any way be construed as a simple technical reprise as opposed to an outright rejection? How certain is he that the judgment of the European Court was not, as the Minister in the House of Commons alleged it to be,

“a challenge to the nature of the UK capacity market mechanism itself”?—[Official Report, Commons, 19/11/18; col. 1090WS.]

It seems that it is not very easy to make that stand up, and as regards our taking a decision today, it needs at least a little amplification and clarification.

The allegation put to the European Court was that our UK system was discriminating against those who had a commercial appetite to reduce electricity consumption as opposed to having proposals to provide generation. I hope the Minister will say that is not true and contradict the advice I have been given that, the way the system is designed at the moment, those who want to reduce consumption—the capacity supply industry—have to make sure they have a payback period in 12 months, whereas those on the demand side are given 15 years. That inequality is leading to discrimination, which means that DSR is extremely difficult to bring within the scope of the support that these regulations are intended to provide.

I hope the Minister will be able to give us some reassurances about the amount he has read and the legal interpretation of it he has, as well as something about demand-side response and getting that playing field level for all those who want to contribute to carbon reduction in the UK via the electricity market.

--- Later in debate ---

[Lord Grantchester (Lab)]

I thank the Minister for his explanation of the regulations before the House this evening. As he stated, they follow up on the Government’s Electricity Capacity (No. 1) Regulations 2019 passed in April. That brought forward modifications to the capacity market that would operate during the standstill period following the legal challenges to the state aid provisions. These were made on the assumption that the Commission’s and the Government’s positions were indeed correct and lawful.

These regulations continue on that assumption and reintroduce T-3 auctions to take the place of the consequentially delayed T-4 auctions, which will now take place in 2020, after which the outcomes and judgments will be known. In response to questions from your Lordships’ Secondary Legislation Scrutiny Committee’s 53rd report, the Minister’s department replied that the Commission’s investigation is expected to conclude before this winter and that delay into 2020 is very improbable, and that on the judicial review, the UK court hearing is most likely to take place in October. These auctions will not be taking place under any scenario other than a status quo achievement for the Government.

Bearing in mind that the UK’s state aid rules under the authority of the CMA will not diverge from the EU state aid rules in either a deal or a no-deal scenario, the Minister is suddenly in a strong position to declare that nothing has changed. But of course, nothing can be taken with any great certainty. That was the position in the debate on the earlier regulations. The circumstances of the T-3 auction do not differ from that position at all. It is a provisional auction in the sense that whatever is collected or potentially disbursed will be held until the EU study of its processes for defying adherence to state aid is published.

The concerns that were voiced around the House on April’s regulations are still valid as there has been no further consideration of the fact that the court judgment was not merely a matter of process on state aid but included factors relating to demand-side management in the capacity auctions. It is not a foregone conclusion that business will continue as usual. The noble Lord, Lord Stunell, reminded the House of that tonight.

In response to questions regarding the department’s plan B on an adverse judgment, the Government’s reply will be that they will make necessary adjustments. But what is the department’s timing on publishing its five-year review of the capacity market under the Energy Act 2013? Will that be before any judgment, such that the review may need to be withdrawn subsequently? Is the review now ready, after the Minister in the other place stated that the Government’s intention was to publish this summer? As the capacity market is still in the same position as last April, and the UK has an 11% margin in supply, I repeat: what is the rush?

In saying that, I repeat that I appreciate that the continuity and consistency of the capacity market is important to industry, and Labour would not wish to undermine either the security of electricity supplies or industry confidence in the capacity market as an investable mechanism to drive through change, bring about cost savings and value for money.

However, in one respect, the T-3 auction proposed under this order would help clarify the trend in clearance prices. In February 2017, the T-4 auction cleared at £22.50 per kilowatt. In February 2018, the T-4 auction cleared at £8.40 per kilowatt, and the latest auction in December 2018—admittedly the T-1 auction following the court hearings—cleared at a mere 0.4p per kilowatt. Ministers have repeatedly stated that having an 11% margin on supply was an indication that the capacity market was working well. What does the Minister expect the results to be for these forthcoming auctions? Does the latest price indicate that the capacity market is not needed, that there is ample capacity and that payments will be virtually nil for standing by to supply into the market? I echo the remarks of the noble Lord, Lord Teverson, about storage, and other aspects.

Labour does not oppose this order. It is important that the current chaos in the capacity market is resolved as much and as soon as possible. The regulations, although provisional, will stabilise the market, and judicial resolutions to the situation should be forthcoming shortly. Nevertheless, some serious probing is needed with regard to the future direction of policy in the capacity market.

Questions around the future of the capacity market are highlighted by the inclusion of subsidy-free renewable technologies to bid into the capacity market through this order. The capacity market was introduced to enable the energy market to transform from one based on fossil fuels to one based on new low-carbon technologies, while maintaining security of supply.

The Minister may say that it was always anticipated that the capacity market framework would allow the participation of renewable technologies at some point, so he is now confirming that this is that point. Despite any margin of supply, does the Minister expect that the capacity market will be a permanent feature? Can he clarify the difference under paragraph 7.14 of the Explanatory Memorandum whereby some renewables are excluded should they receive support from contracts for difference, the renewables obligation or the feed-in tariffs, whereas other participants receiving other forms of support can have their capacity payments adjusted to reflect other state support payments? Paragraph 7.15 states that regulation 49A of the principal regulations for low-carbon generation support is amended to allow this change.

The Minister in the other place stated on this point that onshore wind, offshore wind and solar technologies will now be able to participate, and the noble Lord the Minister has repeated that. Now that the Government believe that the capacity market is the right mechanism for achieving security of supply at the lowest cost to consumers, can he now give a further update on the position of onshore wind? As it is the cheapest source of low-carbon energy, is it now a hollow achievement for it to be allowed to bid into the capacity market when it is banned from obtaining planning permission? Can the Minister now publicly endorse that onshore wind will be allowed to bid into the CfD framework on an equal basis?

In the report Quantifying Benefits of Onshore Wind to the UK, published yesterday by Vivid Economics—a group that does scenario modelling for the Treasury—it was stated that UK customers could achieve a £50 annual saving to their bills through onshore wind being made available. Will the Minister give his assessment of this report and indicate when onshore wind may participate in the UK’s energy market?

Finally, under paragraph 7.18 of the Explanatory Memorandum, it states that other technical issues have been addressed in this order. They do not seem to be material, but nevertheless I would be grateful if the Minister could write to me with an indication of which have now been improved. With the misgivings stated, I can approve the order before the House tonight.

[Lord Henley]

My Lords, I am grateful to all three noble Lords for their interventions and I will try to deal with as many of the questions as possible. I believe I have a certain amount of time in which to respond. I am not quite clear when the usual channels want to return to other matters but I imagine that, whenever it is, it should be seen as a limit rather than a target. Therefore, I will try to keep my responses as brief as possible, and there are possibly one or two that I hope noble Lords will accept in writing. I am thinking particularly of the last point on the Explanatory Memorandum made by the noble Lord, Lord Grantchester.

I think we are all, to some extent, singing from the same song sheet in that we all have the same clear aim of wanting to head in the direction of getting to zero carbon by 2050, as we made clear in our recent announcement. It might be that others feel that it can be done quicker or in different ways, but we are all trying to do the same thing and to see that we achieve increasing amounts of electricity generation by low-carbon means. As noble Lords will be aware, we have achieved a great deal—consumption is down to something of the order of 5% coming from carbon.

We also believe that the capacity market is the right mechanism for delivering security of supply at the lowest cost to consumers. I will write to the noble Lord, Lord Teverson, who asked for detailed figures on the overall costs of that over the years. The noble Lord, Lord Grantchester, asked whether we could speculate about future auctions in the light of the continuously lower prices achieved at repeated auctions. Obviously, it would be wrong for me to speculate in any way about what price might be obtained—that is not what one does in advance of an auction—but it is encouraging that the price has come down. We still believe that that process is necessary and the right way to deal with these matters.

The noble Lord, Lord Grantchester, also asked about the five-year review. I can tell him that it will be published soon. I cannot give him a precise date at this stage but I will say “soon”, “shortly” or something of that sort. However, it is certainly on its way and I very much hope that we can look at it in more detail in due course.

I turn now to the points raised by the noble Lord, Lord Stunell, particularly about the judgment of the European court and the decisions by the Commission. He said that the judgment was more than just procedural. The court identified elements of the capacity market which should have given the Commission doubts about whether the scheme was compatible with state aid requirements. That meant that the Commission should have conducted an in-depth investigation before deciding whether to approve the scheme. Importantly, however, the court did not rule that the design of the capacity market was incompatible with state aid requirements or direct that changes be made to the mechanism. We have carefully considered the matter. When I say “we”, I mean department officials and my right honourable friend the Minister for Energy. I cannot confess that I have read the detailed paragraphs that the noble Lord referred me to, but we have carefully considered each of the issues raised in the court judgments, and we remain confident that the design of the capacity market is compatible with the state aid requirements, including in the way the system is designed in respect of demand-side response.

--- Later in debate ---

[Lord Teverson]

I understand entirely the argument that a number of years are required for physical capacity to build what was originally the coalition Government’s hope that gas would come online. But what I do not understand is this: by having that exclusively for supply side, a whole area of the capacity market is denied by demand response. By the time you come around to the short-term one-year deals, where demand response can come in, you have already filled a major proportion of the capacity market. It therefore discriminates against that sector—or do I completely misunderstand this?

[Lord Henley]

I might have to write in greater detail, but both T-1 and T-4—the short term and longer term—deal with the point about discrimination. I might be wrong, but I will think about that and come back to the noble Lord.

[Lord Stunell]

I am sure that the Minister is aware that for the cost of a gigawatt of generation capacity, you could have a great deal more demand reduction capacity, but only if the right trading environment is in place. If I can offer support to my noble colleague on the Front Bench, it does mean that by the time you have built the generating capacity, the case for the demand-side reduction shrinks. The noble Lord’s argument that six months was therefore justified in the one case, and 15 years was necessary in the other, is precisely the point that the European Court of Justice felt was evidence that the European Commission had not looked thoroughly enough at the UK Government’s scheme. I would have expected him to be saying that this aspect had been reviewed in bringing forward alternative regulations to the House.

[Lord Henley]

Again, it might be better if I write to the noble Lord on that point. He is aware that the Commission—which we support on this—is not happy with that judgment. It needs to be looked at and, as I made clear earlier, we are working with the Commission to ensure that it has everything it needs to continue considering that wider state aid approval for the regime as quickly as possible. I will write to both noble Lords on that point. I made it clear to the noble Lord, Lord Teverson, that I will also write with a more detailed letter on the cost of capacity auctions and the amount of capacity that has been used in the past.

The noble Lord, Lord Teverson, also asked about storage. Both he and I have stressed on other occasions that we see storage playing a great role in the world of energy in the future. I can give an assurance that storage is able to compete in the capacity auctions and has been able to since the outset. I have dealt with the question from the noble Lord, Lord Grantchester, about when we will publish the five-year review; as I said, we hope to do so shortly. That will not be the end of the process, which will identify areas of the capacity market’s design where further amendments may be necessary.

The noble Lord, Lord Grantchester, also asked about support under some schemes preventing renewables participating in the capacity market altogether, where other schemes simply deduct from the capacity market payments. It remains appropriate to exclude CMUs which benefit from contracts for difference, the renewables obligation and feed-in tariff payments, as those are the most likely and significant alternative support for CMUs participating in the capacity market. That prevents the accumulation of state aid. Less significant forms of support do not exclude renewable CMUs from the capacity market. Instead, the rules require new-build wind and solar generation to declare this support, so that it can be deducted from capacity payments. What a capacity provider is authorised to receive under state aid, in addition to its capacity payments, does not need to be declared or deducted.

I turn to a matter rather beyond this debate: our general policy on onshore wind. I can tell both noble Lords who raised the subject that I know of no plans to change that policy. We have seen great improvements in offshore wind, which has the great benefit over onshore wind of being in windier, flatter places where it is possible to build even bigger windmills than are possible on land, as I think even the noble Lord would agree. I therefore cannot offer him any hope that our policy is about to change on that.

Lastly, the noble Lord asked about the energy Green Paper, which we still hope to publish before we break for the summer. He will have to be patient for only another four or five days.

I have dealt with most of the points raised and offered to write on others. I beg to move.

Motion agreed.

Space Science and Technology

Lord Henley Excerpts

Monday 15th July 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, like virtually all other noble Lords —I exclude the noble Lords, Lord McNicol and Lord Ravensdale—I too can remember the grainy pictures on television 50 years ago of the landing on the moon in 1969. I am probably exactly the same age as the noble Lord, Lord Mawson—but it is not unusual in this House for our minds to go back that far.

I begin by joining the noble Lord, Lord McNally, in paying tribute to the noble Lord, Lord Mawson, for giving this boost to the People’s Moon project. Like the noble Lord, Lord McNally, I hope that it gets reasonable coverage because, although we in government recognise the important role that space can play in our economy, security and environment, also important is its unique potential to inspire the next generation. I was grateful for what the noble Lord, Lord Mawson, said about that—the need to get into schools and the work that he is doing on that front. If the Government can help in one department or another, my door is open; he can come to me and we will see just what is possible.

So soon after the debates on net zero, it was also useful for the noble Baroness, Lady Boycott, and my noble friend Lady Nicholson—and I think the noble Lord, Lord McNally, as well—to mention the impact of those photographs of Apollo 8 six months earlier, and just how suddenly and completely they changed our view of the world we live in. Again, I remember those photographs as they appeared in the newspapers at the time.

It is right that we mark the 50th anniversary. It was a truly historic moment in human history, and we should also use this moment—I believe this debate will help do so—to celebrate the United Kingdom’s growing space sector while looking into the future. I hope to say a little about that.

In the 1960s, the space race was fought between two superpowers, the United States and the Soviet Union. Since then, there has been a remarkable growth in the number of spacefaring nations—I forget how many mentions I have seen in the press over the past two days of missions from India, China, Israel and so on—and an unprecedented level of international co-operation on projects such as the European Space Agency. I can give a commitment that we will continue to be a member of that because, as the noble Lord, Lord McNicol, said, it has nothing to do with our withdrawal from the European Union.

When many of us think about space exploration, we see those early pictures of Neil Armstrong and Buzz Aldrin taking those first steps on the moon—but it is also important to remember President Kennedy and his remarkable speech some seven years earlier in 1962 in Houston, when he set America on its path to the moon. He said:

“We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills”.


I believe that the resulting Apollo programme was indicative of what a Government can do and how quickly they can do it. It also shows what citizens can achieve when they put their mind to it. However, as other noble Lords reminded us, it should also be remembered that it is not only hard but very expensive. Both the noble Lords, Lord Mawson and Lord Rees, reminded us that, at the height of Apollo, 4% of federal government spending went into the NASA budget. As a result, in seven years they achieved what they did. One might pause and think just how long it is taking us to sort out this Palace—but that is possibly not the proper thing to say at this stage.

While we recognise the achievements of the past, we should also look to the future, where the United Kingdom aims to play a leading part. The noble Baroness, Lady Walmsley, kindly said that we were doing well—but, as always, she then said that we could do better. The space sector is a success story. It generates an income of £14.8 billion, employs 42,000 people across the country and supports a further £300 billion of economic activity through the use of satellite services. But she was right to draw attention to the need to do more. I can confirm that we are involved in programmes dealing with debris removal and that we are committed to the Sutherland spaceport in Scotland and will continue to be so whatever happens. Scotland is the best place in the UK for vertical rocket launch. We are in regular discussions with the Scottish Government about development of spaceports.

The UK is also a world leader in space science—in designing, developing and operating spacecraft in the most challenging environments imaginable and returning data and observations. We are working closely with industry and, I want to emphasise, our world-class university sector, which both help to grow the UK space sector further as part of our modern industrial strategy, referred to by the noble Baroness, Lady Walmsley.

I have mentioned this to the House before, but I will mention again that I saw for myself the results of some of that work when I visited a company designing, building and exploiting the data from microsatellites in Glasgow. The noble Baroness talked about the strength of Glasgow in that field. Why does a company that comes from the west coast of America want to build satellites in Glasgow? The simple fact is that the expertise and the universities are there and it is a jolly good place to work. We should be proud of that.

The UK Space Agency also delivers a space science and space exploration programme through the European Space Agency and in partnership with other agencies around the world, funding cutting-edge technologies and inspiring the next generation of scientists and engineers.

I was grateful for the reminder from the real expert in this debate; the noble Lord, Lord Rees. There is a range of different experts in this debate, but I think that the noble Lord is the one with the most pertinent expertise. He reminded us of our expertise and that of the European Space Agency in unmanned flight. There is a real opportunity for the UK space sector to strengthen its international relationships and enhance bilateral opportunities while continuing to collaborate with our close partners across Europe. My honourable friend the Science Minister will be speaking more about this tomorrow at the Policy Exchange, including about our plans to increase collaboration with NASA as we approach the moon landing anniversary.

I will mention public engagement and the Apollo 11 anniversary, because the noble Lord, Lord Mawson, asked how we would celebrate that anniversary. We have conducted a crowd-sourced history campaign, capturing the memories of those who are old enough to remember 1969—unlike the noble Lord, Lord McNicol —when humans first walked on the moon. The UK Space Agency and the Arts and Humanities Research Council will publish a collection of those memories later this week, which will include newly unearthed photographs and stories that highlight the lasting legacy of Apollo. The Government have also supported a series of outreach activities to engage the next generation in space.

My honourable friend the Minister for Universities, Science, Research and Innovation recently attended the launch of the Science Museum’s Summer of Space activities, which included two new exhibits: the Apollo 10 command module which orbited the moon on the final test mission before the Apollo 11 landing and Tim Peake’s Soyuz spacecraft which safely returned Tim and other astronauts to earth in 2016 following their stay in the International Space Station. I believe that making use of those opportunities is a good way of marking the historic anniversary and I can think of no better way for Members of this House to mark it than by visiting the museum and seeing those historic artefacts which are a physical reminder of the extraordinary feats of space exploration and, as is clear from noble Lords’ memories of just how crude the equipment was, the bravery of those astronauts and the ingenuity of the scientists and engineers who supported them on their missions.

I conclude by stating that the Government recognise the historic and scientific significance of the Apollo 11 landing and the potential that space has to improve our life on earth. We are seeing rapid growth in the UK space industry and will continue to support it through the industrial strategy, which includes a programme to establish small satellite launch capability from UK soil as well as investments in new space infrastructure such as the National Satellite Test Facility at Harwell. Last week the Government also announced a £40 million investment in Space Park Leicester through the UK research partnership investment fund, leveraging further private investment. Again, I note what the noble Lord, Lord Rees, said about the need for private investment in this field, and further public investment by the likes of Lockheed, Amazon and others.

As I said, we will also continue to be a member of the European Space Agency once we leave the European Union and we will work with other partners as part of humanity’s efforts to explore the final frontier while engaging the public in our efforts to help the UK lead the new space age.

Economic Environment: Growth and Jobs

Lord Henley Excerpts

Thursday 11th July 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, I will not follow the noble Lord on that point but I will pick up on his opening remarks, in which, in paying tribute to my noble friend for getting this debate together, he said that it reveals the complexity of the issues. I make that point because it would be rash of me to try to answer every single point that has been made. On some of the more detailed points, it might be helpful if I write to noble Lords. However, the idea that a subject of this sort could be wound up in a 20-minute speech defies belief.

Having said that, like the noble Lord, Lord Stevenson, I offer my congratulations to my noble friend Lady Neville-Rolfe on bringing forward this debate. It has been a very useful process to go through. She has attracted a very distinguished cast of speakers, all of whom have a great deal of experience in the world of business and beyond. One is my noble friend Lady O’Cathain, a fellow director of Tesco. I do not know whether we now refer to “buy one, get one free” but to have two in this debate is a great success.

I was deeply heartened by the comments of my noble friend Lady O’Cathain about the need for, and importance of, confidence in this field. I echo what she said and remind the House and the country about our successes in education. She mentioned the successes of our universities and the number of top, world-class universities in this country. The part of the industrial strategy with which I am most familiar is the one that deals with life sciences, and I look at the expertise in our universities up and down the country and at the small start-ups in science and technology that spin out from them. I appreciate that concerns have been expressed about those start-ups scaling up to big businesses, but that is happening in some cases. However, that area has had enormous success, as we constantly need to be reminded.

I am constrained in what I can say to my noble friends and others in this debate. The obvious constraints have been referred to, including that of timing, in that it looks as though we will have a new Prime Minister and possibly a new Chancellor and other new Ministers in the next few weeks. There is obviously also the constraint on a House of Lords Minister in BEIS when it comes to suggestions about reducing taxes. My noble friends Lord Popat and Lord Suri both said that they would like to see a major reduction in corporation tax. My noble friend Lord Popat looked at the removal of employers’ national insurance contributions—a tax on employing people. I would love to stand here as Chancellor, possibly sipping my whisky, and say, “That will be done”, but noble Lords know that that is not possible. However, I assure both my noble friends and others who made remarks of that sort that these matters will be passed on to the appropriate Ministers at the appropriate time.

The noble Lord, Lord Stevenson, emphasised the wide-ranging nature of this debate and the fact that we have covered issues relating to immigration and visas, Treasury matters, BEIS matters and the importance of education and training, planning and infrastructure. We have ranged wide, but it is important to go back to the fundamentals as set out by my noble friend. She said that businesses produce the wealth on which we depend. They are fundamental to our prosperity and to the industrial strategy, and I am very grateful for everything that my noble friend Lady Fairhead said about that. It prioritises facilitating the conditions for businesses to flourish. The tax framework can also be a powerful enabler for business in the growth and creation of good jobs.

A point made again and again—I will repeat it to remind the noble Baroness, Lady Kramer, although she accepted it—was that businesses pay the taxes that fund our public services. Public services are important but they need funding. Businesses also create the solutions to meet consumer needs. They bring prosperity and livelihoods to local communities up and down the country. I am grateful to my noble friend Lord Popat for emphasising that unemployment is at a record low in the UK. That is down to businesses doing what they do best: creating jobs and bringing prosperity to our country. I remind the House that not only is unemployment at a record low but employment among men and women, disabled people and others—the figures were quoted by my noble friend Lord Popat—is at a record high.

Businesses are the engine of our economy. The industrial strategy is precisely about backing businesses so that they can help to boost productivity—I will have a little more to say about productivity problems later—and create high-quality, well-paid jobs throughout the United Kingdom, with appropriate investment in skills, industries and infrastructure. To put it another way, the industrial strategy is how we are creating an economy that works for everyone: businesses and people who are highly innovative, highly skilled and of high quality, supported by low and stable taxation and smart regulation.

Our aim, as has been made clear by my right honourable friend the Secretary of State, is to make the United Kingdom the best place to start and grow a business. A number of noble Lords quoted the figures to show how we are rated in that respect. We are starting from a good base. Our business environment is internationally recognised as first class, robust and reliable. The World Bank and the OECD consistently rate the UK as being among the best places in the world for business.

Our stable, predictable and competitive tax regime and the strength of our legal, competition and regulatory systems have made the United Kingdom one of the world’s foremost financial centres and the home to some of the biggest and most respected businesses. International investors choose the UK because they know that our business environment is a fair and dependable foundation for growth and prosperity.

However, I understand that there are concerns about the tax framework, and my noble friend Lady Neville-Rolfe focused on that. As she put it, it is creaking under the weight of its complexity, with a doubling of the size of the tax code since 2009. We are committed to seeking a balance between a tax system that is easy to comply with and one that prevents avoidance and evasion. Since 2010, we have established the Office of Tax Simplification, as well as an independent advisory office in the Treasury. It offers valuable advice on ways of simplifying the tax system, which the Chancellor takes into account.

The framework is an important lever in any economic strategy. Our low-tax system, I believe, generates the incentive for firms to invest, start up, grow, hire new employees and provide benefits to their community and shareholders. I believe also that low corporation tax increases the returns that companies receive on their investments, allowing them to increase investment, lower prices, hire staff and increase wages. I say to the noble Viscount, Lord Chandos, and the noble Baroness, Lady Kramer, that reducing corporation tax has—as my noble friend Lady Neville-Rolfe made clear—increased the take. She cited the Laffer curve. Where the curve ends is a matter for judgment, but certainly that has had an effect. We believe that getting tax right is very important. It is about creating wealth across the country while striking the right balance. It is not about big or small businesses paying nothing and reaping rewards. I say to my noble friend Lord Leigh at this point that, when we leave the EU, we will obviously have even greater freedom to look at things as he suggested, and those opportunities should be taken up.

I accept all the points made by my noble friend Lord Cavendish about small businesses, and by all noble Lords about rates; we have to look very carefully at levels of taxation, how they work and how we get it right to ensure a degree of fairness between different businesses. A number of noble Lords talked about competition between the high street retail sector and the online sector and the need to make this fair. We want a system that provides funding and allows businesses to flourish. Businesses will then benefit from the Government’s investments in infrastructure and the standards of education to which I referred. We need to ensure that businesses are paying their fair share, helping to improve the wider public perception of tax equity and building a sense that we are all contributing to our shared prosperity.

I will say a little about innovation and regulation, which were rightly raised by the noble Viscount, Lord Chandos, my noble friend Lord Cavendish, the noble Lord, Lord Stevenson, and the noble Baroness, Lady Kramer. We are in a changing world. When I speak outside the House on the subject of regulation, I often start with the example of how we got it wrong 150 years or so ago with the introduction of the automobile, when we put a man with a red flag in front of the car. It was obviously not the brightest way of getting the automobile working and did not help particularly with safety—it may be that the Liberal Democrats have a new policy and would like to have a man walking in front of a car with a red flag to reduce emissions, but that is another matter.

Getting regulation right for the new world that we live in—for the fourth industrial revolution—will be crucial. That is why we launched our White Paper on regulation for the fourth industrial revolution—I hope that noble Lords will read it—which sets out the reforms needed to ensure an agile and flexible approach to regulation to embrace the technological changes that we face. The changes are moving very fast and will be difficult to predict. Our new approach to regulation will, I hope, support business to innovate and invest in the UK and give people faster access to new products and services that can transform their lives.

I always wish to give an optimistic, positive view of the state of the economy, but it is also right, as my right honourable friend made clear when he introduced the industrial strategy some 18 months ago, that we “fess up”, as it were, to the weaknesses as we see them. I am grateful to my noble friend Lady Neville-Rolfe for underlining the fact that we have a problem with low business productivity. We have some of the most productive businesses in the world—we do have successes—but we also have a long tail of less productive businesses across a broad range of sectors, all over the United Kingdom. Our review of business productivity showed that firm management matters enormously and that, on average, our managers are less proficient than those in comparable economies. United Kingdom businesses do not always adopt best-practice management techniques and technologies. The reasons are as varied as our businesses, but there is strong evidence that businesses do not always know what is possible, how to find help, or how new technology can benefit them. Again, we believe that the industrial strategy has addressed this and will continue to do so as we work through it.

As I said at the beginning, I want to cover a number of other issues, but I am not sure that I will be able to deal with all of them. However, I will say a quick word about the apprenticeship levy, which was raised by my noble friend Lady Neville-Rolfe. We need, now and in the future, to ensure that we have the right skills in the system. Our ambition is to increase the quantity and quality of apprenticeships to enable businesses to meet their skills need. We are monitoring the impact of the levy and will continue to work with employers on how it can be spent effectively and flexibly. In the last Budget, as noble Lords will remember, the Chancellor announced changes to ensure that it works for business, and we will continue to keep that under review.

Finally, I turn quickly to a point made by the noble Lord, Lord St. John of Bletso, about the need for diversity in entrepreneurship. I refer him to the recent review conducted by Alison Rose, who shed renewed light on the barriers faced by women starting and growing a business and identified ways to unblock untapped talent. We are committed to increasing the number of female entrepreneurs by 50% by 2030. We also want to foster that spirit of entrepreneurship; we have launched a young entrepreneurs review led by the Prince’s Trust, which will continue into the autumn of 2019.

I believe that we are at a crucial point in our history. It is true that our business community is living through a moment of uncertainty—but all eras are uncertain. We should be aware that there are opportunities ahead; the business environment frameworks developed through the industrial strategy will put us in a good position to continue to support business growth and job creation, supported by our fair, predictable and stable tax system.

Once again, I thank my noble friend for offering the House the chance to debate this matter.

Companies: Parental Leave Practices

Lord Henley Excerpts

Wednesday 10th July 2019 Lords Chamber

[Baroness Burt of Solihull]

To ask Her Majesty’s Government when they expect to issue their consultation on requiring transparency in publishing parental leave practices for companies with over 250 employees.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, this proposal was announced last October. The department has been engaging with business and those representing employees to gather their views on the proposal and how to make it work. A public consultation on the Government’s proposed measures will be published in due course.

[Baroness Burt of Solihull (LD)]

I am grateful for that Answer and glad that the Government have finally announced that the public consultation will be this summer. I welcome the Government’s aspiration in the initial statement towards an inclusive economy. Does the Minister therefore agree that the requirement to publish parental leave policies would, as with the gender pay gap, shine a light on which companies are inclusive and help potential recruits to make good decisions about the best company for them, without inviting potential embarrassment and even rejection by having to ask about parental leave policies at the interview?

[Lord Henley]

My Lords, the noble Baroness makes a very fair point. The purpose of requiring employers to publish parental leave and pay policies is so that applicants can make an informed decision about whether to combine a job with caring for their families. At present, as she will be aware, applicants must ask prospective employers for details of parental leave and pay policies. Many people are reluctant to do this, which is why my right honourable friend made that announcement and why we are working towards this. As I said, we hope to publish the consultation soon.

[Lord McNicol of West Kilbride (Lab)]

My Lords, according to figures from the department for business for last year, some 285,000 couples are eligible every year for shared parental leave. However, the department’s figures outline that the take-up could be as low as 2%. Can the Minister outline his understanding of why there is such a low take-up and, probably more importantly, what the Government and his department will do to deal with it?

[Lord Henley]

My Lords, again it is fair to say that the noble Lord is right to highlight that there has been a low take-up of shared parental leave. We will want to look at this to make sure that people can benefit from it. We will work on that, but I give him an assurance that that is what the department is doing.

[Lord Fox (LD)]

My Lords, picking up on that point, research done this year at the University of Birmingham indicates that it is not just parents or potential parents who have low knowledge of shared parental leave; it is also the managers and HR departments within companies themselves. Will the Minister undertake to have an enhanced information campaign within businesses to improve uptake of shared parental leave?

[Lord Henley]

I am more than happy to look at that because there is no point in introducing new measures to assist new employees if the employers, HR departments and others do not know about them. I am not aware of the research the noble Lord has highlighted but I am happy to look at it.

Rural Post Offices

Lord Henley Excerpts

Tuesday 9th July 2019 Lords Chamber

[Baroness Redfern]

To ask Her Majesty’s Government what steps they are taking to ensure that rural post offices are able to (1) continue, and (2) extend, the services they provide to rural communities.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, in 2017 we committed to safeguarding the Post Office network and protecting rural services. The Government have invested over £2 billion since 2010 to ensure the long-term sustainability and resilience of the network. We believe that the Post Office network is delivering all services in accordance with the contractual requirements set by the Government.

[Baroness Redfern (Con)]

I thank the Minister for his reply. Rural post offices are the backbone of many communities. Does he agree that when this review is concluded, the emphasis should be on paying a fair fee to reflect the vital services rural post offices provide, their long hours and the other services for which the payment is still far too low?

[Lord Henley]

My Lords, I agree with my noble friend about the value that we place on the Post Office, and rural post offices in particular. That is why we made that commitment in the 2017 manifesto. Obviously, I cannot make any commitments for the future beyond 2021, when current agreements come to an end. But bearing in mind the commitment we have made and the value we see in the Post Office network, it is exceedingly likely that something similar will be there.

[Lord Wigley (PC)]

My Lords, is the Minister aware of the growing evidence from rural areas, particularly in Wales, of increased crime because of the closure of banks in those areas? Some businesses are having to go 40 or 50 miles to find banks. In those circumstances, can the services available through the Post Office be extended to reduce that danger?

[Lord Henley]

My Lords, I am not aware of that connection with the closure of banks in rural areas causing an increase in crime, but I am aware that there is a decline in bank services in certain areas. I think of my own small nearby town, where both the banks have gone. The important thing is that with the agreement that the banking industry has come to with the post offices, they can provide a great many of the banking services that people require, such as paying in cheques and so on. I could go on in great detail for the noble Lord but there are agreements between the banking sector and the Post Office to help deal with that.

[Lord Fox (LD)]

My Lords, the Minister speaks a good game but the truth is that sub-postmasters and sub-postmistresses are leaving their jobs in the hundreds, if not the thousands. The review is taking time but by the time it ends, there will be too few post offices and none in many rural areas. What will the Government do that is different from what they are doing now? If they keep doing the same thing, the problem will be worse.

[Lord Henley]

I regret to say that what the noble Lord says is complete and utter nonsense. The Post Office network is broadly stable, at about 11,500 branches. Obviously, there are occasional closures for reasons beyond the Post Office’s control; for example, an individual postmaster might retire for reasons of ill-health or the business behind a branch might not be sustainable. However, the Post Office has the means of providing postal services in those circumstances. The important point is to make it clear that the network, the numbers within it and the coverage of that network are broadly stable.

[Lord Hain (Lab)]

My Lords, I refer to my entry in the register. Is the Minister not being incredibly complacent? There have been thousands of closures of rural post offices over the years. I have pressed the Government in the past, and do so again, to look at and adopt the example of the post bank in France. This is a profitable business, has not seen closures on anything like the scale we have, and provides a banking service which rural communities—and many towns—have completely lost. It is a solution to both problems.

[Lord Henley]

My Lords, I simply do not agree. The network is broadly stable. We have seen 400 new post offices open in the last couple of years; the coverage is there. The Post Office itself is now broadly making a profit after 16 years of loss. As a result, that network can be maintained, and we will do what we can to maintain it.

[Lord Marlesford (Con)]

My Lords, will my noble friend suggest to the Post Office that it promotes the banking service more? I have been a client of this wonderful service for 10 years. It has the great advantage that you can put money in and withdraw up to £1,000 a day from any post office, however small, at any time. It is particularly important for rural areas. It is more secure than a hole in the wall, because your card is taken by somebody behind the counter and put into their machine, rather than swiped in public. The Post Office should be promoting this much more.

[Lord Henley]

My Lords, my noble friend is right to draw attention to the banking framework agreement. We are grateful for the work that the Post Office and the banks have done together. Post Office Ltd handled over 128 million banking transactions on behalf of the high street banks; that represents growth of around 12% year on year. The implications of the new framework agreement with the National Federation of SubPostmasters was announced at its conference and has led, in some cases, to a doubling or even trebling of the fees that agents can receive from the banks.

[Lord McNicol of West Kilbride (Lab)]

My Lords, the Post Office recently announced that it is closing and franchising a further 74 Crown post offices, leaving up to 700 jobs at risk. This means that, since 2013, 224 Crown offices have been shut, representing a 60% cut in the Crown network. Will the Government finally intervene and end the closure of Crown post offices by introducing a new condition in the Post Office’s funding agreement?

[Lord Henley]

My Lords, again, the important point is that our post office network is now making a profit and is broadly stable. The Question is about rural sub-post offices, but the noble Lord referred to Crown post offices: there will be occasions when some of those have to be closed. It is coverage that is important; I assure the noble Lord that some 93% of the population live within one mile of their nearest post office and almost 99% of the rural population within three miles of one.

Carbon Budgets

Lord Henley Excerpts

Monday 8th July 2019 Lords Chamber

[Baroness Jones of Moulsecoomb]

To ask Her Majesty’s Government what plans they have to adjust carbon budgets in the light of past performance and the Paris Agreement.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, our existing carbon budgets are already among the most ambitious in the world. They continue to set the right level of challenge for the years ahead. Our priority is to deliver against these stretching targets through our clean growth strategy.

[Baroness Jones of Moulsecoomb (GP)]

One of the ways that we as a nation are cheating on our carbon budget at the moment is by importing some of the most polluting goods from abroad, which means that the countries producing them carry the carbon emission burden. Will the Government now commit to capturing those offshore emissions so that we can understand fully how polluting we are as a nation?

[Lord Henley]

My Lords, I do not accept the noble Baroness’s premise that we are cheating; we are following international rules on this matter. If we wanted to change in the manner that she suggests, which might be a way ahead, it would be worth doing only if we had international agreement from all sides.

[Lord Teverson (LD)]

My Lords, in its report at the beginning of May the Committee on Climate Change made it clear that we had to “ramp up” our efforts in saving and getting carbon out of our economy quite substantially. It particularly criticised the Government’s target of ceasing the sales of diesel and petrol vehicles in 2040. Should we not get real here and say that if we are to meet our targets that date has to be brought forward, as many other nations have done, to 2030?

[Lord Henley]

My Lords, we have ramped up what we are doing; that is why, last week, we brought forward the order that moved us to a legally binding target of net zero by 2050, in line with the advice from the climate change committee. The committee made no suggestion that we should get rid of petrol and diesel cars by 2040, a very substantial change which would cause major problems for the whole automotive industry. I believe that the target we have set is about right.

[Lord Faulkner of Worcester (Lab)]

My Lords, what role will carbon offsetting play in the Government’s plans?

[Lord Henley]

Obviously, that will continue to be available but this goes back to the original supplementary question asked by the noble Baroness, Lady Jones. If we want to make any further changes to how we measure international emissions in relation to what we might import, we would have to deal with that internationally.

[Lord Forsyth of Drumlean (Con)]

My Lords, can my noble friend explain to me how it makes sense to cut down trees in North America, including Canada, turn them into chips, ship them across the Atlantic to Liverpool and then across the country to a power station so as to burn them instead of coal, while at the same time arguing that people should get rid of their wood-burning stoves?

[Lord Henley]

My Lords, my noble friend is slightly wide of the Question, but I accept that shipping wood across the Atlantic in dirty burning boats is sometimes not the best way to go about things—although, in the transition to getting rid of burning coal, it is a great improvement.

[Lord West of Spithead (Lab)]

My Lords, one of the best forms of energy for carbon budgets is nuclear. Our civil nuclear programme seems to be in complete disarray. What will we do to get it back on track, so that we can provide a third of the power the country wants from nuclear, which was the Government’s position?

[Lord Henley]

My Lords, I assure the noble Lord that nuclear will continue to play a major part in what we are doing. He is right that it provides useful power with little carbon produced. We will continue to keep nuclear as an option, as I have made clear on a number of occasions.

[Lord Stevenson of Balmacara (Lab)]

My Lords, we welcome the Government’s commitment to reduce carbon to zero by 2050, but we lack the detail of how it will be achieved. The answers today fall into the same trap. Is it not correct that the department has already published a report that says that carbon targets will be missed in the period 2023-27, and will be even worse in 2028-32? What proposals will the Government actually bring forward?

[Lord Henley]

My Lords, we met our first two carbon budgets. We are on track to deliver over 90% of our required performance for the fourth and fifth carbon budgets. We will look at what the Committee on Climate Change recommends for the sixth in due course. I hope it sets meaningful targets that we can meet.

[Lord Geddes (Con)]

In the context of this Question, could my noble friend opine on the future of tidal power?

[Lord Henley]

My Lords, tidal power has been discussed at some length in several debates in this House. Again, we made it clear that we will look at options for tidal power, but it must be competitive against other forms. I cannot remember the precise figures for the most recent scheme that we looked at, in Wales, but it was going to produce power at around three times the cost of nuclear.

[Baroness Hayman (CB)]

My Lords, another less expensive form of renewable energy is wind. Are the Government now going to look seriously at changing the regulations that stop us from having onshore wind production, as well as offshore?

[Lord Henley]

The noble Baroness ought to look at the success of offshore wind. I am trying to remember how many years we have to go back to see how the price of that has come down. The opportunities for the price of offshore wind coming down are surely far greater than for onshore wind, because of the scale of the windmills that one can build at sea, compared to on land. We have no plans to review that policy.

[Lord Berkeley (Lab)]

My Lords, the Minister has already mentioned shipping, but what about air services? Air and shipping together must be the most polluting forms of transport in the world. I know they are international, but is it not about time we included both within these targets?

[Lord Henley]

My Lords, we do include them in the targets, as I made clear, but emissions from domestic flights and shipping are covered by domestic legislation. The Committee on Climate Change accounts for international flights and shipping in its advice setting out our interim carbon budgets, and this will continue for the more ambitious targets ahead.

Smart Meters

Lord Henley Excerpts

Monday 8th July 2019 Lords Chamber

[Lord Lennie]

To ask Her Majesty’s Government what assessment they have made of the roll-out of smart meters.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, the smart meter rollout in Britain is making good progress, with over 14.3 million smart and advanced meters operating, as of the end of March 2019. The programme remains on track to offer smart meters to every home and small business by the end of 2020.

[Lord Lennie (Lab)]

I thank the Minister for that Answer—just the 50 million or so short of target. Given the promised financial benefits to hard- pressed customers and the obvious global advantages of moving to a low-carbon economy associated with SMETS 2, why do the Government persist in leaving the implementation of this policy to the energy suppliers? Can the Minister state clearly why Ofgem rejected five of the major suppliers’ rollout plans for 2019 as being inadequate? Do the smart meters just not do what it says on the tin?

[Lord Henley]

My Lords, I had better write to the noble Lord with greater detail about Ofgem’s comments. It has completed the 2019 review and believes that suppliers are on track to meet our commitment that every household should have had the offer by 2020.

[Baroness Wilcox (Con)]

I should refer to my entry on the system before I admit that I have something to do with consumers. I want to congratulate the Minister on having had the courage even to get suppliers started on the rollout of smart meters. I would be interested to learn whether he has helped them in any way so far and, if so, whether he will do more.

[Lord Henley]

My noble friend brings great expertise to dealing with the interests of consumers. I can assure her that the programme regularly engages with consumer groups such as Citizens Advice. It has a dedicated consumer issues forum, which they and other consumer groups regularly attend. My honourable friend the Minister for Consumer Affairs has regular meetings with the appropriate bodies.

[Baroness Maddock (LD)]

My Lords, how many people who had first- generation smart meters came up against problems when they tried to change their supplier? It was anticipated that people would make savings when they had smart meters. Have those savings reached the Government’s anticipated level?

[Lord Henley]

My Lords, I cannot help the noble Baroness on the first figure she asked for, but if some figures are available, I shall certainly write to her. Earlier meters will be enrolled in the Data Communications Company infrastructure by the end of 2020, which I hope will help on that front. We are expecting to provide bill savings of some £1.2 billion by 2030, making the programme a very good investment for the country.

[Lord Harris of Haringey (Lab)]

My Lords, I refer to my interests in the register. The network of smart meters will obviously be part of the so-called internet of things. What assessment have the Government made of the cybersecurity of smart meters, of the extent to which they could be turned into a sort of super bot to attack all parts of our infrastructure or commerce, and of the instability in demand for electricity they could create by all of them switching on and off at the same time?

[Lord Henley]

My Lords, the noble Lord is quite right to point to dangers on that front. The Government will continue to keep the situation under review, but I can assure the noble Lord that we are not aware of any concerns.

[Lord Watts (Lab)]

My Lords, what will happen to the market if all customers switch to the cheapest provider?

[Lord Henley]

I hope that the market will be able to adapt to that and deal with it as it ought to; that is what markets are about. I know that noble Lords opposite do not like markets, but, in the main, they work rather well and provide opportunities for consumers to move to cheaper prices. That is why the number of energy suppliers has gone up dramatically, with more than 60 now operating in the country.

[The Countess of Mar (CB)]

My Lords, the Minister said that the objective was to get all domestic premises fitted with smart meters. I understand that smart meters work only if there is mobile phone reception. There are quite large number of pockets of the country where there is no such reception. What is the solution?

[Lord Henley]

My Lords, the Government’s commitment was to make sure that all premises were offered smart meters, but the noble Countess points out a problem with mobile reception—it affects me in the north-west of England—and it is certainly something that we will have to look at.

[Baroness McIntosh of Hudnall (Lab)]

My Lords, the noble Lord said in reply to the noble Baroness, Lady Maddock, that savings of £1.8 billion are expected to be generated through the use of smart meters—if I have got that figure wrong, I apologise. Will he translate that into a figure that might mean rather more to people who have smart meters—for instance, the percentage reduction in their bills that they might expect if they have a smart meter installed?

[Lord Henley]

My Lords, the figure I quoted was bill savings of some £1.2 billion, but I accept that the noble Baroness misheard me. We expect a net benefit of some £5.7 billion from the rollout as a whole. Again, I would prefer to write to the noble Baroness with estimates as to what individuals could save, but obviously, it will depend on how the individual makes use of the smart meter. The point of the smart meter is that it makes it easier for the individual to keep an eye on their electricity or gas use and therefore to make the appropriate savings we would all like, both in the use of energy, which is important, and in money for the individual.

[Lord Hamilton of Epsom (Con)]

My Lords, my noble friend has commented on the value of markets. Will he tell us about the success of capping energy prices? I gather that most customers are now paying the higher tariff and prices have gone up, rather than down.

[Lord Henley]

My Lords, I think my noble friend is wrong—capping has been a success. We announced that it was only a temporary measure because the markets were not working, but I, like my noble friend, want to make sure that the markets work because that is the best way forward.

Environment and Climate Emergency

Lord Henley Excerpts

Monday 1st July 2019 Lords Chamber

[Lord Haskel]

To ask Her Majesty’s Government what steps they will take following the adoption by the House of Commons on 1 May of a motion declaring an environment and climate emergency.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, the Government recognise the urgency of tackling climate change and protecting our environment. Following the Committee on Climate Change report, we have introduced legislation to achieve net zero emissions by 2050.

[Lord Haskel (Lab)]

My Lords, contrary to the Prime Minister’s misrepresentation, we on these Benches support the Government’s climate change initiative, but can we not do better by establishing a model that other nations can follow? When setting the model, will the Government ensure that there will be no creative accounting in carbon by offsetting imports, using international credits or carrying forward over- performance, and that we will introduce environmental stress testing and report? Then, we can be really proud of our achievement.

[Lord Henley]

My Lords, I am grateful for the support of the noble Lord and the party opposite. I regretted its Motion on Wednesday last week because, as I made clear in the debate on the statutory instrument, I thought that it was unnecessary. We have set realistic targets following the advice that we received from the Committee on Climate Change—targets that we believe we can and should meet—and, as we set out in the order, we will aim to meet them.

[Lord Fox (LD)]

My Lords, in last week’s legislative debate, a number of your Lordships spoke about the need to will the means, as did I, and about the technologies that we will need to deliver zero carbon by 2050. The Minister and I agreed that one technology that is needed is bulk energy storage for our electricity grid. Given that he agrees that we need it, can he please tell us what the Government are doing to will this? How much money is being invested and how is the industrial strategy helping to do this? What is happening in this area?

[Lord Henley]

My Lords, in the time I have available to respond to a Question of this sort, I cannot go into detail on every single bit of research that we are doing into energy storage, carbon capture, use and storage, and a whole range of other things. I am more than happy to write to the noble Lord with greater detail on this—he seems to be signalling to me to do that—but I can say that we are committed to doing all we can to meet the targets. We believe that with existing technology we can meet them, and with advances in technology we can do even better.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I am absolutely delighted that the Government think they can meet that target but so far, I have not seen the sort of action that is needed. We need a massively rethought-out new green deal so that that we can discuss it in this Chamber and suggest ways forward for government.

[Lord Henley]

My Lords, we passed the legislation last week. We have announced an environment Bill, the Agriculture Bill is coming along, we have announced an energy White Paper and there is the industrial strategy, which has energy-specific parts. A whole range of government action is going on and there will be more to come.

[Lord Lennie (Lab)]

My Lords, I will give the Minister a second chance—as he knows, everyone deserves a second chance—to answer the question that was not answered in last Wednesday’s debate. Why will international aviation and shipping not be included in the Government’s climate change emissions legislation?

[Lord Henley]

My Lords, as I made quite clear in the debate last week, our plans for net zero cover the whole economy, including international aviation and shipping.

[Lord Naseby (Con)]

Is my noble friend in a position to clarify reports in the press that our aid budget is to be skewed in toto—or nearly in toto—toward reducing climate change impact on other nations, particularly the poorest in the world?

[Lord Henley]

My Lords, I have no intention of commenting on press reports of that sort. The aid budget will continue to be used to provide aid as appropriate. Where necessary, that could include help on climate change objectives.

[Baroness Tonge (Non-Afl)]

My Lords, to achieve the targets announced by the Government, will the Minister now announce that there will be no third runway at Heathrow Airport?

[Lord Henley]

My Lords, again, this was asked of me last week. I was asked by one of the noble Baroness’s former noble friends whether I would lie down in front of the runway. I said that that was not my plan and I believe I made it clear—if I did not, I make it clear now—that we are awaiting further advice on Heathrow from the Climate Change Committee.

[Baroness Deech (CB)]

Can the Minister explain how the planned Oxford to Cambridge expressway, with up to a million houses to be built alongside it, will contribute in any way to the reduction of carbon emissions?

[Lord Henley]

My Lords, following the comments on Heathrow, I do not think the noble Baroness would expect me to comment on every development or building project in the country. The Climate Change Committee has said that it believes we can meet our targets with Heathrow, but we are awaiting further advice from the committee. If it wishes to comment on the Oxford to Cambridge expressway, or we feel it necessary to do so, we will do so.

[Lord Watts (Lab)]

My Lords, if the Government are serious about climate change, do we not need to do much more about population growth around the world? I have visited some of the African states and, as the Minister knows, hardly any birth control methods are available to local communities. Should we not do more on this issue?

[Lord Henley]

My Lords, I believe that birth control is at the forefront of the Department for International Development’s concerns, but the noble Lord will be aware that the rate of population increase is slowing. Many people are saying there is a good chance that it will plateau by the middle to the end of the century. We will continue to play our part in that.