Working Time (Amendment) Regulations 2013

Lord Knight of Weymouth Excerpts

Monday 22nd July 2013 Grand Committee

[Lord Knight of Weymouth]

My Lords, as we have heard from my noble friend, we are returning to what is, for us on this side of the Committee, the vexed question of the abolition of the agricultural wages board, which we have consistently opposed. In opening, the Minister implied that the agricultural wages board was all about the minimum wage for farm workers. It is worth reminding the Committee at the outset, by way of clarification, that it is about so much more than just the minimum wage. This is doing away with a whole wage structure, training, regulations and measures in respect of accommodation and farm dogs, and all sorts of other things.

My noble friend Lord Whitty talked about the timing. I will return to the issue of Wales in a moment, but this also follows yesterday’s Tolpuddle festival—an occasion on which, in beautiful sunny Dorset, we remember the Tolpuddle Martyrs. In 1834, George Loveless, James Loveless, James Hammett, James Brine, Thomas Standfield and Thomas’s son John were all charged with having taken an illegal oath and then transported to Australia. That was the basis of the formation of the trade union movement in many ways and is rightly celebrated every year at Tolpuddle, when those martyrs are remembered.

My noble friend was right to probe the lack of an impact assessment. At the time, we kept returning to the impact assessment for the legislation which abolished the agricultural wages board, and we will keep reminding people that 150,000 workers are affected by the abolition of the board and that £240 million will be taken out of farm workers’ pockets. I know that that is contested by the Government, but they did not take advantage of this opportunity to publish any kind of impact assessment on these regulations to repair that.

I also want to comment on the implications for existing terms and conditions for individual employees. The abolition of the agricultural wages order largely protects existing employees engaged prior to 1 October 2013 with no specific contractual provisions. However, I note an article in Farming UK dated 26 June which quotes Colin Hall, a partner at BTF Partnership and a director of the 50 Club Horticultural Employers’ Association, as saying:

“For others, however, such as those more recently employed with a specific contractual provision reserving the employer’s right to amend their contractual terms following abolition of the AWO, or those employed on or after 1 October 2013, the implications are greater.”

There may be some currently employed workers who have particular contractual provisions who will be affected by these changes. I would be interested to hear from the Minister whether he and his department are planning on working with agricultural employers and advising them on their new obligations as employers following the abolition of the board and the bringing into force of the regulations that we are debating today.

The Minister may have seen the article in Farmers’ Weekly on 11 July—I know that he is a keen listener to “Farming Today”, and I am sure that he is as assiduous in reading Farmers’ Weekly—about Peter Bailey, who was employed as a tractor driver and stockman in Berkshire for more than 22 years. He was awarded £38,000 for underpayment of wages after working an average 55-hour week at a farm there. Defra took up the case with the board and in the end Mr Bailey was able, through a tribunal, to prove that he was being exploited, not getting the pay he was entitled to and forced to work more hours than he should have, and that his employer was at fault. The tribunal found against the employer. That was a contravention of the old agricultural wages order but demonstrates that some farmers struggle to put existing employment regulations into proper effect. As things change, it is a particularly vulnerable time for employers. We need to ensure that they are properly advised so that they do not, inadvertently, do the wrong thing by their staff.

It is equally important that farm workers know their rights, reduced as they are. For any of them listening, I strongly recommend that if they are not a member of a trade union they quickly join because they will need one more than before as they will have to negotiate their pay and conditions on a case-by-case basis with employers. They will need the advice and support of a trade union to do that effectively. It is also worth noting—this was not something that was in force or that we even knew about when we debated the legislation to get rid of the board—that as of 29 July, this month, workers unfairly dismissed or discriminated against by their employers will be charged a fee for taking their claim to a tribunal. That means, in the absence of the protection of the agricultural wages board, that these typically extremely lowly paid workers will be denied the access to justice of a tribunal unless they are willing to pay a fee, with no guarantee, if the case is found in their favour, that they will get that fee back.

It is worth saying that the law is also changing so that if their employer—who might be their landlord—sidles up to them in the farmyard and makes them an offer to do things slightly differently and change terms and conditions, they would not be able to use that conversation in a tribunal either. That would no longer be admissible. I find that of huge regret, and we were not able to debate it when those orders went through. The changes to their pay and conditions as a result of this order and the new law abolishing the agricultural wages board increase the risk of agricultural workers suffering.

My noble friend Lord Whitty raised the issue of Wales and asked some highly pertinent questions about how this will work given the decision of the Welsh Assembly Government effectively to retain the agricultural wages board in the Principality. I would be very interested to hear how the two will work together. I understand that these regulations were laid before that decision was made by the Welsh Assembly Government, so perhaps there is unfortunate rather than deliberate problems of timing. It will certainly be September before the other place has a chance to debate these regulations. If we do not have a satisfactory answer from the Minister now, we will have to decide whether we want to pray against the regulations or leave it for the Minister to come back with some proper consideration of these matters when they come to the Commons in September. There will certainly be a problem if the agricultural wages board arrangements are to apply in Wales while the changes to leave entitlement are being made in these regulations. The exemptions were put in place in 1998 for a good reason. If they are to apply in Wales while also being changed it will create a problem which the Minister will have to resolve.

So for all the reasons that my noble friend Lord Whitty gave, we are not opposing these regulations as such, subject to some reassurance on the Welsh issue, because they are merely tidying up. However we hugely regret the abolition of the agricultural wages board. I do not think that it has been properly thought through. I think that, in combination with some of the other changes that are taking place, there will be more farm workers who are exploited beyond the few who are exploited at the moment, one example of which I gave from a recent report in the agricultural press.

With those words, I am happy to listen with bated breath to what the Minister will tell us.

[Lord De Mauley]

I thank the noble Lords, Lord Whitty and Lord Knight, for their contributions. As I said earlier, the amendments we are proposing to the Working Time Regulations are necessary technical amendments to the legislation as a result of the end of the agricultural minimum wage regulatory regime on 1 October, as the noble Lord, Lord Knight, was good enough to acknowledge. The amendments have no impact on levels of protection for agricultural workers and I believe that they are, in themselves, relatively uncontentious. However I recognise that, as the noble Lord, Lord Whitty, said, recent developments in Wales raise certain issues in regard to abolition of the agricultural wages board which noble Lords are rightly interested to hear about.

The Agricultural Sector (Wales) Bill, passed by the National Assembly for Wales on Wednesday last week, would restore a separate agricultural minimum wage regime in Wales. It might be helpful here if I gave noble Lords some explanation about relevant procedural matters.

Under the Government of Wales Act 2006 there is a recognised procedure for the consideration of whether Bills passed by the National Assembly for Wales are within its legislative competence. Essentially, this provides that the Attorney-General and the Counsel General for Wales—either or both—have four weeks after a Bill is passed by the National Assembly in which to decide whether to refer any question of competence to the Supreme Court. After this period, if no referral is made and the Secretary of State for Wales has indicated that he will not use his powers under the Government of Wales Act to intervene, the Bill is submitted for Royal Assent. This applies to all Bills passed by the National Assembly and this is the stage which we have now reached with the Agricultural Sector (Wales) Bill.

My right honourable friend the Attorney-General is currently assessing the legislation to determine whether its provisions are within the Assembly’s competence, as he does with all legislation passed by the Assembly. It would not be right for me to speculate here what conclusion either the Attorney-General, or indeed the Counsel General, might reach. I will say that, as noble Lords are aware from previous debates on this issue, the UK Government regard the agricultural wages regime as wage-setting and employment law, which are subjects that are not devolved to Wales. However, it is for my right honourable friend the Attorney-General and the Counsel General separately to consider whether or not a reference should be made to the Supreme Court on the question of the competence of the provisions of the Welsh Bill. This is a decision for them which it would not be appropriate for me to second-guess. Should either the Attorney-General or the Counsel General for Wales, or both, decide that such a reference should be made, it will be up to the Supreme Court to consider the Bill and make a judgment.

I hope, therefore, that that makes the position clear. There is a statutory procedure to be followed in the case of all Bills passed by the National Assembly and, quite properly, that procedure is now being followed in relation to the Agricultural Sector (Wales) Bill. The noble Lord, Lord Whitty—

--- Later in debate ---

[Lord De Mauley]

The noble Lord effectively asked why we do not wait to press ahead until all this has been resolved. We will not know the outcome of the Welsh position for some time, but we need certainty for people in employment in farming in the mean time. If we did not do this then new employees could effectively be left in limbo.

The noble Lord, Lord Whitty, asked what discussions the Government have had with Welsh Ministers about all of this. There has been extensive discussion with Welsh Ministers about the position of the agricultural wages board in Wales, and Welsh Ministers were informed of the Government’s decision to pursue abolition by the Enterprise and Regulatory Reform Act. The UK Government communicated our view that this was a non-devolved matter which did not require the consent of the Assembly clearly to Welsh Ministers.

The noble Lord, Lord Whitty, reiterated his position when we debated the Act—if I may shorthand it. I understand his position very well. Abolishing the agricultural minimum wage will bring agriculture into line—

[Lord Knight of Weymouth]

Before the Minister moves off Wales completely, I would be grateful to know whether he considered the order applying just to England, so that we would not have this issue. Given that detailed conversations were going on with Ministers in the Welsh Assembly Government, was that an option?

Littering from Vehicles Bill [HL]

Lord Knight of Weymouth Excerpts

Friday 19th July 2013 Lords Chamber

[Lord Knight of Weymouth]

My Lords, I have no wish to disrupt the consensus that congratulates the noble Lord, Lord Marlesford, on a good Bill and on seeking to address a serious problem which, clearly, your Lordships care greatly about, judging by this debate and the passion with which some addressed it. We are also grateful to the noble Lord for garnering support for his Bill from a number of organisations and for reflecting that support. I am also grateful for the briefings we have had, and have heard in part quoted, from CPRE and Living Streets. He is right about the need for a culture change, which was reflected by my noble friend Lord Judd and others.

There is a danger in over-romanticising the past. We heard a flavour of that in some of the contributions today. It is probably true that we have cleaner air and bathing water. We are even seeing some culture change around people’s attitude to dog fouling, although not among everyone. It is still a problem but less of a problem than it was when I was growing up. However, I find it very odd when I see people hanging from trees bags containing dog mess that they have picked up. I do not understand what that is about. I am happy to say that none of them appears to be nappy bags, so I do not think that they were anything to do with the noble Lord, Lord Selsdon, and his nappy bags. It is a strange habit that leaves me completely perplexed as I walk around the countryside occasionally walking my dog.

It is true that the problem of littering from vehicles is getting worse. I noted the comments made by the noble Earl, Lord Shrewsbury. The drive-through restaurant is a problem that has increased littering from vehicles. Perhaps the corporate social responsibility of McDonald’s, Kentucky Fried Chicken and others that he mentioned can be pricked to help councils deal with that. In some areas, those organisations try to do a little to deal with it. Certainly, where I live in Dorset, we see the same sort of rubbish that the noble Earl sees where he lives and much of it appears to be generated by the drive-through restaurants.

I wholeheartedly support this Bill and want to see it progressed. I have four points to make. The first, to repeat what the noble Lord, Lord Marlesford, said, is to hear about the effect in London. We will be interested to hear what the Minister has to say on that. In Committee, we should explore whether this proposal will apply just to the road and verges off the road, as implied in Clause 6. Clause 1 refers to Section 87 of the Environmental Protection Act 1990, which refers to any place “open to the air” in the area of the authority. We need to clarify the definitions.

I am also interested in how we can enforce this Bill. We can learn from the noble Lord, Lord Selsdon, and his experience travelling around the continent. Will we end up being able to use technology? I am not one to romanticise the past. Sometimes I romanticise the future and perhaps there are aspects of technology that we can use in terms of our smartphones that know where we are to take pictures of people if we can catch them in the act. But catching people in the act, as we know when trying to discourage dog fouling, is quite tricky. Indeed, the act of dog fouling tends to take a little longer than throwing something from a moving vehicle. I especially am interested in whether local authorities with CCTV would be able to use that technology in enforcing these measures and whether the latest code of practice generated by the Protection of Freedoms Act would allow that to happen, particularly given that this is the enforcement of a civil offence. That is something else we might want to explore in Committee.

Finally, I am interested in what would happen to the proceeds of these fines. According to the Bill, the levels would be set in regulations, which of course is right. Would a council be able to generate a surplus? Should it be effective in enforcement? Would it cover just the cost of the administration of prosecuting people for these civil offences? Could it also cover the cost of litter clearance? Those are interesting issues. There are some people who wanted this Bill to be more aggressive. They may want more aggressive fines and would be very comfortable with councils generating a surplus.

I do not wish to detain the House. The noble Lord, Lord Marlesford, and, certainly, the noble Lord, Lord Lawson, were very keen that we should see an end to any procrastination from the Government on this issue. I look forward to hearing from the Minister whether he will accept the invitation made by the noble Lord, Lord Lawson, to bring forward a government Bill to bring into effect the intentions of the noble Lord, Lord Marlesford, whom we support wholeheartedly.

Producer Responsibility Obligations (Packaging Waste) (Amendment) Regulations 2013

Lord Knight of Weymouth Excerpts

Monday 8th July 2013 Grand Committee

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

My Lords, this instrument seeks to correct an error in the 2012 regulations. The error concerns the formula used for calculating the glass remelt recycling target for producers of glass packaging. The consequence is that the proportion of producers’ glass obligations that have to be met by evidence from remelt applications is inadvertently higher than the intended 63% for 2013-15. This instrument corrects that mistake by substituting an amended formula which ensures that the 63% glass remelt target is correctly applied to a producer’s glass recycling obligation for 2013-15 and 64% for 2016-17. My officials have worked with the Environment Agency to correct the error and to check that no further changes are needed to the 2012 regulations.

Prior to the 2012 regulations coming into force, Defra carried out a written consultation, with officials engaging with a broad range of representatives from industry, regulators and other interested parties. The consultation included the correct target of 63% but the draft regulations accompanying the consultation contained the error, which went unnoticed at the time. To correct it, we recently completed a public consultation on this revised draft instrument. We invited views on the plans to correct the error and there were no responses.

In practical terms the error has had no impact on business, with UK environment agencies using a correct version of the formula and enforcing against the intended 63% target. This instrument does not impose any new burden on any business. However, I apologise unreservedly for the error and hope that I have adequately explained that this instrument is intended to do no more than correct a mistake. I commend the draft regulations to the Committee.

[Lord Knight of Weymouth]

My Lords, I am grateful to the Minister for introducing these regulations, and in particular for his apology. He will not be surprised, and may be relieved, to know that I do not oppose them since obviously it is appropriate to correct the error. Indeed, when I first looked at the regulations I naively did what people do, and that is simply to look at them. Of course, there is no mention of the error. I looked at the impact assessment, where again there is no mention of the error. My first question to the Minister, therefore, is what has been the impact of the error? What has been the cost to the taxpayer of getting this wrong and having to reconsult, even though there were no responses to the consultation?

The Explanatory Memorandum is perfectly clear: the instrument corrects an error in the formula for calculating the glass remelt recycling target for producers of glass packaging. He is not yet on his feet in the other place, but we anticipate from the media that the Secretary of State for Education will shortly be announcing changes to the national curriculum, among which will be that primary school children will have to learn their fractions. It is worth asking when Ministers will learn theirs too, so that we do not make these errors in the future.

The regulations are fine and they do a perfectly good job. I note in passing that these are regulations which the Government support—and that occasionally the Government support regulation. These are also regulations from Europe—and occasionally the Government support regulations from Europe. These are also regulations that gold-plate EU regulations, so there are times when the Government support the gold-plating of EU regulations. As I say, that should just be noted in passing. Having dealt with these regulations around a year ago, we are here because an error was made, so my only question of any substance for the Minister is: how much is it costing us?

[Lord De Mauley]

My Lords, as always, I am most grateful to the noble Lord for his comments. Before I address them, perhaps I could say that the target we are talking about offers both economic and environmental benefits for the United Kingdom. As valuable resources for our industries become scarcer and more expensive, we need processes in place to recycle and recover them in order to retain as much of their value as we can in the economy. Indeed, the Government want the United Kingdom to move towards a zero waste economy; that is, an economy where resources are fully valued. We want to see material resources reused, recycled or recovered wherever possible, and only disposed of as a last resort. The targets in these regulations play an important part in achieving this ambition. They will help the UK to go further in recovering the value of discarded packaging materials and help to tackle the wasteful practice of burying these resources in landfill. Overall, we estimate that the whole package of targets will provide a net benefit of over £180 million to the UK economy over the period from 2013 to 2017. Over 95% of those benefits will come from revenue generated from recycled materials. We will also see greenhouse gas savings associated with diverting waste from landfill and energy savings from replacing virgin materials with recycled ones.

The Government recognise that the economic benefits will not be shared by all. These regulations will place an increased cost burden on the producers of packaging materials. However, the recycling targets will help to support wider growth and the creation of jobs in the recycling sector. I am pleased to say that when we consulted on the regulations, most businesses, including the majority of those on which the increased costs will fall, supported our approach. As I said, I am sorry for the error made in the 2012 regulations and I thank the noble Lord for taking the time to debate this instrument today. It will permit producers to continue to meet their obligations under the correct glass remelt recycling target.

We have not calculated the cost of correcting the error. I do not anticipate that it will be material. It will consist basically of official time to check the regulations and prepare amended regulations. As I said in my opening speech, the effective cost of the correction is nil, because everybody has been operating on 63% anyway. The only other thing I would say to the noble Lord is that I always enjoy being ragged by him about my mathematics. With those comments, I commend the regulations.

Flooding: Insurance

Lord Knight of Weymouth Excerpts

Wednesday 26th June 2013 Lords Chamber

Asked by

[Lord Knight of Weymouth]

To ask Her Majesty’s Government what agreement they have reached with the insurance industry to ensure that owners of homes at risk of flooding can obtain affordable home insurance.

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

My Lords, we are at an advanced stage in discussions with the insurance industry about the future of flood insurance. We aim to conclude those discussions and announce future measures as soon as possible to ensure that households can continue to access affordable flood insurance in the future.

[Lord Knight of Weymouth]

My Lords, the Secretary of State is currently struggling to agree a fair deal on CAP reform for UK farmers, and his department has one of the worst settlements in Whitehall in today’s CSR. I hope that he does a lot better for 200,000 householders in this negotiation with insurers. This House rises on the deadline for concluding the negotiation. Given the persistent interest from noble Lords on all sides, can the Minister therefore guarantee us an opportunity to question him in here on the conclusion of the negotiations before we break for the Recess?

[Lord De Mauley]

My Lords, I had hoped we might have a constructive debate about this. However, since the noble Lord has raised the common agricultural policy, perhaps I should say that it was Labour’s leadership in the last round of CAP reform that cost us €550 million in disallowance and led us to the disastrous administration of the single farm payment. We, by contrast, are tackling another immensely complex negotiation on flood insurance in a measured and sensible way. We have to balance the interests of those at high risk of flood, wider policyholders and taxpayers, while the ABI is a membership organisation with a lot of interests to represent. The noble Lord asks about an opportunity to debate the eventual outcome. I would be pleased about that; it is not my role to guarantee it, but I am sure that we will have a chance to do that.

Water Industry (Specified Infrastructure Projects) (English Undertakers) Regulations 2013

Lord Knight of Weymouth Excerpts

Wednesday 12th June 2013 Grand Committee

I know that many noble Lords have firmly held views on the merits or otherwise of the Thames tideway tunnel and I look forward to our debate this afternoon, during which I expect that many of these views will be put forward. However, I ask the Committee to bear in mind that the regulations before it today could apply not only to the Thames tideway tunnel but to any large or complex sewer or water infrastructure projects in future. I commend the draft regulations to the Committee.

[Lord Knight of Weymouth]

My Lords, the Minister will be relieved to know that on this occasion, unlike a previous one, I will not seek to give contradictory views to represent the views of some of my colleagues on this side of the Committee. This debate comes at an inconvenient time for Thames Water but, therefore, at an opportune time for Parliament. I will make some general comments and then delve a little into some of the specifics of the Thames tideway tunnel project. In making my comments, I am grateful as ever to the Secondary Legislation Scrutiny Committee of your Lordships’ House. Its third report of this Session brings these regulations to the special attention of the Committee on the grounds that they give rise to issues of public policy likely to be of interest to us. I am particularly grateful that the Committee is willing to delegate me to take forward all those public policy issues. It is right that we should reflect on them.

As the committee points out, the Explanatory Memorandum implies that these regulations are generic and apply to all water and sewerage companies and large infrastructure projects that meet the criteria. That was clearly set out by the Minister. However, the only project to which the regulations are expected to apply over the next 10 years is the Thames tideway tunnel. The impact assessment therefore exclusively estimates the impact of the project in relation to these regulations. We have debated the tunnel before, but there are issues I would like to raise as events have moved on.

First, I will make some generic comments. The arguments put for establishing a separate body to manage the finance, delivery and extraordinary risks of major water infrastructure projects are reasonable. The example of the Thames tunnel is helpful. It will cost more than £4 billion and, while Thames Water will carry out associated investment at its own risk, the cost of the main tunnel is a considerable financial risk to put on a company with a turnover of £1.8 billion. Assuming that Thames Water is well regulated and responsible, there is logic in establishing a separate infrastructure provider to construct the tunnel and have Thames Water effectively lease it back.

These regulations then extend the reach of Ofwat to these providers, which is important to ensure that the public interest is protected. The alternatives discussed by the Minister and in the accompanying papers are to leave things as they are or to require that the project be put out to tender by the water company. Defra discounts the former because Ofwat would struggle to regulate the financial arrangements when they are bound in with the rest of the company’s activities. To some extent, I struggle to see how it can effectively regulate the general finances of a company and then the separate finances of a big project, but cannot manage to do it when they are done together. However, I am happy to believe those involved when they tell me that they cannot. I am also happy with the desirability of a separate provider over the complexity of negotiating a new licence, which is the implication of requiring the company to tender a major project. Therefore, I am happy with the regulations as they stand in the generality.

Let me then turn to the specifics of the Thames tideway tunnel and the figures in the impact assessment. I remind the Committee that I rent a flat here in London very close to one of the sites for the construction of the tunnel, so in that respect have an interest. Thames Water has also been to see me to brief—or some would say lobby—me about the project. I accept the basis of the company’s argument. The capital’s Victorian sewerage system has served the capital well, but urgently needs more capacity to meet the needs of modern-day London. The Thames tideway tunnel will ensure that the capital has a sewerage system fit for purpose for at least another century.

The tidal part of the river remains an environmental and public health hazard. It cannot be acceptable to allow the tidal River Thames to be an open sewer. Sewage discharges into the tidal River Thames breach the urban waste water treatment directive and British taxpayers would face the prospect of substantial fines if the tunnel is not built. Other world-leading cities, including Paris, Stockholm, Helsinki and Washington DC, as well as the Rhine/Ruhr conurbation in Germany, are forging ahead with similar schemes. I agree with Thames Water’s briefing that London is in danger of being left behind and facing substantial fines if we do not act.

I am happy to support the project. The benefits to employment in London should be maximised and the impact on residents minimised, and I am pleased on progress in moving more material off the roads and on to the river during the construction phase. However, I also note the recent remarks by the new chair of Ofwat, Jonson Cox. Interestingly, Mr Cox is a water industry insider. He said last week that some unlisted companies have a moral case to answer over allegations, that they,

“use shareholder loans to avoid UK taxation”,

through “complex offshore holding structures”. He said:

“A good number use high-coupon shareholder loans to improve their equity returns … It appears that this reduces tax liability for the benefit of shareholders”.

He went on:

“Tax policy is not for an economic regulator and these structures may be legal and common in private equity. But some aspects are morally questionable in a vital public service”.

Thames Water has published its annual results this week. It appears that the company pays no corporation tax on its £1.8 billion turnover while continuing to pay executives many times more than the Prime Minister. In my view, this is unacceptable—it stinks. Why should the public be reducing the risk to shareholders of Thames Water through the Water Industry Financial Assistance Act 2012, if it then uses every last trick in the book to maximise shareholder return at the expense of the UK taxpayer? Does the Minister agree that these loopholes must be addressed as a matter of urgency? The logic of allowing profit is to reward the risks, particularly of investment, but that is undermined by excessive profit, excessive executive pay and tax avoidance when Parliament and the Government are acting to reduce the risk to Thames Water customers and shareholders.

When we turn to the impact assessment, why should the taxpayer be funding an extra £5 million of regulatory cost of Ofwat in setting up these arrangements? Could we not find a way of billing Thames Water for this expense, given that Thames Water pocketed a £5 million credit from the Treasury in a year when it made £550 million in profits? Given that the chief executive, Martin Baggs, was awarded a pay rise of 5.9%, taking his basic salary to £450,000 plus a bonus of £274,000 as part of a scheme to,

“reward significant improvement in the group’s financial and corporate performance”,

as well as picking up a further £366,000 in shares next month under the company's long-term incentive plan, maybe the £5 million could be found from senior executive salaries alone. Does the Minister agree?

On the narrow question of the regulations, I am content. On the question of Thames Water fulfilling its moral responsibilities and thereby breaching the trust on which the financing of the Thames tideway tunnel is based, I am not.

[Lord De Mauley]

My Lords, this has been an interesting debate on a number of issues relating to the draft regulation and indeed to the Thames tideway tunnel. I thank the noble Lord for his views and his insightful interventions. I thank him for agreeing that the general approach we are taking is reasonable. That is perhaps the most important thing to come out of today, and it is extremely helpful. I will come back to his specific points in a moment.

As I indicated in my introduction, it is important that these regulations should be considered separately from the specific Thames tideway tunnel project in London. In summary, the regulations enable the creation of infrastructure providers regulated by the Water Services Regulation Authority, Ofwat, to finance and deliver large or complex water or sewerage infrastructure projects. They provide for the procuring, licensing and regulating of an infrastructure provider that is separate from a water or sewerage company. They set out how the Secretary of State or Ofwat can specify to which projects the regulations would apply and how they designate the company that is to become an infrastructure provider. The regulations are intended to apply to all such large or complex water or sewerage projects that may be proposed in the future, where their application would be considered to result in better value for money for both customers and taxpayers.

I turn specifically to the Thames tideway tunnel, and I think the noble Lord has already made similar points. Climate change, population growth and higher customer expectations of environmental standards and supply resilience are anticipated to require larger and more complex infrastructure than the existing regulatory regime was designed to provide for. For example, changing rainfall patterns are expected to result in wetter winters and drier summers—who would believe it after last summer?—and to aggravate water scarcity conditions in the south and the east. This may lead to an increased requirement for potentially complex arrangements for transporting water.

Moreover, heavy rainfall events are likely to become more frequent—that we can all believe. In London, these events will further strain an already overtaxed sewerage system, leading to more overflows of untreated wastewater, containing raw sewage, into the Thames. Even after ongoing upgrades to sewage treatment works and the Lee tunnel are completed by the end of 2015, just over 18 million tonnes of wastewater will enter the Thames every year from London’s combined sewer overflows when storm-water capacity is exceeded. These overflows currently occur on average about once a week and have a significant environmental impact on the river. They increase the likelihood of fish kills, create a higher health hazard for the users of the river and damage the aesthetic appeal of the Thames.

EUC Report: EU Sugar Regime

Lord Knight of Weymouth Excerpts

Monday 3rd June 2013 Grand Committee

[Lord Knight of Weymouth]

My Lords, I, too, congratulate my noble friend Lord Carter on introducing this debate. I think that I am the first to speak in this debate who is not a member of the committee, so I congratulate the committee as a whole on an excellent and concise report, which has been mirrored by this debate. I, too, aspire to be both excellent and concise in making my comments now, though I feel somewhat more confident in one than the other. I will leave it up to the Committee to judge which.

The EU sugar regime is impossible to defend, and I am pleased that no one has sought to do so today. Coming to this fresh, it is difficult for me to think of a worse example of the problems of the common agricultural policy and the need rapidly to reform away from the legacy policy enshrined in this regime.

In trying to understand EU matters, it is always easy to get bogged down in jargon. When I read the response from the vice-president to the committee, I was reminded of some of those problems. The noble Baroness, Lady Byford, read out a particularly interesting section on how consumers might be able to engage with the High Level Forum for a Better Functioning Food Supply Chain. It goes on,

“In this context, consumer organisations have supported the work done under the B2B platform of the High Level Forum”—

blah blah; it is a lot of euro-babble. I would therefore like to think how I would explain it to a lay person. What would I say? This is an attempt, based on my efforts to understand the regime.

It was established 45 years ago as a Common Market organisation to protect producers of sugar. It does so, as I understand it, by using taxpayers’ money to pay a direct subsidy to producers and by setting a minimum price paid to producers by sugar factories. At the same time, we are also subsidising some of these farmers through rural development grants—and this is to produce a product that we know is unhealthy, leading to obesity and with some links to cancer.

Having then interfered with the market once, we are then locked into a spiral of constant, costly market interference. To prevent overproduction in response to the generous price, and to in some way control the cost, there are then quotas to set a limit on production. Production in excess of the quota is known as out-of-quota sugar and strict rules then govern its use. It can be exported up to another limit, sold for biofuel or other industrial non-food uses, or be counted against the following year’s quota of sugar. The quotas can be varied to try to keep up with changes in the amount of sugar that people want to buy.

So far so good, in terms of the story, but of course it does not end there, because some of the poorest countries in the world grow sugar cane. Although we know that those countries would be better off if they refined it themselves, we like to import it and refine it here. Indeed, when our beet production was limited, some of our refiners adapted to refine cane sugar themselves as well. So, we give free access to preferred poorer countries to fill the gap between what we allow ourselves to produce and what we need. Fair enough— as the noble Baroness, Lady Byford, reminds us, these countries need the help—but they get it on our terms.

However, it seems that the Commission is very bad at giving extra money to help those countries produce the cane sugar we need, so we have to make up the shortfall, which we do by importing from other countries, rather than, say, allowing ourselves to produce some more. We sometimes pay our beet producers to store some sugar so we can release it on to the market to make up for shortfall, but we are normally too slow to do this because the Commission is not proving that good at responding quickly.

I may have misunderstood some of the detail but that appears to be the story from my reading today. It is a story that could have been written by the most swivel-eyed of Eurosceptics. It is madness and needs to change. At no point are consumers accounted for and, despite all this public money, consumers are paying a lot more for sugar, as the noble Baroness, Lady Byford, set out so well.

Of course, it is easier to say what is wrong with the system than how we get from where we are now to a market-based system. I welcome the committee’s report, which is sensible and discusses the risks for ACP and LDC countries as well as others in the industry of changing too fast. I also welcome the Government’s response, although I note the comments of my noble friend Lord Carter and others who have spoken on the unacceptable lateness of that response. I also agree that the response on research appears a little complacent. However, we are all broadly in agreement.

My position on the main specific issues is that quotas are outdated measures that create artificial shortages on the EU market, do not deliver supply to meet demand, drive prices up, affect consumers heavily, limit the functioning of the market and hinder farmers from adapting to market signals. They also hamper efficient producers and stop new entrants from joining the industry and helping to develop it. Therefore, as we have heard from the noble Earl, Lord Caithness, they should be abolished as soon as possible. I hope that the Government will find some friends on the Council and reject the Parliament’s proposal to delay from 2017 to 2020. I suspect that they will end up compromising on 2018. If so, I guess that I can live with that, provided that it is adhered to with no concessions to being subject to progress and such like, as argued by some MEPs.

On cane refiners, regardless of whether the quotas stay or are abolished, beet growers and cane refiners must be treated fairly. A mechanism could be introduced so that when it is clear that a refiner’s raw material needs cannot be supplied from the preferential countries or topped up from beet production, raw cane sugar from other sources would be made available at low or no import duty.

On developing countries, through the European Parliamentary Labour Party we are pushing the Commission to ensure measures to help mitigate the effects of abolition of the quotas, such as increasing competitiveness and diversifying production. We must move away from a costly system that fails to stabilise the market, is doing little to serve producers and is certainly not serving consumers.

We would do well to recycle some of the savings from abolition into education about the health effects of consuming too much sugar. However, I agree with the committee that health is no reason to continue with the barmy EU sugar regime. I am, incidentally, unpersuaded as yet by the argument for using tax in this area, as the noble Baroness, Lady Parminter, argued, given the comments that we have already made about consumer pricing.

We would do well to ensure that assistance to preferred suppliers works and assist others to follow the Mauritius example and those supported by the Fair Trade Foundation to process more sugar domestically.

Most of all, we must get on with regime change. My one question to the Minister—I promised him only one question—is to ask how likely it is that we will get agreement, as planned, by the end of this month, and whether the Government will stick to their determination to phase out quotas before 2020.

Insurance: Flood Risk Areas

Lord Knight of Weymouth Excerpts

Wednesday 22nd May 2013 Lords Chamber

[Lord De Mauley]

I have to admit to the noble Lord that this is not in my policy area, so I have not. I attend the regular ministerial meetings so I know a certain amount about what is going on. In negotiations, it is very important that the intricate details are kept confidential, and I hope that the noble Lord will understand that, but, as I say, I am confident that we are working towards a solution.

[Lord Knight of Weymouth]

My Lords, the noble Lord, Lord Greaves, is right that the time that it has taken to reach this agreement is unacceptable. Last week we discussed the Defra delays over doing something about plastic bags. This week we return to this question. I declare my interest as someone whose home was flooded last July. Why do we keep having these Defra delays? Is it that Ministers are not showing leadership and providing a sense of urgency, or is it that right now it is impossible for this Government to agree about anything?

[Lord De Mauley]

My Lords, whenever we talk about flood insurance, the noble Lord leads with his chin. I just say this to him, once again: the statement of principles, which his Government put in place, did nothing about affordability. That is what we are seeking to tackle this time.

Reservoirs Act 1975 (Exemptions, Appeals and Inspections) (England) Regulations 2013

Lord Knight of Weymouth Excerpts

Monday 20th May 2013 Grand Committee

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

The amendments to the Reservoirs Act 1975 by Schedule 4 to the Flood and Water Management Act 2010 introduce a more risk-based approach to the management of large raised reservoirs, and these regulations are a key component of this process. The regulations are required to be brought into force as soon as the substantive provisions amending the 1975 Act are commenced.

By way of background to the Reservoirs Act 1975, while it is rare for a large raised reservoir to fail, the impact of such failure on life and property could be considerable. During the 2007 summer floods, there was a near-miss incident at Ulley reservoir where a complete reservoir failure was averted only by emergency action. In his review of the 2007 floods, Sir Michael Pitt made recommendations for improvements to reservoir safety. These recommendations were addressed through amendments to the 1975 Act made by Schedule 4 to the Flood and Water Management Act 2010.

Regulation-making powers inserted into the 1975 Act by the 2010 Act include the allowance of specific exemptions from the 1975 Act, the introduction of appeal rights and clarity on the timing of inspections. The regulations relating to exemptions specify what are not to be treated as large raised reservoirs for the purposes of the 1975 Act. Exemptions from the 1975 Act include tips that are covered by mines and quarries legislation and canals and inland navigations, and these exemptions are maintained. Due to the new definition of a large raised reservoir as a result of the 2010 Act, other bodies of water potentially fall within the scope of the 1975 Act. This has led to a new exemption for road and rail embankments with drains that have not been artificially blocked, such as with gates. Where a road or rail embankment effectively acts as a flood storage reservoir, it should be recognised as such and managed accordingly.

The regulations also provide undertakers of large raised reservoirs with the right to an appeal. An undertaker may appeal against the designation of a large raised reservoir as high risk and against notices given by the Environment Agency either to appoint an engineer or to carry out a recommendation of an engineer in the interests of safety. The regulations provide that the First-tier Tribunal will hear all appeals under the amended 1975 Act. To maintain the credibility of the 1975 Act and the efficacy of the designation regime, it is important that the appeals mechanism is independent, efficient and comprehensive and is a fair and cost-effective way of adjudicating any disputes. The process for bringing an appeal is governed both by these regulations and by the Tribunal Procedure (First-tier Tribunal) (General Regulatory Chamber) Rules 2009.

The regulations also set out the timings of inspections. Previously, under the 1975 Act, all large raised reservoirs had to be supervised and inspected, whereas the 2010 Act amends this to include only those large raised reservoirs designated as high risk. Transitional arrangements will be in place to ensure the smooth introduction of these requirements. The regulations also require the Secretary of State to review the operation and effect of these regulations and to publish a report within five years after they come into force. The powers to make these regulations are contained in the amendments made by Schedule 4, which were commenced in October 2011. The substantive provisions introducing a more risk-based approach to reservoir management cannot be implemented without these regulations.

The amendments to the Reservoirs Act 1975 introduce a more risk-based approach to the management of large raised reservoirs and these regulations are a key component of that process. They are a necessary and appropriate statutory obligation and I therefore commend them to the Committee.

[Lord Knight of Weymouth]

My Lords, anyone observing this debate might think that, based on attendance, there is little interest in these regulations. However, I think that this is one of those circumstances where attendance signifies consent, and lack of attendance signifies positive consent. I think the fact that more noble Lords have not attended the debate simply demonstrates the extent to which the regulations are not contentious.

I remember well the floods of 2007 and how perilously close we came to real disaster when emergency action averted the failure of Ulley reservoir. That was why the previous Government, of whom I was a member, asked Sir Michael Pitt to carry out the review, and the Pitt report recommended these improvements to reservoir safety legislation and, in particular, this risk-based approach. It would be extremely churlish of me to be anything but supportive of these regulations given that they reflect the work that was done following the Pitt review. It merely remains for me to ask two or three questions that arise from the regulations.

The first, which might sound slightly oppositional, is straightforward. Why has it taken so long to bring forward the regulations given that Sir Michael Pitt carried out his review some time ago? They are dealing with significant matters of risk in respect of flooding and we have had a lot of flooding activity in the past 12 months. Everyone has noticed the nature of the weather during that time and the flooding that goes with it, so it would be helpful to know whether more could have been done to bring these forward sooner.

The second question is on Regulation 3 and those items not treated as being large raised reservoirs. As the Minister said in his opening comments, certain items such as tips, which have been exempted as large raised reservoirs, and other items are being added here. Assuming that some of those items might have some high risk attached to them on a risk-based approach, how is that risk being assessed? Who is inspecting them and how is the risk then being raised and dealt with by the owners of those bodies of water? If none is of high risk because of its very nature—such as its embankments or drains—then to ask whether the risk-based approach would not have dealt with it without this piece of legislation is perhaps rather a pedantic, subsequential question to that.

Finally, Regulation 4 deals with the right to appeal first against designation and Regulation 5 with the right to appeal against a notice. The basis of that appeal is to be able to go to a First-tier Tribunal. Can the Minister update us on how much capacity the Tribunals Service has to deal with these appeals? What is his expectation regarding the volume of appeals? As we refer more things to the Tribunals Service, there is a general concern that the service’s funding is not growing. I am quite confident in saying that. I suspect that it might be shrinking, and yet we are asking it to do more work. In these matters of public safety, which is what these regulations are dealing with, we would certainly not want appeals to be delayed because of a backlog at the Tribunals Service due to its lack of capacity.

That is probably my most significant question. The Minister has been assiduous in writing to me when things do not initially seem as forthcoming as they could be, and any information that he could give us about the Government’s assessment of the Tribunals Service’s capacity would be very helpful. Incidentally, if an appeal is unreasonably delayed in the Tribunals Service and an incident then occurred, where would the liability fall? Would it fall with the owner of the reservoir or with the Government because they did not have sufficient capacity in the Tribunals Service?

My final question also relates to the Tribunals Service. There was some mention either in the impact assessment or the Explanatory Notes of discussions that are still going on with the Tribunals Service about how it will deal with technical matters as opposed to legal matters when appeals are being heard. If the Minister has any update to put on the record about those discussions that would obviously be very helpful.

To summarise, we on this side are extremely happy to see the Government coming forward with these regulations, although we would have liked them to have happened a little quicker. There are one or two issues of concern in terms of the tribunal arrangements for appeals, but it is right that people should be able to appeal and it is right that it should be done in the context of the Tribunals Service. I therefore do not have any substantial argument with the way in which this is going forward. On that basis, I hope that I have given the Minister enough time, by talking a little longer, for him to give us some answers.

Environment: Plastic Bags

Lord Knight of Weymouth Excerpts

Tuesday 14th May 2013 Lords Chamber

[Lord De Mauley]

The noble and learned Baroness raises an important question. It is one that we are considering. At the moment, we have not been able to find a bag that is of sufficient strength to do the job, but it is a very important subject and we are looking at it closely.

[Lord Knight of Weymouth]

My Lords, the noble Lord said that it will take until the middle of this year before he gets the data for the first year’s operation of the scheme in Wales. Will he give us a timeline for how long it will take him to assess that data so we know when he will make a decision? Will it take him a year?

[Lord De Mauley]

My Lords, we will get on with this expeditiously. There is a lot of action already. I understand that retailers including Marks & Spencer, WHSmith and Lidl have instituted voluntary charges. Sainsbury, Asda, Tesco, Morrisons, Waitrose and Co-operative Food have put carrier bag recycling facilities at the front of their stores. We are providing funding for various projects in the marine environment, where the problem is often at its starkest. Keep Britain Tidy operates the Love Where You Live education and information programme. As I said, we are actively considering a charge on carrier bags based on the experience in the devolved Administrations.

Marine Conservation Areas

Lord Knight of Weymouth Excerpts

Wednesday 13th March 2013 Lords Chamber

[Lord De Mauley]

Yes, my Lords. First, it is worth saying that a sizeable proportion of the 58 are included in the 31 that are currently out for consultation. As regards the others, there are questions over data certainty and cost to which my noble friend Lord Eden referred earlier. We will have new scientific evidence to use along with responses to our consultation when making our final decisions on which sites should be designated this year. Further evidence will continue to become available thereafter and will be considered when making decisions on future tranches of marine conservation zones to complete the network.

[Lord Knight of Weymouth]

My Lords, the aim of the marine Act was, as the noble Lord, Lord Eden, said, to establish an ecologically coherent network of sustainable conservation zones. The Government’s current suggestion of just 31 falls way short of achieving that aim and ignores the Government’s own science. The environmental and social gains of protecting our marine environment are obvious, but has the Minister seen the analysis showing an economic gain of £10 billion in Scotland alone through this sort of protection? Instead of trading insults with Hugh Fearnley-Whittingstall in the Guardian, should not Richard Benyon, the Minister in the noble Lord’s department, build on what the previous Government established and, as the noble Lord, Lord Eden, has asked, give us a clear timetable—not “shortly”—for further implementation?