Lords Sitting of 6 March 2003

Preamble
The House met at eleven of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Rochester.

Royal Assent
The Chairman of Committees (Lord Brabazon of Tara): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts and Measures:

Income Tax (Earnings and Pensions) Act,

London Development Agency Act,

Synodical Government (Amendment) Measure,

Church of England (Pensions) Measure.

Waste and Emissions Trading Bill [H.L.]
11.6 a.m.
Read a third time.
Clause 7 [Trading and who transfer of landfill allowances]:
Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 1:
Page 5. line 34, at end insert—
"( ) their use will not result in any increase in the number of daily waste transport journeys, to any landfill or landfills, above that required in the previous year;"
The noble Lord said: My Lords, the Bill makes provision for the trading and transfer of landfill allowances for the disposal of biodegradable municipal waste. At earlier stages of the Bill we had a number of discussions and serious debates around the problems created by the transport of waste. It is very often waste that is transported long distance—quite often along roads that are less than suitable for the heavy transport involved. It arrives at a disposal facility, which we hope, in part as a result of this Bill, might soon be doing rather less business.
If there is a purpose in this Bill, it is supposed to reduce waste that goes to tipping, and to reduce the transport of waste from one location to another. I have a relative who is, so to speak, in the business—so I have no business to declare, but he is a relative, which has caused me problems in the past. He says that in this modern era there is no reason any longer for a waste disposal authority to be required to transport its biodegradable waste for treatment outside its boundaries, provided that the technology is put in place.
The transport of waste is a serious issue that is offensive to many people. In the long term, the Bill can be of great benefit. However, in the short term it could cause problems, particularly if we start trading the
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allocations. The amendment simply seeks to say that trade should not take place if it leads to increased journeys conveying waste.
We have had this debate on transport on many occasions. I think everyone agrees and accepts the principle. The difficulty has always been to find words in a suitable form to achieve a reduction in transport without disrupting the business from the day the Bill comes into force. As this is the Third Reading, it is our last attempt to try and get something about transport into the Bill. The debates in the past have been worth it. They have not been a waste of time, because, at the very least, they draw the significance of that issue to the attention of everyone who takes note of what is said in this place. I beg to move.
Lord Greaves: My Lords, the noble Lord, Lord Dixon Smith, has raised this important issue on a number of occasions during the passage of the Bill. We do not want the Bill to result in more transport of waste than there is at the moment. He is right to say that he has struggled to find a satisfactory way of putting that into the Bill. With all due respect to him, I do not think that he has achieved it in this amendment. He has rightly raised the issue again, but we cannot support the present wording because we do not believe that the amendment is either practicable or enforceable.
People can wrestle with ways to reduce the transport of goods on this country's roads. But arty proposal has to apply to all transport of goods. There is no reason for simply bringing out in a bureaucratic way a remedy in respect of the transport of waste. With regret, we cannot support this amendment.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, I agree with both noble Lords that transport is an important part of waste strategy, although it also fits into the wider transport issue. However I do not think that this amendment would achieve what the noble Lord, Lord Dixon-Smith, seeks. We have to bear in mind that it is the allowances that are traded and not the waste. In aggregate, there will be no more allowances than the finite number on a zero sum basis. In other words, the point of the trading system is to provide flexibility to overcome difficulties in meeting the target—and to allow trading between authorities which are doing better than the trend and those which, for one reason or another, are unable to meet that trend. In total, there is a finite number. Therefore, an authority that increased its number of journeys by purchasing extra allowance would be balanced by the fact that the authority trading with it had foregone that extra allowance. In aggregate, therefore, such provision cannot be necessary.
I also agree with the noble Lord, Lord Greaves, that even if such provision were desirable, it would be unenforceable. For example, if an authority were faced with a catastrophe requiring the closure of a landfill site or incinerator and had to trade to meet its target, the exact location of the alternative disposal provision

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would determine the aggregate length of journeys. It would be difficult in such circumstances to tell the authority that it should incur an additional penalty because it was unable to use the best means of disposal. As I said, therefore, in aggregate, this provision is not necessary and would in any case be unenforceable. While I recognise the importance of transportation in this matter, I do not think that this amendment would improve the Bill.
Lord Dixon-Smith: My Lords, I hear what the Minister says and I have to accept his comments. I shall perhaps return to the issue in later amendments. Nevertheless, I am unrepentant for raising the issue again today. As I said, and as the Minister and the noble Lord, Lord Greaves, have acknowledged, the issue is significant. I accept that it is difficult, and probably exceedingly dangerous, to deal with transport matters by statute. With that in mind, I think that the time we have spent has been worth while. My father used to say that the only pleasant thing about knocking your head against the wall was that it was actually rather good when you stopped. I think it is time that I stopped. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
11.15 a.m.
Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 2:
Page 5, line 46, leave out paragraph (f) and insert—
"(f) make provision for all trading to be carried out by direct transfer or sale between waste disposal authorities;"
The noble Lord said: My Lords, this is a short amendment to leave out paragraph (f) on page 5, line 46, which provides for the intervention of what I would call third party brokers in the business of trading waste disposal allowances. We think that such intervention is wrong. We do not think that third parties should be involved in this business at all. We would prefer to have our wording in the Bill, to make provision,
"for all trading to be carried out by direct transfer or sale between waste disposal authorities".
The "waste disposal market" is not a conventional market. It is not a market that anyone can enter. The only parties that will be allowed to trade waste disposal allowances are waste disposal authorities, and there is a limited number of those bodies. The waste disposal authorities are currently composed of most if not all of the shire counties—I am not quite sure of the position of Rutland, which is unique—the unitary authorities and the London boroughs. I agree that the number is not finite. I suppose that if the Government were to have their way over the creation of elected regional assemblies, and under those only unitary authorities, the number of waste disposal allowances could conceivably increase. However, we cannot anticipate future numbers and the consequences of legislation that is only beginning its passage through Parliament. The Bill is currently in this House, and it will in any event take a long time to implement.
Given that it is a closed market, that all local authorities know and work with each other as waste disposal authorities in a national local government organisation and that they are familiar with arrangements across boundaries and across the country, it is an odd proposition that someone will be able to create a profitable profession by trading the allowances—which, if the system works, will not be required by 2020. I think that that would be a very hazardous job for anyone to undertake.
However, we do not think that that will happen. We think that the normal meetings and lines of communication between local authorities and waste disposal authorities will very quickly enable those with surplus capacity to locate and do business over the telephone with those deficient in capacity. Our amendment says that that is what should happen—whereas the present, rather odd paragraph provides for third party intervention in the trade. The present paragraph also provides for the necessity of regulation to define how that person should behave in his trading practices. We think that the current provision is unnecessary and that Amendment No. 2 would be much better. I beg to move.
Lord Greaves: My Lords, in Grand Committee we asked why the Government considered that this new profession of biodegradable municipal waste allowance brokers might be necessary. We were not given satisfactory answers. As the noble Lord, Lord Dixon-Smith, said, the world of local government, certainly the world of local government waste disposal, is fairly small. Those involved in it know one another. If people have allowances to sell or to transfer, it is not clear why they cannot just telephone those whom they believe might be interested in them, or, indeed put advertisements in the appropriate publications. It is not clear why the measure in the Bill that we are discussing is required. Indeed, the regulations we are discussing may be implemented by the Government. Do the Government intend to implement these regulations? Do they think that they will be necessary? If not, are they just included in the Bill in case they might be necessary at some point in the future, or do the Government have the firm intention of implementing them to create a new and rather strange profession?
Lord Stoddart of Swindon: My Lords, I should like to support the previous two speakers. I do not have much to add but I have a question. When the legislation was framed, were any figures provided? For example, what profit are brokers likely to make if in fact they come into being? How much profit a year will they make? What will be the cost to local authorities? Somehow or other the cost will be placed on waste disposal authorities and eventually, one way or another, on the consumer. Presumably, figures must be available. Is it possible for the Minister to provide those figures now?
Lord Whitty: My Lords, at earlier stages we debated this matter at length. It is clear that I have not quite got

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my case across. The measure is intended to achieve what both Opposition Front Benches normally demand; that is, to give local authorities flexibility with regard to how they operate the scheme while at the same time safeguarding the public interest in relation to propriety and so on. Waste disposal authorities may well for the most part involve their own staff and trade directly with one another. Indeed, given the presence of certain noble Lords today, it would be eminently sensible for such a deal to be concluded between Essex and Lancashire. However, local authorities can choose to contract out many of their operations or to buy in professional advice. I say to the noble Lord, Lord Stoddart, that presumably they will do so only if that is more cost-effective than to carry out the relevant operation in-house. There is no question of additional cost here. We simply recognise that local authorities may wish to employ professional brokers in this matter rather than deal with it in-house. If they do so, we need to ensure that that is regulated to safeguard the public interest. That is all that the provision achieves.
As regards whether we shall need to implement the relevant regulations, we are committed to consult on the whole of the clause, including the paragraph we are discussing. If the overwhelming view expressed in the consultation is that waste disposal authorities cannot conceive of any circumstances in which they would involve professional brokers, the relevant regulations will not need to be triggered. If, however, professional brokers do become involved in the process, the Government will need to regulate their involvement. Therefore, we have covered that eventuality in the Bill. Some waste disposal authorities may consider that it is more cost effective and more professional to carry out the operation in-house rather than outsourcing it. We recognise that flexibility is needed in this matter. However, as I say, the public interest needs to be safeguarded in relation to the propriety of brokers'; involvement. That is the reason for the inclusion of the provision in the Bill; namely, to enable the Government to regulate that profession. I hope that the noble Lord will recognise that we should provide for that eventuality and will not press the amendment.
Baroness Byford: My Lords, before the noble Lord sits down, I apologise to the House that illness prevented my attendance in Committee and at Report stage. Do I understand from the Minister that at the moment the Government are consulting on the issue? Or, is he suggesting that in future they may consult if an interest is shown? Surely, if the Government are consulting now, it seems odd to have included the relevant regulations in the Bill. But if consultation has taken place, I can understand why the relevant regulations are in the Bill. I seek clarification.
Lord Whitty: My Lords, there are several parts of the Bill on which consultation will be required before we bring forward regulations. That includes the
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measure that we are discussing. We are not consulting currently but we shall do so before we implement regulations under the measure we are discussing.
Baroness Byford: My Lords, I hope that I may press the Minister further. I assure him that this is the last occasion on which I shall do so. Further to what the Minister said, any alterations or recommendations that emerge during consultation will be implemented in statutory instruments or orders. If that is the case, the House will not have the opportunity to debate them in the way that we are debating matters today. That is one of my big concerns.
Lord Whitty: My Lords, the regulations we are discussing are no different from regulations in general, including regulations right across legislation relating to various trading schemes. If local authorities wish to outsource their activities, that process should be subject to certain standards. We have covered that eventuality in the Bill. It is sensible to do so. That does not mean that a local authority must employ a broker. It may well be that no local authority employs a broker. However, the measure in the Bill enables us to implement the relevant regulations should local authorities employ brokers and indicate in the consultation that they wish to do so. I welcome the noble Baroness back to the debate.
Lord Dixon-Smith: My Lords, I am grateful to the Minister for his response although I am bound to say that it sounds to me rather like someone who is buying unnecessary insurance. I am also grateful to the noble Lord, Lord Stoddart of Swindon, for his helpful remarks and to the noble Lord, Lord Greaves, for his comments. Although it was suggested that a deal between Essex and Lancashire might be possible, we have a little difficulty in that we both have plenty of words but for a deal to be done someone needs I o have a deficiency. The debate has been worth while. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hanningfield Lord Hanningfield moved Amendment No. 3:
Page 6, line 7, leave out from "for" to end of line 9 and insert "the allocating authority to make available to each waste disposal authority full financial resources for it to comply with any requirement imposed on it by or under provision of the kind mentioned in paragraph (h) together with all regulations as set Out under sections 11 and 12"
The noble Lord said The noble Lord said: My Lords, I tabled this amendment at both Committee and Report. I am trying to make noble Lords realise how much the measure that we are discussing will cost. Since Report I have done some more work and consulted colleagues about the likely cost. The Minister mentioned Essex and Lancashire. As leader of Essex County Council, I have consulted the LGA as regards the likely costs of implementing the legislation. I am certain that my findings are also relevant to Lancashire.
At Report stage I believe that the Minister disputed my suggestion that the implementation of the legislation might cost Essex £100,000. However,

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having carried out further work, we believe that it will cost Essex £100,000 to implement the legislation. The total cost for all the waste disposal authorities in the United Kingdom is about £15 million. I do not wish to give noble Lords a lecture on council tax, but they are all well aware of the current problems with regard to council tax levels. Local government is expected to pay for the provisions included in Bills such as the one we are discussing out of its existing funding. Given the demands imposed by education and social services, it is impossible for local government to find even the relatively small sum of £15 million.
As I say, I am the leader of Essex County Council, one of the largest local authorities in the country. We have nowhere near enough money in what is now called the FSS—our grant from government—to fund the current expenditure on waste disposal. Most of that has to be funded by Essex council taxpayers.
I do not want to give a lecture on council tax today but, when councils do not get grants from government, for every £1 million that we have to raise we have to ask the public for £4 million, because of the gearing effect. That is why council tax bills are so high this year, because of the gearing effect of extra money for which local authorities have to ask. If the Bill is going to cost £15 million, it could well cost the public £60 million in council tax with a gearing of four. That could add a considerable amount to council tax bills around the country in future.
I want noble Lords and the Government to acknowledge that the expenditure must be recognised as an additional expenditure to local government. Therefore, some way must be found to fund it, perhaps through government grant. There must be some acknowledgement of that. I am concerned that the Government do not seem to recognise that the Bill will cost local authorities money, and that that money has to be provided. I hope that the Minister will give us a reasonable response, and that the Government will take account of the subject before they finalise the legislation. I beg to move.
11.30 a.m.
Lord Dixon-Smith: My Lords, I have every sympathy with the amendment. My Amendment No. 21 is grouped with it and is directed towards a similar purpose, which is to get proper recognition from the Government of the increased costs imposed dribble by dribble in little ways, but which mount up for individual local authorities into quite large sums. They rarely seem to be taken account of properly when it comes to the annual national calculation of what the costs of local government truly are.
I need say no more at this stage, as the case has been well made by my noble friend. Anything I say will be repetitious, but I support the principle that he set out.
Lord Greaves: My Lords, the issue has been discussed during the passage of the Bill, and it is relevant. We should welcome the noble Baroness, Lady Byford, back to our discussions on the Bill. Her
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colleague, the noble Lord, Lord Dixon-Smith, has performed valiantly in her absence. I should also apologise for the fact that I could not be present on Report, for reasons of illness. I was very grateful to my noble friend Lord Livsey for standing in.
The principle behind the amendment is important. The details of the amendment do not actually match the need in the legislation, but in a sense that is not important. What is important is that we want a commitment from the Government that the extra work and costs will be funded.
It is no secret that there is a great crisis in local government at the moment, certainly in England. Now is not the time to discuss in detail the present problems of council tax levels throughout the country. The noble Baroness, Lady Farrington, nods her head in agreement, although she may not agree with me on anything else today. Why the crisis is taking place at the moment—why council tax for the new year is at the levels proposed—is a huge mystery. I do not think that anyone quite understands it.
Local government has got to a stage where it is bursting through a barrier. It cannot go on providing the services that it provides at the moment without substantially more money. The Government will say that more money is being provided, and it is. However, it is clearly not enough to do the job. It is fairly clear that one of the fundamental reasons why the crisis is happening is that the Government are putting more and more responsibilities on local government and simply not funding those extra responsibilities. That is where the Bill has relevance to the crisis.
The noble Lord, Lord Hanningfield, explained quite clearly that, unless the Government are prepared to fund adequately each and every additional responsibility that they give to local government, the crisis will get worse. Individual extra responsibilities such as that under discussion do not of themselves involve a large amount of money, but when they are added together there is a serious problem.
We cannot support the exact wording of the amendment because it is technically deficient. I hope that the noble Lord does not mind me saying so. Nevertheless, the principle that he raises is one that we have mentioned throughout our debates on the Bill, and we need a satisfactory answer from the Government.
Lord Stoddart of Swindon: My Lords, previous speakers have showed us what difficulties local authorities will be in because the Government keep piling jobs on to them but, at the same time, do not make the resources available. To a large extent, local government has been robbed of the ability to raise its own resources. In my book, we should get back to real democratic local government—independent local government—raising the resources that it needs through council tax or new sources of revenue.
In addition to legislation piled on local government by central government, we now have legislation piled on it by the European Union. Without any additional resources, it therefore has to raise even more money to

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satisfy the legislation imposed by not only our own Government, but a government sitting in Brussels outside this country. Local government is, so to speak, in double jeopardy.
Those are much wider issues, but there is no doubt about the figures that we have seen this week of increased rates. The average rate on band D has gone over £1,000. It is becoming very burdensome on local people to have to deal with the extra services imposed on them without having the resources. The longer-term solution is to give local government freedom to raise more of its own money, but the short-term answer is for the Government to assure us that they will allocate to the local authorities sufficient funds for them to carry out the duty imposed on them by the Bill.
Lord Whitty: My Lords, the noble Lord, Lord Stoddart, and to some extent the noble Lord, Lord Greaves, strayed somewhat wide of the amendment, although we could debate matters that they raised. The amendment proposes a very specific hypothecation. Even if I were to accept t he estimated costs given by the noble Lord, Lord Hanningfield, we are talking about only a small part in the total area of waste management.
The issue of hypothecation raises a number of problems. Although I—
Lord Hanningfield: My Lords, the Minister is not speaking to the right amendment. My hypothecation amendment is the next one.
Lord Whitty: My Lords, we are on Amendment No. 4, arc we not?
Noble Lords: No!
Lord Whitty: My Lords, the noble Lord, Lord Dixon-Smith, referred to Amendment No. 21, which is in the next group.
In any case, I shall go back to Amendment No. 3, which deals with the totality of resources. Although I can understand local authorities always saying that they do not have enough, it is instructive that through the block EPCS grant there have been very significant increases in recent years. Certainly, the noble Lord, Lord Hanningfield, will be familiar with the overall figures. There have also been benefits in this field from PFI projects, and so forth.
A substantial amount of resources are allocated by Government to the totality of waste management. It is unusual and I believe unprecedented to specify within the Bill that particular resources will be provided for as part of the block grant. We are requiring a number of administrative responsibilities to be undertaken by local authorities: the keeping of information, enforcement of regulations and so forth. The additional burden of that can be exaggerated. I believe that to some extent the estimates probably do exaggerate it. To a large extent, waste disposal authorities have to provide that information to the
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Environment Agency in any case. Therefore, I would still argue about the degree of financial burden. Nevertheless, there is a financial implication in the Bill.
However, it would be very unusual indeed to put on the face of the Bill that that specifically should be a feature of the block grant, either through the formula or by hypothecation and not to allow that to be dealt with in the normal way between government and local authorities. The administrative costs of this part of the Bill would normally be dealt with through the block grant system and reflected in the local amount for EPCS within that block grant. To start to unravel that system would lead us into significant difficulties and would be unprecedented. It is important that adequate resources are provided, but not in the way specified in the Bill.
Lord Hanningfield: My Lords, perhaps I may press the Minister again on that point. It is imperative that such resources are included in a block grant if the amendment is not accepted. As I have said, we are already spending much more on waste disposal than is provided for in the block grant. As leader of Essex County Council I know that we put in considerably more money than is allowed for by government figures, and we should like to put in more. Can the Minister assure the House that this will be included in the block grant and that he will make certain, when he talks to his colleagues, that this is part of a block grant for future local government settlements?
Lord Whitty: My Lords, as regards the calculations for the block grant, I cannot give a quantum commitment otherwise I would be committing the Chancellor of the Exchequer to future expenditure well beyond the current term of this Parliament and possibly even of this Government. I am not in a position to do that. However, clearly, in the calculation of the EPCS element of the block grant one has to take account of the additional burdens that might be implied by additional legislation. I think that is as far as I can go.
Lord Hanningfield: My Lords, I thank the Minister for that reply. I wish he could have been more explicit about how local government will be funded to implement this legislation. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 9 [Duty not to exceed allowances]:
Lord Hanningfield Lord Hanningfield moved Amendment No. 4:
Page 7, line 33, at end insert—
"( ) All monies in respect of financial penalties collected under this section shall be hypothecated directly to waste disposal authorities as directed by the allocating authority."
The noble Lord said: My Lords, in tabling Amendment No. 4 I am attempting to ensure that local government get back at least some money to help to implement this legislation and to help to fund the complicated and detailed work we are trying to do in recycling waste and in waste disposal, which costs local government a lot of money. As we have said in a

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previous debate, there is not enough money. We do not want to debate levels of council tax today but we want to find enough money for local government to carry on its work to assist the implementation of the Bill.
The amendment contains a way to do that. Money will be taken from local government in fines. I am sure that noble Lords would agree that it would be fair for that money to be recycled back into local government to help with waste disposal. In Committee the Minister stated that probably it would not be right to reimburse fines. It is to be hoped that only a few local authorities will be fined. The money could then be apportioned back to local government to help with the recycling issues I have just described. That would play only a small part in helping with the cost, but it could be a useful part. The money would then be diverted directly into paying for the waste system.
The Government have announced that they will thoroughly review local government finance and consider different suggestions for ways of raising money locally. I have been involved in discussions about that. This kind of provision might be a way of giving extra money locally. Can the Minister tell the House what will happen to the money? I did not pursue the previous amendment, but I hope that the Minister at least will say that the money can be "recycled" to help recycling. I beg to move.
11.45 a.m.
Lord Whitty: My Lords, we are now directly on the issue of hypothecation. Amendment No. 21 is grouped with this amendment and I shall therefore take as read what was said earlier by the noble Lord.
The issue of hypothecation is important and raises serious principles. Hypothecation of fines or penalties in general also raises rather wider issues than simply in relation to waste management. Nevertheless, as I indicated earlier, I have sympathy with the comments of the noble Lord. It is not the intention of the Government that the raising of fines should lead to a drain on the waste management system. So, in a sense some kind of hypothecation is implied by my saying that.
However, we are not in a position to have a mechanistic form of hypothecation, as proposed by the amendment. We are discussing how best we can ensure that those resources are not lost to the waste management system. It is important that the framework for transferring resources from penalties back into the waste management system is soundly based. Discussions on that issue are still continuing. Therefore, I am not in a position at this stage to indicate anything which could turn itself into a provision within the Bill.
It has been accepted that any increase, for example, in the landfill tax over and above the present escalator increase would be recycled back into local authorities and businesses in that area. We are currently working on the options for achieving that. In that context and in view of the options for recycling revenues raised from penalties under these provisions, that could also
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be tackled. I am not in a position today to give the House any further commitment to that. However, noble Lords can take from what I have said that the Government have some sympathy with that.
Even if the timetable was correct or appropriate, it is not entirely clear that we would want to achieve that by an amendment to the Bill. There will be further stages of the Bill in another place, and it may be that we shall return to this matter. However, it is not at all clear that this is necessarily the best way to achieve what we both want in this respect.
I turn to Amendment No. 21. There is a slight problem in that Amendments Nos. 21 and 4 are mutually exclusive. Amendment No. 21, tabled by the noble Lord, Lord Dixon-Smith, would hypothecate penalties specifically to forestry. As the Minister responsible for forestry, that holds some attraction. It would be a nice idea in certain circumstances. However, to provide in the Bill for 95 per cent of the penalty income to go that way is probably going too far.
Obviously, it is preferable that any money taken out of the system is in some way put back into the system. However, I believe that both the amendments are over-specific as to how that should be done. I am not in a position to offer an alternative to the House at this stage. However, with that indication of the Government's overall intent I hope that the noble Lord does not pursue his amendment today.
Lord Hanningfield: My Lords, I thank the Minister for those comments. I think they were fairly helpful. I wish he had been a little more specific. However, I understand from his comments that the Government intend to find some mechanism by which this money can be kept in the system in order to help with waste disposal and recycling and not go into the Chancellor's or some other pocket. Therefore, we shall look at the matter in future stages when the Bill continues in another place. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 11 [Scheme regulations]:
Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 5:
Page 8, line 34, leave out "make provision about what amounts to" and insert "define"
The noble Lord said: My Lords, in moving Amendment No. 5, I shall speak also to Amendment No. 7. These are small and trivial amendments but they enable me to make a worthwhile point. Both amendments are designed to improve the language on the face of the Bill. Clause 11(2)(c) states:
"Regulations under subsection (1) may (in particular)—… (c) make provision about what amounts to the utilisation of landfill allowances".
The words,
"make provision about what amounts to",
are both inelegant and inefficient. They are bad use of language. The word "define fulfils the same function as those five words.
Amendment No. 7 deals with Clause 11(2)(f), which states that the regulations may in particular, "make provision requiring". One word—require—achieves exactly the same purpose and would be more efficient and elegant. In both cases I suspect that my teachers at school would have failed me in my exams if I had used such English. Our Bills, as far as possible, should be written in efficient, elegant and comprehensible English.
I have tabled further amendments. However, because time is pressing I shall probably not move them. They are directed towards the same purpose. I think the point is worth making and that these two examples are quite stark. I beg to move.
Lord Whitty: My Lords, on the face of the matter, one might be tempted to agree both with the noble Lord, Lord Dixon-Smith, and his teacher. However, I must point out that there are legal difficulties, in particular with the second amendment. Clause 11(2) gives examples of the types of provision, and therefore we have to refer to "provision".
Clause 10(2)(c) would permit regulations to make clear what utilisation of landfill allowances occurs. Those regulations may well need to set out a sizeable list of circumstances where an allowance will be taken to be utilised. Although that could be presented as a definition, the current reference to "provision" covers exactly that type of utilisation.
As regards the words "make provision", mentioned in Amendment No. 7, I am advised that that wording is necessary from a legal viewpoint in order to cover the subsequently referred to provisions.
The case is slightly less strong in relation to Amendment No. 5. It would be possible to exclude the words "make provision". However, given that it is always desirable to have a degree of uniformity of approach, the advice is that this change of terminology would not help. There is something to be said for uniformity when one makes lists in order to make clear that none of the examples is subsidiary to the other. I would therefore prefer to maintain that subsidiarity by retaining the current wording.
Lord Dixon-Smith: My Lords, I listened to the noble Lord with interest and almost amazement. Of course, I have to defer in this instance, as he does, to lawyers. I am afraid that the points made do not impress me because if we can present legislation in a more comprehensible way, we should. This language is inelegant, even if it does not entirely do precisely what I would wish it to do efficiently. None the less, the point is made. I think it is a valid one.
The Minister spoke about Clause 10. It was actually Clause 11 that these amendments occurred in, but that was merely a slip of the tongue. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 6 to 8 not moved.]
Clause 14 [Disclosure of information by monitoring and allocating authorities]:
Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 9:
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Page 10, line 35, at end insert—
"( ) Each allocating authority must disclose, at three yearly intervals, to the Secretary of State such monitoring information as he may by regulation direct, in order to comply with Article 15 of Council Directive 1999/31/EC."
The noble Lord said: My Lords, we think that Amendment No. 9 is worth pursuing. The directive states:
"At intervals of three years Member States shall send to the Commission a report on the implementation of this Directive, paying particular attention to the national strategies to be set up in pursuance of Article 5".
That is absolutely fine. The report will be on the basis of a questionnaire. We do not know what will be in it because it has not yet been prepared by the Commission. However, we know that the Government will submit precise information on a three-yearly basis. The purpose of the amendment is to require the collection authorities to produce the relevant information and to report it on a three-year basis. Therefore, it will be readily available to the Government. They will not need to make subsequent regulations when they know what precisely is required.
It may be said that I am now buying insurance against the future. I accept that criticism, but the amendment is a genuine attempt to try to save the Government future difficulties in requiring additional information which people are not already preparing. It can easily be done because nowadays everyone keeps a mass of statistics in this area. It is a question of filing them in an appropriate file on a computer so that they are ready for triennial submission. I beg to move.
Lord Whitty: My Lords, I understand that the noble Lord is trying to be helpful. Nevertheless, I cannot accept the amendment. The Secretary of State will be required to report the UK's progress on the implementation of the landfill directive—including on Articles 5(1) and (2), which the Bill seeks to implement—at three-yearly intervals, as the noble Lord indicates. That will be in response to a questionnaire sent out by the EU Commission. In order to provide the EU with an accurate report, it will be necessary for the Secretary of State—in this case DEFRA—to obtain information from each allocating authority; namely, the devolved administrations as well as our own.
We have a good relationship with the devolved administrations. We have fully consulted with them regarding the terms of the Bill. We are all agreed about the direction in which we wish to go. In that spirit of co-operation following devolution, it is expected that each of the devolved administrations would provide the information necessary to fulfil our reporting obligations. Those obligations are covered by the memorandum of understanding and so-called concordats between the Westminster/Whitehall machine and the devolved administrations.
We have not thought it necessary to put on the face of the Bill the terms of those concordats. If we started doing so in one respect, I think there would be problems in others. Therefore, we do not think it necessary or appropriate to use the Bill to compel—as

935
the amendment would—the devolved administrations to pass information to the Secretary of State. We are content to rely on the memorandum of understanding and the concordats.
I hope that with that explanation, the noble Lord will not pursue the amendment.
Noon
Lord Dixon-Smith: My Lords, I hear what the Minister has said—I always listen with care—and am grateful to him for his response. In speaking to this amendment, I acknowledged a weakness in that I was attempting to anticipate the future, which is always slightly dangerous. With that in mind, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 16 [Registers: public access]:
[Amendments Nos. 10 and 11 not moved.]
Clause 17 [Strategy Pr England]:
Lord Dixon-Smith Lord Dixon-Smith had given notice of his intention to move Amendment No. 12:
Page 11, line 35, at end insert—
"( ) The measures mentioned in subsection (2) must include measures to reduce non-municipal biodegradable waste going to landfill."
The noble Lord said: My Lords, I shall speak also to Amendments Nos. 14 to 16. The Government kindly dealt in many ways with the subject in a letter. I am grateful to the noble Baroness, Lady Farrington, who had the letter prepared and signed. It acknowledges, in particular, that there are remarkable success stories in some aspects of non-municipal biodegradable waste, particularly packaging. The noble Baroness noted that some 80 per cent of the 19 million tonnes of commercial and industrial biodegradable waste in England was recycled. That is a remarkable achievement worth putting on the record.
Earlier in the letter the noble Baroness caused me some confusion, which practically justified my amendment. She said that waste disposal authorities and waste collection authorities picked up around 100,000 tonnes of municipal solid waste every weekday. She added that the amount of biodegradable waste in municipal solid waste varies according to waste management infrastructure and so on. It makes it sound as though we do not know what is happening in that area. It seems that there would be room for slippage. But I acknowledge that a good deal of work is happening. In the circumstances, I shall not move the amendment.
[Amendment No. 12 not moved.]
Lord Hanningfield Lord Hanningfield moved Amendment No. 13:
Page 11, line 35, at end insert—
"( ) Within the context of the strategy required by section 16, a duty shall be placed on a waste disposal authority and a waste collection authority within a given area to produce and publish a Joint Municipal Waste Strategy.
( ) Within the context of the Joint Municipal Waste Strategy, a waste disposal authority may exercise a power of direction to a waste collection authority to specify the type of segregated waste to be delivered in support of meeting agreed targets for the recovery and recycling of dry recyclable material and biodegradable waste."
The noble Lord said: My Lords, this amendment would help to make the legislation more workable. As we discussed in Committee and on Report, the majority of the landmass of England is still covered by two-tier authorities—county councils and district councils. As my noble friend Lord Dixon-Smith said, even if we introduced regional government and unitary councils, most changes would probably not happen for 15 or 20 years. Let us hope that, by then, all waste will be recycled, in which case this legislation would be obsolete. In the mean time, we must make the legislation work.
Essex County Council, of which I am the leader, has been trying to make waste management work in the county; therefore, we have also talked to other counties. One of the secrets of making waste management work in two-tier authorities is to have a joint municipal waste strategy, whereby county councils and district councils work together closely. Essex County Council and district councils are working closely to develop a waste strategy as are many counties in England, including Hampshire and, I am almost certain, Lancashire.
But some counties do not take that approach. Much of the UK is not covered by any completed strategy. The amendment would help the Government to make the legislation work by requiring councils to have a joint municipal waste strategy. Nobody could deny that it should be part of the Bill, which is a complicated piece of legislation. As we shall discuss later, some authorities could be fined for problems created by others.
I received some helpful letters from the Minister, who acknowledged that there was a problem that must be resolved. I hope that the Minister and noble Lords can accept the amendment, because it would add a great deal to the Bill. It would help all local authorities to try to make the legislation work. We all want to reach a stage where the maximum amount of waste is recycled and a minimal amount goes into landfill. Co-operation and a strategy are needed to ensure that that happens across the country, particularly in England, where there are two-tier authorities. I beg to move.
Lord Dixon-Smith: My Lords, I support my noble friend's amendment. One of the reasons that I withdrew Amendment No. 8 was that it would become redundant if Amendment No. 13 were accepted. In parts of the country where waste collection authorities are separate from waste disposal authorities, it is

937
important that there is joint ownership of the waste management strategy, particularly in dealing with municipal biodegradable waste.
The Minister has tabled amendments with the same objective as this one. But Amendment No. 13 is worth serious consideration by the Government. I, too, hope that they can accept it. Success in dealing with the problems will depend on immense hard work and co-operation by everyone involved in the business. There have been occasions when two-tier authorities have not always seen their best interests as being identical. Therefore, the development of a joint municipal waste strategy between the two tiers has much to commend it. The EU directive sets out a time limit by which we must produce solutions or else the whole process will become exceedingly expensive. I hope that the Government will treat the amendment sympathetically.
Lord Greaves: My Lords, this amendment, together with others, including several by the Minister, covers an issue that provoked much debate and concern in earlier stages: the relationship between disposal authorities and collection authorities in areas of two-tier local government. I refer specifically to county council disposal authorities and district council collection authorities.
There are two aspects of the problem. First, without the co-operation and support of collection authorities in separating waste satisfactorily before delivering it for disposal, disposal authorities may be unable to meet their targets. Secondly, what will be the comeback for collection authorities if they fail to separate waste satisfactorily with the result that disposal authorities are subject to penalties under the legislation? In such cases, the disposal authorities would not be at fault. There are, therefore, two considerations: the need for co-operation between the two tiers, and the penalties imposed on district councils that fail to co-operate. The aim is to separate waste so that biodegradable municipal waste can be disposed of appropriately to reduce landfill waste as required by the European directive.
We support the objectives of the various amendments aimed at tackling the problem. We welcome, in particular, the fact that the Government have tabled amendments in response to concerns expressed previously.
Having said that, we have some problems with the amendment. We have no problem with the first paragraph, which refers to joint municipal waste strategies, and would not hesitate to support it. The question of separation and power of direction in the second paragraph is much better dealt with in the later government amendment. We therefore regret that the two paragraphs of the amendment have been moved together.
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However, we support the general principles advanced by the noble Lord, Lord Hanningfield, and we look forward to hearing the Government's reply. On balance, we are minded to support the amendment.
Lord Livsey of Talgarth: My Lords, perhaps I may add a coda to what my noble friend said. In Wales, until recently we had two tiers of local government authorities. Because of devolution, we have had single-tier authorities. From personal experience, they have operated waste disposal and collection much more effectively than was previously the case. If there is to be regional government in England—that is clearly at the mercy of the democratic will of both Houses of Parliament—the issue may well be re-examined in future. I assure the House that in our experience of unitary authorities, collection and disposal of municipal waste has been much simplified.
Lord Whitty: My Lords, all sides of the debate on the Bill recognise the issue of the relationship, in those parts of the country covered by two-tier authorities, between the county and the district, with the district having responsibility for collection. As was said on sanctions, the final group of amendments largely deals with the issue of giving the disposal authority some influence over the collection authority.
Effectively, the amendment requires a joint strategy. I have sympathy with what is proposed. We need an effective partnership between the two tiers so that disposal and collection move in the same direction to meet the landfill directive obligations. It is also true, as the noble Lord, Lord Hanningfield, said, that there are some excellent examples of co-operation and, as he implied without naming names, there are also some examples in which such partnerships have not developed so fruitfully. One can envisage other such examples developing under additional obligations.
However, our approach has not been that of imposing statutory responsibilities. We have encouraged preparation of joint municipal waste strategies. We have issued guidance and given encouragement to develop such strategies and guidance on how to prepare them. The guidance sets out in broad terms what such strategies should cover and the partnerships needed to develop sustainable waste management among the authorities in an area.
As I said, some authorities have clearly risen to that challenge. It is also true that the Strategy Unit document, Waste Not, Want Not, recommends that joint municipal strategies merit further consideration. The Government are indeed considering implementing that part of the report. However, we must also bear in mind that local authorities are drawing to the Government's attention the number of statutory strategies that various pieces of legislation have imposed on them and suggesting that we should be reluctant to impose more. We must consider that dimension when proposing any additional municipal strategy statutorily laid down, especially one that involves a complicated collection of authorities.
We would hope that the extension of the disposal powers of direction included in the final group of amendments headed by Amendment No. 22 would

939
encourage joint working where there may be difficulties and will provide a safeguard, but there should be a degree of voluntarism to how those joint waste management strategies are drawn up—whether the collection of authorities want formally to go down that road. We believe that that is a sensible route and we have encouraged authorities to go down it, but, for those wider reasons, we are not inclined to write it into the Bill. That does not undermine the need for partnership between the two tiers and a clear understanding of what is the strategy and what are the respective responsibilities. I hope that that argument not to write another statutory strategy into the Bill is sufficient.
Lord Hanningfield: My Lords, I thank the Minister for those comments. However, the Bill will be enacted and it must work. The Minister has advanced the Government's view as described in Waste Not, Want Not, and we expect further legislation in due course to implement some of its ideas. But the Bill will be enacted shortly. Without the parts of it that will make it work, it will be difficult for local government, as we have said in Committee and on Report. There needs to be a firm relationship between the collection and disposal authorities if the Bill is not to cause chaos.
Requiring a joint municipal waste strategy in the Bill would be the one thing that would make it work. I only repeat that in Essex, Hampshire and Lancashire, big authorities are putting much effort into that. They have done so voluntarily; but many places are not doing so. Enormous difficulties and disputes may be caused in implementing the Bill. The Bill would lose if it did not include the amendment, so I should like to test the opinion of the House.
12.17 p.m.
On Question, Whether the said amendment (No. 13) shall be agreed to?
Their Lordships divided: Contents, 115; Not-Contents, 99.

Division No. 1

CONTENTS

Aberdare, L.

Carlisle of Bucklow, L

Addington, L.

Carnegy of Lour, B.

Alderdice, L.

Cope of Berkeley, L.

Allenby of Megiddo, V.

Crathorne, L.

Alton of Liverpool, L.

Dahrendorf, L.

Ampthill, L.

Dean of Harptree, L.

Anelay of St Johns, B.

Denham, L.

Arran, E.

Dixon-Smith, L.

Astor of Hever, L.

Eccles of Moulton, B.

Blaker, L.

Elles, B.

Blatch, B.

Elliott of Morpeth, L.

Bowness, L.

Elton, L.

Bridgeman, V.

Feldman, L.

Brougham and Vaux, L.

Ferrers, E.

Burnham, L.

Fookes, B.

Buscombe, B.

Fowler, L.

Byford, B. [Teller]

Gardner of Parkes, B.

Caithness, E.

Geddes, L.

Campbell of Alloway, L.

Geraint, L.

940

Greaves, L.

Peyton of Yeovil, L.

Greenway, L.

Pilkington of Oxenford, L.

Hamwee, B.

Plumb, L.

Hanham, B.

Plummer of St. Marylebone, L

Hanningfield, L.

Rawlings, B.

Harris of Peckham, L.

Reay, L.

Harris of Richmond, B.

Redesdale, L.

Henley, L.

Rees, L.

Higgins, L.

Renfrew of Kaimsthorn, L.

Hodgson of Astley Abbotts, L.

Rennard, L.

Hooson, L.

Renton, L.

Howe, E.

Renton of Mount Harry, L.

Howe of Aberavon, L.

Roberts of Conwy, L.

Howell of Guildford, L.

Rodgers of Quarry Bank, L.

Jellicoe, E.

Roper, L.

Jenkin of Roding, L.

Saatchi, L.

Knight of Collingtree, B.

St John of Fawsley, L.

Laing of Dunphail, L.

Saltoun of Abernethy, Ly.

Livsey of Talgarth, L.

Sanderson of Bowden, L.

Luke, L.

Scott of Needham Market, B.

Lyell, L.

Seccombe, B.

McColl of Dulwich, L.

Sharp of Guildford, B.

MacGregor of Pulham Market,L.

Shutt of Greetland, L.

Mackie of Benshie, L.

Skelmersdale, L.

McNally, L.

Smith of Clifton, L.

Maddock, B.

Stewartby, L.

Mar and Kellie, E.

Stoddart of Swindon, L.

Marlesford, L.

Strathclyde, L.

Mayhew of Twysden, L.

Swinfen, L.

Miller of Chilthorne Domer, B.

Thatcher, B.

Miller of Hendon,B.

Thomas of Walliswood, B.

Molyneaux of Killead, L.

Tordoff, L.

Montrose, D. [Teller]

Trumpington, B.

Murton of Lindisfarne, L.

Tugendhat, L.

Northbrook, L.

Vivian, L.

Norton of Louth, L.

Waddington, L.

O'Cathain, B.

Wigoder, L.

Pearson of Rannoch, L.

Williams of Crosby, B.

Windlesham, L.

NOT-CONTENTS

Acton, L.

Evans of Parkside, L.

Ahmed, L.

Evans of Temple Guiting, L.

Amos, B.

Falconer of Thoroton, L.

Andrews, B.

Farrington of Ribbleton, B.

Archer of Sandwell, L.

Faulkner of Worcester, L.

Bassam of Brighton, L.

Fyfe of Fairfield, L.

Berkeley, L.

Gale, B.

Bernstein of Craigweil, L.

Gladwin of Clee, L.

Blackstone, B.

Golding, B.

Borrie, L.

Gordon of Strathblane, L.

Boston of Faversham, L.

Goudie, B.

Bragg, L.

Gould of Potternewton, B.

Brooke of Alverthorpe, L.

Grocott, L. [Teller]

Brookman, L.

Hardy of Wath,L.

Brooks of Tremorfa, L.

Harris of Haringey, L.

Bruce of Donington, L.

Harrison, L.

Burlison, L.

Hilton of Eggardon, B.

Campbell-Savours, L.

Hogg of Cumbernauld, L.

Carter, L.

Hollis of Heigham, B.

Chorley, L.

Howells of St. Davids, B.

Christopher, L.

Hoyle, L.

Clinton-Davis, L.

Hughes of Woodside, L.

Cohen of Pimlico, B.

Hunt of Kings Heath, L.

Craig of Radley, L.

Irvine of Lairg, L. (Lord Chancellor)

Crawley,B.

Janner of Braunstone, L.

David, B.

Jay of Paddington, B.

Davies of Coity,L.

Jones, L.

Davies of Oldham, L.

King of West Bromwich, L.

Desai, L.

Kirkhill, L.

Dixon, L.

Lea of Crondall, L.

Dormand of Easington, L.

Lipsey, L.

Dubs, L.

McCarthy, L.

Eatwell, L.

Macdonald of Tradeston, L.

Elder, L.

941

McIntosh of Haringey, L. [Teller]

Slim, V.

MacKenzie of Culkein, L.

Strabolgi, L.

Mackenzie of Framwellgate, L.

Taylor of Blackburn, L.

Morris of Aberavon, L.

Tenby, V.

Morris of Manchester, L.

Thornton, B.

Nicol, B.

Turner of Camden, B.

Patel of Blackburn, L.

Uddin, B.

Pitkeathley, B.

Walpole, L.

Ponsonby of Shulbrede, L.

Weatherill, L.

Prys-Davies, L.

Whitaker, B.

Randall of St. Budeaux, L.

Whitty, L.

Rogers of Riverside, L.

Wilkins, B.

Rooker, L.

Williams of Elvel, L.

Sawyer, L.

Williams of Mostyn, L. (Lord Privy Seal)

Scotland of Asthal, B.

Williamson of Horton, L.

Simon, V.

Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.
12.27 p.m.
Clause 18 [Strategy for Scotland]:
[Amendment No. 14 not moved.]
Clause 19 [Strategy for Wales]:
[Amendment No. 15 not moved.]
Clause 20 [Strategy for Northern Ireland]:
[Amendment No. 16 not moved.]
Clause 21 ["Biodegradable waste" and "municipal waste"]:
Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 17:
Page 14, line 40, after "capable" insert "within 25 years"
The noble Lord said: My Lords, Amendment No. 17 deals with a small but none the less, in its way, significant matter. It would make a distinction between inert waste and biodegradable waste.
Biodegradable waste could be treated in an anaerobic digestion plant to produce useful fuels such as ethanol or even hydrogen; inert waste could not. There is a thesis that plastic bottles will break down eventually, but the timescale is so long—the suggestion is 300 years, although I do not know how that was tested—that it must be regarded as inert waste. Most building products are inert waste. With a substance such as timber, there is a problem. Timber is biodegradable, if treated appropriately. We have suggested that the distinction between types of waste should be made at 25 years.
I shall be interested to hear what the Minister has to say about the amendment. He and I have worked together on the Bill for some time, so I suspect that he will tell me that the amendment is unnecessary. However, I consider the discussion worthwhile. It will help those outside the House if such matters are clarified in Hansard. I beg to move.
Lord Whitty: My Lords, I understand what the noble Lord is getting at. I shall not even argue that we could have a different definition. The Bill is dependent on the definition in the landfill directive. The amendment would change the definition of "biodegradable waste" in a way which is not the same definition as that in the landfill legislation. It is a narrower definition, although the EU definition does
942
not include plastic bottles. The noble Lord will be happy to hear that. Therefore, it would mean that all the measurements would be different from the measurements required by the landfill directive. For that reason and the potential of doing something different from that which we are required to do under the directive, I am unable to accept the amendment.
12.30 p.m.
Lord Dixon-Smith: My Lords, I should not want to take a particularly Euro-sceptic line, but it is a question of definitions. I must accept that. The whole genesis of the Bill relates to the European directive. I am grateful for the explanation. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 22 ["Landfill"]:
Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 18:
Page 15, line 23, at end insert—
"( ) In this Chapter "composting" includes a requirement to maintain selected biodegradable waste at 98 degrees celsius for a minimum of two hours before storing."
The noble Lord said: My Lords, Amendment No. 18 states that,
"'composting' includes a requirement to maintain selected biodegradable waste at 98 degrees celsius for a minimum of two hours before storing".
This is a significant amendment. Many people hope that the composting industry may be able to remove a significant proportion of municipal biodegradable waste from the need to go to landfill.
Be that as it may. The countryside still is recovering from the previous outbreak of foot and mouth disease. It had a direct cost to the Treasury in excess of £4 billion. It probably cost the economy at large in excess of £10 billion. Many people are still suffering as a result.
The exact cause of that foot and mouth outbreak is unknown—or at least it cannot be defined. I believe that the only certainty is that the virus must have been in imported meat or in an imported meat product. There was once a case when the foot and mouth virus succeeded in crossing the Channel. As, in this instance, there was no outbreak of foot and mouth disease on the Continent, I believe that we can rule out that possibility. Therefore, this appalling problem was imported, although we do not know in what or where or how. The dreadful reality is that we do not know how many misses we may have before we receive a hit.
As a consequence of that outbreak, the pigswill industry was closed down at an administrative stroke. The industry was banned. Although the pigswill industry was well regulated and the disease probably caused by inadequate treatment, it was deemed too dangerous to permit the industry to continue its business. As I understand it, the industry was required to treat food residues at 98 degrees celsius or above for a minimum period of two hours.
We now have the Animal Health Act. to which this House devoted a great deal of time, which has the specific intention of increasing the biosecurity of the

943
whole agricultural industry and all related trades through the food chain. The Bill tries to ensure that this dreadful disease is not visited on this country again.
If we treat municipal biodegradable waste less rigorously than was acceptable for pigswill, there are those of us who are very concerned that a coach and horses could be driven through all the work that has been done in the field of biosecurity since the last outbreak of foot and mouth disease. If I understand it correctly, the process of composting will require that the temperature goes up to only 60 degrees celsius, although for a much longer period of 48 hours. However, I understand that the foot and mouth virus is a particularly tough little beast.
There must be the consideration of what is to happen to this compost. We are not discussing simply foot and mouth disease; there are other diseases which could conceivably be spread too. The compost will go to garden centres. One can bet that it will be handled by people not wearing gloves. The compost may be used for pot plants and used in gardens. It may be spread on agricultural land if there is a sufficient quantity, if it is deemed worthwhile, and if it is found to be "beneficial to soil and soil structure". That raises the question of contact with animals, not to mention contact through human use.
We cannot afford to take any risks. Therefore, if Amendment No. 18 is not on the face of the Bill, we shall need very specific assurances. First, there should be no possibility of the foot and mouth disease vector being imported to the United Kingdom through any meat or meat products. To achieve that, it would probably be necessary to ban the importation of all meat and meat products. Therefore, that is not a practical option. But, if the Minister could give that assurance, no further assurances would be necessary.
Secondly, as an alternative, could meat or meat products be prevented from being used in biodegradable waste for composting? If that could be achieved, it might be possible to accept the Bill as it stands. Again, that would be very difficult to achieve. Thirdly, bearing in mind that the treatment to remove the virus now is less rigorous than in the past, would it be possible to guarantee that the composting process ensured the complete and total breakdown of the foot and mouth virus so that the transmission of the infection in that way could not arise?
The fourth assurance relates to the possibility of other diseases. Are the Government satisfied that all diseases that might cause problems for either human beings or animals and pets are totally removed in the composting process? Finally, could it be ensured that the compost was used in such a way that it would be impossible for the disease to spread to animals?
I am a countryman. Composting is composting. but I would not like to guarantee that there would be nothing left in the compost to attract animals such as rats. There is a real problem with this development. I have a great deal of sympathy with the composting industry over this matter. If Amendment No. 18 is
944
included in the Bill, the industry's problems will increase dramatically and its costs will also increase. However, in view of the events of the past two or three years, I believe that the proposal should be included in the Bill. I regard it as a matter of extreme significance. I beg to move.
Lord Livsey of Talgarth: My Lords, we wholeheartedly support the amendment. It is crucial that "composting" should include,
"a requirement to maintain selected biodegradable waste at 98 degrees celsius for a minimum of two hours before storing".
The main points include the impact on agricultural land where in wet weather biodegradable applications can lead to run-off from the farmland into water and water courses. We are also most concerned about the knock-on effect of the run-off into drinking-water supplies.
The second point relates to the disposal of organic waste, especially catering waste, on agricultural land. As the noble Lord, Lord Dixon-Smith, said, that includes meat and inadvertently may include bones. A great deal of meat is de-boned, but chicken bones and so forth appear in catering waste. The impact is twofold. The first is on human health. We need only mention BSE and CJD, which has occurred. Furthermore, typhoid and salmonella could be spread.
We are concerned also about the impact on animal health. I refer to scrapie and to BSE in particular. Lambs and calves, for example, can pick up salmonella from the pasture. I know of a farmer who contracted a type of salmonella typhomuirin from calves and nearly died. It is highly infectious.
The noble Lord, Lord Dixon-Smith, also mentioned foot and mouth, and heat treatment is a most important factor in dealing with that and with BSE. In fact, one should use higher temperatures than those stated. I had experience, albeit 40 years ago, on a family farm of bones being picked up by dogs on the farm. That resulted in an outbreak of foot and mouth disease from imported Argentinan meat. Fortunately, it was an isolated incident on one farm, but all the stock had to be destroyed as a result.
The heat treatment at high temperatures is most important. The noble Lord, Lord Dixon-Smith, made an important point about the banning of pigswill. I wholeheartedly agree that it should have been banned. Biosecurity in relation to animal health is also most important. The relaxation of temperatures led in one respect to the initiation of the BSE outbreak in the mid-1980s and we do not want to repeat such problems. The 98 degrees Celsius specified in the amendment is crucial and we wholeheartedly support it.
Baroness Byford: My Lords, my name is attached to the amendment, which my noble friend has clearly explained. It refers to,
"a requirement to maintain selected biodegradable waste at 98 degrees celsius".
Noble Lords have referred to the closure of the pigswill industry, from where we have obtained the figure. My noble friend rightly spoke about foot and mouth

945
disease and others which we in this country try to guard against and I want to add two further points. The first relates to fallen stock. I understand that from 1st April fallen stock will not be allowed to be buried on farms. What will happen to them thereafter? Even though the majority will not carry disease, it is possible that some may and will have to be disposed of in a proper manner. Furthermore, I understand that blood which accumulates at abattoirs will have to be dealt with differently. Will the Minister explain how the Government are tackling the new requirements being placed on abattoirs?
Finally, as regards catering waste, I would like to believe that the Government's contingency plan—I know they are working on it and that we have not yet received it—and their import control plan will lessen the risk of disease being spread within this country. But we know very well that it is almost impossible to stop disease entering the country. We must therefore take every precaution we can in this country to minimise the possibility and therefore hope that the Government will accept this worthwhile amendment.
12.45 p.m.
Lord Plumb: My Lords, I fully support the amendment and the points that have been made. An enormous danger exists—we have seen it happen in the past and may well do so again. I realise that it will he difficult for the Minister to give the assurances for which my noble friend has asked. I wonder how many noble Lords saw on television last night a programme about the illegal import of foods. It was one of the most horn tic programmes I have seen on television for a long time. The quantity of food that enters this country is considerable and appears to be increasing. The type of food that is coming in is dangerous. The packages containing foodstuffs were often full of maggots and disease. Sometimes it was not known from where they originated or even what animal they came from.
Consumers are horrified by what they see on such programmes. When producers see the importance of dealing with such food as it comes into this country, they become aware of the difficulties we have in coping with the situation. While we recognise that much of the food will go into compost, while there might appear to be discrimination, who knows what goes into compost from the household or industry?
I fully support the amendment. I hope that the Minister will take note and accept the amendment. It will deal with an enormous problem and stop the import of products which created havoc at an extremely high cost to the taxpayers of this country, as we saw during the foot and mouth outbreak.
Lord Swinfen: My Lords. I agree with the amendment. As I have not taken part in previous debates on the Bill, I am a little puzzled by the word "selected. I understand that catering waste from the home or commercial establishment needs to be treated, but do we need special regulations to decide what is to be selected? Having quickly glanced at the Bill, I see no powers to indicate how it is to be selected. Is that
946
matter covered in a current Act? If not, at a later stage of the Bill in another place regulatory powers must be included in it.
Lord Whitty: My Lords, the House will recognise that I would not want to put anything on to the statute book which would increase the vulnerability of our livestock industry to foot and mouth disease or our country to other diseases—human and animal—which cause such a degree of devastation. Therefore, our concern is the same as that expressed by Members on the Benches opposite.
Strong concerns have been expressed about the safety aspects of composting certain types of biodegradable waste; namely, catering waste and animal by-products. We take those concerns extremely seriously. However, it is also true that the composting of catering waste inevitably will be vital if local authorities are to achieve the recycling targets to which they will be subjected by this Bill and the Landfill Directive. However, the composting and biogas treatment of catering waste in the way being advocated in the amendment are in effect banned by the Animal By-Products Order 1999, which will come into effect in May. That order prevents the disposal of catering waste that might contain meat in a way that enables livestock or birds to access and move it, thus increasing the risk of transmission of animal diseases. The requirement will also extend to home composting. Spreading such compost on to pastureland will be banned, as was pointed out by one noble Lord. Furthermore, under the regulations, unsorted catering waste containing meat arid meat by-products will have to go through additional stages of composting. A number of wider issues were raised relating to blood and fallen stock. Some of those matters are relevant to the order, but they are not relevant to biodegradable waste.
Last year the department commissioned a risk assessment to look at the animal and public health risks posed by the composting and biogas treatment of catering waste, as well as; the effect of spreading it on the land. It concluded that, provided satisfactory controls are in place, the treatment can be carried out safely. The controls set out in the by-product regulations, which as I have said will come into force on 1st May this year, will ensure that. For those plants processing only catering waste and not animal by-products, the regulations will allow national standards to be set.
However, when setting national standards we must bear in mind their total effect. I imagine that a number of noble Lords have received a letter from the Composting Association. It indicates that if the bulk of catering waste were subjected to the kind of treatment suggested in the amendment, it could in fact have counter-productive effects on safety. Heating waste to such high temperatures can destroy the beneficial micro-organisms that should be encouraged by the composting process, thus rendering the compost ineffective. In addition, destruction of good microbes through heating can increase the susceptibility of the waste to an increase of pathogenic

947
microbes such as salmonella. It is by no means clear that the proposal would guarantee greater safety than the provisions of the by-products regulations already in place.
Turning to the national standards element, we have just completed a consultation aimed at proposing suitable UK national standards for the treatment of catering waste. The standards are in line with the recommendations of the independent risk assessment, to which industry and users have now replied.
The Government accept that the composting of kitchen and catering waste is an important method of diverting waste away from landfill, but it is vital that it is done safely and with due regard to all the dangers referred to by noble Lords. However, it is not sensible or necessary to put into the Bill a different form of control and requirement from that already covered by the animal by-products regulations. Furthermore, even leaving aside the point made by the noble Lord, Lord Swinfen, that the amendment is not complete in itself, its effects could be counter-productive.
Given the assurance that the Government have already considered this dimension, but believe that the animal by-products regulations already cover the points, and given the further protections through national standards currently being developed, I hope that noble Lords will not pursue the amendment.
Lord Dixon-Smith: My Lords, I have listened with care to the Minister. Before responding to his remarks, I wish to express my gratitude to all noble Lords who have spoken in support of the amendment, including the noble Lord, Lord Livsey, my noble friends Lady Byford and Lord Plumb, as well as the slightly more hesitant support offered by my noble friend Lord Swinfen, who rightly raised the question of selected waste. However, having listened to what the Minister had to say in response, it is clear why the word "selected" has been introduced.
As I would expect of a government, the Minister has enunciated in the strongest terms his clear intention to try to make the system safe. However, it will depend on the risk assessment. The difficulty is that before the foot and mouth outbreak a risk assessment would have suggested that it could not happen, but it did. That is the nub of this problem.
Catering waste is not to be sent for composting and the use of such compost is to be banned on pasture. That is fine, but if it is used on adjacent arable land and cattle stray on to that land, who can say what will happen? It is not unknown for animals to stray from their areas. There are to be more rigorous forms of treatment where catering waste is involved, but when we consider biodegradable municipal waste, comprising the garbage that we heave into our own dustbins, it obviously includes food residues and residual animal waste products. They may be satisfactorily or unsatisfactorily treated; they may be cooked or uncooked, such as in the disposal of rare steak. We must consider the dangers.
948
I hear what the Minister says about regulations which are to follow after the completion of the risk assessment and I take his point that heating compost may have certain disadvantages with regard to the final product. I am well aware of the work being done in this area.
If the Bill had reached the end of its parliamentary process today, I would be inclined to take the Minister's words a little more seriously, but today's procedure is not the end of the process. The Bill has yet to be sent to the Commons and thus there will be plenty of opportunities to consider the matter further. At the moment I am not satisfied with the Government's response. I asked for specific assurances, but they have not been given. To be honest, I did not think that the Minister would be able to give those assurances, although I thought that it would be worth asking for them. In the circumstances, I should like to test the opinion of the House.
12.58 p.m.
On Question, Whether the said amendment (No. 18) shall be agreed to?
Their Lordships divided: Contents, 125; Not-Contents, 107.

Division No. 2

CONTENTS

Addington, L.

Greaves, L.

Alderdice, L.

Hamwee, B.

Alton of Liverpool, L.

Hanham, B.

Anelay of St Johns, B.

Hanningfield, L.

Arran, E.

Harris of Peckham, L.

Astor of Hever, L.

Harris of Richmond, B.

Baker of Dorking, L.

Hayhoe, L.

Blaker, L.

Henley, L.

Blatch, B.

Higgins, L.

Bowness, L.

Hodgson of Astley Abbotts, L.

Bradshaw, L.

Holme of Cheltenham, L.

Brougham and Vaux, L.

Hooper, B.

Buscombe, B.

Hooson, L.

Byford, B. [Teller]

Howe, E.

Caithness, E.

Howe of Aberavon, L.

Campbell of Alloway, L.

Howell of Guildford, L.

Carlisle of Bucklow, L.

Jellicoe, E.

Carnegy of Lour, B.

Jenkin of Roding, L.

Carrington, L.

King of Bridgwater, L.

Colwyn, L.

Knight of Collingtree, B.

Cope of Berkeley, L.

Laing of Dunphail, L.

Crathorne, L.

Livsey of Talgarth, L.

Crickhowell, L.

Lucas, L.

Dahrendorf, L.

Luke, L.

Dean of Harptree, L.

Lyell, L.

Denham, L.

McColl of Dulwich, L.

Dholakia, L.

Mackie of Benshie, L.

Dixon-Smith, L.

McNally, L.

Eccles of Moulton, B.

Maddock, B.

Elles, B.

Mar and Kellie, E.

Elliott of Morpeth,L.

Marlesford, L.

Elton, L.

Mayhew of Twysden, L.

Feldman, L.

Miller of Chilthorne Domer, B.

Ferrers, E.

Miller of Hendon, B.

Fookes, B.

Molyneaux of Killead, L.

Fowler, L.

Montrose, D. [Teller]

Gardner of Parkes, B.

Murton of Lindisfarne, L.

Geddes, L.

Newby, L.

Geraint, L.

Newton of Braintree, L.

Glenarthur, L.

Northbrook, L.

949

Norton of Louth, L.

Sanderson of Bowden, L.

Oakeshott of Seagrove Bay, L.

Scott of Needham Market, B.

O'Cathain, B.

Seccombe, B.

Palmer, L.

Selborne, E.

Patten, L.

Selsdon, L

Pearson of Rannoch. L.

Sharp of Guildford, B.

Pilkington of Oxenford, L.

Shutt of Greetland, L.

Plumb, L.

Skelmersdale, L.

Plummer of St. Marylebone, L.

Smith of Clifton, L.

Reay, L.

Strathclyde, L.

Redesdale, L.

Swinfen, L.

Renfrew of Kaimsthorn, L.

Thatcher, B.

Rennard, L.

Thomas of Walliswood, B.

Renton, L.

Tordoff, L.

Renton of Mount Harry, L.

Trumpington, B.

Roberts of Conwy, L.

Tugendhat, L.

Rodgers of Quarry Bank, L.

Vivian, L.

Roper, L.

Waddington, L.

Ryder of Wensum, L.

Wakeham, L.

Saatchi, L.

Walpole, L.

Saltoun of Abernethy, Ly.

Wigoder, L.

Sandberg, L.

Williams of Crosby, B.

Windlesham, L.

NOT-CONTENTS

Acton, L.

Grocott, L. [Teller]

Ahmed, L.

Hardy of Wath, L.

Allenby of Megiddo, V.

Harris of Haringey, L.

Amos, B.

Harrison, L.

Andrews, B.

Hilton of Eggardon, B.

Archer of Sandwell, L.

Hogg of Cumbernauld, L.

Ashton of Upholland, B.

Hollis of Heigham, B.

Bassam of Brighton, L.

Howells of St. Davids, B.

Berkeley, L.

Hoyle, L.

Bernstein of Craigweil, L.

Hughes of Woodside, L.

Billingham, B.

Hunt of Kings Heath, L.

Blackstone, B.

Irvine of Lairg, L. (Lord Chancellor)

Boothroyd, B.

Janner of Braunstone, L.

Borrie, L.

Jay of Paddington, B.

Boston of Faversham, L.

Jeger, B.

Bragg, L.

Jones, L.

Brooke of Alverthorpe, L.

King of West Bromwich, L.

Brookman, L.

Kirkhill, L.

Brooks of Tremorfa, L.

Lipsey, L.

Bruce of Donington, L.

McCarthy, L.

Burlison, L.

Macdonald of Tradeston, L.

Campbell-Savours, L.

McIntosh of Haringey, L. [Teller]

Carter, L.

MacKenzie of Culkein, L.

Christopher, L.

Mackenzie of Framwellgate, L

Clarke of Hampstead, L.

Merlyn-Rees, L.

Clinton-Davis, L.

Morris of Aberavon, L.

Cohen of Pimlico, B.

Morris of Manchester, L.

Craig of Radley, L.

Nicol, B.

Crawley, B.

Parekh, L.

David, B.

Patel of Blackburn, L.

Davies of Coity, L.

Pitkeathley, B.

Davies of Oldham, L.

Plant of Highfield, L.

Desai, L.

Prys-Davies, L.

Dixon, L.

Ramsay of Cartvale, B.

Dubs, L.

Richard, L.

Elder, L.

Rogers of Riverside, L.

Evans of Parkside, L.

Rooker, L.

Evans of Temple Guiting, L.

Sawyer, L.

Falconer of Thoroton, L.

Scotland of Asthal, B.

Farrington of Ribbleton, B.

Sheldon, L.

Faulkner of Worcester, L.

Simon, V.

Fyfe of Fairfield, L.

Slim, V.

Gale, B.

Stoddart of Swindon, L.

Gilbert, L.

Strabolgi, L.

Gladwin of Clee, L.

Symons of Vernham Dean, B.

Golding, B.

Taylor of Blackburn, L.

Goldsmith, L.

Tenby, V.

Gordon of Strathblane, L.

Thornton, B.

Gould of Potternewton, B.

Grenfell, L.

950

Turner of Camden, B.

Williams of Elvel, L.

Warwick of Undercliffe, B.

Williams of Mostyn, L. (Lord Privy Seal)

Whitaker, B.

Williamson of Horton, L.

Whitty, L.

Woolmer of Leeds, L.

Wilkins, B.

Resolved in the affirmative, and amendment agreed to accordingly.
1.8 p.m.
Clause 25 [Activities to which Chapter 1 does not apply]:
[Amendment No. 19 not moved.]
Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 20:
After Clause 25, insert the following new clause—
"APPLICATION OF THE LANDFILL TAX ESCALATOR

(1) Commencing in the financial year 2006–07, the whole of the portion of landfill tax above £15 per tonne in each year will be disbursed to the allocating authority for each area.

(2) The allocating authority for each area will apply the disbursement received under subsection (1) to—

(a) research into ways of reducing the amount of all waste going to landfill,

(b) capital projects designed to treat biodegradable municipal waste to prevent it from going to landfill,

(c) capital projects designed to treat biodegradable waste to reduce the amount of all waste going to landfill, and

(d) schemes designed to benefit the local community where waste treatment projects are sited.

(3) The allocating authority for each area shall ensure that capital projects for treating biodegradable municipal waste are—

(a) sited within the boundaries of the location controlled by each waste disposal authority that is applying for funding, and

(b) supplied with waste mainly collected within the boundaries of the locality controlled by the relevant waste disposal authority.

(4) The allocating authority for each area shall by regulations ensure that private waste disposal companies shall also be entitled to use the facilities resulting from subsection (2).

The noble Lord said: My Lords, the amendment relates to the application of the landfill tax escalator. It requires that after 2006–07 the moneys from the landfill tax escalator, which are already committed by the Chancellor of the Exchequer, should be dedicated to the research, investment and so on required by the waste disposal industry if we are to meet national targets.
It has been estimated that an annual expenditure of £1.5 billion for the next 10 years will probably be required if we are to meet the directive in the way intended. At the moment the Government are investing in the order of £7 million or £8 million per year in this field. There is, of course, a good deal of private money and investment going in and the total turnover of the waste industry amounts to a large sum of money. But we are talking about new investment and the money has to come from somewhere. If the costs of disposal are being deliberately increased in order to prevent waste going to landfill., there is merit in the revenue generated being reinvested in the new process plant required to meet national targets.
This is a fairly simple principle. It is one which every Chancellor of the Exchequer, and therefore every government Minister, is bound to resist. But it is a case worth arguing. We believe that this should be done. I beg to move.
Lord Greaves: My Lords, as I understand it, the amendment seeks to hypothecate all the revenue from landfill tax over £15 a tonne to the specific purposes set out in the amendment. This is an entirely new principle as regards landfill tax. At present, 20 per cent of landfill tax goes to worthy schemes; to recycling, and so on. The noble Lord, Lord Dixon-Smith, wants to take the whole of the increase in landfill tax—the landfill tax escalator—and apply it to specific purposes in relation to the Bill and specifically in relation to municipal biodegradable waste.
This interesting idea is worthy of considerable debate. Third Reading is not technically the best time to hold such a debate. It would have been interesting to explore in Committee the exact intention behind the amendment, and why these specific purposes and not others are set down. We cannot do that at this stage. Therefore, we must take the amendment or leave it.
Over and above capital projects in relation to treating biodegradable waste, the money would be applied to,
"schemes designed to benefit the local community where waste treatment projects are sited".
I am not sure how such a local community would be defined. The question arises: why that local community, and not local communities which have landfill sites, which in many cases are likely to present more difficulty in terms of the effect on the community? The terms of the amendment are very specific. It is difficult to see exactly why it is drafted as it is.
In addition, the amendment seeks to impose conditions relating to capital projects designed to treat biodegradable municipal waste, stating that they have to be,
"sited within the boundaries of the location controlled by each waste disposal authority".
I am not sure what that means; I suspect that it is a misprint for "locality". The amendment also lays down the specific condition that the capital projects funded by this money should only be within,
"the relevant waste disposal authority".
This may be a county view. It may have arisen in counties with lots of land which get upset when much smaller unitary authorities want to locate waste disposal facilities of various kinds in those areas. I suspect that that is how this situation has arisen. It seems to me totally impractical. It seems that joint schemes might be prevented from happening by the precise wording of the amendment. Viewed from Lancashire, which might in future be broken up into unitary authorities, the county will not start locating individual facilities such as this within each of the
952
likely unitary authorities; it will have a certain number of facilities in strategic positions in the county. The unitary authorities they appear in will be arbitrary.
For those reasons, and because we do not have an opportunity to probe the amendment properly and discover its meaning, I shall not be able to advise my colleagues to support it.
1.15 p.m.
Baroness Byford: My Lords, I have added my name to the amendment. I am disappointed that we did not raise the subject earlier. That said, and accepting the comments of the noble Lord, Lord Livsey, that the wording is not perfect, I hope that the Minister will give us some indication that the Government will consider the proposal.
We know very well that the Government do not like hypothecation—all governments are fearful of it. The amendment is designed so that the money that will go to good causes is not taken away. It is certainly not my intention that it should be taken away. The new money raised will be used for the benefit of the community in finding out different ways in which the amount of waste going to landfill can be reduced.
Having accepted that the amendment is slightly wordy and not perfect, if the Minister will give an indication that between now and the Bill's appearance in another place the Government will give the matter additional thought rather than simply turning the amendment down flat, I for one shall be happier.
Lord Stoddart of Swindon: My Lords, as pointed out by the noble Lord, Lord Greaves, there are defects in the amendment. However, the proposal could be debated as the Bill moves through its stages in another place.
I am not at all sure that I am against hypothecation. It seems to me that it may be a very good discipline for Chancellors of the Exchequer and that money raised from the taxpayer on the pretext of doing one thing should not be used to do something else.
In past weeks we have had an example of hypothecation which everyone seems to think is working very well. I refer to the London congestion charge. The fines from the charge, as I understand it, are to go towards improving public transport. Who in this Chamber is opposed to that? Hands up, please, those noble Lords who are opposed to the idea of the fines going towards better transport in London. The idea of hypothecation is possibly gaining a great deal of support. We should not, therefore, reject the amendment on that basis. If it is put to the vote, just to establish that principle, I shall vote for it. Then we shall see what happens. At least it will make the Government think.
Lord Whitty: My Lords, the Government have thought about this proposal and I understand what is behind it. I shall not engage in any knee-jerk ideological defence of the position against hypothecation. Increasing landfill tax beyond its current escalator will be necessary in order to deliver

953
sustainable waste management and it is intended to provide businesses and local authorities with the incentive to use and develop alternatives to landfill. So the issue of' recycling this revenue immediately arises.
However, it is not normal for legislation—and not conventional for House of Lords legislation in particular—to pre-empt what might be normal Budget business. We announced in the Pre-Budget Report that revenue from businesses which results from increases in the landfill escalator will be recycled back to businesses. We also said that the increases will be revenue neutral as a whole-in other words, the increase in revenue from the local authorities will also be recycled back to local authorities.
The revenue will, therefore, not be lost to local authorities; it will go back into the system to bring further benefits to local government. That is admittedly in general terms, and does not have the prescriptive nature of this amendment. But, as the noble Lord, Lord Greaves, indicated, the restrictions and ambiguities of the prescriptions are in any case not helpful to the noble Lord's cause.
We are discussing ministerially the mechanism for recycling the revenue from municipal waste under a group chaired by a Treasury Minister. I am not, of course, in a position to anticipate the forthcoming Budget or any subsequent Budget, but I have no doubt that there will be announcements by the Chancellor of the Exchequer in due course.
In the meantime, it is not an appropriate use of this legislation to pre-empt such decisions. Therefore, while displaying as a great sympathy as I am in a position to do with the objectives of the amendment, I must resist it.
Lord Dixon-Smith: My Lords, I am grateful to the Minister for his sympathy, if nothing else. The noble Lord, Lord Greaves, is also sympathetic but says that the wording might be too restrictive in the way these funds could be used. I accept some of his criticism, but some of the restrictions were thought through. For instance, most existing landfill sites already have fairly heavy conditions imposed on them to make them more environmentally attractive. Not the least of the big problems in dealing with waste is overcoming local nimbyism. That was why we felt we should put these funds towards the benefit of communities where new facilities are provided.
One would hope that part of the result of these developments over the next 18 years would be that we did not need to open any more landfill sites. Were that to happen, it would be extremely beneficial.
I am grateful to the noble Lord, Lord Stoddart of Swindon, for his support, particularly on hypothecation. He used the London congestion charge as an argument in favour of it, but that is not necessarily proven yet. We do not know how the congestion charge will work in the long term and until we do, I would not want to take it as an example of anything, although it certainly seems to have had a remarkable effect.
954
My noble friend Lady Byford asked the Government to consider the ideas behind the amendment, even if they do not accept it. I am grateful for that thought because the Minister gave some hint in his response that the Government are doing that In the circumstances, therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 26 [Penalties under Chapter 1: general]:
[Amendment No. 21 not moved.]
Lord Whitty Lord Whitty moved Amendment No. 22:
Before Clause 31, insert the following new clause—
"DIRECTIONS TO WASTE COLLECTION AUTHORITIES IN ENGLAND
(1) Part 2 of the Environmental Protection Act 1990 (c. 43) (waste on land) is amended as follows.
(2) In section 48 (duties of waste collection authorities as respects collected waste), after subsection (1) (collection authority to deliver collected waste to places directed by disposal authority) there is inserted—
11 (1A) A waste collection authority in England which is not also a waste disposal authority must discharge its duty under subsection (1) above in accordance with any directions about separation of waste given by the waste disposal authority for its area."
(3) In section 51 (functions of waste disposal authorities), after subsection (4) there is inserted—
"(4A) A waste disposal authority in England which is not also a waste collection authority may in directions under subsection (4)(a) above include requirements about separation that relate to waste as delivered, but may do so only if it considers it necessary for assisting it to comply with any obligation imposed on it by or under any enactment.""
The noble Lord said The noble Lord said: My Lords, I shall also speak to the other amendments in my name in this group. We have discussed the need for a good relationship between the waste disposal authorities and the waste collection authorities in areas with two-tier authorities. We all accept that there is a need for that to be clearer.
The amendment would give a power to allow counties to direct districts as to the form in which waste should be delivered. That is in line with the Waste Strategy 2000. The amendment would amend Sections 48 and 51 of the Environmental Protection Act 1990 to allow for that direction, which is already there for a parallel purpose. The amendment would extend a county's existing powers to give directions to a district by providing that such directions may include requirements about the separation of waste as delivered to the county.
The amendment to Section 48 will place the district under a duty to comply with any directions about the separation of waste. The amendment provides that a county can use that power only if it considers it necessary for assisting it to comply with any obligation imposed on it by or under any enactment. That will include enactments under this Bill, other Bills and the Local Government Act 1999.
The new clause would come into force on a day appointed by the Secretary of State. We therefore need to consider how the timing would fit in with some of the other measures designed to improve co-operation between the county and district in two-tier areas. We see partnership between the two levels as very important in delivering this. The ability to give a direction helps in areas where relations between the two tiers are not always as amicable as we would like and where a joint approach is desirable.
It may he helpful to the House if I mention the amendment in the name of the noble Lord, Lord Dixon-Smith, which deals with passing on penalties. I understand why it has been tabled, but we did not find penalties being passed between counties and districts an attractive prospect. We want to ensure that there is partnership; the question of direction clearly gives some authority to the county but arguing about sanctions and money is unlikely to develop the constructive partnership that we wish to see. We therefore want to leave it clear that the county—the waste disposal authority—is responsible for meeting targets. We do not want to confuse the issue by introducing the ability to pass on any sanction or penalty to another authority.
Of course, the allocating authority has the discretion not to impose part of the penalty that would otherwise arise if it concludes that the county has failed to meet its target because of the district. That is perhaps better than arguing who should pay the fine. There is a mixture of incentives and powers already in the Bill if we accept these government amendments. Whatever the view taken on the amendment on which the Government were just defeated, there is a general desire on all sides for disposal and collection authorities to work together. That would not be enhanced by introducing the shifting of the penalty. However, we accept the logic behind the amendments in my name. I beg to move.
Lord Dixon-Smithhad given notice of his intention to move, as an amendment to Amendment No. 22, Amendment No. 23:
Line 11, at end insert—
""(1B) Where a waste collection authority which is not a waste disposal authority fails to discharge its duty under subsection (4A) of section 51 of this Act, and as a result the waste disposal authority receives a penalty, the Minister shall have a duty to transfer the penalty to the waste collection authority.""
The noble Lord said: My Lords, Amendment No. 23 was tabled to fulfil a lack which was pointed out to me at an earlier stage in the Bill when I was trying to deal with the problems of reducing transport. I was properly checked by the noble Lord, Lord Livsey, and the Minister because that amendment contained no means of enforcement.
956
The Minister's amendments are very welcome and of course, if everybody plays the game straight, there will be no problem. However, if somebody slips, there is no mechanism for enforcement. If the allocating authority were minded to impose a penalty, it could do so only on the disposal authority, not on the collection authority that had caused the problem.
I am grateful to the Minister for raising this matter. If the allocating authority were minded to withhold any penalty that was due to the inaction or inappropriate action by a collection authority where the collection authority was not the disposal authority, that would remove the need to transfer the penalty. That is an option—it is not a fact. The Government are proposing that we have in place a system under which the Government—the "allocating authority"—could impose a penalty on a waste disposal authority because of the action or inaction of a third party. That is patently unjust.
This leaves me with a personal dilemma about whether to press the amendment, bearing in mind the time and our practice on a Thursday. Given that we now have a joint waste strategy between the waste disposal and the waste collection authorities, as well as some of the other things that have happened today, perhaps we can let it go. But it may be necessary for someone in another place to return to this issue and make sure that the matter is quite clear. On the whole, it is not particularly nice to leave doors open which are better closed or not to open doors when they are closed. In the circumstances, however, I shall not move the amendment.
[Amendment No. 23, as an amendment to Amendment No. 22, not moved.]
On Question, Amendment No. 22 agreed to.
Clause 35 [Commencement]:
Lord Whitty Lord Whitty moved Amendment No. 24:
Page 21, line 36, after "17" insert ", (Directions to waste collection authorities in England)"
On Question, amendment agreed to.
Clause 36 [Extent]:
Lord Whitty Lord Whitty moved Amendment No. 25:
Page 22, line 27, leave out ", 29 and 30" and insert "and 29 to (Directions to waste collection authorities in England)"
On Question, amendment agreed to.
An amendment (privilege) made.
Lord Whitty: My Lords, I beg to move that the Bill do now pass.
Moved, That the Bill do now pass.—(Lord Whitty.)
On Question, Bill passed, and sent to the Commons.
Baroness Farrington of Ribbleton: My Lords, I beg to move that the House do now adjourn during pleasure.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended. from 1.31 to 3 p.m.]

Lord McIntosh of Haringey: Personal Statement
Lord McIntosh of Haringey: My Lords, with the leave of the House, I wish to make a personal statement. In the debate on pensions yesterday, the noble Lord, Lord Jenkin of Roding, said that I gave,
"the figure for stakeholder pensions sold as 1½ million".
He went on to say:
"I hope that the Minister"—
that is, my noble friend Lady Hollis—
"will therefore recognise that her colleague"—
that is, me—
"misled the House by a factor of 20 per cent".—[Official Report, 5/3/03; col. 859.]
This is what happened. My briefing said that the figure was 1.15 million. I said, and I quote from the tape:
"There are 335.000 employers involved with stakeholder pensions. A hundred"—
and I hesitated—
"one and a half million stakeholder pensions have been sold".
I clearly mis-spoke. I apologise unreservedly to the House for that error, but I hope that the House will acquit me of any intention to mislead.

Epilepsy
3.1 p.m.
Baroness Gould of Potternewtonasked Her Majesty's Government:
What action they intend to take following the review of the management of patients with epilepsy by the University Hospitals of Leicester National Health Service Trust.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, we have commissioned an independent review of this issue which is due to be published in the spring. We will consider its findings very carefully alongside the local clinical review to decide what further action may he needed.
Baroness Gould of Potternewton: My Lords, in asking my Question, I must declare an interest as president of Epilepsy Action. I welcome the fact that such a review is taking place. However, can my noble friend indicate whether, perhaps as a result of the review, the Department of Health will undertake further investigation into whether there is a prevalence of misdiagnosis in other hospitals? I make the point particularly because of the shortage of epilepsy-trained neurologists. I wonder what action is being taken and what resources are being provided to improve the situation.
Lord Hunt of Kings Heath: My Lords, I should like first to congratulate my noble friend on the
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announcement today of her appointment as chair of the Advisory Group on Sexual Health and HIV. She is right to suggest that there are lessons to be learned nationally from what happened in Leicester. It is a. fact that there are problems in diagnosing epilepsy by doctors. We intend that the treatment and care of people with epilepsy will be part of the National Service Framework on Long-Term Conditions. My noble friend's point on diagnosis will indeed be covered in that national service framework.
Baroness Barker: My Lords, according to the CSAG report, epilepsy misdiagnosis in children Ina) occur in up to 40 per cent of cases in this country. In view of that, what steps will the Government take to require strategic health authorities to provide specialist epilepsy neurological services and training to other paediatric staff?
Lord Hunt of Kings Heath: My Lords, as I believe I have already mentioned, the National Service Framework on Long-Term Conditions will be extremely helpful in assisting the NHS to ensure that it has the right kind of services and deals with some of the diagnosis problems to which the noble Baroness referred. In the past two weeks, we have published an action plan on epilepsy which involves provision of support and information. We are also referring to NICE the question of drug treatment for epilepsy. On the workforce issue, we have had an increase in the number of consultants within the paediatric specialty and a small increase in the number of consultants within paediatric neurology. Within the specialist interest nursing profession, we are again seeing an increase in the number of epilepsy nurses. I recognise that more needs to be done, but I believe that we have set the framework in which to tackle these important issues.
Earl Howe: My Lords, I declare an interest as president of the National Society for Epilepsy. Is the Minister aware of the disappointment expressed by many bodies in the world of epilepsy care that the amount of money earmarked in the Government's action plan for the 380,000 people in this country who have epilepsy is a mere £1.2 million? How far does he believe that that sort of money will go among so many epilepsy patients?
Lord Hunt of Kings Heath: My Lords, the point about the specific funding announcement is that £1.2 million is for the non-NHS modernisation agency project, which will help to improve the quality and access to neurology services, and that £288,000 is going to the National Society for Epilepsy to improve information and support for people with epilepsy and their families. It is a relatively small amount of resource. However, we are moving away from the earmarking of funds nationally towards placing as much money as possible at the local level, and it will be for local primary care trusts to decide how to spend that money. I accept that in doing that we have a responsibility to ensure that there is enough guidance for primary care trusts so that they do indeed spend the

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resources in this important area. That is the purpose of the action plan, the national service framework and the referral to NICE in relation to epilepsy drugs.
Lord Skelmersdale: My Lords, will the noble Lord confirm that research into epilepsy, and indeed any other long-term illness, has nothing to do with primary care trusts? Can he say how much money the Government are spending on research in this particular area?
Lord Hunt of Kings Heath: My Lords, much of the research in this area will be funded through the Medical Research Council. The latest figures that I have are for 2000–01, when the MRC spent about £3 million in this area. However, the council also spends larger sums on basic research on nerve function and damage, and that should also be effective. In addition, one of our R&D programmes is sponsoring a project on a randomised control trial of longer-term clinical outcomes and the cost-effectiveness of standard and new anti-epileptic drugs. That is being funded at a cost of about £1.3 million.

Drug Courts
3.7 p.m.
Lord Adebowaleasked Her Majesty's Government:
What is their policy towards drug courts in light of the publication of the updated drug strategy and the proposed introduction of a single generic community sentence.
The Minister of State, Home Office (Lord Falconer of Thoroton): My Lords, the experience of drug test and treatment order review courts shows that there is much to be gained by allowing sentencers to play a more active part in the review and monitoring of drug treatment and testing orders. To be most effective, we need to ensure that there is continuity through the stages of the court process, that there is consistency in practice, and that sentencers have the opportunity, training and guidance to build experience. We are currently considering how we can build on best court practice and, subject to the outcome of any pilots, I hope that we will be able to give courts a much greater role to play in the rehabilitation of drug misusing offenders.
Lord Adebowale: My Lords, I thank the noble and learned Lord, Lord Falconer, for that reply. I also declare an interest as chief executive of Turning Point social care, an organisation with some experience in the provision of drug courts in places such as Wakefield. I personally have long been an advocate of the drug court model. I believe that it offers a considerable advantage over traditional court hearings in terms of its status as well as more direct benefits by having a panel where specially trained
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magistrates can both understand the complexity of drug use and offer a sensitive and supportive role to offenders over a long period of time.
The drug court pilots in England and Scotland have shown that drug courts are more successful than the traditional court-review approach in retaining people in treatment for longer. Does the noble and learned Lord agree that future growth in that regard would result in considerable savings in the criminal justice system, improved treatment outcomes and wider savings to society more generally? Will he consider expanding drug courts as a means of delivering the drug treatment requirements of the community sentence?
Lord Falconer of Thoroton: My Lords, I pay tribute to the work that Turning Point has done in relation to a large number of projects which help to reduce dependency on drugs and thereby reduce crime driven by drugs. I also pay tribute to the work that Turning Point did in the Wakefield and Pontefract courts in the period before drug treatment and training orders were introduced. I agree in principle with what my noble friend says; namely, that the more experience a court has of dealing with drug offenders, the better able it is to review the progress of drug treatment and training orders and to pass appropriate sentences. We need to consider how we can involve courts more in the process of ensuring that the sentences they pass are effective in dealing with drug-fuelled offending.
Lord Hodgson of Astley Abbotts: My Lords, given the prevalence of drug-taking in prison, which reinforces the link between drugs and crime, and the fact that the updated strategy refers to expanding treatment provision in prisons, will the Minister explain what that commitment really means in terms of how many additional treatment places and what additional resources will be made available and so on?
Lord Falconer of Thoroton: My Lords, it means first and foremost providing more treatment than is currently available. The current amount of money available for drug treatment is somewhere in the region of £450 million per annum. By the year ending 2005, we envisage having £573 million available to provide drug treatment. That will include drug treatment available for those in custody, which is a very important area on which to focus. However, we should emphasise that drug treatment in prison is of most help if support is given after the offender leaves prison. So many people immediately fall into their old ways when they leave prison unless support is given at that point. That is what we need to focus on as well as providing proper treatment.
Lord McNally: My Lords, does the Minister agree that although treatment, counselling and help are of the greatest assistance in the war against drugs, we shall win that war only if we hit hard the drug barons and organised drug crime at its source? How are the

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Government's initiatives to obtain greater co-operation from financial authorities on issues such as the laundering of drugs money and the movement of drug profits succeeding?
Lord Falconer of Thoroton: My Lords, I agree with the proposition advanced by the noble Lord, Lord McNally. It is not just a matter of seeking to help people who are dependent on drugs to prevent them returning to crime, but also of hitting drug barons and the people who are making huge amounts of money out of crime. We have dealt with money laundering to some extent in previous legislation. We have also provided a very effective legal framework in the Proceeds of Crime Act to ensure that those who make money out of drugs, whether through money laundering or in other ways, are hit effectively through the judicial system. We are putting in train legal measures to ensure that that will be the case.
Lord Corbett of Castle Vale: My Lords, does my noble and learned friend agree that it is rather ludicrous that it is quicker to get treatment for drug abuse in prison than it is in the civilian world? For example, people in Birmingham have complained of having to wait for up to a year for drug treatment. Will my noble and learned friend have a word with his noble friend at the Department of Health to see what can be done about that?
Lord Falconer of Thoroton: Yes, my Lords. I am very aware of the fact that in certain parts of the country it takes too long to access drug treatment. That is a matter that the Home Office and the Department of Health are working on together. As regards the point about people in prison accessing drug treatment earlier than those outside prison, difficult judgments have to be made, but society as a whole is helped if the people who commit drug-fuelled crime have their need for drugs reduced.
Lord Taverne: My Lords, given the problems associated with drug treatment in prison when a rehabilitation course comes to an end, will the Government give serious consideration to converting some prisons wholly to the task of rehabilitation to get people off drugs?
Lord Falconer of Thoroton: My Lords, over the past few years the focus in prison as regards seeking to rehabilitate people from both drug and alcohol dependency has changed. I do not think that it would be appropriate to focus a whole prison on rehabilitation. We need to focus on steps to detoxify prisoners who are dependent on drugs or alcohol. The Prison Service is now focusing effectively on that.
Baroness Howe of ldlicote: My Lords, in light of the updating of the drug strategy, what view are the
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Government taking of the growing use of gat in this country which has significant health implications quite apart from the drug aspect?
Lord Falconer of Thoroton: My Lords, perhaps I may write to the noble Baroness on that matter.
Lord Rea: My Lords, can my noble and learned friend give us some indication of the success of drug treatment and training orders? How long have they been in operation? Can he say how effective they are in preventing reoffending and keeping people drug free as compared with a group of people who receive standard sentences without DTTOs?
Lord Falconer of Thoroton: My Lords, pilot DTTOs began in March 1999 and ended in March 2000. They were rolled out nationally in October 2000. We have not yet had time to work out how effective they have been as one needs to look at reconviction rates over a longer period than the two years in which they have been in operation. The number of DTTOs made by the courts has now reached approximately 6,000 a year. The courts consider them attractive disposals in relation to drug-fuelled offenders. Shortly we shall publish material to indicate how effective they have been.
Baroness Thomas of Walliswood: My Lords, does the noble and learned Lord agree that the overcrowding of the prison system and the subsequent frequent movements of prisoners between one prison and another is having a deleterious effect on the delivery of drug treatment in prison?
Lord Falconer of Thoroton: My Lords, one should put the matter in context. The focus of prisons has changed over the past few years from being simply places where there is no education, no treatment and no rehabilitation at all to places where conditions have improved. People are focusing on seeking measures to reduce reoffending. Things are very much better than they were in, for example, 1992. Of course, the fact that there are more people in prison than previously makes the task harder but we should not lose sight of the progress that has been made.

Teaching Standards
3.17 p.m.
Lord Quirkasked Her Majesty's Government:
To what extent they are satisfied with the progress of teaching, learning and administration noted in the annual report of Her Majesty's Chief Inspector of Schools published on 5th February.
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland): My Lords. the annual report of Her Majesty's Chief Inspector of Schools in England confirms that standards of pupil attainment have continued to rise and that that improvement is the

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result of better teaching. Inspectors found more good teaching and fewer poor lessons than ever before. Although there is much to celebrate, we recognise that we must build on the significant gains made in primary schools and secure similar improvements in secondary and further education.
Lord Quirk: My Lords, I am grateful to the Minister for that reply. Indeed, there has been welcome progress and there is a great deal in the report that is very pleasing. But what will the Government do about the great deal that is less pleasing? for example, I refer to the 25 per cent of FE colleges that are found to be unsatisfactory, the significant disparity between boys' and girls' achievement in maintained schools—oddly enough, not matched in the independent sector—and the sad lack of achievement by Afro-Caribbean children (puzzlingly only after about the age of nine or 10) as compared with all other groups.
Baroness Ashton of Upholland: My Lords, the noble Lord, as always, makes some very important points. I shall try to deal with them briefly although each one of them could give rise to a debate. The noble Lord's remarks are absolutely right. Of the children who transfer to secondary school, a quarter of pupils, mostly boys, do not reach the required standards in literacy and numeracy. Those areas need to be tackled. We are considering carefully how we support boys in that regard. Boys from disadvantaged backgrounds are particularly susceptible to low achievement. Much work is being carried out on that matter.
As regards ethnic minorities, we have just begun consultation on a new strategy to determine how we can more successfully support children from ethnic minorities. That includes considering the role of Saturday schools that have been successful for many ethnic minority communities and also the excellent work that Ofsted has already done on identifying the factors that make a difference to the attainment of children from ethnic minorities in both primary and secondary schools. I urge noble Lords to examine that strategy.
We accept that more needs to be done to ensure that the needs of students in further education are met, particularly those of average and less able students. A strategy is under way to try to develop that further.
Lord Sutherland of Houndwood: My Lords, does the Minister agree with the Chief Inspector of Schools about the absolutely vital importance to be attached to leadership in schools? If so, what steps are in hand to enhance the abilities of those already in post as head teachers and those who will come into post over the next five to 10 years?
Baroness Ashton of Upholland: My Lords, I agree with the chief inspector and the noble Lord that leadership has been identified as the fundamental principle behind school achievement. Every noble Lord who has had the privilege of visiting our schools will know from his own experience that that is true.
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The leadership incentive grant is one way in which we hope to support better leadership, particularly in schools where heads are struggling and might benefit from working more collaboratively with other colleagues. We have always said that, with the work of the National College for School Leadership, we want to make sure that there is true leadership in every school.
Lord Taylor of Blackburn: My Lords, does my noble friend agree that the national leadership college in Nottingham is doing an excellent job? Unfortunately, it has been going for only about 12 to 18 months, but the progress that it has made in that time is remarkable. Does she agree that it will go further if we can give it more assistance?
Baroness Ashton of Upholland: My Lords, I agree. I hope that, by talking about extra assistance, my noble friend is not asking me to commit more money, which I am not allowed to do. We had hoped that the identification and support for school leadership would prove a success in a short time, and I believe that that is the case. It is reflected in the chief inspector's report.
Lord Northbourne: My Lords, is the noble Baroness aware that the problem of Afro-Caribbean, or in this case Afro-American, boys doing less well than girls in schools has been effectively addressed in Washington in the United States? By introducing male mentors into primary schools, the situation has successfully been turned around.
Baroness Ashton of Upholland: My Lords, the noble Lord is right. That is one reason why we have introduced mentors into our schools, and they have had a dramatic effect. There is no doubt that, for many of our pupils, the absence of a suitable role model can be a factor in their educational attainment. We are looking to increase our provision on the subject through the Excellence in Cities programme and our work to raise the attainment of particular groups of children.
Baroness Sharp of Guildford: My Lords, I want to press the Minister on the further education issue. She said that the Government were developing a strategy. However, one of the chief inspector's criticisms was of the absence of any kind of joined-up strategic thinking at local level. Will she tell us a little more about precisely what is being done at that level?
Baroness Ashton of Upholland: My Lords, I would be glad to tell the House about that. From April this year, strategic area reviews are taking place, led by the local LSCs. They will look at the breadth, range and accessibility of provision in further education. There will be increased capital investment, which is important, and they will look to ensure that provision meets the needs of the 16 to 19 year-old learners.
We have the largest ever investment in further education—the Success for All programme—which will tackle poor provision within colleges, higher

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funding for higher performance, support and intervention for unsatisfactory performance and, from August 2003, three-year development plans agreed with the local LSCs setting out measures to improve the teaching for support for students and so on. We are setting up a national leadership college, based very much on our experience with schools, from September 2003. I hope that that gives the noble Baroness some of the ideas on which we are working.
Baroness Blatch: My Lords, does the Minister agree that the issue of children with ethnic background is oversimplified? The report points out rather well some specific difficulties among children from ethnic minorities. For example, children with an Asian background outstrip many children of the indigenous population. What research is going on to investigate why Afro-Caribbean children in particular do not perform so well in our schools?
Baroness Ashton of Upholland: My Lords, the noble Baroness is absolutely right. There are huge differences between different groups. Within the Asian community, for example, children from an Indian background will be more successful than children from Pakistani or Bangladeshi backgrounds, who do less well than many of their Afro-Caribbean counterparts. As has been said, in the Afro-Caribbean population it is the transfer to secondary school with which boys in particular have difficulties.
Within our work, we are looking carefully at what I would describe for our purposes as working-class white boys, a group who themselves do not do so well in school. One critical factor is that, for the first time, we will have information over the next year about the background of children in order—and only in order—to be able to track educational attainment in a more successful way. We already know quite a lot about the different groups of children and their underachievement. Translating that into finding specific and new ways to support those children is the key, and we are engaged on that.

Public Information: Chemical or Biological Attack
3.25 p.m.
Lord Hanningfieldasked Her Majesty's Government:
Whether they will supply the public with basic information on measures they should take to assist themselves and others before the arrival of the emergency services at the scene of a chemical or biological attack.
Lord Falconer of Thoroton: My Lords, the Government do not currently issue in advance detailed guidance to the public on measures that they might take if they become victims of a chemical or biological attack.
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The response to chemical or biological incidents, accidental or otherwise, depends on a number of factors. The emergency services are best placed to decide the appropriate response, taking into account the relevant factors. My right honourable friend the Home Secretary, in publishing his Statement on Monday 3rd March, and in his moving of the order renewing Part 4 of the Anti-terrorism, Crime and Security Act, made it clear that the Government would establish a dedicated website. Whatever information is useful to the public will be posted on it.
The Government and emergency services will, of course, make available immediate information and advice in the event of a discernible threat or the carrying out of such a threat in the United Kingdom.
Lord Hanningfield: My Lords, I thank the Minister for that reply. The whole question has had a lot of national media attention this week. As the leader of a large local authority adjacent to London, I ask whether he will make more resources available to local government. He talked about the emergency services, but local government will be the main emergency service. We are told that we might have to expect 20,000 people an hour corning out of London, but no provision or plan has been made for that. Although I do not want to be alarmist, we need to know more about what might happen. Will the Minister give us more information?
Lord Falconer of Thoroton: My Lords, it is extremely important not to be alarmist and for people simply to be alert. The message from central government is that to give detailed advice on a particular sort of threat is both misleading and unhelpful. The right course is to wait and see what the immediate threat might he under any circumstances, and then take advice from the emergency services. The more detailed advice one gives in a vacuum, the more problems one causes.
Lord Tope: My Lords, is the Minister aware of the study published this week by London First and the London Chamber of Commerce and Industry, which showed that 80 per cent of small and medium-sized businesses had no contingency plans for a terrorist attack or mass evacuation" Do the Government intend to take any action in that respect?
Lord Falconer of Thorolon: My Lords, I repeat that a terrorist attack could mean a variety of things. It is critical to be alert but not alarmed, and to be clear to take advice from the emergency services whenever there is an immediate threat or a threat that matures. Simply to try to cover every possible eventuality would lead to confusion and difficulty when the problem arises.
Baroness Trumpington: My Lords, is the Minister aware that, after the hurricane, all the Whitehall telephone exchanges were out of order, something that

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never happened during the Blitz? Is he sure that steps have been taken to see that that does not happen again?
Lord Falconer of Thoroton: My Lords, I was not aware that in 1987 all the Whitehall exchanges went down. I know that the noble Baroness would have been, because she was a Minister at the time and would have been unable to phone friends and colleagues. Communication is utterly vital in relation to an emergency, and I very much hope—I am sure—that communications have been focused on.
Lord Brooke of Alverthorpe: My Lords, is my noble and learned friend aware that many people in America are stockpiling bottled water and food reserves in their homes? What does he say about that? What advice would he give to someone such as myself who might ask whether they should do the same?
Lord Falconer of Thoroton: My Lords, people should not stockpile at the moment. There is no point in taking such measures. The right course is to be alert, continue as before, and accept the advice of the emergency services when a discernible threat emerges or occurs.
Lord Roberts of Conwy: My Lords, in view of what the noble and learned Lord said about being alarmist, will he put into perspective the proposed London exercise on a massive scale, which we have read about in the press in the past few days?
Lord Falconer of Thoroton: My Lords, the right course for any organisation in central or local government is to be prepared but not to identify or seek to guard against a particular kind of threat when we do not know the precise detail of what may happen. It is right that we should be prepared and should have tried out our services against the possibility of an incident occurring but we should not be alarmist. We should focus on continuing as before and on being willing to take the advice of the emergency services.
Lord Hodgson of Astley Abbotts: My Lords, in the light of the importance that the Government are now giving to civil defence, can the Minister tell the House, first, how many times the senior government committee responsible for this policy area—the Ministerial Group on Protective and Preventative Security, chaired by the Home Secretary—has met? Secondly, how many of the 10 Ministers on the committee have attended each meeting? Thirdly, how often is it expected to meet in the future?
Does the Minister understand that if the Government refuse to answer those simple and innocuous questions on the slight fig leaf of Exemption 2 of the Code of Practice on Access to Government Information, the public will be entitled to believe that the Government do not give real attention to this important area?
Lord Falconer of Thoroton: My Lords, as the noble Lord knows, the public would not be right to think
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that we do not give the appropriate attention to that issue. I cannot tell the House the precise number of times the committee meets, but it meets as often as is necessary. This is a very high priority for the Government.

Water Bill [H.L.]
3.31 p.m.
Baroness Farrington of Ribbleton: My Lords, I beg to move that this Bill be now read a second time.
The Government's approach to the water environment and water industry is firmly grounded in sustainable development. That is emphasised and discussed in detail in Directing the Flow, which was published last November. Directing the Flow responded to calls from stakeholders with a wide range of interests for an overarching government strategy that would take a longer-term look at the issues facing water. It has been broadly welcomed.
The principles of sustainability are apparent throughout the Bill. At the same time it does not contain the whole of the Government's policies for water. It is not directing the flow in legislative form, and it is not meant to be. It complements a range of measures which are already in place or are being developed elsewhere. These include giving effect to the Water Framework Directive consideration of the spending priorities for the next periodic review of water pricing in 2004.
Part 1 of the Bill deals with water resources, abstraction and impounding. The Government launched the move towards the sustainable use of water resources at the water summit in 1997. The 10-point action plan at that summit included a review of the abstraction licensing regime. After all, the existing system is based on legislation dating from 1963. Following consultation, the Government published their decisions in March 1999.
Along with the provisions in Part 3 about water resource management and drought plans, this part is about long-term sustainable use of water resources, very much against the background of climate change. That is also a major aim of the EU Water Framework Directive. The Bill and the directive are moving forward together.
Sustainability must mean striking a balance between potentially conflicting demands. The provisions in the Bill seek to strike such a balance. At the centre of the process are water resource management and drought plans. Water undertakers already produce those voluntarily, but the Bill makes them compulsory and enforceable. They will sit within the framework set by the Environment Agency's water resources strategy, Water Resources for the Future, and their catchment abstraction management strategies.
At the same time all new licences will be time-limited, normally to 12 years. From 2012 abstraction licences can be revoked without compensation if they can be shown to be seriously environmentally damaging, in accordance with the "polluter pays"

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principle. The time after which an unused licence can be revoked because it has not been used is reduced from seven to four years.
We recognise that there are concerns about the cumulative effect of those changes but sustainability does not mean assuming that things can carry on the same way for ever; it means making sure that we fully understand the level of resources and demand. It means having the levers to make changes where necessary, but also that existing activities should be able to continue unless there are good reasons o for adding new limits.
The Bill makes the licensing system more effective, but also reduces the regulatory burden. Most importantly, the new abstraction licence threshold of 20 cubic metres per day means that an estimated 20,000 small-scale abstractors will be exempt from licensing. That is a big deregulatory measure. Farmers, in particular, will benefit from that change as many of these small abstractions are made by them.
The Bill also brings some previously exempt uses of water into the licensing system. We know that there will he quite a lot of attention on those provisions, with the impact on trickle irrigation being a particular concern. The Government are keen to see trickle irrigation continue and flourish as we recognise that it can be an efficient use of water. But we believe that there should be fair treatment across all abstractors, so that a licensed abstractor is not adversely affected by a large, neighbouring, unlicensed abstraction.
The aim of Part 2 is to provide a new and better regulatory environment for the water industry and its consumers. It originated in the 1998 White Paper, A Fair Deal for Consumers—Modernising the Framework for Utility Regulation. There needs to be a basic approach to regulation across utilities. However, the Government's response to the report by the Better Regulation Task Force on economic regulators stressed that regulation is best done to suit the circumstances of the market that is being regulated. There are features unique to water. Those include the need for close involvement by the environmental and drinking water regulators, and the ongoing need for large-scale capital investment.
We need a sustainable industry if the Government's objectives and consumers' needs are to be met. The Bill replaces the existing individual Director General of Water Services with a regulatory authority, which will help to safeguard transparency and consistency. That meets a recommendation of the Better Regulation Task Force. The Bill also places a duty on the authority to look at means of achieving sustainable development, while continuing to ensure the financial health of the industry in a way which is unique among utilities.
The Bill places the consumer at the heart of regulation in two ways. First, it raises protection of consumers' interests to the top tier of the economic regulator's duties. Secondly, it sets up an independent consumer council for water whose sole purpose is to promote the interests of consumers. The Bill gives the council power to investigate complaints, carry out
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more general investigations into consumer issues and publish advice and information. To help it with those tasks it has the power to demand information from the regulator and undertakers.
The Bill will strengthen transparency and quality of service through various provisions. The Secretary of State will be able to set standards of performance without first needing an application from the regulator. That will enable the consumer council, for example, to approach the Secretary of State direct, increasing the level of its independence. If companies fail in their statutory functions they can he fined, potentially up to 10 per cent of their turnover.
These provisions must be used sensibly to avoid adding unnecessarily to costs or making it more difficult to attract investment, which would not benefit the industry or the consumer. For example, we need to avoid the temptation of frequent new standards. A regulatory impact assessment must first show that should any new standards be introduced, they really will be beneficial. Companies also need to know how and in what circumstances the power to fine will be used and that there will be no overlap between enforcement authorities.
As regards competition, genuine, open competition can lead to better prices, more innovation and improved quality of services. But competition is a means of achieving these benefits and not an end in itself. In the case of water there are wider objectives: to protect public health; to protect and improve the environment; to meet the Government's social goals, including affordability of water supplies: and to safeguard services to customers by sustaining an industry that can provide water efficiently and effectively. These wider objectives led the Government to the conclusions that we announced in March last year, and developed in the consultation paper published in July.
The Government believe that keeping the undertakers as vertically integrated companies, with clear responsibility for the operation of their networks—including water resource planning and investment—is important if we are to meet those wider objectives. New entrants will be able to use the undertaker's network to supply their customers, by buying water wholesale from the undertaker and providing retail services to customers, or by introducing their own water stock into a network for onward supply to their customers through common carriage.
We concluded that competition should not include household customers. The regulatory regime, which we would need in order to protect public health, social and environmental objectives and customers' essential needs, would be too complex and costly and still leave too many risks. Finally, we decided that even for commercial and industrial customers we should adopt a cautious approach starting with a consumption threshold of 50 megalitres a year. Introducing competition into the public water supply is a first. We need to be able to monitor how such competition works.

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We would expect a review of the situation by the three regulators no more than three years after the provisions come into force, to consider the impact of the competition framework, including whether the 50 megalitres threshold is still appropriate. The Bill then provides a power to alter the threshold.
The Bill provides the essential framework for a workable system of competition. It sets up a licensing regime to make sure that the licensed water suppliers—the new competitive players—act properly and do not endanger the water supply that they feed into. It also regulates the relationship between licensed suppliers and existing undertakers so that they are all operating in a fair market.
The Bill also contains a number of miscellaneous provisions, which, although not substantial, are nevertheless important for our water priorities. I could put them into a few broad categories. There are provisions that help to enhance the protection of people and property. These include amendments to the Reservoirs Act to enhance existing arrangements for reservoir safety and provisions to enable a streamlining of flood defence organisation and funding.
There are provisions that help to reduce pollution of waterways and groundwater. In particular, the Coal Authority receives powers so that it can take much more effective action against pollution from abandoned coal mines. Finally, there are provisions of benefit to water companies and their consumers. For example, the Bill clarifies how the trade effluent consent system operates. It makes it easier for sewerage undertakers to adopt new lateral drains—the part between the edge of the premises and the main sewer—and reduces the chances of consumers being faced with unexpected repair costs.
The three pillars of sustainable development are environmental, economic and social. Those issues and the right balance between them must be at the heart of our approach to the resources of the water environment and the management of the water and sewerage industry. The Bill takes this agenda forward in such a way that, we believe, gets the balance about right.
The Delegated Powers and Regulatory Reform Committee is satisfied with the great majority of powers proposed in the Bill, but it recommends that two Henry VIII powers defining the regulation-making powers for the Bill generally should be subject to the affirmative, rather than to the negative, procedure. We are content to accept the committee's recommendations and will ensure that amendments to that effect are tabled. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Baroness Farrington of Ribbleton.)
3.45 p.m.
Baroness Byford: My Lords, I thank the noble Baroness, Lady Farrington, for introducing the Water Bill this afternoon. We, on these Benches, in principle welcome its many proposals. It has an important
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sustainable approach to the balance between the water needs of business, members of the public and of the environment in its widest sense. I fear, however, that the Bill will add levels of bureaucracy and costs; it certainly introduces sweeping powers and uses language, such as "significant" and "serious", which give lawyers field days.
The Minister will therefore not be surprised to learn that we have reservations about some of the proposals and many questions, which we shall seek to put in Committee. All of us recognise the crucial part that water plays in our daily lives. We expect to have "on tap" clean, good-quality water at all times, come what may. In introducing the Bill now, the Government have clearly decided to have little regard to the implications of the EU Water Framework Directive (2000/60/EC). That directive came into force in December 2000 and has to be transposed into British law by 31st December 2003. The directive aims to achieve an integrated approach to river basin management and requires all inland and coastal waters to achieve "good status" environmental objectives by 2015.

Knowing that, I am surprised that the Government are pushing ahead with the Bill at this time. I understand that the Minister in another place, Mr Morley, has implied that any additional requirements following the directive will be put before the House in the form of statutory instruments. I perhaps am not the only one who finds that unacceptable, particularly when we have the Bill before us. I hope the noble Lord, Lord Whitty—who knows how difficult it is for the House to alter or to have any influence upon statutory instruments—will give an explanation for that in his winding-up speech.
Over the years we have been faced with drought conditions, although in the past three years floods have caused havoc. Indeed, it was because of the years of drought back in 1997 that the Government held a water summit which produced a 10-point plan for improved water management. Since then, and in particular in the past three years, we have experienced swings between drier weather and deluge. The Water Bill addresses the impact of drought conditions and plans accordingly, though I was disappointed that the issue of water conservation and efficiency is not fully taken on board.
However, I do not think that equal thought has been given to the question of flooding. My noble friend Lord Dixon-Smith will deal with that matter at greater length when he speaks later. In addition, the Government's decision to create larger new towns, particularly in the South and the South East, must take into account the environmental consequences. Perhaps the Minister will tell us what budget the Government have included in the costings for these new towns with regard to water and flooding.
Part 1 of the Bill seeks in general to amend the abstraction licensing framework, promoting greater water conservation and giving consumers a greater role. It provides the Environment Agency with

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additional tools for managing water resources and stronger powers to take action against abstraction that causes environmental damage.
I feel sure that the Minister will receive briefings from businesses which are concerned that the new abstraction licences are to be issued with a time limit. The Government and the Environment Agency, I understand, have indicated a suggested time of 12 years. That, for some businesses, is too short a time span over which to write down their costs. Even if a flexible approach is taken, the business concerned may have no guarantee that approval may be given for a longer period. Does the Minister accept that that is and will be a deterrent to those who want to invest? Will he explain how we will encourage greater competition—something that we support? That is especially difficult when the licence may be revoked without compensation.
We welcome the proposals to remove the need for small businesses that use less than 20 cubic metres of water a day to obtain licences. That accounts for between 1 and 2 per cent of the volume of water abstracted, but affects as many as 20,000 of the current 48,000 licence holders—and, as the noble Baroness said, many farmers.
Part 2 deals with the new regulatory arrangements. The director general of Ofwat will be replaced by a regulatory authority appointed by the Secretary of State. An independent consumer council will be established to raise consumer issues, represent their views and deal with consumer complaints. We welcome the requirement that it should be required to take rural needs into account. A new utilities panel will be responsible for competition issues.
The Government, their agencies and offices are often major users and, sadly, polluters of water. What assurance can the Minister give that a regulatory authority appointed by him will have sufficient independence to take action against the Government—or local government? What protect ion will there he for senior officials of the authority against removal from office by political direction?
Part 3 deals with a range of specific issues, such as the establishment of a new regional flood defence committee for such areas as may be specified. It also allows for the abolition of existing local flood defence committees. The power to abolish such committees should be exercised with caution. It is important that local knowledge should not be lost and that it is adequately represented in the membership of any replacing regional committee. I should be grateful if the Minister could define a region for us. Are they to be the regions as we now know them, or a mix of different parts of existing regions? We have serious concerns and urge caution against making change purely for change's sake.
Is this not another case of the Government failing to match up to their devolution rhetoric and removing decisions from local determination? Is not the motive here part of the Government's obsession to set up unwanted regional assemblies? Is there not a risk that a region, as designated by Mr Prescott, might choose
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to downgrade local concerns about flood risk to fulfil its other objectives—on housing, say? Whatever the reason, the suspicion inevitably exists.
Part 4 deals with miscellaneous items, as the noble Baroness said. I shall refer to one: the Drinking Water Inspectorate. The Bill also transfers existing local authority functions relating to reservoirs. I am sure that I am not the only one who has grave concerns that the Bill takes away local functions and gives huge additional powers to the Environment Agency.
The Bill has created wide interest. I have received papers from Water UK, Water Voice, wildlife groups, the National Farmers' Union, the Country Landowners' Association, the National Consumer Council, the Environment Agency and British Soft Drinks, to name but a few. That is unusual at this stage of a Bill, and shows how important it is that we get it right.
I now turn now to some specific concerns that we shall raise in Committee. The noble Baroness touched on trickle irrigation. Clause 7 would remove current exemptions to the licensing system, such as trickle irrigation. That system is an efficient and effective method of irrigating crops. Such a removal could have a devastating effect on horticulture and agriculture. Clause 25 amends section 61 of the Water Resources Act 1991 by reducing the period of non-use of licence from seven to four years.
On what grounds has that proposal been made? Was consideration given of the practice, which is current in the farming community, of lengthening crop rotation, which is being sought to encourage good farming practices and a better environment?
Other organisations have expressed serious doubts about the time-limiting of the licences, to which I have already referred. I summarise their concerns as having in common complaints about lack of flexibility in the Government's approach and fears that if the limits are too tight, businesses will be unable to recover their capital investment within the limits set.
There has also been adverse comment on the proposals to set an efficiency duty on water companies alone, rather than on all abstractors, and to set different licence conditions for the new water suppliers than exist for water companies. Several contributors have raised doubts about the proposed competition in supply to major users—in particular, the danger that that will be achieved only if prices to smaller users are increased to compensate.
In Clause 27, the proposal to revoke or vary abstraction licences of a right if they are causing environmental damage, without compensation, after 15th July 2012, in Clause 27, is another area of concern, and must include an appeals mechanism for any decision to withdraw the licence.
I now turn the Select Committee report, to which the noble Baroness referred—I am grateful that she did. In paragraphs 17 and 18, it refers to Clause 95 and recommends that the power to amend or repeal an Act of Parliament under Clause 92(2) should be subject to the affirmative procedure, which the noble Baroness has conceded. Paragraph 18, referring to Cla use 96,

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states that the Select Committee recommends that the power to amend or repeal under Clause 96(6) should be subject to the affirmative procedure. I am grateful that that has been established at this stage.
This is a big Bill with many parts. Some of it is fairly dry in setting up procedures—perhaps not a very good pun, as we are dealing with a water Bill. Forgive me, I must be getting a dry throat. But it is our duty to scrutinise the Bill and ensure that we get it right. Water is a precious commodity. As I said, we expect it to be on tap and of quality all the while. That does not happen just by chance. It is our responsibility to ensure that the Bill is practical, fair and user-friendly and will bring the outcomes for which we all hope for individuals, companies and the environment.
3.58 p.m.
Baroness Miller of Chilthorne Domer: My Lords, I thank the Minister for introducing the Bill, which should be an exciting Bill, because water is an exciting and emotive subject. Enough of it is essential to life and, one could say, it is the essence of life. Too much of it becomes threatening, as flood water. Climate change is making weather patterns ever more difficult to predict. Although we have grown better at the art of prediction and try hard to control water supply and floods, we seem ever more at the mercy of the elements. We are, at last, learning to work with the grain of nature, not against it. Therefore, the noble Baroness will be disappointed to learn that I do not find the Bill exciting and that we on these Benches are disappointed by it.
Technological advances mean that we can review how we use, conserve and recycle water in ways that were not dreamt of even 30 years ago. The future should offer a better chance to restore a balance in this country between our needs and those of other species. We in this country should view ourselves as fortunate to have such an adequate water supply. It is a national resource that enables Britain to grow excellent crops, to raise prime livestock, as we often hear in your Lordships' House, and to allow a range of industries to function as well as supporting generous domestic usage. It can and must also support our wonderful wetlands, marshes, fens, broads and the huge variety of other natural habitats.
But this cannot be described as an exciting Bill that furthers many of those aims. It is a regulatory Bill, necessary because water, a national resource, has been privatised. It is argued that privatisation has enabled investment to take place in the infrastructure that guarantees a regular supply, high-quality drinking water and the clean-up of waste water. It has also produced returns for shareholders. And there is less degradation of wetlands and pollution of rivers. So the picture has not been entirely grim since privatisation—that is far from the case.
But the downside is that we now have a complex web of regulations and a plethora of regulatory bodies. The Bill has concentrated hard on dealing with those regulatory issues; so hard that we have 200 pages of
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regulation. But those pages contain no principles about water use or good regulation. The Government laid out excellent principles in their water policy paper, Directing the Flow, on which I commend them. The Minister said that not all their policies were included in the Bill; but I searched hard to find in it any of the policies expressed in Directing the Flow. It is sad that those fine words have not been translated into legislation.
During the passage of the Bill we shall table amendments to include in it some guiding principles. In its present form the Bill perpetuates, to some extent, the uneasy tensions between the regulating bodies. The Liberal Democrats will table amendments to redirect the aim of all concerned to the sustainability principles in which we believe. The Minister said that those principles were also important to the Government and were at the heart of the Bill. In Committee, we can help the Government to achieve their aim of introducing sustainability.
We were pleased with the approach in the European Union's Water Framework Directive, which was a largely British initiative. It redirects the way in which we work—to work with nature not struggle against it. The directive is based on natural catchment areas. We need to start work on it now; yet the Bill barely refers to the existence of the directive. I share Conservative Members' surprise at that. Several aspects of the Bill could have been strengthened. For example, the Water Services Regulation Authority could have been required to take account of the Water Framework Directive. Flood defence committees should have been reorganised along the lines of natural catchment areas, not according to lines on a map as the Bill currently suggests. I declare an interest, as my husband chairs a local flood defence committee. The Scottish Parliament's water Act builds on the opportunities offered by the Water Framework Directive. This Bill would be far stronger if it were amended to take a similar approach.
We will also table amendments to encourage the storage of surplus winter water for the benefit of farmers, upstream communities and habitats. That would enable downstream towns and cities regularly flooded under our present system to look to new land management practices to alleviate an ever-increasing threat. Such practical approaches are missing from the Bill.
The Bill makes three changes, albeit substantial ones, to the regulatory system. It enables the licensing system to be far more sensitive to the needs of the environment, which we welcome. However, it does little to ensure that holders use water efficiently, which is particularly disappointing. The amazing efficiencies that can be gained are best exemplified in the annual Water Efficiency Awards promoted by the Environment Agency, which involves examples from business, agriculture, commerce and industry. Our amendments would recognise the vast potential offered by the technological and working practice changes that people can use to achieve efficiencies, saving not only water but huge amounts of money.

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The Government should commit to targets to stabilise water usage and, by conservation and efficient use of water, to increase our reserves. It is disappointing that the Bill contains no provisions to enable efficiencies—for example, in planning. Directing the Flow talks about joined-up policies, but there is nothing in the Bill to ensure that the construction industry builds according to best water practice. It is astonishing that, in the 21st century, the Government seem content to retain our essentially Victorian, water-borne sewerage system. It is not a forward-looking Bill.
Other opportunities are missed in the Bill, including aspects that we debated at length during the passage of the Countryside and Rights of Way Bill. The Government mention that one of the main, important principles of sustainable development in their water policy is recognising the benefits of water for people to use and enjoy now and in the future. They expand on the issue in paragraph 4.48 of Directing the Flow, saying that they are,
"committed to finding ways to increase access to water".
When my noble friend Lord Mar and Kellie tabled amendments on the issue, the Minister assured him that something would he done. However, the Bill does nothing to encourage any further use of water in that recreational sense.
Directing the Flow acknowledges the requirement for product information about water use. The Government have made an effort in other areas; for example, they propose to introduce a labelling scheme for cars to promote energy efficiency. Where is water efficiency promotion in the Bill? We welcome the creation of the new consumer council for water. But its proposed powers are worryingly limited and will leave it dependent on the Secretary of State for a voice in some matters. That is an extraordinary state of affairs that we find most unsatisfactory and intend to try to change.
We support the fact that many smaller abstractors have been taken out of regulation. Some details on who is in and who is out of the regime need to be addressed. Other practical issues will also be the subject of amendments from these Benches. We will deal with streamlining in our amendments. The Bill will be the subject of many puns—untapped potential is another that springs to mind.
The Liberal Democrats are far more positive than the Conservatives about a regional approach to water use. I see that that has come as a surprise to Conservative Members. But, in this regard, perhaps more than any other, rainfall and water use are regional issues. The West of England has far more water than the East. A regional approach would be very productive. Regional assemblies could have an extremely strong relationship with their regional flood defence committees. Local expertise need not be lost in that way.
The principles behind a regulatory Bill should be spelt out in the Bill. Better regulation, though important to consumers, should not have been the end of the story of the Bill. Disappointingly, perhaps, we
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can discount the competition element, which is in the Bill. However, it affects a small number of users and will not overcome the fact that the water industry in this country is, for most consumers. nothing but a complex monopoly of companies with a prime duty to their shareholders. I look forward particularly to hearing from my noble friend Lord Livsey of Talgarth on the prospects for not-for-profit water companies.
When MORI carried out a survey of people's attitudes to their water charges, it found that people did mind about factors beyond price. They care about the environmental impact of their water use. They care about wildlife, wetlands, healthy rivers and clean beaches. It would be irresponsible of those whose prime duty it is to care for the environment to pay no heed to the price that people must pay for their water, especially those least able to afford the increases.
A regulation Bill must include the principle that each regulatory body has a duty to pay regard to the aims of the other. The ability of the water regulation authorities to pay attention to the need for sustainability must also be strengthened. It is only in that way that the consumer interest quoted by the noble Baroness, Lady Farrington of Ribbleton, will he at the heart of the Bill.
It is impossible to imagine a resource for which a sustainable approach is more important. We believe that it is possible to make the Bill fulfil at least some of the principles of sustainability, and we look forward to the Committee stage, when we will try to do so.
4.11 p.m.
Lord Beaumont of Whitley: My Lords, I too thank the Minister for introducing the Bill and for the way in which she explained it. We, on this Bench—I use the royal "we" in that sense, as I represent many people outside the House who are interested in the subject—welcome the Bill, on the whole. Obviously, it is a Bill in which Greens should be involved.
Although I welcome the Bill, I have one or two doubts about it. Certainly, there are steps that we can take to improve it at a later stage. The first problem has been raised by every speaker so far—the overlap with the EU Water Framework. Directive. It is difficult to see why, when the Water Framework Directive is being incorporated into UK law, we should not wait until it has been incorporated before having our own Water Bill or do the whole thing at one time, rather than, in this peculiar way, doing the two things alongside each other. We should consider that point.
Some of the Bill does not live up to what the directive requires. Article 11(3)(e) of the Water Framework Directive refers to controls on abstraction. The recent consultation on the directive by the Department for Environment, Food and Rural Affairs specifically identified the requirement for such controls to be reviewed periodically. That is a requirement for the time-limiting of licences. The continuation of permanent licences, without a timetable and a mechanism for conversion, would represent a failure to transpose the directive adequately and, hence, would be a breach of its conditions.

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The abstraction licences in operation are, I am told, sufficient to drain all the rivers of Britain. The system works only because the licences are not used in full and, sometimes, are hardly used at all. The fact that, to date, we have not been able to pull them in without compensation has meant that nothing has been done about that. We must seize the opportunity to tackle that problem root and branch. I hope that we will do so and not pussyfoot about, paying too much attention to the authorities, who have gained a great deal of income from the previous abstraction licences, with their lack of controls or ending dates.
There is also the issue of the promotion of efficient and sustainable water use. That also comes under Article 11(3)(e) of the directive, and it must be written more firmly into the Bill. When the noble Baroness who spoke from the Liberal Democrat Benches said that they hoped to put down amendments that would write sustainability more firmly into the Bill, it rang a bell with me. I shall join them in that matter.
We also need transparency. In some parts of the Bill the information needed by the authorities and by consumers is over-regulated, in the interests of commercial confidentiality and other such things. In dealing with water, which is a resource for all of us and one of the most basic resources in the world—after all, your Lordships are, I am told, 95 per cent composed of water which is a basic element—there is not much room for secrecy; we should have totally free access to information and the complete ability to write in sustainability.
Nevertheless, it is a worthwhile Bill. It is worth the immense amount of work that we will have to put into it in the forthcoming months.
4.18 p.m.
Baroness Thornton: My Lords, I welcome the Bill and congratulate my noble friend the Minister on her excellent and clear explanation of it. I apologise for not being here for the first minute of her speech; I was racing down through the Lobby, which was very crowded, trying not to push people over.
The Bill has been a long time in arriving, but it is the better for the care and consultation that has gone into its content. I was slightly alarmed by the notion that the Bill might be delayed even further. Some years ago, I served as a member of Ofwat's Thames customer services committee in London. That was soon after the privatisation of water services. Our committee was keen to serve customer interests as well as we could, but we were often frustrated in our efforts because we were accountable to the regulator's office, which sometimes led to conflict. Access to information was often a problem, as our right to information had to be directed through the Ofwat office, which was also under a duty to the businesses.
I enormously enjoyed my time as a local water watchdog. I was particularly interested to read the aspects of the Bill that addressed customer relations. It is interesting to note that the creation of WaterVoice in 2001–02 was an attempt to create a more arm's-length
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relationship with Ofwat and a recognition that there is a distinct need to have an independent voice for the consumer.
Before making one or two remarks about the consumer voice and the issue of sustainability, I should like to refer to the time when I served on the Thames customer services committee. I remember attending a seminar in the mid-1990s to discuss the issues of competition and competitiveness and how more customer choice could be introduced into the provision of water services.
I am pleased that it is recognised in the Bill that this is a complex matter and one that does not lend itself easily to some of the solutions which have brought greater competition into other utilities. Last year, I found myself with two gas suppliers. Although it was a confusing situation, the quality of my gas did not change. Therefore, I am pleased that the Bill contains practical and sensible proposals as regards the issue of introducing competitiveness. It recognises that for ordinary consumers the main issues are the availability of clean, safe water at a reasonable price.
I am also pleased that the Bill seeks to bring order and clarity into who does what in the industry. I found that it was not always easy to remember who does what out of the River Authority, the Drinking Water Inspectorate, the Environment Agency and so forth.
The discussion in the water industry about the consumers' voice has been long-running. It was addressed in the 1998 Green Paper, A fair deal for consumers—Modernising the framework for utility regulation. Since then discussions have continued as regards the draft Bill—we nearly got there in the Utility Act 2000.
I welcome the proposal in the Bill to set up a new independent consumer council for water, supported by a committee structure in England and Wales. It would replace the current system of customer representation which dates from 1990.
The consumer council for water must have strong powers to obtain, both from water companies and from Ofwat or the new regulator, all the information that it may reasonably require for the purposes of carrying out any of its statutory functions to represent water consumers. Under the Bill's proposal, if Ofwat fails to comply with the direction from the consumer council to provide information, Ofwat will be required to give reasons for its failure. If a water company fails to comply with a direction to provide information, the consumer council would have to refer the refusal to Ofwat to decide whether the company should be ordered to supply the information.
There must be a question as to whether it is satisfactory that the consumer council should rely on Ofwat in this way to carry out its own functions. However, it is to be welcomed that the Secretary of State is taking a power to prescribe an arbitrator to decide, in the event of disputes, whether Ofwat or a water company should be ordered to supply information requested by the consumer council. Those issues should be explored further in Committee.

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The Consumers' Association raised issues about access to information. It has suggested that the Government make clear during the passage of the Bill those areas of information in which the council may be denied access. Such exceptions to the rule of providing requested information have already been identified in the energy market. This suggestion deserves examination.
My second point concerning information is that of the power to require information from new entrants to the market. The Government intend the consumer council for water to be an advocate for all consumers, including those larger users that are able to take advantage of the extension of competition. However, the Bill appears to prohibit the council from directing those new licensed suppliers to provide it with information. The council can direct only the traditional monopoly water companies to provide it with information to enable it to discharge its responsibilities as a consumer advocate. This may be another issue that needs to be addressed during the course of the Bill.
My third point is about the council's ability to publish information. As drafted, the Water Bill appears to set out what the Consumers' Association calls a "wicked" choice for the consumer council for water; namely, to risk being ineffectual when it knows a company to be causing considerable consumer detriment or to be in breach of its statutory powers—another issue to be addressed in Committee. These issues all need to be addressed in the context of what is a progressive and good proposal.
Turning to the issue of sustainability, I congratulate the Government on placing a duty of sustainability on the new regulatory authority. They signalled their intention to do so in their response to the Environment, Food and Rural Affairs Select Committee in another place in January 2002. They stated that the new authority,
"shall act in a way best calculated … to contribute to the achievement of sustainable development".
That commitment has been carried through into the Bill.
Some might say that a strong commitment to a water conservation duty and the new powers in the Bill are unnecessary in the light of rainfall and floods of recent years. Water still remains a precious resource. The long-term problems of climate change, long, dry summers and heavy rainfall mean that the Bill must make an important contribution to changing water usage in the UK. The proposals concerning licensing abstraction are particularly welcome. The Wildlife and Countryside Link have circulated an apposite briefing on the issue in which they explain the link between this and the implementation of a biodiversity strategy. I welcome the Bill. I look forward to our discussion in Committee.
4.26 p.m.
Lord Elliott of Morpeth: My Lords, in taking part in this debate, I wish to declare an interest. For 10 years I was chairman of a water company; for 13 years I was president of the then Water Companies' Association.
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In general, the Bill before us is commendable. I shall comment briefly on some of its proposals. Before doing so—thinking of my now, long experience in the water industry—I am tempted to pose a simple question. What is new? The Bill is mainly about regulation of the water industry. The water industry has always been heavily regulated, and so it should be. Therefore, in some regards the Bill makes excellent proposals. It proposes to strengthen existing regulations and to simplify others. However, there are what have always been known in the water industry as "end of pipe" solutions—bits and pieces of solutions rather than looking at the network as a whole.
My noble friend referred to the Water Framework Directive. Perhaps that will provide a full look at the network as a whole. Perhaps the directive should have come before this Bill, but it has not. A new regulatory authority and a new independent consumer council are to be welcomed, as are the increased supervisory powers of the Environment Agency. I am a little sad about the Environment Agency taking over local government responsibilities. As chairman of a company, it was useful each year to entertain and explain our work to the appropriate committees of a number of local authorities in our catchment area. That was good for public relations. Of course. it could still happen but there will no longer be the same impetus for it.
I have misgivings about the provisions to increase opportunities for competition in the supply of water services. Competition in the water industry has never been easy to achieve. In my opinion, it still will not be. In the period when I presided over representatives of 28 statutory companies—of blessed:memory—there was a form of competition in that companies which were proud of their achievements compared themselves with each other. That brought a certain competition.
I fear that the advent of new entrants obtaining water from existing reservoirs and mains will present a considerable number of problems. The proposals in the Bill suggest that if there are new entrants, they will attract large customers from the incumbent company in each area. Large customers are always important to every company. Water is a regulated, price-capped industry with income set in advance. Therefore, if large users leave a company, prices for domestic customers will rise. Surely, that is the opposite of what competition should achieve.
My other major concern is that the Bill proposes time-limited abstraction licences, with the agency preferring a 12-year duration. That has been mentioned several times today. As anyone associated with the water industry knows, equipment lasts much longer than 12 years. As anyone associated with the industry also knows, investment by water companies is a big thing—an enormous amount of money is invested. Investments should be protected for longer than 12 years, so is there not a need for the Environment Agency to grant licences for considerably longer than 12 years?

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There is much else in the Bill which I consider commendable; for instance, the strength of the Drinking Water Inspectorate and flood plans for national security. There are increased powers to deal with pollution from disused mine works. During my chairmanship of a company, I had some experience of that in the former coal field of County Durham, an area which it covered. Having made inquiries this week, I am happy to say that the problem has been resolved, but it is good that a power is given to the coal industry to deal with future problems.
There is greater opportunity for consumer complaints, which is also a good thing. Water companies were always sitting ducks with regard to complaints. I remember receiving a number. It is written into the Bill that frivolous complaints should not be taken seriously. I remember receiving a few frivolous complaints. I once arrived home to find on my front doorstep a glass container with a screw top and a note attached to it. The note had a simple message for me: "Shake it". When I did, I got rather a shock. But I was happy to be assured by the company's chemists that the water had come from a pond and from no area of our supply system.
On another occasion, a gentleman had complained so often that I decided to interview him. I remember asking, "Do you complain about other things besides water?". He gave me a very good answer: he said, "I complain about everything. It's the only way you get anything done". I am therefore pleased to learn that consumer complaints are taken seriously in the Bill, which is right.
Under the Bill, the water industry is to be controlled by five regulators: the board replacing Ofwat concerned with economic and social aspects; both the Environment Agency and English Nature concerned with the protection of the environment; the Drinking Water Inspectorate; and the Health and Safety Commission. Together, those bodies should provide a stable regulatory environment for the industry, but in the past various bodies associated with the industry have lacked co-ordination. In order to improve coordination, there needs to be greater co-operation between the various bodies.
I believe that the Bill will contribute to the further strengthening of our water industry and I hope that it will seek to produce the balanced and sustainable framework which the industry certainly needs.
4.34 p.m.
Lord Borrie: My Lords, it is a great pleasure to follow the noble Lord, Lord Elliott of Morpeth, who speaks from long experience and, clearly, uses a great amount of common sense and home truths. I, too, must declare an interest as chairman of Vivendi Water UK and a director of one of its subsidiaries, Three Valleys Water. I, too, am conscious that the Bill completes unfinished business. Having been involved in the debates on the Bill which became the Utilities Act 2000, I know that the water aspects of that Bill were withdrawn.
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The regulatory elements of the Utilities Act 2000 have certain echoes in this Water Bill; for example, the one person regulator. The Director General of Water Services is to be abolished and replaced by a board to be known as the water services regulation authority. The former fashion for one person regulators, which began with the Director General of Fair Trading in 1973 and ran through the specific industry regulators created following privatisation of various utilities in the 1980s, has now been replaced by a fashion for boards, as with Ofgem, Ofcom and the new board of the Office of Fair Trading created by the Enterprise Act 2002.
The merit of knowing precisely where you are when dealing with one individual rather than a committee is being lost. Unless the largely part-time board members are content to confine themselves to broad strategic decisions, we may have slower and less-decisive decision-making. Still, I accept as a reality that hoards are now the vogue and I do not propose to try to swim against the prevailing tide.
However, I ask for flexibility and for boards which are not too large. The minimum membership provided under Schedule 1 is a chairman and two other members. I suggest, if I may bravely do so, to my noble friend the Minister that at least as regards initial appointments the board does not go above a total number of five.
Furthermore, I would like the Government to be flexible and, whatever Her Majesty's Opposition may say, retain flexibility on whether initially one person should be both chairman and chief executive officer, rather than committing themselves to having two separate individuals. I say that especially in relation to water. One does not have to follow fashion because on other boards in other companies it is done in that way. I want to make the serious point that water regulation and the management of the staff of what has been called "Ofwat" will not be as big or complex an operation as is the remit and staffing of, for example. Ofcom under the Telecommunications Bill or the Office of Fair Trading. Moreover, having all senior executives reporting to the head of the organisation, rather than reporting to the No. 2, will assist in recruitment and the cohesion of the organisation. I say to the Benches opposite that it would assist if we believed that corporate governance in private companies, and what is desirable there in relation to the roles of chairman and chief executive, should not necessarily be regarded as appropriate in this regulatory regime.
Like my noble friend Lady Thornton, I welcome the recognition in the Bill of the valuable work of WaterVoice, which represents water consumers, by the clear provision for its statutory independence given under the formal name of the Consumer Council for Water in Clause 34. It is useful that it will be more clearly seen as independent of the authority and as representing existing and future consumers. Although my reading of the Bill has not found a provision, I trust that it will represent commercial and industrial as well as private consumers.

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I would ask for the council's membership usefully to be larger than that of the authority because it is an advisory rather than an executive body. Perhaps around 10 to 15 members would be appropriate. There should be regional representation; representation of both individual and business consumers; and, in case the thought has not occurred to my noble friend on the Front Bench, it may be useful to consider putting on to the council someone who has held a senior position within the water industry so that discussion can be wide ranging and well informed.
One of the major concerns oft he water companies—it has been alluded to by the noble Lord, Lord Elliott of Morpeth, and others—is the so-called reform of abstraction licensing. Of course reform is needed for various reasons, including those put by the noble Lord, Lord Beaumont of Whitley. All licences are to be time-limited. A period of 12 years seems to be the commonly anticipated figure. The chairman of the Environment Agency, from which we shall surely soon be hearing in our debates, will have the opportunity to review the licences regularly in order to meet changing circumstances such as climate change, the changing needs for water and changes in the natural environment. That is fair enough. But the difficulty here, as the noble Lord, Lord Elliott of Morpeth, pointed out, is that the abstraction of water for public water supply purposes involves the expenditure of considerable capital sums on the construction of major infrastructure works. 'Water companies investing in such infrastructure need some reassurance as regards the long-term security of their investment.
I am not sure that I have fully understood the reasoning, but the Government seem to have changed their mind about allowing a presumption of renewal on the expiry of a licence. Furthermore, compensation rights for non-renewal are reduced. To my mind, ensuring the security of supply of good-quality water to customers is one of the most important responsibilities borne by water companies and of the regulator in his role of overseeing their work. Surely it must be adequately recognised by both the regulatory bodies and by the Bill that security of supply should be in no wise impaired.
Much space in the Bill—by that I mean literally many pages of the legislation—is given over to the potential for competition. Schedule 4 takes up some 36 pages, setting out the detail of licensing provision for new entrants wanting to retail water and compete with the existing water companies, which of course own the infrastructure in their geographical area. Over recent years Ofwat, the regulator, has been keen to enable competition to take place. I suppose he feels left out because the other utilities—such as gas, electricity and so forth—have, despite their complications, been meritorious in this area. But lie has been left out because it is more difficult to introduce competition in the supply of water, although he has sought to enable it through the growth of so-called "inset" appointments in the common belief—it is thought to be encouraged by the Competition Act 1998—that competition could be effectively brought about. In fact, little competition exists.
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Although, as we have heard, the Bill provides specifically for licensed competition—despite the fact that initially it is to be limited to the supply of commercial customers requiring 50 or more megalitres a year—I do not believe that the Government have any real faith in it. I should be glad to hear whether the Minister does have faith in the future of competition. However, at present only 2,000 customers are included in the initial category. Competition, which is customarily the Government's favourite remedy for any industrial inefficiency or sluggishness, does not seem to be considered to have much scope in the field of water supply. I believe that it is doubtful whether many potential new entrants will come forward because there will not be a great deal: of money in it. Furthermore, perhaps I may say that the water companies appear to be quite adept at preserving their customer base from any form of cross-border raid by other companies or from third parties.
It follows that the economic regulator will want to see the continuation of' a number of companies between which efficiency comparisons can be made in order to settle the periodic price reviews. Comparative competition will still be needed as a substitute for real competition. Unfortunately, this may have the effect of the regulator continuing to oppose any form of restructure through mergers, whatever merits may lie in the resultant economic efficiency and benefit to consumers. Ofwat ought to use a wider rang: of methods in its price-setting process.
Over the past 12 years or so, consumers of water have enjoyed sufficient supplies of high-quality water. Company plans for the future give assurances that supplies will he maintained. That is due to both the water companies and the regulator, but the regulator should not regard the present precise total of water companies as a number written in stone; in other words, the structure of the water industry should not be ossified.
4.46 p.m.
Baroness O'Cathain: My Lords, I declare an interest as a director of South East Water for the past five years. I shall certainly not use that interest as a case for special pleading, but I shall use the knowledge I have gained in that role to bring to the attention of the House certain points in the Water Bill that could and should be changed in order to achieve what the Bill sets out to do.
My initial reaction to the legislation is that it is a one-sided attempt to deal with the serious problem of water resources, pollution, flood control, land drainage and other issues. It is long on processes and bureaucratic arrangements, but extremely short on demand management. Indeed, there is not even a nod in that direction.
Those close to the water industry are aware of the inherent problems of water shortages, while those not involved in the industry may find it difficult to believe that we do have serious resource problems. A briefing from the Environment Agency points out that in parts of the South and the South-East of England, there is less water per person than in Ethiopia or the Sudan.

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As a country, we waste an enormous amount of water. We are unable to comprehend why events such as hosepipe bans or suggestions that we should share baths can arise. Are we not plagued with rain, rain and more rain? It is rather like the line from the Ancient Mariner that I am sure we all learnt at school:
"Water, water, everywhere, Nor any drop to drink".
Because of this perception, little attention is paid to the water supplied to the 50 million or so water users in England. Incidentally, it is useful to note that water usage has doubled over the past 50 years. If we have a shortage of water resources today, it does not take much rocket science to calculate that we shall face far greater shortages if our usage continues to increase. I fear that the Bill reinforces that view because it is short on any attempt to face the reality that something will have to be done about demand management.
As has already been pointed out, the Bill is long and complex and, indeed, has already been subject to delay. It is unlikely that another water Bill will appear within quite a few years and therefore it is extremely important for this Bill to be all-encompassing and for it to deal with those matters which are already causing concern to those close to the industry. More than that, the legislation must take a long-term view.
Water is not a "Top of the Pops" issue for Parliament, as evidenced by the rather sparse attendance at this debate and in the fact that the Bill is likely to be committed to a Grand Committee, which is not exactly a big draw in terms of the numbers who attend the proceedings. The subject is unlikely to receive much by way of parliamentary time in the coming 10 years, which is why it is vital to get it right.
In the spirit of being constructive, I should like to flag up a few issues that should he considered during our deliberations on the Bill. I believe that they are fundamental to the efficient and effective management of that most important of all natural resources, water. Will the Minister consider carefully whether the Bill can be amended—and, indeed, added to—to encompass these concerns?
Surely it is one of the duties of Parliament not only to consider carefully the existing situation but to take heed of strong indications of likely future developments and how they will affect the industry. For example, it is known that there will be further and extensive house building in the south and south-east of England. It is known that these areas have a shortage of water resources. Indeed, the Environment Agency has acknowledged that these areas have a shortage of water, but it has not declared the South and South East to be areas of water scarcity. It is also known that these areas are in peril of serious and frequent flooding.
There are ways of planning for the impact of large increases in house building which could overcome to a very great extent water shortages and flooding concerns. It seems strange to me that water companies are not statutory consultees in the planning process. Why? Is it because some of the solutions are sensitive and have been put by successive governments into the
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"all too difficult" basket? Compulsory metering is one such solution. I am convinced that that issue must be addressed if we are not to stagger on from crisis to crisis in water resources.
I call attention to this issue at Second Reading because, although it is not mentioned in the Bill, it is fundamental to the effective and efficient management of demand in the industry. The Bill deals with the environmental sustainability impacts; compulsory metering could lessen the negative impact.
I rather like the quote from the document entitled Using Resources Wisely for the Future, which was produced by the then new department, DEFRA, following the last general election. It states:
"Sustainable development means thinking in an integrated way about economic, environmental and social objectives. It matters to people because it is an approach which shows that government is interested in the long term as well as in the short term".
Is that really true? Is it not aspiration rather than reality? I fear it may be.
The Environment Agency accepts that real water savings from metering will come about only when there is a sufficient proportion of homes being metered to be able to introduce innovative tariffs to dissuade high domestic use. Which one of us has not turned on the tap before cleaning one's teeth and left the water running for the full two minutes advocated by the dentist? That is but one small example of how unthinkingly profligate we are with water. The attitude of domestic customers across Europe and in most of the developed world is quite different because they have compulsory metering.
Being brave and dealing with compulsory metering could result in huge benefits to the serious and concerning problem of water resources in the South and South East. I do not know whether it would be possible to amend the Bill so fundamentally to encompass this issue, but we should certainly try.
Another hot potato is the question of debt. One could be excused for thinking that this is irrelevant to the Bill. However, it is relevant to the aim expressed by the right honourable Secretary of State, Mrs Beckett, when she wrote in the foreword to the paper Directing the Flow, produced at the end of last year, that,
"We must embrace wholeheartedly the aims of all three pillars of sustainable development—economic, social and environmental—in our approach to water".
The noble Baroness, Lady Farrington, also referred to this in her very good introduction of the Bill.
The ever-increasing level of customer debt is compromising the economic future of the industry. By way of brief explanation for those not involved in the water industry, the customer debt issue relates to the fact that, although the supply of water is a statutory obligation on the industry, the payment of debt for water used is not a legal obligation on the customer. Water companies have no sanctions against long-term defaulters; they have to continue to supply water.
That fact is now very well known indeed among reluctant payers. I am told that, when people get into debt, the citizen's advice bureau has a schedule of payments that must be made, and water bills come well

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down the list—even after, would you believe, catalogue payments for goods ordered on hire purchase and satellite TV monthly subscriptions. Bad debt is a huge concern within the industry. At the last count it was running at £717 million. The total has risen 10 per cent since the Water Act banned the use of disconnection for non-payment and subsequently when budget payment devices were outlawed.
The snowball effect of this in terms of reluctance by companies to invest is understandable. Those in the industry—working together—have come up with innovative suggestions to tackle this problem, and it is up to the Government to grasp the nettle and to consider statutory measures to reduce this unacceptable level of debt. Is it right that payers should subsidise those who choose not to pay? What price economic and social sustainability?
Investment is essential in every industry; it is probably even more essential in the water industry. Your Lordships would be astonished at the average age of the assets of the industry, mainly in pipes. Victorian pipework was very good and has lasted well over 100 years in some cases—but would you really want to rely on it forever, particularly bearing in mind the absolutely essential nature of water for each and every one of us?
The Bill compounds the felony of discouraging investment. Being charitable, it is probably yet another example of the law of unintended consequences coming into play. Because of the uncertainty surrounding the new regime for extraction licences proposed in the Bill—an issue which has been referred to already—investment decisions within the water companies are likely to be subjected to ever more intense and continuing examination because the payback period linked to the length of the licence could be too short. My noble friend Lord Elliott of Morpeth referred to this issue in his illuminating contribution to the debate.
Twelve years sounds a long time, but it is not. Those who have knowledge of other statutory areas—particularly those involving waste collection and street cleaning—will know that the norm has been to allow contracts of 25 years in length because of the high level of investment. I cannot for one moment consider that the level of investment for rubbish collection and street cleaning is anything like that needed for the water companies to reduce the age of the assets, to ensure a continuous flow of clean water and to reduce leakages. I intend to return to this issue in Committee. However, it would be good if the Minister could have a re-think before then.
I turn now to proposals that are in the Bill. Knowing that the Bill will be subjected to detailed scrutiny in Committee, I wish to make only a general point at this stage. Part 2 of the Bill appears cumbersome, overly bureaucratic and potentially very costly. A new structure will be introduced to regulate the industry; the Environment Agency will be given new and greater powers; and the Secretary of State at the DTI will be given new powers to determine standards of performance for the water industry. That is plain
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wrong because the basis of utility regulation is that it is independent of short-term political pressures and the regulator works only according to duties contained in primary legislation passed by Parliament.
Has anyone given thought to the cost of all this? I am not thinking about the cost of the new staff, new offices, new overheads, training expenses and the time that the regulatory bodies will take to introduce all of that; I am thinking of the cost increases to be born by the industry as a result of this bureaucratic structure and, by extension, to be born by the consumer. More and more people will be beavering away producing information which probably no one will read. The people thus engaged will not be doing much to provide a better service to customers or, for example, to deal with leaks from ever ageing assets. All this frenetic activity will give employment to many, but for what benefit?
The water industry is already highly regulated. There are whole departments in the water companies whose sole job is to provide information to regulators. There are currently three regulators but the number is to be increased. Ofwat collects more information than is seen in any other regulated industry. WaterVoice, the consumer wing of Ofwat—which is to be replaced—has a generally good relationship with the water companies. It asks for a great deal of information, which is given on an ad hoc basis; but that will be the subject of regulation when the new consumer council is introduced. The council will have a statutory right to demand and publish great swathes of data.
I feel obliged to ask three questions. Do we need a fourth regulator? What benefit will that be to customers who already have access to an enormous amount of data from Ofwat? What about commercial confidentiality? Of course we have to have regulations—but, please, not so much and not forever growing like Topsy.
Wearing my business and commercial hat, I am appalled by the ever-increasing cost of bureaucracy, form-tilling and box-ticking—and that is true not only of the water industry. No wonder we as a nation are worried about falling behind in the productivity stakes. We need to devote more of our energies to giving service to customers, developing new ways of doing things and eliminating waste—not to form-filling and box-ticking.
The proposals in the Bill concerning the new structure of the regulators have one serious flaw. It is so serious that I believe it must simply have escaped notice. The flaw is that there is no provision/ requirement for all the regulators to talk to each other. They almost certainly will; but surely this requirement should be on the face of the Bill. There should be a statutory requirement that they communicate on a regular basis.
The phrase "joined-up government" is a mantra for this Government. Let us now see action rather than hear continuous repetition.

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I look forward to the Minister's comments, and I particularly look forward to trying to make the Bill a better one through our deliberations in Committee.
5.1 p.m.
Baroness Young of Old Scone: My Lords, I have pestered governments for this Bill for over 10 years. I welcome its introduction at this time. Your Lordships will be able to judge my pleasure when I declare my interests as vice-president of the RSPB, president of a county wildlife trust and chief executive of the Environment Agency. I assure noble Lords that in that last capacity I have read and inwardly digested the Addison rules.
Rising water demands are with us. They have increased by 40 per cent since the 1970s. Water is an increasingly scarce resource, as the noble Baroness, Lady O'Cathain, indicated, in the South and the South-East of England particularly. Even in an average year, less water is available per person across England and Wales than in Spain; and in the future we shall see the increasing impact of climate change.
Water is necessary for a whole range of requirements: homes and gardens, industry, water-based recreation, especially for agriculture and also for wildlife. Many of these needs are in competition with each other. The Bill provides a more flexible framework for the sustained balancing of these competing needs for the greater public good.
Noble Lords may remember the water summit that took place in 1997. It was a landmark in environment and water policy. It signalled a welcome and effective commitment by the new Government to the sustainable management of water resources. This Bill takes forward that commitment.
I particularly welcome three groups of provisions: first, those that relate to a more effective regulatory system. The Bill will see the deregulation of 25,000 small, mainly agricultural abstractions. That represents almost half of all the abstraction licences that currently exist in this country; and there are provisions for the easier transfer of licences.
The Bill introduces regulation for the first time in regard to water abstractions, some of them substantial, which are currently not required to have licences, such as the trickle irrigation of crops and the dewatering of quarries and mines. I recognise the anxiety of those in the farming community whose livelihoods depend on water. I believe that the Bill provides sufficient transitional safeguards. Although agricultural abstractions may represent only a small percentage of the total volume of water abstracted, those abstractions are often in areas of high water stress and take place in summer, when there is lower water availability.
I welcome the Bill's provisions for more efficient and sustainable management of water resources. The trading of licences will encourage efficiency of water use. The time limitation of licences and the ability to revoke damaging abstractions without prohibitive compensation after 2012 are welcome provisions. I
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believe that there are appropriate safeguards to ensure that users have plenty of time—at least six years' notice—to adjust to any changes as part of their business cycle. There will be a presumption of renewal.
The noble Lord, Lord Elliott of Morpeth, expressed concern about investment by water companies in long-term assets and not being able to gain the benefit of that investment. He will be well aware from his past experience of the provisions that operate for other water company assets—for example sewage works. These are long-term investments, but the discharge consents are reviewed every four years —and most of my friends who are in water company management do not lie awake worrying about this matter but are quite relaxed about it. I hope that that reassures the noble Lord that there are ways in which long-term assets and regular review can be combined. I hope that responsible abstractors will recognise the importance of time limits to allow for fair reviews of potentially damaging abstractions.
But 90 per cent of licences are currently permanent, and even the provisions for review and revocation in the Bill are all too slow. The Bill would be improved if it enabled a significant conversion of permanent licences quicker than 2012. If that cannot be achieved, not only shall we feel the hot hand of the Water Framework Directive on our collars, but I suspect that we shall not be able to ensure that the highest priority users have an adequate water supply.
The Bill introduces improved water resource planning arrangements. It finally brings into statute the requirement for water companies to have resources and drought plans. Noble Lords may recall that these sprang from the heady days when customers under one water company in the North were having to use standpipes and the chairman of the company—I shall not speak its name for fear of shaming it—was found sneaking across the Border to have a bath in another water company area. The water resources and drought plans will, I hope, consign such occurrences to history as they are brought into statute.
Water is not solely a good thing and scarce—it can be a bad thing and too plentiful at times of flood. I found it slightly bizarre, when standing up to the waist in ice cold water during the New Year floods, to be contemplating a Bill on scarce water resources and drought plans! But the Bill rightly contains provisions for improving flood defence arrangements. The increase in extreme weather events and rising sea levels mean an increase in flood risk. The damage and distress that we saw in 1998, during the severe floods of 2000 and in the floods at the start of this year are all too real.
I welcome the Bill's provisions for the simplification—perhaps I should call it "streamlining" as we are into puns—of the flood defence arrangements. But the public are very unclear as to who is responsible for what in flood defence, and who pays for what. The Bill helps to clarify those responsibilities by reducing a layer of flood defence committees. That will enable more efficient decision-making, but it will continue to be local. The Bill also

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provides simplification of the currently over-complex funding arrangements. They are so arcane that I am not surprised that the public are confused.
All in all, this is a good Bill. But it could be a great Bill with some adjustments. I have alluded to the need for a faster pace on time-limited licences.
The Bill contains an anomaly. Some navigation authority reservoirs would still remain outside the regulatory and management framework. That is a challenge to the principle of consistency. All significant abstractions should be licensed. This means that about 40 per cent of British waterway reservoirs, for example, could impact on water courses without statutory protection for the environment or for other abstractors.
As many speakers have said, the proposal for a new water consumer council is welcome. But I, too, would like to quote the public research indicating that water customers are not interested merely in social issues and issues of price, and that these should not be the sole matters with which the new consumer council for water is tasked. Water customers also value the environment. As the Minister will recall, I have, in the past, occasionally with some success, tried to insert a sustainable development duty in every public body that passed by in your Lordships' House. We managed to do it in the case of regional development agencies and in the National Assembly for Wales, although I failed dismally in the Scotland Bill. We now have a water regulator that will have a sustainable development duty, so why should the consumer council for water not also have that duty? It would be a nice match and reflect the fact that consumers are interested in the environment.
There is a strange silence in the Bill. The Government's strategy Taking Water Responsibly mentioned a duty for all licensed abstractors to use water efficiently. That is not in the Bill due, I understand, to legal difficulties, but it would be useful to explore that further. It would be an important signal to all abstractors to address some of the issues that have been outlined today.
I thank the noble Baroness, Lady Farrington of Ribbleton, and the Minister for bringing the Bill forward. It is important for all water users. I have two stark illustrations of the need to get a grip on these issues. First, nearly 400 of our river or wetland wildlife sites designated by law as nationally or internationally important are currently threatened by abstraction, so there is a real need to bring abstractions into a logical framework. Secondly, we do not want to return to the droughts of 1989 and 1995. I think we are probably due one quite soon, if the point needs to be underlined.
The Bill is vital. It will balance the needs of households, businesses, agriculture, wildlife and the environment.
5.12 p.m.
Earl Peel: My Lords, I thank the noble Baroness, Lady Farrington, for the clear way in which she introduced the Bill. Up to a certain point there seemed to be remarkable consensus that the Bill was largely
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uncontentious and would enhance the successes that have occurred since water privatisation. But my noble friend Lady O'Cathain seems to have put the kibosh on that in an extremely interesting and illuminating speech. Clearly the issues are more complex than people like myself had realised.
As a general point, looking at the figures, it seems that the quality of water in this country has improved quite substantially. The water companies, English Nature, the Environment Agency and everyone involved should take credit for that. I was a little surprised at the rather disparaging remarks of the noble Baroness, Lady Miller. Nitrate concentrations remain high in certain rivers, although I appreciate that the creation of nitrate-vulnerable zones should help to address the problem.
Despite improvements in water quality, many of us remain concerned about the lack of what I might describe as co-ordinated environmental management of river systems. I join my noble friend Lady Byford in asking the Minister why the Water Framework Directive's objectives have not been incorporated into the Bill when it seems logical to do so.
I particularly welcome the introduction of river basin management plans, as that should lead to much needed sustainable management of the whole river system. I speak with some experience, as I am involved in such a scheme on the River Ure in north Yorkshire. It is an entirely voluntary scheme. It involves representatives from all the interested groups within the catchment area and is co-ordinated through the Environment Agency. We originally formed it because a number of us were concerned at the high levels of summer water extraction undertaken by Yorkshire Water, which we felt was having an adverse effect on the environmental integrity of the river. It has been partially successful, with all parties coming together and discussing the problems. We have just engaged a consultant to carry out a full audit of the species in the river, which I believe should have been done a long time ago. But progress has been slow. We have failed to secure the funding for a project officer, which is an essential part of the operation. So the Water Framework Directive is sadly missing from the Bill.
It is clear that the use of water can no longer be taken for granted. Long-term management has become a fundamental requirement, whether it be for consumer use, industry, agriculture, the environment or recreation.
Without wishing to undermine the enormous importance of other clauses of the Bill, I should like to concentrate most of my remarks on the clauses relating to abstraction licences and the need to ensure that they will be applied in an even-handed way. I declare an interest as a landowner, but water abstraction does riot involve me directly.
Agriculture has an over-riding dependence on water and it is therefore essential that the industry is treated fairly. It is interesting to note, however, that it only accounts for less than 2 per cent of water abstraction in the United Kingdom. I take the point of the noble Baroness, Lady Young, that its effect on water

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pollution can be considerable. That is why there have been so many regulations of late, many of which have cost the industry a considerable amount of money.
I welcome the concession in Clause 6 which removes the need for those who abstract less than 20 cubic metres of water per day from having to obtain a licence. Anything that reduces red tape these days is only to be welcomed.
I fully acknowledge that abstraction can no longer be seen as an automatic right and that a more coordinated system needs to be put in place. To this end, the power in the Bill for the Environment Agency to enter into water resource management schemes with abstractors seems eminently desirable. However, as my noble friend Lord Elliott of Morpeth pointed out, it is important to appreciate that many businesses, including agriculture, have invested, sometimes heavily, in abstraction systems and other capital equipment dependent on the licence and it is only reasonable that compensation should be given if the Environment Agency wishes to terminate or alter a licence.
The Government have chosen 2012 as the year when compensation will cease in the event of an abstraction licence being revoked or altered, although this will happen only when it is deemed that serious environmental damage is taking place. I know that certain conservation bodies are unhappy with this, but I do hope, for the reasons I have given, that the Minister will be robust in resisting any reduction in this timeframe. As I understand it, if someone applies for an abstraction licence after the Bill is enacted, the Environment Agency will issue only fixed-term licences. I believe that that is perfectly reasonable, but what happens if the agency decides during the course of that licence that sufficient environmental damage is being caused to warrant that licence to be revoked or altered? In those circumstances, will the abstractor with the licence receive compensation? If the answer is yes, I pose what I can only describe as the philosophical question—one of principle, I suppose: what is the difference between compensation taking place before 2012 and not taking place after 2012?
I take this opportunity to suggest that it would probably be more equitable for the Environment Agency to issue licences to existing licence holders rather than new ones—assuming, of course, that there was an over-demand for water—as the existing operators will almost certainly have already invested in capital equipment and will be an up and running business.
I have two further quick points on that. "Causing serious environmental damage" is an arbitrary term. It will need further explanation from the Government. Will the Minister confirm whether there is an appeal system against the turning down of an abstraction licence?
The noble Baroness referred in her opening remarks to trickle irrigation, which is efficient and effective and is an important part of the horticultural business. The industry is of significant importance in production and
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employment, which is often in rural areas. Many such businesses are long-established and fully invested and are deeply concerned at the prospect of having to apply for a licence that could be revoked or altered in such a way as to undermine their business seriously. Because they have not had to have licences before, no compensation will be paid. I am not suggesting that such operators should be treated favourably. I am simply asking the Government and the Environment Agency to appreciate that they are coming into the licensing arena for the first time with an up and running business. That must be taken into account.
I also hope that there will be further discussions between DEFRA, English Nature and those who depend on trickle irrigation to try to establish a working practice. I appreciate that the Bill helps in that process, but there is a real feeling of concern. I urge the noble Lord to talk seriously to the industry while the Bill is going through your Lordships' House.
On a general note, it is worth remembering that under the Environment Act 1995, the Environment Agency has an obligation to have regard to the economic and social wellbeing of local communities in rural areas. I am sure that is ingrained on the noble Baroness's heart. I imagine that responsibility will go some way towards allaying my fears. However, when considering the effects of the cessation or alteration of an abstraction licence it is also important for the agency to consider the specific level of investment in plant and machinery that an operator has undertaken.
Further considerable care needs to be given to ensuring that operators do not close down when the consequences would be an increase in imported products, with obvious adverse effects on employment and the balance of payments and an increase in transport, which inevitably means an increase in pollution. We need to balance the issues very carefully. The Countryside Agency is working hard to encourage locally produced goods. It would be a pity if that determination was undermined by the over-zealous approach of the Environment Agency.
One or two other issues will have to be looked at in more detail later during the progress of the Bill, including the compensation of licences in Clause 25 and the need to ensure that the abolition of local flood defence committees does not result in local knowledge being removed from the regional committees. That point was well made by my noble friend Lady Byford. There is also the thorny question of liability and any claims that might arise out of damage caused by water abstraction. There is also the question of reservoirs.
I broadly welcome this long-awaited Bill. It deserves a more harmonious passage through your Lordships' House than some of the more recent Bills that have emanated from DEFRA.
5.24 p.m.
Lord Livsey of Talgarth: My Lords, it is a great privilege to speak on the Bill. This morning we had the WET Bill, this afternoon we have the Water Bill and all we are missing is the noble Baroness, Lady Gardner of Parkes, to have the High Hedges Bill this evening, but perhaps that would be a step too far.

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I appear to be the only person here who was present for the passage of the Water Act 1989, which privatised the industry. I remind any who may think that this is a lengthy and complex Bill that 532 amendments were tabled to the 1989 Bill. I sat in Committee for 205 hours and only two amendments were accepted throughout that time. The Act took over £25 billion of assets and valued them at £7 billion. I tabled an amendment to that Bill that might interest the noble Lord, Lord Elliott. I proposed not-for-profit companies as an alternative to privatisation. The amendment was rejected out of hand by the Secretary of State at the time. I find that ironic, as he was the right honourable Member for Folkestone, and I know well his roots.
Glas Cymru, which my noble friend Lady Miller mentioned, is a not-for-profit company that benefits the environment and consumers by reinvesting its surpluses. It was put together about two and a half years ago by the noble Lord, Lord Burns, and many other talented people to ensure that water supplies in Wales were rescued from the Americans. They raised £2 billion of corporate bonds in the City, creating the holding company Glas Cymru, which means blue Wales—or green Wales, depending on what part of Wales you come from. Welsh Water is the statutory undertaking and is the licence holder for the distribution of water throughout Wales.
In the coming year, consumers in Wales will have a £10 cut in their water bills. That is a start, because water has been more expensive in Wales than almost anywhere else. That extraordinary situation is brought about by the fact that we have difficult geography and lots of water pipes that are very expensive to maintain. As the noble Baroness, Lady O'Cathain, said, some of them are very old.
I believe that the infant success of Glas Cymru will prove that it is possible to have a not-for-profit company delivering very well on the environment. on sustainability and for community and social purposes, which I think is the intention of the Bill, as outlined by the noble Baroness, Lady Farrington, in her excellent opening speech. It is a perfect fit. It will be interesting to see how matters develop.
I do not want to dwell on the speeches that have been made. Part 1 deals with abstraction and impounding, Part 2 deals with regulatory arrangements and Part 3, although headed "Miscellaneous" deals with the Drinking Water Inspectorate—which I found to be a very important body in my work in another place—and the whole consideration of drought, drainage, reservoirs, discharges and water mains.
I thank the Government for including the devolution aspect. The Bill contains powers for the National Assembly for Wales. That is important, because those of us from Wales remember that water is sometimes an explosive subject. Thank goodness that has not been the case for the past 20 years. If the Bill is pursued sensitively, I do not believe that the subject will be explosive in the next 20 years either.
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I am interested in a few matters not yet mentioned. I declare an interest as a fisherman with a very small fishing interest on the River Usk. Compensatory river flow is extremely important to sustain the life of rivers—not only the fish, but otters, insects and everything else. The environment and ecology will not function properly unless there is a decent amount of water coming down. Regulation is clearly necessary for that. In very dry years, it is very difficult when the compensatory flow is cut. The rivers become very low and ecologically unsustainable. It is a difficult situation which must be put right.
I was very impressed by the noble Baroness, Lady Young, the chief executive of the Environment Agency. I am concerned about one issue in particular. Some of the Bill's provisions will remove functions from local control. The question of democratic accountability is extremely important. In that context, however, I welcome the devolution of some aspects to the National Assembly for Wales. Nevertheless, appointees control some aspects of the Environment Agency. In particular, I foresee that the reorganisation of local flood defence committees will lessen democratic accountability. I believe that there can be democratic accountability and a democratic input into river basin management while maintaining local flood defence committees and a regional input. Such an arrangement would be not bureaucratic but entirely logical. As my noble friend Lady Miller said, and as the daily local weather forecast shows, rainfall is a regional phenomenon.
Other issues such as new and expanded reservoirs concern Wales in particular. The following may not mean much to noble Lords, but it would mean a lot to an audience in Wales. Trewern, near Bala, was essentially drowned so that water resources could be provided for Liverpool. In my former constituency, Brecon and Radnorshire, 12 reservoirs serve many different communities. Frankly, we do want any more of our communities to be flooded—thank you very much. I should not expect this Government even to consider doing so.
The noble Baroness, Lady O'Cathain, mentioned the huge demand problem particularly in the South East. I do not want compulsory metering for the whole of the United Kingdom. I think that she advocated compulsory metering only in the South East, and I can understand the reasons for that argument. However, compulsory metering could not be applied in the areas which I represented. Other methods are preferable when the local infrastructure is problematic.
I remember it being said during passage of the Water Bill that up to 40 per cent of all water is lost because of leakage. Some progress has been made. Nevertheless, that is an extraordinary waste of a most valuable resource. Speakers have pointed out today that less water is available in South East England than in Spain. I stand to be corrected, but I believe that, even now, up to 25 per cent of water, and perhaps as much as 30 per cent, is lost through leakage. It is a profligate waste of an essential resource.

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I apologise for not mentioning individual contributors; I am just picking one or two points that I think are important. The important issue of flow control has been mentioned. I am more familiar with the demand end of the issue than the supply end. Indeed, I am very familiar with the Rivers Severn and Wye. People do not understand why, when the reservoirs are full and heavy rain—I cannot use the words I had in mind—is forecast, there is still flooding particularly in the Midlands, the Wye Valley and Hereford. There seems to be no plan to release water from reservoirs before heavy rain. I had to deal with 10 residents of Builth Wells who were flooded out of their houses for three consecutive years and subsequently became uninsurable. It is a scandal that could be overcome by proper co-ordination, some of which is provided by the Bill.
If there is better control, we will not have so much flooding in the Midlands and particularly in the West Midlands. The Bill needs to address that type of issue. It is a vast Bill, though not nearly as large as the water privatisation Bill. I am sure that we will have an interesting time considering it. I thank everyone who has contributed to this debate. I think that the Government will be more sympathetic than the then government were when we considered the water privatisation Bill.
5.37 p.m.
Lord Dixon-Smith: My Lords, I begin by declaring an interest in that I am an abstraction licence holder. It is worth explaining how that came about as it colours my remarks and my approach to the Bill.
Back in the early 1960s I perceived a need to irrigate my farm. I farm in north Essex where the average annual rainfall up until the year 2000 was between 18 and 19 inches. It is a well-known dry area. My farm is not in the driest part of Essex but Essex is certainly among the driest areas of the country. My farm has no water course and no known subterranean water. However, I need water. I called in some experts to address the question of how to supply that water. They told me that the farm had plenty of water and that all they had to do was to impound the winter flow.
As I say, the farm does not have a water course, but it does have a ditch. Normally the ditch has a flow for about four months of the year but for eight months of the year there is no flow. I looked into the matter further and had built at that time an impounding reservoir, banked on all four sides and filled exclusively with water that runs off the farm's ditches although the water passes through some other land on the farm. We store over 700 inches of water. I apologise that I have not caught up with megalitres and cubic metres. However, if I say that an acre inch of water is 22,000 gallons, perhaps that will help those who want to convert my figures.
In an ordinary winter we probably have enough water running off the farm to fill two more such reservoirs. In the past three years I believe that I could have flooded the farm completely to a depth of some
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feet. The Bill was prepared at the end of a dry period and the attitude adopted within it is influenced by drought. Also at the present time people are concerned about another matter.
My experience colours my attitude. We are not particularly short of water in this country but we are particularly short of management of our water. As regards the management of our water, I found it difficult to divine the thinking behind the Bill and how it will work. That is a real problem. I refer to the timing of the Bill and the difference between a drought approach and a flood approach.
Interestingly, in the autumn of 2001 a large number of houses in Essex were flooded. That was a one in 800-year event. Some extraordinary weather patterns have occurred but I say seriously that a deep philosophical problem arises with regard to how one deals with a one in 800-year event. How does one protect oneself against such an event? Neither governments nor institutions last that long. There are more than 30 generations of people in 800 years. Yet we have to deal with these issues. It is a great credit to the insurance industry that it does what it can—and does it very well—to cover such out of the ordinary losses. I hope that the insurance industry will be able to run a profitable business as a result of the enhanced premiums that it will levy in the future. There is a risk, of course. A one in 800-year event can happen in two consecutive years, even if it does not recur in the next 1,500 years.
I refer to the regional flood defence committees that are to be set up under the Bill. However, the problems of flooding are not regional but local and concern particular catchment areas. I believe that there is a potential problem with the Bill in that moving to a regional approach may conceivably be all right from an investment point of view but we need to ensure that the local interest is not lost. As I say, the problems of flooding are often very localised. They relate to particular catchment areas rather than to a whole catchment area. We need to consider that.
The problems of dealing with a surplus and a shortage of water have the same solution. It comes in the creation of far more reservoirs, which we fill in times of surplus flow and diminish in times of low flow in the summer. One cannot wholly prevent flooding by doing that, but one can go a very long way towards it. The idea of sitting on reservoirs that are full for a whole season because the rain keeps falling does not strike me as particularly good management if—perhaps there should be an obligation for this—the water companies are properly involved in flood control, as well as in water resource provision.
I shall mention a matter on the business of flood control that is not in the Bill, although it would be nice if it could be brought into it. I was recently in the United States, and happened to go to Phoenix at the commencement of the storm that caused so much trouble in the east of the United States. Phoenix is in Arizona. Normally, one would think it were a desert. About two days after my arrival—I took complete responsibility for it, of course, as they were glad to

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have it—Phoenix had more rain in a day than it would expect in a year. Flash flooding was the order of the day, but I saw at least one artificial flood plain in operation. Inevitably for the United States, it was a golf course but, the morning after that rain, it was a lake. As a result, several hundred houses were not flooded. We need to think creatively about our approach to the problem.
Surface reservoirs could be impounding reservoirs like mine. They could be great reservoirs, such as are provided in the mountains of Wales or Hanningfield in Essex. My noble friend Lord Hanningfield, who is not present, takes his name not from the reservoir but from the village, as does the reservoir. Another example is what I want to call Grafham Water, but my noble friend Lady Byford might want to call Rutland Water. If we had impounded surplus flow in those reservoirs and used that water in the summer, we could reduce peak flows in the winter and do much to reduce flooding. I accept that we cannot prevent it, mother nature being what she is, but we can manage our resources much better than we do.
We have been blessed with a benign climate in this country. Much has been made of our having less water than Ethiopia or possibly parts of Spain. However, we do not have those countries' evaporation problems, which makes a huge difference.
A point that flows from that—it has already been made by my noble friends Lord Elliott of Morpeth and Lady O'Cathain, and the noble Lord, Lord Borrie —is that if we are to have such major constructions, especially in terms of water services, a 12-year abstraction licence is nonsense. The reservoirs that supply the Midlands, Manchester and Birmingham from Wales are more than a century old. I am not quite sure when they were constructed. One of the Essex reservoirs that do so much to relieve the problems in the South East is nearly 40 years old, and the other is 70 or 80 years old.
One cannot get the construction necessary for us to manage our water resources properly on the back of a 12-year abstraction licence, renewable for 12 more. That is simply not realistic. The water industry has many problems, as my noble friend Lady O'Cathain explained, such as over-investment and trying to get a return. If we expect it to work on that system without the prospect of automatic renewal, the industry 'will collapse.
The subject becomes even more important when we consider the South East in the context of the Government's proposals for major development in the Thames Gateway, the M11 corridor and so on. We are talking about a quarter of a million houses and a huge enhancement in population. Those major developments will not be possible without major investment in water infrastructure.
The other point is that the provision of that water infrastructure will take time. This does not concern only reservoirs but river basin transfer schemes. We already have a scheme from the Ely Ouse into Essex. There is a scheme under discussion to move water from the Trent to the Ouse so that it can be moved from the
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Ouse to Essex. Those things will not happen without immense confidence in the future. We need to be aware of that background when we consider the Bill.
I turn to what I call the "London paradox". I find the London situation strange. London is well supplied with water from the south, west and north —the North Sea is to the east. That arose historically because London used to have intensive development. There was much industry and commerce in London. As the ground became polluted the water sources became polluted. The first reaction of the water supply companies was to look further out for new and clean supplies. That is as may be and has been done successfully.
However, we should recognise that London's water is very well used indeed, wherever it comes from. The best way to describe it is that it is used at least five or six times between Teddington Weir and the Beckton outflow, and is cleaned up each time. Even through the drought period through which we have just gone, the water table under London was rising between one and two metres per year. There is no shortage of water in London; there is plenty. It is beginning to threaten the lower levels of the deep underground railways and the lower basements of tall buildings which have gone down as well as up. There is a real problem.
There is talk of extracting the water, putting it through fountains and letting it run into the river. However, there is not talk of Using it because it is polluted by heavy metal. I cannot help but wonder about the wisdom of pouring water polluted by heavy metal into the Thames estuary, where it can be concentrated in fish, shellfish and seaweed, which are perhaps brought back in for us to eat.
In any event, I cannot help wondering—I do not know the answer—why we cannot clean heavy metals out of water the way we seem to be able to clean organic pollution out of water. If we did that, perhaps we would not have the shortage of water in the South East that we appear to have.
There is much in a practical sense to deal with, which cannot be put on the face of the Bill. The question is how the Bill will impact on those needs and how to tackle those problems. Trying to determine that is obscure. I have read many briefing papers. The Bill is plainer than it was. However, it seems to me that we have to ensure that in practical terms it focuses on those issues. If it does not we might as well not pass it through this place.
5.53 p.m.
Lord Whitty: My Lords, I thank all noble Lords who have taken part in this well-informed debate in which many aspects of water management have been covered. It is true that this is a substantive Bill. However, as a number of noble Lords have said, it is also true that aspects of water management are not and, indeed, cannot be covered by the Bill. A number of comments by noble Lords were on !natters which are not covered by the Bill, which they perhaps think should be in the Bill but are more particularly the context for the Bill. For example, the noble Baroness,

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Lady Miller, mentioned that there are many aspects of Directing the Flow which are not reflected in the Bill. Some legislative bases for following those through already exist and others do not require legislation.
The noble Baroness, Lady O'Cathain, was concerned about the lack of measures relating to demand management. Again, those are wider issues than abstraction and licensing. But they are—and must be—part of overall water strategy.
The issues raised by the noble Lord, Lord Dixon-Smith, and others in relation to huge planning problems, in particular in the South East, require major efforts of long-term strategic planning by the water authorities and the planning authorities in the approach to constructing and planning consent. They are part of the context in which the Bill operates but they are not issues that require the kind of legislation that it puts forward. Nevertheless, they are part of the overall context in which the Bill is being produced. They underline the vital importance of having a consistent, new and long-term approach to the way in which we deal with water in this country.
The noble Baroness, Lady Miller, said that she did not find the Bill exciting but that she found the issue exciting. I thought that the debate was exciting. As we go through the Bill, which is quite hefty—it is not as hefty as the privatisation Bill, but it has 202 pages—I am sure that we shall find plenty to talk about in relation to what is in it. We also need to bear in mind the other issues behind those in which it intervenes in the whole process of water management. Other areas are partly touched on, such as flood and water resources. It covers the structure of flood committees, but the totality of flood management is already dealt with under existing powers and planning arrangements.
Such issues as how water companies manage leakage—a point to which the noble Lord, Lord Livsey, referred—are already covered by existing legislative requirements. Some progress has been made, but more is still to be made. The major basis for those issues already exists in the 1991 Act.
Another aspect was addressed, as to what is not in the Bill but is nevertheless part of the context of the Bill. My noble friend Lady Farrington said at the beginning that the Bill is moving in parallel with the Water Framework Directive. The noble Baroness, Lady Byford, and other noble Lords—the noble Baroness, Lady Miller, and the noble Lord, Lord Beaumont, for example—said that more of the Water Framework Directive should be on the face of the Bill.
It has never been intended that the framework directive, as such, would be incorporated in the Bill. The Bill can help to deliver some elements of the directive's objectives, but most of the regulation under the framework directive is specific and will be transposed in the normal way that European directives are. The noble Baroness, Lady Byford, suggested there are some limitations on the role of the House in that respect. But that is the way we have transposed all such
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directives under the European Communities Act. We do not need to incorporate them on the face of primary legislation.
Having dealt with what is not in the Bill, but which is, nevertheless, interesting and important and part of the background, I shall try to deal with one or two of the issues that are. First, on the extraction licences in one form or another, there was objection from a number of noble Lords—from the noble Lords, Lord Elliott and Lord Dixon-Smith—to the intention to time limit all licences and that the normal period would be 12 years.
The Bill changes the option for the Environment Agency to issue new licences into an obligation. Therefore, in the long-term future all new licences will be time limited. That fits in with the Environment Agency's approach to strategic planning.
The noble Earl, Lord Peel, referred to the need to approach the planning of water resources on the basis of catchment areas. We are developing management abstraction schemes on strategies across different catchment areas in England and Wales. That requires an ability to alter the terms of licences. Nevertheless, there is a need to establish a relationship with the abstractor so that the conditions can be attached in order to meet the objectives of those strategies.
There are concerns that the 12-year strategy—although the Environment Agency can issue licences for longer periods; 12 years is not a restriction written into the Bill—and limiting abstraction licences may deter long-term investment. But there are significant elements of uncertainty under the current licensing system, especially environmental considerations, which, by and large, were not taken into account when the original permanent licences were instituted. However, the Environment Agency has powers and will be reviewing permanent licences as part of the process. In some ways, greater certainty will be provided under the conditions issued under future time-limited licences than under current permanent licences.
The noble Earl, Lord Peel, asked about presumption of renewal of licences. There is still a presumption behind the scheme that licences would be renewed in normal circumstances. To answer another of his questions—on appeal before revocation of a licence—one can appeal to the Secretary of State about both the revocation and conditions of the licence. So there are built-in safeguards to the new system.
In a sense, the opposite argument was made by the noble Lord, Lord Beaumont, who suggested that we should have a relatively short period of licensing. The noble Baroness, Lady Young, looked forward to a more rapid conversion of permanent to time-limited licences—which has advantage to companies taking out abstraction licences, as well as to the Environment Agency in its duties to pursue a long-term strategy directly linked to the conditions of the licences. So we shall consider conversion of some existing licences into time-limited licences, with conditions appropriate to modern water management requirements.

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On the detail of who will be covered by the new abstraction licensing system, I am glad that several noble Lords welcome the exclusion of small user-abstractors now covered by the licensing system. Of those 20,000, a significant proportion will be farmers, who will welcome that exclusion. The main concern about extension of coverage relates to trickle irrigation. I understand the anxieties of the horticulture, potato and other industries about the implications, but the whole system concerns the total quantum of water, rather than how it is used.
Although trickle irrigation can be a marvellously effective and efficient use of water, it is not necessarily so in and of itself. It depends how effectively the extractor uses the system. It is therefore important that such users are brought under the regime. However, the Government are concerned that their being brought under the licensing regime is done in such a way as does not threaten or impose excessive cost on their business of horticulture, which, as the noble Earl, Lord Peel, rightly said, is important for rural development. As he said, it is important to talk those industries through the process as we bring them into the system.

The noble Baroness, Lady Byford, raised the question of revocation of licences after four years of non-use. I understand why the move from seven to four years may be inappropriate in certain circumstances. The Bill simply provides a power where there is no good reason for not using the system for four years. Where a crop rotation system or other rational reason for not using the abstraction licence exists, that will clearly be a strong argument against revoking the licence. But there will be situations in which failure to use the abstraction licence, given the need to manage the total system. would be grounds for removing the system after four years.
Compensation will end only in cases where a permanent licence is revoked because an obstruction causes serious environmental damage. It will remain payable when a time-limited licence is revoked. There must be serious environmental damage as opposed to a relatively minor problem with the licence; therefore, there is a significantly reduced likelihood that licences will be subject to such revocation. It is important that, throughout the process, the Environment Agency talks to any holder of a licence that is in danger of being revoked.
Noble Lords raised issues other than the licensing system, such as the nature of the new regulatory authority. My noble friend Lord Borrie was concerned that the board that replaces the individual regulator should be kept relatively small. I agree, particularly in the context of the water sector. The noble Lord also said that the board should have clear responsibilities.
The noble Baroness, Lady Byford, was worried that, because the board of regulators would be appointed by the Government, it could be subject to political pressure. The individual regulator is appointed by the Government at present. The regulator and the regulatory system have proved distinctly independent from the Government over the past few years, which is important. We wish the new system to maintain that independence.
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Concern was expressed about the fact that the Environment Agency is to be the regulator under the Reservoirs Act 1975. Noble Lords were also concerned about other aspects of the removal of what is seen as local control into a national system. Across England and Wales there must be consistency of approach in such important issues as managing the overall system and public safety. It will also be important to have a consistent line of communication with local authorities.
Noble Lords raised several points about the consumer council for water. It will be given additional powers, which was generally welcomed. But my noble friend Lady Thornton was concerned about the council's access to certain information. It is important that the council acquires adequate information. But it is a different situation from that of the competitive sector, where competition occurs at the top end of the market—in supplies to large users. The balance of power and the role of a consumer representative are different in the case of a monopoly supplier providing for a vast range of domestic and small business use. Concern was expressed about the restriction of access to information from the Consumers' Association referred to by my noble friend. Under the Bill, the consumer council for water will have virtually the same access to information as Energywatch has under the energy legislation. There is no distinction.
On competition, the noble Lord, Lord Elliott, was concerned that if we creamed off the large users of water, everyone else's bills would increase. Normally, competition leads to an overall price reduction; but we need to be wary of that immediate effect. Therefore, the director-general of Ofwat and the new body must take into account their duties to all customers rather than simply considering competition to supply larger customers. So, in making a decision to allow access to competition, he, and subsequently the new body, will have to take into account its knock-on effect on all customers, not simply on the supply to customers above 50—like the noble Lord, Lord Dixon-Smith, I cannot remember what the measure of quantum is—megalitres, I think it is. That represents only about 2,000 companies and users. Their interests as big users are important, and competition can operate easily in that context. However, it is also important to man age the knock-on effect on other consumers.
My noble friend Lord Borrie raised an issue that nobody else raised—he decided to knock it down anyway—about whether we had a combined or separate chairman and CEO. As is usual with such regulatory Bills, we will no doubt return to those arguments. I have some sympathy with what my noble friend said.
With regard to the structure of the industry as a whole, there is no presumption that the present structure is set in stone. However, it is important that there be a sort of special merger regime that recognises that there are natural structures for the water catchment areas in the regions. Any proposed merger that limited competition would need to be referred to the Competition Commission, and the commission would need to consider whether the merger would be

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detrimental. We are starting with a structure that has been set under the nationalised system and the new, privatised system for some time. That does not necessarily mean that it is there for all time with regard to the enterprises that manage it. Nor is there a presumption against all such mergers, and so there needs to be some flexibility for the regulator.
Several other issues were raised that could be hugely controversial in the context of the efficient management of water. The noble Baroness, Lady O'Cathain, mentioned metering, and the noble Lord, Lord Livsey of Talgarth, immediately said that that would not be acceptable in Wales. One would have thought that Wales had enough water, although most of it goes to Manchester and Birmingham. No doubt, some of those issues will be touched on, but they are not covered by the Bill. The noble Lord also spoke about the nature of the companies running the water system. I agree that they do quite well in Wales, with a non-profit company, but we do not propose to change the structure of ownership of the industry through this Bill.
I was pleased that my noble friend Lady Young of Old Scone was able to give a broad welcome to the Bill from her perspective with the Environment Agency and wearing her many other hats. It is important that the Environment Agency is sensitive to all the wider issues of water management and to the interests not only of water companies and consumers but to everybody who depends on the effective flow of clean water and the consistent flow of water for industrial and commercial use.
Like other noble Lords, I look forward to the Committee stage. I suspect that it will be wide-ranging, if not as wide-ranging as the Second Reading debate. From what noble Lords have already said, I imagine that a number of amendments to different parts of the Bill will be proposed. I look forward to the discussion.
On Question, Bill read a second time, and committed to a Grand Committee.

Women
6.15 p.m.
Baroness Gould of Potternewtonrose to ask Her Majesty's Government what barriers remain to women's full participation in the political, economic and social life of the country.
The noble Baroness said: My Lords, I am pleased to have the opportunity to introduce this debate to coincide with International Women's Day. I should like to thank all noble Lords taking part. The history of International Women's Day is the story of ordinary women as makers of history and change. It is rooted in the centuries old struggle of women's ability to participate in society on an equal footing with men. It is a day each year to reflect on the progress made by women in playing a full and active role politically, socially and economically, but also to examine what burdens remain and how they might be overcome.
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Such an examination has to take place against the changing nature of women's lives. As recently as 25 to 30 years ago—a time that I can remember—the man was seen as the breadwinner, women's expectations were lower and deference was greater. Women hoped for more, but expected little; choice was not on the agenda.
Today we live in a different world. Women's lives have undergone a revolution. Lone parent families make up a quarter of all families, divorce has trebled and seven out of 10 women are in paid work. But at the same time, women still have the major responsibility for the family. Society is still dependent on women's unpaid labour—work all too often unrecognised. But recognition must come, for it is estimated that by 2020 there will be 12 million over-65 year-olds being cared for by working women over the age of 50.
There is a strange belief that the gender debate has been won and that gender equality has arrived. I wish that were true. There has been progress, but women still experience disparities in income, in missed opportunities, in promotion, in inflexible working and suffer harassment at work and violence at home. To end gender discrimination, there must be the development of flexible working, equal opportunity in the workplace, the closing of the pay gap, the removal of the democratic deficit, and a dramatic reduction in the level of violence against women.
I shall concentrate my remarks on the practical problems of women at work, and pay. However, first, I shall say just a word about domestic violence. I do so in order to congratulate the Government on tackling this serious and abhorrent crime—for crime it is. Domestic violence accounts for a quarter of all violent crime and claims the lives of two women per week. Those are unacceptable facts. Stopping domestic violence and bringing perpetrators to justice is a priority. I trust that the consultation paper, due next month, will do that.
I turn now to women at work. Women are professional jugglers. In one day, not only do they do a full time job, but they are mother, grandmother, wife and partner. To do that well and effectively, they need a package of measures of support and services tailored to their new pattern of living. Women want choice and quality. They need financial security, and they need time.
The new deal for lone parents and the changes to the tax and benefit system give real assistance in enabling women to move from welfare to work. The National Childcare Strategy with the provision of 600,000 new childcare places aids choice. But for real choice, we must go further: there must be a democratic shift in the pattern of working. Research by the DTI identified that there is a strong demand for flexible working. Where employers have offered this option, 69 per cent of employees have taken advantage of such options as reduced hours, job sharing, working a set number of hours per year rather than per week, or working from home. However, Equal Opportunities Commission research showed that only half of employees know that as from next month parents with young and disabled

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children will have the legal right to ask employers for flexible working. and that employers must seriously consider such requests. Much more publicity is needed.
Sensible employers know that if they offer flexibility, they will gain from a reduction in staff turnover, a reduction in absenteeism, and increased motivation, loyalty and productivity. But flexible working must not mean a loss in promotion prospects, currently too often the case for the 42 per cent of women who work part-time.
The 2001 census confirmed that women's and men's jobs are still profoundly affected by their sex. Women remain concentrated in the five lowest paid employment sectors and 60 per cent of women work in just 10 occupational groups. Women make up 84 per cent of employees in personal services; 78 per cent of employees in administrative and secretarial work; and 71 per cent of employees in sales and customer services. There are only 9 per cent in skilled trades; 17 per cent as machine operatives; and only 34 per cent are managers, senior officials and professionals. Fewer than 10 per cent of directors are women and in the FTSE 100 firms, that figure falls to 7 per cent.
The glass ceiling may be broken in places, but it is made of toughened glass and remains shatter proof. Whether it is at senior levels in the public or private sector, women's progress is still blocked by the same prejudices and misconceptions.
Many of those misconceptions start in schools. Girls are outperforming boys at all levels, but sex stereotyping is still prevalent. Sex stereotyping pigeonholes boys and girls into fixed roles and behaviours. It limits an individual's opportunities, as well as contributing to the skills' shortage in sectors such as engineering, science and technology. Despite there being a skills shortage in these subjects, girls are still being steered into traditional areas, particularly for work experience.
The divide is at all levels, through to A-level and into apprenticeships: engineering apprentices are 96 per cent men; health and social care apprentices are 89 per cent women: computer analysts and programmers are 79 per cent men; and primary and nursery teachers are 86 per cent women. Those figures speak for themselves. Careers advisers, teachers, employers and parents all have a responsibility to break this cycle and give more comprehensive advice on the different and differing options available.
Occupation segregation is also one of the key factors for the continuing pay gap. Others are the unequal impact of women's family responsibilities, the secrecy that surrounds pay, the exclusion of women from bonus schemes and lower starting salaries. The latter is so clearly illustrated by the evidence of male graduates earning between 15 and 30 per cent more than female graduates in the same occupations and with the same qualifications. The pay gap stubbornly remains, albeit reduced from 37 per cent when the Equal Pay Act was introduced to 19 per cent today for full-time workers—a gap that widens to 40 per cent for women working part-time.
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Businesses are being encouraged by the Government, but not required, to conduct pay audits. It is hoped that 50 per cent of large employers will have carried out such reviews by the end of this year. But as 93 per cent of businesses, big and small, believe themselves satisfied with their current pay systems, this target is unlikely to be met. Pay regulation may be the only way of eliminating the pay gap.
At the end of this month, all government departments will be producing their equal pay reviews. The findings of those reviews, and the hoped-for government response to remove any unjust pay differentials, should be a spur to private employers.
The majority of pensioners are women and in spite of initiatives by the Government to support older women, the pay gap continues to contribute to a pensions gap. The average income of a retired woman pensioner is less than 60 per cent of a retired man's average income. A single woman pensioner's average weekly income is £153 compared with a male single pensioner on £194 per week. That is a 22 per cent difference. This gap in retirement income has to be plugged not only by the state but by private pension schemes which need to be more flexible to take account of women's fragmented career patterns.
In the time allowed, I have been able only to skim the surface of women's discrimination at work and in pay. But women's importance in the labour market is growing. The future success of the UK economy depends on women being able to reach their full potential. We need to change the culture of work so that equal opportunities and equal treatment becomes a priority. We have to continue to break down the barriers and remove the burdens to full participation in society. Only then can we say that women are playing a full part, politically, socially and economically.
6.24 p.m.
Lord Oakeshott of Seagrove Bay: My Lords, I follow the noble Baroness, Lady Gould, with pleasure, especially in developing her analysis of the problems of promotion for women at work. I focus today on the barriers for women's full participation in our business life, taking it from the top and looking at our 100 largest companies, the FTSE 100 Index. I thank Dr Val Singh and Professor Susan Vinnicombe of the Cranfield Centre for Developing Women Business Leaders for some helpful statistics in their annual female FTSE report. They confirm many of my own observations over the past 26 years, as a result of meeting big company boards in my day job as an investment manager in the City, where I work in equal partnership with a woman.
First, I turn to the facts. In the FTSE there are 14 female executive directors on the boards of Britain's top 100 companies. The noble Baroness has just quoted a figure of 7 per cent for directors of' FTSE companies as a whole, but that is a slightly optimistic assessment because it includes non-executives. For the jobs that really matter—the executive directors—the figure is 3 per cent. So today there are 14 women in that

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role; four years ago there were 13. Eighty-nine of the top 100 companies have no woman executive director at all, while the great majority never have had. There is one woman chief executive, one woman chairman, the noble Baroness, Lady Hogg, and one joint managing director. FTSE retail companies have four executive directors, while two work in the media, one in insurance, two in the former building societies, one in transport and one in health supplies.
What about the vital sectors: oil, leisure, telecommunications, pharmaceuticals, water, electricity, information technology, property and the big five clearing banks? They are female-free zones, all of them, as regards women executive directors. The biggest companies, for all their fine gender equality statements and glossy reports stuffed with pictures of happy female faces, are the worst offenders of all. Not a single woman executive sits on the board of one of the top 25 FTSE companies, today valued in total at over £600 billion on the Stock Exchange.
I shall focus on executive directors because they are the people who really matter. They hold the power in a company by controlling the company culture and paths of promotion. We waste too much time both in this House and in business generally agonising about the exact number and role of non-executive directors. Almost all big companies are happy to tick that corporate governance box. They have female non-executives ranging from the genuinely independent and effective down, quite frankly, to the "quango queens" who are there only for adornment.
What kind of message is sent to women working below board level in a company or, indeed, to younger women wondering whether to work at all for that company if no woman has ever worked her way up to the main board? Far too many of our largest companies give the impression not just that there is a glass ceiling for women, but that the door to the boardroom is permanently padlocked. Even the handful of women who have broken through on to the boards of our big companies are usually either foreign or the finance director. So the proportion of women in the top business jobs is pitiful and things are improving at the pace of a lame snail.
The men at the top of the largest companies need to ask themselves for how much longer they can afford to fish in so limited a talent pool. Is there really not a single woman among the tens or even hundreds of thousands they employ who could do their job? If not, what are they doing to encourage, train and promote women, and when do they expect their management succession programmes to deliver? Employees, customers and investors should tell the men on those boards that they are shooting themselves in the foot. They are acting against their own commercial self-interest if the way to the top is not genuinely open to the best talent, regardless of sex. Quotas are not the answer, but enlightened self-interest, backed up by plenty of public pressure and naming and shaming if that is necessary, makes the best case for change.
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My wife, who is a doctor and an academic, reminds me often that women will have won equality at work only when there are as many mediocre women in the top jobs as there are mediocre men. On that test, in business, as in so many other walks of our national life, we have an awful long way to go.
6.30 p.m.
Baroness Greengross: My Lords, I congratulate the noble Baroness, Lady Gould, on initiating a very important debate on a special day.
The International Longevity Centre UK, a small think tank which I chair, recently appointed its first fellow, a woman with two children who was at the peak of an exceptional career, with a top finance job in what is traditionally a man's world. She felt that she had to give it all up because she could not manage to have any family life. In spite of the good policies promoted by the Government and many of the best employers, she found the conflict of interests impossible to resolve and wanted a life with her family.
She is now researching how this happens to so many other women—most of them, obviously, in less privileged positions than her—and looking at what policies would enable them, and her, to work on equal terms to men, but recognising the different needs. Huge steps are still needed.
Childcare facilities for women in jobs are limited and expensive for many. For example, a nurse on the top grade—I am the mother of one such young woman—finds it very difficult to cover the costs of a nursery because, as she is earning, she does not qualify for subsidised childcare. The loss of such women to our economy is very serious, especially the many thousands of young aspiring women on whom we place so much responsibility for our future.
As regards older women, we know—the noble Baroness, Lady Gould, has told us—that women live longer and in poorer conditions than men. We also know—it has been expressed very eloquently—how this poverty continues throughout life and into old age. Unfortunately, the Government, who are doing a great deal to promote the interests of women—as is the feminist movement, the sisterhood itself—have done much more, in the past at any rate, for younger women than for older women.
We know that women have immense difficulty in matching men in terms of contributions to pensions and that the situation continues to get worse. We also know that women live—possibly partly due to this poverty—in worse health than men typically do. They are not necessarily suffering from life-threatening disease but from disabling and chronic conditions which affect older women more than older men. Claims for incapacity benefit from women are rising.
Many more older women are carers—I am sure that the noble Baroness, Lady Pitkeathley, will go into much more detail on this subject—but, because families are changing so rapidly, we now see a lot of what are called "beanpole" families; that is, families consisting of single women of many generations. We

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have reached the situation where we have women looking after women looking after women across the generations.
Very often now, the "cared for" largely outnumber the carers. That is a huge burden that many women carry. Many grandmothers— and, indeed, great grandmothers—because of marriages breaking up, now find themselves doing full-time childcare jobs, which is a huge difficulty for many of them.
We also hear in the economy nowadays about family-friendly policies which allow breaks that match the school holidays—indeed, in Parliament, particularly in another place, it is now the routine—and flexible hours that fit in with children's school times. A study in the United States found that there were more carers looking after older people than there were looking after children, and it has a younger population than we have. But most policies do not take into account the needs of people caring for elderly husbands and wives and for older people who may be very frail and whose care often lasts for 15 to 20 years.
As to the issue of older women in the labour market, most employers—not the best ones; there are notable exceptions, mainly in the retail trade and largely in areas of high male unemployment—still feel that older women are not worth training because they do not have time to benefit from their labour. However, it has been demonstrated in research—mainly by the Employers Forum on Age—that younger workers tend to leave their jobs after a year and half to two years, whereas an older employee, perhaps one of 60, will give five years of loyal and reliable service. It is well worth retraining and re-employing older people. They can learn new tricks. We have to recognise that talent does not depend on chronological age. It depends, as it does throughout life, on an individual's skills and capacity to do a job.
6.35 p.m.
Baroness Gale: My Lords, I thank my noble friend Lady Gould for bringing this important debate before us today—on the eve of International Women's Day.
Are there any barriers left for women to participate in the political life of this country? Yes, must be the answer. The biggest barrier to overcome for most women is the attitude of members of political parties. In all parties there is still a huge barrier of prejudice towards women who seek elected positions within their party. This can be seen at local officer level, right up to parliamentary level. I believe that there is a genuine desire at the top of all parties to have more women involved. But parties at the top cannot get their members in the constituencies to accept the need to do something positive about it.
Some barriers have been removed—for example, by introducing "family friendly" hours in political institutions, as there are in the Welsh Assembly, and changes to the hours in the House of Commons. But I do not believe that improving the working practices of political institutions is the main barrier to women coming forward to stand for office.
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Women put themselves forward for selection, in the main, to serve. Women have as much desire to serve and to make a contribution as men. But that is very difficult to convey to most party members. The main problem is one that women in all walks of life experience—prejudice and discrimination. We have laws to deal with discrimination against women and I believe that it is now time to have laws to overcome prejudice. That will be difficult, but not impossible.
If we look at the present position of women in political life, we see that they are not well represented as local councillors or at parliamentary level. There are exceptions where women are well represented. I refer to the Scottish Parliament and the Welsh Assembly. So why does that happen in Wales and Scotland?
It has not been without difficulty. Special measures were put in place by the Labour Party to ensure that women had an equal chance of being selected; and they worked well. Some believed at that time—in 1999— that the mould had been broken. But, sadly, that was not the case, as the selection of candidates for the general election proved. There are now fewer women Members of Parliament than there were in 1997.
I believe that laws can change people's attitudes towards women. There are already many measures in place. The most recent is the Act which allows political parties to have all-women shortlists when selecting candidates. The Labour Party has already started to use this legislation in Wales when selecting candidates for the Welsh Assembly.
Of the 16 constituency vacancies, six were designated as all-women shortlists. But, in fact, nine women have been selected, making a total of 23 women candidates fighting constituency seats and one woman on the list. So the end result is now 24 women and 17 male candidates. I am not sure what is happening in Wales, but at least it is good! If all the parties in Wales used the legislation, I am sure that there would be at least 30 women Assembly Members out of 60. I am not going to get carried away with this good result. I know that we still have a long way to go before women can achieve equality in all walks of Life.
In the political sphere some changes are taking place. Wales is giving a good lead in the Welsh Assembly elections. The Question asked is what barriers remain. The barrier of prejudice is a big one, but it can be dismantled.
I spoke earlier of the importance of legislation in changing people's attitude. If that is the case, is there a need for further legislation to help remove the centuries-old, worldwide prejudice against women? Yes, is my answer. France, for example, has passed a law, used for the first time in 2001, which imposes a quota of women candidates at local elections. The proportion of women councillors rose from 22 per cent to 48 per cent, proving once again that laws can help women and showing that the electorate do riot discriminate between women and men candidates. Is there any Government thinking to emulate France—only in this matter—in bringing forward legislation to introduce quotas of women candidates at all levels of elections? Does the Minister agree that this must be the

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next step in the raft of legislation that already exists to ensure that women can make a full contribution to the political life of this country?
6.41 p.m.
Baroness Howe of Idlicote: My Lords, I thank the noble Baroness, Lady Gould of Potternewton, for achieving the debate on this significant date and for the marvellous way in which she introduced it.
The terms of the Motion rightly imply that a certain amount has been achieved by successive governments over the years. It is also right that we congratulate the present Government on what they have achieved so far. Their old Labour predecessors were the main architects of the equal pay and sex discrimination legislation and the continuing record of taking measures to make a real difference to women's full participation as UK citizens is worthy of respect.
A major target remains—that of equal pay for work of equal value. I will not repeat what was said, but 30 years after the Equal Pay Act passed into law, and with women continuing to lose between £50,000 and £250,000 over a lifetime, that target must be tackled and achieved. It seems to me that the vital remaining areas fall under two specific headings—attitude change and the need to continue to pinpoint particularly high-profile jobs at the decision-making level. If both were tackled effectively, they would have a considerable knock-on effect with much wider benefits.
The most critical attitude in employment is the acceptance—indeed, the promotion—of the work/life balance. It must become a timetable norm in every workplace. It is not a new concept, it has been urged for some time and I am glad to say that it is gradually gaining acceptance. Married to that—and you cannot have one without the other—is a more widespread acceptance and promotion of a much more equal sharing of family care responsibilities. Men are missing out. They are missing out on children's development, not just on the chores but on the joys of parenthood.
Legislation can often be an appropriate framework within which attitudes can be encouraged to change. A good example was the excellent measure of the noble Lord, Lord Faulkner, to end sex discrimination in clubs. But legislation cannot do the whole job; ultimately, in a democracy, the people concerned have to accept what is proposed.
In the matter of high-profile jobs, attitudes—conscious or unconscious—must also be dealt with. I will touch briefly on public sector appointments. MPs, and jobs in which the proportion of women remains obstinately low, as well as the corporate sector.
In public appointments—and here thanks are particularly due to Dame Rennie Fritchie, the Commissioner for Public Appointments—the Government have made progress. Every department has been set a 45 to 50 per cent target for women in such appointments by 2005. The DTI's women and equality unit has also conducted an excellent campaign to encourage more women to apply, as only a third of
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appointees are women. I should also like yearly statistics to be published by an independent body—perhaps the Audit Commission—giving a comparative ranking of what each department is up to and has achieved.
Despite these commendable efforts, like many people I remain to be convinced that within the public sector, which is an important role model, women make up a proper proportion of those chosen, particularly for the top jobs—chairmanships, chief executives and paid positions. Many of your Lordships will agree that the proportion of women MPs remains abysmal. I shall not go further into that issue. The noble Baroness, Lady Gale, has given us some hope. With the passing of the recent legislation on that subject, we may see more women MPs—and, I hope, more women in this House, too.
Professions such as engineering seem reluctant to recruit or retain enough women. I was going to say more about that. I am particularly pleased that my noble friend Lady Greenfield is here. She is one of our most eminent scientists and I am sure she will talk about the issue. We must have more action to recruit and retain women in that area.
We have heard the numbers—or lack of numbers—of women in the top jobs in the private sector, despite the 30 per cent who make up the management of the corporate sector as a whole. In his report Derek Higgs points out:
"a commitment to equal opportunities, which can be motivational as well as of reputational importance. is inevitably undermined if the board itself does not follow the same guiding principles".
Most of us would be able to think of people in top jobs who should have been there much sooner and others who have not arrived yet. I am thinking particularly of Rachel Lomax, the outstandingly well-qualified candidate who has at last become Deputy Chairman of the Bank of England. If she were a man, I think she would have been there 10 years ago when the vacancy arose.
Why does all this matter? Top decision-making levels in the public or private sectors are important, because that is where the framework within which we all work is decided. The sooner we see a better balance of the sexes at the top level, the sooner we are likely to see a country that better reflects the needs of a modern, competitive economy and the needs and aspirations of both halves of the population. Let us hope that the House of Lords—renamed by then, I hope—will not be called on to debate a Motion similar to this Unstarred Question in 50 years.
6.48 p.m.
Baroness Massey of Darwen: My Lords, I congratulate my noble friend Lady Gould on securing this debate and on introducing it in such a vigorous manner. Formidable presences in your Lordships' House, including the Minister responding tonight, may mask the fact that there are still barriers to the full participation of women in public life. I am glad that there are men speaking tonight. Men are sometimes seen as part of the problem, but they are also part of the solution.

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Barriers may be due at least in part to the portrayal of girls and women as invisible and without power or influence. Even today, with more and more positive role models, women are struggling against the legacy of that invisibility in many of our institutions. Thankfully, those images have been challenged, nowhere more so than by the feminist movement. However, there are still deep-seated problems to overcome.
We now see many women determined to overcome the barriers in significant numbers and against some opposition. One such young woman—my daughter, who is a director of a large company—told me that at a client meeting she was assumed to be there to organise refreshments and was addressed as "girlie" by visitors until her role was revealed.
As the noble Baroness, Lady Gould, said, images of women and the stereotyping of their roles affect women's perception of self and others' perception of them. A French friend of mine told me of learning English from a text book that described men and women. It said:
"He is big, he is strong, he has a lot of money and a big car. She is sad, she is weak, she is ill; she has fainted on the carpet".
Noble Lords may remember an advertisement in which a car was draped with a glamorous woman with very long legs—images of women, fit only to drape over a bonnet. A Women's Press card changed the caption to the advertisement to have the woman say, "When I'm not lying on cars, I'm a brain surgeon". Women strike back.
Let us take another example—fairy stories, where women are always helpless, sometimes persecuted by an evil stepmother or sister, and usually have to be rescued, usually by a handsome prince. Witness Rapunzel, she of the long hair in high towers; Cinderella; Little Red Riding Hood; Sleeping Beauty; or Snow White. The women are passive and pathetic, not participants in their own destiny, not supportive of other women, and good only for serving breakfast to dwarves, being eaten by a wolf or sleeping for a very long time.
In our own Palace of Westminster, the statues and portraits are mainly of males, apart from the extraordinary statues of Queen Elizabeth I and Victoria. Many of the women portrayed were despatched in painful and undignified ways. Women can be seen in pictures along the Corridors beseeching help with baleful looks or clinging to the garments of noblemen. A lot of weeping goes on. Where are the images of proactive, powerful women?
If we look in the daily press, women are often invisible except for trivialisation—displays of body parts or involvement in scandal. I have checked some recent newspapers. There was not a single photograph of women in sport and no mention of women in the major stories of the day. Headlines included, "Why women fall for older men (they know their way around a wine list and don't expect you to go Dutch)" and "Anthony Hopkins marries a bankrupt businesswoman". Women are sometimes mentioned in relation to problems-headlines such as "Why women
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worry" or "Help me over this hormone trouble". Women dominate problem pages, often because they see themselves as failing—in relationships, in sexual prowess, in being a parent. It is all negative. Women's bodies are frequently medicalised, as if they have no control over their own health. In one bookshop recently, I came across 15 books on the menopause, 10 on pre-menstrual tension and a very great number on slimming.
Some of that may seem trivial and even frivolous. It is not. Those examples are fed to girls, boys, women and men every day. It is insidious propaganda. We know that how people see themselves, how much self esteem they have, influences what they actually achieve. I suggest that barriers can be subtle but pervasive, and that they still need challenging. leaping over or knocking down.
6.53 p.m.
Baroness Greenfield: My Lords, I add my congratulations to the noble Baroness, Lady Gould. The under-representation of women in science, engineering and technology threatens global competitiveness. It is an issue for society, organisations, employers and the individual. Quite often when you talk to people they say, "It will gradually get better. Things are changing". However, as the statistics over the past five or six years show, that is sadly not the case. In the past six years, the numbers have remained lamentable. In the physical sciences, only 20 per cent of PhDs are women. At the professorial level, the numbers are single figures. One might think that the biomedical sciences, traditionally more attractive to women, offer more hope—indeed, at the PhD level, 50 per cent are women. But then only 30 per cent are lecturers; 15 per cent senior lecturers; and under 10 per cent professors.
It was because of this problem that I was recently invited to submit a report to the Secretary of State for Trade and Industry to explore the difficulties, but also to try to come up with some solutions to the problems of women in science, engineering and technology. One of the most immediate problems for us was that about which we have already heard—having children at the critical phase in one's career. The problem is particularly acute in science where there is no career structure at all in the public sector until you are in your mid-30s. One is dependent on temporary grants during two to three years of living hand to mouth while doing research and publishing papers. It is precisely at that time when one is biologically at one's optimum for having children that one threatens to set oneself back if one has children and cannot get into the race to publish papers and to gain grants.
The solution that I propose is that of ring-fenced funds to enable any woman or, indeed, man, who has had primary care of a child and therefore has potentially jeopardised her or his publication record, to apply for grants from a ring-fenced pool of funds. That would enable them to re-enter—pump prime, if you like—their career, catch up and start to publish again.

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Women in mid-career are not represented on panels to the extent that they should be. They lack policy making experience and they lack the mentoring that they so badly need. A mentor is someone who believes in you more than you believe in yourself. Speaking as a woman involved in science, I can vouchsafe that it is important to have someone in whom you can confide and to whom you can pour out your troubles so that you do not bottle things up but rather can explore positive ways forward. The report proposes a nation-wide mentoring scheme to help women.
I turn to the notorious glass ceiling. Women do not apply for senior jobs. Moreover, they are not known to search committees or to head-hunters. That is because women are notorious for not putting themselves forward. There is an old saying that if there are 10 desiderata at a particular interview, men will promote the seven in which they are proficient whereas women will apologise for the three in which they are deficient.
What we need is a system to help women come to the attention of head-hunters and search committees and give them the confidence to apply for jobs and grants. One possibility is to have what is called a working science centre—a sort of database that almost constitutes an employment agency—to enable anyone to consult a database to find out who and what is available. It would simply bring the appropriate candidates—they could be men as well as women—to the attention of potential employers. We know that that is possible as we already have vast databases thanks to the HEFC and research assessment exercises. It would require very little effort to maintain and update those databases and to make them available both to the private and public sectors. It is done already at the Royal Institution to bring together the media and scientists. It would not be hugely expensive and, moreover, it could be funded both by government and by the private sector. I draw an analogy with a media centre. It is possible to ask for very small contributions and obtain multiple donations from industry. In that way many subscribe without it being too much of a burden on them.
Other possibilities are carrot and stick measures to encourage the culture of job sharing and part-time working. Why should that be such an anathema? Traditionally one likes to think that one is the sole pioneer in science. However, scientific papers are usually multi author. I see no reason therefore why one cannot encourage job sharing. Certainly as regards teaching and research, one could encourage a certain amount of sharing in respect of the teaching component.
One could also have teaching remission or, indeed, provide extra funds for those of us who have to bear the extra burden of being the token woman on committees and visit girls' schools to promote the role of women in science, engineering and technology.
Science is at the centre of all our lives and is becoming increasingly so. It affects nutrition, education, reproduction, the climate,
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communication—everything that we hold dear. We cannot afford to allow 50 per cent of the talent in that sector to haemorrhage.
6.58 p.m.
Lord Winston: My Lords, when a little girl is born, she is born with about 2 million eggs in her ovaries. When the ovaries are first formed, she has 5 million eggs in her ovaries. She has already lost the largest proportion of them by the time she is born. By the time she reaches puberty, it is calculated that she has about 200,000 to 300,000 left. Thereafter, she will ovulate, if she is fertile, once a month. That is about 360 to 400 eggs. The rest are lost by a process of programmed cell death during reproductive life. It is a staggering loss. To give noble Lords an idea, during the course of this debate—one and a half hours—the average child-bearing woman will have lost one egg. In the same period of time I shall have made about 10,000 sperm, but that is another matter.
We are forgetting the serious issue that women are very seriously penalised by their biology. If we look at the statistics, the age for having a first child in the United Kingdom is rising year on year, as in most western societies. It is doing so because women are getting skills and education, competing with men in the workplace, earning as much as men and contributing as much to society. However, they are severely penalised. Until we address that, we have a serious problem as to how we deal with the rest of women's status in society.
The great majority of the women whom I see in my clinic have contributed to society and are then penalised. Under the National Health Service, they cannot even get infertility treatment because they are too old. It is worth pointing out that fertility drops dramatically after the age of 35. By the age of 40, at least one-third of women will be infertile. By the age of 42, it is calculated that about two- thirds of women will be infertile. Most pregnancies after that age end in miscarriage. That is a grievous loss of life and is appalling for a woman to contemplate. It is truly shocking. I am sad to say—I say it to the Minister, whose job is not to answer health questions directly—that it has been unfortunately neglected in the health service, and we need to do something about it fairly immediately.
We have sought to use all sorts of inappropriate treatments for the problem. For example, egg sharing is allowed in this country under regulation by the HFEA, so that young women can be exploited to give up their eggs to older women. That is only in the private sector. No National Health Service hospital will do that, because most of them do not regard it as ethical. There is a growing trade in fertility treatment, which means that 90 per cent of affected women cannot get it under the National Health Service. With the exception of one or two health authorities in the London area, virtually none will offer treatment to women over the age of 37 or 38.
It is time that we found ways to deal with the situation. One way that is quite clear is to recognise the problem of age. The Government have focused on

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chlamydia causing infertility. Believe me as someone who has practised in the subject for many years: chlamydia is totally insignificant in comparison with age. Age is much more serious. The problem of chlamydia is that it gives the idea that somehow a woman has caused her infertility. It is a terrible canard and causes great anguish to the very many women who think in some way that they are responsible for their agonising plight. The pain of infertility is equal to the pain of osteo-arthritis of the hip, but it is not dealt with sympathetically and it needs to be. We have to consider that issue very seriously. Until we have improved our reproductive medical services, there will be problems.
The noble Baroness, Lady Greenfield, raised the issue of science. It is a real possibility that if there were funding in the area to research how we might prolong reproductive life, we could do so by five or 10 years in women, preserve eggs in the ovary and prevent some of that cell death. That is certainly worth consideration. It would be one solution. It is worth bearing in mind that women are far fitter and live longer nowadays. Therefore, they could probably child-rear later, but are penalised because of their biology. It seems to me that biology penalises them primarily at the moment, and society is failing to take cognisance of that fact.
7.4 p.m.
Baroness Pitkeathley: My Lords—although on this of all evenings I would prefer to say, "My Ladies"—I congratulate my noble friend and say what a joy it is to take part in a debate with so many powerful and articulate ladies and, of course, some powerful and articulate men.
Noble Lords will not be surprised to hear that I shall focus on carers, for whom there is a dilemma so far as the topic of the debate is concerned. Although I would not want in any way to discount the contribution of male carers at the heavy end of caring, this is still largely a women's issue. On the one hand, women carers make the most enormous contribution to the economic and social life of this country. Others have referred to that. It is not at all unusual for a woman to have a caring career, starting perhaps as a young carer, going on to care for a child, then for an ageing parent and finally for a spouse. Nor is it at all unusual for women to be multiple carers: I met someone the other day who was caring for two elderly parents and a son with a learning disability. They make a huge contribution as the cornerstone of community and healthcare.
Their contribution was calculated last year as being worth £57 billion per year. That is a sum equivalent to the cost of the National Health Service. The fact that that care is provided within a relationship, usually willingly and almost always with love, should not and must not blind us to the value of that contribution and to the fact that it makes very sound economic as well as moral good sense to support carers. As one carer said,
"Society would collapse without carers—don't ignore us".
We must never forget that vast participation in the economic life of our country.
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On the other side of the argument, I can also put a case about women being prevented from making their full contribution by the restrictions which caring duties place on them. Those duties affect their health. Six out of 10 carers report that their health has been adversely affected by caring. If they are providing substantial care, they are over twice as likely as the rest of the population to have mental health problems, especially if they are receiving no relief at all. Many are in that position.
Carers are also poor. In a Carers UK study, 77 per cent reported being worse off financially as a result of becoming a carer, attributable to loss of income when they had to give up work and to the extra costs of disability. The combined effects of poverty and ill health can lead to isolation and social exclusion and leave carers ill-equipped to deal with life even alter their caring duties are over.
Nowhere is that more apparent than with regard to carers in the workplace. Another Carers UK study, Redressing the Balance, points out that carers attempting to rejoin or remain in the workforce are affected by three different types of barrier: the individual barrier of their lack of skills and confidence, especially if they have spent years out of the workforce; systems barriers, which can be about lack of information and problems in getting adequate support services; and financial disincentives to working because of the rules in the benefit system, especially concerning part-time work. There are labour market barriers too. Employers do not always understand the needs of carer employees or offer appropriate flexible working practices.
So, carers struggle in the workplace, and that can he a waste of a very precious resource. Those employers which take pains to support carers—Centrica, for example, has very good working practices—find ample reward, as carers take the commitment and skill they brought to their caring role into the workplace to everyone's benefit. In the workplace or at home carers need recognition and respect, choice, a decent income, proper information and practical help. We must try to ensure that they receive them.
However, I must not he unduly pessimistic. This Government have a proud record of support for this country's carers, male and female, from the National Carers Strategy and the Carers and Disabled Children Act to changes in the benefit, pension and tax systems to recognise carers and the major changes recently made to the Community Care (Delayed Discharges etc.) Bill to recognise the position of carers. Much has been done to improve the position of carers and the way in which we recognise their contribution. More remains to be done, but the power of the carers movement grows year by year.
In the face of the barriers which exist, we can only marvel that, despite everything, carers manage to become involved in their local carers' groups, with local and national health and social care organisations, and somehow manage to become drivers for change. I met a carer in the North of England last week who is now chair of' her local

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authority social services committee, having become both politicised and empowered by setting up a carers' support group. As she said to me,
"Our voice gets stronger all the time. All we are asking for is a fair deal".
7.9 p.m.
Lord Sawyer: My Lords, I want to speak on women, low pay and exploitation in the public services. I should also like to thank my noble friend Lady Gould for initiating this debate and for her lifetime of leadership in this area. I worked with Joyce for many years and it was a great privilege. I also had the privilege to represent low-paid workers for 24 years— 80 per cent of whom were women—when I worked for NUPE/Unison as a trade union official.
These women carry the grand titles of ancillary workers, cleaners, orderlies, domestics, kitchen maids, dinner ladies and so on. Their job titles, as does their pay, reflect the value society places upon their work— not much.
Throughout my years as a union official, we fought and campaigned for better pay and recognition for millions of workers, many of whom were part-time, who performed these important jobs and yet they were unseen and undervalued by the people for whom they worked.
In 1997 we achieved what we believed to he a major breakthrough. That was the election of a Labour Government. At last we had the opportunity to halt the privatisation and the competitive tendering that had been eating away at our members' already unsatisfactory pay and conditions. Sadly, we were mistaken. The drive to market test, the push to outsource, the obsession with subcontracting and the dogma of best value cascaded down on the directors of the private companies but on the backs of low-paid women workers.
I have no time to show the scars, but believe me they are deep and unnecessary. I urge all those who hear or read my words to read Polly Toynbee's excellent book, Hard Work: Life in Low-pay Britain, and to witness in those pages the loss of pay, pensions, holidays, maternity rights, dignity and self-respect that these women in public services that have been privatised have experienced.
I am angry—and I have always been angry—about low pay and its effect on women workers, in particular. However, I want to offer some solutions. They are: first, the simplest and most beneficial way to deal with low pay is for employers to value their workforce and to pay a decent and fair wage. That so many employers choose to exploit workers and expect to get the best from them has always been of constant amazement to me throughout my life.
Secondly, in the absence of that, the state must step in. Here I want briefly to pay tribute to an old friend, Rodney Bickerstaff, the former general secretary of Unison, without whom we would not have a national minimum wage. That minimum wage is about to be updated. The TUC is asking for it to be raised from £5
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to £5.30 per hour. I urge those concerned and others with influence to make it so and to ignore the objections of those who should know better.
Thirdly, the new agreement in the public services on ending the two-tier workforce is very welcome. It should be implemented with commitment and enthusiasm. The spirit and intent of the agreement should be to end economic exploitation of low-paid workers and to introduce dignity and pride at the place of work.
Fourthly, the trade unions have fought hard for government action on this agenda but have failed to recruit and organise low-paid workers. Only 15 per cent of workers in privatised companies providing public serves are trade union members. More needs to be done by the Government. They should talk to the Government about what help might be given.
Fifthly, the use of union learning representatives, learning accounts and learning centres needs to he targeted at low-paid workers. For example, all employers and unions should be involved in introducing basic literacy and skills development for the low-paid workforce. That approach is absolutely crucial. It is about self-help. It opens doors for people in those jobs that have so far remained closed.
I do not have time to discuss childcare and benefit issues, which I recognise are crucial to this debate. My five points are directed at unions, employers and government. If they were taken up they would bring an end to a shameful period of exploitation of women workers, of which none of us can be proud.
7.14 p.m.
Baroness Thomas of Walliswood: My Lords, I thank the noble Baroness, Lady Gould of Potternewton, for putting down this subject for debate today. She picked a good topic for the right day and we have heard some splendid speeches—not least that of the noble Baroness herself.
Trying not to use up too much time, I shall try not to repeat points made by other speakers—not even, on most occasions, to refer to their speeches. I beg their pardon.
I start from the simple principle that poverty is the greatest inhibitor of women's participation in society. We should be thankful today that the poverty that keeps women chained to back-breaking, unpaid work throughout the developing world is no longer commonplace here; that women in this country are able to control their fertility and access education and work; that we are not forced to flee from our homes; or are, except in a few cases, subject to trafficking as prostitutes into foreign lands.
I make that point to put the problems of women in the United Kingdom in their proper context and show how far we have come. Nevertheless, as many have said, we have not achieved economic security equal to men, by any means. There are seldom complaints from men that women dominate the caring professions, or other poorly paid employment, such as the noble Lord, Lord Sawyer, described. Those areas of employment lack prestige and, taking a cynical view,

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may be thought to be suitable for women—a form of housework, in fact. They ma), be badly paid and lacking in prestige because women predominate, but I do not have time to develop that argument.
My noble friend Lord Oakeshott has vividly illustrated the problems of reaching the top in business. Success in penetrating the professions at a perfectly ordinary level can also apparently cause unease. The news that more women than men are now training to be doctors seemed to have the British Medical Association in a spin a few months ago, with dark talk about quotas for male students. No doubt experience will show that increased numbers of women in medicine will benefit healthcare and worries will dissipate with experience.
On the other hand, the success of women in capturing some really key jobs is somewhat reassuring. In particular, I think of the first woman president of the Law Society and the success of women in capturing two of the three main jobs at the Trades Union Congress—a welcome development in an organisation that has not always seemed sympathetic to the cause of equality for women in the workplace.
However, the concentration of women in badly paid employment is directly reflected in the earnings gap between men and women. The news that that gap increased last year is discouraging. That has important consequences for the number of women who are poor in their life in retirement. That is especially worrying for their further participation in social life, not just for the women themselves hut for society as a whole.
Every voluntary group, including the political parties, knows that in recent years we have lost the most valuable source of volunteers as women have left the marital home for work. If women continue to be poor as pensioners, they may still be unable to play a full part in local society, although they have much to offer.
Women have not been as successful as many of us would have wished in national politics, although, in my experience, the picture in local government is a little better. Years ago, I was in charge of the approval of a selection process for my party in England. I was pleased that we proposed a higher proportion of women as candidates than any other party. We won so few seats that the fact that those women tended not to be selected in winnable seats seemed unimportant. But of course it is of the greatest importance. All the main parties are currently having some difficulty with that, despite the change in the law introduced by the Government—largely, I suspect, because of the prejudice of local selection committees.
There has been much glee in the press about the problems of the Conservative Party and Theresa May in that regard, but that glee is totally misplaced. It does the reputation of our Parliament no good to appear so unrepresentative of the population at large. If substantial improvement does not take place soon, the House of Commons will seem even more out of touch with the people than it does at present. After all, people are now used to seeing women in their workplace. Perhaps the grey suits even deter voters from voting.
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Gisela Stuart is about to celebrate 50 years of continuous representation by women MPs in Edgbaston. I have been invited to join her in Birmingham for that event and am looking forward to doing so.
This is an important subject; we have heard some wonderful speeches; I look forward to listening to the Minister sum up.
7.20 p.m.
Baroness Buscombe: My Lords, I, too. heartily congratulate the noble Baroness, Lady Gould of Potternewton, on introducing this important debate, especially since it is International Women's Day. I also congratulate her on the announcement today of her chairmanship of the Independent Advisory Group on Sexual Health and HIV, which is extremely welcome.
I would love to respond to all the eloquent, concise speeches on this diverse, important subject, in which so many issues were raised from different perspectives. I will be unable to do so in the six minutes allowed, but I shall try. I received an excellent brief from the House of Lords Library containing many articles on the subject. One, in particular, set me off. Its headline reads:
"Even men say women make the best bosses".
The subject was cogently covered by the noble Lord, Lord Oakeshott, and the noble Baronesses, Lady Greengross and Lady Howe. The Higgs report is helpful. Let us hope that a difference is made for those who should be at the top in business. As the noble Lord, Lord Oakeshott, said, business is acting against its own commercial interests in not opening the way for women to make it to the top.
The noble Baroness, Lady Greengross, spoke of t he conflict of coping with family life, which is a real issue that touches on the comments of the noble Lord, Lord Winston. We are all working against our biological clock, trying to achieve so much, but there is that huge problem. Could research be carried out to find out whether it is possible to prolong women's childbearing life to enable them to remain in the workplace?
The noble Baroness, Lady Greenfield, mentioned the under-representation of women in science and technology. I did not realise that a career structure for women in the public sector did not exist until they are in their 30s, which creates a serious barrier to participation.
The noble Baroness, Lady Pitkeathley, spoke eloquently, as ever, about carers and their vast contribution to the economic life of the country. The movement has grown, which I applaud. The noble Lord, Lord Sawyer, spoke passionately about continuing exploitation in the workplace. Low pay continues to be a problem. Employers need to value the need for dignity and pride in the workplace and to value their workforce.
I shall use this opportunity to celebrate women Peers in your Lordships' House. The noble Baronesses, Lady Gale and Lady Thomas of Walliswood, spoke eloquently about politics. But I

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was surprised that no lady Peer even mentioned us when discussing the subject. I have before me a formidable list of Front-Bench women Peers. I speak also of Back-Bench and Cross-Bench women Peers who attend regularly. Noble Lords have said that, without women Peers, the business of your Lordships' House would collapse. Collectively, they embody an outstanding cross-section of skills, expertise and experience. All debate on women and politics focuses on another place as if we barely existed. Perhaps because we are not elected we are perceived as politically illegitimate.
The reputation of all noble Lords was not helped by the awful documentary on your Lordships' House by one Molly Dineen, who failed to understand or appreciate our collective strengths, calibre and purpose. In addition, I recall hearing a woman, when first appointed as a people's Peer, say on the radio that she had greater legitimacy than existing Members of your Lordships' House. That is nonsense. On the contrary, the joy is that, with regard to our role, we are all equal before your Lordships' House. As women Peers, we are at one with our male fellow Peers. That said, I cannot resist the opportunity to articulate the view that, in the treatment that we and our spouses receive—I make a distinction between our role and the treatment that we receive—sexism exists, and most of it does not even occur to male Peers.
Where does the title "Baroness" come from? Somewhere in Europe? It is a constant source of confusion and even, sometimes, embarrassment. I must give a small example. If I book a restaurant or a theatre ticket in my name and my husband presents his card, as Mr Philip Buscombe, to pay, I am sometimes looked on as something of an impostor, a fake. No one understands the title "Baroness", and most assume that we are just someone's appendage. Following the passing of the House of Lords Act 1999, there is no reason why our husbands should not be afforded the same respect as the wife of a male Peer, given that the title "Lord" does not, as of right, bring a seat in your Lordships' House.
The fact that Peeresses are seated in our place on the Benches at the State Opening, while our husbands, who are requested to wear morning dress, are consigned to the Strangers' Gallery, is insulting. It seems odd that we should have the Equality Bill before your Lordships' House and regularly debate general equality issues—which is good—when we put up with inequality in the way that we treat ourselves. It is time to change. The greatest barrier to participation in your Lordships' House is financial. As long as we remain unpaid, full participation will remain the luxury of a few. That cannot be right.
I shall finish with the words of a French woman politician:
"Some men seek power for its own sake; women seek power so that they can get things done".
I believe that that is true. We should take care to think about our position in your Lordships' House.
7.27 p.m.
The Parliamentary Secretary, Lord Chancellor's Department (Baroness Scotland of Asthal): My Lords, it is a huge pleasure to have the privilege of responding to the debate. I add my voice to those rightly congratulating my noble friend Lady Gould of Potternewton on securing the debate, which celebrates and marks International Women's Day, first celebrated on 19th March, 1911.
My noble friend Lady Gould of Potternewton made it plain, as did several noble Lords, that we had come a long way since 1911—but not quite far enough. It is clear from what all noble Lords said that we are on a journey. It has been an extremely long journey, and we are all hopeful that it will soon come to an end. There are no easy answers, but, tonight, we touched on some of the possible pathways that we need to take to resolve the issues. I thank all those who applauded the efforts made by the Government to address this difficult and complex issue. I thank them particularly for the kind words about domestic violence, carers, the pay gap, low pay and poverty.
We were all greatly amused and delighted by the description given by my noble friend Lady Massey of Darwen of the invisible woman. We smiled and laughed. What was sad about it was that we all recognised a huge grain of truth about the depiction of women over many years. That presents a challenge. As my noble friend Lady Gould of Potternewton and the noble Baroness, Lady Greengross, said, we must consider what we are doing to our children, our boys and our girls. If we are to change stereotypes, all our young people must be given a more positive image of what they should be and how they should participate.
The Government recognise that schools cannot directly tackle the problems of stereotyping, the pay gap, or the skills shortage. However, we should ensure that young girls understand the long-term impact of the choices that they make at 13 or 14 years-old. That is why the Women and Equality Unit has produced an information pack for International Women's Day entitled, Does Sex Make A Difference? There are copies in the Library. I hope all noble Lords will take advantage of obtaining a copy. The information pack is crammed full of statistics, plans on the pay gap and information on stereotyping, women in public life and domestic violence. It covers many of the topics which we have alighted upon today.
While listening to the speech made by the noble Lord, Lord Oakeshott, complemented by the comments made by the noble Baroness, Lady Howe, I wanted to say that it should be made standard reading for all the FTSE 100 companies and beyond. It was all eloquently stated. These difficulties are very real. The pay gap, which still stands at 19 per cent, is a good example of one of the problems. As many noble Lords have said, we know that women make an important contribution to the success of the economy. However, still they are stereotyped into a narrow range of low paying jobs—as alluded to by my noble friend Lord Sawyer.

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In particular, women from the Indian sub-continent earn much lower average hourly wages than white women. However, the Government have made it clear that equal pay and business success go hand in hand. I agree with the noble Baroness, Lady Thomas of Walliswood, that one of the real issues is poverty. I say to my noble friend Lord Sawyer that that is precisely why the Government have recognised the need to tackle low pay, which affects minority ethnic women more than anyone else. Therefore, we introduced the national minimum wage in 1999, currently £4.20 per hour. That represented a real boost to the pay of low-paid workers, 70 per cent—I repeat 70 per cent—of whom are women. Approximately 1 million women have benefited. Of course, I hear all that my noble friend said and that we need to do more.
Our determination to close the pay gap is not just about money, it is about social justice and sound economics—not least because the economy is facing serious skills shortages in sectors such as IT, science and engineering. I should like to take this opportunity to thank the noble Baroness, Lady Greenfield, for her report last year on this issue. The Government are currently reviewing its recommendations. I agree with the way in which she powerfully set out the case today.
I am pleased that the Equal Opportunities Commission and Opportunity Now—which is a business-led campaign to realise the benefits of ensuring that women fulfil their potential—have set up a forum of 240 employers to share best practice and to encourage them to carry out equal pay reviews. The Government are also leading by example. As a noble Lord said, there is no point if one has the rhetoric but does not actually deliver the goods. Therefore, the Government are attempting to do that. We have set a target of April 2003 for departments and agencies to conduct an equal pay audit and prepare action plans to close any gaps.
The issue for women is also about progression. The comments made by the noble Lord, Lord Oakeshott, and the noble Baroness, Lady Howe, were absolutely clear. The recent report by Derek Higgs painted a similar picture. As noble Lords will know, the Government are currently looking at how to take forward some of those proposals.
However, I am pleased to say that matters are improving. I agree with the noble Baroness when she says that we should celebrate the achievements of this House—the Front Benches, the Back Benches and the representation of women. Our figures are improving and we should like to see them improve even more. Currently, 16 per cent of our House is made up of women. I want to emphasise the fact that on the Government Front Bench there are six women out of a total of 17. As regards Whips, equality really reigns because we have three male and three female Whips. Therefore congratulations are due.
Perhaps I may also congratulate Wales. My noble friend Lady Gale was right in emphasising the achievements there. However, I was interested to hear about the French experience, but we have new
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legislation and we do not know whether we will follow them. I believe that sometimes the French are better placed in following us, but that is for another debate.
On the importance of childcare, I am powerfully supportive of the comments made by the noble Baronesses, Lady Greenfield and Lady Greengross. Obstacles face women who want to return to work— for instance, the lack of decent childcare—and our new strategy to expand childcare provision particularly in disadvantaged areas has already benefited more than 1 million children. The Government have legislated so that from April this year, employers must seriously consider requests to work flexibly from employees with children under six and disabled children under 18. We recognise that not everyone who wants to work flexibly is a parent. Therefore, the Government have taken action by introducing time off for workers with dependants for family emergencies.
We also want to see more women in this House and in another place. The Government want to encourage more women to apply to join the boards of our public bodies, because only about one third of the places are held by women and just under 2 per cent by women from minority ethnic communities. We have pledged that by 2005 women should hold about half of all appointments. For example, in the Lord Chancellor's Department 43 per cent of appointments should be held by women and 4.5 per cent by members of ethnic minorities by 2005. Last year, the Government ran a series of seminars to encourage more women to enter public life. I spoke in Leicester to minority ethnic women and it was a delightful occasion. We certainly hope that many more women will come forward.
Domestic violence was touched on lightly by my noble friend Lady Gould. I agree that the statistics in that regard are truly shocking. However, we are trying to take positive steps to address the issue. My department is also taking action by improving the way in which the different jurisdictions interact and we are providing £2.5 million over the next three years for a children's fund to develop and expand the provision of supervised contact centres.
The noble Baroness, Lady Greengross, spoke about women pensioners. She is right in saying that they are among the poorest and most vulnerable in our society. That is why we have introduced a range of policies which directly benefit women, including the state second pension; a particular ballast relating to carers, as has been noted by my noble friend Lady Pitkeathley; the stakeholder pensions; and pension sharing on divorce.
I turn briefly to address some of the issues raised by my noble friend Lord Winston. He is right in saying that women have to face the difficulties presented by biology. I am grateful to him for his most thoughtful speech. I say in reply that the National Institute for Clinical Excellence is to issue guidelines so that the latest knowledge and the best practice are available to all parts of the NHS. The health authorities and trusts right across the country will be expected to implement the NICE guidelines in full. In that way, we will be

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assisted in our determination to ensure that in future couples receive fairer and faster access to clinically cost-effective and appropriate fertility treatment.
We have had the most splendid and delightful debate. Perhaps it was not long enough; I am sure that noble Lords could have gone into a great deal more
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depth on many of the issues. However, I rejoice in all the contributions that have been made and I hope that real attention will be paid to what noble Lords have had to say. All the points were extremely well made.
House adjourned at nineteen minutes before eight o'clock.