Spending Round 2019

Debate between Lord Liddle and Lord Davies of Stamford

Wednesday 25th September 2019 Lords Chamber

[Lord Liddle (Lab)]

My Lords, it is very enjoyable to hear the noble Lord, Lord Young, having the freedom of the Back Benches, and I hope we are going to hear far more from him in that capacity. We should, of course, be debating the great crisis we are facing in our nation’s affairs, but he was very pungent in his remarks on BBC News yesterday about what the Government should be doing, with which I agree.

This has actually been a very enjoyable debate. I would also like to say how much I enjoyed listening to my old friend, the noble Lord, Lord Horam—I learned a lot from him in his very long political career, particularly in the earlier stages—and he had a lot of interesting things to say.

The document we are discussing is very flimsy, and not backed up by any economic analysis from the OBR. The question is: does it represent a turning point in our attitudes to public spending and tax? Are we finally getting away from the policy of the last decade, which has basically been to hold public spending down below the rate of economic growth so we can achieve a gradual reduction in the ratio of debt to GDP when we think we can get away with that, but cutting taxes instead when we face political trouble? So the question is, are we moving away from that framework? Are we now accepting that both infrastructure investment and some types of social investment by the public sector make economic sense because they add to economic growth potential? One should not just be looking at the pure number of the deficit but should be asking oneself how much within the public spending envelope will add to growth potential and is therefore a sound investment.

Are we facing up—I think none of the political parties is--to the great demographic challenge we will face in the next 10 years?. According to the IFS and the Resolution Foundation, if we are to maintain present standards of pensions, health services and social care, tax as a proportion of GDP will have to rise by 5% because of the challenge of demography. I think that this is where the Government ought to open a public debate.

As we were discussing at the Labour conference in Brighton, the tax burden on the top 1% or 5% can certainly go up a bit; the broadest backs should bear the heaviest burdens. However, the fact is that we will not enjoy a decent quality of welfare state and public services in this country unless we can make the case to the public overall for a general increase in taxation. This is going to be difficult in an environment of Brexit—

[Lord Davies of Stamford]

I am listening to my noble friend with great attention—he is a great expert on these matters. As an alternative to increasing tax, would it not be possible to consider some compulsory universal insurance system, such as happens on the continent?

[Lord Liddle]

I would include compulsory social insurance or hypothecated taxes as part of the general remark that I made. However, we are going to have to find new ways of funding our welfare state because of the demographic challenge. This is going to be difficult if Brexit goes ahead because, even if we avoid no deal, which we have legislated against, the kind of medium-term deal that Boris Johnson has in mind—the Canada-plus, free trade agreement—is not the smooth Brexit that the economic forecasts of the OBR have relied upon. It is a much tougher, harder Brexit than the customs union and regulatory alignment that Mrs May was aiming for. It will have more serious economic consequences for the country, and I worry about that a great deal.

Of course, you could not possibly justify, as a result of Brexit, a temporary increase in the government deficit, but you can only do that for a time. We saw in the 1970s that there had to be an adjustment for the higher price of oil, and we saw after the 2008 financial crisis that there had to be an adjustment for the fact that the deficit had risen as a result of the cost of saving the financial system.

If that will be the case, who will bear the pain? The people who cannot afford to bear the pain, and the people whom this document completely neglects, are poor working families. There is nothing in this document to relieve the burden that they have faced in the last 10 years. This is a gross generational unfairness: I get a nice real-terms increase in my pension every year, but what do the young mother and her children get? They get their benefits frozen as a direct result of the Government’s policy.

Most of these people are not people who do not work. They are not, to use that horrible language, scroungers; they are people who work the living daylights out of themselves, sometimes with two or three jobs, in order to meet the family budget. This squeeze on working families is having a dreadful impact. The Resolution Foundation, one of the best independent think tanks of the past few years, suggests that we will have something like 1.5 million children in poverty— 37% of all children—if we continue on our present policy path on tax credits, universal credit and the rate of benefits. That is unacceptable. Even in the period that we are talking about, there is a 4.1% increase in departmental expenditure in the coming year but further cuts in benefits are going on. It cannot continue. I notice in Cumbria the dreadful impact that is having on the ground. We have a great increase in demand for our children’s services, from parents who cannot cope with bringing up their children themselves, and the costs of our children’s services are rising dramatically. This will become as big a challenge as social care unless we address it.

The big question is: is this a turning point? I hope that the noble Lord, Lord Duncan, from his new position will be able to say positively that the policies of the past nine years have been abandoned.

European Union (Withdrawal) Bill

Debate between Lord Liddle and Lord Davies of Stamford

Committee: 3rd sitting (Hansard): House of Lords
Wednesday 28th February 2018 Lords Chamber

[Lord Davies of Stamford]

My Lords, the support of the noble Lord, Lord Kirkhope, for the amendment will be welcome. It reflects what I have always thought was a considerable cross-party consensus in this country in favour of a reasonable amount of regulation. Of course there are fanatics. Professor Minford is a very good example of an intelligent man who believes if we got rid of all regulation it would be a very good thing, and he has made calculations of the economic benefits to the country if literally all regulations—health and safety, environment, consumer protection and employment protection and so on—were simply abolished. However, he is rightly regarded as a fanatic in his own profession and indeed in politics. There are a number of people on the right wing of the Conservative Party who have always been very close to that way of thinking, and it would be quite terrifying if the Government, under the camouflage of taking powers apparently needed to bring about Brexit, found themselves in possession of instruments that meant that without any real let or hindrance they could simply take an axe to the protective regulation that has emerged in this country over the decades.

All civilised countries have to have a reasonable amount of regulation in these fields or they very rapidly cease to be civilised. One of my great worries about leaving the EU is that we will probably end up with more regulation that in many cases will be much less rational: it will be the result of a campaign by the Daily Mail and weak Ministers giving in, saying, “Oh goodness, let them have what they want”, and regulating on this or that. There is a much greater chance of that happening when we are no longer part of a body of 28 countries that are forced to look at these issues in realistic terms and come to some agreement on the subject. That is very worrying.

[Lord Liddle]

Would my noble friend give way? I want to be helpful to his argument. He refers to Professor Minford and the cost of EU regulation. It is only by making the extreme assumption that all these regulations will be abolished that the tiny number of economic studies that demonstrate some growth benefit from Brexit are able to get to that number. Those studies are quoted very frequently from the Front Bench opposite as examples of the fact that some economists differ from the consensus, but in fact that difference depends on the assumption that we would scrap every single piece of EU social protection.

[Lord Inglewood (Con)]

My Lords—

[Lord Davies of Stamford]

I think that was an intervention. I gave way believing that it was.

[Lord Liddle]

It was to help my noble friend, yes.

[Lord Davies of Stamford]

I do not know whether or not to be pleased by that remark. It was very kind of my noble friend to want to help me but I do not know if I was in that much need of help at that moment. However, he has made a major contribution to the debate. He has pointed out something that all of us who were involved in the referendum campaign are well aware of: there were constant references by leave campaigners and the leaders of the leave campaign to the costs of the EU, but when you looked at the figures you found that they were based on the assumption that we would get rid of a whole raft of regulation—perhaps all regulation, as Professor Minford would like. However, very few people, if you put it to them, would want to live in a society in which there was no regulation in these areas. So there has been a great deal of dishonesty and obfuscation, not only in this area but in the whole European debate. In my view, that has not been a positive contribution to the ability of the British people to make an intelligent and well-informed decision. It is regrettable that some people have been prepared to be that cynical in this context.

To revert to the amendment and the clause before us, there is an extraordinary aspect to this: if the Government really do not have sinister intentions in this area—I cannot believe that they do; I do not actually think they intend to get rid of a whole raft of regulations, even in areas like employment protection, which we know the Conservatives particularly tend to dislike—why have they themselves not produced, in drafting the Bill or subsequent amendments, protections that would assure everyone that they had no such intentions? The amendment is a good one but it should not be necessary. It is most unfortunate that the Government have allowed the suspicion to be created that these regulations, which are fundamental to a civilised society, should be at risk. I look forward to hearing from the Minister that I am quite mistaken and the Government have no intention of using these powers in a deregulatory fashion but want only to use them functionally to assist in the transition to the post-Brexit era, and that they are prepared to accept the need to reassure the public that these powers cannot be misused and therefore will introduce some protections of their own, if they do not agree with this amendment, on Report.

Brexit: Triggering Article 50

Debate between Lord Liddle and Lord Davies of Stamford

Wednesday 29th March 2017 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords—

[Lord Liddle (Lab)]

My Lords—

Financial Services Bill

Debate between Lord Liddle and Lord Davies of Stamford

Tuesday 10th July 2012 Lords Chamber

[Lord Liddle]

Britain’s position is given a special status given that we are the financial centre of the European single market. The governors of the central banks who make up that body are alive to London’s concerns at all times. It is very important that we play a major role there. It is therefore crucial that we keep these issues under review. I do not think that the way in which the Government have handled the proposals for a banking union is in the UK national interest. It is a bit rich to say, “It is none of our business because this is to do with the eurozone”, but then to complain that the creation of this thing might mean that there was an inbuilt majority against Britain on all financial regulatory decision-making. It is rather contradictory.

The position we have to adopt is that although we are not in the eurozone and will not be in the eurozone, we have to sustain the single financial market. That involves us having the closest possible relationship with the relevant European bodies and keeping abreast, in terms of our own arrangements, with developments there. For those reasons, I strongly support my noble friend’s amendment.

[Lord Davies of Stamford]

I also strongly support my noble friend’s amendment, which was very well conceived and—if I may say so—very persuasively moved. I also agree very much with my noble friend Lord Liddle in the way that he approaches this problem. I think that there are four major issues on which the House needs to ponder carefully. The first is the emerging mismatch between the evolving structures in financial regulation on both sides of the channel. Something has already been said about that so I will not go into it any further.

The second issue is subjective, but I fear that it is very difficult to deny. It is our declining influence in matters of financial regulation and supervision around the world. Many of us can remember a time when the British were regarded as great experts in these things. We obviously were brilliant because we had such a successful financial services industry. Therefore, when we said something about financial regulation, supervision or the right way of creating a framework for a thriving financial services industry, whether it was said in Washington, New York, Brussels or Frankfurt, it was listened to with great attention. We naturally had a very strong influence. I am sorry to say that a combination of the Euroscepticism of this new coalition Government and our recent failings in financial regulation and supervision—one thinks of the failings of the FSA in matters of RBS and so forth, and now the terrible and very upsetting scandal of LIBOR fixing, which I will not go into any further—inevitably will, and is, undermining the influence that we used to have. That is a very worrying situation.

There is, thirdly, the competitive issue, which we will come on to in later amendments. It is quite clear that as the framework for financial regulation diverges between this country and the continent, there is always a danger of competitive advantages changing, and possibly not in our favour. One of the obvious examples of which people are well aware is the possibility of lower capital-adequacy ratios on the continent. Presumably, particularly in the light of the crisis that we have all been through, they will always be set at a fairly sensible prudential level. However, there may be significant differences—for example, in retail deposit insurance schemes—which would lead people to want to hold their accounts on the continent rather than here. All kinds of things could emerge from regulatory and supervisory initiatives that would change the competitive balance. We need to be very alert to that.

Finally, the jury is out on whether or not it is in the national interest for us to be part of the emerging European banking union. I can see a great many theoretical reasons why it might be very strongly in our interest to join, but I do not have the slightest hope of persuading colleagues in the House today of that. Indeed, I am happy to wait and see, but we need to keep the matter under review. The regular review which my noble friend proposes in this amendment is exactly the kind of procedure and discipline that we want.

All British institutions involved should be aware that they are being reviewed in this matter; that their collaboration and effective participation in European structures is being watched; that they are expected to use their influence as effectively as they can on our behalf; and that they should be very conscious of the role they are playing. All that is very important and we need to monitor the results. We need, a few years after it comes, to be able to look back over the record as revealed by these reviews and otherwise—quite pragmatically and open-mindedly, without dogmatism or emotionalism—and to take a rational decision on the best way of achieving the national interest going forward.

European Union (Approval of Treaty Amendment Decision) Bill [HL]

Debate between Lord Liddle and Lord Davies of Stamford

Wednesday 23rd May 2012 Lords Chamber

[Lord Liddle]

My Lords, this is a small Bill consisting of two clauses but, as we have heard in this excellent debate, it is about the huge topic of the future of the euro. As the noble Lord, Lord Howell, explained to us with his usual clarity, the Bill is an enabling measure. We are legislating here not on the substance of the European stability mechanism but only on the enabling treaty change to allow it to happen. Labour recognises the need for this enabling measure. As the noble Lord, Lord Lamont, said, it is already priced into the markets. No one should kid themselves that the establishment of the European stability mechanism is a sufficient response to the crisis that we have now. There is an enormous crisis in Greece and a growing calamity of collective austerity. To that extent but not much more, I agree with my noble friend Lord Reid.

My noble friend Lord Giddens said that he had had enough of talking about being on the edge of precipices. Perhaps I may say what I think is at stake here. At stake is a crisis that threatens the success of the post-war settlement that we have seen in Europe and the stability and prosperity that the European Union has brought to Europe. That is what is at stake in this crisis. I disagree profoundly with the noble Lord, Lord Flight, and his parallel with the gold standard. The difference between the European Union and the gold standard is that it is a political union, and politics can do something about it. If leadership is shown we can avert a crisis that threatens to break up the post-war settlement.

What we need, as the noble Lord, Lord Hannay, said, is a bit more solidarity and a bit less emphasis on limited liability. How should we go about trying to save the situation? First, the firewall needs to be a lot bigger in scale and more flexible in operation. The existence of the stability mechanism cannot be a substitute for a central bank. The central bank must be willing and prepared to intervene decisively in the bond markets to stem self-fulfilling speculation and panic. I do not think that we will get eurobonds at this stage; I do not think that the Germans will agree to eurobonds until there is established a European fiscal authority. However, we could have a more flexible stability mechanism.

Secondly, the stability mechanism should be preparing now to act quickly on recapitalising the banks in Europe on a pan-eurozone basis. If responsibility for sorting out the banks remains with the national countries—the sovereigns—the problems of countries such as Spain can only get worse because sorting out the banks increases the fiscal problem; dealing with the fiscal problem involves a squeeze that makes austerity more severe; and the impact of this fiscal squeeze on growth ultimately also deepens the problems of bad loans and zombie banks. We have to deal with this on a pan-European level and the ESM is the body to do it.

Thirdly, we need a more balanced strategy—not choosing growth over austerity but a balanced strategy. François Hollande’s victory has changed the political weather in Europe. There is a growth plan under preparation in Brussels. We have heard about it in our debate—unspent structural funds to be used better, recapitalisation of the European investment bank and an experiment in project bonds. Put with that, the noble Lord, Lord Davies of Stamford, talked about the need for structural reforms and the need to revive the single market which Prime Minister Monti is so behind. That is a credible package. They are welcome initiatives but from our side we not think that they are enough. For one thing, their impact would take too long to work. Infrastructure schemes and renewable energy projects are rarely ready to go. Southern Europe needs stimulus to growth now.

[Lord Davies of Stamford]

I am grateful to my noble friend for giving way. He will be aware that in Greece the motorway building programme was stopped midstream because of the bailout conditions. Those projects are shovel ready—a lot of work has been done on them and they are all ready to go. Some financing there could affect demand very rapidly.

[Lord Liddle]

The noble Lord, Lord Davies, is absolutely right. In addition to infrastructure, I think that we need a more moderate pace of deficit reduction. The Commission argues that the fiscal compact gives you all the flexibility that you need in a crisis situation. That should be done. Secondly, we should be mobilising the structural funds to tackle the employment issues, particularly the fact that in countries such as Greece and Spain, getting on for half of young people are out of work which is completely unsustainable socially and politically. It is also the case that a major competitive weakness of southern Europe is the low skills level of its workforce. That must be addressed from Europe through the structural funds—a crash programme of social investment in human capital.

Thirdly, the eurozone needs more balance between the strong and the weak in the urgent competitiveness adjustments that it must make. Stronger countries such as Germany have room for manoeuvre. Noble Lords talked about higher wages for German workers, which are certainly affordable. German wages have gone up very little despite the country’s enormous export success. I am glad that there is now a consensus between the Social Democrats and Christian Democrats on the introduction of a national minimum wage. Germany would have to tolerate only a bit more inflation to help the south, which is suffering debt-trapped deflation. That would enable the ECB to meet and maintain its target level of inflation of around 2% across the whole eurozone.

Our hope is that the political ramifications of the Hollande victory will result in a wider and bolder set of actions to build a stronger firewall, recapitalise the banks, adjust the pace of deficit reduction, offer immediate help on jobs and increase demand in countries with surpluses. That will not get us out of the need to make harsh adjustments. However, if we continue with collective austerity it will lead to collective suicide.

What is the coalition’s view? Is it still backing Mrs Merkel’s priority of fiscal austerity, which has been its policy at home for the past two years? Or is it undergoing a latter-day Keynesian conversion to the need for growth in Europe? If the eurozone can have a plan B, can we not have one at home? That is what we need. It is very odd for a Eurosceptic Conservative Party to argue that it is all right to have additional public borrowing through the EIB and project bonds at European level, but that of course it would be a complete disaster to tolerate any flexibility in the public borrowing of the UK. I find this an amusing contradiction in the present situation.

That confusion and contradiction, with a sharp eye for public relations, have been characteristic of the Government’s conduct of their European policy. As the noble Lord, Lord Williamson, said, they treat the eurozone as a convenient whipping boy to cover their own failures. As we know, last year growth in the eurozone was higher than in the UK. I am interpreting what the noble Lord, Lord Williamson, said.

European Union Bill

Debate between Lord Liddle and Lord Davies of Stamford

Tuesday 3rd May 2011 Lords Chamber

[Lord Liddle]

Yes, the noble Lord, Lord Wallace, is right about that.

We are not talking about that but it could be, if we are going to have an effective force for this purpose, that we need to have a much more integrated force posture with common rules of engagement. That is a possibility that member states in these particular circumstances ought to be prepared to consider.

Look at north Africa, where the events occurring mean that the European neighbourhood policy and the Union for the Mediterranean require a complete rethink in their light. We need, as a European Union, to develop a coherent policy which particularly offers those countries in north Africa which are going down the path of strengthening democracy and human rights incentives for going further in that direction. I was interested in a piece that I read—I think it was yesterday—by Peter Sutherland about what might be necessary in order to make that policy happen. It involves tackling very sensitive and difficult issues, such as the need to have more flexible rules on immigration for people from those countries so that they can come and study in Europe, spend time here and then go back there. It requires having more flexible rules on trade so that trade with the European Union can boost their economies and jobs. That would do something about the appalling problems of youth unemployment in those countries. It may require a more common approach to asylum. We are potentially facing having 400,000 people in refugee camps in north Africa, so I read in a newspaper article the other day. These are issues that cannot be addressed in 10 years’ time but on which the European Union needs to develop credible policies, in its own interests, in the next year or two.

Most of the time, we obviously want Europe to use its existing powers under the existing treaties. Yet are we saying that we would not contemplate any change at all? This is the Williamson question which was asked earlier. The Government are getting themselves into a trap here. The coalition has pursued a positive approach to the European Union so far in its negotiations, but if they really believe that they are pursuing a pro-European policy, we urge them to be flexible on these issues and to recognise that we do not want to tie ourselves down with referendum requirements in areas where there is cross-party agreement and a general consensus that we need a stronger and more effective European Union. I beg to move.

[Lord Davies of Stamford]

My Lords, the most important theme emerging from the contribution on this side of the Committee to the debate tonight is the need for the European Union, like any businesslike and serious organisation, to retain the capability for flexibility in responding to what are unpredictable and therefore, necessarily, unpredicted situations. That is enormously important and it is quite clear that the Government are, by contrast, saying of the European Union that we should remain rigidly anchored on the existing constitutional arrangements until and unless, by some enormous shift involving a public referendum in this country, there is a sudden, seismic change. That is the fundamental difference between the perception on this side of the House and that on the other side of the way that the European Union ought to be conducted.

Many of us on this side have the considerable suspicion that, because the Government’s attitude is so unrealistic in relation to what would be the requirements of any organisation that expected to survive in the modern world, there is actually a Machiavellian plan deliberately to make the EU inflexible, to cause crises and conflicts and, at some dramatic interlude, to stymie the whole of the EU. We know that many members of the Conservative Party have had that agenda for a long time.

There is a particular issue of flexibility facing me at the moment. As I understand my noble friend, he has suggested that in the interests of the House and of making rapid progress, we should debate in one session all the amendments from Amendment 23C to 23L. I understand that they cannot be formally moved together en bloc, but my noble friend’s suggestion was that they should be discussed and debated as such and I am happy to do that. If I receive so much as an eyebrow signal from either Front Bench that I am doing the wrong thing, I will sit down and try to address the House again under Amendment 23L, which is what I was intending to do. Unless I receive such a signal, I shall proceed to make a few remarks about that amendment against the background of the theme that I have just set out, which is the unifying theme in all the debates that we are having on this clause.

Amendment 23L deals with the issue of piracy. As my noble friend rightly says, this is a grave and serious problem that does not merely affect east Africa but, unless we get this right, could affect large areas of the world because, if piracy is shown to be something that pays and makes a lot of money with impunity, others will inevitably get involved in it. We will return to a situation that we thought we had left behind in the 19th century when the Royal Navy, above all, in collaboration with the navies of other civilised countries succeeded in more or less extirpating piracy, which had been such a threat to lives, to civilisation and to developing world trade, and I do not think anyone wants that to happen.

My noble friend Lord Liddle sensibly said—I agree—that there may be great advantage in trying to review and standardise the terms of engagement of our various naval units and fleets that are off the coast of east Africa at present. It is slightly absurd that we have three task forces there—one American, which we are supporting, one NATO and one EU. That does not seem a sensible way of making progress, but I leave that matter aside.

I agree with what my noble friend said about the probable need for greater operational co-ordination. I am not sure whether that raises the issues of the Bill in relation to changes in the competences or powers of the European Union, but I have a suggestion to make to the House. I listened with respect, as I always do, to the noble Lord, Lord Wallace, when he commented the other day that, by saying that in future the EU might need some particular power and it would not be sensible for us to deprive ourselves in advance of the opportunity of granting the EU that power in the interests of us all, I was raising hypothetical issues. He said that I did not actually come up with concrete scenarios or specific cases. I hope that I have his attention now because I am coming up with just such a specific scenario.

Anyone with a business or economics background will always look at the demand side before they look at the supply side, on the grounds that the supply side emerges only when there is a demand for something. I put it to the Minister that one of the big problems with piracy is that, on the demand side, people are prepared to pay the money. That issue has not been addressed at all. I have to tell the House that every week ransom payments are paid amounting to millions of pounds. Sometimes they are paid through banking channels, and sometimes they are paid literally with cash dropped out of chartered aircraft on to the coast of Somalia that is then picked up by pirates. As a result, some individual or ship is released from imprisonment by the pirates who have illegally hijacked them. This happens the whole time; I repeat, it happens every week. Every year tens of millions of pounds are paid in this way; indeed, the figure may well be getting into hundreds of millions in the course of a year. I have spoken about this to underwriters in the City of London, who confess that to pay ransoms to pirates is becoming quite a normal part of their business.

Revised Draft National Policy Statement for Nuclear Power Generation, volumes I and II (EN-6)

Debate between Lord Liddle and Lord Davies of Stamford

Thursday 13th January 2011 Grand Committee

[Lord Davies of Stamford]

My Lords, I totally agree with the noble Lord, Lord Jenkin, that there will almost certainly be a need during the next 20 years or so for more nuclear sites than are currently envisaged by the Government. Although I know nothing whatever about the specifics of Dungeness, I have already made a very strong case, and I will look forward to what the Minister says in response.

Perhaps I may begin by surprising probably both sides of the Committee by offering an element of at least modest congratulation to the Government and the Conservative Party on the distance that they have travelled on this subject since I left the Conservative Party some four years ago. At that time, the Tory Party’s doctrine was that nuclear power was a last resort. That was just one of the myriad issues on which I disagreed with that party at the time—it was not the most critical but it was important. I am very pleased to see that, in this matter at least if not in others, the Tory Party has advanced in the right direction. I still do not think that it has got to the right point. I think that its acceptance of nuclear is grudging and in some cases is based on something of a misunderstanding. I note that the overarching document, EN-1, states at paragraph 3.5.7:

“The Government believes that new nuclear generation would complement renewables”.

That seems to be wrong on two grounds, the first political and the other technical. The political ground is that it does not emphasise sufficiently the enormous importance of nuclear. It implies that nuclear is just one of a whole series of possible sources of future power generation. It must be the major source of electricity generation in the future. Secondly, it is quite wrong to say that it “complements” renewables; it is baseload, and renewables are not. What complements renewables is the natural gas combined cycle generation capability which stands alongside renewables, so that when the wind is not blowing, which is about 70 per cent of the time in this country, it can immediately be switched on and replace that peak load. However, nuclear is not a reciprocal of renewables, as that sentence suggests. Therefore, I think that the Government have not quite grasped the enormous importance of nuclear even yet.

We have with us a very able Minister who knows his brief very well. He made a response to a debate on this subject that I attended the other day to the effect that nuclear was not getting any subsidy because it was a proven technology. That seemed a very arbitrary and irrelevant criterion. It may well be that we do not need to give a subsidy to nuclear because nuclear investment will happen without it. If so, I would be the last to suggest that taxpayers’ money should be added to it. However, the criterion should be whether it is necessary to give a subsidy to achieve a desired purpose for the future strategic interests of the country. Obviously, it is necessary to provide subsidies for tidal and wind power, which we are doing, and I support that. Obviously, it is necessary to provide subsidies for the whole area of carbon capture and storage, which is uncertain technologically. I am happy with that investment, with all its risks. Investments do involve risks, and I do not have to tell the Minister that, as he has an investment banking background. I am in favour of that too. However, the criterion should simply be whether it is necessary, not whether a technology is more or less proven. We all know that nuclear technology is subject the whole time to upgrading and improvements of various kinds. That attitude reflects again the feeling of a reluctant commitment to nuclear power which characterises the Government’s policy, although that is a great deal better than the policy that I described, which persisted some four years ago. I hope that the Government will continue to advance in their thinking in the right direction.

I have one or two specific questions that I shall take the opportunity to put to the Government with the chance to have the answers on the record, because I suspect that they will be of interest to others in this country apart from myself. The first one relates to the whole issue of timing, which seems to me absolutely urgent. We are behind time. Of course we should invest in nuclear, and the Blair Administration should have invested in nuclear. There is no doubt about that and I am perfectly happy to accept that point. We should have got into this business 10 years earlier, and we now find the Magnoxes being decommissioned and the EGRs, potentially, being decommissioned. We do not have time to replace that capacity quickly enough. At paragraph 3.5.9 of the EN-1 document, the Government say that they believe it is,

“realistic for new nuclear power stations to be operational in the UK from 2018, with deployment increasing as we move towards 2025”.

That is welcome as a statement of a target but it does not say enough. Can the Government fill out that particular sentence? How many new nuclear power stations do they expect to be operational by 2018? We very badly need to know. When will those power stations start to contribute electricity to the grid? Can we have a little more detail on that?

My second question relates to the further studies referred to in volume 1 of EN-6. I was able to get volume 2 only when I came into the Committee today. I tried yesterday in the Vote Office—if that is the right name for it—where you get papers, to get volume 2 and was told that it was not available. If I were still in the House of Commons, I would probably make a point of order on that. We do not make points of order here, so I cannot do so. I mention it in passing.

Page 4 of the EN-6 refers to a whole lot of studies that will be required. Paragraph 1.6.5 says:

“Further studies will need to be carried out, as part of the project HRA and environmental impact assessment”,

and then, in the following paragraph:

“Further studies will need to be carried out, as part of the project EIA process for individual development consent applications”.

In the fourth paragraph within paragraph 1.6.5, it says:

“These issues will need to be considered in project level HRAs and EIAs”.

The final sentence on the page is:

“The significance of these effects can only be determined through studies as part of the project level EIA and HRA”.

We have a welter of new environmental studies to be undertaken. Are these going to be prerequisites for the granting of planning consent at the beginning of construction of these nuclear power stations and, if so, is that 2018 target at risk, or are the Government confident that whatever happens with these studies, that 2018 deadline—which is far too late in terms of the national interest but we have to do the best we can—will not be at risk? We need to have a clear, unambiguous answer on that.

The third question for which I should be grateful for an answer relates to the whole issue of geological waste. Paragraph 2.11.3 on page 14 of EN-6 says:

“In reaching its view on the management and disposal of waste from new nuclear power stations the Government has in particular satisfied itself that … geological disposal of higher activity radioactive waste, including waste from new nuclear power stations, is technically achievable”.

It may be technically achievable, and that is good news. We know that it is technically achievable because the Americans are investing in a major deep nuclear waste project, and the Finns are investing in one as well, in both cases in granite, and taking into account all the obvious risks. But what are the concrete plans from the Government for making progress in that area? I think that earlier I heard the Minister say that the intention was to have this deep nuclear waste storage facility in place by 2130. Did I hear him say that or did I mishear him?

[Lord Liddle]

2040.