Water Industry (Financial Assistance) Bill

Simon Hughes Excerpts

Tuesday 6th March 2012 Commons Chamber

[Dan Rogerson (North Cornwall) (LD)]

Clearly, I am delighted that the Bill has been introduced. I would have liked to have seen it some time ago and I am very pleased that the coalition Government have responded to the call from people in the south-west for a measure of support towards the incredibly high costs that they pay for their water—or, more accurately, for the disposal of their sewage, as that is what we are talking about. We talk about water bills, and as a generic term I suppose that is fair enough, but in reality we are talking about the cost of dealing with sewage. As we heard from the hon. Member for Hammersmith (Mr Slaughter), that is clearly an issue in other parts of the country, too. This is very much a Bill of two parts and I shall not seek to comment on the question of what is required in London, other than to say that I sympathise with London MPs who see the costs that their constituents will pay in the future. Whatever scheme we use, and, clearly, the hon. Gentleman thinks that this is the right scheme, there will be greater costs for their water—or sewage—bill payers. From a south-west perceptive—that is, from a Cornish and Devonian perspective—people have been paying these bills for a long time, as we have heard. They are not worried about the future; they have been dealing with this problem since privatisation and, as we have heard, it goes back to the way in which the water industry was privatised.

My speech is somewhat timely. I shall not seek to comment in detail on the inquest that has just reopened in Taunton, but we need to remember just how controversial the process of privatisation and how it was undertaken were. The water poisoning incident at Lowermoor in my constituency still concerns people today and I shall follow with interest the outcome of the inquest into the death of Mrs Cross and the question of whether information was withheld from people as privatisation was introduced.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

On the broader, rather than the narrow, point, may I say that those of us with London seats do not try to make the case that our bills are as high as those for people in the south-west and have always argued for a better deal for them? Any argument about the Bill, for us, concerns part 2 and the terms and conditions under which the Government might support Thames Water with any funding for big projects.

[Dan Rogerson]

My right hon. Friend is absolutely right. The Bill offers opportunities for other parts of the country in that if the Secretary of State felt subsequently that measures should be put in place to look after the interests of water bill payers—or sewage bill payers—in other regions, the Bill would allow them to do that. That is very welcome to all parties.

Let me return to my point about privatisation in the south-west. I do not have the figures to hand about whether much of a receipt was realised at the time, but, clearly, the liabilities companies were being asked to take on were quite high. I suspect that some income was coming into the Treasury at the time of privatisation and a small “green dowry”, as it was called, was provided to the south-west to deal with the recognised cost of clearing up the woeful underinvestment in sewage treatment around a very long peninsula. If a fairer assessment of the real picture had been undertaken at that time, bill payers in the south-west could have been spared a great deal of hardship. It is worth putting on the record that more account could have been taken of the situation at the time. Rather than everything being rushed through, there could have been a better deal at that point that more fairly reflected the burden being placed on my constituents and those of other hon. Members in Devon and Cornwall.

Members from other parts of the country have said to me, “Well, you live in that wonderful part of the world and have that coastline. You enjoy it, so you’ve got to pay for it.” They should try saying that to a young person living with their family in the ward in which I live and in which I spent the early part of my life, St Mary’s ward in Bodmin, which is one of the most deprived wards in the south-west. I would venture to suggest that a young person growing up in that ward might well spend far less time on the beaches of Cornwall than people from other constituencies who come down and visit, or than those who are fortunate enough to own a second home in my constituency that is very close to the beach. My hon. Friend the Member for St Ives (Andrew George) has already discussed the costs sometimes involved in connecting water and sewerage systems to isolated and remote properties, which may be unoccupied and have low water bills because they are on meters. Those costs are borne by people living inland, on the peninsula, who probably do not get the benefit of going to the coast very often.

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[Richard Benyon]

I thought that the hon. Gentleman was going to make a helpful intervention, but he made his point eloquently once again.

The alternative proposal for a shorter western tunnel would allow large volumes of raw sewage to continue to flow into sections of the Thames—exactly what the Thames tunnel is designed to avoid. It is clear that the public do not want raw sewage going into this iconic river through one of the most important cities in the world.

In what I must say was a great speech, we heard from my hon. Friend the Member for Hendon (Mr Offord) about how serious is the issue of combined sewer overflows—not just in London, but around the country. He added his own perspective on other elements of the Bill. I can assure him that combined sewer overflows are monitored robustly and that action is taken where permits are breached or problems with the environment are identified. Beyond the Thames tunnel, some £1 billion is being invested further to reduce the impact of combined sewer overflows across the country.

We are ever mindful of the costs involved in the Thames tunnel project. We remain convinced that there is an economic case for it. Part of it is Thames Water’s estimate that the project would directly employ about 4,250 people in the construction and related sectors, as well as providing further secondary employment. The Thames tunnel team actively support the Crossrail Tunnelling and Underground Construction Academy, which is currently training and gaining employment for 70 apprentices a year. Following the Crossrail model, the Thames tunnel project will specify in its contracts the level of apprentices that will be employed by the contractors.

Let me say that I remain sceptical on cost, which is where I believe Ministers should be on a project of this size. We are receiving the best possible advice, and the work will be ongoing. I cannot possibly stand here and say now that costs will definitely be pegged at the current estimated level, but we will try to deliver this project within budget and effectively for the people of London and the country as a whole.

[Simon Hughes]

Will the Minister allow me?

[Richard Benyon]

I am sorry, but I am a bit short of time, and I may be about to answer the point. Despite the concerns raised by my right hon. Friend the Member for Bermondsey and Old Southwark, Ofwat regulates the ring-fenced regulated businesses and ensures that customers receive value for money from them. Who ultimately owns that ring-fenced business makes no difference to customers; the licence conditions attached to the ring fence provide the necessary protections. Thames Water’s structure is similar to that of several other water companies.

We heard eloquent and passionate speeches from the right hon. Member for Lewisham, Deptford (Dame Joan Ruddock) and from the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), reminding us of the potential impacts of the tunnel’s construction on their constituents. I remain ready to work with them to try to minimise the impacts in any way I can. I am very conscious of the effect that it can have on communities.

My hon. Friend the Member for Thirsk and Malton (Miss McIntosh), my right hon. Friend the Member for Bermondsey and Old Southwark and the hon. Member for Edmonton (Mr Love) asked for an opportunity to amend the waste water national policy statement. We are, of course, happy to have a debate on the policy statement, and, like other debates in the House on national policy statements, it would be a yes or no debate. Best endeavours are being made to ensure that it is held before the Easter recess, and I hope that that provides the necessary reassurance. As for the other project to which the policy statement refers, the Deephams sewage treatment works, Thames Water intends to begin the phase 1 consultation in about June this year. It is still working on a preferred option, and aims to submit a planning application in late 2013 or early 2014.

The hon. Member for Wakefield (Mary Creagh), the shadow Secretary of State, sometimes reminds me of someone having a fight in a pub when the lights have been turned out. She flails around in all directions, and causes as much damage to her mates as to anyone else. She had to intervene later in the debate to tell us that she was, in fact, supporting the Bill, which is a great relief. That was underlined by the hon. Member for Luton South (Gavin Shuker), and we are grateful for his support as well.

Despite the concerns raised by the shadow Secretary of State, the powers in the Bill are appropriately drafted. Although we currently have no plans to use those powers other than to assist South West Water customers and in relation to the Thames tunnel, we heard many calls today—including, again, calls from Opposition Members—for us to legislate to help reduce the problems of water affordability around the country, and to invest in new infrastructure to help make the country more resilient to droughts in future. As the water White Paper made clear, given our growing population and changing climate, our need for infrastructure investment will not diminish. We should leave ourselves the flexibility to offer similar Government support to future projects if the case is strong. However, it is inconceivable that any nationally significant infrastructure project would proceed with Government backing unless the case had been fully debated, as the Thames tunnel project is at present.

Let me repeat the Secretary of State’s commitment: we will publish a draft Water Bill for pre-legislative scrutiny in the coming months, and it will cover the remaining legislative commitments set out in the water White Paper. The market reform proposals in the White Paper will be a key part of the Bill, and are a direct response to Martin Cave’s invaluable report.

In the few seconds that I have left, I want to talk about affordability. One of the necessary provisions is the ability for us to issue guidance on water company social tariffs, so we can address the issue of water affordability nationally. The reduction in South West Water bills to which we are committed addresses an exceptional historic unfairness, but we recognise that many people in the south-west and elsewhere are struggling to pay their water bills. We are encouraging all water companies to introduce social tariffs to reduce those bills in order to help people who would otherwise struggle to pay them, and we will publish final guidance on the design of the tariffs in the spring.

My hon. Friends the Members for St Ives (Andrew George) and for Newton Abbot (Anne Marie Morris) were keen for us to expand the existing reach of the WaterSure scheme. I assure the House that we have considered that carefully, but, as Members will appreciate, we have to make tough decisions about the use of limited public funds.

Water Industry (Financial Assistance) Bill

Simon Hughes Excerpts

Wednesday 29th February 2012 Commons Chamber

[Mrs Spelman]

Is the hon. Gentleman saying that his party is not in favour of trying to clean up the sewage out of the Thames? He will know that the initial study on the Thames tideway was launched when his party was in power—in 2001—and that a significant amount of time was spent looking at alternatives and carefully assessing with the greatest rigour what the costs of such a complex project might be. Just to put this in context, the proposed cost for the Thames tunnel is comparable to the amount having to be spent in Paris to do almost exactly the same thing, and on what the German Government are having to do to deal with an outdated system on the Rhine-Ruhr. So I do not accept his argument that the expenditure on cleaning the sewage out of the Thames is not justified.

The objective of our approach is to help relieve the extent to which households in London are being asked to contribute. As I said in my written ministerial statement on 3 November 2011, the Government believe that the private sector can and should finance this project, but we accept that there are some risks that are not likely to be borne by the private sector at an acceptable cost. We are willing, in principle, to provide contingent financial support for exceptional project risks where this offers best value for money for Thames Water’s customers and taxpayers. However, I will want to be assured that, when we offer this contingent support, taxpayers’ interests remain a top priority. We are working with Ofwat, Infrastructure UK and Thames Water to ensure that the financial structure for the proposed Thames tunnel includes safeguards, so that the likelihood of Government support being called on is minimal.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I do not oppose the Bill at all, but may I just alert my right hon. Friend to something? Leaving aside the arguments about whether there should be a full tunnel or another solution, which I hope to address if I am called to speak, there are concerns about the Government giving money to a company such as Thames Water. It is not a very transparent organisation, being a private equity-funded company that has 10 layers of corporate structure, including in tax havens in some parts of the world. The Government should attach tough conditions to support for any water company if this is to be seen as transparent and good value for money.

[Mrs Spelman]

I share the right hon. Gentleman’s concern that there should be rigour in this exercise, and I have just talked about the safeguards we are seeking. I can also assure him that we have been advised by Ernst and Young that the projected cost of this project does represent value for money, but the rigour will continue to be maintained throughout the elaboration of the project.

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[Mary Creagh]

That is an excellent point. That is why we were interested in the Government’s consultation, which talked about a national affordability scheme and offered the potential to absorb the costs of WaterSure. I hope that the Minister will offer some clarity on that in his closing speech, and I am sure that we can work together on that.

[Simon Hughes]

I do not mean to pre-empt what the hon. Lady might say on the other aspects of bills for water rate payers, but are she and her colleagues concerned—I put this point to the Secretary of State—that the value to water rate payers in London of the Thames tunnel, which is now priced a £4.1 billion, might not be what it was when the previous Government thought it was a good idea? There are big questions about whether it represents value for money for water rate payers and is the best solution in the light of the evidence.

[Mary Creagh]

We believe that the allocation of sums, guarantees, indemnities, or whatever form the financial assistance takes, should be done with full parliamentary oversight, and I will address that when I move on to clause 2.

We believe that the tariffs should be paid for by cracking down on bad debt, which the Secretary of State mentioned in her speech. Ofwat’s website states:

“More than five million households currently owe money on their water bills and over the last five years the amount owed has increased by more than 50%.”

In 2010, £1.6 billion was outstanding, three times the amount of bad debt for gas and electricity bills, despite the fact that water bills are much lower. As she said, the people who cannot or will not pay add an average of £15 a year to the bills of consumers who play by the rules. Bad debt arises in part because landlords are under no legal obligation to provide their tenants’ details to water companies. Rather than a voluntary approach, the Government should compel landlords to share their tenants’ details with water companies, and I know that the consultation is ongoing and is due to close fairly soon. If we reduce bad debt, we can reduce everyone’s bills and fund social tariffs that help those struggling to pay.

Clause 2 creates financial mechanisms and guarantees to support the construction of the Thames tunnel. Why do the Government avoid using the words “Thames tunnel”? Are they trying to avoid a proper discussion of the merits? Labour supports the project. Our Flood and Water Management Act 2010 introduced a “provision of infrastructure” regulation, creating the framework for the tendering, designation and building of such projects. However, costs have risen and time scales have stretched. The Government need to show leadership and make a clear commitment to the project and ensure that the right vehicle for managing and delivering it is put in place. The consultation process for the tunnel is vital for ensuring that sites are placed correctly and the environmental impact of the work on residents is minimised.

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[Simon Hughes]

The Minister knows that some of us have been asking for that process to be followed, and we look forward to such a motion coming before the House. I therefore endorse the hon. Lady’s request, which I think will have widespread support from all parties.

[Miss McIntosh]

I am sure the Secretary of State, wherever she is, and my hon. Friend the Minister will have heard that point.

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[Miss McIntosh]

In our report on the Thames tunnel, we did not consider aspects of affordability, which are rightly covered in an earlier report to which I will turn shortly.

I am delighted that DEFRA accepts that the remaining site-specific sections have been improved and that the Government have, as recommended by the Committee, moved to change the definitions in the Planning Act 2008 to include sewerage transfer and storage projects such as the Thames tunnel in the process for deciding applications for nationally significant infrastructure projects. The Committee welcomes that. I hope that we have discharged our duties comprehensively, given that this was one of our first opportunities to do so under the Planning Act.

[Simon Hughes]

I pay tribute to the hon. Lady and her colleagues on the Select Committee. May I make an unashamed, but well-linked plug? Next Tuesday, 6 March, at 7 o’clock in Committee Room 11, I will be hosting a meeting to discuss the state of the issues that relate to the Thames tunnel. I hope that she or one of her colleagues will be able to come and listen to what is said.

[Miss McIntosh]

I am most grateful. If it does not clash with our Committee meeting, all of us who are available will endeavour to be there.

I echo the comments of the hon. Member for Wakefield (Mary Creagh) about there not being an impact assessment. The explanatory notes state that because the Bill is concerned solely with public expenditure, no impact assessment has been undertaken. Clearly, it is not just about public expenditure; a substantial amount of money is being requested by the water companies, through the Government, to give a £50 reduction. The Minister will be aware that some of those who live in and represent the south-west are concerned that increases in inflation will wipe out the £50 reduction.

Today, the Select Committee took evidence from the Minister of State, Cabinet Office, who is responsible for providing policy advice. He told us that an impact assessment is meant to look at the environmental impact of a project. I am not suggesting that the Bill is defective because it does not have an impact assessment, but I would like to record my personal disappointment that there is no impact assessment. It would have allowed the House to perform proper scrutiny on Second Reading and in subsequent parliamentary stages. It should have been incumbent on the Government to produce an impact assessment on the implications for the water companies of the reduction of water bills in the south-west of England and on the impact that the Bill will have on Thames Water.

The Select Committee produced an excellent first report of this Parliament, if I may describe it as such, entitled, “Future flood and water management legislation”. It is right at this moment to pay tribute to the work of the previous Government. There was all-party support for the Pitt report and its recommendations. There was also all-party support for, and obviously positive scrutiny of, the Flood and Water Management Act 2010. The fact that we are having to wait for the draft water Bill, which will cover all the other aspects, is a source of concern. We are approaching apace 30 June 2013, when the Association of British Insurers will look to replace its statement of principles on the provision of flood insurance. There will also be a host of other measures to consider.

Perhaps in responding, the Minister could explain what he is doing about insurance. I want to record my personal resistance to any state funding of insurance. There are hard cases, which many of us will have in our own constituencies, where houses remain at a substantial or high risk of flooding. I can think of examples such as Thirsk, Pickering, Malton in the past, and Sinnington at the moment. There are therefore insurance aspects that need to be considered. However, as soon as a Government introduce an element of state funding or state insurance, it leads others who are on a low or fixed income to argue that they have concerns about their ability to pay insurance. I know from the visits I made as shadow floods Minister to parts of the country such as Cumbria that there is real concern, particularly when properties are rented, about whether those on low incomes can afford even contents insurance.

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[Andrew George]

I certainly would not wish to denigrate or diminish in any way the importance of successful British companies. Where a company provides a good basis for investors, I celebrate that, along with others. I am simply commenting on the reality of the situation of water companies in relation to all other private companies, which ply their trade in a much more risky environment. That is simply a matter of fact, not of debate.

[Simon Hughes]

There is a link between the experience of colleagues and constituents in the south-west and that of people in the Thames area, because Kemble used to own South West Water and it now owns Thames Water. When it owned South West Water the bills were significantly high and there were a lot of complaints. People are fearful that some of the practices it used then, which included paying out dividends greater than its income—that seems to be not about saving the capital—might be being applied at the moment.

[Andrew George]

I am grateful to my right hon. Friend for that intervention.

On the question of the high water bills in the south-west, let me put on record the fact that in 2010-11, bills for South West Water customers were, on average, £486, which is certainly higher than the average bills in the rest of the country, which were £339. Unmetered customers had much higher bills, of course, at a rate of £721, whereas bills for metered customers in the south-west were £394 on average. As I and others have said, that was the focus of the Anna Walker inquiry.

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[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I am grateful for the opportunity to take part in the debate and to follow the hon. Member for Plymouth, Moor View (Alison Seabeck), who rightly concentrated on matters in the south-west.

May I say, as I have said in other policy areas, that as a London MP I fully support the Government’s proposal, derived from a Liberal Democrat election commitment, to assist people in the south-west? Over the years, I have campaigned with colleagues to improve water quality in the south-west and to clean up sewage on its beaches—I and my hon. Friend the Member for St Ives (Andrew George) helped with the Surfers Against Sewage campaign. I am also clear that there is a collective responsibility for Members across the UK to legislate to end disparities in water prices. As a London MP, therefore, I do not resent our legislating to assist colleagues in a beautiful part of the country where bills have been disproportionate compared with ability to pay and the justice of the case.

[Sheryll Murray]

Does the right hon. Gentleman agree that, from a south-west perspective, this is truly a cross-party initiative? I cannot think of another example where every major political party has campaigned on the water issue.

[Simon Hughes]

I absolutely accept that. I was not disputing the cross-party nature of the campaign. I was trying to support my hon. Friend and colleagues across the House by saying that those of us who do not come from the south-west have supported them too.

A pledge made by the Liberal Democrats bas been honoured, and a pledge made by the coalition Government has also been honoured—generally, then, this is a good proposal.

The second part of the Bill is the one that preoccupies those of us with London constituencies and constituencies served by Thames Water. It is the largest water company in the country and covers a significant number of colleagues with constituencies in the Thames valley as well as in the capital. That relates to clause 2. I support the general proposal that the Government should be able to assist major infrastructure projects, and I am aware that last year and the year before, the Chancellor rightly identified a set of infrastructure projects around the country to get people back into work. Good, long-term, viable infrastructure projects are a good thing, and we should support them.

There is always a danger, however, that infrastructure projects start with one price tag but end up with another. When the Thames tunnel scheme to deal with sewage in the Thames—the system built in the Victorian era by Bazalgette is no longer fit for purpose—was first proposed, the general cost was said to be between £1 billion and £2 billion, but everybody now accepts that, at 2011 prices, the Thames tunnel would cost £4.1 billion or more. That excludes financing costs, as the notes to the Bill explain, but includes £900 million for risk and optimism bias. So this is a big project that will cost a lot of money.

In 2006, the water regulator warned potential buyers of Thames Water that it would not allow them to saddle the company with high debt levels and pass financial risk on to the customers. I want to concentrate my remarks on the financing, and the financing structure, but I also want to place on the record my position on the project. I have supported the general position that we need to deal with the infractions on air quality and water quality in London that have brought us before the European authorities. That is what we are facing in relation to water and air quality; therefore, we need to act.

I have started from the proposition that the Thames tunnel, as proposed by Thames Water, is the right answer. When it was endorsed by the last Government it had my support, but I am increasingly troubled that it looks as if it may not be the answer that everybody once thought it was. Therefore, when I recently made a full submission as part of the consultation process, I asked—I am also about to write to the Secretary of State to ask this question, after this debate and after a meeting on Monday—whether, at least between now and the point in the normal timetable when Thames Water might be in a position to make an application, there could be a final independent review of the viability of the current project.

Those driving the project have an interest—Thames Water has an interest, and there are others with an interest. It is important not just to have a battle between those with an interest in favour and local authorities such as mine—[Interruption]—and that of the hon. Member for Hammersmith (Mr Slaughter), who is about to intervene on me—which, because of the effect on their constituents, have become opposed. At the moment we have a dialogue of two different interested groups, and I think we need to get some people involved who do not have a vested interest. There are people in the European Commission who do not have a vested interest, there are people in international environment agencies who do not have a vested interest, and there are also people who do not have a price interest. Before they commit their support to a project that is rapidly increasing in cost—I will say why that is a danger for the Government, as well as for everybody else—I think the Government would be wise to commit themselves to one last review. I hope I can persuade colleagues over the next few weeks that this can be done in a way that is compatible with the timetable in general terms.

[Mr Slaughter]

The right hon. Gentleman took part in a Westminster Hall debate last September—less than six months ago—at which I think I was also present, when he said:

“The Thames tunnel is the best direction.”—[Official Report, 14 September 2011; Vol. 532, c. 316WH.]

Is he saying that he has changed his mind since then? If he is saying that he has reservations about cost or individual sites, I would say that I probably share them—if I get a chance to speak, I will probably address them. Is he, however, saying that he has now changed his mind about the project as a whole?

[Simon Hughes]

The answer is that there is a proposal on the table for what is called “the full tunnel”. I am not as certain now that what is called the full tunnel is the right solution. There is already the tunnel being built in the east—that is well under way—and there is an argument for a smaller tunnel and other measures. I just think we need to satisfy ourselves before we go for the full tunnel that that is the right solution. There are also site issues, of course, but I regard those as secondary, although in my constituency, as in the hon. Gentleman’s, they are hugely important to our constituents, not least with a major site being planned in the middle of my constituency affecting thousands of people, thousands of homes and two or three major schools.

[Mr Slaughter]

rose—

[Simon Hughes]

I will give way one last time.

[Mr Slaughter]

The right hon. Gentleman is being very generous. When he says “not the full tunnel”, I should point out that the context of his remarks last September was his objection to the wholly inadequate Selborne report, which proposes a partial tunnel—a disastrous tunnel—in west London. I hope he is not saying that he supports that.

[Simon Hughes]

Rather than have a long dialogue, I will let the hon. Gentleman have a copy of my submission to Thames Water later, so he can read my full views. However, let me summarise, as I did in my submission:

“I am now clear that, since the end of the first round of consultations in 2011, the arguments for a review of the full tunnel proposal and possible alternatives have substantially increased. There has been a growing amount of opposition against the full tunnel from my constituents and other constituents in greater London.”

I go on to say that we should therefore give that argument greater weight.

Let me turn to the substance of the financial issues, which are dealt with in this part of the Bill. Back in 2007, a memorandum was submitted to the Treasury Committee by a Mr Martin Blaiklock—consultant, infrastructure and energy project finance—on the subject of Thames Water specifically, but also on equity-type investment generally. He said:

“Over the last 12 months I have be keeping a particularly close watch on the activities of Thames Water, not least because I am a Thames Water customer, but also because it is one example,—and a good example,—of Private Equity involvement with public services. The case of Thames is significant as it is the UK’s largest privatised water utility, serving the Capital and 13 million customers, and also a monopoly service provider...Thames Water Utilities Limited…is the utility licensed by OFWAT. However, Thames Water Utilities Limited is 5 or 6 times removed from the controlling investor group…of whom a number are based offshore in Luxemburg…Is this the ‘transparent’ corporate structure expected of a UK monopoly public service provider?”

I cannot put this on the record, but there is a helpful graph in that memorandum to the Treasury Committee showing Thames Water Utilities Ltd at the bottom. Above it are lots of holding companies, including Thames Water plc, Thames Water Holdings plc, Kemble Water Ltd and Kemble Water Holdings Ltd, and intermediate holding companies. The list goes right up to non-Macquarie investors and then to Macquarie, and shows the purchase of part of the company by the Chinese state finance organisation and others. That shows an organisation that does not do transparent finance. We therefore need certain safeguards to be put in place to protect any taxpayer investment and Government support.

The company also has considerable activity in the Cayman Islands. I am not sure whether that is the most appropriate way for a major utility company to spend its money. The tax arrangements of Thames Water, having been bought by Kemble, have involved setting up a subsidiary financing branch in the Cayman Islands, based at Ugland House, which has 18,856 other businesses registered at it. There is a real question of transparency for Thames Water, and the Government need to have a public debate on it. We need to look at this matter in Committee and on Report to determine exactly how the financing arrangements are arrived at. There is at the moment no proposal from Thames Water as to how it will raise the £4.1 billion to finance the project, and I am concerned that the cost might ultimately be borne by the Thames Water ratepayer, which might not provide the best value for money for our constituents who pay their bills.

Mr Blaiklock concluded:

“There is no doubt that the introduction of Private Equity-type investment into the privatised UK public services has sharpened up the financial management of such enterprises. However, such Private Equity investment has also

(a) introduced a lack of transparency in the control, governance and, therefore, the accounts of such utilities. Some utilities, such as Thames Water, are effectively owned and controlled offshore, possibly by companies with limited liability and domiciled in tax havens. Corporate information is, not surprisingly, hard to come by for such Private Equity investments! Hence, in the event of operational failure by such utilities…it is quite possible that the controlling company and its directors cannot be called to account, notwithstanding OFWAT’s Conditions P and F licensing requirements…

(b) increased the leverage and, thereby, decreased the financial strength of such utilities, at the expense of customers and the security of service; and

(c) introduced corporate uncertainty. The investment horizon for Private Equity is traditionally three to five years, which is short for public service utilities, which require long-term capital and financial stability. The only balancing feature has been the increased intervention, as direct investors, by pension funds and life insurance companies—as principals, not clients—albeit some are offshore owned and controlled. Such investors have longer time horizons and are ideal investors for such public service utilities.”

The other activity that is certainly questionable is the way in which Thames Water has managed its affairs in recent years. Extremely high dividend payments have been made over the past years, representing a direct transfer of income and capital out of Thames Water to private investors. At the financial year end in 2011, Thames Water made £225.2 million in profits, but it distributed £271.4 million in dividends. This high dividend policy is a recent development, but it is not limited to last year. In 2010, the unadjusted common dividend payout ratio, in percentage terms, was 141.5%—that is, nearly half as much again, on top of profits, was paid out. The figure for 2009 was 126.7%—a quarter as much paid out again as was made in profits, and in 2008, 61.3% was paid out. That contrasts with Anglian Water’s dividend ratio of 81.%, Southern Water’s 58.7% and South East Water’s 48.4%. The policy of paying higher returns to investors started immediately after the company was purchased by the consortium behind Kemble Holdings in 2007. The company paid out £535 million in dividends in 2007, and £233 million in 2008.

All this has happened while the company has vastly increased its debt position. In the financial report of 2008, the change in the amount of debt held by Thames Water was more than £1.5 billion. Ofwat warned the bidding companies to keep a good debt ratio, advising that 45% would be appropriate. The ratio is now at 80%. We—Parliament—and the Government need to ask why Thames Water has increased its debt holding by so much when it is known that it has an extremely large capital project coming up, which will need a substantial amount of borrowing.

My question to my right hon. Friend the Secretary of State is whether the Government have investigated whether Thames Water would have been able to make a greater contribution to any scheme from its own funds if it had not spent the last few years borrowing money in order to pay itself. Both the financial policy and the tax arrangements of Thames Water seem to me to be appropriate for us to debate.

My conclusion is that we might need to insert conditions into the Bill regarding any financial arrangements whereby the Government underwrite the borrowing by Thames Water, making it clear that they should be transparent, ethical and accountable so that Thames Water users, those of us who represent people in the Thames Water area and everybody else in the country can understand that there has been some pretty strange organisational finance going on in the last five years. We must make sure that the objectives do not feather the nests of the equity investors rather than benefit Thames Water users, so we must ensure that we have the right financial vehicles if we are to go ahead with infrastructure projects like this one. We will have plenty of opportunity to debate the project itself on other occasions, but I hope that the Secretary of State will be sensitive, as I know the Treasury is sensitive, to these real concerns about how Thames Water runs its financial affairs.

Oral Answers to Questions

Simon Hughes Excerpts

Thursday 19th January 2012 Commons Chamber

[Tony Baldry]

I entirely agree.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

My borough contains the largest African community in Britain. Will the hon. Gentleman consider whether the Church Commissioners might communicate better to Christian Africans in Britain what is being done by the Church in Nigeria and, indeed, in Zimbabwe, which is the subject of the next question? Will he also contemplate sending a small group of Church representatives who are from Nigeria and Zimbabwe to those countries, where they may be able to build a bridge?

[Tony Baldry]

The right hon. Gentleman has made two very good suggestions, which I will discuss with those responsible at Lambeth palace.

Public Bodies Bill [Lords]

Simon Hughes Excerpts

Tuesday 25th October 2011 Commons Chamber

[Andrew George]

I agree. I am grateful to the hon. Gentleman for his correction. I was here then and it is for the hon. Gentleman and his party to reflect on why we thought at that stage that the board might have been under threat. I entirely agree with him about the full raft of protections that should be available to agricultural workers. If I thought those protections were being significantly undermined, I would certainly not pursue the new clause in this manner. I emphasise that I do not feel precious about a particular quango; it is the protections I am most concerned about. I hope to hold out an olive branch to Ministers and say to them, “I agree with the principle underlying the Bill, which is to try to rationalise, amalgamate and abolish where that is necessary. Here is an example where we want the protections, but the small quangos that have proliferated can be amalgamated.” I am meeting them halfway and saying, “Let’s keep these protections.”

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I represent one of the most urban constituencies, but I was brought up in some of the most rural ones. My hon. Friend’s new clause seems rightly to probe whether there is a sensible way to look after the low-paid in the agricultural industry without the duplication of quangos. That seems an entirely proper thing to do, and I hope that colleagues on the other side of the House have the same objective.

[Andrew George]

I did not answer the hon. Member for Harrow West (Mr Thomas), the Opposition spokesman, who asked whether the new clause is intended to be probing or whether I intend to press it to a vote. This is clearly a matter of judgment. My intention is to advance the proposal as a solution that is available to the Government. The Bill is, after all, enabling legislation; it does not actually abolish the Agricultural Wages Board. At some point in the future there will be a framework within which the Government can bring forward a proposal, and we hope that they will genuinely consult upon it and that we will have an opportunity to debate the matter before taking it forward. My intention is to probe the matter. If I receive a deeply unsatisfactory response indicating that the Government have no intention of even considering the retention of any of the protections, or that they intend to drive on as quickly as possible with the abolition of not only the board but the regulations themselves, I will certainly consider pushing the new clause to a vote. I hope that the Minister is listening on that.

--- Later in debate ---

There are perfectly good arguments for saying that we should continue to have an arm’s length Youth Justice Board. It is possible to carry out the functions of the Youth Justice Board effectively under different arrangements, but there are certain essentials, three of which I have sought to identify: the local role of youth offending teams; the importance of not allowing the role to be sucked into NOMS; and the importance of knowing what kind of independent advice Ministers are given. Those are the things the Justice Committee cares about, and I want to be satisfied that the Minister cares about them too.

[Simon Hughes]

I want to say a few words, following what my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) has said and on behalf of my right hon. Friend the Member for Carshalton and Wallington (Tom Brake), who might join us later but is unable to be here at the moment. He has engaged with the Minister, as I have, and I thank the Minister for his engagement with colleagues on this matter, which is much appreciated.

I have always thought that the decision to create the Youth Justice Board was a good one, a view vindicated by its reputation and record. It has done a good job. The right hon. Member for Cardiff South and Penarth (Alun Michael) made the point, which I agree with, that it has clearly helped bring down offending and reoffending rates among young people and produced more successful ways of dealing with youth offending, both strategically at a national level and at the level of youth offending teams, to which my right hon. Friend the Member for Berwick-upon-Tweed referred. I have a few questions for the Minister. My honest position is that I am nervous about the proposal, because I do not want to lose a good thing, but I know that the Minister sees that it has many good elements and I hope that he can reassure us.

We know from a parliamentary answer that there have been 70 responses to the consultation, but we have not heard what the balance is between those who support the Government and those who oppose them. We do know that many of the key voices—the right hon. Member for Cardiff South and Penarth quoted some of them—to whom we should listen think that the Youth Justice Board is a good thing and ought to stay. If chief police officers and the Magistrates Association want the arrangement to stay, we should be very careful before proceeding down a road that changes it. Will the Minister share with us slightly more explicitly the answers to the consultation?

I would be grateful if the Minister responded to my right hon. Friend and put it on the record. It is imperative that the ability to plan, manage, organise, give advice on policy and take policy decisions on youth justice is retained separately—obviously linked with other parts of the criminal justice system, but separately. The way to deal with youngsters coming into the criminal justice system is entirely different from dealing with adults or old lags who reoffend.

Importantly, I would like the Minister to put on the record the fact that there will be absolute freedom for the successor body, if there is one as an advisory council, to speak when it wants to speak, to be able to say what it wants to say, and therefore to contribute to the public debate, as well as to the private debate. Will the Minister make it clear that if functions are to be transferred—I understand the Government’s argument about reducing the number of quangos—a Minister, for the moment presumably the Under-Secretary of State for Justice, the hon. Member for Reigate (Mr Blunt), would be accountable to Parliament specifically for youth justice issues, and would see that as a separate component within the realm of the prison service and justice issues as a whole.

Some of us remain to be persuaded that this is the right way to go, because of the good record of the Youth Justice Board, and some of us are troubled that we might lose those good things if it were to go, but we are open to persuasion if clear assurances are given and the questions asked by my right hon. Friend, the right hon. Gentleman and me are answered adequately.

[Robert Flello (Stoke-on-Trent South) (Lab)]

The Youth Justice Board has played a central role in reducing the number of criminal offences committed by young people since its creation, but the Government’s proposal to transfer its functions to the Ministry of Justice threatens to roll back the progress of the past decade. As we have heard, the YJB has pioneered the creation of a distinct youth justice system, separate from the adult estate, recognising that the factors that lead young people to commit crime are complex, and can be addressed only through specifically targeted crime prevention and rehabilitation strategies.

As we have heard, during the last Parliament the Youth Justice Broad oversaw a 43% reduction in the number of first-time youth offenders by working with youth offending teams to focus on the causes of crime. We have also heard, but it is worth repeating, that there has been a 34% reduction in offences committed by young people and a 15% reduction in the number of young people in custody, down from 2,830 per annum to 2,418 per annum by May 2010.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)]

It is a pleasure to reply to this debate, not least to the right hon. Member for Cardiff South and Penarth (Alun Michael), given his role in establishing the Youth Justice Board in the first place, and to the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith), who is Chairman of the Justice Committee.

The right hon. Member for Cardiff South and Penarth made what he thought was a gibe in saying that I was not abolishing the Youth Justice Board but nationalising it and that he was surprised by how left-wing I was. He thereby gave the game away on the central weakness of the arguments made against the Government’s intentions.

To some degree, there is a significant element of truth in the right hon. Gentleman’s words, because this issue was first addressed in the context of looking at all arm’s length bodies given that ministerial accountability had been significantly diluted by the proliferation of such bodies. In that sense, it is appropriate that this area is brought back within the ambit of direct ministerial accountability. The longer I have held these responsibilities as the Minister responsible for youth justice, the more confident I have become that that is the proper thing to do. We are not changing the delivery of youth justice on the ground and all the achievements of the Youth Justice Board but protecting them. In my prepared remarks, I will elaborate on exactly how we are going to do that. I hope that I will be able to bring comfort to the right hon. Gentleman and to the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), who sought the same assurance.

The right hon. Member for Cardiff South and Penarth concluded his remarks by talking about the importance of partnership. The youth offending teams are indeed an exemplar of partnership working at the local level, and that will remain unaffected by the changes that the Government intend. The Chairman of the Select Committee commented on the importance of the ability of local agencies to work together, and none of that will be changed by the Government’s taking the Youth Justice Board within the ambit of the Ministry of Justice. I can give him the assurance that he sought about NOMS, which will sit within the central Youth Justice Division as a separate body on youth justice. I will attend to the detail of that shortly. I was properly subjected to questioning about the role of advice that will come to Ministers. I will have more to say about that in the substantive part of my remarks, and I hope that that will give comfort to my right hon. Friends on the Liberal Benches.

The new clause would remove the Youth Justice Board from the list of organisations that may be abolished by order made under clause 1. The two amendments in relation to Wales would set up a joint committee to oversee the exercise of the powers and responsibilities of the Youth Justice Board. That joint committee would be a committee of the Youth Justice Board, if it is not abolished, and Welsh Ministers. If the Youth Justice Board is abolished, the joint committee will be a committee of the Welsh Ministers and the body to which the Youth Justice Board’s powers have been transferred. Under our proposals, this would effectively mean a joint committee of Welsh Ministers and the Ministry of Justice.

The amendment to remove the Youth Justice Board from the Bill is the same as the amendment originally moved by noble Lords. Subsequently, the Government successfully reintroduced the Youth Justice Board to schedule 1 during the Committee stage in this House, having further addressed the most substantive issues raised in the other place and by other interested parties. The Government remain convinced that the national governance of youth justice, but not its front-line delivery, should be done differently. This reform is consistent with our principles of localism, our drive to reduce the number and cost of public bodies, and our commitment to clarifying lines of accountability.

The Youth Justice Board forms one part of the youth justice system, the aim of which is to prevent offending and reoffending by children and young people under the age of 18. I want to emphasise again that the delivery of youth justice by youth offending teams on the front line will not be affected and that a distinct, secure estate for young people will remain in place. I am happy to pay tribute to the achievements of the Youth Justice Board, which was established at arm’s length from Government to provide strategic leadership and coherence to the then youth justice system. This was, in part, a response to the 1996 Audit Commission report, “Misspent youth”, which found that there was no integrated youth justice system and that what did exist at the time was inefficient and expensive. The Youth Justice Board’s arm’s length status gave it freedom to establish the current system.

A decade on, we are in a completely different place, nationally and locally. A coherent and effective youth justice system has now been established, and it is the Government’s view that direct accountability should now be returned to Ministers. I am also clear that Ministers should determine the standards required in youth custody. Each year, £300 million of taxpayers’ money is spent on the provision of secure accommodation for under-18s. It cannot be right that unelected individuals in a non-departmental public body are responsible for such a sum.

That is why the Justice Secretary, in his written ministerial statement of 23 June, set out his intention to carry out the core functions of the Youth Justice Board within a newly created Youth Justice Division. The division will continue the Government’s focus on meeting the needs of children and young people in the justice system, overseeing the delivery of youth justice services, identifying and disseminating effective practice, and commissioning a distinct secure estate and placing young people within it. The division will form a dedicated part of the Ministry of Justice separate from the National Offender Management Service. It will ensure that the commissioning of the youth justice secure estate and the placement of young people within the estate is driven by people whose responsibility is for and whose focus is on the needs of young people. Its structure will also ensure that youth justice work in the community remains closely linked to work with young offenders in custody. That is at the heart of our ambitions for a rehabilitation revolution.

The new Youth Justice Division will be a powerful impetus behind future improvement, with the policy leverage within Government to effect change. At a time when Departments have a wide range of priorities and scarce resources, it is Ministers, led by the Justice Secretary and me, as the Minister with responsibility for youth justice, who are best placed to lead the youth justice system.

[Simon Hughes]

I am encouraged by what the Minister has said so far. Will the head of the new division proposed by the Government have direct access and direct accountability to the Secretary of State and the appropriate Minister rather than always being subject to having everything cleared by the permanent secretary in the Department?

[Mr Blunt]

The Justice Secretary has announced that John Drew, the chief executive of the Youth Justice Board, has agreed to lead the transition to the new Youth Justice Division structure and to continue to lead it beyond that. That will ensure continuity in senior management. As regards his reporting responsibilities, he will report to the director general of justice policy within the Department, but, as now, I will continue to have bilateral meetings with officials of his seniority in any event. Of course, he will occupy a special place by virtue of leading the Youth Justice Division within the Department. There are further safeguards that I will come to, and I hope they will give my right hon. Friend some comfort.

We appreciate that the Youth Justice Board successfully brought together staff from a number of backgrounds, including those with direct experience of youth justice, social and health services, and police and probation officers. I and the Department will not abandon that expertise and experience, nor will we fail to replenish it. That is wholly consistent with the Government’s policy that the civil service remains open to recruits of high quality from outside its immediate ranks.

--- Later in debate ---

[Mr Blunt]

As the right hon. Gentleman has identified, we are entering a period when that may well happen. I will come to that point in the course of my remarks.

This reform will not impact on the delivery of front-line youth justice by youth offending teams. We need to be clear that the front-line delivery of youth justice is completely separate from the national leadership and oversight provided by the Youth Justice Board. Under the Crime and Disorder Act 1998, the delivery of youth justice in the community is led by local authority youth offending teams. They are accountable to the chief executive of the local authority and are well embedded in local structures. Young people will continue to be placed separately from adult offenders in a dedicated secure estate that is driven by their needs.

It has been argued that the recent riots prove that the Youth Justice Board is now needed more than ever. I am afraid that I cannot agree. In my recent appearance before the Justice Committee, I set out the limitations of the current governance arrangements in the operational scenario that we faced in dealing with the disturbances. The operational integration of measures to address under-18s was delayed by 24 hours or so in the Government’s initial collective response to the riots precisely because of the more remote relationship that I have with the Youth Justice Board compared with the National Offender Management Service. That would not have occurred if youth justice had been administered as we propose.

I am conscious that part of my role is to ensure that other Departments and local authorities play their part in the delivery of youth justice. That is most acute in terms of resources, because the Department for Education and the Home Office currently provide funding to the Youth Justice Board. I am concerned that as the responsible Minister, I am not engaged as early as I should be in ensuring that there is proper financing for youth offending teams on the ground. It should be my responsibility to ensure that budget settlements from other Departments and local authorities are cleared and that youth justice is getting a proper shout from inside the Government. That can be better done by a Minister than by an arm’s length body.

[Simon Hughes]

I am encouraged by the Minister’s commitment and by his clear belief that his model will work. May I ask him to give one more undertaking? Will he or his Department come back to the House in about a year if the change goes ahead to ensure that the advisory group, which I now understand he proposes to chair, is sufficiently independent, that Parliament and people outside can be sure that it will speak out when it needs to and that its voice can, if necessary, be different from the conclusions that Ministers reach having heard its advice?

--- Later in debate ---

[Mr Djanogly]

Yes, the board will be there to address policy issues such as those that my right hon. Friend mentioned. It is important to keep in mind that the position of chief coroner would have had power over none of those.

The ministerial board will meet quarterly, with the dates fixed and publicised well in advance so that meetings cannot be cancelled without good reason. The board will also have a strong independent feel to it, with coroners and other members sitting on it, together with representatives from the bereaved organisations committee.

The new committee will be independently chaired and I have given commitments that the chair cannot be appointed or removed without the approval of committee members. I would expect the chair to become a powerful advocate for the bereaved and be a champion of coroner reform. If the Government are not delivering on this package of reforms, I would expect the chair to hold us to account.

The bereaved organisations committee will have a particular remit to monitor the new charter for coroner services. The charter, which we intend to publish in early 2012 following the recent consultation exercise, will set out for the first time the standards of service that those coming into contact with the system can and should expect. This will play a vital role in driving up standards of service and helping people to understand their rights and responsibilities in relation to the coroner system.

[Simon Hughes]

I am listening carefully because I, like others, need some persuasion. Why would it not be possible, compatible with all the other arrangements that the Minister is setting out, for one coroner to be designated as the chief coroner, to have the same sort of responsibility for the coronial service as a presiding judge has in a circuit or over one of the divisions of the High Court, and to be the route of communication up and down at no or no significant additional cost?

[Mr Djanogly]

We would expect that to be the situation because we would expect the Lord Chief Justice, who would be responsible for the judicial aspects, to appoint someone, but that would be within current costings. I should also say, because this was raised by the hon. Gentleman’s right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) in an earlier remark, that that cannot, under existing legislation, be an existing coroner. It can be only a High Court judge or a circuit judge. That would be at a cost of some £400,000 a year.

[Simon Hughes]

rose—

[Mr Djanogly]

If the right hon. Gentleman does not mind, I do not have much time and I must proceed.

I want to reassure hon. Members that the Government have listened to concerns expressed here and in the other place and by a large number of organisations. We have responded to these concerns and we have compromised, so we no longer intend to abolish the office of the chief coroner. Moving the office from schedule 1 to schedule 5 means that we will retain the chief coroner in statute. We have listened to the views of stakeholders on the constitution and remit of the new ministerial board and bereaved organisations committee and we have amended our proposals accordingly. We are considering a requirement for the new board to produce an annual report to Parliament, as my hon. Friend the Member for Brigg and Goole wished, strengthening further the accountability for and transparency of our reform proposals.

The Government’s decision not to proceed with full implementation was not taken lightly. My hon. Friend the Member for Brigg and Goole, I thought, made somewhat light of the costs of the chief coroner. The simple fact is that we cannot afford the establishment costs of £10.9 million and running costs of £6.6 million per year, especially when functions can be carried out from within existing resources.

--- Later in debate ---

[Simon Hughes]

The Minister’s last point was important and well made. If the Bill receives Third Reading, will it be helpful and possible for the Minister’s office to send out a notice to all the bodies listed in it, so that there can be no misrepresentation of their position or the Government’s position?

[Mr Maude]

That is an extremely helpful suggestion, and I will undertake that we do that. This is not the end of the process, but a work in progress.

We conducted a comprehensive review of all 904 bodies and have made some radical proposals for change, and some significant changes to the landscape have already been put into effect where statutory provisions were not required. However, we have said there should be a triennial review of all the bodies that the review concluded should continue to exist as independent bodies. Therefore, every three years, we will look at whether that body and those functions are still needed, and whether those functions still need to be carried out in a way that is not democratically accountable.

The original Bill contained a catch-all provision, schedule 7, which, frankly, was not well received in the other place—“universally reviled” might be the more straightforward, candid way of putting it. We responded properly, I think, to the vigorously expressed views and undertook to remove the schedule, which we have done, although the procedures in the Bill will still exist, and if a triennial review concludes that there should be reforms—perhaps abolition or merger—to governance or funding, whatever they may be, those procedures could still be used, but beforehand, a short piece of primary legislation would be needed to insert that body into one of the active remaining schedules.

As I said, there has been proper scrutiny, changes have been proposed and some have been accepted by the Government. There are additional safeguards on the processes and procedures in Parliament for approving orders made under the Bill. Furthermore, the Bill now includes clause 27, which contains provision for the abolition of the regional development agencies and makes way for successor arrangements in the form of local enterprise partnerships. The Bill also now includes clause 28, which contains provisions that will change the funding arrangements for S4C and which will place a new duty on the Secretary of State for Culture, Olympics, Media and Sport to ensure that S4C receives sufficient funding to fulfil its public service functions, replacing the outdated and unsustainable funding formula that currently exists under the Broadcasting Act 1990. Those concerned about the independence of S4C should take greater comfort from its funding being channelled through the BBC than through the Government. The BBC is, after all, robustly independent of the Government, while the Government, by definition, are not independent of the Government. I think that the change will enhance S4C’s independence.

During the passage of the Bill, we have sought to balance two distinct objectives: proper safeguards on the use of ministerial powers while still giving Ministers the ability to give effect to the commitments that we—and all parties, actually—made at the last election about reforming the landscape. That included a statutory duty to consult; the option for Parliament to opt for an enhanced affirmative procedure; a requirement on Ministers to lay an explanatory document alongside a draft order setting out its purpose and a summary of the representations received during consultation; a sunset clause limiting to no more than five years the length of time a body can appear in the schedules of the Bill; a requirement that orders do not undermine a function that is rightly independent of Ministers, including—importantly—judicial functions; and a requirement that a charity must consent if it is to take on responsibility for delivering a public function. We thought that the latter was implicit, but some were concerned that it needed to be made explicit, which we gladly acceded to.

We made other important concessions. I have referred to the removal of the now notorious schedule 7 and of provisions relating to the reform of the Forestry Commission and the public forest estate. The Bill has therefore been greatly improved. There have been some disagreements, but that is inevitable: we could not conduct a review of 904 bodies and possibly expect every part of both Houses of Parliament to arrive at exactly the same view.

The Government are committed to ensuring that public functions are delivered within a fair, efficient and effective system that delivers good value for taxpayers. The Bill will facilitate this reform, removing duplication, cutting out waste from the system, introducing new ways of delivering important functions and fundamentally improving accountability, which I stress is the Bill’s primary purpose. However, there will be savings: we have estimated that the administrative costs alone to public bodies will have reduced by £900 million a year by the end of the comprehensive spending review period—2014-15—and that there will be cumulative administrative savings of at least £2.6 billion over the same period. I hope and believe that that should enjoy widespread support across the House.

The House will be aware that this is not the first attempt by a Government to reduce the number of public bodies. Reviews were conducted under the previous Administration but despite the abolition of a number of public bodies over this period, the number overall continued to grow. I am sure the House will agree that our approach constitutes a more ambitious programme to realise significant and lasting improvements to the public bodies landscape.

We are also conscious that the success of these reforms has to be consolidated by a concerted effort to control the future size and shape of the public bodies landscape. That is why our programme of triennial reviews, to which I referred, will keep the continuing public bodies under regular review and ensure that they do not continue way beyond their useful life—as, frankly, a number of them have done in the past. I hope that the House will come together tonight in support of the important belief that ministerial accountability for public functions and the use of public money should be at the heart of the way we deliver services to the public.

This reform programme will deliver real and long overdue improvements to the accountability of the quango landscape. It will ensure that public bodies exist only where there is a legitimate need for a function to be exercised at arm’s length from Government, and it will deliver significant savings during the spending review period.

In conclusion, let me end by thanking the Committee charged with examining the Bill, along with the Chairs and the Clerk. I particularly thank my hon. Friend the Minister for Civil Society and the Deputy Leader of the House for the good humour and clarity with which they conducted these debates during this time.

Oral Answers to Questions

Simon Hughes Excerpts

Thursday 13th October 2011 Commons Chamber

[Hon. Members]

“Hear, hear!”

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I am grateful, Mr Speaker. There is always just time.

Will the hon. Gentleman ask the Church Commissioners to work with the Government to ensure that the issue of Christian minorities not only in Egypt but in other countries such as China where they are being heavily persecuted will be taken up internationally and by the United Kingdom Government?

[Tony Baldry]

I entirely agree with that. In fairness to the Foreign Secretary, he has been a doughty champion of the need to protect persecuted Christians throughout the world, whether in Pakistan, China or Egypt. It is very important that religious freedom should involve freedom for everyone, irrespective of their religion and of where they wish to practise their religion.

Waste Water (Thames and Greater London)

Simon Hughes Excerpts

Wednesday 14th September 2011 Westminster Hall

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

We are moving to slightly calmer waters as we change from a debate on European Union fiscal union to one on waste water in the Thames and Greater London. I am grateful to the Minister for his and his Department’s regular interest in these matters.

On Monday this week, David Walliams—he is probably more famous than many of those elected to Parliament—ended his swim from Gloucestershire to Westminster bridge. On the same day, Boris Johnson, the Mayor of London, wrote an article in The Daily Telegraph entitled “David Walliams’s Thames swim: it will take a super-sewer to get London out of this mess”. He was referring to the fact that London has a looming waste water crisis.

We have a fantastic piece of engineering in this great city of ours. Our sewer system was designed by Sir Joseph Bazalgette in the wake of what was known as the great stink of 1858. The purpose was to stop the sewage backing up into homes and streets whenever the system overflowed. It was connected to the Thames, so that excesses of waste water and sewage emptied into the river. That system was designed for a city of 4 million people. The city’s population is now approaching 8 million, and before too long it will be a conglomeration of nearer 9 million people. It is obvious to everyone that, with the best will in the world, the present system will not be sustainable. Thames Water is responsible for the system, the company is overseen by Ofwat, and the regulator is accountable to the Department for Environment, Food and Rural Affairs.

For some years a proposal has been on the table to build a Thames tunnel. It was the subject of consideration by the previous Government, and the scheme has been handed on to the present Government. In principle, Labour Ministers gave their blessing to a tunnel scheme; the alternative was a softer environmental mix of things, including a hope that rain water could be collected, and that there would be a more personalised collection with less sewage and so on.

The amount of sewage currently discharged into the Thames is one of many dramatic figures. That is not sewage taken to the waste disposal plants but the excess of sewage that ends up in the river. It is 39 million cubic metres a year. That may not mean much to most people, engineers apart, but it is equivalent to filling the Royal Albert hall 450 times. That is a lot of sewage. It is clearly something that nobody would wish to be in our capital city’s river.

Last weekend, I had the privilege of chairing the hugely successful Thames festival for the 10th time. The Mayor of London’s Thames festival is a reincarnation of the GLC festival, which started 15 years ago. It is held to celebrate the river, and getting on for 1 million people were there this weekend. We want the river to continue to be celebrated. We want it to be clean. We want it to be accessible, and we want people to be able to use its beaches. We want it to be used for commerce and tourism and related activities. We want to see more natural life in the river, including fish such as porpoises and dolphins. We also want to see David Walliams or the Mayor of London swimming in it—or even the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), whose constituency is opposite mine on the north bank of the river, and me. I was once thrown in; it was not a pleasant experience, but that was soon after I was first elected 28 years ago.

I bring the matter to the House today because, in part, it is already on the Minister’s desk. Indeed, the Minister will be aware that in November last year, perfectly properly, the Government published the national policy statement for waste water. On 30 March 2011, the Select Committee on Environment, Food and Rural Affairs published its report. It makes 19 recommendations. In essence, the Committee would like to see the draft national policy statement amended. As the Minister knows, some of the Committee’s recommendations relate specifically to Thames matters. I shall put recommendations 9 and 14 on the record, but I shall leave colleagues and others to read the other conclusions later.

Recommendation 9 states:

“Approval of the costs which can be passed on to water and sewerage company customers is rightfully a core Ofwat function under its current regulatory remit and it is hard to see the benefits to be gained from duplicating this activity within the spatial planning process. In view of the alarming increases in estimated costs, Ofwat must fully utilise its regulatory powers to scrutinise the economic case for the Thames Tunnel project and be rigorous in determining which costs should be passed on to Thames Water’s customers.”

Amen to that. Water bills are high enough and the project will not be cheap, so people will want to ensure the best cost benefit.

Recommendation 14 states:

“We recommend that the draft NPS be revised to produce a purely generic document by removing Chapters 3 and 4 on the replacement of the Deephams Sewage Treatment Works and the Thames Tunnel. Defra may wish to provide material in an annex exemplifying points made in the NPS by reference to specific schemes, but it should be made clear that it does not constitute information to which decision makers must have regard when considering project applications.”

Those are the only two Thames-specific recommendations. The others are about the process.

I shall briefly put things into context and then pose my questions. I apologise that I gave the Minister notice of my questions only recently, but they are all matters for his Department. However, I shall understand if he needs to come back on some matters. The European Union agreed in 1991 that there should be one system across Europe. Again, following the previous debate, one of the good things that has come out of the EU is that it is setting standards on such things as air and water quality. Bluntly, London has failed on both water and air. On water, the UK is on the way to being taken to court by the Commission. We are also at risk of being liable for poor air quality in London. The EU is the right place to chase such things and to ensure better quality. The Thames tunnel project was intended to ensure that we comply with statutory EU requirements. However, we have been held to be in breach of the directive, which is why the matter is going to the European Court of Justice. Judgment is expected next year.

Secondly, the Government have been consulting on secondary legislation to be made under the Planning Act 2008 that would classify proposed major sewer projects such as the Thames tunnel as nationally significant infrastructure projects. The consultation closes on 5 October. The project would go to the independent Infrastructure Planning Commission. My colleagues and I and Conservative Members did not want that body to be independent, but when the Localism Bill becomes law it will become accountable to the Government, and the Secretary of State will be accountable to Parliament, which I welcome.

The last bit of the jigsaw is that Ministers are considering the draft national policy statement in light of the consultation responses generally, and the Select Committee’s responses in particular. We will have a final statement before too long. A waste water policy statement is coming down the track, and there will be changes to the planning law. There is also Thames Water’s plan; the company has received responses to its consultation and it will almost certainly published a revised plan in November.

Like every riverside MP, but more than most, my constituency is very much on Thames Water’s map. When the company announced its plans at the turn of the year, it featured two sites in Bermondsey. It considered Druid street, which would connect the local combined sewer overflow, known as Shad Thames pumping station, to the main tunnel. It also considered the foreshore near Butler’s wharf and the car park at the flats in Tower Bridge road. It decided that Druid street was the preferred site. However, there was concern about that as it was the site of a children’s playground on a council estate and not the greatest of sites. I hope that Thames Water will respond positively to those views and go ahead using the Shad Thames pumping station and not the Druid street site.

By far the most controversial plan is to use the King’s Stairs gardens as the main drilling site for south London. Some 5,274 people have signed a petition against it, and a considerable number of other people, including me, have said that it is not a good plan because it is a greenfield site and on the Thames Path.

Thames Water has responded positively to such views. It has always engaged well with the community. I pay tribute to the Save the King’s Stairs Gardens action group and to its chair Donna Spedding. The group made a substantive case about the use of greenfield sites as opposed to brownfield sites and put forward good technical arguments.

As a result, Thames Water has now co-purchased Chambers wharf, a brownfield site slightly further upstream. As of this moment, there are two sites in the frame. Obviously, the Rotherhithe community hopes that the King’s Stairs gardens site will come off the list as it is inappropriate. We do not know where the other sites will now be—whether it is in Southwark, Deptford or further downstream.

[Mr Andy Slaughter (Hammersmith) (Lab)]

The hon. Gentleman correctly identified two problems with the scheme. One is the choice of site and the other, as with all infrastructure projects, is the cost. As constituency Members, we will all have issues and will have to negotiate with Thames Water. Like the hon. Gentleman, I have found Thames Water to be a reasonable organisation with which to negotiate. Can we try to disaggregate this matter from the project as a whole? My local authority, which is implacably opposed to the scheme, is using those legitimate objections to object to the whole scheme. I hope that we can have a three-party endorsement today of the fact that we have to clear up the Thames. David Walliams has focused our attention on that. Every single week, my constituents see huge amounts of raw sewage going into the Thames, near to where they live. Let us try to identify and solve the problems so that we can support a scheme that really has to be carried through.

[Simon Hughes]

The current estimate for the Thames tunnel scheme is pretty enormous. It is £3.6 billion and is likely to go up rather than down. Thames Water says that the alternative would cost £13 billion and take 30 years. When I responded to the consultation, I said that the evidence seemed to be in favour of the Thames Water plan, subject to getting the sites right, but I wanted final reassurance. I made my response formally at the turn of the year.

I also put in a short response to the private commission that was set up by some interested local authorities and chaired by Lord Selborne. The commission has argued that we must have a totally different direction. I am not persuaded by that. The Thames tunnel is the best direction. The previous Government came to that view and the present Government have held to it. Unless something comes up in the latest process, we need to go ahead with the Thames tunnel scheme, but the site must be right. My experience is that engineers are reasonable people who will look at a better option if it is put to them. They are also quite flexible. The private commission is having its hearings and it is about to produce its report. I hope, therefore, that we can arrive at a common position.

My questions to the Minister are partly procedural as well as substantive. Will the Government respond specifically to all the recommendations in the Select Committee report? If they cannot do it now, when will they do it? If the concerns that have been expressed by colleagues across the House and in the Select Committee are taken into account, will the Minister accept that that will lead to a change in the draft policy statement?

Will the Department delay bringing the debate on the policy to the House until the Localism Bill has been enacted and implemented and the Infrastructure Planning Commission has been set up? I want to ensure that if the Thames tunnel is subject to an overarching planning approval, the decision is a democratically accountable one. Will the Minister give us the earliest date when Parliament might be able to have the national policy statement back? When the policy comes back, can he assure us that there will be a debate on the Floor of each House so that colleagues in London and the whole of the Thames estuary can make a contribution to the debate? This is a big debate and we want to ensure that it is given adequate time and that it is not something that is pushed through on the nod or in half an hour.

It is clearly logical to have one overarching planning approval for the scheme, but if there are any sites on which there is a significant building there should be extra planning processes to ensure that everything is done in the right way. For example, if the King’s Stairs gardens site or the wharf site in Bermondsey are chosen, people will want to know that the new building will not be too tall, too big, too wide or too ugly and they will also want to have their say. The subsidiary buildings should not be rubber-stamped through either. Will the Minister pass on that concern to his colleagues in the Department for Communities and Local Government? We want an extra consultation process about the detail or extra planning requirement.

Whatever our views about the Selborne commission, will the Minister tell us that the Department will consider the report and respond to it before the final draft of the national policy statement is published? Will he give us the Government’s final assessment of the cost of the project and will he give us an assurance that council tax payers, local councils and the Government will not have to pick up the tab? Obviously, people understand that this is a Thames Water project and that it will not be cheap. People will want to know not just what the cost is overall but that their bills will not go up in other places as well. It would be helpful if the Minister could show us the departmental cost-benefit analysis.

Will the Minister tell us whether there is any compensation available to people whose land, properties or amenities are affected? If they suddenly have a great treatment works or a shaft put in front of their window for seven years, what compensation will they receive? If Thames Water identifies new sites, people in my constituency and elsewhere would be grateful if the sites that are no longer in the firing line or are no longer being considered are dropped off the list so that they know they are no longer under threat.

I end by paying tribute not just to the Save the King’s Stairs Gardens group but the Save Your Riverside group. All these people are highly intelligent and reasonable in what they are asking for and I hope that I have reflected that here. This is a huge issue for many of our constituencies in London and we would be grateful for as much information about the scheme as the Minister can share with us.

Oral Answers to Questions

Simon Hughes Excerpts

Thursday 12th May 2011 Commons Chamber

[Mr Speaker]

Order. It would be very difficult for me to underestimate the comprehensiveness of the hon. Gentleman’s reply, which I think I can safely say is unsurpassed in the House.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

9. What recent assessment the Church Commissioners have made of the financial consequences for the Church of England of (a) women priests and (b) women bishops.

[Tony Baldry]

The General Synod of the Church of England legislated to make special financial provision for the 441 clergy who resigned from ministry between 1994 and 2004 as a result of opposition to the admission of women to the priesthood. The total cost of that to the Church Commissioners was £27.5 million plus a further call of £2.4 million on the unfunded pension scheme. The draft legislation to enable women to become bishops makes no financial provision for those who might leave should it in due course pass into law.

[Simon Hughes]

Now that the last remaining people who had a long-term philosophical commitment to opposing women in the ministry appear to have left the Church of England, may I urge the Church Commissioners to move with all speed to do what the vast majority of Church of England members want, which is to make sure that women can become bishops, as well as priests, at the earliest available date?

[Tony Baldry]

My views on this matter are well recorded. As the right hon. Gentleman will know, this matter is now out with the dioceses. I am sure that the Archdeacon of Southwark, who is a strong campaigner on this issue, will keep him informed. The dioceses are reviewing the matter and will vote on it in the near future. If they vote in the affirmative, the matter will go to the General Synod. This matter is being dealt with as speedily as is possible.

Oral Answers to Questions

Simon Hughes Excerpts

Thursday 3rd February 2011 Commons Chamber

[Mr Paice]

The short answer is yes—which my hon. Friend might be happy to settle for. I should emphasise, however, that that was one of the recommendations in the report that we published last year. We are pursuing it, but we have to ensure that we get the existing stuff working so that we do not interrupt payments even more while we look at the whole process of outsourcing.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

15. What steps she is taking to reduce fish discards; and if she will make a statement.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

I refer my right hon. Friend to the answer that I gave earlier.

[Simon Hughes]

I listened to the Minister’s earlier answers. Fish, like forests, are of as much interest in Bermondsey and Southwark as anywhere else in Britain. What is he doing not only to deal with the common fisheries policy, but to ensure that people at home understand the benefits of eating more fish, particularly sustainably caught fish, so that they can both be healthier and help to solve this Europe-wide failure?

[Richard Benyon]

The Fishing for the Market project, which is being carried out by DEFRA, analyses the 54% of discards that are created because there is no market for those fish. Some of them are perfectly edible delicious fish, such as dab. We must also ensure that the public ask for Marine Stewardship Council accredited fish, which can be bought at the fishmonger and the supermarket. Supermarkets are the key to driving forward this agenda.

Oral Answers to Questions

Simon Hughes Excerpts

Thursday 9th December 2010 Commons Chamber

[Mr Paice]

The hon. Gentleman should be aware that until the Warwick agreement, when the trade unions forced the Labour party to back down, it was Labour party policy to abolish the Agricultural Wages Board. I should make the point that agriculture has changed dramatically in the 60 years since the board came into being. The previous Government did not reinstate any of the other wages boards when they had the chance to do so. Instead they instigated the Low Pay Commission, and we believe that that is the right body to manage agricultural wages, as it does everybody else’s wages.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

T4. Following the successful Nagoya conference on biodiversity and against the background of the current very important climate change conference in Cancun, can the Secretary of State tell us how she intends to take forward the protection of biodiversity, both in this country and internationally?

[Mrs Spelman]

As I said in response to an earlier question, the new biodiversity strategy for England will be published alongside the natural environment White Paper in the spring, to which we have had an astonishingly high number of contributions from the public: there have been in excess of 15,000.

Energy and Environment, Food and Rural Affairs

Simon Hughes Excerpts

Thursday 27th May 2010 Commons Chamber

[Clive Efford (Eltham) (Lab)]

rose—

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

rose—

[Chris Huhne]

If I may make a little progress first, I will happily give way again.

It is because of the urgent need to deal with climate change that we are committed to making this Government the greenest ever by taking that urgently needed action at home and abroad. This is not merely an aspiration; it is essential. The actions of this Government in this Parliament will define our ability to combat climate change in the decades to come. That is why, in the first week of the new Government, the Prime Minister announced that Departments would reduce their carbon emissions by 10% in the next 12 months—an early indication of our intention to take real action rather than merely setting meaningless targets.

--- Later in debate ---

[Chris Huhne]

I am always pleased to hear questions from the hon. Gentleman, because he is a neighbour in Hampshire and has followed this agenda closely, with great passion and commitment, for many years. The issues that he raises are key. He will note that the coalition Government agreement contains a firm commitment to feed-in tariffs, and we will take that forward. Renewable heat is an important issue and we want to ensure that we make progress on that. The Department will have to come up with the exact ways in which we do that, but this is a crucial part of the whole package. Broadly speaking, a quarter of our carbon emissions come from our housing stock, much of which will still be there in 2050; people will still be living in it. Given that, what we are trying to do, particularly with the green deal, is move to a situation where we can retrofit that stock with insulating measures that will make a dramatic difference. Our Bill is designed to do that, and I very much look forward to working with people from across the House, including those on the Opposition Benches, whose substantial commitment to this agenda over many years I recognise, to make this a really effective, long-term piece of legislation. We want it to be something that we can all take pride in, that will be on the statute book for many years and that will stand the test of time.

[Simon Hughes]

My right hon. Friend knows that I warmly welcome him, with his fantastic commitment over many years to the green agenda, to his post, as well as the greenness of this Government. Given that our party had the most ambitious programme, with a 10-year programme for home insulation across the country, and that the commitment is continued in outline in the coalition Government agreement, will he assure us that as he and colleagues across Government work out how that can be delivered, they will be as ambitious as possible, not just for five years but over 10, and that every home that it is technically possible to convert will be able to have that programme met most generously from reduced fuel bills? It would make the most fantastic transformation for real people in their homes.

[Chris Huhne]

My hon. Friend has stated precisely what the objective of this key centrepiece of the legislation will be. It is essential that we deal with the issue and leave a legacy that will stand the test of time and will genuinely modernise all our old housing stock, including the pre-first world war housing stock. There are a lot of problems, such as solid wall insulation, of which we are all aware, and such measures can make a dramatic difference to our ability to meet our climate change targets. Indeed, we are all committed in the Climate Change Act 2008, which was taken through the House by the right hon. Member for Doncaster North, to a very dramatic cut in carbon emissions. We have to accept the logical consequences of that commitment, one of which will be measures across the economy to decarbonise the economy and to save energy. I agree with the emphasis put on this subject by my hon. Friend.

As well as reducing carbon emissions and helping to reduce energy bills, the investment in energy efficiency will support our green recovery. It will create more green jobs in the building industry as we convert our old housing stock to state-of-the-art standards. It will help industry grow and build a thriving green economy for the UK, as well as help to close our energy gap in the most efficient way possible by saving energy that we waste.

We are also committed to using our Bill to put in place the building blocks for our low-carbon future. The economy of the future is likely to be powered by electricity and we need to be able to generate enough electricity to meet future needs from low and zero-carbon sources. We are still working on the detail and identifying where legislation is required, but these measures might include the reform of our energy markets to meet the challenges ahead in delivering security of supply and the transition to a low-carbon economy, including the introduction of an emissions performance standard to regulate emissions from coal-fired power stations.

--- Later in debate ---

[Edward Miliband]

I welcome the hon. Lady to the House. I wish that the Labour party had won her seat, but she comes to the House with a distinguished campaigning record on green issues, and she will inform our debates and bring great expertise to them.

I disagree with the hon. Lady about nuclear power, because we have to plan for the long term. She is right that we have to meet an urgent challenge, but we also have 80% targets for 2050, and we must drive our targets for 2020 beyond 2020 to 2025 and 2030. The Opposition’s view is that nuclear power needs to play a role.

[Simon Hughes]

The right hon. Gentleman is part of the Labour party’s conversion to nuclear power, and he knows that my party has not done so. As well as the fact that nuclear power cannot deliver quickly, is it not true that the contribution that it could deliver is so far away that it will also make a minimal contribution, if one at all? Can he honestly tell the House that he believes that nuclear power can be delivered in this country without public subsidy, unlike in the United States, Finland or any other country in the world?

[Edward Miliband]

Yes, I can, because we have learned the lessons of Britain’s past on nuclear power, as well as international lessons. What have we said? For example, we said that companies will have to put aside money to cover legacy waste. I honestly believe that that is necessary. That is not to say that nuclear power has no challenges, but the challenge of climate change is far bigger, and we reject the alternatives at our peril.

The mystery is that the Secretary of State and the new Government seem to have three positions on nuclear power, but there is a revealing history, and we need to be clear and honest about the fact that Liberal Democrats said in the past that, if they ever got into government, they would do everything that they could to stop nuclear power happening. The hon. Member for Cheltenham (Martin Horwood), who is not in his place, said:

“I assure any investors who may be watching our debate...that their investment will be at risk if we play a part in any future Government, because if we had the chance we would seek to slow down, and if possible to stop, the development of nuclear power.”—[Official Report, 30 April 2008; Vol. 475, c. 322.]

I have to tell the Secretary of State, whom I greatly respect, that people will think that that is his and the new Government’s hidden agenda. He has said no to nuclear and described it as a “dead end”. It is quite simple: to show the clarity that the Minister of State says is necessary and to send a clear signal, I urge the Secretary of State to say that he was wrong to say, “Our message is clear: no to nuclear.” The grown-up thing to do is to admit that he got it wrong and that he wants nuclear power to be part of this country’s energy mix. Surely, if he believes in his own policy on public subsidy, all the Liberal Democrats should vote for it. He has set a policy—we do not disagree with it—and Liberal Democrat Members should vote for it. Sending those mixed signals is not good for the business community.

Let me end my comments on nuclear power by making the point that there is a very strange thing in the coalition agreement at the end of the section on nuclear power. I have been scratching my head about it. It says that they—presumably, the people who wrote the coalition agreement—want

“clarity that this will not be regarded as an issue of confidence”.

What an extraordinary thing for a Government to say about their own policy. Oppositions normally say that they do not have confidence in a Government’s policy. The Government are saying that their do not have confidence in their own policy. What confidence can the world outside have in the Government’s policy when they say that they do not have confidence in it?

The person whom I feel most sorry for is the Minister of State. He must be tearing out his hair. He spent many distinguished years in opposition. He persuaded the Prime Minister to abandon his position that nuclear was merely a last resort, and now he ends up with the right hon. Member for Eastleigh (Chris Huhne) in charge. Someone said rather unkindly last week that it really is like having a vegan in charge of McDonald’s. I think that that is very unfair, but Tory MPs, most of whom support nuclear power, must be shaking their heads. The coalition has given us the dogma of the Tories on wind farms, which will mean that they find it difficult to deliver, and the dogma of the Liberal Democrats about nuclear power. Neither side is willing to face up to the tough decisions that we need to make as a country to make the low-carbon transition.

--- Later in debate ---

[Malcolm Bruce]

My hon. Friend makes a pertinent point. As I have said, we missed the boat 35 years ago, and we must not do so again. There is a real risk that that might happen, if we do not get the policies right.

[Simon Hughes]

The benefit for apprenticeships and jobs is also manifest. People who are training to work on offshore oil rigs understand that in their careers they might work on renewables or carbon capture and storage, so we have to see this area as an apprenticeships, skills and jobs opportunity as well as an energy opportunity.

[Malcolm Bruce]

I completely agree with my hon. Friend.

I hope that the Secretary of State took away several points from the exhibition. Exciting as the development of renewables is, it will not replace oil and gas soon in investment, jobs, tax revenue or exports. That will take some years—but if we run them in tandem, we can build one up as the other declines. Renewable technology will require a number of push-and-pull measures to realise its full potential. For both of them, we require substantial onshore investment in ports and transport infrastructure. As a representative of part of the city of Aberdeen, I am concerned that our infrastructure is not appropriate for a city that claims to be the energy capital of Europe. Our promised bypass has not happened, our commuter rail service has been postponed indefinitely, our city finances are in a considerable mess and we have the two most underfunded councils in Scotland, with money being diverted to other parts of the country. In those circumstances, my message to the Secretary of State—and my right hon. Friend the Secretary of State for Scotland—is that it is the UK Government who stand to lose if that infrastructure is not right, because some of the investment will go out of the UK altogether.

I welcome several of the proposals in the Queen’s Speech to promote marine energy and to support home energy efficiency, which can help move us away from dependency on the national grid and huge power stations, and make microgeneration genuinely part of the national grid, rather than just a domestic alternative to current generation. As I keep asking at every event I attend, when will we get micro combined heat and power? What steps will be taken to provide an easy way for people to take up feed-in tariffs? I defer to the point made by the hon. Member for Southampton, Test (Dr Whitehead) about renewable heat, which is part and parcel of that issue. What can be done to help people with hard-to-heat homes—a question asked earlier by my hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes)? We have many such in Aberdeen, and they are expensive and difficult to tackle.

I would like to address the international dimension. I am a vice-chairman of GLOBE UK and GLOBE International, which played an invaluable role in testing potential policies and negotiating positions in the run -up to the various climate change summits. In fact, in advance of Copenhagen, GLOBE clearly identified China’s concerns, through the climate change dialogue that we run.

--- Later in debate ---

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

Mr Speaker, congratulations on your re-election and thank you for giving me the privilege of speaking in the Queen’s Speech debate.

I have had the privilege of being elected for the same part of my borough for the eighth time and I say to colleagues elected for the first time, to whom I pay tribute, the excitement does not pale just because we have gone through the democratic process again. The honour is always as great and the sheer equality of the democratic process, which means that everybody’s vote counts the same, reminds us to be humble about the privilege we have of being here.

I am seeking to speak in this debate because, in the last Parliament, I was responsible in our party for these issues. I enjoyed that task immensely and have taken a long interest in environmental and energy issues. I wish the two Secretaries of State and their ministerial team all the best in what is one of the most important areas of public policy for us to get right.

As someone who sat for 27 years on the Opposition side of the House, haranguing Government to be greener—[Hon. Members: “Come back.”] No, I am certainly not coming back. I plan to stay on this side of the House for the rest of my career. It is encouraging to hear the Government say—I believe them—that this will be the greenest Government ever, which will be in everybody’s interest. It was great that one of the first things the Government did was to sign up, as a Government, to the 10:10 campaign, which I endorsed on behalf of my party on the day it was launched last September at Tate Modern.

I draw the attention of the House, and those outside, to the huge number of policy commitments made in the areas of energy and climate change and environment, food and rural affairs; 24 specific commitments of policy made under the Department of Energy and Climate Change, and 18 made under the Department for Environment, Food and Rural Affairs. That shows the seriousness of intent of both coalition partners to the enterprise of changing the way in which we do business in Britain.

It would be remiss of me to fail to pay tribute to the right hon. Member for Doncaster North (Edward Miliband). He knows that I hold him in high regard and had a very good working relationship with him. I applauded him when I thought he was doing the right thing and encouraged him in the work he did at Copenhagen. I thanked him for that and I do so again. He also talks a good talk as well as having real convictions in policy terms. I wish him well in his leadership election and I say to him that we were glad to have him as the first Secretary of State for the Department. He set a high standard to be followed; I am sure it will be. We had disagreements on certain issues, but I would not want that to undermine the value of what he did. The Government did not always meet their targets—on biodiversity, fuel poverty or renewables, for example—although one would not normally have known that to hear the then Secretary of State. I hope that the new Government will do better.

I want to select a couple of subject areas that I think are important and to encourage the Government to be strong. I will then deal with two things of huge importance. First, it is important that the Government have made the commitment to the green investment bank. If we are to have a sustainable economy, we need the mechanism to fund the initiatives that come with it. That relates to the future of apprenticeships and sustainable jobs in the manufacturing industries of the future. We have missed many tricks over the past 25 years by not being ahead of the game. Other countries have overtaken us and we must now catch up and go forward. Colleagues who are warning that the review of investment decisions made by the previous Government means the end of that should bide their time. This Government will not want, as a matter of policy, to pull the plug on good green investment decisions made by the last Government.

Secondly, as I indicated in an intervention on my right hon. Friend the Secretary of State for Energy and Climate Change, it is a real challenge, but a real opportunity, to make every home in Britain that is practicably able to be a warm home. More than 25% of the emissions in our country come from the domestic sector, or badly insulated homes. The programme that the Liberal Democrats put in their manifesto was ambitious; it granted people up to £10,000 to be spent in a home that passes the test and worked that through the devolved Administrations and local government in England. I hope that the new programme will allow a programme to start in 2012 for 10 years. That would make a fantastic contribution, not just to reducing fuel bills for people, to preventing untimely deaths of the old and vulnerable and to reducing our emissions, but it would produce huge numbers of jobs and apprenticeships in the building and construction industries. It is a win, win, win, win agenda item. As a postscript, let us not forget the homes that are off the mains, because they need assistance too.

Thirdly it is important that the Government continue to build and support small rural communities that have suffered too much from the loss of primary schools, post offices and, sometimes, pubs, as well as the loss of cheap housing for people who work on the land. That must remain a focus of Government across the UK and I know that Ministers are aware of the importance of them as the lifeblood of rural communities.

Lastly, it is great that we have had so quickly the decision that there will not be a third runway at Heathrow and that we will not have expansion at Gatwick and Stansted. We must understand that it is not necessary to go on building more airports and airport capacity in the south-east. If we go ahead, as we will, with a high speed rail network—not just in Britain, but across Europe—people will begin to understand the environmentally better ways of travelling. That requires other things; my friends in the Department for Transport know that it requires fare structures that work better and encourage people to use trains by making travelling across Europe something one can do as easily by train as one has in the past by plane.

The first of the two big issues that I want to flag up is biodiversity, alluded to by my right hon. Friend the Secretary of State. This is the international year of biodiversity but the EU target to halt the loss of biodiversity by this year has been missed. I ask all Ministers to look at the report issued last week by the United Nations and the international committee set up to deal with these matters. The report makes it clear how badly we are doing and how serious the issue is. It says:

“The target agreed by the world’s Governments in 2002, ‘to achieve by 2010 a significant reduction of the current rate of biodiversity loss at the global, regional and national level as a contribution to poverty alleviation and to the benefit of all life on earth has not been met…Species which have been assessed for extinction risk are on average moving closer to extinction…Natural habitats in most parts of the world continue to decline in extent and integrity…Extensive fragmentation and degradation of forests, rivers and other ecosystems have also led to loss of biodiversity and ecosystem services…The five principal pressures directly driving biodiversity loss (habitat change, overexploitation, pollution, invasive alien species and climate change) are either constant or increasing in intensity.”

I hope the Government will take this issue seriously in all their Departments, and not only at home in the four countries of the UK, but across Europe and internationally. Unless we save the land of which we are the stewards, we may not have a land worth saving, and there may be greater risks as well.

It would be surprising if the second matter I commented on was not the nuclear industry, especially as I am following the hon. Member for Copeland (Mr Reed), who stands up vigorously, and very coherently, for his constituency, which is what I would expect. My party and I do not agree with nuclear power. I have not changed my view as a result of the election. We think that it would produce too little in terms of energy, that it would be too late and too expensive, that it would need public subsidy—in effect, the hon. Gentleman accepted that—and that it would be too dangerous. The process that has been negotiated and agreed has been arrived at as a result of an acceptance by my colleagues in government that there is majority support in the Government and across the House for nuclear power, but it does not seek to change the mind of those of us who think it is the wrong way to go.

I hope that that approach will be coupled with one other thing. I have made this request to both the previous and current Secretary of State. The Government are required formally to justify proceeding to nuclear power. That is called the process of justification. It is required under European Union law, and it looks at the cost-benefit analysis and the health risks. A draft justification has been written, but the Secretary of State is entitled to call for a public inquiry on the justification for nuclear power. It need not be a long inquiry—it could last for a year—but I believe that if we are to have science and evidence-led policy, the right way to proceed towards making the decisions on these matters, coupled with the view that there should be no subsidy, is for the Government to announce in the near future that there will be a public inquiry into the justification. I might add that I do not believe that we in this country will ever have a future generation of nuclear power if the private sector has to pick up the pieces, but we will wait and see.

[Albert Owen]

Although the hon. Gentleman and I hold diametrically opposed views on nuclear power, I respect the firm stance he takes on the matter. What he has just said about kicking things even further into the long grass will dismay those people who want to invest in the industry now, and are prepared to do so. Will he explain his party’s policy—not the coalition’s—on the extension of current nuclear power stations, which are generating safely as we speak now? Will they have the opportunity to extend their generating life and thus maintain high-skill jobs in this sector?

[Simon Hughes]

First, let me say that, in the context of the hon. Gentleman’s beautiful island, I understand why he holds to his position on this matter. I understand, of course, that Wylfa has produced jobs in the nuclear industry, as Trawsfynydd did before it, and that the people in north Wales need jobs. We hold different views, and that is the result of all sorts of factors working on us. My party’s policy is that we would continue to use the existing fleet of nuclear power stations, but we would not artificially continue them and we would not want to build new ones. That has been the Liberal Democrat policy over the years. We are obviously in new territory now, and there will be new processes, and the hon. Gentleman and I will, no doubt, continue to participate in the debates on the matter.

The fact that part of my constituency, which is just over the bridge, has had MPs continuously since 1285—or, perhaps, 1295—reminds us that we are all just passing creatures in this place. There are two big issues that my constituents would expect me to mention. We still need affordable housing in large measure, and that must be a Government priority. Of course tackling this is difficult, but things need to be improved and we need many new properties to be built. I do not think there is a single constituency in the country that does not have an affordable housing need, and Bermondsey and Old Southwark certainly has that need. We will also continue to need apprenticeships and jobs in lasting industries, and I will take every opportunity to encourage the Government to address that.

I want to end in a slightly unusual, personal way. For my family, 27 May is a difficult day, as it is the anniversary of both our grandmother’s death and my dad’s; he died on 27 May a long time ago—in 1976. He would have been very excited, as any parent would, at his son sitting in Parliament, although he never lived to see that, but he would have also wanted me to be here to do something, because that is what he was all about. His agenda would have been, “Make sure you support manufacturing industry.” He was a brewer and understood that unless we make things, we do not earn to pay our way. He would also have said, “Make sure that young people have the chance of going on to college even if they cannot afford it.” He would have encouraged me to oppose tuition fees, which I do. Lastly, he would have said, “Make sure we continue to look after our troops in the front line, when they go and fight for our country,” which we must do. I will say one other thing in his honour. He died of cancer, and we must continue the research and development to ensure that fewer people die of cancer and that diagnosis happens quickly so that people have the best chance of being treated, for all our families and all our constituents.