Lords Sitting of 15 December 1999

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack
Prayers—Read by the Lord Bishop of Southwark.

Lord Ewing of Kirkford: Personal Statement
Lord Ewing of Kirkford: My Lords, with the leave of the House, I wish to make a personal statement. Yesterday afternoon I intervened in the debate on the Question in the name of the noble Baroness, Lady Cumberlege. On reading my intervention, I have come to the firm conclusion that it was untimely, ill-thought out and may well have caused offence, which I pray your Lordships will accept was not my intention. I apologise sincerely and unreservedly to your Lordships' House in general and to the noble Baroness in particular.
Noble Lords: Hear, hear!

EU Tobacco Subsidy
Baroness Jegerasked Her Majesty's Government:
Why does the European Union continue to subsidise the growing of tobacco; and how much was spent on this subsidy in the last financial year.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Hayman): My Lords, Her Majesty's Government strongly disapprove of the common agricultural policy support regime for tobacco introduced in 1970 to support production in disadvantaged areas of the Community. We have argued consistently that the Community should progressively disengage from support for tobacco production on the g rounds of health and cost. We shall continue to press for further progress in that area. In the year ended 30th September 1998—the last year for which figures are available—just over 870 million ecus were spent on tobacco premia.
Baroness Jeger: My Lords, I thank the Minister for her reply. I have asked the same Question in the House for about seven years. Every time I receive a similar Answer: that the Government do not approve of subsidising tobacco growing, but because of the CAP we are bound to dish out money for it. Does the Minister realise that there is a contradiction here? Quite rightly, we spend millions of pounds on campaigns to stop people smoking in this country and to stop advertising and yet we ask the British taxpayer to pay taxes to subsidise the growing of tobacco. I believe that that is unsupportable.
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Does the Minister realise that much of the tobacco that is grown in Europe is substandard? According to the World Health Organisation, a great deal of that tobacco is exported to the poorer countries of the world, where, as the WHO also tells us, smoking is increasing. I hope that some thought will be given to the ridiculous situation of sending subsidised tobacco to the poorest people in the world while spending millions on telling our own people not to smoke.
Baroness Hayman: My Lords, I have considerable sympathy with the points made by my noble friend. We have to recognise the contradictory nature of paying premia for a product that gives rise to such grave health concerns and which damages so many people's lives and health. My noble friend says that she has asked this Question for seven years. As she will know, there was some reform of the tobacco regime in 1992 with the introduction of a clawback arrangement of 1 per cent of the premia. In 1998 there was a modulation of the premia according to quality and a quota buy-back system for growers wishing to leave the sector. The clawback arrangements were increased to 2 per cent.
However, I recognise what the noble Baroness says about the quality of the tobacco that is grown and the way in which it is exported. The Government recognise and share the concerns. They have done all that they can and will continue to work in that area, but being part of a union where there are eight producer nations means that it is not so easy to make the progress that we would like.
Viscount Waverley: My Lords, is it the intention that all subsidies, including those that are camouflaged, will become illegal under World Trade Organisation rules?
Baroness Hayman: My Lords, the outcome of the latest WTO negotiations is so clouded as not to allow me to give an absolute Answer to the noble Viscount at the moment. However, I shall write to him on that issue.
Lord Pearson of Rannoch: My Lords, I apologise for putting the matter this way, but can the Minister answer the Question on the Order Paper? Why does the European Union continue this absurd folly? In relation to the second part of the Question, can she say how much the United Kingdom contributes to the £700 million or £800 million that go down that classical "Euro drain"?
Baroness Hayman: My Lords, I tried to answer the Question. I was asked how much was spent on the subsidy in the last financial year. I gave the last available figure which, as the noble Lord may be interested to know, was 2.5 per cent of the overall CAP payments. I cannot work out the British share of that amount in my head, but I shall do so back at the office and write to him on that point.

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I also said that the reason that the CAP support regime was introduced in the first place was to support production in disadvantaged areas of the Community, to maintain farmers' incomes and to reduce surpluses by adapting production to market needs. I imagine that that is the same reason that it is supported by those countries where tobacco producers operate now.
Lord Bruce of Donington: My Lords, is the Minister aware that, according to recent authenticated reports, this area of expenditure was the subject of considerable fraud which brought into disrepute the whole way in which these funds are administered, both centrally and regionally? Will my noble friend agree that once again this is the result of qualified majority voting applying to all European expenditure and the allocation of resources? Will she agree also that any further endeavour to introduce qualified majority voting ought to be resisted with the support, I imagine, of the entire United Kingdom population?
Baroness Hayman: My Lords, I always hesitate to answer on behalf of the entire United Kingdom population in these matters. My noble friend is absolutely right that this matter is governed by qualified majority voting and that fraud has been a serious problem in this sector. The reforms in 1992 to which I referred reduced the opportunity for fraud by eliminating intervention and export refunds and by simplifying the premium arrangements, reducing the categories of tobacco on which payment was made from 34 to eight. The member states were also required to set up national control agencies in order to oversee the payment of premiums, the administration of the quota system and the contractual arrangements. Expenditure is going down in this area but, as I said before, we still believe it is too great.
Baroness Trumpington: My Lords, does the Minister realise that she has my sympathy on this occasion, as well as sympathy for the noble Baroness who asked the Question? I spent a great many years answering in her place on this subject. As far as I remember I was told that most of the money goes to Greece for areas where they can grow nothing else.
Baroness Hayman: My Lords, the noble Baroness recalls well. Greece is one of the areas, together with France, Germany, Spain, Portugal, Belgium, Austria and Italy, that receives subsidy in this regard. It is a major problem because major investment is often required to help people to change. The alternative crops are often themselves in surplus, like olive oil and wine. Added to that, tobacco still attracts the highest premiums per hectare under the CAP regime. Changing things is therefore not an easy task.

NHS Financial Deficit
2.45 p.m.
Lord Clement-Jonesasked Her Majesty's Government:
What they anticipate the NHS financial deficit will be in this financial year.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, the latest forecast of income and expenditure for health authorities and NHS trusts is a deficit of £197 million.
Lord Clement-Jones: My Lords, is not the Minister being unduly reticent in his reply? Some of the forecasts that have been made have been of a deficit this year of £400 million with an accumulated deficit of over £1 billion, with worse to come next year. Is it not time, rather than denying the extent of the deficit or preventing it being published by finance officers of the NHS, for the Secretary of State to accept that the NHS is severely under-funded and that he should do his best to secure greater funding in the Comprehensive Spending Review next year?
Lord Hunt of Kings Heath: My Lords, the figure I have given is the best forecast we have. I believe the noble Lord is referring to the accumulated deficit of £1 billion talked about by the Healthcare Financial Management Association. I am glad to say that it is indulging in realms of fantasy. The House will well know that, in relation to resources for the NHS, through the Comprehensive Spending Review we have put in a large amount of additional growth money—4.9 per cent increase in real terms this year. Through that we are enabled to provide real improvements to the National Health Service. Thirty-seven new hospitals are either being built or are in the process of being built. There is much greater access to services. The NHS is undergoing a fundamental modernisation programme which we are funding.
Baroness Gardner of Parkes: My Lords, can the Minister tell us what proportion of that deficit will be for the London area alone? Is it much worse off than other parts of the country? In view of the fact that no government are able to adequately fund the National Health Service, is it not time to look at new ways of doing so?
Lord Hunt of Kings Heath: My Lords, London has a number of trusts which are facing financial pressures. We are working closely with them to ensure that they take the action that is necessary. In relation to alternative systems of funding, I am not persuaded by the arguments. The system that has been in place since 1948 has served the NHS well. We have the most cost-effective healthcare system in the world. We have shown, by the additional resources that we have

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invested in the service, that we can sustain the NHS, make it fit for the future and have one of the best and most modern health services in the world.
Earl Howe: My Lords, is it not the case that the much publicised new money that the Government announced for the NHS will be largely swallowed up over the coming two years by cost pressures that cannot be avoided? Will the Minister confirm, for example, that additional pension contributions alone are set to absorb an extra £650 million over that period? That is on top of the huge costs arising from new legislation such as the EU working time directive.
Lord Hunt of Kings Heath: My Lords, there are elements which come into the budgets of the health service every year; for example, pensions, pay, the working time directive or indeed the rising cost of generic drugs. That is part of the life of the National Health Service. With a three-year Comprehensive Spending Review, it is not always possible to estimate exactly potential increases in budget. However, within the resources that we have made available, I am confident that we have the capacity both to meet those unexpected pressures and to introduce significant improvements in services.
The Countess of Mar: My Lords, can the Minister say whether awards for damages against NHS hospitals come into that total budget? If they do, can the noble Lord say how much such awards amounted to during the past year and tell us what Her Majesty's Government are doing to address the problem?
Lord Hunt of Kings Heath: My Lords, the noble Countess is certainly right to refer to important and, I think, worrying trends in relation to clinical negligence awards. Within the deficit figure that I mentioned there is certainly provision for the potential future cost of litigation which has been started. The latest figures that I have show that in the 1997–98 summarised accounts for the NHS costs charged to expenditure for clinical negligence amounted to £144 million.
This is a matter of great concern. We have to be very careful in terms of avoiding defensive medicine. We also believe that the more effective clinical governance that we are introducing and the development of evidence-based medicine, will, over time, enable us to tackle these issues.
Lord Pilkington of Oxenford: My Lords, in the allocation of resources, can the Minister say whether he has given attention to the appalling situation of the elderly in many of the hospitals, as has been revealed in recent press reports?
Lord Hunt of Kings Heath: My Lords, we are very concerned to ensure that older people being cared for in the NHS receive a first-class quality service. My honourable friend, Mr John Hutton, has made it clear that the Commission for Health Improvement will, as a priority, focus on services for older people in its first inspection round. We are establishing a national
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service framework on services for older people which will start work next year. It will focus on the very issues raised by the noble Lord.

The Salisbury Convention
2.52 p.m.
Lord Campbell of Allowayasked Her Majesty's Government:
Whether they favour retention of the Salisbury convention when Her Majesty's Opposition have no voting majority in either House of Parliament.
The Lord Privy Seal (Baroness Jay of Paddington): Yes, my Lords. I am sure the noble Lord is aware that the Salisbury/Addison convention has nothing to do with the strength of the parties in either House of Parliament and everything to do with the relationship between the two Houses. The other House—and, with it, the Government—is elected on a universal franchise and, pace the noble Earl, Lord Onslow, who I am sorry to see is not in his place, no one in this House is elected on that basis. In those circumstances, it must remain the case that it would be constitutionally wrong, when the country has expressed its view, for this House to oppose proposals that have been definitely put before the electorate.
Lord Campbell of Alloway: My Lords, I thank the noble Baroness the Leader of the House for her reply and, indeed, for taking the Question. However, as a matter of principle and leaving aside Wakeham, if we may, for one moment, perhaps I may ask the following question. If the circumstances in which this convention was introduced and implemented no longer exist, can the noble Baroness say whether retention can be justified without further examination? Further, and in this context, can the noble Baroness say whether it is really requisite for the House to determine a self-denying ordinance to replace it? Is it not a matter for the House as master of its own procedures?
Baroness Jay of Paddington: My Lords, if I understand precisely what the noble Lord is saying, he is asking on what principle the Salisbury/Addison convention was established in 1945. Perhaps I may quote directly from the then Lord Cranborne who, in proposing this, said that,
"we should frankly recognise that these proposals" —
those contained in the election manifesto of the Labour Party at that time—
"were put before the country at the recent General Election and that the people of this country, with full knowledge of these proposals, returned a Labour Party to power. The Government may, therefore, I think, fairly claim that they have a mandate to introduce these proposals". —[Official Report, 16/8/1945; col. 47.]
I am not sure where the noble Lord sees a difference of principle between that situation, which was enunciated and has formed the basis for the Salisbury/Addison convention ever since, and the situation in which we now find ourselves.

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The noble Lord asked me to ignore the noble Lord, Lord Wakeham, and his Royal Commission, but he will be aware that the Government very precisely put in the commission's terms of reference the need to maintain the position of the House of Commons as the pre-eminent Chamber of Parliament. Having reread the recent constitutional lecture given by the noble Lord, Lord Strathclyde, on this subject, I believe he reaffirmed that point.
Lord Strathclyde: My Lords, the noble Baroness the Leader of the House is very kind to say that she has reread my speech to the think-tank Politeia. I hope that she enjoyed it. However, is it not the case that in 1945 this House was entirely hereditary? There were no life Peers at all and very few Labour Peers. That justified the reason for the creation of what we now know as the Salisbury convention.
The noble Baroness has said that this House has changed, that there is a new dynamic, and that the House has a new authority. Therefore, does she agree with the view that I expressed in my speech—the Tory Party's view—that the time has come to re-examine the Salisbury convention and for discussion to take place before a new agreement can be reached between the parties?
Given the noble Baroness's initial Answer, could she possibly write to me—unless, of course, she has the answer to hand now—with a list of the manifesto commitments that she believes bind the House and this Parliament?
Baroness Jay of Paddington: Yes, my Lords. I shall be delighted to send the noble Lord a copy of the manifesto, which may answer his question very simply. I shall not burden the House by trying from my inadequate memory to rehearse it to him this afternoon. However, perhaps I may remind the noble Lord that he also said in this well-known lecture, which bears more than one rereading, that we should be, in his very felicitous expression, "less grim-jawed" about the Salisbury convention. Frankly, I never regard the noble Lord as being grim jawed at all, but, when speaking about the changing circumstances—and it is a delight to be able to quote him so extensively—he went on to say:
"The House of Lords is not suddenly going to change all that" —
that is to say, the Salisbury/Addison agreement—
"It will always accept the primacy of the elected House. It will always accept that the Queen's Government must be carried on".
Lord Lipsey: My Lords, does my noble friend the Leader of the House agree that the day that this House starts conducting a systematic, frontal attack on the legislative proposals of the elected government, that day this House will be signing its death warrant?
Baroness Jay of Paddington: My Lords, my noble friend puts it in a very exact form and one which I would hesitate to underline in public. However, if
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noble Lords were to trespass very broadly on these understandings and conventions, it is very clear that it would indeed change the dynamic of future reform.
Lord Simon of Glaisdale: My Lords, as your Lordships are here concerned with a convention and not a rule of law, is it not the fact that it is relevant only in so far as it is constitutionally required? Is not that a matter for your Lordships and not for the Government to decide? Further, perhaps I may venture a third question: should not this matter be shortly debated again?
Baronesses Jay of Paddington: My Lords, in due deference to the noble and learned Lord, Lord Simon, I say only that I was asked to comment on this matter. I was in no way suggesting that the Government were in any sense doing more than simply reflecting the established position. Of course, matters of procedure in your Lordships' House are for the House as a whole.
The noble and learned Lord asks me to comment on the constitution. I do not know whether he regards Dicey's Law of the Constitution as being an appropriate authority, but perhaps I may quote directly from it:
"The general rule that the House of Lords must in matters of legislation ultimately give way to the House of Commons is one of the best-established maxims of modern constitutional ethics".
Lord Hooson: My Lords—
Lord Denham: My Lords—
Noble Lords: This side!
The Attorney-General (Lord Williams of Mostyn): My Lords, I believe that the House would wish to hear from the noble Lord, Lord Denham.
Lord Denham: My Lords, I am most grateful. I remember a time when a Labour opposition took a lot of convincing that the Salisbury/Addison convention applied to them as well as to a Tory opposition. Over the years, the convention has gradually evolved to suit the circumstances of the time. The noble Baroness the Leader of the House will realise—will she not? —that there has been a rather substantial change in the balance between the two Houses which must lead to a substantial revaluation of the Salisbury/Addison convention.
Baroness Jay of Paddington: No, my Lords, I am afraid that I cannot accept that. The Conservative hegemony—I use the words of my noble and learned friend Lord Falconer when he replied to a similar debate last week in your Lordships' House—in this House has been altered. As I hope that I suggested in my reply to the original Question from the noble Lord, Lord Campbell of Alloway, the Salisbury/Addison convention is based on the relationship between the two Houses. It has nothing to do with the relative party strengths in this House.
Lord Hooson: My Lords, does not the noble Baroness the Leader of the House agree that the

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Salisbury convention is not so much a matter of principle as of expediency and convenience for the business of Parliament, and that the conditions which necessitated that convention coming into being still exist at present and will continue until we know what the permanent constitution of the second House is likely to be?
Baroness Jay of Paddington: My Lords, I agree with most of what the noble Lord has said. This matter is about business management, as I hope I made clear when I quoted the words of the then Lord Cranborne in 1945. However, it also concerns the political imperative of the elected party's manifesto commitments. Therefore, it goes a little beyond expediency and can concern the important political principles of the programme which is laid before the electorate.

Elderly Patients: NHS Hospital Treatment
3.1 p.m.
Baroness Knight of Collingtreeasked Her Majesty's Government:
Whether they will take steps to investigate allegations that some elderly patients in NHS hospitals are being denied, or prevented from taking, necessary food and drink.
Lord Hunt of Kings Heath: My Lords, I understand that some of the allegations to which the noble Baroness refers are under police investigation. It would therefore be inappropriate for me to comment further on these. As regards NHS services for older people we are determined to ensure that these are of the highest quality, including the issues of food and drink.
Baroness Knight of Collingtree: My Lords, is the Minister aware that over 60 cases of maladministration against elderly patients in National Health Service hospitals are now under investigation by the police? The Minister indicates that he is aware of that. How long has he known about that? How does he react to the allegation that food and drink are deliberately being withheld from these people because a dead patient means an empty bed? As the police are taking a long time o investigate these matters, will the Minister consider issuing an immediate instruction to NHS hospitals that such treatment will simply not be tolerated?
Lord Hunt of Kings Heath: My Lords, I cannot comment on the specifics of the police investigation. It would, of course, be quite wrong to have—and we would utterly condemn—circumstances in which older people were deprived of food and drink.
Lord Morris of Manchester: My Lords, has my noble friend, or any of his ministerial colleagues, discussed with elderly people's organisations the Call for Action report co-ordinated by Age Concern and, in
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particular, its recommendation that the Government should introduce equal opportunities legislation enshrining the principle of age neutrality so that people will no longer be denied access to healthcare or other support or services simply on the grounds of age? Can my noble friend offer any response this afternoon to that important recommendation?
Lord Hunt of Kings Heath: My Lords, I have seen the recommendation of Age Concern. I make it clear to noble Lords—I have already said this to the noble Lord, Lord Pilkington—that discrimination of any kind in the National Health Service is totally unacceptable. I believe that rather than legislation, the best way forward is effective management of the National Health Service, for which we are responsible. I have already intimated that the Commission for Health Improvement as one of its first priorities will focus on inspecting services for older people in the NHS. The national service framework on services for older people which will be developed next year will, as part of its remit, consider these issues to make sure that the services we provide for older people are of high quality.
Baroness Young: My Lords—
Lord Clement-Jones: My Lords—
Lord Williams of Mostyn: My Lords, I think that it will be more effective if we hear the noble Baroness, Lady Young, first as there is a little time left.
Baroness Young: My Lords, thank you. Leaving aside the question of those patients who are the subject of police investigation, is the noble Lord aware of the extreme urgency of this situation in hospitals? Only this last weekend a terrible case was brought to my attention which concerns a relative of a friend of mine who died of starvation after three weeks in hospital. Is the noble Lord aware that it is not good enough to say that he will await the results of an investigation or an inspection? Does not he agree that this urgent matter requires attention today, not some time in the future?
Lord Hunt of Kings Heath: My Lords, I can only reiterate that I cannot comment any further on the specific cases which are being investigated at the moment by the police. I have already made it clear that we, as a government, would find it wholly indefensible for food and drink to be withdrawn from older people in the way that has been alleged by noble Lords. Our position is abundantly clear, and clinicians, who ultimately have to make clinical judgments, are well aware of that position.
Lord Clement-Jones: My Lords, I direct the Minister to another recommendation of the extremely important Age Concern report mentioned by the noble Lord, Lord Morris. It recommended that there should be a full inquiry into the treatment of older people within the NHS in view of the facts that were

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uncovered in the report. Will the Minister indicate whether the Department of Health will conduct a full inquiry as recommended?
Lord Hunt of Kings Heath: My Lords, I have just made clear that the Commission for Health Improvement will be given as one of its first priorities the responsibility of inspecting services for older people in the NHS. I have already made it clear that the national service framework, which, as the noble Lord knows, is an important and fundamental way of developing policy in the future, will be producing work over the next 12 months. I reiterate that we are determined that older people in the NHS receive a first-class quality service. We are opposed to discrimination of any kind. Although older people form 14 per cent of the population, they use 40 per cent of NHS resources.

Armed Forces Discipline Bill [H.L.]
3.7 p.m.
The Minister of State, Ministry of Defence (Baroness Symons of Vernham Dean): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an instruction to the Committee of the Whole House to whom the Armed Forces Discipline Bill [H.L.] has been committed that they consider the Bill in the following order:

Clauses 1 to 10,

Schedule 1,

Clauses 11 to 13,

Schedule 2,

Clauses 14 to 25,

Schedule 3,

Clauses 26 and 27,

Schedule 4,

Clause 28. — (Baroness Symons of Vernham Dean.)

On Question, Motion agreed to.

Housing in the South-East
3.8 p.m.
The Earl of Carnarvonrose to call attention to the need for housing in the south-east in the years to 2016; and to move for Papers.
The noble Earl said: My Lords, I should inform your Lordships that I am chairman of SERPLAN, with no pecuniary interest! I am sure that we all look forward to hearing the maiden speech of the right reverend Prelate the Bishop of Portsmouth. I should like to take this opportunity to clarify SERPLAN's position regarding future development in the south-east following the publication of the Crow Report.
As noble Lords may know, SERPLAN comprises all the planning authorities in London and the south-east: county, unitary, district and the London boroughs, representing about 18 million people—a region approximately the same size as the Paris region.
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For over two years SERPLAN has been involved with some enthusiasm in producing a sustainable strategy for the south-east. A considerable amount of member and officer time and money have been expended. We also went through a major public consultation exercise before submitting our draft regional planning guidance to the Government. That draft version of the regional planning guidance was submitted to the Deputy Prime Minister last December. We welcomed the principle of a public examination into regional planning guidance and we were impressed also by the five weeks which were devoted to that purpose.
We had no illusions that our strategy was perfect—we have always been open to constructive criticism—but members and officers and, indeed, many people in the south-east, were outraged by the way in which Professor Crow, chairman of the public examination panel, in his report to the Government, set aside SERPLAN's draft regional planning guidance and substituted his own. There is a strong view that Professor Crow has gone well beyond his brief and has not appreciated the new relationship between central and local government implicit in the proposals which the Government have made for modernising regional planning.
There is also widespread concern at the attitude adopted by the panel towards the concept of sustainable development. The draft regional planning guidance is broadly in line with government policy. Professor Crow, however, has described sustainable development as something which is "fashionable". We have not spent two years developing a sustainable development strategy for the south-east just to be fashionable. We are of the view that our strategy is a genuine and largely successful attempt to put sustainable development at the heart of new regional planning.
The Crow report largely echoes the case put forward by the development industry to encourage continued rapid growth to the west and south of London. SERPLAN recognises the vital importance of the south-east to the national economy, but the panel's report brushes aside the problems of congestion and pressure on services and infrastructure already being experienced in those parts of the south-east. Such an approach to economic development would have the ultimate effect of choking off economic growth and prevent the region from realising its full economic potential by bringing forward development opportunities elsewhere in the south-east.
The Crow report also proposes a massive increase in house building, a grand total of 1.3 million new dwellings for the period 1991–2016. This proposed provision is higher even than the Government's own household projections of 1.1 million.
The extensive greenfield requirement implied by proposals for housing provision on this scale would remove the pressure on the development industry to seek out urban opportunities on brownfield land and thereby undermine the achievement of an urban renaissance. Such over-provision would also give the

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green light to future migration into those parts of the south-east already experiencing severe development pressures at the expense not only of the poor areas of the north of England but also of the less favoured parts of the south-east, such as south east Kent and parts of the south coast, as well as areas of London.
SERPLAN has published its response to the report of the public examination panel and I have deposited copies of the report in the Library of the House. That document sets out the main points of criticism, the nightmare vision proposed for the south-east by Professor Crow, and reaffirms our members' and officers' commitment to SERPLAN'S sustainable development strategy for the region.
The objective is to achieve a more sustainable pattern of development and bring about an urban renaissance by making better use of previously used urban land and buildings and by promoting greater use of public transport.
Traffic congestion is a growing problem. To ensure continued mobility, demand management will be necessary, as well as measures to achieve a shift from use of the private car to better use of public transport and for the integration of the transport system with land-use planning.
We are in favour of economic growth. Indeed, one of the main themes of the strategy is to encourage economic success. What we propose for those areas to the west and south-west of London which are experiencing high levels of economic activity is a strategy to deal with the resulting impacts and pressures on the infrastructure. At the same time, we seek to rebalance the regional economy in favour of those areas which we describe as "priority areas for economic regeneration", such as east Kent and the south coast—to which I have already referred—as well as Thames gateway, which still offers further potential for regeneration.
We aim to make housing provision for the region by meeting housing need and taking into account affordability and accessibility in line with the more sustainable approach of "plan, monitor and manage", rather than "predict and provide", an approach which John Prescott—I nearly said Lord Prescott—has already declared "dead". The Crow report has put forward an alternative that will fail to meet housing needs; that will compromise a range of other policy objectives, including attempts to secure urban renaissance; and that will have repercussions for infrastructure provision as well as for public expenditure.
Professor Crow's approach to housing provision is underpinned by his belief that economic growth, particularly in those areas experiencing economic pressures, should be unconstrained unless there are overriding local environmental reasons. Congestion and labour supply problems are not regarded by him as a constraint on development. Earlier in my speech I referred to how such an approach to economic development would in reality stifle economic growth in buoyant areas of the region and reduce the economic potential of the region as a whole.
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The aim of promoting an urban renaissance lies at the heart of SERPLAN's proposals and is in line with Government policy. The commitment to maximising the re-use of existing buildings on previously developed land is reflected in the national target that 60 per cent of additional housing should be provided in this way.
During my visits round the region I have seen many good examples of urban renaissance, three of which I should like to refer to. In the London Borough of Camden, a railway goods yard has been turned into beneficial housing use with affordable rents—excellent; in the London Borough of Waltham Forest, the Action Trust in South Leytonstone has regenerated a blighted site, knocking down early 'seventies housing blocks and replacing them with a wide range of terraced housing; and near the docks in Southampton, in the St Mary's area, a lot of rundown housing has been changed into an urban village, once again with mixed tenures, which appears very successful.
Much of the provision for new housing will be for single-person households. Many of these young people seek a high-quality urban lifestyle, with all the facilities and opportunities for social contact that that can supply. This is a growing proportion of the population, which requires a very different kind of housing from that offered by the traditional suburb. That is why SERPLAN—which incidentally came up with the urban renaissance concept when it began drafting its strategy at the beginning of 1997—is strongly in support of many of the ideas being put forward in the report of the Urban Task Force.
The key aims of SERPLAN's strategy are to provide for sufficient and adequate housing to meet the needs of people living in the south-east and to take account of affordability and accessibility.
The baseline level of housing provision—862,000 dwellings between 1991 and 2016—is no more than a starting point. The scale of housing provision against which our draft plan should be judged is 892,000–914,000 dwellings. The aim is to be responsive to needs as they arise, and as they change, and thereby to ensure that everyone has the opportunity of a decent home.
It is very clear that there may be a need for additional provision to be made for housing. If that proves to be the case, it will need to be brought forward and quickly cascaded through the development plan process. Local authorities have expressed confidence that this is something that can be done, and work is going forward on the mechanics of "plan, monitor and manage".
If everyone is to have the opportunity of a decent home, however, it is crucial that provision is made for a range of dwelling types and sizes in order to meet the needs of all sectors of the community, including those unable to compete in the market. This will require strengthened powers for local authorities to specify and control the range, type and tenure of all dwellings. Our aspirational targets for affordable housing is not less than 40 per cent of the total provision in the rest of the south-east, up to 2016. This amounts to 370,000 dwellings.

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Professor Crow rejects a regional target for affordable housing and instead prefers to rely on increasing the overall level of housing provision and allocating the necessary land. Building detached, five-bedroomed, executive housing on greenfield sites, as many house builders wish to do, will not address the real housing needs in London and the south-east. The "trickle down" theory does not work for housing. SERPLAN's approach of "plan, monitor and manage" provides for housing needs as and when they arise and, with the backing of affordable housing targets, gives much more chance that it will be households in need that benefit from increases in housing supply.
Perhaps I may give your Lordships one final example, Brighton, where people from London are buying up large period houses in that town, which were formerly divided into flats for letting. The landlords are attracted by the once-and-for-all gains to be achieved, but the result is an acute shortage of accommodation to let at a reasonable rent in a town where that kind of accommodation is very much in demand. The numbers-led approach to housing does not respond to need.
What I have tried to indicate in opening this debate in your Lordships' House is that housing needs in the south-east are both varied and complex. The nature and distribution of housing needs in London and the south-east will not be met by a crude process of massive provision on greenfield sites, which would certainly result in the kind of damage that I have described.
On the contrary, it requires the measured and focused approach of "plan, monitor and manage", which enables local authorities to address specific needs in their areas as they arise and change over time. But it also requires local authorities to be given strengthened powers and the means to be able to do so. My Lords, I beg to move for Papers.
3.24 p.m.
Lord Stoddart of Swindon: My Lords, it is a great privilege to follow the noble Earl, Lord Carnarvon, to be able to thank him for raising this matter, and to congratulate him on the manner in which he introduced what is a very complex and important subject. I have known the noble Earl for about 40 years, which is a long time. I have great admiration for his contribution to public life, especially in matters of local government and planning. Because of his long and great experience, we should very much take to heart what he has told us today. Indeed, I agree with most of what he said.
The Crow report states that sufficient housing should be made available for all who wish to live in the south-east region. I must ask the question: is that for all time? I point out that if it is for all time, there is going to be a period after 2016, and if it also applies to that period, I fear that the south-east really will be covered in concrete and housing. I am not at all sure that that will be a good thing, and the question should be considered very seriously indeed.
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Additional housing between 1996 and 2016 is what is proposed, and it is to be a large addition. However, we are already one-fifth of the way through this period, so house building during the remainder of the period is likely to be rather frenetic. Infrastructure services will not be able to develop in time to cope with all the additional people. I refer especially to transport. Planning authorities will be under extreme pressure to give consent to unsatisfactory schemes. Far from improving our towns, villages and countryside, we are likely to be left with ill-considered and bad projects which, under normal circumstances, would not have been agreed.
So much additional housing not only poses a threat to the countryside, it also affects urban areas, especially if densities are to be increased. There is a need to maintain open spaces in towns as well as in the country. Indeed, perhaps it is even more important in towns so that a good quality of urban life is preserved. However, this additional building will put pressure on urban planners to allow overbuilding on sites which ought to remain as open land for the people of those areas.
Perhaps I may give an example. I live in Reading. Already there is pressure to develop the Kennet meadows for housing, which, as a matter of fact, are floodlands. That has been resisted until now, but under the Crow plan, pressures will increase further and eventually no doubt the developers and builders will get their way. Indeed, they will keep on putting pressure on urban areas such as Reading within the south-east region. Further, towns like Reading will be put under twin pressures. First, they will need to provide more housing within their boundaries, and, secondly, they will have to cope with transport and other infrastructure problems from the new rural settlements, such as Grazeley, just outside their area. Quite frankly, if Reading is to deal with the transport problems arising from that, it will need to demolish houses to provide more roads to give access from those areas into the town. There are real dangers to be faced.
Furthermore, I remember a time when Maidenhead was under great pressure to build estates on floodland. Eventually the planners gave in. What happened, of course, was that there was great flooding in the Maidenhead area. The developers and builders had already made their profits and had gone away quite happily. However, it was the public, through taxation and through water charges, who had to put that right. I fear that those kinds of pressures will be increased if the Crow report is accepted by the Government; I hope that it will not be. What is certain is that at present the urban areas do not have the resources to meet these demands. I feel sure that the Government will not put their hands in their pockets to provide the money that will be necessary to deal with this additional development.
The panel has accepted that all housing demands in the region should be met. It uses projections for new household formation to back up its case. But there are both social as well as economic reasons for this need. For example, additional housing need has been generated by a higher divorce rate and family

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breakdown, which have been encouraged by government attitudes—I refer not just to this Government but to the previous government as well—towards the family and marriage and, indeed, by the expectation that in many cases the additional housing required will be provided by public authorities. The Government themselves have encouraged additional family formation.
The Government's approach to the family should be designed to keep families together rather than to drive them apart. That should figure in housing strategy. For example, taxation should encourage marriage and stable partnerships. Employment is a key component of any housing strategy, as the noble Earl pointed out. But that really does require intervention by central Government: not necessarily in the way it was done in the 1950s, 1960s and 1970s, but certainly by making other regions excellent places in which to do business and nice places in which to live. I realise that the panel believes that this kind of approach is old fashioned, but some better, nation-wide strategy wild have to be adopted if the United Kingdom is to avoid a situation where large areas will increasingly be grossly underpopulated while others are grossly overpopulated.
I hope that the Government will take note of what was said by the noble Earl and of what will be said during the course of the debate, and kick the Crow report right into touch.
3.32 p.m.
Lord Jenkin of Roding: My Lords, I want to concentrate on one aspect which the noble Earl, to whom we are most grateful for initiating the debate, mentioned in the course of his speech. I refer to the growth of younger single-person households in London and the south-east, which is a very important aspect of the problem to which the noble Earl drew attention. Of course, it is not the only issue but it is a crucial one. I should Id like to put a little more flesh and blood, if I may put it that way, on the important points that he made.
I have had a look at the tables of household projections. I do not wish to bore noble Lords with the figures—they are all there in the tables—but I have calculated that of the total of 2.8 million single-person households in Lon don and the south-east by the year 2021, around 35 per cent—about 1 million—will be single people under the age of 45. It is on that group that I should like to concentrate.
The noble Earl was right to say that very many of those people want the buzz and excitement of the city centre. Last year I chaired a discussion of the Foundation for Science and Technology. Quite a number of those young people were asked about living and working space: in the millennium. They said that,
"they would wish to live near city centres in multi-purpose buildings, containing leisure and service facilities as well as domestic and possibly some employment features, with extensive use of information technology to ease contact with families, friends and business contacts. Such a lifestyle would offer the greatest choice of leisure and work opportunities".
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That echoes entirely what the noble Earl said in his speech. More recently—at the end of November—I was privileged to hear the speech delivered by the noble Lord, Lord Rogers of Riverside, to the British Property Federation. He said that the clue to getting more building on brownfield sites lies in taking a different attitude to densities. I ask noble Lords to hang on to that point because I believe it to be one of the keys.
How is the solution to be found for these younger single-person households, bearing in mind the need for higher densities? At Christmas time perhaps it is right that I should mention CASPARs—not Melchior or Balthazar, but CASPARs, City Centre Apartments for Single People at Affordable Rents. I had not heard about CASPARs until my attention was directed to them. They are an invention of the Joseph Rowntree Foundation. I should like to quote a few words from Richard Best, the foundation's director. He said:
"The time is now right. Demographic, environmental, financial and social reasons suggest central urban sites should be developed for private rented housing. The biggest growth over the next couple of decades will be in single person households. 'Singles' are the natural market for city centre renting".
Mr. Best went on to refer to "thriving mixed communities."
The foundation has researched and developed the concept of CASPARs. Its research has been carried out in Birmingham and Leeds but the findings are equally relevant to London and the south-east. The foundation makes three points. It states that such accommodation can best be provided in converted buildings rather than in new ones, recycling buildings which have outlived their present purpose but could be converted into apartments of that kind. It has established that they should be able to be provided without subsidy. Indeed, Mr. Best's article suggests that there are quite good returns—better than one would be likely to get on the stock market. Some excellent examples already exist. At a recent reception in the House I sat next to the president of Redrow Homes. That company is now building this kind of accommodation in London. It can be done.
What are the indicators? First, the preferred location for these places is in or near city centres. It is not in the suburbs and it is most emphatically not on greenfield sites. Secondly, security is hugely important. With all the electronic aids now available, that can be provided economically. Thirdly, they should not be furnished, because people like their own furniture. But it is best to have the buildings provided with some basic fitted furniture. Fourthly, they should have economic heating. There should be one-bedroom flats for those who can afford only one bedroom, but the point was made to me very firmly that some of the more affluent groups would prefer two bedrooms. Fifthly, some communal facilities are necessary.
I believe that such accommodation addresses one of the social problems of this group of people in our society—loneliness. These are perhaps people who have had a relationship but it has broken up and they are facing living alone. They do not want a separate house in an impersonal estate, but they want

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somewhere where they can have some kind of a social life and make friends. We must be careful; we are not creating hostels. The Rowntree research makes clear that that is not what is sought. It must be the kind of housing where the occupiers can, to employ an Oxbridge expression, sport their oaks; where they can go behind their own front doors and be assured of privacy but where they are also able to share some common facilities. CASPARs are a reality. They ought to form a part of the concepts of planning authorities seeking to grapple with the problems of the growing population in London and the south-east. In some cases that is happening already.
I asked a leading firm of chartered surveyors: what is the obstacle to getting more of this kind of housing built? I was told by its head of research that, over everything else, it has to do with the attitudes of planning authorities. They simply do not understand this kind of development. They must. I hope that the Government will draw this matter to the attention of every planning authority in London and the south-east. Then we may make some impact on the problem.
3.40 p.m.
Baroness Maddock: My Lords, I, too, am grateful to the noble Earl, Lord Carnarvon, for giving us the opportunity to debate this important issue. We all need a decent home. Few in this House or anywhere else would dispute that. But when it comes down to the detail of how many homes need to be provided, where they should be, and for precisely whom, matters become much more controversial. Nowhere is that more true at present than in the south-east.
The south-east is already densely populated. Its transport and public services groan under the pressure of a booming economy. It also contains very attractive green belt which everyone wants to protect. But the south-east will not achieve its economic, social and sustainability goals unless we build the right homes in the right places for the right people. That is the challenge that we are debating. It is a challenge to all of us as politicians, whether at national, regional or local level.
Many voices and reports are contributing to this debate. There is SERPLAN, made up of the region's planning authorities, which proposes that, up to the year 2016, some 650,000 new homes are needed. The Crow report adds 64 per cent to that figure; it states that some 1.1 million additional homes will be required. The Government's figures indicate a need for slightly fewer than that. The Crow report is somewhat controversial. I am sure that we shall hear more about it during the debate. It recommends that the target for new housing on recycled urban land and the use of other buildings and redundant land should be reduced. Also, it is not clear whether the Crow report, although committed to housing need, wants targets to be set in the same way as is suggested by SERPLAN.
The Government have yet to give their considered response to the Crow report. The Council for the Protection of Rural England would like to see the
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whole of the Crow report scrapped. It wants to see a system based more on local and regional planning, with strong account taken of sustainability and environmental factors. Social housing providers—I declare an interest as vice-president of the National Housing Federation—emphasise the need for targets for affordable homes. I believe that the Government have previously recognised that, because they have strengthened planning guidance in this area.
The time allowed for this debate is short, and it is impossible to go into detail on this vast subject or cover every area. My noble friends on these Benches will add some of that detail in their contributions. My noble friend Lady Hamwee will concentrate on planning issues, an area in which she has considerable expertise. I want to concentrate on two areas: the need for affordable homes, and the opportunity for maximising the use of derelict land and buildings.
Affordability is not merely about building four-and five-bedroomed homes on greenfield sites, which seems to be the direction that is often run by market forces. The proportion of lower paid workers, mainly in the service and public sectors, is increasing. Such workers find it difficult either to compete effectively in the tight housing market of the south-east or to gain access to social housing.
Households in the market sector in the south-east consume similar types of housing to households in the rest of the country, but pay a greater proportion of their income on housing costs. Income for income, mortgage payments are on average 24 per cent higher in the south-east than in the rest of England, and private sector rents are 20 per cent higher on average. So, although people in the south-east sometimes have higher incomes, the extra amount is often not enough to offset the increased cost of housing.
That means, for example, that teachers, nurses, firemen, policemen—all the essential workers needed in a thriving economy—often cannot afford to enter the housing market in the south-east. It means that children will often have several teachers in a term. That is particularly true in London. It means a greater use of agency nurses and a shortage of workers in many of our key service areas. That is why, as other speakers have emphasised, it is important that any future housing provision in the south-east takes account of affordability.
I now turn to the subject of empty properties and derelict land and buildings. The Empty Homes Agency estimates that there are some 950,000 empty residential properties in the south-east which have been vacant for more than a year. Many will be re-rented, and some will come back into use as a result of movement in the housing market. But many will remain empty. They are a blight on the local neighbourhood and at the same time deny people the homes that they need. But those figures do not include the many tens of thousands of new homes that could be created in the wasted space above shops and in redundant shops and offices and other buildings—buildings which, in planning terms, are not presently classified as residential.

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The Empty Homes Agency has produced an excellent report, New Homes in Existing Buildings. What emerges from that report, and from the report of the urban task force under the noble Lord, Lord Rogers, is the need to harmonise VAT on refurbishment and new build. The difference between the two is a real block in many cases when trying to bring empty homes and other empty buildings back into use; and it does nothing to discourage builders from regarding greenfield sites as their first choice. A second crucial point is the council tax treatment of long-term empty property. It cannot be acceptable for it to be cheaper to keep a property empty than to have someone living in it. I do not believe that the use of empty property and derelict land and buildings is a panacea in terms, Of the matters that we are discussing, but it could play an important part. It is important that we develop planning and change financial regimes so that, wherever possible, we can maximise the contribution of that sector.
In order to solve these problems, we need political will and co-operation. There must be an understanding of how housing need affects everyone. But what is not required is political posturing, nimbyism or endless debates, often heard on the radio and in another place, about who did what, and when. People outside do not want a cheap party political debate on this matter. They want constructive debate. They want to find a way forward to solve some of the difficulties that we all face in the south-east. Experience tells me that our debate today is likely to be constructive, measured and informed. I look forward to listening to the remaining speakers.
3.49 p.m.
The Lord Bishop of Portsmouth: My Lords, I thank the noble Earl, Lord Carnarvon, for initiating the debate and those who have spoken so far. In the collection of memorabilia at home there is an RIBA Pugin Memorial Medal won by my father in 1937 when he was a student at the Edinburgh College of Art. Twenty-nine years later he was awarded a doctorate at Edinburgh University for a study of the provision and use of space in European housing, comparing northern with southern. So it is from the context of this family formation and from the perspective of the diocese of Portsmouth, which consists of south-east Hampshire and the Isle of Wight, that I want to address your Lordships for the first time today.
I know that in some of the observations I shall make I have the support of other Church leaders in my area, including my close friend and colleague, the Roman Catholic Bishop of` Portsmouth, Crispian Hollis.
There is indeed a need for new housing. That leads me to ask the same questions as the noble Baroness, Lady Maddock has just asked: what kind, for whom and where? In the urban areas of the diocese of Portsmouth, Portsea Island and Gosport, the percentage of housing classified as unfit is 7.2 per cent, 12,900 homes. That is higher than the average for the south-east region, which is 5 per cent.
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We also have a growing problem of homelessness. Not far from where I live in Fareham there is a hostel for 100 people made up of lone-parent families and some refugees from Afghanistan, Kosovo, Georgia and Russia. They have been placed there by social services from all over the south-east. There are, moreover, hostels for young people and single men and women in the city of Portsmouth. That city has among its postcodes the poorest in the whole of the south-east. On the Isle of Wight, in Ryde and Newport, the major challenge is the lack of social housing for the homeless. Many have to be put in bed-and-breakfast accommodation. Alternatively they are the hidden figures for whom, if I dare say it, there is no room in the inn at any time of year. Two hundred and fifty more houses need to be available per annum, over and above the 100 vacancies that usually occur. I know that the authorities and the housing associations on the Isle of Wight are working hard to improve the picture.
But what of the creation of community? In parts of Portsea Island some of the urban villages of the 19th century have proved wonderfully resistant to many of the negative social pressures towards fragmentation in recent times. That is largely because local neighbourhoods had their own facilities from the start: schools, churches, parish halls, shops, places to have a meal, fish and chip shops and the like.
But when we compare that scenario with two different developments—a large council estate in Leigh Park, north of Havant and the village of Whiteley, west of Fareham—there are, it seems to me, some important lessons to be learnt. Leigh Park was begun in 1947 originally for 2,000 homes. It now has 30,000 residents. It was built with no infrastructure, apart from schools and churches. It received its first dedicated library two years ago and for work or leisure it is essential to travel.
Whiteley, on the other hand, is a different social area altogether—a 1990s development of well designed housing units which have sprung up in a rather piecemeal fashion. There is now a school and a church congregation hard at work on a building project to which the sharing churches are giving every encouragement. But the village centre is on the edge of Whiteley and there is no good road system. That creates a problem in terms of access to work and shopping. Many people love the area and its accompanying wildlife; others have given up on the lack of amenities and have moved elsewhere.
Many of those questions are replicated elsewhere, including in the north-west at Manchester where I worked for six years. None of the questions is insoluble. Environment shapes the way we behave as well as the way we develop or do not develop collective trust which can enable us to look at new problems imaginatively—problems which highlight what human beings are, our inherent dignity as well as our inherent weakness.
I conclude with an illustration from when, as a boy, I eavesdropped on one of my father's site visits. It became a case study in the thesis to which I referred

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earlier. We were in France, at the post-war Unité d'Habitation block of flats in Nantes designed by Le Corbusier, now part of architectural history. It was stylish for the time and every cubic centimetre was milked for its potential use. The dining room, in French fashion, was the place of gathering and lingering, unlike in this country with northern and southern housing having different styles and approaches. The local infrastructure was not bad for the time.
I shall never forget coming out of the elevator and being faced, not with a corridor, which is what I expected, but what amounted to a small open street. This reflected Le Corbusier's desire to try to form an urban village community. He had had that inner street painted white, but the flat dwellers had soon asked for it to be painted dark. They did not feel like an urban village and they did not want to be up there either.
The provision and use of space is a vital part of architecture; it is also a living spiritual force. I very much hope that the future planning of different kinds of housing for the south-east might reflect some of those considerations and those yet to be expressed in this debate in order to construct and reconstruct our built environment.
3.56 p.m.
Lord Alexander of Weedon: My Lords, it is my privilege and pleasure on behalf of the whole House to congratulate the right reverend Prelate on his articulate and compelling maiden speech. The right reverend Prelate brings to our work immense, wide-ranging experience in the Church, much of it at grassroots level. He is also a talented author on spiritual issues. I see that the title of one of his books is, All the Company of Heaven. He will recall that Disraeli said, on his elevation to this House:
"I am dead; dead, but in the Elysian fields".
I hope the right reverend Prelate will enjoy the company, but even more I hope we will have the opportunity to hear him on many occasions.
This topic is of great importance to the needs and quality of life of future generations. The issues are acute for the south-east, the most successful part of our country, but they have real resonance for other areas. The south-west is but one illustration of a region which has problems with current anticipated targets.
My own interest is as a member of the Government Panel on Sustainable Development, set up six years ago in the wake of the Rio summit, to give direct advice to the Prime Minister on environmental issues of wide-ranging importance. The panel is chaired by the distinguished environmentalist, Sir Crispin Tickell, and we have the noble Earl, Lord Selborne, as one of our members.
We have looked at many topics. High on the list, regularly, has been the concern about successive projections of housing needs and their implications. We were long sceptical of the "predict and provide" approach to projections which led to the view that we should need 4.4 million new houses by 2016. So we
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naturally welcome the reduction to 3.8 million by 2021. The recent projections are no doubt conscientious, but the change indicates the need to keep them continuously under critical and, indeed, sceptical review.
The south-eastern region has the ambition to be the economic hot spot of Europe. That is perfectly legitimate. But it carries with it the inevitable corollary that gravitational pull will lead to a growth of population. "How do we cope with demand?" is the critical question in this debate. Our panel has consistently considered that a dramatic effort of will is needed by government if the demand for housing is not to cut a further swathe through the precious countryside of our island.
It has long been accepted that housing development cannot simply be left to market forces. The green belt is a clear recognition of the need for government intervention; so is all the town and country planning legislation. It is welcome that the Government set targets for the amount of housing to be built on greenfield sites: first, 50 per cent and then 60 per cent. However, I wonder whether I am alone in thinking that this commitment has been a little more muted recently and may in practice turn out to be somewhat wobbly.
Developers obviously often prefer greenfield sites. What financial advantage is there currently to do otherwise? Take simply, as did the noble Baroness, Lady Maddock, the wholly anomalous position in regard to VAT. New buildings are exempt but VAT on the cost of conversion of residential building is charged at 17.5 per cent. In its fourth report in February 1998, the panel said:
"The Government has indicated that it is keen to promote the use of fiscal incentives and that it will give consideration to ways of applying them to land use. For example, the rating of VAT on greenfield sites and the refurbishment of derelict homes might be harmonised. The panel hopes that action in this respect will follow".
By October 1998 we had the Government response:
"The issue of the comparative rates of VAT on new build may also be of relevance, as the panel suggests, although VAT changes are constrained by European Union law and the demands of sensible tax design. These proposals are being considered by the Government in the wider context of the relevant policy".
There followed the familiar rubric:
"Final decisions on taxation are, of course, a matter for the Chancellor of the Exchequer".
How wonderfully illuminating! Lest the Eurosceptics—if there are any among us—should seize on this comment as one more illustration of the shackles imposed on us by the wicked bureaucrats in Brussels, I remind the House that only recently the French Government announced that VAT on conversions would fall to 5.5 per cent.
The panel returned to the charge in its report in January 1999:
"A major outcome of the proposed urban and rural White Papers should be the use of brownfield sites for development purposes rather than permitting the further erosion of the green belts".

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That has proved too much for the Government. Ten months on, that report has received no response at all.
By contrast, those who are really affected by the problem responded with speed to the report of the urban task force chaired by the noble Lord, Lord Rogers. It was under no illusions. To bring brownfield land back into use is critical and difficult. One obvious impetus is to refuse access to greenfield sites, but that is not enough. Tax incentives are critical as the experience of the United States in the reclamation of urban areas demonstrates. It has even been proposed that there should be a tax on greenfield development and vacant brownfield land and an increased level of tax on vacant property.
If there were a tax on greenfield land it could be hypothecated to provide extra funds to cross-subsidise development on brownfield sites. I do not suggest that solutions are easy or that all of those that have been floated are right, but they raise the correct issues. They recognise that fiscal intervention is necessary to take account of the environmental costs and benefits of building sufficiently to incentivise the regeneration of urban areas. Without this we shall get nowhere.
The Government are not insensitive to the media. I conclude by quoting a comment in a recent editorial in The Times:
"The Government still clings to the forecast that 3.8 million homes will be required by 2021. But this prediction owes more to astrology than to sound reasoning … if more land is required for development, surely all brownfield sites should be considered first? Tax breaks might even be offered to tempt developers towards such areas. Free thinking is welcome. The development of Britain's green fields is not".
I believe that t his is one of the issues by which the Government will be judged long term and that concrete action is called for now. I look forward to the Minister indicating in his response what the Government will do.
4.06 p.m.
Lord Sawyer: My Lords, I also thank the noble Earl for initiating this. debate. I enjoyed his speech and agreed with much of what he said. Recently, I was elected chairman of the Notting Hill Housing Trust. We concentrate on London and the home counties and are one of the largest housing providers in the region. We house people from a wide range of income groups. Experience tells us that good housing goes hand in hand with economic prosperity. We have found that the most sustainable growth is often linked with existing communities and that the key ingredient is to ensure that we build balanced communities rather than seclude the rich in their own guarded enclaves or banish the poorer households to the socially excluded housing estates. We must apply that principle to future housing strategy in London and the south-east.
The housing capacity study for London makes a projection of 381,000 new homes in London by 2016 but only 20 per cent of them are what we regard as affordable housing. Clearly, that is insufficient. I agree with the noble Earl that the target for affordable housing at which we must aim is nearer 40 per cent. I emphasise the overwhelming need for greater housing
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provision of all types in the south-east. I refer to affordable housing that will allow more middle income professionals, such as teachers and nurses, to work and live in London and the south-east. As the noble Baroness, Lady Maddock, said, if we do not provide homes where people want them or near to where the jobs exist, we fail to face reality.
London and the south-east are growing and will continue to grow. It would be foolish to dampen this prosperity. If we restrict the growth in employment in the south-east it will not be to the benefit of other regions. The renaissance of the English regions will come from their wealth creation and a spirit of enterprise, not the application of a brake on the economy of the south-east. We need growth in all our national resources to be able to improve the quality of life for all. We need proper economic development plans for Scotland, Wales and the regions of England to tackle unemployment and housing demand, and the growth in the economy of the south-east will be linked to the growth in the supply of housing.
In many cases the new households will be created by local people who want a place of their own to house their families. These new households will be the saving grace for many of our communities. We can all see what happens otherwise. Many villages cannot now support a local shop or even a bus stop. Those who seek to deny any new housing also deny their neighbours the future support of an active community. Of course, some new housing development will raise questions. We must treasure our attractive countryside. We understand why people are so concerned about new development. Our experience at Notting Hill tells us that new development can be seen as a positive change rather than a negative threat.
We have responded to local views and, as a result, have learnt two important lessons. The first is that it is naive to believe that we can go on eating up greenfield sites. Too much of our housing industry has grown fat by pushing culs-de-sac into the countryside. Many people now react against that. We do not want housing that is considered to be an imposition or is resented by local communities. We have found that housing development which is part of organic growth and the renewal of neighbourhoods is far more likely to be successful. We should re-use existing buildings and previously developed land wherever possible. Clearly, this is bound to be a key factor in the sustainable growth of London and the south-east. If we fail to do this, there will be even more pressure from London on the housing market outside the immediate area of the south-east.
It is right to concentrate on brownfield sites, and housing organisations such as the Notting Hill Housing Trust have shown that it can be done. It requires vision and commitment to turn rundown sites into good housing. If we can do this in our building plans for the south-east, growth will not be so painful; in fact it can and will be beneficial.
The second lesson we have learnt is that housing developments work best when we build a balanced community. The success of this is shown in the make-up of our most treasured neighbourhoods. In our

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cities, town centres and successful villages we see a mix of different households, income groups and people coming together to form communities. This is a powerful lesson for our future. In our new developments, provision of a range of housing for different income groups and a range of tenures should be the aim. No longer should we build housing which excludes people from society. All new developments should include some housing for those with middle incomes, and some for the lower paid.
Finally, we need planning policies and powers which encourage the development of attractive housing. If we can grow in that way, people will see new development as a positive change. Not only is it possible to build the housing needed but, if we do so, we shall also find that growth can also be seen as desirable. This debate has demonstrated wisdom, understanding, experience, realism and compassion by those participating. I am confident that the Government will provide an encouraging response.
4.11 p.m.
Lord Ezra: My Lords, I declare an interest as the president of the National Home Improvement Council.
As have all previous speakers, I should like to thank the noble Earl, Lord Carnarvon, for raising this issue at this time. Like all who are taking part in the debate, I have read the Crow report and, as I went through it, my concern mounted. It seemed to me to ignore the Government's brown-site policy. It showed a remarkable lack of concern on the subject of congestion, no apparent interest in urban renewal, and an indifference to the progressive erosion of greenfield sites—in fact the very opposite view about future development from that expressed by those who have spoken today and many others in this country. It has thrown into doubt the real needs for housing in the south-east. Perhaps I can best contribute to the debate by citing a practical example of what might happen if the erosion of greenfield sites were to proceed.
I live in an area of West Sussex known as the Weald Vale to the west of the market town of Horsham. In that area, there are four villages: Broadbridge Heath, Slinfold, Barnes Green and Southwater. Christ's Hospital school, which is in the vicinity, owns a large amount of land currently under cultivation. As part of the proposed development for housing, it has offered to sell 275 acres for such development in order to accommodate up to 3,000 houses.
Christ's Hospital school is an eminent school with a record of charitable work, taking on many pupils who cannot afford the full costs of their education. It is already well endowed; and, if the transaction took place, it would become even better endowed and I am sure that it would put the money to good use. However, at the same time consideration needs to be given to the impact of such a development on those who live in the area.
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At present we are short of road space. There is congestion, even with the current population. So there would have to be much more work done on roads, quite apart from the building of the 3,000 houses.
There is a water shortage. In answer to a recent question, we were told that Southern Water would provide for the extra demands. As someone who has lived there for many years, I can only ask: why has it not met existing demands, let alone some future substantial increase in demand?
Gas, electricity and sewerage connections would have to be built. The local rail station is very small. No doubt it would have to be extended, as would rail connections. Schools and hospitals may well be required additionally. At the very least, all this work could take a decade of disruption which those who live there would have to endure—and the end result would be that a carefully nurtured area of market town and rural villages would be destroyed for ever and replaced with urban sprawl.
It might be argued that the prolonged misery of the few is justified in the interests of the many. I should like to question whether that is so. At present nearly 15 per cent—that is, 2.8 million—of the homes in England are in a state of major disrepair, according to the latest English House Condition Survey. Is it desirable to stimulate the further abandonment of such properties with their replacement with new homes elsewhere? Britain already has more derelict housing than other parts of western Europe. Is that trend to be accelerated?
I come now to the fiscal point raised by the noble Lord, Lord Alexander of Weedon. It is about time that the extraordinary VAT disparity between improving existing housing and building new housing was changed. This can be done under European Union rules, as the noble Lord pointed out. It would be perfectly in order for the Government—indeed, I believe that the Commission is recommending it—to reduce the rate to 5 per cent to apply equally to new house build and conversions—and conversions play a large part in the whole spectrum. The noble Lord, Lord Jenkin of Roding, referred to it in relation to the provision of accommodation for young people wanting single accommodation. So a major step forward could be taken in harmonising the rate of VAT at a lower level, and probably with no loss of revenue to the Treasury.
Urban renewal has been mentioned. We need to balance the estimated needs of the south-east with the situation that exists elsewhere in the country, a point mentioned vigorously by the noble Lord, Lord Stoddart.
I believe that there is an alternative strategy to that implicit in the Crow report. It would consist of house refurbishment and conversions with fiscal incentives—and so much housing in this country requires such treatment; urban renewal; concentration on brown site development, and the minimisation of greenfield development with fiscal deterrence. I believe that a combination of those policies would meet the housing needs not only of the south-east but elsewhere in the country also.
4.18 p.m.
Lord Marlesford: My Lords, I declare some interests. First I am a former chairman of the CPRE. Secondly, although Suffolk is not in SERPLAN, I am President of Suffolk Preservation Society. Thirdly, I am a Suffolk fanner with green fields which I have no intention of seeking any permission to develop. Fourthly, I am in the process of converting redundant farm buildings into dwellings.
We owe a deep debt of gratitude to the noble Earl, Lord Carnarvon, for having this debate at the right moment. His achievement of getting agreement between, I think, 138 different local authorities cannot be underestimated. The Government are being asked to judge between SERPLAN and Professor Crow's panel, which suggests that the south-east can and should accommodate 430,000 more houses than SERPLAN believes to be possible. Professor Crow believes that Sussex alone must have an extra 137,000 houses, which is 55,000 more than SERPLAN proposed. Sussex is a dramatic, well-known and beautiful county and it will have many lobbies to protect it. I wish them well. Essex, whose subtle beauty is as important as it is unknown, is being threatened with an extra 150,000 houses, which is 66,000 more than SERPLAN proposed.
The decision to he made is hugely important. If it goes wrong, it will have a knock-on effect for the Government's policy in a wide area. Not only will it do great damage to the countryside, but it will screw up the Government's urban renewal policy throughout the Kingdom; in the north as well as in the south-east. It will imbalance the Government's growth policies.
We know that Mr Prescott has had one or two little local difficulties with the transport side of his house. We are benefiting because we now have the lead Transport Minister in this House. We look forward to discussing the issues with him on many occasions. However, we have been told by the Government—and I accept what they tell us—that Mr Prescott will retain control of the big picture; he will make the main decisions. I want to tell Mr Prescott, through the Minister, that this is the big picture; this is one of the big decisions. I hope that Mr Prescott will take personal responsibility for this crucial decision.
To some extent, Professor Crow represents the philosophy of the Town and Country Planning Association, which has had close links with the interests of the house builders. We all know that house builders prefer to build in greenfield sites. They are more economic and easy to build on and therefore make life simpler. You cannot blame them for that view, but you have to recognise it and bear it in mind. The Town and Country Planning Association was reared in the tradition of new towns, a tradition which some of us would say is responsible for the urban decay in many of our city centres. It likes to play on the big scale, indulge in grand planning and "play Monopoly"; what I would describe as the "Legoland mentality".
Let us consider how the huge figures—more than 1 million new houses, which is a 64 per cent increase on the SERPLAN prediction—are arrived at. First,
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the predictions start with the demographic predictors (who were originally lodged in the basement of Marsham Street) putting forward the pernicious philosophy of "predict and provide". I do not blame this Government for that; the previous government had it, too. However, in March last year, we were told by Mr Prescott that "predict and provide" is dead and I saluted him for it at that time.
I want to refer noble Lords to a series of articles written by Simon Jenkins which appeared in various newspapers. He knows more than I ever shall about planning and development, growth and the quality of life in this country. Therefore, I do not apologise for quoting briefly from an article which appeared in The Times on 3rd November. He stated:
"Whitehall officials periodically gurgitate something called a 'rate of household formation'. Using census data, they count numbers reaching marriageable age, divorcing and living longer. They leave out anything they cannot count, such as numbers of asylum seekers or internal migrants. They do not regard second homes as 'households', or take account of such economic factors as youth unemployment, house prices, rents or shifts in housing benefit. In statistics, only what is countable counts.
This half-baked prediction of household formation is then, by sleight of hand, converted into a 'need' for the same number of houses … Worse, because census data is available locally, the number of houses 'needed' can be neatly broken down by county. House builders thus claim government authority to demand new land, preferably green fields, for their buildings".
He goes on to say:
"To speak of this 'trickling down' to meet housing demand from single households is like subsidising the caviare counter at Harrods to relieve malnutrition in the Gorbals".
I believe that the real requirement is to recognise that the so-called "housing need" should be met by combining the market and the people's determination of environmental standards required for us, for our children and for their children. Therefore, once there is a limit to the number of houses that can be built without destroying our countryside, the market will decide where they should be.
If that means that many new houses are not built in the south-east, that is the right answer. I support my noble friend Lord Jenkin in his remark about the need to utilise more redundant buildings. That would be perfectly possible and much cheaper. It can be reasonably economic, too. I have recently converted a redundant granary of mine to a one-bedroom dwelling. Admittedly without taking into account the site value, the rent provides about a 7 per cent return on the cost of the conversion. I believe that that is a reasonable return.
I do not need to take account of the value of the site because I do not want to sell it and as it was a redundant granary it was of no current value to me. I believe that in undertaking such conversions one is fulfilling a social purpose as well as enhancing the environment.
Now that our farming industry is in crisis, I hope that the Government are not tempted to bail out part of that industry in the south-east by allowing it to sell off blocks of green land for housing at huge profit.

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That would be an immoral and unfair decision. The farmers who most need help are not even in the south-east.
I hope that Mr Prescott will take the whole issue seriously. The protection of rural England, for which the CPRE can take much credit, has been an acute political issue since the young and angry Clough Williams-Ellis wrote his England & The Octopus in 1928. If the Minister does not have a copy, I shall give him one, provided that he promises to read it!
4.27 p.m.
Lord Graham of Edmonton: My Lords, that was a fair offer and I hope that the Minister is able to accept it.
I am delighted that 15 Members of your Lordships' House will debate housing from a range of angles. I have taken part in housing debates with only four or five speakers. The noble Earl, Lord Carnarvon, is to be congratulated on his luck, first, in winning the ballot and, secondly, in deciding that this topic needed airing.
I am not a Member who can argue about precise figures. I am not a professional or competent to argue about the figures; I am a politician. However, I speak from experience. I was first a member, then chairman, of a housing committee and I know that a number of noble Lords speak from such experience. I defy anyone who has had to get down at the mucky end of housing not to say how much we should pay for a big house, or for land or how we can keep people out or bring them in, but to say how we should provide for those at the bottom end of the pile. I was pleased to hear the noble Baroness, Lady Maddock, say that we need affordable housing. Many Members of this House can afford to buy a bigger and better house, but if I speak on behalf of anyone, I speak for those who want adequate housing at a reasonable rent in the area in which they have grown up, which meets their needs and which provides a home in their community. It is not easy. When I listen to and understand what the Minister and his colleagues will have to do, I see that they are not going to satisfy everyone. There are different imperatives.
I plead one credential; I am joint president of the Association of London Government. I am not the only one in this House; the other joint president is the noble Lord, Lord Jenkin, who has vast experience at all levels in government, including at the very top. We try to represent the views brought to us by the London boroughs. The Association of London Government is calling for £300 million per year additional funding for the next three years to invest in 15,000 homes for the public sector; £50 million from the discretionary part of the Housing Corporation's approved development programme; for the Government to increase the current cost limits for acquisitions in the private sector and for repair of existing properties; and for the Government to give greater weighting to homelessness. Such initiatives would be appropriate as part of the Government's latest attempt to tackle homelessness.
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In addition, the ALG is calling for a cash injection to meet the extra drain on councils' spending due to the costs of tackling homelessness; and for powers to allow London boroughs to make long-term—that is, of more than 10 years—leasing arrangements. In requesting the introduction of such provisions, it is not a foreign voice, but simply illustrates that when we look at housing, land and the future, different groups of people in this country have different agendas.
The debate has been conducted in the best of all possible spirits. People have put forward their point of view without rancour, sometimes with passion, but always with sincerity.
There are a number of things the Government can do to ease the situation. They need to develop better strategies for dealing with pressures that are national responsibilities, such as those relating to asylum seekers and refugees, which often fall disproportionately on London. Not much can be done about that problem; it must be tackled, but the burden on people who live in London can be eased. A review of options for reducing economic migration to London is needed. It has been said more than once that London is a magnet. We cannot change that; that is how it is; but we need to develop strategies to deal with that particular situation.
The consequences of the failure to meet those needs will include increased social exclusion; more people being housed in inappropriate and expensive temporary accommodation; and increased homelessness. If someone asks me whether I am in favour of more initiatives rather than fewer, I am in favour of more. I have had more than 40 years' experience of one kind or another. I have been responsible for as many mistakes as anyone else. We are now having to put right many mistakes, over which I presided at local and other levels. No one has clean hands in that matter; no one is beyond recrimination in the debate.
I turn to the amount of money spent on housing. I happen to be the chairman of a body called the United Kingdom Co-operative Council, which co-ordinates the broader co-operative movement. We produced a pamphlet entitled Realising the Potential,.in which we drew attention to the development of the co-operative housing sector. We pointed out that as a nation we spend less on housing than any of the 13 industrial nations which are members of the OECD. Between 1985 and 1996, we invested an average of 3.5 per cent of GDP in comparison with 6.3 per cent in Germany, 5.1 per cent in Italy and 5 per cent in France. Football and cricket are not the only league tables of which we are at the bottom. It may be a British disease, but it can be improved.
Much of the demand for housing can be met by using brownfield sites. In 1995, Price Waterhouse published a report on co-operative housing which showed that affordable housing is better managed and maintained if tenants are directly involved in its control and management. Within the panoply of provisions there is a sound case for greater attention being paid by the Government and others to the value

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of co-operative housing. There is great value in it. No one should doubt the Deputy Prime Minister's commitment to improving housing provision. The quality of the house in which one lives is probably a more basic matter. When I came into politics, housing was way up on the agenda. It has slipped. How and why has it slipped? Has it slipped because there is more affluence, because there is more indifference, or because there are other things on which people want to spend their money? I do not believe that anyone here has the answer, but I hope that the Minister takes heart from the fact that he has a number of friends all around the House who want to see him and the Government succeed in this difficult task.
4.35 p.m.
Baroness Thomas of Walliswood: My Lords, I share with other Members of your Lordships' House who have spoken today gratitude to the noble Earl, Lord Carnarvon, for raising this subject. His experience in local planning is a match for anyone's, if not more so. I was a member of SERPLAN under his chairmanship and found the whole process extremely interesting. The point of view he expressed would be widely supported by a number of people, not least the 150 or 200 people who gathered in a hall in Leatherhead on a wet Friday evening, who I am sure would have cheered him to the rafters—to use an old-fashioned expression.
I should like also—unfashionably, and slightly incorrectly—to say how glad I was to hear the maiden speech of the right reverend Prelate the Bishop of Portsmouth, whom I knew when he was in a rather less superior but none the less extremely valuable position as the parish priest in Guildford. I believe that we shall all enjoy hearing from him in days to come. I shall not repeat the many criticisms made or queries raised in the context of the Crow report, but I hope that the Government will respond to three major concerns raised.
First, I agree with the noble Lord, Lord Graham of Edmonton, who emphasised the importance of housing as part of the well-being of the family, the individual and the community. I most sincerely believe that if we can tack le some of our worst housing, which includes poor housing in the south-east, we should do a great deal to improve the health—quite apart from anything else— and the general sense of well-being of the people who live in those houses. It is a powerful point to which I hope the Government will respond.
Secondly, I am concerned, along with others, about the balance between the development of the north, or for that matter the south-west, and the south-east. Those are broad categories and I know that one should not be too general, but I am trying to put my points briefly. I hope that the Government will respond to that concern.
Thirdly—I do not believe that this concern has been clearly articulated, although it lies behind much of what other noble Lords have said— I raise concerns over the way in which the public inquiry was handled. The drafting of the report on the inquiry appears to put into jeopardy the whole system of planning
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established in this country and the Government's own recently enunciated policies which should guide that planning process. I hope that there will be a general response from the Government on that matter.
In the few moments remaining, I want to concentrate on the environmental aspect of the problem. People talk about the south-east as though it were some protective little enclave whose residents never want to see any change or development, or anything to spoil its pretty little green fields. People talk about "leafy Surrey". Since the Second World War, the south-east has absorbed housing equal to the size of London. If the plan goes ahead, the south-east will absorb a further amount of housing equal to the size of the Isle of Wight. Do not let us kid ourselves. Development in the south-east has continued, is continuing and no doubt will continue. Everyone understands that.
The question is how we can tolerate increasing amounts of concentration in population in what is already one of the most heavily populated areas in the whole of Europe. I believe one probably has to go to Holland, or possibly the suburban areas around Paris, to find so large an area with such a heavy density of population as one finds in London.
Of course, I know most about my own county and I shall concentrate on that. There is now very little left of Surrey which is not either built on, green belt, an area of outstanding landscape value or an area of outstanding natural beauty. Almost all the land which has not been built on falls into one of those categories. That is one of the reasons why it is so difficult to find a mechanism for introducing low-cost housing into Surrey. Meanwhile, the county has two-and-a-half to three times the national average of traffic. I support my noble friend Lord Ezra, who asked how we shall deal with people moving in and out of the Horsham-Crawley area—that whole area, which spills over into Surrey, which has been designated by the Crow report as a growth area. How shall we cope with the transport needs of that huge development? Does not the development in that area both presuppose that there will be a second runway at Gatwick and make that second runway more likely?
The decisions on the siting of development have enormous implications far beyond what is simply the local plan. Unfortunately, in this country we do not have a national airport strategy. In the absence of such a strategy, every existing airport is in danger of exponential growth, particularly the airports in the south-east immediately adjacent to London. I believe that there are some doubts as to whether the approach adopted by Crow does not predispose towards an expansion of Heathrow.
Therefore, transport, tranquillity and, finally, quality of life are all important issues. People want to establish their headquarters buildings in Surrey. They want to bring their executives and lower management to live in the county. When asked why they want to do so, business people reply that it is because of the qualities of the environment, which the exaggerated housing figures could help to diminish. My guess is

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that that is also the case in many other areas in the south-east. We must not kill the goose which laid the golden egg.
4.44 p.m.
Lord Bowness: My Lords, I, too, add my thanks to the noble Earl, Lord Carnarvon, for introducing this debate. Indeed, in many ways at the beginning of the afternoon he expressed all the concerns which exist about the Crow report. Like the noble Lord, Lord Stoddart, I hope that the Government will take note of his very considerable experience in local government and planning matters when they give consideration to whether or not to amend SERPLAN's proposals.
I recognise that there is a need for planning policies which will ensure the continued prosperity of the south-east and the growth of its economy, and that that prosperity can be enjoyed by those who live and work in the south-east. I agree with the noble Lord, Lord Graham of Edmonton, that it is difficult to know what should be the precise figure for new housing. However, I believe that we can all recognise an extreme case; a case which is so extreme that it deserves to be rejected. I believe that that is so with the housing forecasts and figures put forward in the Crow report.
I believe that there should be a speedy and outright rejection of the report with regard to housing numbers. I say that for a number of reasons. As previous speakers have already suggested, were the Government to prefer Crow to SERPLAN, they would fly in the face of the wishes of the local authorities and the regional planning body in the south-east. That will be at odds with the Government's own stated objective, which is to see greater power and responsibility exercised regionally.
Some in the United Kingdom believe that we are light years away from seeing central government trust local authorities to work individually or collectively, as in the case of SERPLAN. That is not a prerogative of one particular party; it comes simply with being the government at Westminster. However, in this instance the Government can prove that there is a real change abroad by rejecting the report.
As other noble Lords have said, Crow represents a return to predict and provide—a method which has been derided by the Secretary of State. It does not meet the objectives of brownfield sites. Sadly, it seems to have little regard for the environment. The south-east may be seen, and may see itself, as the powerhouse of the nation. However, its residents are entitled to assume that in pursuit of that goal or the maintenance thereof, some regard is had to the conditions which will prevail if development on the scale suggested goes ahead.
In the debate on the gracious Speech I drew attention to the fact that a commentator had estimated that the number of houses proposed by Crow would, if lining a single street, stretch the 7,200 miles from London to Hawaii. Clearly, the green belt is under threat, however much the authors of the report may seek to say otherwise. That seems especially to be the
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case on the borders of the metropolitan area, precisely where it is most needed. If noble Lords are in any doubt, perhaps I may quote one sentence. I accept that quoting out of context can be invidious, nevertheless I shall read one sentence:
"Since at least 40 per cent of new development will be on greenfield sites, it is inevitable that some will have to be on the urban edge and in many parts of the region this means in the green belt".
That sends a most unfortunate message. If the urban sprawl is increased into Kent, Surrey and the other neighbouring counties of Greater London, the problems will be multiplied over an even larger and more unmanageable area than Greater London already comprises. Development on the scale suggested is not at the margin. It is not about trying to obtain a slight gain here or there; some sensible in-fill development or to obtain affordable housing in existing communities; in some cases, it means doubling the proposed development in the different counties: from some 35,000 houses in Surrey to 77,000, and from nearly 100,000 in Kent to 150,000. Once planning policies are altered to allow the houses to be built, the commissions will come through very quickly.
Local authorities will not want to be on the losing end of planning appeals. The houses will be built long before the transport and other infrastructure and facilities are in place. I submit to your Lordships that the impact on transport facilities and infrastructure will be enormous. Already, unsuitable roads are subjected to heavy and damaging traffic, and public transport leaves much to be desired.
The report talks about supporting improvements to public transport. But that and other infrastructure improvements take time and money. I heard the noble Lord, Lord Macdonald, on the radio the other day repeating the statistic that it takes 14 years from the inception of a road scheme to its completion. I can tell your Lordships that the tramway in Croydon was a gleam in our eye in 1986 and it will open, we hope, next year—and that had a fairly straightforward passage. All those things which are needed to accommodate more people take a great deal of time and money.
I live in what some of your Lordships may not describe as a village but what we describe as a village; namely, Warlingham. It is on the edge of Greater London and within Surrey. Every year, the roads around that village lose more and more of their banks. Every year, another few inches are lost from the village green as a result of the depredations of traffic and deliveries to supermarkets.
Lastly, I ask the Government to look at the two questions that the authors of Crow stated were never far from their minds as they conducted this examination:
"Do you want the economy of the South East to stagnate or at any rate to perform at less than its full potential?
Do you want the planning process to frustrate or at any rate do less than it could to assist the desire of people to have a decent home to live in?"
It seems to me that those two questions are loaded, to say the least of it and that if you take a different view from Crow, it means that you are in favour of

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stagnation or frustration. I should like to know what is the evidence that the economy will stagnate without that level of development. There are already many people living in those counties who would like jobs and economic growth for their own needs, not necessarily for the attraction of new people.
Decent housing has been talked about this afternoon by many noble Lords. Like them, I want to see that provision. But I do not want to see the additional houses comprising four or five bedrooms, three bathrooms and two garages, which is all too often the answer 1.o development.
Even if social housing policies are rigorously enforced, as other noble Lords have indicated, in my submission, it is not right for such housing to be away from the established centres.
I submit that the report raises more questions than it answers; creates more problems than it solves; undermines local responsibility; shows a lack of understanding of the conditions which exist and which will be exacerbated if it is adopted; and has a truly old-fashioned disregard for concerns about the environment.
4.52 p.m.
Baroness Hamwee: My Lords, I should declare two current interests. First, I am president of the Town and Country Planning Association, although I am not here to speak for that association this afternoon. Secondly, I am a prospective candidate for the Greater London Assembly and London will be very much affected by the south-east regional planning guidance.
From these Benches, we have chosen to focus our first contributions on need. I thank the noble Earl, Lord Carnarvon, for framing the debate in that way. My noble friend Lady Maddock talked about a number of needs, including key service workers who are priced out of housing. That is something which my colleague, Susan Kramer, our mayoral candidate is making very much her own subject.
It is a multi-faceted subject. That is inevitable because people are complex. A multi-faceted—dare I say, joined-up?—approach is needed, as the noble Lord, Lord Graham of Edmonton, said. I have always supported an approach to planning issues which does actually plan; which does not provide a straitjacket but which looks ahead realistically. I am extremely comfortable with the plan, monitor and manage approach so long as it is not forgotten that the first element is planning.
It is my ambition also to achieve the greatest public participation—democracy involving the public without, of course, forgetting the role of government to lead. I am fascinated by the comments on the operation of the new-style panel, getting away from the adversarial approach and being open and participative.
Therefore, it is a pity that part of the panel's recommendations. the part which has hit the headlines, was not thrashed through during that process. But that perhaps is a matter relating to the process and not necessarily relating to the outcome. As
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other noble Lords have said, it is important that we should not cling to polarised positions and not revert to an adversarial approach. It is all the more important that the process which leads to the decisions of the Secretary of State is dealt with in as transparent a fashion as possible. Certainly, no one can say that we are not now having a debate, although I am aware of how the general debate is concentrating on numbers rather more than on meeting need.
The noble Earl described the bottom-up approach taken by SERPLAN. I, too, was a member of that body for some time. We have not yet found an effective way of debating at local level strategic issues such as overall housing need. It is much easier to engage a community on subjects like local greenfield areas, sadly too easily confused with green belt. It is not nearly so easy to have a debate which deals with overall numbers and need, numbers which many of us cannot comprehend. I use the analogy of a committee which is likely to spend a lot longer looking at spending a few thousand pounds on a small traffic—management scheme than it is on spending many, many millions on some major infrastructure development. That is because it is so difficult to get one's brain round how one spends millions, as it is about how one houses millions.
SERPLAN is not a strategic body although its members and its officers struggle manfully to work cohesively, and I pay tribute to the noble Earl in that regard. To deal with regional strategic issues, we need regional strategic government, not officials who are part of the central administration.
What is the context for the debate? As has been said, there is the need for affordable homes; the connection between homes and jobs; the objective of urban renaissance; escalating house prices, which are of such concern at present—and I wonder whether limiting house building will do anything to control prices; transport congestion, to which my noble friend Lady Thomas and the noble Lord, Lord Stoddart, referred; and a concern to recognise the importance of our countryside and our open spaces in our towns, as well as outside them.
The core strategy of RPG identified by Professor Crow's panel comprises, as he says, seven essential and necessarily intertwined elements. Time precludes me from going through all of them but I shall mention three: the prospect of a decent home, affordable homes, planning now having regard for the sequential test with which your Lordships are familiar; securing a prosperous and attractive countryside; and, last but not least, urban renaissance, which in the report is extended to suburban areas.
Of course, the report has gone further, with detailed recommendations about APLE—areas of plan-led expansion. This debate is quite agricultural. That raises the question of whether we have yet worked out how the sequential test should be applied and, in particular, how far ahead we should plan. Is it possible to plan to lay the groundwork without firm commitment and without raising the temperature of the debate in such a way that the future development,

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whatever form it might take, has so distressed people and polarised views that it makes it quite difficult to plan ahead?
The London Planning Advisory Committee sounded sensible notes of warning when it considered the report, supporting some parts of it and disagreeing with others. I shall mention just one comment. It suggested that SERPLAN's baseline figure for housing need is not adequate as a basis for the rest of the south-east's provision but also that the panel's other extreme would have untenable consequences.
No one argues with managing development. The logic is that if we anticipate that development cannot be contained in towns, should we think calmly about whether it needs to be concentrated on limited areas of greenfield sites? After all, the urban task force itself suggested that in the south-east only 39 per cent of development could be sited on brownfield land.
I believe that if we do not think about those issues we shall leave the way open for incremental development which causes such difficulty through its piecemeal nature. I agree with my noble friend Lord Ezra, who used the example of the Christchurch Hospital land, although, interestingly, I read Professor Crow's report as seeking to avoid that scenario.
The logic is that we should also look at what people do and where they live as part of the same picture. Professor Michael Breheny's recent work, undertaken for the Town and Country Planning Association, is interesting. He advises that,
"The new job centres are suburbs, small towns and rural a reas"—
that may not be news that we want to hear. He continues,
"Thus, for example, market towns, with a high quality of life. with none of the dereliction or social problems that tend to be associated with a manufacturing past … have tended to prosper … At the same time, work is becoming increasingly feminised and professionalised"—
I hope noble Lords will forgive the jargon. That will have an effect on the decline of full-time jobs and the places where jobs are to be found. Professor Breheny's conclusion is that,
"the changing geography of jobs is profoundly counter-urban".
That may not be welcome news, but I believe that we have to take the matter seriously.
The noble Lord, Lord Sawyer, talked about the need to assess where jobs will be found. It has been put to me that reducing jobs in Wokingham will not transplant them to Whitehaven. I agree with the noble Lord's regional approach.
Similar work—although I have not yet had an opportunity to read more than the press release—has come from the Performance and Innovation Unit, suggesting that we have to look at the issue of work in countryside areas. I do not believe that that amounts to building over the countryside, but it relates to addressing the issues.
When I first became involved in politics I was struck by the power of a point made to me on the doorstep: "I am all right, I have a home, but I really do not know
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where my children will live". Twenty years ago or more that statement was forceful; now it is even more forceful. Society and government at every level have to answer that need.
5.2 p.m.
Baroness Seccombe: My Lords, I must explain that I am here in place of my noble friend Lady Byford who, sadly, is not well. I am sure that noble Lords will join me in wishing her a speedy recovery from what, I believe, is a nasty bout of flu.
I congratulate the right reverend Prelate on his speech and hope that he will find time to contribute to debates in the future. I greatly enjoyed his contribution today. I believe the right reverend Prelate summed up the debate when he said that it is a question of what kind of houses, for whom and where. I thank the noble Earl, Lord Carnarvon, for the chance to join in this most opportune debate. His approach was one of authority and common sense. He has started us in the right direction.
As an elected member of a local authority I had to deal with housing problems, as did the noble Lord, Lord Graham of Edmonton. It was heart-breaking to listen to the situations of some people which brought home to me the importance of having one's own front door. Yesterday morning the "Today" programme interviewed the chief executive of Locate in Kent. That organisation works with its French partner in Lille and with Eurotunnel Developments to attract particularly Far Eastern companies to set up at either end of the tunnel.
A number of points emerged, including, first, the fact that Far Eastern companies see Kent as the gateway to the UK and from the UK into Europe. Secondly, the south-east has to compete with the regions as government prefer new jobs to be located in areas of high unemployment in the rest of England, Wales and Northern Ireland. Thirdly, it was stated that grants are available to attract firms to Kent.
As we have heard, some population specialists say that 1 million plus new homes will be needed by 2016 in the south-east. That must be based on greater numbers of elderly living on their own, greater numbers of single-parent families, lower mortality rates, lower marriage rates and inward migration. Can the Minister state what proportion of that 1 million plus homes are likely to be filled by people moving into the south-east over the next decade and a half? In his Answer of 30th November, at col. 718 of the Official Report, the Minister said that most of the current inward migration is from London. Can he say what proportion of that number are people who retire to the area and what proportion are people who are filling new jobs?
It would be interesting to know how many homes in each of the regions served by regional development agencies are empty and what proportion belong to local authorities, to various government agencies and departments and to private owners.
The business of attracting jobs to areas of high unemployment has been going on for a long time. It has been made more urgent by the decline in

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traditional industries such as shipbuilding, coal, steel and heavy engineering. I understand that thousands of jobs in the textile industry are now coming to an end in the Midlands and the north. Furthermore, the crisis in agriculture is hitting family farmers who lose their homes when they leave their jobs. All of those people need new jobs in the communities in which they live.
One argument over devolution concerned the need to ensure that measures to attract jobs to Wales and Scotland would not merely move them from existing locations in England. Can the Minister explain what rules have been put in place to prevent that? Can he also tell us what measures are being taken to ensure that existing jobs do not move within England from one region to another as grants encourage companies to abandon old sites, leaving them for future generations to clean up?
If we are to have new jobs and more people in the south-east, it will be necessary to have more homes. That is obvious. Steps must be taken to ensure that planning permissions given in the next decade will result in housing suitable for those who will want to live in them in 2016. As the noble Baroness, Lady Maddock, and the noble Lord, Lord Sawyer, said, we need affordable housing. It is no use building 4 to 5 bedroom, three-bathroom and triple garage houses on half an acre if, in 15 or 20 years, the need will be for 2 to 3 bedroom units to accommodate those who can no longer climb the stairs or weed the garden.
The noble Lord, Lord Jenkin of Roding, spoke about single-person households and the fact that there are 1 million in Landon and the south-east. He spoke of how their needs are different. Such people get a buzz from city centres and he told of the exciting projects of Redrow Homes in converting buildings.
Where there are large numbers of houses there needs to be adequate infrastructure, as so many noble Lords have said, including the noble Earl, Lord Carnarvon, the noble Lord, Lord Stoddart of Swindon, and my noble friend Lord Bowness. The wise words on global warming indicate that the south-east will become increasingly wet in winter and dry in the summer. Who will assume the costs of piping potable water in and storm or flood water out? The noble Lord, Lord Ezra, posed the question whether Southern Water would accept the responsibility. Or would government be expected to do so from central funds when problems began to show?
There is also a need for infrastructure to cope with transport needs. The 10-year plan unveiled by the Deputy Prime Minister is no more than 10 years' expenditure at current levels. Is it anticipated that funding for the roads, railways, buses, trams and trains, adequate to cater for the occupants of over 1 million plus homes, will come out of that figure? Or is this something the Government will be expected to provide from central funds when the deficiencies begin to show up? Where there are 1 million plus new homes there will normally be rather a lot of children. Part of the infrastructure requirement therefore will be for maternity units, nurseries, schools and play areas. Will those costs be met by the property developers or is that
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something the Government will be expected to provide from central funds when nature's blessings begin to show up?
An obvious extension of that train of thought is the requirement for new facilities generally—for libraries, hospitals, for old peoples' homes. Many of the services will be provided by the local authorities through the standard spending assessment, but who will provide the capital for the buildings? Or is this too something that the Government will be expected to provide from central funds when needs must?
I fear that further house building in the south-east will take the form of a cycle which goes something like this: the Government provide grants to attract new jobs to the south-east; houses, factories, commercial premises will all be built in the south-east; houses, factories, commercial premises elsewhere will be empty. The Government have to find extra money to build roads, hospitals and so forth in the south-east. The Government have to find extra money to alleviate the results in the south-east of global warming—and so on.
I have not even mentioned the pressures on wildlife and prime agricultural land that the building of 1 million plus homes could cause. The south-east is host to a number of species which are not to be found in many other parts of Britain; for example, the yellow-necked mouse, the serotine bat, the large tortoiseshell butterfly and the pasque flower. How does the Minister propose to fit 1 million plus houses, two new national parks, countless factories, shops and offices and mile upon mile of roads and railtrack into this area and protect and preserve its wildlife and amenity value? Will the Minister provide the figures of grade 1 agricultural land which will be sacrificed directly to the concrete mixer?
A decent home of one's own is a goal we all share, and one that we all want for everyone. The contributions to today's debate have been informed and have shown the expertise and experience that exists in your Lordships' House. The debate has highlighted many issues and I shall be interested to hear the Minister's response.
5.12 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, I am grateful to the noble Earl for initiating this debate and for the wide range of contributions to it. As other noble Lords said, we are grateful for the maiden speech of the right reverend Prelate the Bishop of Portsmouth, who reminded us graphically that often community and human values override and are more important than even the best laid plans of planners and architects. That is a lesson we can learn from this debate which, not entirely but to a significant extent, concerned numbers as much as quality and community.
Serious and difficult issues are involved. It may be sensible for me to start by reminding your Lordships of the way in which regional planning guidance now works and therefore the context in which the numbers

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have emerged and, not so much in your Lordships' House but in the media and elsewhere, been subject to slightly over-excited commentaries.
In general, the new system of regional planning guidance has been broadly welcomed across political parties and throughout the country. Instead of being chopped-down statements of generality, we intend that from now on the planning guidance should embody an agreed spatial strategy for each region. They will be agreed with the many different interests and agencies within the region, with the regional planning body in the lead. They will need to integrate all the issues to which the noble Baroness, Lady Seccombe, and others referred—transport and economic planning generally—into a much more sustainable approach. Each RPG under this process is then subject to a public examination of the kind carried out by Professor Crow in order to ensure that all the main issues are dealt with openly and transparently.
A key feature of the arrangement, as the noble Baroness, Lady Hamwee, indicated, is one of partnership, bringing everybody into the process. It involves listening to residents, businesses and those who provide services in the region. A great deal of conflict is involved which must be reconciled; for example, the demands for growth and prosperity must be reconciled with aspects of the quality of life in the south-east, as indeed with other areas.
Without disparaging the difficulties in other parts of the country, the south-east faces a much more complex set of pressures than other regions. We are grateful to the noble Baroness, Lady Hamwee, and others in respect of SERPLAN for the way in which members and officers implemented the new procedures in preparation for the RPG. SERPLAN played a leading role in the formulation of regional planning policy and enthusiastically piloted the new procedures.
Under the chairmanship of the noble Earl, SERPLAN has given the south-east a distinctive voice and, to a large extent, as other noble Lords have said, brought together various interests in the south-east. In responding to a central point made by the noble Lord, Lord Alexander of Weedon, SERPLAN brought to the forefront the concept of sustainable development. The Government support it in putting that at the centre of what we are trying to do.
There is therefore a great deal of common ground between SERPLAN and the Government, contrary to what one may believe from reading the newspapers. We are both concerned to see sustainable development at the centre of any plans for economic growth. There is general agreement that we cannot go on building in the laissez-faire pattern which has occurred in recent years, above all in the south-east. We may have to concentrate on more limited areas and a more structured approach. Nevertheless, it is also the case that in the wider debates since SERPLAN published the draft RPG, some issues need to be addressed in relation to the SERPLAN approach and about which we ourselves may have anxieties.
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The SERPLAN draft RPG was subject to public consultation and public examination. The position now is that, following public examination from Professor Crow, it is necessary for the Deputy Prime Minister, as the Secretary of State, to consider the panel's reports and all the representations on SERPLAN's draft RPG. We will then publish in the new year proposed changes to the RPG. Again, that process will be subject to full consultation.
That is the process. The panel report was a report on the public examination, and a wide range of representations have already been made. It is not the case that the panel put forward, as the noble Baroness, Lady Thomas, suggested, figures which were significantly higher than those that were making representations to them. Indeed, some figures were significantly higher than that. Part of the problem of dealing with the figures is that to some extent today, and certainly outside this Chamber, Professor Crow has come in for a great deal of personal criticism. That is inappropriate. He was doing his job in this context.
However, the Government are not bound by the panel's view, nor indeed the view of SERPLAN. We will be giving careful and detailed consideration to all the recommendations before we make our views known. Planning the future shape of the south-east is a major undertaking. There is bound to be controversy; there are bound to be differing views and we should respect each other's views to enable us to reach as broad a consensus as we can in this context.
The role both of SERPLAN and subsequently of Professor Crow had to be seen in that context. In the south-east, as in the rest of the country, we are using these public examination panels. We have a panel of 10 independent persons, including Professor Crow, who chair those examinations and those on structure plans and make recommendations. Consideration of how effectively we can deploy our resources of those scarce people over the busy period next year led to an announcement by the Minister for Planning that Corrine Swain will chair the Yorkshire and Humberside examination rather than Professor Crow.
In relation to the south-east, it must be said that there is an absolutely huge demand for housing in the area. This is a reflection of the buoyancy of the region, the standard of living of its inhabitants and, indeed, the investment that is being made there. Most of the demand comes from the needs of those who are already living in the region forming households and having families.
We owe it to those in the south-east, as we do to those elsewhere, to ensure that they are able to secure decent housing. Shortage of housing is one of the reasons why prices in the south-east are beyond the reach of many. Even in the most prosperous parts of the south-east there are still substantial areas of poverty and deprivation. If the costs of housing are driven too high by shortage, there is a danger of more people becoming excluded because they cannot access satisfactory housing. Many people already find it very difficult to live near their jobs and that aggravates the problems associated with transport and infrastructure.

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As I said, the majority of this demand comes from pressures within the south-east itself. There is also migration into London and into the rest of the south-east. The noble Baroness, Lady Seccombe, asked me for precise figures in relation to the migration and I shall provide her with them in more detail by letter. The vast majority of people moving into the south-east come from the London area rather than from the rest of the country. Although it may be true that there is some small drift from other regions, it is not a massive north/south drift or a north/south divide which is being reflected and which is somehow manifest in the pressure on housing in the south-east; it is more London and the Internal pressures within the south-east. There are, indeed, movements out of the south-east into other neighbouring regions.
As far as concerns putting this into the national approach to regional policy, our policies for the regions aim to bring the less prosperous regions up to the standards of the best. Indeed, in response to my noble friend Lord Stoddart, that remains the strategy adopted by this Government. Our main instruments for this are developing planning measures region by region and the powers that we are giving regional development agencies. We are allocating expenditure to them in a way which provides more resources to tackle the problems in the north so as to try to provide greater employment and investment opportunities.
We also recognise the important role that the regional development agencies have in all parts of the country in supporting regeneration, including regeneration in the south-east, and in shifting some of the balance and, therefore, the pressures within the area. For example, there is much more pressure in the western part of the south-east on housing and on other infrastructure than there is in the eastern part. There are also areas of derelict and previously contaminated or work-out land, such as the Thames Gateway, which could do with substantial further development. There are also parts of the south-coast, like Hastings and Sandwich, where again there is not only deprivation but also a need for more substantial housing and infrastructure.
As I said, and as other noble Lords have indicated, there are serious problems about the approach taken by the panel and. its implications as regards the pressures on housing in the south-east. There are also problems in relation to SERPLAN's original proposals; for example, there appears to be a view built into the SER PLAN figures that fewer households will need separate dwellings than has been the case in the recent past. In other words, there will somehow be a slow-down in the growth of families and consequently in family life. We do not quite see the justification for this and it is something that we need to consider. We need to consider both propositions in the light of such questions.
We need to ask what will happen to households if insufficient housing is provided. If real needs are found to exist, how will they be provided for? Alternatively, will there be a huge backlog that cannot be met which will show itself in rising prices and, therefore, further exclusion? Our approach to all of these pressures is
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that we have to plan, monitor and manage the system and that we must do so with a high degree of regional consensus to meet the legitimate future needs. We need to do so as scientifically as possible, while bringing with us as many people as possible. We cannot do so by astrology or by simply accepting "predict and provide" figures; and certainly not by accepting the figures of house builders and developers.
Contrary to the more extreme reactions to the panel's report and their association with the Government, we are certainly not taking a "predict and provide" approach. We need to consider a wide range of factors. We are looking for a sustainable future. Similarly, we cannot leave local authorities to do it on their own. Indeed, that would be subject to the normal wrangles at that level. Structure and unitary plans have to be brought together and local authorities will have to do this within a framework that we have to give them. We all need to set out a way forward in the regional guidance as a clear basis for future development planning, subject to monitoring and management and bringing all the authorities concerned together.
It certainly does not mean that the Government are blindly following Professor Crow's recommendations; it means that we need to take account of them and the points raised. In particular, we need to look at a new assessment of the needs of the area and the capability of the south-east to deliver more housing, including conversions, as the noble Lord, Lord Ezra, and others, have said, and an improvement in the housing stock. We must also look at new developments. It is not sensible for the south-east to do what it has far too frequently done in the recent past; namely, allow very substantial development of so-called "executive housing" to spread in a poorly-planned fashion, largely into greenfield sites.
Over the past 20 years such developments have perhaps caused a high level of anxiety in the towns and villages of the area. I do not believe that we should continue to go down that road. Few authorities have seriously considered the alternatives to moving onto greenfield sites. We have made clear our commitment in the south-east, as elsewhere, to move from the current figure of around 50 per cent to a60 per cent development of brownfield sites within the south-east.
As concerns were raised by the noble Lord, Lord Bowness, and, I believe, by the noble Baroness, Lady Maddock, I should point out that we are also committed to maintaining a green belt. There has been a fair amount of scare-mongering in this area. The green belt needs to be maintained and there should be no inappropriate development on it. That does not necessarily mean that the current boundaries have to be ossified for good; indeed, there will be a few exceptional circumstances. However, during the period of this Government so far over ten times as much land has been, or is proposed to be, added to the green belt as against that which has been lost or is proposed to be lost. This is the approach we are taking to maintain the robustness of our greenbelt policy.

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There is another factor that needs to be considered and it is one that has been alluded to; namely, that the south-east has been building at some of the lowest densities in the whole country. That is one of the reasons why so much has spilt over into greenfield sites. On the one hand, there are many people saying that land is so precious that we cannot build on it—at least not to the extent that we are already doing—and, on the other hand, there are developers and authorities who are making little attempt to build more economically and sensibly. We are also talking about smaller households and smaller families in this context. As I believe the noble Baroness, Lady Maddock, said, there is a complete mismatch. It means that the housing requirements are actually using more land in the south-east than is necessary. Indeed, if building continues at the present rate, the size of those houses laid together would stretch a lot further than Hawaii.
It is not sensible for us to be building in that way in the south-east. We need to plan for a wider range of housing with much smaller units and less lavish provision for the car in residential layouts. We must look at sustainable patterns of development, which will also restrict the pressure on transport and other infrastructure. That is not to say that what we are going in for—my noble friend Lord Stoddart was slightly worried about this—'is "town cramming". We are going in for an effective and planned approach to urban renaissance, greater efficiency in the use of land and a greater part of the new development occurring on brownfield sites.
The guidance that we have produced in PPG3 and PPG13 is already clear and will be reflected in our wider polices for urban and rural areas. This fits in very well with what a number of noble Lords said during the course of the debate. We do not accept the view of the panel that a 50 per cent rate of development on previously developed land is the only one that is feasible in the short term. We are committed to the higher figure of a recycling target of 60 per cent. We are committed to bringing brownfield sites into housing use. We are also committed to developing empty property and unfit property, although there are far fewer empty properties in the south-east than in most other parts of the country.
We are also committed to making sure that the housing that we provide is accessible and affordable, as my noble friends Lord Graham and Lord Sawyer and the noble Baronesses, Lady Maddock and Lady Thomas, have said. It is key that our young people are able to access housing. It is key that our service employees who may not be high up the income scale can access housing. It is important that every family has access to a decent home. Planning policy has been changed already to give local authorities the tools to require a more sustainable mix of housing. Authorities in the south-east must not continue to prioritise greenfield or sprawling executive estate-type housing. Our policy must be to increase the re-use of brownfield land. We have the recommendations from the Urban
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Task Force of the noble Lord, Lord Rogers, which provide further measures which we can pursue in that direction.
Local authorities, of course, have a key part to play. My honourable friend Nick Raynsford has recently announced that £187 million of capital resources have been awarded to local authorities in the south-east for investment in housing. That is a massive increase of over 50 per cent on the previous year. These increased allocations have been made through the housing investment programme and will give authorities in all parts of the region the opportunity to make real inroads into the backlog of repairs and to improve their stock in the way that the noble Lord, Lord Ezra, suggested.
Many of the points which have been made by the noble Lord, Lord Jenkin, and others on promoting urban regeneration, including the issue of high density, low cost housing, are currently being considered in the context of our preparing an urban White Paper in response to the points made by the noble Lord, Lord Rogers. We are pursuing a rigorous programme of analysing those proposals and of research. As is already clear, there is considerable scope for towns in the south-east to improve their town centres and to provide the housing that is required.
Noble Lords will not expect me to comment on the various taxation proposals which have been mentioned by a number of noble Lords, but they will all need to be considered in this context. I note that I am approaching the limit of the time in which I may speak and therefore I shall finish. We have had a good debate. I think that I have made it clear that at this point the Government endorse neither SERPLAN's nor the panel's approach. The Government have a number of queries in relation to both of those. However, it is vitally important, politically and for the future of the south-east, that so far as possible all responsible parties in the south-east should reach a consensus on this matter which reflects the real needs of the south-east and the varying pressures on different parts of the south-east. As the noble Baroness, Lady Hamwee, said, we ought not to allow ourselves to develop polarised positions on this matter. I assure noble Lords that my department, and above all my right honourable friend the Deputy Prime Minister, are committed to getting this right. My right honourable friend will take a little more time to present the Government's views and for the views of others to be taken into account.
This is one of the most difficult planning issues which the country faces at this point. I am grateful for the contributions of all noble Lords and in particular for the initiative of the noble Earl in introducing this debate and for all the work he has done on SERPLAN prior to that.
5.33 p.m.
The Earl of Carnarvon: My Lords, I have about three minutes in which to say a few words. I believe that the debate has been a great success and I am grateful to all noble Lords who have contributed to it.

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I was particularly interested in the points made by the noble Lord, Lord Alexander. He understands the concept of sustairtability. I hope that he will agree with the following definition of sustainability; that is, meeting present needs without compromising the ability of future generations to meet their needs. That is an important definition.
I was delighted to hear the maiden speech of the right reverend Prelate the Bishop of Portsmouth. He referred to Leigh Park, Havant. I was chairman of the planning committee that gave permission for those 2,000 houses. I could not know the area better as I visited it many times. However, much more importantly, the right reverend Prelate said that behaviour is related to environment. That comprises a bigger problem than merely planning.
The Minister explained the planning guidance process and referred to the common ground between SERPLAN and the Government. I realise that he could not say much more than he did today. I was grateful for the way that he summed up the position. I look forward very much to the Government's response for my own sake. for all noble Lords' sake and for SERPLAN's sake. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

The Coal industry
5.35 p.m.
Lord Hardy of Wathrose to call attention to the future of the coal industry and related coal engineering industries; and to move for Papers.
The noble Lord said: My Lords, I am grateful for the opportunity to raise the position of the coal and coal engineering industries, not least because this debate takes place at an extremely critical time both for the industry and for the future arrangements for the energy requirements of our country.
I think that it is best if I begin by asking my noble friend a number of questions. I hope that they will receive relevant responses. I shall then say a few words about my anxiety with regard to the various issues to which those questions refer.
First, do the Government accept that much coal will continue to be required by the United Kingdom for rather a long time?
Secondly, do the Government accept that it would be wise for the United Kingdom to retain a coal engineering industry, not only to maintain its commendable export record but also because the world will continue to need coal and other minerals as people penetrate deeper into the earth's crust for those resources? At the same time, people may soon cry out for a clean coal combustion capacity, to which our industry could con tribute provided it has the home base which it will need if it is to survive.
Thirdly —this is 'elated to my previous point—even if our coal industry disappears there will still be a huge international "coal burn" for a long time. The destruction of our industry will have remarkably little effect on that total consumption.
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Fourthly, if we do not burn coal, how will it be replaced? Perhaps my noble friend can tell us the scale of our gas reserves. I understand that the current record suggests proven gas reserves of perhaps no more than eight years-worth. More will be discovered, but probably in smaller fields which will be difficult and expensive to harvest.
Fifthly, is it sensible for us to sustain a belief in cheap, subsidised exports when our industry could soon be on the verge of disappearing?
Sixthly, Poland now aspires to be a member of the EU. It is obliged to act as a responsible part of the EU. It is in principle not supposed to dump within the EU and yet Polish coal is being sold in Britain today at a price of £1.10 per gigajoule, which is way below the cost of production. When one adds the substantial cost of transporting that coal, one realises that that importation is almost indefensible.
Seventhly, has the Department of Trade and Industry considered the implications of the recent purchase of Ferrybridge, Fiddler's Ferry, Drax and Eggborough, for which a price of almost £1.5 billion has been paid? That suggests that people from abroad are quite prepared to import large quantities of coal into the United Kingdom while our industry disappears.
Eighthly, have the Government disregarded the fact that, excluding Russia, Europe has only some 3.6 per cent of the world's gas and one-eighth of the world's coal, and that we shall be increasingly dependent on gas and coal from areas of the world which are certainly not particularly stable or likely to be favourable in their attitude to the United Kingdom's needs?
Ninthly, is it reasonable to pursue a course which will see the end of British deep mining when it is currently demonstrating an enormous capacity in a successful and safe operation, providing that base which the engineering industry requires?
Tenthly, do the Government intend to maintain their present approach given that £14.5 billion was devoted to the subsidy of the coal industries of Germany, Spain and, to some extent, France, while our own industry not only is not subsidised but bears charges and costs which are not applicable to our European neighbours' industries?
Eleventhly, do the Government recognise that the United Kingdom has been successful? If one looks at the rates of productivity in Europe, one finds, for example, that, measured in kilogrammes per man hour, Spain produces 400, Germany 650 and the United Kingdom, on the latest figures, well in excess of 1,600. We are far, far more effective than our European competitors, whose industries are being retained.
Lastly, do the Government recall that they promised the coal industry no favours but fairness, wisdom and a level playing field? In that case, how can one defend the fact that our industry is facing a very adverse slope?
Those are the questions. I shall now express why I am concerned. When I became a Member of the House of Commons in 1970, I had 12 collieries in my

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constituency and more than 20 within five miles of its boundaries. Thousands of my constituents worked in the industry. In the village in which I lived, close to Wath upon Dearne, 57 per cent of the men worked in the pit. There are two or three industrial gypsies now, working for contractors at long distances.
Before that, I was a local councillor. In my ward was Manvers colliery, where my father was over man, and the headquarters of the South Yorkshire area, which then consisted of 19 collieries. Only one of those remains—Maltby, which has vast reserves—on which £200 million was invested. It should have a long life; it employs only 400 men. It was not even on the list that Mr Heseltine produced in the earlier Parliament.
Silverwood was on that list. I am pleased to see that the noble Lords, Lord Ezra and Lord Haslam, are in their places. I shall listen to their speeches with interest and respect. They may recall that Silverwood was one of the most profitable, record-breaking pits in the country over a long period. At this moment, vast sums of money are being expended in reclaiming the site of that very successful former colliery. I shall listen to other noble Lords' contributions with great interest. I hope that they will be helpful in assisting the Government's view.
It is all very well to say that there will be help for the areas affected, but most of the pits in the constituency that I represented closed in the 1980s, about 12 years ago. A lot of money has been spent since, but the gap between the problem and the remedy, or attempted remedy, has been a long one—12 years. There was enormous concern about the devastation of employment which then occurred. Many spoke about that. Some spoke also about the social corrosion of the changes which took place and which may have placed our areas at a particular disadvantage.
The debate comes at a critical time. Will the United Kingdom be able to withstand international forces which we may not at this stage be properly able to assess? Will we sacrifice energy security? We seem to be hell-bent along that road. Do the Government recognise that if the deep-mine industry, as successful as it is, is wiped out, that will inevitably destroy our mining engineering industry, which requires a home base, at least for demonstration purposes? We need to be very careful about that.
There is much talk about green issues. My noble friends who have known me for a long time will recognise that I have been a conservationist, a very green politician, for a long time. It is certainly well over 25 years since I first spoke about the need to burn coal cleanly and said that there is no need for the filth which pours into our atmosphere so remorselessly and unrelentingly, and which has been scarcely adequately challenged internationally. I support our commitments in Kyoto; I wish only that other advanced countries—particularly the United States—would take the same approach. We have to recognise that, although we have achieved much, a great part of that bill is borne by the mining communities.
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We should not be too glib when we talk about alternatives. We talk about solar power. Many parts of the world have greater access to that source of energy than we have in the United Kingdom, even with global warming. Wind power is not as attractive as many people imagine, although it may have a contribution to make— as have other renewables, although some of them will be frightfully expensive. I recall that in 1970 I had a briefing from the electricity industry. I can see now how we were presented with the nuclear future through very rose-tinted spectacles.
As this century ends, the newspapers are full of photographs providing images of the past 100 years. Some will stick in our minds for a very long time—the pictures of the closed collieries; of the pit wheels marking where the collieries stood— but, as I have said before, the one that will long linger in my mind is of standing beside the sarcophagus at Chernobyl. That may be some evidence that man's ingenuity is not quite matched by man's wisdom.
The world will continue to need coal for a long time. We ought to be contributing to a capacity to burn it cleanly.
Lord Islwyn: My Lords, I thank my noble friend for giving way. I appreciate his long-term interest in the mining industry, particularly in the welfare of miners. We have both contributed to debates about compensation and the delay in payment of compensation to miners who have been affected by breathing and chest diseases as a result of working for long periods in coal mines. There have been reports recently in the press that some of the compensation for these people will come from the miners' pension fund. I can tell my noble friend that in South Wales that has gone down like a lead balloon. Does he have any observations to make about that?
Baroness Ramsay of Cartvale: My Lords, I remind your Lordships that this is a timed debate. It is undesirable that noble Lords should interrupt at any length during timed speeches.
Lord Hardy of Wath: My Lords, I am well aware that the Government are taking rather a lot of money out of the miners' pension fund. I am quite sure that my noble friend Lord Varley, who is very knowledgeable about these matters and experienced in energy matters, may wish to comment.
Some years ago, when Mr MacGregor was chairman of British Coal, I went to a large exhibition at the National Exhibition Centre which was presented by the British mining engineering industry. Mr MacGregor spoke at that exhibition bringing in the new criterion that no reserves could be counted unless they could be mined currently and profitably. That wiped out about 150 years of Britain's SS coal reserves. I wonder whether the Government have done a calculation of the effect of the massive increases in productivity in the past decade, under British Coal as well as under Mr Budge. I believe that, in economic terms, they have clawed back at least half of the period that Mr MacGregor wrote off.

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Will the same criteria apply to the small gas fields which will be very expensively harvested? That should be considered.
I am nearing the end of my speaking time. I became very angry occasionally during debates on coal in the previous Parliament because all we used to get from the other side were references to Mr Scargill and the miners' leadership, with the very clear implication that the mining communities were the enemies within. I found that utterly offensive. The record of those communities in Britain has been very substantial. We heard no words about the "enemy within" when the nation called for coal, and there were no such words when men were suffering from pneumoconiosis and other such diseases against which my noble friend Lord Lofthouse has waged such an active campaign. It is good that the Government are now implementing the provisions introduced, albeit half-heartedly, by the previous administration. However, this is a national burden—and it ought to be.
Miners' health is also one of the reasons why I welcome the priority given to safety by British Coal—now our national coal board—and by Mr Budge. While I opposed the privatisation of coal, I was reassured by the priority given to health and safety by Mr Budge, and I believe that the men and management at Tower colliery, at Long Gannet and those in Mr Budge's pits deserve commendations on their efforts to ensure that strides forward in productivity are matched by concerns for safety and health. Because of that, perhaps future miners will not suffer such disadvantages. At this time we need wisdom and I only hope that Her Majesty's Government will show it. My Lords, I beg to move for Papers.
5.51 p.m.
Lord Haslam: My Lords, first, I should like to express my appreciation to the noble Lord, Lord Hardy, for introducing this debate, because yet again the coal industry and its related industries are clearly at another important crossroads. I hope that noble Lords will bear with me if I reflect briefly on an earlier period of British Coal when I was directly involved as its chairman during the period after the miners' strike until the end of 990. I believe it contains some important lessons for the present situation.
First, we should remember that the trigger for the strike was the threat by my predecessor, Sir Ian MacGregor, to close six collieries. In the five years following the strike we were to close over 100 uneconomic pits, leaving 69. Manpower was reduced by 140,000, but total output was only marginally reduced. Thus, productivity was doubled, equivalent to an improvement of 14 per cent per annum. I do not take any great pride in those statistics, but if that had not been done, I do not believe that we would even have the coal industry that we have today.
Surprisingly, Mr Scargill survived at the end of the strike, but was suffering from the illusion that the strike had been a real success. Thus, he was as confrontational as ever and opposed to the closure of
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every colliery. However, most of the miners had come to recognize—I pay tribute to them for this—the economic realities and we were able to work around Mr Scargill. That was only made possible because during that period we had no enforced redundancies. Every miner was offered either a transfer to a lower cost pit or the generous redundancy terms that we were permitted to offer by the then Conservative government. I must also pay tribute to the outstanding British Coal management skills in carrying through this daunting task. It was quite the most difficult one I had experienced in my long and varied industrial career. I should also like to endorse the tribute of the noble Lord, Lord Hardy, to the officials of the miners themselves, who in the end did extremely well to help to bring about that particular achievement.
My successors were able to pursue these policies with equal vigour right up to privatisation in 1994. It had been my belief that the "fighting weight" of the industry would be based on about 35 to 40 large, low-cost collieries, the number being predicated on the belief that they would provide future access to most of the remaining workable reserves in the UK without incurring the prohibitive costs of sinking new mines. However, that was not to be.
There were a number of other parallel issues on which we focused our attention. These were as follows: first, the dumping in the UK of cheap coal from Poland, Russia, Colombia and China; secondly, the import of highly subsidised nuclear energy from France through the inter connector link, which originally was intended primarily to export cheap coal energy to France. Those dumped imports were equivalent to the output of six large collieries. Thirdly, government subsidies to British Coal were being phased out, but massive subsidies continued to be paid to the coal industries of Germany, Spain and France. In Germany, the subsidy was between £3 and £4 billion per annum. The outcome of this was that the UK bore the brunt of absorbing all the cheap imports that were available around the world.
Furthermore, there was a need for urgent government support in the development of clean coal technologies, which could improve generation costs by 25–30 per cent and reduce by a similar amount the emission of greenhouse gases. One of the greatest contributions that the UK could have made to reducing world CO2 emissions would have been to develop and demonstrate advanced clean coal technology. Undoubtedly, that technology would have been widely adopted in the developing world.
All these topics were pursued with vigour by the then government and also with the European Commission. But even then the limited support we received could only be described as lukewarm. As a result, all the topics have today a familiar ring because they are still not solved and continue to be subject to rhetoric rather than determined and meaningful action.
Current world coal consumption is about 4 billion tonnes per annum. Reputable international energy agencies estimate that that figure will rise to about

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6.4 billion tonnes by 2020, primarily because of growing demand from the developing countries, in particular China and India. For example, China's need for coal is growing at the rate of about 100 million tonnes per year. Surprisingly, demand is also growing from the USA as it cuts back its nuclear capacity. At present, no further nuclear plants are planned for the USA, and by 2020 half the existing units will have been closed down. That represents almost 10 per cent of US energy consumption. What will replace it? It will be coal and gas, and most probably mainly coal. Those figures also reflect that there are an estimated 200 years' worth of coal reserves in the world, whereas the comparable figure for oil and gas is 50 years. It has often been said that we shall find new reserves of gas. However, having visited the Falkland Islands recently and seen the drilling operations off the islands, I believe that we might be coming to the bottom of the barrel.
A worrying feature is that the countries I have just mentioned are not showing any signs of supporting the Kyoto targets. By 2020, even if the UK and EU targets are met, they will have a minimal impact on the world outcome. The achievement of any Kyoto targets for reducing the world production of greenhouse gases from coal-burning are far removed from reality.
There is no doubt that in the late 1980s the German Government heavily supported their coal industry because they failed to face up to the problems of restructuring, as we did. However, now they have a more valid reason as they face a real problem: they are dependent upon Russia, the Middle East and Algeria for their supplies of natural gas. As the noble Lord, Lord Hardy, has already indicated, those countries are not the most reliable suppliers. They also face added pressure from their influential Green Party to phase out their nuclear industry, which represents 30 per cent of their electricity supply. Against that background, the German Government are most unlikely to allow their coal industry to disappear.
On the evidence that I have, our own natural gas reserves are currently estimated at 12 to 14 years, although the noble Lord, Lord Hardy, quoted a lower figure. But, surprisingly, we shall be supplying gas, through the new inter connector, to the Germans, for example, in the interests of so-called EU competition, thus further reducing the life of our own reserves. In addition, the Magnox nuclear reactors will be phased out by 2010 and the AGR reactors will be past their anticipated life, eventually leaving only the Sizewell B reactor active. Therefore, we could then find that we are in the same position as the Germans, dependent upon imported gas from Russia and the Middle East and our growing renewable energy sources which, while making encouraging progress, will not in any way fill the gap.
Against that background, are we willing to allow the remaining vestiges of our coal industry to disappear, along with the future access they provide to some of our valuable coal reserves, without having a much clearer vision of how we will meet our energy needs post 2020?
6 P.m.
Lord Varley: My Lords, it is always a great pleasure to speak after the noble Lord, Lord Haslam, in debates of this kind. His comments were certainly interesting and the points he made about the world situation were devastating. I was particularly interested in his comments about the Falkland Islands and his visit there. I was the chairman of the Falkland Islands Company for about five years. Along with others, I would be absolutely astonished if oil were discovered in the Falkland Islands in the quantity that is regarded as commercial, although I hope fervently that that will be the case.
I join the noble Lord, Lord Haslam, in his tribute to British mining engineers. I expect that the noble Lord, Lord Ezra, will join in that tribute. Until a few years ago we had—I do not know whether they still exist in the quantities required—the finest coal mining engineers in the world. They contributed immensely to the terrific productivity records of British Coal not only under the chairmanship of the noble Lord, Lord Ezra, but under the chairmanship of the noble Lord, Lord Haslam, too. It is a pleasure to follow such a distinguished industrialist as the noble Lord, Lord Haslam.
It is also a pleasure to support my noble friend Lord Hardy of Wath. I thank him for initiating the debate. I congratulate him on making such a powerful speech in support of the coal industry and the related engineering industries.
It appears to me that the country is now in a make-or-break situation as far as concerns the coal industry. That sounds dramatic, but I believe that we are exactly in that position. With British mined coal at a production level of around 25 million tonnes a year, employment at about 7,000 people, and faced, as we are, by imported coal, some of it at dumped prices, we are presented with close to a crisis in the industry. The fact that the coal industries of our European neighbours receive massive state subsidies from their governments only highlights the problems we face here in Britain. Either we take whatever steps are needed to protect our industry at roughly its present level or we give up the ghost and face the consequences.
I cannot pretend—I hope that the Government do not pretend—that a few fine words and cheap platitudes will save the industry. There are many people now who secretly believe that the coal industry is a fringe industry and an embarrassment; an industry that ought to be got rid of as quickly and as quietly as possible. I noticed that in a debate in another place on 10th November, Mrs Helen Liddell, the Minister for Energy and Competitiveness in Europe—what a wonderful title that is—said in her peroration that,
"coal has a future".
Addressing the mining communities directly, she went on to say:
"from the bottom of my heart,…we"
meaning the Government—
"will not turn our back on them".—[Official Report, Commons, 10/11/99; col. 1065.]

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I hope that those fine words will not come to haunt Mrs Liddell in the future. I have read very carefully what she said in the debate on 10th November and I could not detect anything in her remarks which encourages me to believe that the industry will not decline further, and probably quite rapidly, in the next year or two. Unless action is taken quickly and effectively, what is left of the industry will be gone in a short space of time. It will then become a real fringe industry.
I hold no brief for the company, RJB, which owns the bulk of the coal industry. But if the fine words of hope and heartfelt concern of the Minister for Energy mean anything at all, they mean that she will have to work out with RJB what is needed to secure the industry's future at the current level of production; and she will have to do it very urgently. That may mean direct financial assistance, either in the form of direct subsidy to the producers, similar in scale to that which is made by governments in Germany, France and Spain, a point made by the noble Lord, Lord Haslam, or a subsidy to the electricity generators to burn coal. If the Government do not take action soon, the honeyed and comforting words will be seen and taken as empty gestures.
Some may say that it is perfectly reasonable— some would even say desirable—to let the coal industry die. I have heard those arguments put time and again. That is not my view yet; I think that the industry can still be saved. It is not the declared policy of the Government—yet. But unless the Government take action soon, the industry will die quite quickly and more misery will be inflicted on the mining communities, adding to the massive misery imposed on the miners by the previous Conservative government and from which they are still suffering.
We hear a great deal about the deprivations of the inner cities. I do not doubt for a second the privation and acute hardship that exist in parts of our great conurbations. But those hardships are shared by former mineworkers and their families in small mining communities throughout Britain. The throwing out of work of miners by the previous government in the early part of this decade created wretched conditions in those areas. It will take many, many years to eliminate those conditions.
The Markham Valley in north Derbyshire, where I worked as a very young man nearly 50 years ago, had five collieries within about two-and-a-half miles. Markham Valley is well known to the noble Lord, Lord Ezra, and probably to the noble Lord, Lord Haslam, too. I know that the noble Lord, Lord Ezra, visited the area on many occasions during his stewardship of the National Coal Board. At the peak of performance, those five pits employed about 5,000 men. The villages which surrounded those pits have suffered a plight which will take decades to eliminate. I have in my hand a photograph of the existing site. The head stocks of those pits have gone, the surface buildings have been removed, and this vast site has
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been bulldozed. It looks like a lunar landscape. I shall show the photograph to my noble friend Lord Harris of Haringey—
Lord Hardy of Wath: McIntosh!
Lord Varley: My Lords, I beg my noble friend's pardon. I shall show the photograph to my noble friend Lord McIntosh of Haringey at the end of the debate.
The local authorities which cover the area are doing what they can to create what they euphemistically call a "growth zone", but they lack the financial incentives and the money to do it at the pace that is required. A few months ago the Deputy Prime Minister launched a task force to implement money through what is called the Coalfield Regeneration Trust. The money allocated to the regeneration trust is a pathetic amount of £10 million. To be charitable, that £10 million regeneration trust could be described as a step in the right direction—a small deposit towards what is really required. But the Markham Valley site alone—the lunar landscape to which I have just referred—will cost £37 million for site reclamation, development, proper roads, a motorway junction for access and servicing, and environmental services. There are dozens of comparable sites throughout Britain.
The coal industry and the industries associated with it have shed something like 250,000 jobs since 1984. I do not believe that any industry, over the same period, has experienced job losses on such a scale in such concentrated areas.
Fortunately, former mineworkers have a pension scheme. In fact, they have two: a mineworkers' pension scheme and a staff scheme. Here I must declare an interest. I am a beneficiary of the pension scheme, for service going back to the early 1960s. I receive 28p a week from the scheme, on which I pay 40 per cent tax. However, I make no complaint about my personal position. Given that the service took place a very long time ago, 28p represents good value. Fortunately, I receive bigger and better rewards from pension schemes linked to later employment.
Mineworkers' pension schemes are very wealthy and successful. That success reflects great credit on the schemes' trustees and the fund managers. The pension schemes have generated huge surpluses. I do not want to go into all the detail, but because the Government became the guarantor of the pension scheme—that is what the men in the pits voted for when the pits were privatised—the Government are legally and properly entitled to a proportion of the pension surplus. To date, that entitlement adds up to £3.4 billion. The Government have not taken that amount so far; I believe they have taken around £250 million a year. The surplus money is still accumulating interest and profit. It is conservatively estimated that it will soon exceed £4 billion.
The Government deserve to be rewarded for the risk that they took in guaranteeing the pension. But as the present day beneficiaries grow older, the numbers will decline and the risk will diminish. It seems to me that

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some of that colossal pension fund surplus could be used to enhance the benefits of pensioners, but also some of the Government's proportion could be channelled into helping to regenerate former coalfield areas.
I want to mention another matter which may be considered relatively minor in terms of this debate. However, it is not minor to the men concerned. All I ask is that my noble friend should refer to it in his reply or promise to write to me. It is the question of miners' concessionary fuel. I have been told that the Department of Trade and Industry, which takes responsibility for the concessionary fuel scheme, has it in mind from April next year to offer to those who benefit from the scheme not only UK-produced fuel but manufactured briquettes made abroad, including Chinese anthracite. All of this may be a great slander on the Department of Trade and Industry and I shall be very pleased to hear my noble friend say that it is not true. Perhaps he will look into the matter and comment on it in due course.
It seems to me that the coal industry is at a critical turning-point. I re-emphasise what I said at the beginning of my remarks. The Government must either take a bold policy decision soon to hold the current level of production and protect the coal industry's market at around £25 million tonnes a year, or they must openly and honestly declare that the industry must face the full force of the market as it pertains in this country, and that it must do so without help.
If the Government choose to support the coal industry, they will have to say that they are doing it on energy policy grounds and strategic grounds. It will mean facing up to the environmental questions referred to by my noble friend Lord Hardy and investing in clean coal technology. It will mean subsidising the private coal producers or the private electricity generating companies which burn coal. I know that it will stick in the gullet of many Members of the House of Commons, but it would be barmy to renationalise the coal industry, as some suggested in another place on 10th November—even though the market capitalisation of RJB is only £45 million. RJB bought the English coalfields from the Government at a cost of £814 million and they are now worth only some 6 per cent of the original price.
If the Government say that it is no part of their business to keep the industry intact, it will wither away quite quickly. We shall have to face up to the need for a massive realistic programme of financial assistance to regenerate the areas concerned. That would need to be done quickly and with great sincerity. I mean a worthwhile programme of financial assistance, not the fiddling, paltry £10 million regeneration scheme that our loveable Deputy Prime Minister was put up to announce some weeks ago. There was a strange juxtaposition in this House earlier when the House debated the pressures on housing in the south-east and what is likely to happen early in the next century. If we
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do nothing about the coal mining areas, miners' children and grandchildren will drift south and exacerbate the problems that exist in those areas.
The Government must face up to the crisis. It is no good Ministers looking to officials in their departments to bring forward schemes to soften the impact and put off the evil day. Officials will always do a good job. They will always find some short-term palliative to get over the immediately difficulty, as I have seen happen on dozens of occasions. Ministers will say that that is wonderful. They will be Micawberish, hoping that something will turn up. It is "make up your mind time" for Ministers. It is time for them to be brave and bold. I hope that they will be.
6.16 p.m.
Lord Lucas: My Lords, I am grateful to the noble Lord, Lord Hardy of Wath, for introducing the debate and am honoured to take part in it. I suspect that I am the least well-informed speaker on this subject. I did go down a deep coal mine in my youth, when the National Coal Board seemed to take the view that there were not enough Etonians under ground. I suspect that that view is shared by other people for other reasons! I greatly enjoyed the experience, but cannot say that I have had any great involvement with the coal industry since then.
There are a number of very good reasons why the Government should continue to support the coal industry. It is something that only the Government can do, because it requires a long-term strategic view on what is right for this country. Looking ahead, we are clearly in for some rough times in the energy market as fossil fuels run out. As has been said by other speakers, many of the reserves of those fuels lie in parts of the world that are not naturally stable or particularly friendly towards this country. We are therefore likely to see some sharp fluctuations in prices and availability.
There is a great deal to be said for making sure that in this country we continue, for the sake of the stability and long-term health of our economy, to have a diverse set of available energy sources; and that, where possible, those sources are indigenous. I welcome the Government's efforts in relation to alternative sources of energy, and hope that they will continue to build over the years, but they would come nowhere near to replacing the coal industry, or indeed the nuclear industry. We are faced in the short term with price pressures from dumping and subsidies overseas, and from short-term economies in relation to gas-fired power stations—short-term in relation to our life-span, if not those of our children.
Industry, given the chance, may take a five-year view on what is the best fuel to use and the best strategy for generating power. Being speculative, it might even stretch it to 10. The Government must think in terms of 50 years. They must think in terms of contingencies about which the ordinary industrialist may not have to think. The Government must see it as their responsibility to reduce the risk of catastrophe that the country is running in the long term—at the

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acknowledged cost of some greater price, an insurance premium, as it were, that we all must pay on electricity in the mean time.
We cannot expect the Government to do anything about the subsidies that Germany gives its coal industry. There is remarkably little evidence that this Government will be effective, even in dealing with monstrous illegalities like the French beef ban. The German subsidy on coal has been running for a long time. We managed to do nothing about it; this Government have made no dent in it. It will continue. There is therefore a cost to the Government in supporting the coal industry which comes from the failure to deal with subsidies elsewhere. The Government must bear that cost. It is a consequence of failures and of the decisions that they have taken and it is not right that they should impose the costs of those decisions on the coal mining industry.
When it comes to coal, particularly deep coal where the main reserves lie, the Government need to consider the desirability of keeping the industry going in a manner that will enable it to respond, when the time comes that coal is needed again in large quantities.
It is clear that a large proportion of the world's fossil fuel reserves is in the form of coal. It is also clear to us all that when push comes to shove and there is a lack of fossil fuel and alternative energies remain, as they will, substantially more expensive than fossil fuel—Kyoto or no Kyoto; global warming or no global warming—we will use those fossil fuels.
The coal industry has a good, long future world-wide. We should not, for reasons of short-term economic circumstances, put our participation in that industry—a substantial and successful industry—at risk, particularly when so many of the factors disturbing the industry are essentially down to the Government, one way or another, in terms of the decisions they take about the structure of the energy industry in this country and the extent to which they allow subsidised coal imports to displace our domestic production.
I do not suppose that I have made myself popular with my Front Bench in saying that. I do not believe that either Front Bench will be pleased with any of the speeches today, but I hope that we shall hear something of comfort from the noble Lord, Lord McIntosh. At least his party has an historic association with the coal industry. I hope it still means something to them.
6.21 p.m.
Lord Dormand of Easington: My Lords, it is inevitable that, as the fifth speaker in the debate, I shall repeat some of the points made by previous speakers. I make no apology for it. In any case, repetition will serve to emphasise what I, like others, believe are important points. I was delighted to hear that the noble Lord, Lord Lucas, enjoyed his visit down the pit on one occasion. I am sure that his enjoyment depended largely on the fact that he knew that he did not have to spend the rest of his life down there.
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The coal industry is once again facing problems. In the many years of my connection with it, there have always been problems. However, today I believe that some of the problems are rather different. With sympathy and determination from the present Labour Government, they can be solved or considerably alleviated—I say "immediately". The Government have shown sympathy with the difficulties now being experienced.
It would be helpful if the Minister would make the Government's attitude towards the coal industry clear and unequivocal. The Government could and, in my view, should say that for the foreseeable future this country needs a coal industry. The direct employment in the industry of about 15,000 people—reduced though it has become in recent years—is still of great importance. Indirect employment in the coalfield areas and the jobs in the mining equipment companies are equally important. There are other considerations, some of which have already been mentioned, such as the saving on imports.
Some of us have heard from the British mining companies group that if the UK mining industry ceases to be an equal fuel supplier, there will be a loss of up to 8,000 of their companies' engineering jobs and over 50 companies will follow. I fear that those figures are reasonably accurate. We may hear more about them later.
I interpose one little point here. The Minister may be able to say something about the position of Ellington colliery in Northumberland. We are all aware of it, some of the Ellington miners were in the House of Commons yesterday and I had the opportunity to talk to them. I need hardly say how deeply concerned they are.
Much of my speech will be taken up by asking direct questions to which, frankly, we seem to receive either no answers or indirect responses which evade the questions. My first query concerns state aid to the German, French and Spanish coal industries. That has already been mentioned, but it has to be repeated. There is no doubt that those countries receive about £3 billion in assistance. Are the payments contrary to EU law? One answer given is "yes". Another answer is "no"; that the British Government can choose not to provide such help. In the event, we know that the British Government have done that. I want to know what the position is because we need clarification on it. Polish coal is entering this country at prices which do not reflect the true costs of its production and transportation. In other words, according to the usual definition, the coal is being "dumped" in this country. Is that, too, contrary to EU law? Is it likely to be stopped? I should like that question answered.
In the case of Spain, there is the discriminating application of limits on the sulphur content of coal from different ECSC sources. My right honourable friend Helen Liddell, the Minister in another place, has said that the UK has received assurances that UK coal will be treated on the same basis as Spanish coal. Again, my question is: When will we know when that becomes effective?

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In Germany, state aid has led to a distortion in the anthracite market (not mentioned so far) in the ECSC and particularly in the UK. Again, has any practical action been taken on that? I believe that the British Government have raised some or all of those matters with the European Union. However, my main concern now is—and I underline this—to ask: When will something be done about them? To some extent that reflects the concern which my noble friend Lord Varley emphasised in his contribution.
Before too long, the Government will have completed three years in power. We seem to be achieving little, or not that much. On the same principle, it is tempting to refer to the beef crisis, but let us stick to the coal industry for the moment.
The Government responded to representations made by a number of us about distortions in the electricity generating market which favoured the contribution of new gas-fired power stations. I asked the energy Minister how many consents had been given to such power stations since the present Government came to power on 1st May 1997. The answer is that 23 approvals have been made, 14 have been turned down. Those 14 would have generated four gigawatts of electricity, equivalent to 10 million tonnes of coal. I am not convinced that the Government have got the balance quite right, at least for the present. However, we should be clear that the policy of stricter consents is short term and temporary. Those are the Government's words. In the interests of security and diversity of supply, it is of the utmost importance that the Government do not terminate the arrangement prematurely. The 1998 Digest of UK Energy Statistics shows that on current use, proven probable gas reserves will only last only 14 more years.
On a separate but important point, will my noble friend say whether the Government still retain an interest in coal liquefaction? For many years some of us in another place and here raised the question of oil from coal. I am aware that, quite apart from the technical side, one of the many problems is its expense. However, I believe that some research into it by the Government is well worth the money. Perhaps my noble friend is able to comment on it. Some countries, particularly in Africa, have had liquefaction for many years and perhaps we can learn something from them. It is a sad thought that, if the difficulties of coal liquefaction can be surmounted, we in these islands are sitting on millions of tonnes of unmined coal that can be exploited for this very purpose.
The background to everything that has been said in this debate is the efficiency of the UK coal industry. There is little doubt that in recent years the industry has reduced its costs. However, I have found difficulty in obtaining figures that can be compared with those of our competitors. I keep returning to this point. One source shows that the UK industry has reduced its costs to £1.15 per gigajoule but that import prices have now been reduced to 75p per gigajoule. Another source reveals that average UK coal prices are still one-third higher than those for imported coal not supported by state aid.
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Against that, the Confederation of UK Coal Producers calls attention to what it calls "a whole raft of on-costs" that must be absorbed in this country in reaching the final selling price, which is the lowest pithead cost in the European Community. The on-costs, some of which will be familiar to noble Lords, include: royalties paid per tonne produced; licence fees for consents to mine coal; licence or planning permission fees to local government; mineral planning regimes; and full restoration costs for open cast operations. There are other on-costs. Can my noble friend say whether or not this is a justifiable complaint? I believe that that is a crucial ingredient of the debate. If so, how can we begin to make comparisons in considering the fundamental issue of the price of coal? It will also be of assistance if my noble friend can say whether these facts and figures are reasonably accurate. I find it difficult to believe that the countries that I have named can be so much more efficient in producing coal regardless of the differing circumstances of the nature of their coal deposits.
I hope that I am correct in assuming that the Government, at least for the present, do not place emphasis on nuclear power. I believe that in this country there are two factors of which most people are aware and about which they express fear. Nuclear power carries risks, and waste storage problems are frequently brought to the attention of the public. Accidents in other parts of the world, not least the recent one in Japan, receive massive publicity. Whatever the safeguards, I am sure that people would not welcome an increase in the use of nuclear power, at least at the present time. Most nuclear stations have passed their design lives, and we can assume that some, or perhaps all, of the older stations will have to be decommissioned. We cannot depend on gas for much longer. Therefore, that is yet another reason for ensuring the continuation of our coal industry.
I turn briefly to the question of clean coal technology. I am glad that other noble Lords have referred to this matter. The value of this technology is proven and enjoys the support of most people in the coal industry. Why is progress being delayed? There is a greater need for it now than at any other time. If there is a lack of investment, is there not a case for tax or other incentives? This is a matter which I believe the Government should seriously consider. In a recent debate on the coal industry in another place, my right honourable friend the Minister responsible for energy did not mention clean coal technology, although time may have prevented her from doing so. But it would be helpful if today my noble friend could say something about it, particularly as other noble Lords have touched on it. This is one area in which substantial progress is urgently needed.
In conclusion, I can tell my noble friend that nothing I have said is a criticism, even an implied one, of the Government's policies on the coal industry. However, there is still much to be done. Those of us who come from mining families and have represented mining constituencies recall all too well the attitude and policies of the party opposite. The Government have to deal with some of those legacies. The action taken

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since 1st May 1997 is a demonstration of the appreciation of the work and sacrifices of generations of miners in the most difficult and dangerous occupations. All who are concerned about the future of the industry know that in spite of the real difficulties that it faces, it will receive sympathy and fairness from the present Government, and I hope that we shall hear something about that in my noble friend's reply today.
6.36 p.m.
Lord Ezra: My Lords, in listening to the speeches of the noble Lord, Lord Hardy of Wath, who so effectively introduced the debate this afternoon, and the noble Lords, Lord Haslam and Lord Varley, I thought of the number of times in the past that we had together dealt with coal affairs. I was also very impressed by the contributions of the noble Lord, Lord Lucas, and his strong support of the industry, and the noble Lord, Lord Dormand. For the record, I should declare that I have been in the energy sector for many years. I am still actively involved in it, regrettably at an age when most sensible people would long since have retired, but I cannot resist the lure of trying to promote the efficient use of energy.
I should like to think back for a moment and then move forward. We should recall that in the post-war period the coal industry has suffered the most dramatic turn-round of any industry, perhaps in our whole industrial history. After all, this was the industry which powered the Industrial Revolution and contributed a major part to the country's wealth over several centuries. Regrettably, it is now a shadow of its former self.
When I joined the newly-formed National Coal Board in 1947 there were 700,000 mineworkers on the colliery books and over 900 collieries, no doubt many of them quite small. However, they were all deep mines. That was the number with which we started. Today, there are fewer than 10,000 mineworkers on colliery books and 18 collieries. What has happened is that productivity has increased enormously, but the size of the industry has declined massively.
That is about the past, and we cannot undo it, but, as other noble Lords have said, we must now be concerned about the future. I agree with the consensus view which has emerged that at the very least we need to keep the industry at its present size; and there is a strong case for saying that it should grow further. The reason is that we shall begin to run out of indigenous gas before very long and will depend more and more on supplies from uncertain sources. Furthermore, the decommissioning of nuclear plants is beginning. That process will accelerate, and something will have to take the place of those plants.
Many suggestions have been made about what to do about it. I should like to make two practical proposals. To reassure the noble Lord, Lord McIntosh, in advance, I believe that these are very modest proposals, to which the Government could accede without much difficulty, but they would make a major difference to the future of the industry as it is now.
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The first suggestion is this. The coal industry is having to face up to substantial imports of coal, some of which may be subsidised and some not. What has exacerbated the situation is the strength of sterling. I remember being bedevilled with that problem when I was directly involved in the coal industry. In some periods imports would be very cheap because sterling was high and transatlantic rates were low; at other times the reverse was the case. The problem was to ride the storm. I believe that we have to do that now.
Twelve million tonnes of steam coal are being introduced into this country for power station use. My inquiries have shown that out of current production and existing capacity, and drawing on stocks, it would be possible to replace 5 million of those 12 million tonnes. If that were done over a couple of years, the position of sterling and many other factors might well change and the industry could experience a major respite.
The cost would be minimal. About £5 per tonne, £25 million per annum, would secure an additional 5 million tonnes for the power station market. If they wished to pursue the idea, it would be for the Government to consider how it could be achieved. As the noble Lord, Lord Varley, pointed out, it could be done by the difference being given to the power stations, to the pits directly or in some combined way. To provide that extra tonnage, which would tide the industry over a difficult period, it seems a minimal charge compared with the massive subsidies given elsewhere.
My second proposal looks to the future. Clean coal technology has already been mentioned by a number of noble Lords. If coal is to be maintained as a long-term source of energy in this country, the environmental considerations become uppermost. Unless we can devise technologies which can reliably make coal more attractive from the environmental point of view, it will be difficult to secure its long-term future. That can be done on the basis of processes collectively known as clean coal technology. We do not need more laboratory work. That has all been completed; the processes are known. What is required is a major demonstration plant. Unless we can have such a plant in this country—there are some Elsewhere—it would not be regarded as a valid way of going forward. On the basis of that demonstration plant, I believe that we could begin to build up power station capacity using that technology. Within the next 10 or 20 years when many of the nuclear stations could be decommissioned, it is not inconceivable that clean coal plants could aggregate to something like 5,000 megawatts. But in order to achieve that, we must have a demonstration plant.
What demonstration plant do we need? We are talking about a capacity of 400 megawatts. That would cost a substantial sum. But it would not be for the Government to put in that money. We would need to create the conditions under which the private sector could invest in that technology. Two years ago, I introduced a Bill to extend the non-fossil fuel arrangements—they give assistance for non-fossil fuels to be developed—to fossil fuels where there was

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a strong case. I instanced clean coal technology. I remind your Lordships that the principle of the non-fossil fuel arrangements is that no capital is put in to stimulate those developments but that a rather higher price of electricity is guaranteed over a period. For example, if the price of electricity, as at present, is about 2.5p per kilowatt hour on the pool, some higher price would be guaranteed over a period. And on the basis of that benefit the investment, which could be substantial—we may be talking about £300 million pounds going into the plant—could be forthcoming. I am told that in this case little extra is required—something like a ½p per kilowatt hour. On that limited basis—from the Government's point of view the small amount would be spread over 15 years—there could be much interest from the private sector in investing in the demonstration plant, in the expectation that after a few years' experience of that plant no further assistance would be required and that it could well be worth while investing in ordinary-sized commercial plant.
I believe that those two proposals are modest and may represent the view emerging from our debate. I think that we should put forward practical proposals where possible. I hope that they will be considered seriously. As noble Lords have said, in particular the noble Lord, Lord Varley, it is a time for major decision. If measures similar to these modest proposals are not taken now, the mining industry will continue to decline. Of the 18 collieries I mentioned, three are up for closure. So the number is diminishing rapidly. If we are not careful, more will be up for closure simply because the markets will not be there.
Something has to be done. In the long history of the coal industry, from time to time governments have intervened because they have felt it necessary to do so. For example, the government intervened in the market schemes of the pre-war period to cut out the internecine competition between the various colliery companies; otherwise the industry would have been destroyed. From time to time governments have intervened. And this is such a time. Such intervention need not be substantial. It does not need to be anything like the level of subsidies paid in other countries. I believe that these modest proposals could spell the difference between continued decline and maintaining the industry, perhaps with possible expansion to meet the needs of the future.
Lord Dormand of Easington: My Lords, before the noble Lord sits down, I wish to ask a brief question. I know that it is a timed debate. Does he agree that some of his suggestions do not lie in the hands of the Government of this country? I referred to a number of matters relating to the European Union where it is difficult to get either action or satisfaction.
Lord Ezra: My Lords, I believe that the whole policy should be discussed with the European Union to gain its full support and agreement. For example, it might be possible for the demonstration plant to get some resources from the European Union. However, I
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believe that the initiative must come first from the Government, and they then need to consult the European Union on that and related matters as soon as possible.
6.50 p.m.
Lord Northbrook: My Lords, I congratulate the noble Lord, Lord Hardy of Wath, on initiating this important debate. Without doubt, the British coal industry has experienced serious problems during the past two decades. Economics and the environment were the principal reasons for pit closures in the 1980s and 1990s and now the driving forces are still environmental. As already mentioned, they include the problem of subsidies in Germany, Spain, France and Poland, which are almost certainly illegal.
The falling price of coal is a major additional factor, with the price down an astonishing 50 per cent during the past five years. It is particularly sad that Ellington is to close at a time when other employment in manufacturing in the north-east is under threat from government policies which pushed manufacturing into the recession from which it is just emerging.
In the 1980s and 1990s, the United Kingdom coal industry continued its long-term decline. In 1997, production stood at 45.8 million tonnes, down more than 11 per cent from 51.9 million tonnes in 1996. That represents less than one half of the 1987 figure of 98.7 million tonnes. In 1997, the UK imported more than a quarter of its coal. The decline in production has been apparent for some eight years. Peak output was 292 million tonnes in 1913, about one third of which was exported. Production remained fairly constant at between 170 and 190 million tonnes until 1957 when it began to decline, being replaced by oil and subsequently gas and nuclear power.
The same trend is apparent in the employment figures. In 1913, more than 1.1 million men were employed in more than 3,000 deep mines. On nationalisation in 1947, 1,500 pits employed 750,000 men. By late 1992, there were 41,000 miners in 51 British Coal pits; in late 1998, only 13,000 miners in 23 deep mines remained.
During the past 20 years or so, the industry has not been sufficiently competitive to survive against coal produced more cheaply elsewhere in the world. In order to ensure the survival of the industry in this country, it was necessary for governments of all parties to agree to close down uneconomic pits, regrettably leading to the loss of more than 200,000 jobs. The effect of that was movingly described by the noble Lord, Lord Hardy.
By the end of the previous Conservative administration, a smaller but much more viable industry had been created. When the Labour Government came to power the industry was expecting that decisions would continue to be made on its future, taking market conditions and economic viability as the main criteria. However, it did not expect to read that Labour would put further obstacles in its way.

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In its manifesto, the Labour Party made clear that it would fight global warming through a new target of a 20 per cent reduction in CO2 emissions by 2010. The Labour Party in opposition assured the coal industry that coal mining jobs would be safe. Yet the Deputy Prime Minister has signed up to achieving an even higher target for CO2 emissions than was demanded at Kyoto. Can the noble Lord, Lord McIntosh, quantify what effect that will have on the coal industry in terms of pit closures and loss of jobs? Furthermore, can he say how the Government will reach the target to which they signed up in Kyoto?
Another major problem faced by the UK coal industry is that it is not operating on a level playing field with regard to subsidies. Our industry is unsubsidised, whereas the total subsidies to the German, French and Spanish coal industries between 1995 and 1998 were £14.5 billion. Those subsidies are highly unfair and probably illegal. Most European states outside the UK have been accused of subsidising their coal to the detriment of UK producers, although EU rules forbid giving one company an unfair advantage over a competitor.
In response to a Question asked by the noble Lord, Lord Mason of Barnsley, the Minister, the noble Lord, Lord Sainsbury, stated that,
"we are working with our colleagues in Europe to make certain that action is taken to reduce the subsidies".—[Official Report, 4/11/99; col. 269.]
Will the Minister explain what progress has since been made on the issue?
I understand that outside the EU, Poland has been dumping cheap coal in this country. Can the Minister refer that serious problem to his colleagues in the Foreign Office? It should be suggested to Poland in clear terms that as a pre-condition of it joining the enlarged European Community, such practices must cease with immediate effect.
Returning to the UK coal industry, the Government are making a conscious effort to help by imposing a moratorium on gas-fired power stations. Thirty-six applications in the pipeline were frozen. However, as is often the case with the Government, the actuality has been different from the rhetoric. Between the announcement of a new policy in October 1998 and the end of October 1999, the Government approved 16 new gas-fired projects, most notably one of 500 megawatts in South Wales just before the Welsh Assembly elections. The 2,000 megawatts of approvals overall potentially displace 5 million tonnes of coal from the electricity market, the equivalent of two collieries.
The Conservative Front Bench believes in the ending of the gas-fired power station moratorium because it drives up the price of electricity. Even the Labour dominated Select Committee on Trade and Industry stated:
"We do not believe that this moratorium on Section 36 consents for new power stations will assist the coal industry in the short term … We look to the Government to ensure that the moratorium is lifted as soon as is practicable.".
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Can the noble Lord, Lord McIntosh, give the House some guidance on the timetable for lifting the moratorium?
I want to address other issues with regard to the industry. First, there is the question of the import of French electricity via the French inter connector. According to figures from the RJB mining company, that displaces 7 million tonnes of coal each year. It is astonishing that the Government continue to allow these imports from a country which has failed to liberalise its electricity market as required by EU law.
The second issue that I want to address was brought to my attention by Scottish Coal. It is the plight of Scottish coal being transported to English power stations. According to Scottish Coal, existing contracted traffic flows suffer routinely a 30 per cent reduction in rail freight availability, putting pressure on cash flows and potentially putting Scottish Coal products out of business. Currently, Scottish Coal is short of 10 to 15 trains a week, thus costing the company one-third of a million pounds while RJB is short of 50 trains a week, costing the company £1.5 million. Coal Pro has recently launched a complaint and it is hoped that if the Office of the Rail Regulator can tackle the complaint it will be given every support by the Government.
In summary, we on these Benches recognise that times are very difficult for the coal industry. However, we do not believe in state aid for coal and we wish the unfair subsidy system carried out by France, Spain and Germany to be stopped. We believe that the Government's decision to impose higher emission limits than those agreed at Kyoto will cause serious problems for the industry. We favour more gas-fired power stations being built and we strongly favour an end to the moratorium on gas-fired power stations. I have put to the noble Lord, Lord McIntosh, some questions, and I should be grateful for a reply. My final question is: when can we expect the reform of the electricity pool system, which could be of help to the industry? I look forward to the Minister's response.
7 p.m.
Lord McIntosh of Haringey: My Lords, the Government are grateful to all noble Lords who have taken part in this well-informed debate. To have a debate on coal which is well informed and includes a noble Lord from Eton and one from Winchester is, I suppose, not bad. Above all, I congratulate my noble friend Lord Hardy on introducing the debate. He posed me 12 questions to which I shall try to reply as I go along. I shall try to sum up at the end if I can and if I need to, but I have been asked literally dozens of questions. I shall do my best, as I always do, but I shall write to noble Lords whose questions I fail to answer.
The key to understanding the fate of the coal industry and the potential future of the coal industry is to look at it in the context of energy policy as a whole. The key to energy policy is that the previous government did not have one. Indeed, they prided themselves on not having one and on saying that the market unrestricted should govern the future of

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different fuels. The trouble with that argument was that changes in the relative prices of different fuels at various times—year by year, and sometimes even month by month—made forward planning of energy policy difficult if not impossible. Certainly, the attempt to rely only on prices at any one time as the determinant of the constitution of energy and in particular of electricity generation was a nonsense.
When representatives of the coal industry came to us in 1997 and expressed their concerns about distortions in the energy market, which they said were killing coal, they asked for "fairness, not favours", which I believe is a proper position from which to start. In our response to them in the White Paper on energy policy of October 1998, we set out objectives for the coal industry which deserve to be repeated and emphasised here. We said that the objective should be that the supply of fuel—in particular, for electricity generation—should be secure, diverse and sustainable. The combination of those three criteria should enable fuel to be obtained at competitive prices.
Looking at those objectives, it is clear that that is not in itself a proper platform for the salvation of the coal industry, but it is one on which we can see how a coal industry may survive and how distortions which have damaged the coal industry in the past could be got rid of. Everything that noble Lords have said about the decline of coal and the risks of gas is true. It is certainly the case that the coal industry has declined in the way described; it is true also that in the pits which have survived and in other pits which have not been finally decommissioned, there are long-term reserves of coal under this country. In addition, it is true that the reserves of gas available to this country are limited in their duration. In response to my noble friend Lord Hardy, it is true that Britain will be expected to be a net importer of gas by 2010. We shall have to become used to the right way of describing such figures. I believe that a century ago one said "oughty-one" and "oughty-two"; I do not know whether that is worth reviving.
In response to a direct question from my noble friend Lord Hardy, it is true also that Europe will be a net importer of gas in the not-very-distant future. In the interests of security, diversity and sustainability, we must consider the long-term future of all the fuel sources which could contribute in particular to electricity generation. I shall return at the end of my remarks to our reform programme for energy generation if I have not covered it in the rest of my speech.
It makes common sense to ensure diversity of energy supply. An acceptable level of diversity is part of energy policy, to make it flexible to be able to respond to unexpected events or situations. The contribution of coal to power generation has declined; in 1990, it provided 72 per cent of electricity generation; in 1998, it was only 30 per cent. We do not have a fixed view on what the energy mix should be, or on the proportions of different fuels needed to guarantee security of supply and diversity, but we do not want to see our
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capacity to produce electricity competitively from coal being eroded by distortions in the market. That is why I talk so often about energy and not only about coal.
That is also why we announced a programme to reform the electricity markets so that all fuels, including coal, could compete fairly. I agree not only with my noble friend Lord Hardy, as I have said, but also with the noble Lord, Lord Ezra, that the prospect of substantial decommissioning of nuclear power stations without their replacement will affect us in the near future.
The White Paper identified lack of competition among generators as one of the distortions of the electricity market. My noble friend Lord Hardy asked about the price paid for the divestment of Ferrybridge C, Fiddlers Ferry and Drax—but I forget the first one he mentioned. That divestment was part of our policy set out in the White Paper to remove distortions in electricity generation. I have no evidence that the high price is such as to encourage the import of coal, but certainly the fact of divestment and the removal of distortions cannot be bad for coal.
The electricity market is now open to competition at all levels. Separation of supply and distribution in the electricity market will be achieved through market forces and regulation, and formalised through legislation which we intend to introduce as soon as possible.
I was asked by my noble friend Lord Dormand and the noble Lord, Lord Ezra, about electricity trading arrangements and, in particular, about the Electricity Trading Pool. We published a blueprint for those on 21st October. The utilities Bill was mentioned in the Queen's Speech; it will be brought forward as soon as possible and it is our intention that the new electricity trading arrangements will be introduced before the end of the year.
I was asked by a number of noble Lords about the stricter gas consents policy, a phrase I prefer to the term "moratorium" used by the noble Lord, Lord Northbrook, because there have been more approvals than refusals. Refusals for gas-fired plants are painful decisions to take because applications for gas-fired plants in many parts of the country are greatly supported by local people. I remember taking part in a debate on Raglan Bay in Wales last year, where the pressure from south Wales—which does not have an excess of electricity generation—for approval for the combined heat and power neighbourhood heating plant was strong. Indeed, Baglan Bay has been approved. However, I emphasise to my noble friend Lord Dormand that 4 gigawatts of capacity have been refused in the 14 refusals, which is not insignificant. It is equal to half of the whole output of RJB Mining and it constitutes significant support for the coal industry. I note what the noble Lord, Lord Northbrook, said officially on behalf of the Conservative Party: that the Conservative Party is against those stricter consents and, therefore, to that extent is against this support for coal.
With regard to how long the policy will continue, the White Paper made it clear that the policy will be relaxed as soon as the Government are advised by the

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director-general of electricity supply that the reform programme has been undertaken and that distortions in the market have been removed. That does not mean completing every aspect of the programme but, certainly, we must have the new electricity trading arrangements in force before the consents policy can be relaxed. That does not enable me to give a strict calendar date.
I was asked by many noble Lords about subsidised coal and unfairly priced coal imports. Of course, it is true that Germany in particular, Spain and, to a lesser extent, France heavily subsidise their coal industries. Historically, that goes back to the European Coal and Steel Community, which pre-dates the European Community. The levels of subsidy which they give to their coal industries are permitted by the agreements of the European Coal and Steel Community and result from the fact that they were already at a high level from the base date of 1993. As has been pointed out, at that time we were subsidising our coal industry by only £12 million but those countries were able to give subsidies of £3 billion or more, which is still a reduction of the 1993 figure.
The noble Lord, Lord Lucas, believed that there was nothing to be done about that and the noble Lord, Lord Northbrook, asked me about progress on the matter. There has been some progress; for example, with regard to graded anthracite, we have complained about the unfair practices of two subsidised German anthracite producers. In 1998, the Commission requested repayment of aid by the German companies involved. With regard to Spain, our complaint to the Commission has resulted in confirmation that any UK exports to Spanish power stations will be eligible for the same subsidy as that paid for Spanish coal.
I recognise that in many respects we are constrained by our international obligations. The current ECSC agreement comes to an end in 2002. We shall have to negotiate for the most favourable replacement—if there is to be a replacement—of that agreement when the time comes. Again, with regard to the inter connector with France, that is a treaty obligation and there is nothing that we can do about it in the short term. However, so far as concerns the electricity industry in France, we are certainly pursuing the anti-competitive practices which enable France to export subsidised electricity to this country.
I was asked in particular about Polish coal. Noble Lords will want to know that Helen Liddell, the energy Minister, has recently met the Polish energy Minister. We understand that the coal industry will lodge an anti-dumping or anti-subsidy complaint with the European Commission concerning Polish coal imports. I do not believe that it is appropriate for me to intervene in their negotiations on accession to the European Union, but I cannot imagine that this is a matter which will be ignored when those discussions take place.
The important point I make about German, French and Spanish subsidies is that there is no German, French or Spanish coal imported into this country. Even if the subsidies did not exist, there would still be
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little chance of United Kingdom coal being exported to those countries in competition with unsubsidised coal from other parts of the world. Theoretically, of course, that is enormously important but in practical terms it does not make very much difference to the UK coal industry.
Lord Hardy of Wath: My Lords, perhaps my noble friend will allow me to intervene. He will no doubt accept that if those countries did not subsidise their coal industries, the opportunity for those exporting to the United Kingdom would be diverted to the areas where imports are far more competitive than the expensive coal produced in those countries.
Lord McIntosh of Haringey: My Lords, that argument depends on an assumption of limited availability of coal from the rest of the world. I am afraid that I do not believe that to be the case. If I am wrong, I shall write to my noble friend. To put the matter into context, less than 5 per cent of UK coal imports are priced unfairly. We simply have to deal as best we can in the real world with the problem of cheaper coal from other countries which is not unfairly subsidised. When my noble friend Lord Varley challenges me to put up or shut up—in other words, to protect the coal industry unequivocally or to abandon it to its fate—I have to say to him, with due respect to his experience in government, that things do not work like that. We do the best that we can. With regard to energy policy, I have said that it is designed to produce a rational economic policy for energy and for electricity generation. One of the benefits of that should, and we hope will, be to benefit the British mining industry.
Lord Varley: My Lords, I shall remind my noble friend of what he has just said when the industry has gone. As sure as night follows day, unless something is done pretty quickly, this industry will go.
Lord McIntosh of Haringey: My Lords, I have spent a quarter of an hour describing what we have been doing and what we are doing. I know that I shall not satisfy my noble friend, but I must continue as best as I can to describe the facts as the Government see them. Those include having a rational energy policy in which coal continues to play a part. It is our view that with the objectives of security, diversity and sustainability, coal should continue to play a significant part in British energy policy.
My noble friend Lord Varley and a number of other noble Lords expressed the view that the support for coalfield communities was inadequate. My noble friend was wrong to say that the task force has only £10 million. In fact, it has £53 million. However, I acknowledge that, in view of the devastation which has been caused in coalfield communities by the decline in the mining industry, anything which we do for those areas will be inadequate. I could give your Lordships a list of a whole range of initiatives which have been taken, but my noble friend Lord Varley would tell me that they have been "put up" by civil

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servants. The initiatives are all valuable, but I am not claiming that coalfield communities are what they were when the bulk of the population was in well-paid work in the mining industry. That cannot be so.
I was asked about the UK mining machinery industry. In the time available I can say only that we acknowledge and welcome the fact that the UK mining engineering industry is exercising its skills effectively, not only in sales to this country but particularly in exports. We are doing everything that we can to help that industry to diversify into overseas markets. We have been supporting work by the Association of British Mining Equipment Companies, and the Indo-British Coal Forum is helping us to export British mining equipment to India. There are many other worthwhile initiatives which demonstrate our support for mining engineering.
In particular, I was asked about cleaner coal technology. We value that in its own right. My answer to the noble Lord, Lord Northbrook, is that the Kyoto agreement is not a threat to the coal industry. The issue of cleaner coal technology forms an insignificant part of that agreement, and I do not believe that the noble Lord is right in saying that we are exceeding our obligations under Kyoto. However, I agree entirely with my noble friend Lord Dormand and the noble Lord, Lord Ezra, that cleaner coal technology is an important issue. We set out in Energy Paper 67 this year detailed plans for research and development, technology transfer and export promotion. We are making available £12 million for cleaner coal R&D over three years and we expect there to be more as part of the Comprehensive Spending Review. We are also undertaking more feasibility work on underground coal gasification and accessing coal-bed methane. There is no work that I know of at the moment on liquefaction but I shall write to my noble friend on that point.
We have done a study on the demonstration project for which the noble Lord, Lord Ezra, asked. It concluded that it would not be justified in terms of a direct grant or any other kind of levy. We shall look at that again within the next three years and I shall be glad to correspond with the noble Lord on that issue.
I want to respond to the points made, in particular by my noble friend Lord Varley, about coal pensions. Indeed, there are two funds. The major fund had a 20 per cent uplift in 1997. It is true also that there were very serious deficits in the earlier years after privatisation which were made up by the Treasury. But that was the agreement at that time and it is certainly true that there is a very substantial surplus at this time.
I know that mining communities have been offended by the idea that we should be hypothecating some of that Treasury money to put in to the health plans for the mining industry for dealing with vibration white finger and pneumoconiosis. I understand the offence that caused, but it speeded up the payments and has done some good. I do not believe that that is very different from my noble friend Lord Varley asking me to divert the money from the Treasury into regeneration of the coalfields. It is still hypothecation.
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My noble friend asked me about concessionary fuel. I am sorry that I cannot answer. As we speak, DTI Ministers are taking decisions on the award of the tender. We shall make an announcement as soon as possible.
I hope that I have shown that, in seeking to reestablish rational energy policies as a whole, we are doing everything that we can to ensure that the coal industry continues to play a part in fuel and energy policy in this country to the benefit of the coal industry and of the country.
7.22 p.m.
Lord Hardy of Wath: My Lords, it has been an extremely interesting debate and I am grateful to those noble Lords who have contributed to it and contributed on the basis of considerable knowledge and experience. The noble Lord, Lord Haslam, recognised the need for high productivity collieries during his tenure after the strike.
I certainly hope too that the Government will pay heed to the informed contribution of the noble Lord, Lord Ezra, and in particular to the two proposals which he made. They are modest but they could be of enormous significance.
I am grateful to my noble friend Lord Dormand, with his knowledge of the North East. He referred to the Ellington Colliery. My noble friend will be aware that the last colliery in Durham was closed with, I believe, 40 years of reserves. I hope his contribution will also receive attention.
My noble friend raised the question of gas consents. The Minister referred to that in his winding-up speech. The fact remains that during the last period of Conservative administration, 16 consents were given while in a similar period under the present Government, 32 consents have been granted.
I do not wish to be discourteous to the noble Lord, Lord Northbrook, but I prefer the Etonian to the Wykehamist contribution this afternoon. If we were to burn even more gas without limit, our stocks would not last until 2010. My noble friend was being extremely optimistic in that assessment.
The noble Lord, Lord Lucas, made an important point that strategic consideration cannot and should not be ignored. I agree with the assessment made by my noble friend Lord Varley. We are reaching the point at which action must be taken; otherwise there will be no deep mine industry in these islands. If that is the case, no matter how many initiatives the Government take to assist our superb mining engineering industry, that will go down the drain too. That is not a conclusion which anyone with any sense would wish to occur.
My Lords, I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Student Loan Scheme
7.24 p.m.
Baroness Youngrose to ask Her Majesty's Government whether they will ensure that those who have studied at British schools elsewhere in the European Union can gain access to the student loan scheme.
The noble Baroness said: My Lords, I thank all those who are to take part in this short debate this evening. I expect we all agree that it is at rather an unsociable hour and on rather an unsociable day.
I have now taken an interest in the British schools in the European Union for a very long time. I started, first, when I was a Minister at the DES, as it was then called, in 1979 doing the job that the noble Baroness, Lady Blackstone., does today. On a number of occasions I have raised various matters of concern to those schools.
I should say at the outset that this is in no way a party political issue. I have always received support from all sides of the House and I hope that that will be so again this evening.
Perhaps I may briefly say something about the British schools. Those schools belong to what is known as COBISEC, a rather curious acronym but it covers them all. There are 36 British schools. They educate some 12,000 students in the European Union, but they are unusual in that they are British Schools in the European Union. The national curriculum is taught throughout. the schools, which usually cater for pupils aged from five to 18. Pupils take GCSEs and A-levels. The schools are inspected by Ofsted. They take great trouble to keep up with all educational developments in the UK and receive all the essential publications and materials from the DfEE.
They are independent and charge fees. Of course, they have to do that because they receive no help from the British Government, nor from any other source. Although I have tried on many occasions to secure some financial help for poorer students at those schools, I have not yet been successful.
I believe that the schools make a huge contribution, not only to education, important though that is; their contribution is much wider. As I have heard myself say many times, and, indeed, heard government Ministers say many times, the United Kingdom is part of the wider European open market. Of course, as a result, many British businessmen and women must, of necessity, live in the EU. It is a part of their job and, in most cases, it is not an option. They are in the EU to work and not there for a holiday.
Not surprisingly, under those circumstances, many parents want their children to be educated in a British school and they want that education to be unbroken; that is, the children can go to the British school and can return to a maintained school in the UK without more than the normal difficulties of changing school which they would experience in this country—hence the great value of the British schools. Some children attend for
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as little as a year or for an even shorter period. Others are educated at such schools throughout their whole school lives.
Therefore, the British schools make a huge educational contribution to our effort in Europe. Indirectly they make a huge contribution to those people who are exporters and who are really involved in the business of developing the large open market which is the European Union.
The subject of this Unstarred Question is a narrow point but it is extremely important. Many pupils from those British schools qualify for entrance to British universities. In fact, a very high proportion go on to further or higher education. But they are not automatically eligible, as would be British students in the UK, for loans from the Student Loans Company. That has had the effect, which I am sure is not intended, that it is much more difficult for the poorer students than for the better-off students. After all, if your father is the chairman of a major company in Europe, you are in a very different position from if you are the son or daughter of a teacher. The Student Loans Company arrangements are, as I am sure the Minister knows far better than I, more favourable than loans from commercial banks. With the added costs of fees at universities, the ability to have a loan from the Student Loans Company makes a great deal of difference.
As I am sure the noble Baroness knows, the Chairman of COBISEC has been in correspondence with the Secretary of State, Mr Blunkett, over the past months on that matter. Perhaps I may quote from the Secretary of State's letter dated 13th October 1999.
"I understand your concern arises from the requirement that, in order to be eligible for student support, students should have been ordinarily resident in the United Kingdom for the three years preceding the start of their course. You will appreciate that residence criteria have been set so that support reaches those who can be said to have a residential connection with the UK. However, we do recognise that some students cannot meet this requirement because they have been living abroad on a temporary basis. Local Education Authorities are therefore able to waive the three year ordinary residence requirement if they deem that an applicant's absence is due to temporary employment abroad".
He goes on to say:
"We believe this is a fair approach, and we do not have any plans to change it".
The difficulty—I hope the noble Baroness understands that there is a difficulty—is that it is unfair. The regulations are applied, I am sorry to say, rather haphazardly and inconsistently in local education authorities. In effect, for a student leaving school, it is a lottery. I am sure that that is not the intention, but that is the effect.
This evening I do not want to be entirely negative because the issue is far too important. I am confident that it is an issue that could be solved without too much difficulty. The COBISEC schools have made a number of suggestions, but they would really like a straightforward and clear system that is intelligible to the students involved as well as to the local education authorities.

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We have raised, first, the issue that it is government policy to place no restrictions at all on the movement of people for employment purposes in the EU. Why not apply the same principle to education? Secondly, why not have a consistent application of regulations in every local education authority? It seems to us that the Secretary of State could set consistent criteria which would be uniformly applied throughout the UK. That would make all the difference.
Thirdly, it would be helpful if all applications could be dealt with by one central unit, similar to that set up to deal with the payment of university fees by EU students. We have considered that one criterion might be a letter or a contract from a parent's employer which could be regarded as sufficient evidence of the temporary character of employment. Alternatively, a right to a loan could be linked to domicile rather than to residence, although that is not such an easy criterion. I understand that the Inland Revenue consider British citizens born in the UK to be domiciled here for life for inheritance tax purposes unless they can prove that they have a new domicile, which is extremely difficult.
It may be that none of those suggestions is quite right, but they are meant to be constructive. I hope that the noble Baroness will be able to tell us that she is able to move on this issue. I feel that we are handicapping a number of young people who could come to this country to qualify at our universities. They could make a contribution to this country or to the EU, or anywhere else in the world, in future but at the moment some of them will find it difficult to get to a British university, despite having the correct qualifications, simply because they happen to reside in Europe.
We simply ask for a clear, straightforward system. I hope that the Minister will look favourably on that. If she cannot give a positive answer this evening perhaps she will take the matter away and return with one in the not too distant future.
7.34 p.m.
Baroness Hooper: My Lords, I believe that the British education system has a fine reputation throughout the world wherever it exists. British schools are well recognised. We should do all that we can to encourage and nurture that reputation. I congratulate British schools on the excellent job they carry out throughout Europe. I am happy that I have had the opportunity of visiting some of them, not when I was a Member of the European Parliament, but more recently as a Member of your Lordships' House.
Tonight we are speaking particularly of the 36 COBISEC schools in the European Union. In that respect, I also congratulate my noble friend Lady Young on championing the COBISEC British schools on a number of occasions and on a variety of issues, not least, as I remember well, during discussion on what became the 1988 Education Reform Act. In many ways the COBISEC schools have been joined and integrated into the British system or at least they have been able to co-ordinate their activities with the
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British curriculum. Those schools should be further encouraged to continue that process by allowing the pupils to progress from British schools abroad to British universities. I believe that the input of such students in our British universities would be beneficial. For those, like myself, who wish to see a Europe which understands itself better, the value of that contribution cannot be underestimated.
The subject of the debate is a technical issue. It is not a problem of principle because, as my noble friend said, successive government policies have encouraged the free movement of people for employment purposes throughout the EU. Therefore, it follows that people who, together with their families, have to move should have facilities for the education of their families.
In respect of university fees, I would be glad of clarification from the Minister. I had understood that there was full reciprocity for university fees between European countries so that university students could move from one country to another and expect to receive from their governments the same assistance and support. That has always been something of a problem for us as we pay not only fees but also accommodation costs to our students. That is not so in all European countries, and it puts us at a disadvantage. An Italian student coming to study at a British university would have far more financial support than a British student studying at an Italian university. Although the rights are reciprocal, they are based on what a student receives in each country and in Italy a student would receive only payment of fees and nothing towards accommodation. In that respect I do not fully understand why student loans should not be made available to students coming from other parts of the European Union, particularly when they are emerging from British schools and have had the benefit of a British school curriculum.
My noble friend Lady Young covered many of the issues relating to this matter and in particular emphasised the unfairness of the system as it applies here. As I said, it seems to be a technical issue rather than a matter of principle. It is the unfairness of the way the system is interpreted which has given rise to the discussion this evening. I urge the Minister to support the case that has been made and look forward with interest to what she has to say in reply.
7.40 p.m.
Baroness Elles: My Lords, first, I have an interest to declare in that I have a British grandson at school in Brussels who is hoping next year to go to a British university, if he is accepted, and also no doubt, following this debate or further discussions, hoping for the availability of a student loan.
My noble friend Lady Young gave a detailed picture of the background of the subject of the debate tonight. It is clear that with regard to student loans a fairly fluid position seems to obtain. According to which university in the UK one desires to go—for instance, Sussex University—a student loan may or may not be available. It depends on the interpretation of the regulations by the local authority.

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I contacted Westminster City Council's education department asking for information and was told that student loans are sometimes given to British students who have been educated on the Continent and come back to enter an English university—in this case it would be the University of London, King's College, or one of the other colleges of the university—but it said that certain criteria are used to judge whether the student will be given the loan, and those criteria do not necessarily apply in other parts of the country. That is the difficulty. My noble friend Lady Young was right to ask that there be some sort of regular standard throughout the Gauntry whereby if regulations exist but need not be strictly adhered to, the same criteria are used to make that judgment. That is where the prime difficulty arises.
As I understand it, there is a three-year residence requirement immediately prior to going to a British university, regardless of nationality. Someone from South America, Canada or even Mongolia may be eligible for a student loan while at university in Britain, but someone born and bred in London who has been living since the age of, say, 13 outside Britain with his or her parents would not be eligible for a loan unless a specific local authority decided to help out in a particular field.
Children receiving education under the British system in another member state of the EU will clearly benefit more from the British university system than from going on to a foreign university, with all its different ways and standards. A French university programme, for example, is different from that in a British university. Clearly someone who benefited from a British school in an EU member state and who was coming back to Britain would hope to benefit from all that other British students have been able to benefit from, including a student loan.
Other countries, of course, have other regulations. For instance, France—ever keen to keep its nationals in a close relationship with their home country—enables the young to have free or subsidised education at French universities, regardless of the length of time they lived outside France. In fact, they may never have been in France before but on coming to a French university they are given the same benefits as any other French student. One would hope, of course, as my noble friend Lady Young said, that we eventually reach that situation in this country.
Since the introduction of student loans in the United Kingdom, there seems to be some variation in the way the rules are applied. Apparently some councils grant loans to students whose parents are working and living abroad on temporary contracts; for example, those who do so for not more than five years and who remain closely connected with the United Kingdom by still having a home here This point was raised by those I spoke to at Westminster City Council. If someone keeps a home in this country, though they are not living here and for the time being do not pay United Kingdom tax, the fact of having a home here would entitle the child to come back to a British university and have the benefit of a student loan. It is not a happy situation for a new Labour government to encourage
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those who have homes all over the world, including the United Kingdom, who are working elsewhere in the Community to receive the benefit of student loans for their children while, as my noble friend Lady Young pointed out, someone who is not well off and has a modest post in France or Germany would not be eligible because they could not afford to keep a home in this country while working abroad.
The measures seem to vary according to the interpretation placed on them by individual local education authorities. That is the problem. How is it possible to persuade a local authority to interpret the rules in a way which will apply equally and fairly to those citizens who come back from other parts of the world? There are clearly different methods of dealing with these arrangements. Can the noble Baroness, Lady Blackstone, say what consideration has been given to the plight of those not residing in the United Kingdom immediately prior to the envisaged date of entry to university, who will have lived here for many years before going abroad and who may also have the intention to return after their employment? What chance will there be for those students?
The three years prior to university is one of the most difficult times for a child. The parents are abroad, and they come back to the United Kingdom to find all those who came over just three years before and who are living in the United Kingdom have the benefit of student loans, whereas they, who have been working abroad either for the United Kingdom or for its benefit, do not have that opportunity for their children.
No doubt there are other alternatives. But whatever system may be agreed, it is arguably simpler to waive the residence criteria which local authorities apply in different ways. I shall be grateful if the noble Baroness, Lady Blackstone, will give consideration to that and to the other proposals made by my noble friend.
7.48 p.m.
Lord Tope: My Lords, I too begin by thanking the noble Baroness, Lady Young, for introducing this debate. She said quite rightly it is not in any sense a party political issue and for once I am delighted to be on the same side and agree with everything she said. She also described the point as "narrow", and that may be right. But, as she also said, it is an extremely important point for a considerable number of students and their parents. It is also a point which should be capable of resolution.
The noble Baroness spoke of her many years of involvement with this subject. I believe we all acknowledge that fact and pay tribute to her. My noble friend Lord Sharman has also had many years of involvement. Indeed, I believe that he was co-founder of COBISEC back in the 1970s. He has asked me to pass on his apologies to the House tonight. Unfortunately, he has to be out of the country, otherwise he would certainly have taken part in this debate and would have spoken with very considerable personal knowledge of the issue, which I do not claim to have.

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The noble Baroness, Lady Young, described the work of the British schools. I believe she rightly said that there are 12,000 pupils in the 36 schools affiliated to COBISEC. By no means are all of those pupils the children of well-paid, senior business executives. Of course, some may be, but many are not. This issue is of great importance to them.
The essential difficulty is the fact that the current arrangements are discretionary and that local education authorities apply the regulations and interpret their discretion haphazardly and inconsistently—or, let us just say, differently. I asked my own LEA today what its practice was. After 25 years of membership, I must confess that I did not know. My authority confirmed all that we have heard today; namely, that it applies the criteria as best it can and that it is aware that other LEAs, with equal good faith, do it differently. Those concerned recognise that it is inconsistent and unfair and would welcome clearer guidance and criteria against which to work.
The noble Baroness, Lady Young, quoted the letter from the Secretary of State of 13th October to the chairman of COBISEC. I should like to do the same because, in that letter, the Secretary of State said that LEAs are able to waive the ordinary three-year residence requirement. He also said that DfEE officials were then in the process of reviewing the way that they advise LEAs on the interpretation of the residence requirements and,
"in particular the temporary absence provisions".
I have looked through the Eligibility Guide for Mortgage Style Student Loans 1999/2000 and could not help noticing a remark made during Question Time on 6th July by a noble Lord on the Government side. He said that he thought that anyone eligible for a student loan ought to be capable of understanding the regulations. I must say that the Minister disagreed with him on that occasion; and now I know why. Having read through the guide, it seemed to me more suitable for a PhD thesis than for a first degree.
However, the regulations seem to show that the state of the law on these temporary absence provisions is alarmingly flexible and that to ask the relevant authorities to judge each case on its own particular facts gives them an undue degree of discretion. As regards temporary residence abroad, students and their parents have no clear guidance as to which pattern of behaviour is likely to be acceptable and which is not. That cannot be satisfactory.
As I said, the Secretary of State said in his letter of 13th October that officials were reviewing the advice to LEAs. I hope that the Minister will tell us the results of that review tonight, what advice, if any, will now be given to LEAs, and, indeed, whether it is to be varied. If that review, which I imagine to be relatively straightforward, is not yet completed, can the noble Baroness tell us when it will be and what is delaying the process? As we have said, this is an important issue which needs to be resolved.
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I cannot fail to use the opportunity of this debate to widen the discussion slightly. Your Lordships will be very aware of the commitment from these Benches to make the European Union a success. Free movement of labour has always been one of the central aims of the Union. But with so many different regulations and charges being applied to the sons and daughters of European citizens, it is clear that free movement of labour is seriously impeded. For example, a business executive wishing to develop his or her company's work in the European Union may have decided that it is important to live and work on the spot in Brussels, Hamburg or Madrid. Indeed, he or she may wish to encourage other company employees to do likewise. However, if those with children have good reason to believe that doing so may discourage their children from attending a British university, that is a powerful reason to consider staying put.
The plethora of different and conflicting regulations and charges in different EU countries is an impediment to the free movement of labour. The Liberal Democrats would like to see this Government open negotiations with partner states to establish common standards in such regulations and charges.
As regard this particular issue, I must say that this ad hoc treatment is part and parcel of the general ad hoc-ery—if that is the correct word—in the students' support system. We would argue for a simple system to be available to every British subject wherever resident. We want a single body for all students, including mature student. UCAS could well be given an enhanced responsibility for this by taking over the role of the Student Loans Company and the LEAs. That would solve many problems, including the one we are debating tonight.
Pending that, perhaps I may press the Government at least to consider establishing a central unit to deal with this particular issue. Such a unit could deal with British students who are temporarily resident abroad and enable them to apply for their student loan in that way. Indeed, that would be a similar arrangement to the process that I believe now applies for the remission of student tuition fees. It is not reasonable to expect students living abroad to negotiate with a local authority in the United Kingdom with which they may have only a distant connection.
I cannot conclude my remarks without saying a few words about LEAs. I said earlier that my LEA confirmed that the situation is as has been described tonight; in other words, haphazard at best and open to different interpretation in different areas. Most importantly, that is unfair to the students concerned. It is also unfair to the LEAs or, more particularly, to the staff. As I demonstrated by my own ignorance, it is not the members who deal with such issues; it is the staff who have to do so. They encounter students who describe the circumstances of their friends and colleagues who happen to be dealing with another LEA, which is interpreting the regulations in a different way. That is also unfair.
Perhaps I may press the Government, first, to tell us the results of the review or when we will have them; and secondly, to agree to establish a central unit to deal

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with these applications as a matter of urgency. All those who have spoken are looking forward to the Minister's reply. I am sure she will acknowledge that there is a problem here, although I am sure she already knew about it. As I said at the beginning of my remarks, it is a problem that is capable of solution and one that needs to be solved. It is clear that the present arrangements are not working well. I hope that the noble Baroness will tell us what she is going to do about it.
7.57 p.m.
Baroness Seccombe: My Lords, it is good to have a unanimous view on the problem before the House. I hope that the Minister will he able to share our views. I am grateful to my noble friend Lady Young for raising the matter this evening, as it certainly needs readdressing. I am also grateful for the support of my noble friends Lady Elles and Lady Hooper.
As my noble friend said, there are 12,000 pupils who are vulnerable and subject to arbitrary discrimination. Today, as we prepare to enter the 21st century, we are witnessing mobility of people that would have been unimaginable only 25 years ago. Families move around the European Union particularly but also around the world as the global market takes hold. I can only see this escalating in future years.
My noble friend Lady Young has a particular point concerning British students in British schools in Europe. It is simply this: access to student loans. The Council of British Independent Schools in the European Community is a respected, sizeable organisation with a membership of 36 schools teaching those 12,000 young people and children. These British schools are in 11 European countries. The students are taught in English by qualified teachers who are eligible for the teachers' superannuation scheme and also eligible to qualify as Ofsted inspectors.
Given these points, if I were a parent sent overseas I would feel that my children would be following a British education abroad. I would also expect my child to sit British examinations and to have the opportunity to follow on to a British university with the benefits that go with that. However, as my noble friend Lady Elles said, that does not happen automatically. Depending on the local education authority there may be access to the student loan scheme for some but the applications of others may be rejected.
We now have a system of loans, not grants as in the past. Therefore the cost to the Government must be far less. Perhaps the Minister can tell us the financial commitment involved. Indeed it would be strange to say the least if the Government recognised European students going to Scottish universities by giving them preferential treatment over fees while at the same time denied British students access to the loan scheme. If the present situation continues, I am sure that many parents will take this into account before accepting a position abroad, especially if they have children about to enter the last years of school. The letter that has been mentioned that was sent by the Secretary of State to the chairman of COBISEC in October leads to uncertainty and ambiguity.
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Young people seeking access to the scheme live abroad because their parents do, not because they choose to do so. Therefore they cannot fulfil the residence requirement. In the latter part of the letter the Government state that they wish to ensure that temporary absence provisions are applied consistently and are understood. I hope that the Minister will be able to tell the House the result of the review of advice to local education authorities and what is the current advice on the residence requirements and the temporary absence provisions.
Surely it would be sensible if all the applications were dealt with by one body so that consistency and clarity are obvious. Residence and domicile often cause problems to people. I was fascinated to hear that British citizens born in the UK are deemed to be domiciled here for life for inheritance tax purposes unless they can prove to the contrary. Perhaps therefore access to a loan should be linked to domicile and not residence as my noble friend has suggested.
In summary, there is a problem. One student is lucky; another in identical circumstances is not. The Government surely cannot condone that situation or allow it to continue. I hope that the Minister will agree that the time has arrived when this matter should be looked at again.
Finally, I thank my noble friend for the clear and unambiguous way in which she has presented her case.
8.2 p.m.
The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, I, too, am grateful to the noble Baroness, Lady Young. for raising this issue. I very much agree with all the speakers in this debate that this is in no sense a party political issue. As I think that the noble Baroness, Lady Hooper, said, it is a technical matter which concerns eligibility for the student loan scheme. I also recognise the contribution made by British schools in the European Union. Of course, they educate not just British students but also a number of students from EU countries and from further afield.
The student support system, including student loans, provides help with the costs of higher education for those with a relevant residential connection with the UK. This criterion of residence, rather than nationality, has been the principle of successive governments, including those under which the noble Baroness, Lady Young, served. I believe that she has already indicated that. Consecutive governments have taken the view that it is right that the support provided by the taxpayer should be targeted at those who have a history of residence in the United Kingdom. Where students at British schools in the EU can meet the residence requirement and are on a designated course of higher education, they will be eligible for student support.
I agree with the noble Baroness, Lady Hooper, that such students make a valuable contribution to university life in the UK through their rather diverse and sometimes interesting experiences. However, perhaps I can explain to the noble Baroness why I felt

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that she may have been a little confused. As regards tuition fees, European Union students in whichever country they are studying are treated in exactly the same way as students in that country. That would apply, for example, to a British student in Italy. If tuition fees are charged in Italy—as they are in some universities—the student would pay on the same basis as an Italian student.
However, student maintenance is a matter for each individual country. There is no reciprocity there. If, for example, a British student is studying in Sweden or the Netherlands where there are loan schemes, he or she is not eligible. Similarly European Union students studying in the UK are not eligible either. A quite different regime applies for tuition costs as opposed to loans.
The noble Baroness, Lady Young, may find it helpful if I say a little more about the residence conditions that prospective students have to meet before they can be eligible for student support. I hope that she will forgive me if I recount a little history with which she may be familiar but which may not be familiar to all the contributors to the debate.
The 1958 Anderson report, which provided the foundation for all subsequent systems of student support, enshrined three principles relating to residence. First, a student should be ordinarily resident in the UK. I shall say a little more about what that means in a moment. Secondly, the student should not have been ordinarily resident solely for the purpose of receiving full-time education. Thirdly, there should be some provision to cover temporary absence from the country. These principles continue to apply today.
I give a little more history. The Anderson report did not specifically recommend a minimum term of residence, although a three-year residence requirement was introduced in the 1962 Education Act. Inevitably, there are good arguments for a shorter or longer minimum period. This is a question of balance but we, like many previous governments, believe that the requirement to be resident in the UK for three years is fair and clearly demonstrates a substantial residential connection with the UK.
The term "ordinarily resident" was defined in this House several years ago. Briefly, the judgment stated that local education authorities should ask themselves whether an applicant for support has shown that he or she has lawfully, habitually and normally resided in the British Islands from choice and for a settled purpose. An exception is made where this condition cannot be satisfied because the applicant or his or her parents have been temporarily employed or absent abroad.
Local education authorities are responsible for determining whether an individual student meets this three-year residence requirement. Their decisions are based on information which is supplied by the student. It is for the student to satisfy the LEA that he or she was resident within the UK throughout the three years immediately preceding the start of the academic year in which the course of higher education began.
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Local education authorities may also determine that an applicant can qualify for support where he or she has not been ordinarily resident in this way because of temporary employment or absence abroad. The parents of some students attending British schools abroad may, indeed, meet the temporary absence provisions—as I think that the noble Baroness, Lady Young, quite rightly pointed out—and their children will then be eligible for the full range of student support, including, of course, student loans.
The word "temporary" is not defined in regulations. A statutory definition of the term could not reflect the range of circumstances under which students and their families may find themselves temporarily abroad. It would end up being more restrictive and would not work in favour of students in this category. We believe that the fairest approach is to allow LEAs to judge each case on its individual merit.
A number of speakers—the noble Lord, Lord Tope, and the noble Baronesses, Lady Elles and Lady Young—have suggested that LEAs are indiscriminate and inconsistent. That is not our experience. LEAs are more constructive in the way in which they approach this problem than has been suggested; they use their discretion very sensibly.
Nevertheless, to help achieve consistency between LEAs, my department has offered authorities extensive advice on what they should take into account when considering whether a person is temporarily employed or absent abroad. The same criteria apply throughout the country. Perhaps I may read a paragraph from the guidance. It states:
"In reaching a judgement, the LEA will wish to satisfy itself that the period abroad arises from employment; judge whether or not the absence is temporary; and decide whether, but for the employment of the applicant … he or she would have met the ordinary residence and settlement criteria"
It goes on to say,
"In making its decision, the LEA may wish to take into account, among other things, the nature of the posting; the terms of any contract or employer's letter; the period of time spent abroad; the time spent in this country; and whether a residence has been maintained in the UK".
So, to come back to the point raised by the noble Baroness about contracts, that is something that the guidance suggests LEAs should look at.
My department also tries to provide clear information for every applicant for student support. Each year we publish a booklet, Financial Support for Students, which we ask LEAs to issue to all applicants. The noble Lord, Lord Tope, felt that it was a rather heavy read. In order to be comprehensive and cover all the different issues that could arise, it has to be rather complex. I accept that. On the other hand, if one has got as far as wanting to go to university, one probably should be able to get a grip on this. If one cannot, there should be teachers, parents and others who may give one help in doing so.
The booklet sets out the eligibility requirements for support, including the residence conditions I have mentioned. In addition—I hope this will be helpful—I have asked my officials to provide this information

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directly to all British schools in the European Union in case there are some which may not have easy access to it.
All EU nationals—and this includes British nationals studying abroad—are, as I said to the noble Baroness, Lady Hooper, entitled to means-tested support towards the cost of tuition fees, provided that they have resided in the European Economic Area throughout the relevant three-year period. However, these students are not entitled to support for living costs.
We have an obligation to those applicants who are recognised as refugees by the Government. Those who are now ordinarily resident in the British Islands are exempt from the three-year residence requirement, as are their spouses and children. But that is a rather special category.
As the noble Baroness, Lady Young, said, we have received representations from the Independent Schools Joint Council asking for British nationals educated elsewhere in the EU to be exempt from the residence requirement. Similar representations have been made within the Service Families Task Force. That is a cross-Government body established to address the problems experienced by service families outside the control of the Ministry of Defence.
We have given very careful consideration to the arguments put forward. We intend to make a specific exemption from the three-year residency requirement for Armed Forces personnel and their families serving abroad. This will take effect from the academic year 2000–01. We believe that it is right that we make such an exemption. Armed Forces personnel are bound by military law to accept overseas postings. We therefore consider that this group of people are in a special situation because of the unique nature of their employment.
British forces serving overseas do an outstanding job in meeting our international commitments. They are increasingly taking the lead within NATO and the UN. We ask a lot of them and it is right that we extend this eligibility for support to them. These are rights they would have retained had they not been posted abroad. I should point out that our intention is that this exemption will apply only to regular military personnel; it will not include reservists, whose families are not posted abroad, or civilian personnel, who are not subject to the same disciplinary sanctions as regular military personnel.
Baroness Elles: My Lords, I thank the noble Baroness for giving way. Will this exemption apply also to diplomats, in the same way that some of the other exemptions have applied to both service personnel and diplomats? Will it apply in this case?
Baroness Blackstone: My Lords, no. This is specifically for the children of service personnel. Almost without exception, diplomats will get access to the student loan scheme in any case.
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However, the families of the vast majority of British students being educated abroad choose to live and work abroad. Where this is short-term, the temporary absence provisions will meet their needs. Where it represents a decision to make long-term commitments outside this country, the Government believe that they cannot expect the British taxpayer to provide support. That is what would be involved here.
We do not routinely collect information on the number of British nationals who are educated at British schools in the EU. However, we do know that this year about 1,500 British nationals have applied to my department for tuition fee support under the arrangements for EU nationals that I have already mentioned. Some of these applications will have come from pupils from British schools in the EU. If loan support were extended to these students—this answers the question of the noble Baroness, Lady Seccombe—it would cost the taxpayer more than £4.5 million a year. It could also create considerable complications with our European partners, who could, quite reasonably, argue that we were in breach of EU legislation by treating our own nationals more favourably than nationals from other parts of the EU.
As I said, the current rules are both long-standing and clear cut. I have listened to the arguments but I am not sure that there are compelling reasons to change the residence requirements for these applicants. We do not believe that it is right to open up the student loan scheme to people, whether British or not, who have lived and been educated in other parts of the EU. We have therefore decided that the current arrangements for these particular applicants should remain in place.
However, as I explained earlier, if any British national educated at a British school elsewhere in the EU can demonstrate that he or she has a residential connection with the UK and meets the residency criteria, he or she can have access to student loans. That would apply to the grandson of the noble Baroness, Lady Elles. Whether or not he is eligible, I do not know, but I wish him well and I hope that he gets his place.
Baroness Young: My Lords, I thank the noble Baroness for giving way. I listened to what she said with great interest and I shall read very carefully the report of the debate. Although I completely understand and accept the case for the Armed Forces, can the noble Baroness explain to the House why she feels that members of other groups who help the United Kingdom—not, of course, in the same way as does a soldier under military discipline—through business, exports and other entrepreneurial effort, about which we hear so much, should be ranked as members of a kind of second-class category who have merely chosen to go to Europe? Many are sent over by their companies. I do not believe it is quite fair to say that it is purely a matter of choice.
Baroness Blackstone: My Lords, I take the point made by the noble Baroness that there may be some people in this category who are sent to Europe by their companies. However, I believe that such people have

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some choice as to which company they work for. Under normal circumstances, if someone did not wish to move abroad, most companies would prefer to retain a valued member of staff and would allow that person to remain in the United Kingdom. For that reason, I believe that there is a substantial difference between a member of the Armed Forces who can be posted abroad for a long period and who has no choice whatsoever in the matter—a soldier who refuses to serve abroad is subject to court martial—and a member of another group.
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I recognise that the noble Baroness may be a little disappointed with some elements of my response. I shall certainly check again the points that were made in the debate about the way in which LEAs deal with their discretionary powers in this area. I was surprised by the words of the noble Lord, Lord Tope, when he said that LEAs are unhappy with this discretion and with the guidance provided by my department, because this issue has never been raised with us.
House adjourned at twenty-two minutes past eight o'clock.