Infrastructure Bill [HL]
Debate between Lord Young of Norwood Green and Lord Jenkin of Roding(10 years, 2 months ago)
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Lord Young of Norwood Green (Lab)
My Lords, I wanted to address this series of amendments not because I am opposed to any of them but to make a plea for looking at the genuinely objective evidence that is available. Durham University is conducting a lot of independent, objective analysis of fracking incidents and the potential threats. I agree with my noble friend Lady Worthington that there is a need to build public trust, but sometimes it is hard to do that when certain organisations are totally hostile to fracking applying in any circumstances whatever. They make allegations that are, quite frankly, unsubstantiated. That is my concern. When we look at evidence, we need to look at evidence that is substantiated.
Another website that is worth looking at is that of the US Environmental Protection Agency. It frequently asks questions such as: why does there need to be a two-year analysis of what is going on, and why can we not say now that fracking is terrible, ruins the environment and so forth? The response is that that is not the case. There have been some quite dreadful things. To my eternal shame, a BBC programme endeavoured to show that fracking was the cause of methane contamination, which meant that you could light the gas as it came out of the tap. My plea is that of course we should have proper safeguards and we need to build public trust, but we also need to ensure that we are not repeating unsubstantiated allegations and that we look at objective evidence. Of course fracking will not be the total solution but there is no doubt that, certainly in America, it has substantially cut emissions and it could have a role to play here, although the environment is somewhat different.
Lord Jenkin of Roding
My Lords, I do not think that any of us is in any doubt about the importance of baseline monitoring for the purposes of environmental control. I totally agree with much of what the noble Lord, Lord Young of Norwood Green, said about the misrepresentation that is going around on the whole question of fracking. This must be scientifically based. To my mind, that is where both the Government and the industry have so far failed to convince the public of the case for fracking. As the noble Baroness, Lady Worthington, said in her opening speech, my noble friend Lady Verma made the case for the need for shale gas on environmental grounds. That is the case we need to go on pressing.
With regard to the amendment moved by the noble Baroness, Lady Worthington, an enormous amount of work is being done by the British Geological Survey on the baseline monitoring of contaminants of various kinds, and on the protection of water. This has been sparked by examples in America, where there never has been any proper baseline monitoring. That is an example of the imperfections of their system of regulation, of which our people have taken full account. They recognise that if we are to control contaminants—it is very important that that should be done—we need to know where we are starting from. That is the heart of the noble Baroness’s amendment.
I am told that the British Geological Survey is about to publish a further study. It originally put in the 12-month period on the grounds that there might be seasonal variations. Its latest work on the contamination of drinking water has shown that there are no seasonal variations: there is no evidence of that at all. I would not be in the least surprised if, in its further report—this is the advice I have had—it finds the 12-month period to be unreasonable and that the best method of assessing baseline monitoring for methane should be scientifically based. The work that is done by the BGS in this country is, for the most part, to the highest standard. The Government are entirely justified in putting their faith in it.
I do not know what the Minister will say in response to the amendment, but I would guess that everything the noble Baroness, Lady Worthington, is asking for is, in one way or another, already being achieved or will be achieved by the Government’s existing policy. I am interested to hear my noble friend’s reply. I share the view of the Committee that baseline monitoring is absolutely crucial if we are to have effective regulation.
Postal Services Bill
Debate between Lord Young of Norwood Green and Lord Jenkin of Roding
Lord Young of Norwood Green
The point at issue in Amendment 66A is whether Royal Mail should be allowed to be hived off and broken up into pieces. We are proud of the fact that there are 115,000 post boxes around the country. Royal Mail has increasingly modern mail centres and the famous fleet of 30,000 red vehicles. The Royal Mail Group’s letters and packages business covers the whole of the UK with a one-price-goes-anywhere universal service, six days a week. That is something that Royal Mail is proud of, and something that we, as customers, want. It works only because it is part of an integrated system. Amendment 66A would ensure that we cannot have a situation where everything is shattered into smithereens, people pick up the bits that they want, cherry picking, and the bit that needs most help and support—the bit that is most threatened—is left. The consequence of such a situation may be to undermine our universal service, so we seek support for Amendment 66A.
I shall comment, if I may, on government Amendment 69. Clause 42 provides for Ofcom to review the extent to which the universal service provider is bearing a financial burden by providing the universal postal service. Clause 43 provides for the regulator to consider mechanisms to provide for a burden-sharing arrangement, if Ofcom finds that such a burden exists. This is both a necessary and welcome mechanism in the Bill. Government Amendment 69 would prevent Ofcom from making such a review for a period of five years rather than three years, as originally proposed. This could be seen as a concession to those who want to resist a levy to share the burden of the universal service. We are a bit concerned about that and would like to hear the Government’s reasons. However, we can see the argument for a five-year transitional period in this case, as we have sought for the USO minimum requirements under Clause 35.
Government Amendment 70 is exactly in line with the provisions that have been sought by the Opposition. It is welcomed by both management and staff in Royal Mail. With the potential turmoil and uncertainty of privatisation, it is important to provide some guarantee that Royal Mail will be able to make long-term investment decisions in the provision of the universal service. If it could lose all or part of the universal service, that would surely be a deterrent to major investment in the network that guarantees that the universal service is provided. By guaranteeing the universal service provision to Royal Mail for a 10-year period, this amendment gives Royal Mail the confidence to make necessary future investment. We are delighted that the Government have listened to the submission on this question from this side of the House, and from those inside the sector who have argued for such an amendment.
Amendment 70A goes on to seek that a reasonable period of notice be given before any other operator can begin providing postal services required under a universal service obligation. Under Clause 43, Ofcom can make a procurement determination—in other words, allow some or all of the universal service to be provided by a company other than Royal Mail. Royal Mail and the postal sector desperately need stability. Royal Mail is undertaking a major programme of modernisation involving more than £2 billion of investment. This process, combined with an aggressive regulatory regime, means that the company is facing a very restricted financial position. The business must be given sufficient notice of such a drastic change if it is to be able to plan effectively and to continue to provide the services expected of it. We are pleased that the Government have listened to representations and agreed that there should be no procurement determination for at least 10 years. However, if such a drastic move were to be made to remove Royal Mail as universal service provider, Amendment 70A would simply ensure that a reasonable period of notice would be required to allow everyone to make the transition. We hope to hear an assurance to this effect.
Lord Jenkin of Roding
My Lords, I listened to the noble Lord, Lord Young, but there are anxieties that the protection of the universal service and the amendments he has moved may, to some extent, weaken the determination of the management of Royal Mail to make the maximum effort to achieve the efficiencies that are now widely recognised as being an essential part of the whole programme. The Bill contains measures which would enable the Government, on the advice of Ofcom, to take other measures, for instance going for procurement, to which the noble Lord referred, if somebody else is prepared to offer the service at a lower cost because they are more efficient. It would be difficult to preclude that happening by legislation. Similarly, on the question of the fund, if other providers are to contribute to a fund, is there not a danger that they will find themselves contributing to reinforcing the inefficiencies of Royal Mail? I have said in previous debates that the chief executive of Royal Mail is making a tremendous, herculean effort as a manager to secure the efficiency savings that can be made. She is the first to admit that there is more to do. Royal Mail recognises that it has made a start and that she has the apparent support of the workforce. There needs to be greater efficiency.
I read these amendments, tabled by the Opposition, as removing some of the pressure on Royal Mail to get ahead with that. The noble Lord shakes his head but that is the fear. I therefore hope that that amendment will not be accepted. The amendments proposed by my noble friend on the Front Bench seem to be an admirable way of giving the appropriate protection to ensure that the services have the opportunity to become as efficient as possible, so perhaps not surprisingly, I find myself supporting the government amendments. I hope that they will not be used so that competitors, who could offer other services, find themselves subsidising the inefficiencies of Royal Mail. I know that that is not my noble friend’s intention but nevertheless there are fears among some of the competitors that that might be the unintended consequence. If my noble friend can reassure me on that I will be very grateful.
Postal Services Bill
Debate between Lord Young of Norwood Green and Lord Jenkin of Roding(13 years, 8 months ago)
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Lord Young of Norwood Green
On reflection, I am happy to do that and shall conclude my comments at this point.
Lord Jenkin of Roding
My Lords, the noble Lord, Lord Young of Norwood Green, has said that this is a very large group of amendments. I considered whether it might be possible to disaggregate some of them and came to the conclusion that, as they all broadly address the same subject—access to the network—it is sensible for them all to be discussed together.
The amendments in the name of the noble Lord and his noble friends seek to make access more difficult, and those in my name and the names of my noble friends Lady Wheatcroft and Lord Skelmersdale take a different line. Before I speak to individual amendments, I thought it might be helpful to say something about what we are aiming at. I do not think it is all that different from what the noble Lord, Lord Young, has described to us, although I think the balance is different.
We want to provide a fair balance between protecting the universal service obligation and promoting competition in the postal sector. Therefore, our overall purpose is to try to find a way in which one can do that. I raised this point at Second Reading and since then my noble friends and I have had the opportunity to hold a number of meetings. We have met the chairman of Royal Mail, Ms Moya Greene, who is a very formidable and able lady—an excellent appointment. We have also had meetings with some of the major companies that entered the postal market under the existing legislation, which was introduced by the previous Government.
Turning first to what one learnt from the chairman, it is clear that Royal Mail is still facing an uphill struggle to become profitable, despite the prospective relief from the overhang of the huge pension liability, which we have just been discussing, and despite what seems to be a very welcome improvement in relations with the trade unions. Access to private capital for Royal Mail is seen as absolutely essential if it is to become profitable. That is why it fully supports the provisions in the Bill to remove the existing statutory restrictions on ownership. New capital will help not only to speed up the modernisation of the business, which all are agreed is very necessary, but to secure new sources of business, which it must have if it is to become profitable.
Ms Greene also pointed out to us—I quote her words, which I hope is not embarrassing—that there needs to be “a dramatically different regulatory approach”. I am not sure that we have that yet in this Bill. Ms Greene has described regulation by Postcomm as “intrusive, extensive interference with no freedom to Royal Mail to price their products or to introduce new products”. Moreover, she put the cost of dealing with regulatory impact at no less than £53 million a year. I find that an almost incredible figure, but she says that that is what it costs. We must return to this issue perhaps at a later stage. One has to ask why the competitors should not pay part of the cost of regulation. They are covered by it and they appeal to it, so why should not part of that cost be borne by them? That is the view from the chairman of Royal Mail, and I find it quite compelling.
Sheffield Forgemasters
Debate between Lord Young of Norwood Green and Lord Jenkin of Roding
Lord Young of Norwood Green
Since the issue is one of affordability and value for money, will the Minister confirm that the Government will publish the value-for-money case?