Lords Sitting of 23 March 2004

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

Incomes Gap: Social Consequences
Lord Lea of Crondall Lord Lea of Crondall asked Her Majesty's Government:
Whether there are any negative consequences for social cohesion in the growing gap between the highest and lowest pay levels in the United Kingdom.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey): My Lords, the Government's objective is to build a strong economy and a fair society, with opportunity and security for all, by tackling poverty and social exclusion. The Government's policies are aimed at raising the incomes of the poorest families with children and pensioners relative to the average of the population, not at trying to drag down the position of the highest earners. With the new tax credits, the national minimum wage and the pension credit, we have taken major steps to achieve this.
Lord Lea of Crondall: My Lords, top FTSE chief executives arc now for the first time being paid an average of £1 million per year, which is 100 times the minimum wage compared to 20 times only a few years ago. Is it not "the unacceptable face of capitalism"—to quote Sir Edward Heath for the same people to urge ordinary workers not to put in for double-figure pay rises, while at the same time awarding themselves increases that are six times the average in percentage terms and 600 times more in absolute terms than those at the bottom?
Secondly, in view of the restrictive practices and total abdication of social responsibility by remuneration committees of boards, will my noble friend provide for a representation of employees as well as shareholders on them, and refer their activity to the Restrictive Practices Court or its equivalent?
Lord McIntosh of Haringey: My Lords, I happen to share my noble friend's distaste for conspicuous consumption at the top, but that does not take away from the fact that it is far more effective when dealing with social cohesion—to go back to the original Question—to deal with poverty rather than to concentrate on the activities of the highest paid. Even taking that into account, we have to remember that the top 10 per cent of income taxpayers pay 52 per cent of the income tax received.
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I think that the noble Lord's second question about management boards is somewhat wide of the Question.
The Lord Bishop of Portsmouth: My Lords, my question is about children. Top people quite rightly attract a lot of attention. The Government are to be congratulated on wanting to bring child poverty down by 25 per cent in the next two years. Does the Minister agree that 12 per cent of all children living in abject poverty and in lone-parent homes is a worryingly high figure? What does he propose to do about it?
Lord McIntosh of Haringey: My Lords. I entirely agree with that. I agree that it is a worrying figure. We have to remember that relative child poverty doubled in the years before 1997. We have not yet achieved the reduction of a quarter, but we have taken 500,000 children out of poverty. I take a great deal of pride collectively on behalf of the Government for that. We have done that at a time of very high growth in median incomes against which poverty is compared.
Lord Dholakia: My Lords, is there adequate monitoring of pay levels affecting women and ethnic minorities? Will the Minister confirm that they feature on pay scales at a very low level? If so, what effect does that have on social cohesion?
Lord McIntosh of Haringey: My Lords, there is very full monitoring, as I am sure the noble Lord, Lord Dholakia, knows. I have a document in front of me called The Effects of Taxes and Benefits on Household Income 2001 which, at nearly 100 pages, is a little long for me to read. We do monitor the differentials for women and ethnic minorities and we do acknowledge that there are significant differentials at the lower end of pay scales.
Lord Marlesford: My Lords, does the noble Lord feel that perhaps one aspect of the problem raised by the noble Lord, Lord Lea, was dealt with rather well by the American industrialist J Peter Grace, who, when asked for an enormous salary by one of his executives, replied: "do not have a problem paying you that sort of money; you just have a problem earning it".
Lord McIntosh of Haringey: My Lords, I do not reply to other people's jokes—particularly good ones.
Lord Sheldon: My Lords, is not one of the major problems the remuneration committees themselves? People who are members of those committees have a vested interest because of their other activities.
Lord McIntosh of Haringey: My Lords, that may well be the case in some circumstances. My response to the original Question was about our attack on poverty. I stick to that thrust.
Lord Newby: My Lords, does the Minister agree that one way of dealing with excessive levels of income at the top end and child poverty at the bottom would be to have a somewhat more redistributive income tax policy? For example, the introduction of a rate of 50 per cent on incomes over £100,000 per year—a rate incidentally significantly less than the top rate which obtained during the majority of the previous Conservative administration might kill two birds with one stone?
Lord McIntosh of Haringey: My Lords, I am interested that the noble Lord, Lord Newby, should say that on 23 March 2004. If one looks back at the record of what Liberal Democrats have been saying over the past few years since they adopted this policy, one will find that there are periods of strange silence. I am glad to know that the issue is back on the agenda again. It helps us all to know where we stand.
Lord Hoyle: My Lords, does my noble friend agree that perhaps the solution is to have employees on the boards so that they can watch these activities?
Lord McIntosh of Haringey: My Lords, I have already been asked that question. My answer has been about poverty rather than about a small number of people with very high pay. My objection to such people is more aesthetic than economic.
Lord Skelmersdale: My Lords, the Government's own figures show that income inequality is higher now than at any point under the previous two Conservative Prime Ministers. Why has this inequality risen since the party opposite came to power?
Lord McIntosh of Haringey: My Lords, it has not. The fact is that differences between the top and lower 10 per cent, which had been increasing, have now stabilised—they have stabilised since 2001. In the financial year 2002–03, the income of the bottom 10 per cent rose by 3.3 per cent; and of the top 10 per cent by 2.3 per cent. Of course, we can always play different games with quintiles, deciles and so on to produce the figures that suit us, but those figures are significant.
Lord Haskel: My Lords, does my noble friend agree that one of the main reasons for the growing gap in pay is the difference in skills? Does he agree that industry today demands much higher skills and is prepared to pay a lot more for them, and that the reason for the gap is that those people who have the skills get the pay and those who do not, do not?
Lord McIntosh of Haringey: My Lords, I cannot disagree with that in general, but there are an awful lot of exceptions of people without skills receiving excessive pay packages.

Government Departments: Efficiency Review
2.43 p.m.
Lord Campbell-Savours Lord Campbell-Savours asked Her Majesty's Government:
When the head of their efficiency review, Sir Peter Gershon, will report to Parliament.
Lord McIntosh of Haringey: My Lords, Sir Peter Gershon is working closely with departments to help them develop efficiency proposals for consideration in the 2004 spending review. Departments' agreed efficiency programmes will be published in parallel with the final spending review settlement.
Lord Campbell-Savours: My Lords, my noble friend will know that the public sector can often provide services more efficiently and more cheaply than the private sector. With that in mind, would he ask Sir Peter Gershon whether he recommends the establishment of a national online teacher recruitment agency, which could be run for as little as £2 million or £3 million a year, to replace the existing, fragmented teacher recruitment arrangements, which currently cost between £60 million and £80 million pounds per year? Is not a substantial saving to the taxpayer available?
Lord McIntosh of Haringey: My Lords, my noble friend asked that question of my noble friend Lady Ashton in May last year. She replied that the Government do not recruit or employ teachers directly but expressed interest in any measure that increases efficiency in the system. However, surely one of the most effective ways of reducing the cost of recruiting teachers is to reduce the vacancy rate. The vacancy rate for teachers, and therefore in parallel the turnover rate, has been decreasing, but I am not resistant to my noble friend's suggestion, which I am sure that the Department for Education and Skills will consider seriously.
Lord Newby: My Lords, does the Minister accept that the Government cynically leaked an early draft of the Gershon report to a single journalist to spike the guns of the Conservative Party, which was launching a report on public expenditure on the same day? Does he accept that that complete disregard for the parliamentary process helps to reduce trust in government, and will he urge his colleagues in the Treasury to place in the Library of the House the draft of the Gershon report that was leaked to the Financial Times, was briefed by officials to a single Financial Times journalist and was covered over several pages in the Financial Times? The rest of us have not had the benefit of seeing the text of that draft.
Lord McIntosh of Haringey: My Lords, I have no knowledge of what the noble Lord, Lord Newby, calls a cynical leak. That is an assertion that he makes. He is entitled to his own interpretation, but it is certainly the case that the report in the Financial Times was broadly accurate.
Lord Brooke of Alverthorpe: My Lords, does my noble friend agree that most of the major themes of the Gershon efficiency report, when it appears, are already in the Red Book and available for everyone to see? In the light of that, does he agree that one of those major themes will be a cross-cutting approach to effect efficiencies? What mechanisms exist in the Palace of Westminster for a cross-cutting approach to be taken to examine our separate establishments for the House of Lords and the House of Commons, to see whether we may seek efficiencies here also?
Lord McIntosh of Haringey: My Lords, on my noble friend's first point, yes, Chapter 6 of the Red Book indeed contains a very full exposition of the Government's position on efficiency and how to achieve it in departments. Perhaps I should have given that answer to the noble Lord, Lord Newby, when he talked as if we are somehow being deprived of information that ought to be in the public domain. However, among the more difficult public sector activities for the Government to control are the House of Commons Commission and the expenditure of the House of Lords.
Lord Skelmersdale: My Lords, let us return to the Government. In his Budget last week, the Chancellor said that he intends to make 5 per cent real-terms savings in a number of departments by 2008. How does that square with the Financial Secretary to the Treasury's view on "Newsnight" the other day, who said of the Gershon review:
"These are very long-term, speculative gains"?
Lord McIntosh of Haringey: My Lords, I think that we can state the position very precisely. What Gershon is saying is that there is a target of 2.5 per cent savings per annum in other words, a freeze in money terms—over the spending review period, which is 2005–08. If achieved, that will result in a saving of £20 billion. That target is consistent with both the statements cited by the noble Lord, Lord Skelmersdale.

People Trafficking
2.49 p.m.
Lord Hylton Lord Hylton asked Her Majesty's Government:
What protection should be afforded to victims of people trafficking, who have reached England and Wales, both before and after the Asylum and Immigration (Treatment of Claimants, etc.) Bill becomes law.
Lord Bassam of Brighton: My Lords, in February 2000, the Government set out their comprehensive strategy for addressing the trafficking of men, women and children in the White Paper Secure Borders, Safe Haven. The strategy recognises the need for a multifaceted response to the abhorrent trade in human beings. The provisions in the Asylum and Immigration
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(Treatment of Claimants, etc.) Bill support a continued commitment to the fight against those who would seek to exploit the vulnerable.
Lord Hylton: My Lords, I thank the noble Lord for his Answer. Have the Government noted that no fewer than 32 London boroughs acknowledge having a problem with trafficked children? Will the many facets quoted by the noble Lord include reimbursement of local authorities for all their protection costs? As to adults, will the criteria for the existing Poppy Project be widened, so that women do not have to suffer sexual abuse before they can receive the help that they need?
Lord Bassam of Brighton: My Lords, I am interested In the noble Lord's request for funding on behalf of 32 London boroughs. It must be remembered that London boroughs already receive support through the grant formula, and that the grant formula is finely tuned to take account of pressures on spending, particularly in social services. We keep the formula under careful review, and we listen carefully to what local authorities say on those matters. The criteria for the Poppy Project and Eaves Housing are right. The pilot project has proved to be of immense value. It has been extended until April 2005, and we will need to take careful account of the use that is made of that project in looking at the criteria in the future, particularly if the project is to continue beyond 2005.
Lord Avebury: My Lords, although I welcome the support that the Home Office has given to the Poppy Project, is it not limited to women victims of trafficking for prostitution? What help, other than the Poppy Project, is the Home Office giving to victims of trafficking for other purposes, particularly to children? Does the Answer that the noble Lord gave to the noble Lord, Lord Hylton, mean that there is no special help for any local authority that must cope with a large number of trafficked children? Is the noble Lord aware that it is not only a problem in London, but in other parts of the country also? It is particularly a problem in areas adjacent to airports, where unaccompanied children are finding themselves dumped on to social services departments. Will the Government at least ask local authorities to make returns so that we know the size of this problem and the number of trafficked children that are entering the country?
Lord Bassam of Brighton: My Lords, this is a sensitive issue. We listen carefully to what local authorities say. We have been working with the Department of Health to ensure that we have a code of practice that provides guidance in this area. If there are particular spending pressures, no doubt the Local Government Association and those local authorities with particular problems I understand that those with airports adjacent have particular problems—will make representations. As I described, the Government's approach is multi-faceted. It concentrates on prevention and enforcement, but it

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also ensures that resources are available to help those voluntary organisations that provide facilities to assist where there is evidence of trafficked children.
Baroness Sharples: My Lords, can the Minister give us an estimate of the numbers involved in this trafficking?
Lord Bassam of Brighton: My Lords, by the very clandestine nature of the operation, it is hard to give meaningful estimates. Our estimates suggest that anything between 140 and 1,400 persons are trafficked each year, but that is only a very rough estimate. It is hard to seek returns on that.
Baroness Anelay of St Johns: My Lords, the Minister referred to the multi-faceted approach of the Government to this serious problem. Within that approach, does he agree that the Domestic Violence, Crime and Victims Bill, which is currently before this House, should give protection to people who are so cruelly trafficked? If so, will he give a commitment to support an amendment that I have tabled to the Bill that will come up on Thursday, which achieves that objective? As the noble Lord knows, I am always ready to help the Government.
Lord Bassam of Brighton: My Lords, I am always enormously grateful when the noble Baroness offers her help and assistance. We always have an open mind on these matters, but without the precise wording of the amendment in front of me—I understand the political point that the noble Baroness is making—I obviously cannot give such a commitment. We have a robust strategy in place that is based on co-operation and working with agencies across the world, particularly in Europe. It is based on ensuring that local authorities are effective in the work that they carry out. It is also based on a case-by-case understanding of the problem as it presents itself.
The Earl of Sandwich: My Lords, in line with the question asked by the noble Baroness, Lady Anelay, is the noble Lord aware that Clause 4 of the Asylum and Immigration (Treatment of Claimants, etc.) Bill was well received for its mention of offences? Can he explain why it does not also underline the need for protection, as the noble Baroness mentioned with regard to the Domestic Violence, Crime and Victims Bill?
Lord Bassam of Brighton: My Lords, we have gone some way on the issue of protection. The noble Lord will know better than I that the Nationality, Immigration and Asylum Act 2002 dealt with that issue. We have put in place further measures to penalise traffickers since then—the Sexual Offences Act 2003 and Clause 4 of the Asylum and Immigration (Treatment of Claimants, etc.) Bill—so that sexual exploitation and labour exploitation issues are covered and we hit hard those people who deal in the abhorrent trade of human trafficking.
Lord Dholakia: My Lords, is the Minister satisfied that social services departments offer adequate
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supervision of the victims of trafficking in their care? Is he aware of cases involving West Sussex County Council, where children have disappeared without trace? Is there evidence that they are further trafficked for the purpose of prostitution?
Lord Bassam of Brighton: My Lords, we have discussed on several occasions in your Lordships' House the West Sussex case and the allegations of disappearance. An operation was undertaken to investigate that. Sadly, the investigation did not result in arrests or prosecutions, but there have been other instances, particularly in the UK, where useful co-operation has taken place. A number of high profile prosecutions have taken place; some 37 since 2002 when the first phalanx of new offences was introduced. As to our general level of satisfaction with local authority performance, we are satisfied that they are working hard, but there is, as ever, plenty of scope for improvement. That is why we are working hard with them to ensure that we can identify the problem when it first presents itself.
Earl Ferrers: My Lords, the noble Lord has mentioned twice the Government's -multi-faceted response". Will he explain what he means?
Lord Bassam of Brighton: My Lords, it boils down to ensuring that you have all angles covered—or as many angles as you can—whether it is dealing with immigration across Europe, relations between agencies in the UK, or ensuring that the police are working with social services. It is a strategy that works at many levels.

Terrorist Attacks in Spain: Implications for UK Foreign Policy
2.57 p.m.
Lord Blaker Lord Blaker asked Her Majesty's Government:
What are the implications for United Kingdom foreign policy of the recent bomb explosions in Spain.
The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, the dreadful events in Madrid on the morning of 11 March underline the importance of maintaining the international fight against terrorism as a top priority in the United Kingdom's foreign policy. The threat from indiscriminate, mass casualty terrorism has been with us for several years. This Government have been clear and consistent in their commitment to tackling this threat. The Prime Minister will discuss this with the leaders of our EU partners at the European Council this week.
Lord Blaker: My Lords, I accept the general drift of the Answer given by the noble Baroness. I raise two points. The first is that the change of government in Madrid is likely to lead to a European constitution that is less acceptable to this country than had

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previously been hoped for. That makes it even more important that there should be a referendum in due course, which is what most people want according to the opinion polls. The second point relates to the dreadful assassination of Sheikh Yassin yesterday in the Gaza Strip. Surely that will be followed by extra terrorism, not necessarily confined to Israel, but possibly anywhere. Surely, that makes it essential that the powers that make up the quartet should now return to the charge to get some momentum into the peace process between Israel and the Palestinians, and not leave it until after the American elections in November.
Baroness Symons of Vernham Dean: My Lords, we must see how the new government in Spain decide to deal with their various responsibilities, both with regard to the European questions that the noble Lord raised and to questions that are perhaps more closely related to Iraq and to terrorism. There will be many questions to be settled and discussed with the new government.
With regard to the assassination of Sheikh Yassin, which took place yesterday, your Lordships will know that my right honourable friend the Foreign Secretary has made the British Government's position clear. I remind the noble Lord, Lord Blaker, that the last time that he asked a similar question, I was able to reassure him about the level of the Government's engagement in issues relating to the Middle East and the Israel/ Palestine conflict. I assure him that the level of engagement remains very high. We will do everything that we can to pursue through every possible means a peaceful settlement, as we have done in the past few weeks. I do not think that the events of yesterday will have helped.
Lord Clinton-Davis: My Lords, neither of the questions raised by the noble Lord have anything to do with the Question on the Order Paper. Will my noble friend ensure that everything is done to promote good relations with the new government of Spain, particularly at prime ministerial level?
Baroness Symons of Vernham Dean: My Lords, the noble Lord framed his Question very widely—rather cleverly, perhaps. He asked what the implications were for foreign policy, and then he asked a question about European foreign policy and a question about foreign policy in the Middle East. So, perhaps, he was not that wide of the mark. Even if they were not quite what I expected, they were, I think, legitimate questions none the less.
Your Lordships will know that many of my colleagues in government have very good relationships with those coming into government in Spain. Of course, some things have been said on various issues by the incoming Government that have caused some eyebrows to rise. We already have a good relationship with incoming Prime Minister Zapatero, and your
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Lordships will have heard several of my colleagues in another place express the desire to further that relationship.
Baroness Williams of Crosby: My Lords, does the Minister agree that we should congratulate the Spanish police on what appears to have been an effective operation to apprehend a range of people who may have been connected with the outrage in Spain? Returning to the main theme of the Question, may I ask whether one of the lessons that we should draw from the dreadful Spanish explosions is that it is unwise to make assumptions about the source of a terrorist outrage until all the facts are known? The Minister will recognise that the then Prime Minister—rather unwisely, perhaps appeared to attribute the terrorism to ETA. It later emerged that that was very unlikely, although we do not know for certain.
Does the Minister agree that there is a parallel with the remarks made by Richard Clarke, the senior counter-terrorism expert advising the United States Administration? In a statement to CBS on -60 Minutes", he said that he was specifically asked to try to find reasons to connect Iraq with Al'Qaeda. Would it not be better to conclude that we should concentrate on the fight, as the Minister implied, against Al'Qaeda and not be distracted by a political aspiration to make other people the centre of our charges?
Baroness Symons of Vernham Dean: My Lords, throughout the discussions in your Lordships' House on foreign policy issues, I have tried hard to deal with facts, not speculation. I am often asked to speculate, and I do my best to resist the temptation, no matter how attractive it may seem.
Of course I congratulate the police in Spain on the arrests that have been made, but I caution the noble Baroness—she was careful about what she said—that we should not assume guilt before people have gone through a legal process. It is none the less reassuring to know that the police have been active.
Was there too quick a condemnation of ETA? We must wait for the Spanish authorities to reach some conclusions about who was responsible. The Spanish authorities said that they had good reason, given recent intelligence warnings that they had received. I have no means of knowing the depth of those warnings.
The noble Baronessreferred to Richard Clarke. I say to her that we should also hear the other side of the question. We should hear what is said by Mr Rurnsfeld and by Mr Powell, when they too give evidence. The noble Baroness urges us to wait to see all sides of the question; I urge her to wait to see that side of the question too.
The Lord Bishop of Portsmouth: My Lords, I shall return to the question asked by the noble Lord, Lord Clinton-Davis. Does the Minister agree that the

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new Spanish Government's policy on the Iraq war is a more accurate mirror of traditional Spanish foreign policy than that of the previous government?
Baroness Symons of Vernham Dean: My Lords, I do not know that I am in a position to make such a judgment about Spanish foreign policy over the years. I would be reluctant to do so without considerably more information.
The incoming Prime Minister of Spain has made it clear that no formal decisions will be taken about the way in which Spain deals with the Iraq issue until he has come into office and had the opportunity to consult more widely. To all those who said that it was a fait accompli that Spanish troops would be withdrawn, I say that we should wait a moment and see what the new government decide to do when they are in office and have had the opportunity to take proper briefings. I also understand that the incoming government will be interested to see what the attitude is likely to be with regard to the United Nations.
Lord Howell of Guildford: My Lords, the Prime Minister goes to Spain tonight to meet Mr Zapatero—the new Spanish leader, although he is yet to form a government. If I may say so, he is a leader who is a little loose with his rhetoric. Will the noble Baroness encourage the Prime Minister to say to Mr Zapatero that he should recognise that if, as he says, Spain wants to continue fighting the war against terrorism, it will have to take not merely a local or even a European view of the battle but a global view? That means staying fully committed, with the global community, to dealing with crisis areas such as the Middle East. Will the Minister make sure that the message is taken to Spain that it should not stick to its traditional isolationism but should act as the responsible Spain that we admire and which is a major player in the world of security and peace that we now need?
Baroness Symons of Vernham Dean: My Lords, I venture to suggest that I need not give the Prime Minister of this country any such advice. I am sure that he is well equipped to give that advice to Mr Zapatero.
The noble Lord accused Mr Zapatero of being a little loose with his rhetoric—I think that those were his words in opposition. Sometimes, opposition parties are a little loose in their rhetoric. In government, there are real responsibilities, and Mr Zapatero has made it clear that he will consider those responsibilities carefully before he takes a decision.
Lord Lea of Crondall: My Lords, does the Minister agree that if, as the noble Lord, Lord Blaker, suggests, the change of government in Madrid leads to a move forward on the European constitution—Spain and Poland had some difficulty with the voting weights—many of us would welcome it?
Baroness Symons of Vernham Dean: My Lords, that might well be. As we have already had numerous
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exchanges about the foolishness of premature speculation, it would, perhaps, be as well for us to wait and see what Spain decides.

Hospices: Financial Support
3.8 p.m.
Lord Laming Lord Laming asked Her Majesty's Government:
Whether they will review the financial support given to hospices.
The Parliamentary Under-Secretary of State, Department of Health (Lord Warner): My Lords, as I informed my noble friend Lord Ashley of Stoke on 9 March, the Government have met their pledge to increase NHS investment in specialist palliative care, including hospices, by £50 million a year by 2004. The additional funding has been allocated by the joint NHS/voluntary sector National Partnership Group for Specialist Palliative Care, which will undertake a monitoring exercise to see how the funding has been used, including the level of support for hospices.
Lord Laming: My Lords, I am grateful to the Minister for that reply. Does he agree that the work of hospices deserves the support of us all, because of the pioneering work that they have done on the management of pain for young and old and on encouraging dignity in death, both in hospitals and in the home?
Does the Minister share with me and, I suspect, others the concern about the time that the good people who work in hospices must devote to fund raising? There is constant anxiety about the continuation of this valuable service. Will the Government consider a national formula that would guarantee core funding for hospices?
Lord Warner: My Lords, of course I join the noble Lord in paying tribute to the splendid work done day in, day out, in hospices across the country. As he may know, about three-quarters of all in-patient hospice services in England are provided in the voluntary sector. We have allocated this extra £50 million on a co-operative basis between the voluntary sector and the NHS, so the voluntary sector has played a major part in this allocation and will benefit considerably from the £50 million.
Lord Clement-Jones: My Lords, all of us will welcome the additional £50 million and, indeed, the additional £12 million for training that has also been allocated. However, the Minister is no doubt aware of considerable concern about the funding of children's hospices in particular. On average, only 7 per cent of their funding is received directly through the NHS, whereas adult hospices receive more than 35 per cent. Is the department considering this issue?
Lord Warner: My Lords, I draw the noble Lord's attention to the fact that the New Opportunities Fund,

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chaired by my noble friend Lady Pitkeathley, has given £45 million since 2003 to palliative care for children, of which about £15 million has gone to children's hospices.
Lord Glenarthur: My Lords, can the Minister say how many hospices there are in the public sector and how he expects that figure to grow over the next five or 10 years?
Lord Warner: My Lords, as I said earlier to the noble Lord, Lord Laming, about three-quarters of the in-patient services in hospices are provided in the voluntary sector. That amounts to approximately 2,630 beds. A third of that, give or take, is provided also in the public sector.
Lord Ashley of Stoke: My Lords, is my noble friend aware that although the Government have done well as far as hospices are concerned, it is far from good enough? Although the £50 million he mentioned has been helpful and welcome, the Government are relying far too heavily on the voluntary sector. Hospices should have greater responsibility to the Government, and the Government, in my view, should be primarily responsible for funding them. We are nowhere near that, so how about approaching the issue in that way?
Lord Warner: My Lords, of course we would all like to do better, and we accept that there is a need to continue to improve the funding of hospices. However, the voluntary sector has done a splendid job in hospices and is held in a great deal of public affection by those who use such services. I do not think we would want to, in effect, give a vote of no confidence to that work by implying that we were not satisfied in any way with the work done in voluntary hospices.
Lord Walton of Detchant: My Lords, while welcoming the extra funding to which the Minister has referred, will the long-term support for the hospice movement fall within the remit of the Select Committee's consideration of the Assisted Dying for the Terminally Ill Bill of the noble Lord, Lord Joffe, which is, I understand, not to meet until July?
Lord Warner: My Lords, I do not think it is for me to suggest in any way whatever how that Select Committee should do its work. I draw the noble Lord's attention to the fact that the Select Committee on Health will be making an inquiry into hospices and palliative care.
The Lord Bishop of Oxford: My Lords, does the Minister agree that although hospice care is sometimes said to be expensive, it represents very good value for money? Not only does it represent superb care for patients but, as the noble Lord, Lord Laming, implied, it has pioneered palliative care for the country as a whole and raised standards.
Lord Warner: My Lords, the right reverend Prelate is absolutely right. Great pioneering work has been done
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by hospices, much of it in developing services outside hospices as well as in relation to in-patient beds. For example, there are 264 specialist palliative homecare teams, 81 hospice at home services and 200-odd daycare services. Some pioneering services have been developed by the voluntary hospice movement.
Lord Hunt of Kings Heath: My Lords, given that the health service now knows its allocations three years in advance, will my noble friend encourage primary care trusts to enter into longer term agreements with hospices so that they have much more stability and certainty about the funding they receive from the NHS?
Lord Warner: My Lords, as my noble friend knows, primary care trusts will, from April 2004, be responsible for controlling 75 per cent of the NHS budget. Very substantial increases in that budget mean that there will be opportunities for them to respond to local needs, which is the purpose of many of these increases. Much of the £50 million that I mentioned was to improve inequalities in different parts of the country. My noble friend will be aware that in the cross-cutting review by the Treasury and the voluntary sector, strong emphasis was placed on government departments and the public services entering into more secure funding for the voluntary sector.

Business of the House: Executive Powers and Civil Service Bill IHLI
The Lord President of the Council (Baroness Amos): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That leave be given to advance the Committee stage of the Executive Powers and Civil Service Bill [HL] from Tuesday 30 March to Friday 26 March.—(Baroness Amos.)
On Question, Motion agreed to.

Energy Bill [H.L.]
3.16 p.m.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, I beg to move that the Bill be now further considered on Report.
Moved, That the Bill be further considered on Report.—(Lord Whitty.)
On Question, Motion agreed to.
Baroness Miller of Chilthorne Domer Baroness Miller of Chilthorne Domer moved Amendment No. 171B:
Before Clause 76, insert the following new clause—
"GAS AND ELECTRICITY MARKETS AUTHORITY SUSTAINABILITY DUTY
(1) The 1989 Act shall be amended as follows.

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(2) In section 3A (the principal objective and general duties of the Secretary of State and the Authority), after subsection (2) insert—
"(2A) Subject to subsections (1) and (2) above, the Secretary of State and the Authority shall carry out their respective functions under this Part in such a manner as to ensure the contribution to the achievement of sustainable development.""
The noble Baroness said: Perhaps of all the amendments in the Energy Bill, I regard this one as bringing the Bill up to date in helping the Government achieve what they said they wanted to achieve in the energy White Paper. Ensuring that energy continues to be affordable should not be done at the cost of increased climate change. Indeed, it should be done with a view to decreasing the burden on our environment.
When I moved a similar amendment in Committee, I included the sort of environmental considerations that Ofgem should take into account. The amendment probed the Government's attitude to both the narrow environmental issues and the much wider issue of sustainable development. The Minister gave some quite satisfactory answers on the environmental issues. He said that guidance on environmental and social issues would be issued to Ofgem. I believe it was so issued on 23 February, between Committee and Report. He further told us that regulatory impact assessments and environmental impact assessments must be carried out. That is good, but there is nothing to suggest that any change of policy must result from their being carried out. Nevertheless, I felt that those were both moves in the right direction and did not retable the part of the amendment dealing with the environmental issues.
However, the reply of the noble Lord, Lord Davies of Oldham, on overall sustainable development was, I believe, totally unsatisfactory; I do not believe that it included the words "sustainable development" anywhere. I fear that this Bill does not recognise the importance of Ofgem updating what it is able to have regard to in its principal duties. With all due respect to the Minister and his department, that may be because there is still a lack of understanding of what exactly sustainable development is. The reply suggested that just dealing with the environmental issues was adequate. But I quote to the Minister from the Government's own publication on sustainable development, which states:
"Sustainable development is currently a headline topic for policy making … The significance is given further weight by the recently expanded definition of sustainable development, broadened from its origins within environmental protection and resource conservation now to include social perspectives, as well as economic perspectives, which dictates a relevance to policy making across most if not all of the public sector".
That is a very good statement of policy. It is on the Defra website, and I believe that that department does understand what sustainable development is all about. Indeed, in the recent debate on the countryside, the noble Lord, Lord Palmer, described sustainable development as a three-legged stool. That is a vivid and apt description. All the legs need to be of equal length for the stool to be balanced. That is Ofgem's problem: at the moment, the stool is unbalanced on the
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economic and social sides. That is not to say that we do not need to regard separately the social, environmental and economic strands, but there really must be an over-arching principle in place. That is what my amendment seeks to do.
The Minister's reply in Committee was that the,
"current drafting of the principal objective and the general duties strikes a fair balance between protecting the interests of consumers and safeguarding the environment".—[Official Report, 4/2/04; col. GC 401.]
That defines the problem that I am trying to explain. The Minister saw the problem as a balance, as if the two objectives were on opposing sides of the equation. However, the core of what sustainable development is all about is that the three things are not in opposition, but are in a complementary tension.
The interests of consumers should be seen in the context of the price of energy and the manner in which it is generated; that must be something that Ofgem fundamentally concerns itself with. We have seen some good examples recently of Ofgem, without the sustainable development duty, being unable to exercise its powers in a way that is complementary to sustainable development. It is quite interesting that in Ofgem's own folder about what it does, it states that it works in the interests of customers, both present and future. I was intrigued to discover that it believes that it works in the interests of future customers, as that suggests that it believes that it should be able to take issues such as the overall effect of its policies on something like climate change as central to the duties that it should be pursuing. However, following the Minister's reply last time, I do not believe that, given its duties under the legislation as drafted, it would be able to do that.
The Minister's third point was that:
"Piecemeal rearranging of the regulator's general duties does not provide for regulatory certainty, which is an important objective".—[Offical Report, 4/2/04; col. GC 401.]
My wish to put sustainable development as the overarching framework in which the authority operates is certainly not a piecemeal rearrangement. It would enable there to be a very firm framework so that we should not need to return to the issue in future. With this amendment in the Bill, the legislation should stand the test of time.
Finally, I quote again from the Government's own writings on sustainable development. When it is understood as a matter of importance, I believe that it is very well expressed. The following quote came from the No. 10 website:
"In the past, economic activity tended to mean more pollution and wasteful use of resources. Money has had to be spent to clean up the mess. A damaged environment impairs quality of life and, at worst, may threaten long term economic growth—for example as a result of climate change".
That is very well put. However, if Ofgem, as the regulator that considers how energy should be generated and used, including all those important price mechanisms, is unable to take overall regard of sustainable development, it will fail at that first test. The Government are incorrect in saying that there are

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in place sufficient powers for Ofgem to be able to do that. I have not found that to be the case on the reading of the past legislation. Therefore, I beg to move.
Lord Ezra: My Lords, when my noble friend raised this issue in Grand Committee, she drew attention to the fact that a much stronger obligation to sustainability was laid on Ofwat than is proposed, even with her amendment. on Ofgem. The noble Lord, Lord Davies, in reply to that, said:
"Ofwat is a different structure from Ofgem. Ofwat has clear environmental and sustainable factors built into its remit and role".—[Official Report, 4/2/04; col. 402]
I do not for the life of me see why water, which is a prime necessity, should be treated any differently from energy, which is a prime necessity. I am very puzzled about why the Government, having dealt with the matter with regard to water in one way, should not be ready to deal in the same way with regard to energy.
Lord Jenkin of Roding: My Lords, briefly, I should like to support the noble Baroness, Lady Miller of Chilthorne Domer. It may seem surprising that I do so, given that I have regularly argued that Ofgem is primarily an economic regulator whose primary duty is to look after customers. Where I differ from the noble Baroness a little is in the reference to future customers, which was of course relied on by the Government to resist the amendment that was in the event added to the Utilities Act 2000, that Ofgem should be responsible for,
"securing a diverse and viable",
electricity—or, in the other amendment—gas supply.
The House took a different view on that occasion, and that amendment was put into the Bill. However, I suspect that we shall hear from the Minister the same sort of argument that we heard on that occasion against those amendments. The Minister said, at col. 1497 on 5 July 2000 that,
"it follows that amendments such as this are a distraction and would serve to confuse rather than enhance the framework of obligations and duties under the legislation".—[Official Report, 5/7/2000; col. 1497.]
I have heard that argument put comparatively recently about the amendment proposed by the noble Baroness. However, the Government were wrong on that occasion, in 2000, and the amendment was added to the Bill and is now part of the Utilities Act 2000. I do not believe that it interferes at all in how Ofgem performs its economic duties. Why should an amendment about the environment, such as the noble Baroness has moved, have that effect?
n the present circumstances, when we are facing environmental problems on a wide range of fronts, every organisation concerned in any way with regulating or operating activities that could impact on the environment should always recognise that they have the environment as one of the objectives to which they should have regard. For the life of me, I cannot see why this amendment should not be accepted by the Government. I understand the arguments that have been put by Ministers, and no doubt we shall hear them in a moment or two from the Minister on the Front Bench today. However, on this occasion, I
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believe that the noble Baroness has got it right, and I shall be happy to support her if she presses the amendment to a Division.
Baroness Byford: My Lords, I rise to support the amendment. My name is added to it, and I thank the noble Baroness, Lady Miller of Chilthorne Domer, for explaining her reasons for bringing it back. It is hugely important. As the noble Baroness said, the environmental issue that she raised in Committee has been addressed. I do not know whether she is fully satisfied, but it has been addressed. We do not feel that the issue of sustainable development has been addressed and we support her on that issue. Now the principal duties have expanded to include social and economic impacts it is important that the Government respond in a positive way.
Other noble Lords who have already spoken are anticipating that the Minister will say, "No". As it is the start of a new day, I am hoping that the Minister will say, "Yes". If he cannot say yes, he may at least say that he has heard what noble Lords have said and that he recognises the reasoning behind the amendment. If he does not like the wording of the amendment, at the start of this day we issue him a challenge for the Government to come back with a wording that will meet all our concerns.
The noble Baroness is quite right that this is a very important amendment. I was part of the team that took the Utilities Bill through the House and my noble friend Lord Jenkin has reminded us that Ofgem had to take the amendment on board in the end. The Government took it on board with great reluctance because it was not their idea but they had to accept it. I hope that we can start this afternoon in a more positive spirit. The amendment has much to recommend it. It is not asking for too much. All it is asking, in new subsection (2a), is that:
"the Secretary of State and the Authority shall carry out their respective functions under this Part in such a manner as to ensure the contribution to the achievement of sustainable development".
We are all very conscious that we live in the present but that we must plan for the future. If this responsibility is not put in the Bill I fear that it may slip down the line of importance behind other matters that have to be dealt with. I support his amendment.
3.30 p.m.
Lord Dixon-Smith: My Lords, I have no difficulty in supporting the sentiments expressed by he noble Baroness. I am slightly puzzled by the placing of this amendment at this point in the Bill, after provisions on the police and before provisions on offshore zones. I wonder whether that is the best place for it, although I am bound to say that the more I look at the Bill, the less sure I am that there is an ideal place for it. The noble Baroness has my sympathy in that regard but I support the principle that she has enunciated.
Lord Whitty: My Lords, I am grateful for the noble Baroness's words about the issue of the environment. Her main complaint now is that we have not reflected the whole gamut of sustainable development in terms of the

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duties on GEMA. As she said, there are three strands to sustainable development: the environmental, the social and the economic. Essentially, GEMA operates in the economic sphere but it has some environmental obligations and has guidance on environmental and social matters from the Secretary of State. It contributes, via its economic activities, to sustainability. Clearly there is some crossover. For example, as the noble Baroness recognised in her opening remarks, in producing regulatory impact assessments for all important decisions GEMA must include environmental impact assessments.
The role of an economic regulator is obviously to deliver a degree of economic sustainability as well as to ensure that that is done having regard to environmental and social sustainability. The noble Lord, Lord Ezra, made the point that in the Water Bill, which most of us here discussed not long ago, Ofwat, as a regulator, has a sustainable development requirement. But the water legislation is not drafted in the same way as the Utilities Act and the legislation governing energy. For instance, while GEMA does not have a general duty to have regard to sustainable development, it does have a general duty to the environment whereas Ofwat does not, despite the fact that it is clear that sustainability in the water sector must include an environmental dimension. The balance of responsibilities between the regulator and the Secretary of State in relation to water are different from the balance of responsibilities between the regulator and the Secretary of State under the Utilities Act.
I was rarely present during debates on the Utilities Act, but noble Lords will remember that the overall duties of the energy regulator were debated in some detail. Noble Lords sought an amendment to place a sustainable development duty on GEMA. At the time, the Government's response was that it should be recognised that measures concerned with such matters will often be in the interests of consumers, in particular their long-term interests; that is, the interests not only of present but of future consumers. That is where the economic sustainability responsibilities of GEMA arise and that is the principal objective of GEMA and, to some extent, the Secretary of State.
Time has moved on in one respect since the Utilities Act but we are still dealing with a structure that was laid down in it. To accept sustainable development as a direct responsibility in all its manifestations through GEMA would be to alter the balance set down in the Utilities Act. The concept of sustainable development incorporates social and environmental, as well as economic, considerations. If we incorporate the social and environmental considerations into the principal objective then we remove the priority that GEMA, as part of this structure, has afforded to the economic interests of consumers present and future. That is confusing for GEMA and for those who deal with it.
It is also important to recognise that in the course of production of the energy White Paper extensive consultation took place in relation to how we deliver regulation and the objectives of the energy White Paper.
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The conclusion at that time was that the current drafting of the principal objective and the general duties reflected the objectives, including the balance of responsibilities. That is balance not in the sense of trading one against another but in the sense of delivering all three aspects of sustainable development via GEMA's responsibilities for the economic interests of consumers and the Secretary of State's responsibilities on the social and environmental side.
I appreciate that we have been round this circle when the Utilities Bill was considered and again with the Water Bill. We have had the present structure of regulation within the energy sector for a relatively short time. It has worked reasonably well and the energy White Paper places wider responsibilities on all players within the energy policy structure, including sustainable development. Now is not the time to alter the central responsibilities of GEMA, bearing in mind that sustainable development is mainstreamed into the Government's whole approach to energy policy and the energy strategy embodied in the energy White Paper. To place that responsibility on GEMA is not consistent with the differentiation of the functions that was set out in the Utilities Act. At the end of various consultations in which varying views were expressed we felt that, on balance, we should keep the situation as it is. I do not propose to move from that position today.
Baroness Byford: My Lords, before the Minister sits down, I notice that he has just said that the Government's main sustainability belief is within their White Paper. That is fine but the White Paper will not be part of the Bill. We may not have another chance of a Bill like this for many years to come. I urge the Minister to reconsider because we would be very concerned at missing this opportunity. The amendment will not dilute the responsibilities that Ofgem is being given in the way that he thinks. I think that the opportunity to put a responsibility in law on the face of the Bill will be missed. I am slightly disappointed with his answer and I wonder whether he would like to indicate anywhere in the Bill where there is any reference to what we are trying to achieve with this amendment.
Lord Whitty: My Lords, the answer is: not in relation to the powers of GEMA, which is what the amendment deals with and presumably why it is in this place. There is no other opportunity to debate that particular dimension, but throughout the Bill we have stressed sustainability and some of the objectives of the Bill relate directly to sustainability. The importance of the structure of regulation and intervention in this market is to ensure that we have a sustainable energy policy. However, the particular responsibilities of GEMA are primarily—sustainably—economic; not all the range of responsibilities comes under the heading of sustainable development.
Baroness Miller of Chilthorne Domer: My Lords, I warmly thank noble Lords who have supported this amendment. I am particularly grateful to the noble Lord, Lord Jenkin of Roding, for his long view and,

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with the length of his experience, for choosing to support this amendment. Like the noble Baroness, Lady Byford, perhaps I wished that the Minister would say "Yes" to this amendment, but unlike her perhaps I was more pessimistic. Like the noble Lord, Lord Dixon-Smith, I searched hard for where to place this amendment; there is no obvious place because, contrary to the Minister's view, the Bill does not give us an opportunity to explore the overall framework of sustainable development. As such, I thought that this was probably as good a place as any to put the amendment.
The Government did produce an energy White Paper and they do have a policy on sustainable development, but GEM A is so influential in the implementation of that policy that its ability to interpret what sustainable development means in the market is critical. For all that the Minister said about what is in the Utilities Act being sufficient, we have learnt, for example from the NETA fiasco—whereby CHP was significantly depressed by the way Ofgem chose to interpret its powers under the Utilities Act—that this amendment is essential if we are not to see that situation happen again. For that reason I would like to test the opinion of the House.
3.43 p.m.
On Question, Whether the said amendment (No. 171 B) shall be agreed to?
*Their Lordships divided: Contents, 148; Not-Contents. 111.

Division No. 1

CONTENTS

Addington, L.

Crickhowell, L.

Allenby of Megiddo, V.

Dahrendorf, L.

Alton of Liverpool, L.

Dean of Harptree, L.

AnelayofStJohns, B.

Denham, L.

Astor, V.

Dholakia, L.

AstorofHever, L.

Dixon-Smith, L.

Attlee, E.

Dundee, E.

Avebury, L.

Eden of Winton, L.

Baker of Dorking, L.

Elles, B.

Barker, B.

Ezra, L.

Beaumont of Whitley, L.

Falkland, V.

Biffen, L.

Fearn, L.

Blaker, L.

Ferrers, E.

Bowness, L.

Finlay of Llandaff, B.

Bradshaw, L.

Fowler, L.

Bridgeman, V.

Geddes, L.

Brooke of Sutton Mandeville, L.

Glentoran, L.

Brookeborough, V.

Goodhart, L.

Brougham and Vaux, L.

Gray of Contin, L.

Burnham, L.

Greenway, L.

Byford, B.

Hanham, B.

Caithness, E.

Hannay of Chiswkk, L.

Campbell of Alloway, L.

Hayhoe, L.

Carlisle of Bucklow, L.

Henley, L.

Carnegy of Lour, B.

Higgins, L.

Chadlington, L.

Hooson, L.

Chalfont, L.

Howarth of Breckland, B.

Chorley, L.

Howe, E.

Cobbold, L.

Howe of Aberavon, L.

Colville of Culross, V.

Howe of Idlicote, B.

Cope of Berkeley, L.

Howell of Guildford, L.

Courtown, E.

Hussey of North Bradley, L.

Crathorne, L.

Hylton, L.

606

Jenkin of Roding, L.

Rogan, L.

Kimball, L.

Roper, L. [Teller]

King of Bridgwater, L.

Rotherwick, L.

Kingsland, L.

Saltoun of Abernethy, Ly.

Laing of Dunphail, L.

Sandwich, E.

Laming, L.

Scott of Needham Market, B.

Lamont of Lerwick, L.

Seccombe, B.

Lester of Heme Hill, L.

Selborne, E.

Listowel, E.

Selsdon, L.

Livsey of Talgarth, L.

Sharp of Guildford, B.

Lyell, L.

Sharples, B.

McCollofDulwich, L.

ShawofNorthstead, L.

McNally, L.

Shutt of Greetland, L. [Teller]

Maddock, B.

Skelmersdale, L.

Manaoft, L.

Slim, V.

Mar, C.

Smith of Clifton, L.

MarandKellie, E.

Soulsby of Swaffham Prior, L.

Marlesford, L.

Steel of Aikwood, L.

MashamofIlton, B.

Stewartby, L.

Mayhew of Twysden, L.

Stoddart of Swindon. L.

Strange, B.

Methuen, L.

Swinfen, L.

Miller of Chilthorne Domer, B.

Tanlaw, L.

Miller of Hendon, B.

Taverne, L.

Monro of Langholm, L.

Tenby, V.

Mowbray and Stourton, L.

Thomas of Gwydir, L.

Murton of Lindisfarne, L.

Thomas of Walliswood, B.

Naseby, L.

Thomson of Monifieth, L.

Newby, L.

Trefgame, L.

Northesk, E.

Trumpington, B.

Northover, B.

Ullswater, V.

O'Cathain, B.

Vinson, L.

Onslow, E.

Wade of Chorlton, L.

Palmer, L.

Wakeham, L.

Peel, E.

Walmsley, B.

Perry of Southwark, B.

Walton of Detchant, L.

Plumb, L.

Weatherill, L.

Rawlings, B.

Wilcox, B.

Redesdale, L.

Williams of Crosby, B.

Rees-Mogg, L.

Williamson of Horton, L.

Rodgers of Quarry Bank, L.

Windlesham, L.

NOT-CONTENTS

Acton, L.

Filkin, L.

Ahmed, L.

Fyfe of Fairfield, L.

Amos, B. (Lord President of the

Gale, B.

Council)

Gibson of Market Rasen, B.

Andrews, B.

Golding, B.

Ashley of Stoke, L.

Goldsmith, L.

Ashton of Upholland, B.

Goudie, B.

Barnett, L.

Graham of Edmonton, L.

Bassam of Brighton, L.

Gregson, L.

Berkeley, L.

Grocott, L.

Bhatia, L.

Harrison, L.

Billingham, B.

Haskel, L.

Blood, B.

Haskins, L.

Borne, L.

Hayman, B.

Brooke of Alverthorpe, L.

Hilton of Eggardon, B.

Campbell-Savours, L.

Hogg of Cumbernauld, L.

Carter, L.

Hollis of Heigham, B.

Christopher, L.

Howells of St. Davids, B.

Clark of Windermere, L.

Howie of Troon, L.

Clinton-Davis, L.

Hoyle, L.

David, B.

Hughes of Woodside, L.

Davies of Coity, L.

Hunt of Kings Heath, L.

Davies of Oldham, L. [Teller]

Irvine of Lairg, L.

Dixon, L.

Jay of Paddington, B.

Donoughue, L.

Jones, L.

Elder, L.

Jordan, L.

Evans of Parkside, L.

King of West Bromwich, L.

Evans of Temple Guiting, L.

Kirkhill, L.

Falconer of Thoroton, L. (Lord

Layard, L.

Chancellor)

Lea of Crondall, L.

Partington of Ribbleton, B.

Lipsey, L.

Faulkner of Worcester, L.

Lockwood, B.

607

Lofthouse of Pontefract, L.

Rooker, L.

McIntosh of Haringey, L.

Sainsbury of Turville, L.

McIntosh of Hudnall, B.

Sheldon, L.

MacKenzIie of Culkein, L.

Sheppard of Liverpool, L.

Mackenzie of Framwellgate, L.

Simon, V.

Mason of Barnsley, L.

Smith of Gilmorehill, B.

Merlyn-Rees, L.

Smith of Leigh, L.

Mitchell, L.

Stallard, L.

Morris of Manchester, L.

Stone of Blackheath, L.

Nicol, B.

Strabolgi, L.

Orme, L.

Symons of Vernham Dean, B.

Ouseley, L.

Taylor of Blackburn, L.

Patel of Blackburn, L.

Pendry, L.

Temple-Morris, L.

Peston, L.

Thornton, B.

Pitkeathley, B.

Triesman, L. [Teller]

Plant of Highfield, L.

Turnberg, L

Ponson by of Shulbrede, L.

Turner of Camden, B.

Portsmouth, Bp.

Warner, L.

Prys-Davies, L.

Warwick of Undercliffe, B.

Radios, L.

Whitaker, B.

Ramsay of Cartvale, B.

Whitty, L.

Randall of St. Budeaux, L.

Williams of Elvel, L.

Rendell of Babergh, B.

Winston, L.

Richard, L.

Woolmer of Leeds, L.

[*The Tellers for the Contents reported 148 votes; the Clerks recorded 147 names.]
Resolved in the affirmative, and amendment agreed to accordingly.
3.54 p.m.
Clause 76 [Exploitation of areas outside the territorial sea for energy production]:
Lord Greenway Lord Greenway moved Amendment No. 172:
Page 59, line 20, at end insert—
"( ) No renewable energy zone shall be sited so that it restricts—

(a) any recognised maritime navigation channel, and

(b) any recognised approach to a port."

The noble Lord said: My Lords, in moving Amendment No. 172, I wish to speak also to Amendment No. 184 which stands in my name and that of the noble Lord, Lord Higgins.
In Grand Committee, again in consort with the noble Lord, Lord Higgins, I moved an amendment regarding the safety of navigation in respect of the establishment of offshore wind farms. The amendment arose from concerns felt in the shipping and ports industries, including Trinity House which is responsible for marking our navigation lanes around the coast.
The noble Lord, Lord Whitty, who answered on that occasion, conceded that safety of navigation was a serious matter. I do not think that any of us would disagree with that. However, he nevertheless argued that the concerns expressed were already covered by existing legislation. Since then further meetings have taken place with the industries and the Government, as a result of which further amendments, to which I now speak, have been brought forward. I should say at the outset that the first amendment was originally tabled in the name of the noble Lord, Lord Dixon-Smith, who I am pleased to see in his place. That was a procedural ploy as the noble Lord could not be here last night. Therefore the amendment appeared in my name. It is covered in the generality of what we are
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discussing in this grouping, but he will forgive me if I do not speak specifically to his amendment as I am sure he is quite capable of doing that himself.
Amendment No. 184, which would insert a new clause in the Bill, is designed to meet those concerns from the shipping and ports industries that still exist even after further discussions with the Government. The points covered in the amendment on which I seek assurances from the Government are as follows. The first is the question of consultation. The industries are very worried that they were not consulted early enough in the process of granting licences for offshore wind farms. They would like the Government to publish details of the most heavily used shipping routes for the assistance of would-be developers. They would also like the Government to negotiate possibly a memorandum of understanding on consultation with shipping and ports interests before any further sites are offered for tender.
The industries felt that they were not properly consulted under round one of the offshore wind sites licences. As a result certain sites were proposed such as the one off Cromer where three existing shipping lanes will have to be altered to accommodate a wind farm. The inshore route will become much more difficult. It is one that ships use when there are very strong winds from the west. The middle lane will be moved to go round the wind farm and that pushes it further out to sea and much closer to the third lane, thereby in my view increasing the risk of possible collision.
The industries consider that there is also a need for much more technical study to be carried out into the adverse effects of wind farms on shore and ship radar, radio and other electronic communications systems. An amendment tabled in the name of the noble Lord, Lord Higgins, deals specifically with that subject. I shall leave it to him to fill in the details on that. Suffice to say that we should like the Government to give us an assurance that they will commission a study into the effect of wind farms on marine radar and radio communications systems, including the combination effects of these structures.
The industry would also like to see the use of traffic management tools to enable offshore renewable energy installations and shipping to coexist in safety. In Grand Committee I mentioned the use of shipping clearways that were used in the early days of the offshore oil industry. The Government have indicated that they already have the necessary tools to do this, but I should like an assurance from the Minister that any traffic management systems that may be introduced will be required to conform to international standards and that, as a direct result of the establishment of offshore renewable energy installations, they will be financed by the developers. Furthermore, the industry feels that there is a need for a common regime in territorial waters and the renewable energy zones. These are the zones extending beyond our territorial waters where offshore wind farms can be set up. We seek an assurance that the Government will, in practice, apply Article 60(7) of the United Nations Convention on the Law of the Sea when considering the establishment of installations in territorial waters, as well as the REZs. Finally, there is a need for a pragmatic approach in applying Article 60(7)

609
of UNCLOS, and we seek assurance from the Government that any deviations that may be required of ships—I mentioned an instance earlier—will be kept to a minimum.
I wish to mention one further very important point. In Grand Committee, the noble Lord, Lord Whitty, mentioned the Transport and Works Act 1992 and the difficulties involved with that. Industries are seeking an assurance from the Government that they will give full consideration to issues of safety of navigation before installations are consented to, both under the Transport and Works Act and the Coast Protection Act 1949. The noble Lord, Lord Whitty, made great play of the Coast Protection Act in his remarks in Grand Committee, but there is another avenue for would-be developers to follow: the Transport and Works Act, which does not require them to look at the interests of safety of navigation. I hope that the noble Lord, Lord Higgins, will expand on that as well.
It is worth mentioning what other countries are doing in respect of this. Denmark, Germany and Holland are taking their responsibilities for the safety of navigation very seriously and have commissioned studies. Indeed, I was reading about one in Lloyd's List, the shipping newspaper, only this morning, whereby a company has been taken on by the German navigation authorities to put a test structure on one of their proposed wind farm sites out in the North Sea, to monitor the density of shipping movements. Our Government should be doing that. It is what I might describe as a precautionary approach. It seems to me that the Government are hell-bent on rushing forward to meet their commitments of 10 per cent renewable energy by 2010, whereas other countries are taking a more careful approach and are looking into aspects such as the safety of navigation.
On the precautionary matter, there is the suggestion that back in 1986, when the North Sea oil and gas development was going on, it was UK practice to avoid licensing not only inside traffic separation schemes but also within 10 miles of them, in case ships went off course. We all know that ships do go off course; ships break down; ships it is widespread knowledge—are run by officers whose standards are not what they were 15 or 20 years ago. There have been quite a number of incidents where ships have run into well-known structures. In the old days, for instance, they were forever clouting the odd light-vessel in the Thames approaches and the Channel. We had the incident of the Norwegian car carrier, the "Tricolor", which went down just over a year ago after a collision in the North Sea. Shortly after that, at least three ships ran straight onto that wreck. Even when it was properly buoyed and permanently patrolled by ships, one ship a week ran through that exclusion zone. That says a lot about modern standards of navigation, and thereby hangs the worry. It would take only one incident of a ship—through collision, or whatever—running into one of these wind farms, perhaps catching fire, causing widespread pollution, to cause a huge furore in the national press and everywhere. I do think that the whole aspect of the safety of navigation is something we should look at very carefully indeed.
I hope that the noble Lord who is to reply will be able to give me some of the assurances that I have asked for. I beg to move.
4 p.m.
Lord Dixon-Smith: My Lords, I am grateful to the noble Lord, Lord Greenway, for taking on the burden of moving, in effect, my amendment and his, because he knows far more about the subject than I do. I could not be here last night, and it therefore seemed prudent that he, conveniently for me, should take over my amendment. But I do think I should have my say.
This part of the Bill applies to all of the United Kingdom rights under Part 5 of the United Nations Convention on the Law of the Sea. It gives the Government the power to designate, within that huge area of seabed, renewable energy zones. Theoretically, therefore, the Government could surround this country with renewable energy zones. The problem may not be so much with wind in this instance, but the possibility of wave energy in the future. If we begin to extract energy from waves, that opens up the possibility of going out to deeper sea than one would think of conventionally in the context of wind turbines. Once you begin to widen out the scope, the possibility for interference with shipping becomes greater and greater. I am not a mariner in that sense, but I have sailed off the east coast for some years of my life. The approaches to Harwich and Felixstowe became important to me when we were involved with some port improvements in Harwich. I have lived with the problems of the approaches to the Thames Estuary all my life—who does not who lives in either Essex or Kent? The problems of the Goodwin Sands are something that I remember vividly from my childhood. As the noble Lord, Lord Greenway, pointed out, ships still sink off our shores, for whatever reason, and subsequently there is slightly hazardous navigation. We should not pretend that the sea is a safe place.
My original amendment sought to require the Government, as far as was possible, not to put renewable energy zones in those areas where ships are accustomed to make their passage. They do not make their passage in straight lines in the North Sea, and definitely not as they begin to approach the east coast ports. There are offshore sands and shallows which mean that you must have fairly closely defined routes into these ports. The North Sea itself is shallow. There will be areas which large boats will tend to avoid because of shallow water, even if it is deep enough for them to pass through, because of sea conditions and so on. This matter is not straightforward and it requires the most careful consideration.
You cannot slap down a renewable energy zone somewhere in the middle of the North Sea just because you happen to think it is a nice place. The fact that there is a reasonable depth of water that is convenient for the construction of wind turbines will not necessarily mean that it is a safe place if shipping is required to sail close to it.
That was my motivation in starting my own hare, but the noble Lord, Lord Greenway, has covered the point far better than I. There is no need for me to say

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more—except that I wholly support everything that is being done to apply the same principles to the inshore areas. In many instances there, they are even more vital because the possible channels for shipping travel are inevitably more constricted.
The Earl of Sandwich: My Lords, my noble friend Lord Greenway has raised a serious issue on consultation. Will the Minister address the reasons behind the delay in consultation? The industry deserves an apology from the Government if the consultation has not been adequate. I hope that the Minister will deal with that.
Lord Monro of Langholm: My Lords, I support the noble Lord, Lord Greenway, and my noble friend Lord Dixon-Smith in tabling the amendments. We must assume that if the Government are not prepared to accept them, they believe that the present legislation is adequate. But manifestly it is not. I want to call the Minister's attention to the wind farms on the Solway Firth, which cross the median line between Scotland and England. The Minister must accept that he has to reply, just as Ministers must reply in the Scottish Executive. It is an English/Scottish decision. We are dealing with UK legislation and UK incentives that provide the enthusiasm for all these wind farms.
What consultations did the Government have with the local interests in the Solway Firth, with the fishermen, pleasure sailing interests and the commercial ports of Kirkcudbright and Annan? The Government refused to have a public inquiry and any form of local authority involvement. They said, willy-nilly, "We'll have the wind farm in the middle of the Solway". How does that measure up with their indication that there is consultation and nothing to worry about when there obviously is something to worry about?
It is disgraceful that the Government have reached this decision with no consultation or inquiry and to hell with what the fishermen think. It is a most serious matter. One must thread one's way back from the Irish Sea to ports in the Solway—with a great deal of pleasure sailing in south-west Scotland. One cannot just take a sailing boat anywhere one wants to go through a wind farm it is more complicated than that. Why has this been allowed to happen? Will the amendment avoid the serious difficulty that has arisen? I want to know the answers.
Lord MacKenzie of Culkein: My Lords, I want to speak briefly, not having spoken previously in the debate. I support the points made by the noble Lord, Lord Greenway, particularly about the safety of navigation and whether the general lighthouse authorities are involved in the discussions and consultations. I understand that in relation to the wind farms in Solway Firth the Northern Lighthouse Board had to insist that it was involved. Again as I understand it, at one stage it was told that there was no need for its involvement. It insisted on being well involved because it regarded it as being important for safety and navigation at night that the required
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structures are properly lit. I join the noble Lord, Lord Greenway, in seeking assurance that the three general lighthouse authorities are involved wherever these structures are being built offshore.
Furthermore, I certainly agree with the noble Lord, Lord Greenway, on standards of navigation. In my part of the world—north-west Scotland—when the seamen on watch on board the "Jambo" were sent below, the officer of the watch promptly went to sleep for 40 minutes. That ship went ashore at the entrance to Loch Broom. That can happen anywhere and with disastrous effects. It is important that there is proper consultation and proper involvement with all the relevant authorities.
4.15 p.m.
The Earl of Caithness: My Lords, I, too, want to take up that theme. If your Lordships look at the www.bigconversation.org.uk website, they will see this statement from the Prime Minister:
"We should have the confidence to open up the debate, be honest about the challenges, lay out the real choices".
When it comes to shipping, ports, fishing, recreation and wind farms, far from being a big conversation it is a big silence. I agree with the noble Lord, Lord Greenway, and others who have spoken that the department ought to be severely rebuked for the lack of consultation that it has undertaken on this important subject.
We are now in round two, and as future rounds come up it is particularly important that the Government do not make the same mistake as they have made with rounds one and two in not consulting. When it comes to the sea around our coast, we need to be careful before doing anything. Your Lordships will appreciate that some 95 per cent of our trade comes by ships. We take that for granted, but ships have accidents for all kinds of reasons.
I was involved with the "Braer" and "Herald of Free Enterprise" accidents and I know only too well the disasters that can happen. Both those ships were exercising the right of free passage; an international right. It is the Government's responsibility not to hinder that right. The noble Lord, Lord Greenway, referred to Article 60(7) of UNCLOS; it is worth reading that to your Lordships. It states:
"Artificial islands, installations and structures and the safety zones around them may not be established where interference may be caused to the use of recognised sea lanes essential to international navigation".
That is what is happening with some of the proposals under round two.
That agreement with UNCLOS, to which the British Government have signed up, does not apply to territorial waters, but it applies within the UK renewable energy zone and both should have a common energy regime. It is wrong that there should be two different regimes. I support that statement with the argument that the Thames estuary and the Greater Wash strategic areas straddle both the UK territorial waters and the UK renewable energy zone. It is therefore important that a common regime applies to both.

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Increasingly, Britain and Europe are moving to a short sea shipping regime—a regime supported by the Commission and the governments of member states. That is for two reasons: one is the appalling congestion on our roads and railways; the other is pure economics. Inevitably, much trade to Britain comes on short sea routes from Europe rather than arriving in this country and using the motorway. For example, most of B&Q's goods coming into the Humber estuary come from Rotterdam. There they come off the big international liners, are broken down on to smaller vessels and they come across the sea into the Humber estuary.
It is worth looking at the Humber estuary for a moment. The area will be affected by a proposed wind farm. In 2002, the Department for Transport's statistics showed 15,321 ship arrivals in all the Humber ports. In 2002, more than 1 million passengers sailed either on the Hull/Rotterdam ferry or the Hull/ Zeebrugge ferry. Grimsby and Immingham are the largest freight ports in this country, taking 10 per cent of the 2002 traffic—some 55.7 million tonnes. If one sites a wind farm so that restrictions are imposed on that kind of shipping traffic, one is asking for trouble. I ask the Government to consider this matter very seriously. It is not only the Humber ports that are affected; as the noble Lord, Lord Greenway, said, Cromer is affected, as are the Merseyside ports by the development of Liverpool.
Another reason for considering this matter particularly carefully is that there is an EU initiative on short-sea shipping called "Motorways of the Sea". When I was in Brussels last week talking about short sea shipping, one lane that was mentioned as possibly being designated as a new motorway of the sea was the Rotterdam-Humber link. A wind farm in the middle of that lane would affect the shipping and merely complicate the hazards. The noble Lord, Lord Whitty, may say that it would be very easy for ships to sail round the wind farm, but I ask him what his reaction would be if one of us submitted a planning application to place a mast on the flight path into Heathrow. It is perfectly feasible for an aircraft to divert around a mast but it is not terribly practical to do so. The more that people are asked to divert ships, the more that will cause congestion. That is true not only of ships bringing in freight and passengers; one will be forcing fishermen and recreational craft into a smaller and smaller area.
I want to move on to the subject of recreation and draw your Lordships' attention to some of the effects of wind farms, particularly the one proposed for Portland Harbour and Weymouth Bay. I freely recognise that that is not one of the round two wind farms, but a wind farm there will cause sufficient turbulence to prevent that stretch of water, which is the finest small-craft racing water in northern Europe, being used as our 2012 Olympic sailing event post. That will have a very serious implication for recreational craft and for the economics of this
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country. If our best racing water would be disturbed by turbines, for goodness sake, let us think again and put the turbines somewhere else.
Lord Howie of Troon: My Lords, I believe that my noble friend Lord Whitty should pay great attention to the amendment of the noble Lord, Lord Greenway. This is a very serious matter and I do not consider that the Government have treated it with proper courtesy. The question is partly one of diverting shipping around intrusions in the shipping lanes. The important point about those intrusions—it has not been mentioned thus far in the debate—is their size. The noble Lord, Lord Greenway, referred to the controversies in the 1960s and thereabouts concerning oil rigs. Oil rigs were certainly an intrusion and a potential danger but, from the point of view of energy policy, they were useful. None the less, there was a good deal of concern about their effect upon shipping in the North Sea.
I am struck by the fact that wind farms are far bigger than oil rigs. Therefore, they intrude far more and are much more dangerous. A wind farm with 30 turbines was recently erected off Anglesey. I do not remember its exact size but it produces 60 megawatts of power. That is not a great deal, but it is no doubt worth having.
However, the other day I read in New Civil Engineer magazine, which comes my way, about a proposed wind farm off the East Anglian coast. I am not sure whether it was the one to which the noble Lord, Lord Greenway, referred, but the point is that it will be at least two kilometres—that is, a mile—wide. It is far wider than any oil rig of which I have heard. In addition, it will be five or six kilometres in length. Therefore, we are talking about an area off East Anglia which is two kilometres wide by five or six kilometres long, which is a sizeable area of intrusion into the North Sea.
The Government must consider the following. First, from their point of view, it is highly desirable to obtain energy which does not produce carbon dioxide and other such by-products which are thought to be undesirable. Secondly—this appeals to me as a Scotsman—in a sense, the fuel is obtained for free. On the other hand, the amount of fuel produced is far less than one imagines. In Denmark, wind farms produce only 25 per cent of the available energy, which is less than one might have thought. None the less, wind farms are desirable.
But, against that, the Government must set the fact that, in producing any energy from off-shore wind farms, the intrusion into the North Sea or, indeed, into other seas around our islands will be unreasonable. The Government must rethink their policies from first principles and not from a mere desire to meet their Kyoto requirements, reasonable although that may be.
Lord Donaldson of Lymington: My Lords, I want to pick up the last point concerning the fact that a wind farm is not an isolated object, such as a platform. One must also remember that it has a safety zone around it, which may contribute to the safety of the wind farm if

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to no one else. On the other hand, a far larger zone is thus created which, necessarily, should be regarded as a no-go area.
Much of the planning will depend upon having a clear idea of where ships go, and I am reminded of some surprising situations. In 1993, I was asked by the Government to conduct an inquiry into pollution around the coast of the United Kingdom and into what could be done to prevent it. One question which I asked of the department was, "Where do ships go?". There was a deafening silence and then back came the answer, "A lot of research was done some years ago and clearways were established so that platforms would not be built in the areas where ships go". I said, "Well, that's a useful starting point for us. How does it work?". The answer was, "It doesn't work at all because either nobody tells the ships or it doesn't suit the ships. They don't use the clearway; they simply thread their way as best they can through the platforms". Therefore, it is no good simply to have bright ideas about where one would like ships to go; one must take account of where they actually do go. I was helped a little by some retired mariners of whom I asked, "If you were going from A to B, what route would you take?". At any rate, that was better than the clearway system.
However, since then, some fairly detailed studies have been carried out on where ships go—at least, in coastal areas—and clearly those must be taken into account. Again, I commend the Dutch example of updating such statistics through monitoring. As the size of ships change, draughts change and so patterns will change. One has to be careful to take account of reasonably foreseeable future developments.
It has been said that nowadays standards of navigation vary considerably. That is right, but I do not believe that we should dismiss that on the basis that some third-world countries licence their mariners rather freely. The general-secretary of one of the maritime unions, who I am sure is an admirable trade union leader, has no personal experience of ships. He went to the east for a fortnight and came back with a full master's ticket. It cost the union £5,000, but that was money well spent as it revealed the realities of life. One cannot assume that someone with a certificate in charge of a ship necessarily knows what he is doing.
I do not necessarily believe that that is the greatest risk. The biggest risk is fatigue. Ships often comply with minimum standards, but really they are undermanned. Two examples come to my mind. The first was a gentleman who ran his brand new ship on to an island—I forget whether it was the Pentland Firth, but it was in that kind of area—where it stays to this day. When asked why he had done so, he said, "I got blinded by the lighthouse on the island". That was not a very good excuse. Further research showed that he had been very tired, had come across the Atlantic and that only he and the master were competent watchkeepers. He had undoubtedly dozed off and, at the last minute, seen the lighthouse. Because of his tiredness and in the confusion, instead of putting the
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helm hard over, he worked through the auto-pilot which had limitations on the extent to which one could put the helm over. Hence the accident occurred.
A second example is that of a banana ship which came in after fierce troubles in the Atlantic. It berthed in Portsmouth. The master was given two hours in which to discharge some cargo and put to sea again. Desperately tired, he put to sea and, thinking he saw a navigation light, he took emergency action, putting his ship straight into the Nab Tower. He was a perfectly competent master—I believe he had 40 plus years' experience and an unblemished record. I very much regret that the coastguard agency saw fit to prosecute him. I believe that his employers should have been prosecuted. Such situations happen and we have to take account of them.
Those who erect wind farms should bear in mind that, relatively speaking, they are very fragile structures. The individual structures in a wind farm have absolutely no chance against a ship of any size, with any dead-weight. A ship would skittle them down and there would probably not be much harm caused to the ship. People who erect wind farms might like to take such matters into account.
The noble Earl, Lord Caithness, mentioned the entrance to the Humber. I have been looking at a chartlet produced, I believe, by the Chamber of Shipping on which it says at the bottom that it is not to be used for navigation purposes. That is plainly true, but it is a frightening prospect. How will a ship enter the Humber if the various projected wind farms are erected? I am sure it can be done, but the exercise will call for the utmost skill and vigilance and a high degree of risk will be involved.
I want to mention radar. I have heard interesting remarks on the radio or wherever by someone speaking on behalf of the MoD I believe he came from the air ministry side—concerning worries about the effect of wind farms on radar. To my surprise he said that the MoD was very worried about wind farms in areas where low-flying aircraft operate, but that otherwise it was not very worried. If the radar used by aircraft can be disturbed by wind farms, those in the MoD concerned with the sea should consider this matter carefully, as should the Government.
For all those reasons, I wholeheartedly support the amendment tabled by the noble Lord, Lord Greenway. It is too much to expect the Government to support it, but I hope that they will give it careful consideration and will not oppose any amendments in this group that are pressed.
4.30 p.m.
Lord Howie of Troon: My Lords, individual windmills have fairly substantial foundations which a ship could strike and a good deal of damage would be done to a ship.
Lord Donaldson of Lymington: My Lords, no doubt that is right, provided that the foundation projects sufficiently high from the sea bed. If the foundation is sufficient, I do not see why the stalk of the windmill

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should not stay up. Provided that the draught were not too great, a ship would just whip off the stalks at the top of the foundation.
Baroness Miller of Chilthorne Domer: My Lords, this debate provides a good example of the unfortunate fact that we already have the renewable energy zone proposition and the safety zones around renewable energy installations have been proposed before the Government have brought forward their long-promised marine Bill, which would give a marine planning framework. Without a spatial framework, it is very difficult to balance the competing demands of renewable energy, commercial shipping and even recreational yachting.
In disagreeing with the noble Earl, Lord Caithness, I declare an interest as a recreational sailor. I view the issues of climate change as more important than whether I shall be able to sail in a recreational manner here or there. If push came to shove, I would certainly choose to have my recreational sailing slightly disrupted.
In principle, I believe that the noble Lord, Lord Greenway, has raised an extremely important point about whether the competing demands are being dealt with fairly despite the lack of a spatial planning framework. One slight concern is that the debate on the amendment has focused mostly on renewable energy zones. The amendment talks about approaches to ports. My understanding was that most renewable energy zones—perhaps the Minister can clear up this point—will be further out to sea. As regards approaches to ports, the important factor is the safety zones around the renewable energy installations. A number of issues with regard to commercial shipping need to be addressed and I suggest that Clause 87 should concern those who have a great interest in it.
Lord Higgins: My Lords, the House will be grateful to the noble Lord, Lord Greenway, for moving Amendment No. 172. As he pointed out, it has been grouped with Amendments Nos. 179, 184 and 184A. The issue is clearly extremely important. In a sense, we have had a Second Reading debate. Depending on the Government's response to these amendments, it may or may not be necessary to vote at a later stage in the proceedings.
It is extraordinary that whatever subject comes up in your Lordships' House there is immediately a huge amount of expertise available to debate it. I shall not go through this matter in the form of a wind-up speech, but I shall comment on some of the points that have been made and make a few of my own.
As I said in Committee, I am not intrinsically against wind farms. Almost every weekend I fly to Holland at a rather low altitude, and I am surrounded by wind farms when I arrive there. In the course of doing that, one is very conscious of the large amount of shipping passing from one side of the Channel to the other. It is quite extraordinary that we have reached this stage in relation to such matters without proper consultation and consideration having been given to them by the Government. If the Government were
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thinking of placing offshore wind farms in various parts of the English Channel, off Hull, off Liverpool and in Scotland, it should surely be necessary first to ask, "Where are the shipping lanes?" and then to place the wind farms somewhere else. So far, there appears to have been absolutely no attempt to do that or to consult the relevant interests. That is a very dangerous situation.
The effect of the location of the wind farms, of course, is partly economic, partly environmental and partly a matter of safety. So far as the economic side is concerned, my noble friend Lord Caithness pointed out that 95 per cent by volume of our international trade is by ship, and he also implied that 25 per cent of our internal trade is carried by sea. That is a matter of very great importance.
To what extent have the Government evaluated the problems that arise from diverting our own and other countries' shipping as a result of putting up the wind farms? More particularly, with regard to the environment, have they taken into account the extent to which there may be an increase in pollution because of the re-routing of ships as well as some saving from the location of the wind farms? Whether or not the wind farms are located sensibly will have an effect on the net gain with regard to the sustainable environmental aspects of the question.
It is also the case that there is potential, to which the noble Lord drew attention in proposing the amendment, for an environmental disaster If we do not take fully into account the safety aspects, we shall almost be planning for a disaster, and not necessarily only one. As the noble Lord pointed out, the degree of damage following the sinking of the ferry in the Channel last year was very considerable. If the wind farms are located in the wrong place, the dangers are likely to be repeated time and again and the likelihood is that more than one super tanker will collide with them. As the noble and learned Lord, Lord Donaldson said, although the damage to a super tanker is not likely to be very great, it is still possible that there would be some leakage. That would pose a constant threat to the environment, which needs to be mitigated as much as possible by locating the wind farms in the right places.
Amendment No. 179, standing in my name, takes up the point made by the noble and learned Lord, Lord Donaldson, about radar. The amendment proposes the insertion of a new clause as follows:
"Provisions in this Act and earlier legislation concerning the granting of new licences for generating stations shall not come into effect until the Secretary of State has commissioned, received and approved a full report on the effect of offshore wind farms on radar, radio and other devices used by vessels for the purposes of navigation".
I stress that that is the Government's responsibility, though no doubt they will wish to consider to what extent the cost of such an investigation should be borne by the developers of the wind farms.
The noble and learned Lord, Lord Donaldson, referred to a broadcast that he had heard. 1 can give him a more specific reference. On 16 March, the noble

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Lord, Lord Bach, replying to a parliamentary Question about wind farms and low flying aircraft, said:
"It is undisputed that wind turbines can affect radar, low flying, and communications links, so we have to ensure that wind farm developments do not impair our operational needs and safety".—[Official Report, 16/3/04; col. 127.]
If that is the case for air force training, it is surely far more important in the context in which the noble and learned Lord, Lord Donaldson, drew attention to it. I therefore hope that the Government will accept my Amendment No. 179. Alternatively, it may be necessary to press it to a Division.
In proposing the amendment, the noble Lord spoke also to Amendment No. 184, which raises a number of points. It is extraordinary that the issue is to some extent divided between different departments. The lead department appears to be the Crown Estate—perhaps not a department that immediately comes to mind with regard to the development of international or offshore waters. The document produced by the Crown Estate shows a mass of proposed sites—some, as mentioned on the other side of the House, of very considerable extent—which could not be more conveniently located, not off the shipping lanes but in the Thames Estuary, off the Greater Wash and off Liverpool. All that appears to have happened without any regard to where the shipping lanes actually are and the extent to which the ships will need to divert in order to avoid them, subject to all the hazards of navigation, to which a number of noble Lords have drawn attention.
That brings me to another point regarding the amount of data that we have on shipping lanes. Amendment No. I 84A, also tabled in my name, relates to the use of recognised shipping lanes. It reads:
"Installations and the safety zones around them may not be established where interference may be caused to the use of recognised sea lanes essential to international navigation".
I understand that on 19 March a government department issued some information on shipping lanes. However, it appears to have been sent only to the developers, but apparently not to the shipping interests that are involved. Perhaps the Minister will let us know whether or not that is so.
Clearly, these are matters of very great importance. It is right that we should debate them and, if necessary, vote on them. A number of other points have arisen, particularly with regard to our international treaty obligations, which perhaps may more appropriately be dealt with on consideration of later amendments. I believe that we have been right to raise this issue today. We are grateful to the noble Lord for moving the amendment. There are a number of additional points of greater detail, to which I am sure we shall want to pay close attention in a moment.
4.45 p.m.
Lord Davies of Oldham: My Lords, I am grateful to noble Lords who have participated in this extensive debate. I am particularly grateful to the mover of Amendment No. 172 and to those who have spoken to
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the amendments grouped with it for having identified the issues that we debated generally at Second Reading and considered extensively in Committee. As the noble Lord, Lord Higgins, has indicated and the noble Lord, Lord Greenway, has expressed through his contribution, there are a number of issues about which Members of the House are dissatisfied, and I hope to allay their concerns when I speak to their particular amendments. However, I am also obliged to respond to a debate, which has all the hallmarks of a Second Reading, about general issues of marine safety without having anything to do with wind farms and the sea. That is a fairly extensive remit, and I shall therefore limit my response to certain aspects.
Perhaps I may first clear up one important misconception that I believe has underlined one or two contributions to the debate. To a degree, that misunderstanding is implicit in Amendment No. 172, the first amendment tabled by the noble Lord, Lord Greenway.
The amendment implies that decisions will be taken about whether offshore renewable energy development is to be permitted and then the renewable energy zone will be created over that area of the sea. That is exactly the wrong way round. The process we are introducing is the opposite. The renewable energy zone will be created first around the whole of the United Kingdom. The reason why it is referred to in plural is that it is cumulative.
The zone is not defined totally in one stage. Zones are defined but the concept is a zone around the United Kingdom established in stages in the area of the sea where the UK has the right to produce energy from the water and winds. Designation of the zones is purely an enabling step to give us the legal power to consider and control renewable energy development within them. Creation of these zones does not imply that renewable energy development will take place in any particular location. The process of deciding where and how development will take place comes at a later stage.
In response to the noble Lord, Lord Monro, as regards the Scottish issue, the Solway Firth was the subject of consultation. It featured in round one and was carried out with the agreement of the Scottish Executive. As the noble Lord rightly identifies, it is in Scottish waters. The process might not have been as extensive as he would have liked. It may be that we need to learn lessons from round one on several aspects of consulting more effectively. However, I assure the noble Lord that that was not carried out as part of a "mega" project by the Department of Trade and Industry imposing a requirement upon the locality against some kind of master plan. That is not the way the issues are evolving and it was not so in that case.
What I have learnt from this debate and what noble Lords, including the noble Lord, Lord Monro, have pressed with great strength, is that we need carefully to consider the process of consultation and the position to which the noble Lords, Lord Greenway and Lord Higgins, referred where certain interests felt that they had been consulted on general issues contained in

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the Bill rather later than they would have wished. Certainly, we are seeking to put that right and I shall comment on that in a few moments.
Lord Dixon-Smith: My Lords, I thank the noble Lord for giving way. I want to be clear. If I understand the Minister correctly, in effect he is saying that there will not be renewable energy zones; there is one zone which will circumnavigate the United Kingdom. I have always accepted that within the renewable energy zones the position of a wind farm would be much more closely and strictly defined. Certainly, in so far as I was involved in Amendment No. 172, the purpose of that is specific and identifiable and, I thought, clear from its wording; that is, that there would be areas that were not renewable energy zones and would be reserved to shipping. That is the reason it was worded in that way. That may cause complications for the Minister because it means that there would then be renewable energy zones because shipping would have priority, as, indeed, I think it should, in particular parts of the North Sea where there are these "maritime motorways".
Lord Davies of Oldham: My Lords, I do not want to belabour the point. I merely indicate that the concept of zones is just a sub-section of the zone around the whole of the United Kingdom for which we have legal powers to examine the issues of wind energy. The question of where the installation should be, the whole issue of maritime safety, consultation and all the issues that have been aired in the debate, are part of a secondary process. The amendment addresses the concept of the zone and in that sense is not effective in terms of seeking to obtain what has been expressed in the House.
I shall respond in a more direct way to the very important points raised by the noble Lord, Lord Greenway. By that technical approach at the beginning I do not in any way seek to disavow the importance of the issues he raises. The safety of navigation is a predominant concern to the Government. I remind the House that we are dealing with Report stage. We have had Committee stage and are now into the detail. However, in the course of this debate I have been asked two questions, or they were implicit by some contributions. First, I was asked whether the Government have any concept that building wind installations might affect maritime safety. There is only one answer to such a general question and it is brief. The answer is "yes". Secondly, I have been asked the general question of whether we have any idea that there are important sea lanes which ships pass through, some of which can be likened to motorways on land and that it would be absurd to build an installation in the middle of a motorway. The answer to that is also "yes". The Government unreservedly recognise that point too, to say nothing of the fact that there are international shipping lanes. We are governed by international law and therefore there would not be any question of producing such intrusions.
However, I think this was addressed more accurately by the noble Lord, Lord Greenway, who participated in our deliberations in Committee. He identified concerns for certain kinds of shipping and concerns with regard to access to certain of our ports.
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However, if we can talk about ports in the east of England and not mention Felixstowe I am a little worried about just how precise the debate is on the concerns of Britain as a maritime trading nation.
Lord Dixon-Smith: My Lords, I apologise for intervening again. Harwich and Felixstowe are the same; if you talk about one, you talk about the other.
5 p.m.
Lord Davies of Oldham: My Lords, I accept the correction from the noble Lord. I was seeking to emphasise that it is important that we concentrate on the detail, which has been identified as issues which the Government should appropriately address, and not on the more general issues which obviously the Government are enormously concerned about but which do not relate directly to these amendments nor in a very real sense to the Bill. We all recognise that the Bill has implications for shipping and the sea. However, it will also be recognised that other laws govern the processes of consultation. The question of decisions taken which affect shipping are extant, viable, crucial and still impact upon this process. However, in this Bill we need only concentrate on those issues which arise particularly because of the proposed wind farm installations.
I turn to the substantive issues covered by the amendments. We understand the concerns of the shipping industry about the development of the renewable energy sector. The Government are committed to working creatively and positively to finding ways in which those two sectors can co-exist.
The Minister responsible for energy, my right honourable friend Stephen Timms in the other place, met representatives of the industry on 16 March and has written subsequently to the Chamber of Shipping to give the shipping community assurances which I trust will allay its concern. The most important point is that the Government will not permit the location of offshore renewable energy installations where they would put at risk the safety of navigation. That is the concern behind the amendments tabled by the noble Lords, Lord Greenway and Lord Higgins. As I stated in Committee, the Government are committed to maritime safety and I am happy for the opportunity to emphasise that point again today.
The statement that we shall not permit the location of offshore renewable energy installations where they will endanger navigation is not a vague aspiration on our part. As I indicated in my opening remarks, we already have legislation the Coast Protection Act 1949—to ensure that offshore renewable energy installations are not located where they would obstruct or endanger navigation. The Department for Transport considers applications for consent very carefully and consults the Maritime and Coastguard Agency and other organisations with an interest in marine safety before deciding whether to grant an application.

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The Coast Protection Act applies to development in territorial waters and to areas designated under Section 1(7) of the Continental Shelf Act. So, it will cover installations in the renewable energy zones which are being established by the Bill.
I appreciate that a developer can choose to seek development approval for a project in English and Welsh territorial waters using the Transport and Works Act 1992, which disapplies the Coast Protection Act. However, I want to assure noble Lords that control of such developments is equally stringent under those provisions to ensure maritime safety is not compromised. The Maritime and Coastguard Agency is consulted on all applications.
The noble Lord, Lord Higgins, in his Amendment No. 184A, raised the important point of the cumulative impact of wind farms. I assure him that we regard that as a very important factor in looking at whether development consent can be given for those projects. Developers will be obliged to work closely with each other and with shipping interests to understand the cumulative elements of the development of such installations.
I recognise that the shipping industry would like to see wind farms relocated rather than shipping diverted. The noble Lord, Lord Greenway, emphasised why significant costs would be potentially involved to the shipping industry if diversions were necessary in order to avoid wind farm installations. That is the burden of his Amendment No. 184, which we are considering in the group. This may not be a simple matter, given the technical and environmental constraints on where wind farms can be located. A number of factors will undoubtedly have to be taken into account in reaching decisions in this area. They will include, of course, the efficacy of wind farms and our need, as the House would recognise, to improve production of energy from renewable sources. One important issue to take into account is the possible impact on shipping. Consents decisions have to be carefully balanced across a range of interests. I merely wish to acknowledge in this debate the fact that, as the noble Lord has emphasised, shipping is important.
It may be reasonable in certain cases for ships to reroute around a proposed wind farm rather than for the wind farm developer to find a new site. Where such a rerouting could be achieved safely I emphasise "safely"—we would want to consider it as an option. We would not propose such a change lightly, and would want to look at all the other aspects identified by the noble Lord, including the environmental, but certainly the economic, aspects of interfering with shipping. I can give an assurance that any such requirements for shipping to deviate from its present routes will be kept to a minimum. We shall need to bear in mind also our obligations under the United Nations Convention on the Law of the Sea. It is just not possible for us to site installations, and the safety zones around them, in international shipping lanes.
Looking to the future, the Minister has given an undertaking that the Government will work with the shipping industry to see whether we can improve our
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current processes for making the initial high-level decisions about the areas, within which development of offshore renewable energy installations can take place. The re-establishment of shipping clearways would certainly be one approach that could be considered further in co-ordination with the industry.
Amendment No. 179 raises the issue of possible interference with ship communications systems. As the noble Lord, Lord Higgins, identified, the House has considered—albeit briefly in Question Time—issues with regard to low-flying aircraft concerning the Ministry of Defence. There is the issue of whether wind farms will affect ships' communications systems. I give the noble Lord this assurance: we agree that a further study of the matter needs to be undertaken in view of the possible effects on navigational safety. Such communications are of paramount importance in search and rescue operations. I hope noble Lords will recognise that we take that point on board. We shall carry out such a study and ensure that the results give us the assurances we need that such radar systems are not adversely affected in such a way as to jeopardise the activity of shipping.
As I have indicated, I have spoken at considerable length. This has been a lengthy debate. I apologise for the length of my reply, but I thought I owed it to the mover of the amendment and those noble Lords who have contributed to the debate to give a comprehensive reply. I see that I am being stimulated to add to my already extensive remarks. I give way.
Lord Higgins: My Lords, before the noble Lord sits down, I should like to refer to the question of radar. Am I to understand that he accepts the amendment, which is much more precise than the statement he has just made, in as much as more licences should not be granted until that study has been carried out? It would be quite absurd to grant the licences and then to find that the radar implications make the licence dangerous.
Lord Davies of Oldham: My Lords, I do not want to accept the amendment at this point. I am giving the noble Lord a general response that we recognise the validity of the points that he makes and that we intend to carry out such a study. I am quite prepared to discuss the matter further with him. I was hoping that he would recognise the degree to which I have sought to meet him regarding his amendment in recognising the validity of his points; that he would give us time to work on this issue and to discuss the matter further. I have made my response to his points on that basis.
The amendments cover very important issues. That is why we have had such an extensive debate. I wanted to emphasise just how seriously the Government take the issues and why we recognise the validity of many of the points that have been made. However, I also want to emphasise that we are not convinced, as I hope I have demonstrated, that it is necessary to write new legislation on the face of this Bill. Many safeguards regarding shipping obtain in other legislation, which were already operating with regard to round one of the development of these installations. We do not believe that we need to use the vehicle of this Bill for more

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extensive amendments save that—and I have told the noble Lord—we shall look further at the question of radar, discuss it further and see whether we need to make changes.
As for the rest, I hope I have given the assurance that this debate has raised very important issues. The Government take them very seriously. I hope that on that basis the noble Lord will feel able to withdraw his amendment.
Lord Greenway: My Lords, at the outset I thank all noble Lords from all sides of the House who have contributed to this important but lengthy debate. I must confess that I was wondering what would have happened had the amendment been reached late last night. I think we might have had a much shorter debate. Nevertheless, some very interesting points of view have been put forward. I am very grateful to noble Lords who have been able to expand on the many points that I could not possibly cover in my opening remarks.
The noble Baroness, Lady Miller of Chilthorne Domer, is not in her place, but I should like to pick up her point suggesting that perhaps we might be anti-wind farms. I can categorically say that the shipping industry is not against wind farms. It recognises that the Government have chosen this way forward with renewable energy. All it seeks is the right mechanism and the right early consultation to enable the developers and the users of the sea to cohabit. Indeed, the Minister has said that the Government want to achieve that.
The Minister has been generous in the assurances that he has announced: I have not been sitting with a checklist, because there were too many of them. He has certainly gone a long way towards meeting many of our concerns. There are still one or two concerns outstanding, particularly with regard to the Transport and Works Act 1992, where developers have an alternative route of going about things, which, although it may be expensive, could be attractive to them because of the possibility of extinguishing rights of navigation and therefore reducing risks.
The Minister said that route would be subject to the same checks and balances as under the Coast Protection Act 1949, but there are still one or two worries on that. Using that route, there is no statutory requirement for wind farms causing a hazard to navigation to be addressed. It is appreciated that the MCA, as the Minister said, will be asked to assess orders from the safety perspective. However, the MCA is not legally part of that consent regime, and therefore any conditions in the consents imposed by them would not be legally binding on developers.
If that route was to be taken, there would be a serious weakness in the legislative machinery to protect against wind farms causing a hazard to navigation and therefore compromising safety. I do not know whether, with the leave of the House, the Minister is able to say a little more on that before I decide what to do on this amendment—no answer is forthcoming. In that case, once again, I
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thank all those who have taken part in the debate and the Minister for his assurances. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Higgins Lord Higgins moved Amendment No. 173:
Page 59, line 25, leave out "negative" and insert "positive"
The noble Lord said: My Lords, this amendment is concerned with the procedure that would be exercised for Orders in Council. The paragraph as a whole is concerned with the exploitation of areas outside the territorial sea for energy production. It states:
"The rights to which this section applies shall have effect as rights belonging to Her Majesty by virtue of this section".
This is an important assertion of British sovereignty. I make no complaint about that, but it then goes on at subsection (6), to which the amendment applies:
"Orders in Council under this section, and orders under subsection (5), are subject to the negative resolution procedure".
It seems most extraordinary that something as important as this—asserting our sovereignty over exploitation of areas outside the territorial waters—should be done by negative resolution. I hope that the Minister can agree that it would be more appropriate for there to be an affirmative resolution and that he can accept the amendment. I beg to move.
Lord Davies of Oldham: My Lords, I appreciate the precision and cogency with which the noble Lord has addressed this amendment, but I am afraid that I will not be as forthcoming as I was on his last significant amendment.
There are two slightly different delegated powers in Clause 76, both of which, as the noble Lord indicated, are subject to negative resolution where he would prefer an affirmative resolution. The first, in Clause 76(4), is a power for Her Majesty to designate an area, which we are calling a renewable energy zone, as an area to which the rights under the United Nations Convention on the Law of the Sea set out in subsection (2) are exercisable. The second power, in Clause 76(5), is a power for the Secretary of State to designate the whole or part of a renewable energy zone as an area in relation to which Scottish Ministers are to have functions, as set out, for example, in Clause 80 and the decommissioning powers in Chapter 2.
Both are important powers, but the subject matter of the orders will be technical in nature. My reason for seeking to rebut the argument made by the noble Lord is that we regard them as technical in nature, and we do not foresee that they will be particularly controversial. That is why we have chosen the negative resolution procedure. The Select Committee on Delegated Powers and Regulatory Reform, in looking at the delegated powers in this Bill as a whole, thought that this was reasonable. We do not see a case for a change to an affirmative resolution.
It may be helpful if I add a little more about the powers. As noble Lords will be aware, the United Nations Convention on the Law of the Sea gives the UK the right to exploit the renewable energy resources from the winds and waters in an area that we are

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calling the renewable energy zone. It is essential that there is a power to designate the area that we are claiming as the United Kingdom's renewable energy zone. UNCLOS lays down the rules that contracting parties are to use in designating this area. It is not to extend beyond 200 nautical miles from the baselines from which the breadth of the territorial sea is measured. The rules for establishing these baselines are set out in UNCLOS and the baselines around the UK coast have been established for a long time, so there is no problem in this regard. Noble Lords will recognise immediately that we are not able to claim a full 200 miles in some places, for the obvious reason that we would impact on the areas of our neighbours. This is not a problem, as we intend that the zone will extend only to the median line between us and other sovereign powers. This is the agreed maritime boundary, which we have established for the purpose of designating the UK's continental shelf. We envisage that the renewable energy zone will be designated in stages, hence the reference to zones in the plural throughout the Bill.
I hope that noble Lords will appreciate from this brief description of the process that this is an entirely technical exercise. We would not expect this to be controversial. The process will be similar to the mapping of the UK continental shelf. Our conclusion is that the negative resolution procedure for Orders in Council for such a technical matter is entirely appropriate.
On the second power, which concerns Scottish Ministers and the Scottish dimension, it follows that we need to designate the areas in the United Kingdom renewable energy zone as a whole, within which Scottish Ministers are to exercise certain functions regarding certain parts. The process of designation will be similar to that outlined above. However, we will need to define the maritime border between Scotland and the rest of the UK. There are precedents for this in other legislation. We will want to consult the Scottish Executive before making an order under Clause 76. Again, it seems to us that this is not an area of high controversy. Therefore, we think the negative resolution procedures entirely appropriate. I hope that the noble Lord is convinced by my argument and will be prepared to withdraw his amendment.
Baroness Carnegy of Lour: My Lords, before the noble Lord sits down, and with the leave of the House, he mentioned the Select Committee on Delegated Powers and Regulatory Reform, of which I am a member. I looked up the proceedings of the committee, as printed and available to noble Lords. The committee did not disagree with the point that this was a technical matter, and therefore did not disagree with what the Government wanted to do. However, the point that this measure means ceding sovereignty was not raised. My noble friend Lord Higgins raised the point that the sovereignty of the seas is being ceded.
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Following the Minister's argument, I was not sure whether he took that point or not. My noble friend will doubtless pick up on it if he sees fit to do so.
Lord Davies of Oldham: My Lords, the Select Committee on Delegated Powers and Regulatory Reform looked at this matter and saw that the decision taken that we were involved in was of a limited nature. The first point is that we are bound by the United Nations Convention on the Law of the Sea. The other point is that it is simply a question of defining those territorial waters for Scotland in which the Scottish Executive has the right to make its point. I do not see that that is anything more than a technical matter.
Baroness Carnegy of Lour: My Lords, it was not a Scottish question; I understand that completely. My question was about the point that my noble friend Lord Higgins made to the effect that we were ceding sovereignty of the sea through the Order in Council.
Lord Davies of Oldham: My Lords, I hear what the noble Baroness says, but I have nothing to add.
Lord Higgins: My Lords, I found some parts of the Minister's reply more convincing than others. Some were irrelevant. The irrelevant ones can be pursued with some of the later amendments.
I share the concern of my noble friend who intervened a moment ago. I am far from convinced that it is a mere technical matter. I will consider the matter further and will come back to it, if necessary, at Third Reading. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Byford Baroness Byford moved Amendment No. 174:
Page 59, line 30, at end insert—
""exploitation" excludes the doing of anything which would diminish or harm the natural environment on or under the sea bed, at sea, of on or under land;"
The noble Baroness said: My Lords, in moving Amendment No. 174, I shall speak also to Amendments Nos. 175, 189 and 190, which stand in my name.
All four amendments are based on the amendments that we tabled in Committee—Amendments Nos. 106A and 106B. Those amendments were debated at great length, and the debate is reported at cols. GC 316 to GC 325 of Hansard for 3 February 2004. The noble Lord, Lord Triesman, felt that we had tabled the amendments too early in the process, which explains their repetition in the provisions dealing with interpretation of the chapter. I should hate to think that, by reiterating them only in sections that deal with the setting-up of the zones, we would give carte blanche to builders and developers to behave as they pleased. I am sure that the Government would not wish to see that.
In Committee, I said that the use of the word "exploitation" worried me. It still does. The noble Lord, Lord Triesman, explained that the word,
"follows exactly the word used in the UN Convention on the Law of the Sea".—[Official Report, 3/2/04; col. GC 319.]
I humbly suggest that most international conventions use words that have probably been translated and retranslated from a number of different tongues. If the noble Lord can tell me that English was used, I will stand corrected.
The use of the word in the UN Convention on the Law of the Sea does not mean that it is precisely what is intended by the original German, French or American explanation. My alarm was compounded recently, when the Prime Minister used it in extolling changes to the way in which asylum seekers would be dealt with. He referred to the new regime and the prevention of the "exploitation" of our social security system. That is precisely the normal shade of meaning of the word that, I think, people would accept. It might be used to refer to someone who tried to exploit a loophole and gain something by it. In most cases, that will be the interpretation that an ordinary member of the developer's workforce will understand.
Of course, developers seeking permission to work at sea will present a picture of responsibility. I merely want to make sure that there is in the Bill a description of what is not acceptable. The seabeds around our shores must, as we said earlier, be littered with crashed aeroplanes, sunken ships and waterlogged rubbish that has accumulated over the years. It is no excuse for adding so much as one dropped spanner or ploughing up a seabed for half a mile to say that it is quicker and easier to do so.
I have used the definitions that I have because I feel that harm or damage, in most cases, is relevant to its context. Digging a hole to erect a pylon in an area with a radius of several hundred feet is not, in itself, harmful to the environment, but removing a chunk of seabed measuring 100 by 100 feet probably is. Excavating a black coral reef, as has happened, is both harmful and irrevocable, and we know that damaged coral cannot be regenerated.
I do not apologise to the Minister. I know that we had a long debate in Committee, in which I was supported by the noble Baroness, Lady Miller of Chilthorne Domer, and by my noble friends Lady Miller of Hendon, Lord Ullswater, Lord Dixon-Smith and the Duke of Montrose. It is important that we clarify the point again. If the Minister responds by saying that he does not like my words or does not think that the amendment is necessary, I will encourage him, at this stage of the Bill's progress, to think of another word that does not have such direct influence in everyday language. "Exploitation" is not a good word, which is why I have brought the matter back.
Amendment No. 175 refers to anything which does not cause irrevocable damage in the marine environment. I shall give an example. We live opposite the biggest granite quarry in Europe. It was originally Mountsorrel, became Redland and is now Lafarge. It is on a site of special scientific interest. I realise that, although the work to get the granite out will be done for many years, the site must ultimately be restored, so that the totality of the environment will not be damaged. I used to know it as a lovely woodland, but I fear that I will be under the soil long before that restoration happens.
The word "exploitation" raises alarms for many people. For that reason, I brought the matter back. I was unable to divide the Committee, as the Minister knows. If I had been, I would have done. I apologise to noble Lords who sat through our debates in Committee in the Moses Room, but the issue was important enough for further discussion. I hope that I have persuaded the Minister that the use of the word in the Bill is undesirable. I beg to move.
Baroness Miller of Chilthorne Domer: My Lords, in Committee, I supported the noble Baroness, Lady Byford, and agreed with what she wanted to achieve with the amendments. I continue to do so. I noticed that, with regard to Amendment No. 175, she said, perhaps in error, "irrevocable", when the amendment actually says "irreversible", but I am splitting hairs. The two words have the same meaning.
I hope that the Government will, as the noble Baroness invited them to do, produce a definition in both cases. It is useful, in such a Bill, to have some reference to the protective framework that the marine environment can expect, given the sort of work that will take place. I mention again the fact that there is no marine Act protecting the marine environment, such as the Government themselves thought necessary. They have committed themselves to bringing in such an Act, but they have given no timescale for doing so. If such an Act were in place, we would not need such a definition in the Bill, but because there is no such Act, the marine environment lacks protection, as the Government have recognised. The Government should recognise that lack and put something in the Bill to achieve what the noble Baroness is getting at.
Lord Whitty: My Lords, as the noble Baroness said, the matter was discussed at some length in Committee. I see no reason to change the Government's position. The noble Baroness is attempting to use somewhat tendentious definitions of words that are used in international legislation to achieve the aim of avoiding irreversible harm to the marine environment. The procedures that we are adopting will achieve that, and we cannot stretch the definitions in the way that she suggests.
The noble Baroness obviously has an aversion to the word "exploitation". If I might venture to say so, she seems to regard it in a rather Marxist way as always being likely to be damaging, unless otherwise stated. In fact, the term "exploitation", in English or French—which is what the United Nations treaty is written in—would undoubtedly mean simply taking advantage of, using or operating in a way which made use of natural resources. Whether that was damaging or not depends on the circumstances.
There is also a problem in the noble Baroness's definition of what "damage" and "diminish" actually mean. Clearly, no development of this nature can be entirely impact-free. Certainly, almost any wind farm at sea is bound to change, to some extent, the marine environment. It might diminish the wildlife or it might, in the short or long term, attract a wider range of biodiversity and species into the area—that is likely to

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be the long-term effect. Whether people regard that as harmful and negative or beneficial depends on a rather subjective view. Therefore, I do not think it is very easy to use the definition that the noble Baroness has chosen because there is no construction of wind farms at sea that will not have some effect on the marine environment.
In addition to the effect on the marine environment and ecology, there is the overall impact of creating this development in the first place. The whole objective is, after all, environmental—to provide non-carbon fuel in order not to diminish the planet's resources as well as not to pump carbon into the atmosphere and to heat up the planet. The net environmental gain of the successful exploitation of wind farm possibilities is therefore likely to be substantial. The same would be true of wave and tidal operations. Therefore, it is not just the immediate and local environmental effect which has to be taken into account but the total environmental effect of the whole operation. I do not think that that is covered by the noble Baroness's definition.
The Government's approach to such propositions is through the safeguards of the strategic environmental assessment process and through the site-specific environmental impact assessment of any proposed development application. That will look at the impact on marine life and on any micro-climate as well as the overall environmental effects and benefits of the scheme. That will be a rigorous process and it will not depend on definitions which are somewhat different from the dictionary definitions of "exploration" and "exploitation". The developers will be forced to go through such a process before the Government approve any particular site development or designation of a zone or area.
While I utterly sympathise with the need in this process to ensure that renewable energy projects do not have an unreasonable, disproportionate, negative effect on the local environment, our procedures are in place to avoid that. That is a better way of tightening up control over such developments than attempting a definition, as the noble Baroness suggests.
5.30 p.m.
Baroness Miller of Chilthorne Domer: My Lords, before the Minister sits down, does he mean that strategic environmental assessments will be undertaken before any or all of the projects are commenced?
Lord Whitty: My Lords, there will be the overall strategic environmental assessment as well as the site-specific environmental impact assessment. There will be a designation, followed by a development proposition, which will have to come through the environmental impact assessment.
Baroness Byford: My Lords, I thank the noble Baroness, Lady Miller of Chilthorne Domer, for her support and her questions to the Minister again. Obviously, I am disappointed at his response. Those words are so different, and I think they can be misunderstood. "Exploration" is used in the same
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context as "exploitation"; I think that will be a concern to those actually doing the work, although I think they will just get on with the work that they have to do.
I have listened to the Minister and I know I will not persuade him. At this stage, with disappointment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 175 and 176 not moved.]
Clause 77 [Application of criminal law to renewable energy installations]:
Lord Kingsland Lord Kingsland moved Amendment No. 176A:
Page 60, line 29, at end insert "if he would have been guilty of that offence and so liable had the offence taken place within a part of the United Kingdom"
The noble Lord said: My Lords, Amendments Nos. 176A and 176B are intended to remedy a problem, which seems to have been unnoticed by the Government and their advisers, in relation to the application of the criminal law to offshore renewable energy installations.
Clause 77 provides that, by Order in Council, the criminal law may be applied to any actions which take place around an offshore renewable energy installation or within a renewable safety zone. Under subsections (6) and (7), liability may attach personally to directors and officers of companies for any criminal offence, whatever its nature, which is committed on the installation or in the safety zone.
The effect of this must be to widen the scope of the criminal law. It applies to all criminal offences which must include some in respect of which directors and officers would not otherwise be personally liable. Moreover, this widening will apply in such a way as to establish a legal inconsistency between certain offences committed within the jurisdiction, to which personal liability may not attach, and those committed in a safety zone, to which it will always attach.
We support the application of the normal criminal law to renewable installations and the area around them. However, there is no obvious policy rationale—at least, none that has been explained by the Government in consultation—either for widening the scope of the criminal law or for creating the difference in approach between the onshore and offshore regimes.
In our view, both subsections (6) and (7) of Clause 77 should be subject to the proviso that they are applicable if, and only if, the person in question would have been guilty of the offence, and therefore liable to be proceeded against, if the offence in question had taken place within a part of the United Kingdom. I beg to move.
Lord Whitty: My Lords, the provisions in this part of the Bill relating to the criminal law are modelled on those in the Petroleum Act 1998, which itself consolidates a similar provision in the Oil and Gas

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(Enterprise) Act 1982. There is therefore quite a long history of treating offshore activities in this way. Quite a lot of modern legislation includes provisions for officers of corporate bodies to be punished when it can be proved that they had consented to or connived at criminal behaviour by the company or were negligent in allowing that to so happen.
I understand the point that the noble Lord is making, but there is a corporate responsibility here. It is largely corporations which will be operating in these renewable energy zones and on the installations to be established there. Officers of corporate bodies have a responsibility if it can be proven that they consented to or connived at the commission of an offence. The noble Lord is right that the provision extends the liability for an offence; it does not extend the definition of an offence as compared with onshore, but it is done in a way which has applied in the offshore petroleum industry since the 1980s for the reason that, by and large, what happens on oil and gas platforms and, likewise, offshore wind farms, is a corporate responsibility.
That seems to us sensible; I am not sure that the noble Lord has convinced me otherwise, although I understand his point. However, I am not at this stage inclined to accept that we should treat this differently from the very analogous situations that exist elsewhere offshore.
Lord Kingsland: My Lords, I am grateful for the noble Lord's response. The fact that there is a similar clause in previous legislation is not a conclusive response to the arguments I have put forward on behalf of the Opposition in support of the amendments.
We shall have differential criminal law regimes for directors of companies: one onshore and the other offshore. In my submission, that is inherently undesirable. All the Government have to do is to agree with our amendments. There will then be a level playing field for directors whether or not the offences are committed inland or outside the territorial waters. Why is that such a difficult pill for the noble Lord to swallow?
Lord Whitty: My Lords, I am not entirely sure that I am in order in responding at this point but I shall do so as long as we do not make a habit of it.
Presumably the same logic applies with petroleum platforms. Offshore it is extremely unlikely that individuals will commit offences unless they are under the broad jurisdiction of a company which either owns, is operating or is a subcontractor on that site. Onshore there is clearly a high probability that someone is acting entirely on his own whether or not he is a company employee. Therefore, one is dealing with a situation of corporate responsibility for the site, part of the site or part of the operation on the site in a way that does not apply on land. It is not unreasonable, therefore, that there is some additional
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responsibility—not additional extension of the criminal law—on the people who are in charge of the operations on that site.
Lord Kingsland: Additional responsibility means an extension of the criminal law since we are talking only about criminal obligations in this case. I am most grateful to the noble Lord for engaging in a discussion about this matter. I do not propose to pursue it to a vote today but I shall bring it back at Third Reading. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 176B not moved.]
Clause 81 [Activities in Zones requiring 1989 Act Licences]:
[Amendment No. 177 not moved.]
Clause 82 [Modification of licence conditions for offshore transmission and distribution]:
[Amendment No. 178 not moved.]
Lord Higgins Lord Higgins had given notice of his intention to move Amendment No. 179:
After Clause 84, insert the following new clause—
"LICENCES FOR GENERATING STATIONS
Provisions in this Act and earlier legislation concerning the granting of new licences for generating stations shall not come into effect until the Secretary of State has commissioned, received and approved a full report on the effect of offshore wind farms on radar, radio and other devices used by vessels for the purpose of navigation."
The noble Lord said: My Lords, in the light of the Minister's comments, I propose to return to the issue at Third Reading but not to move the amendment.
[Amendment No. 179 not moved.]
Clause 85 [Consents for generating stations in Zones]:
[Amendments Nos. 180 and 181 not moved]
Clause 87 [Further provision relating to public rights of navigation]:
[Amendment No. 182 not moved.]
[Amendment No. 183 had been withdrawn from the Marshalled List.]
[Amendment No. 183A had been retabled as Amendment No. 197A.]
Lord Higgins Lord Higgins moved Amendment No. 184:
After Clause 90, insert the following new clause
"MEASURES TO MANAGE RISKS TO SAFETY OF NAVIGATION
(1) This section applies where the Secretary of State considers that the proposed location of offshore renewable energy installations or the stages of construction, operation or de-commissioning of the aforementioned installations give rise to unacceptable risks to safety of navigation.

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(2) Reference to installations also includes their safety zones, and the reference to risks includes those related to collision, grounding and to interference to shore and ship radar, radio and other electronic communication systems caused by the aforementioned installations.
(3) If risks are identified at the strategic planning or environmental impact assessment stages in the evaluation of proposed installations, the Secretary of State shall consider which of the following measures shall be introduced to eliminate or to reduce the risks to acceptable levels—

(a) the relocation of installations away from recognised sea lanes, navigational channels including port access channels, particularly where installations may cause interference to lanes essential to international navigation;

(b) the establishment of ships' routeing measures conforming to international standards;

(c) the introduction of vessel traffic services conforming to international standards; or
any other appropriate measures.

(4) If experience in any of the stages referred to in subsection (1) or (2) above identifies risks, the Secretary of State shall consider whether the measures in subsection (3)(b) or (c) or any other appropriate measures shall be introduced to eliminate or to reduce the risks to acceptable levels.
(5) Where the measures in subsection (3)(a) or (b) are to be introduced, the Secretary of State shall ensure that a system for monitoring traffic patterns, their volumes and densities is established to assist in implementation and to overseer the effectiveness of the measures.
(6) Where the measures in subsection (3)(b) are to be taken, the Secretary of State shall ensure that any deviation from recognised sea lanes, navigational channels including port access channels is kept to a minimum.
(7) Where the measures in subsection (3)(b) or (c) are to be introduced, the Secretary of State shall ensure that all costs are borne by developers."
The noble Lord said: My Lords, I beg to move and seek the opinion of the House.
The Deputy Speaker (Baroness Cox): My Lords, the Question is that Amendment No. 184 shall be agreed to. As many as are of that opinion will say, "Content". To the contrary, "Not-Content". Clear the Bar.
Division called.
The Lord Chancellor (Lord Falconer of Thoroton): My Lords, Tellers for the Contents have not been appointed pursuant to Standing Order 54. A Division therefore cannot take place, and I declare that the "Not-Contents" have it.
Amendment negatived.
Lord Higgins Lord Higgins moved Amendment No. 184A:
After Clause 90, insert the following new clause
"INSTALLATIONS IN TERRITORIAL WATERS AND RENEWABLE ENERGY ZONES
Installations and the safety zones around them may not be established where interference may be caused to the use of recognised sea lanes essential to international navigation."
The noble Lord said: My Lords, I beg to move, and wish to test the opinion of the House.
5.48 p.m.
On Question, Whether the said amendment (No. 184A) shall be agreed to?
Their Lordships divided: Contents, 157; Not-Contents, 115.

Division No. 2

CONTENTS

Addington, L.

Hooson, L.

Allenby of Megiddo, V.

Howe, E.

Alton of Liverpool, L.

Howe of Aberavon, L.

Anelay of St Johns, B.

Howe of Idlicote, B.

Astor, V.

Howie of Troon, L.

Astor of Hever, L.

Hurd of Westwell, L.

Attlee, E.

Hylton, L.

Avebury, L.

Jenkin of Roding, L.

Barker, B.

Jopling, L.

Beaumont of Whitley, L.

Kimball, L.

Biffen, L.

Kingsland, L.

Blaker, L.

Knight of Collingtree, B.

Bowness, L.

Lamont of Lerwick, L.

Bridgeman, V.

Lester of Herne Hill, L.

Brooke of Sutton Mandeville, L.

Liverpool, E.

Brookeborough, V.

Livsey of Talgarth, L.

Brougham and Vaux, L.

Luke, L.

Burnham, L.

McColl of Dulwich, L.

Buscombe, B.

MacGregor of Pulham Market, L

Byford, B.

Caithness, E.

MacLaurin of Knebworth, L.

Carlisle of Bucklow, L.

Maclennan of Rogart, L.

Camegy of Lour, B.

McNally, L.

Chester, Bp.

Maddock, B.

Chorley, L.

Maginnis of Drumglass, L.

Clement- Jones, L.

Mar, C.

Cobbold, L.

Mar and Kellie, E.

Colwyn, L.

Marlesford, L.

Cope of Berkeley, L. [Teller]

Masham of Ilton, B.

Courtown, E.

Methuen, L.

Cox, B.

Miller of Chilthorne Domer, B.

Craig of Radley, L.

Miller of Hendon, B.

Crathorne, L.

Monro of Langholm, L.

Dahrendorf, L.

Monson, L.

Dean of Harptree, L.

Montagu of Beaulieu, L.

Dixon-Smith, L.

Mowbray and Stourton, L.

Donaldson of Lymington, L.

Murton of Lindisfarne, L.

Donoughue, L.

Naseby, L.

Dundee, E.

Newby, L.

Eden of Winton, L.

Northesk, E.

Elles, B.

Oakeshott of Seagrove Bay, L.

Erroll, E.

O'Cathain, B.

Ezra, L.

Palmer, L.

Falkland, V.

Park of Monmouth, B.

Feldman, L.

Parkinson, L.

Ferrers, E.

Patel, L.

Fookes, B.

Patten, L.

Freeman, L.

Peel, E.

Geddes, L.

Phillips of Sudbury, L.

Glenarthur, L.

Plumb, L.

Glentoran, L.

Plummer of St. Marylebone, L.

Goodhart, L.

Rawlings, B.

Greaves, L.

Razzall, L.

Greenway, L.

Reay, L.

Hamwee, B.

Redesdale, L.

Hanham, B.

Rees, L.

Hayhoe, L.

Renfrew of Kaimsthorn, L.

Henley, L.

Rennard, L.

Higgins, L.

Renton, L.

Holme of Cheltenham, L.

Rodgers of Quarry Bank, L.

637

Rogan, L.

Strange, B.

Roper, L.

Swinfen, L.

Rotherwick, L.

Taylor of Warwick, L.

Russell, E.

Tenby, V.

St.John of Bletso, L.

Thomas of Gwydir, L.

Salloun of Abernethy, Ly.

Thomas of Walliswood, B.

Scott of Needham Market, B.

Thomson of Monifieth, L.

Seccombe, B. [Teller]

Tope, L.

Selsdon, L.

Trumpington, B.

Sharp of Guildford, B.

Ullswater, V.

Sharples, B.

Vinson, L.

Shaw of Northstead, L.

Waddington, L.

Shutt of Greetland, L.

Wakeham, L.

Skelmersdale, L.

Walmsley, B.

Slim, V.

Walton of Detchant, L.

Smith of Clifton, L.

Weatherill, L.

Soulsby of Swaffham Prior, L.

Wilcox, B.

Steel of Aikwood, L.

Williams of Crosby, B.

Stoddart of Swindon, L.

Windlesham, L.

NOT-CONTENTS

Acton, L.

Hogg of Cumbernauld, L.

Ahmed. L.

Hollis of Heigham, B.

Alli, L.

Howells of St. Davids, B.

Amos, B. (Lord President of the Council

Hoyle, L.

Hughes of Woodside, L.

Andrews, B.

Hunt of Chesterton, L.

Ashley of Stoke, L.

Hunt of Kings Heath, L.

Ashton of Upholland, B.

Irvine of Lairg, L.

Bassam of Brighton, L.

Janner of Braunstone, L.

Berkeley, L.

Jay of Paddington, B.

Bhatia, L.

Jones, L.

Billingham, B.

King of West Bromwich, L.

Blackstone, B.

Kirkhill, L.

Blood, B.

Layard, L.

Borrie, L.

Lea of Crondall, L.

Brooke of Alverthorpe, L.

Lipsey, L.

Brookman, L.

Lockwood, B.

Brooks of Tremorfa, L.

Lofthouse of Pontefract, L.

Campbell-Savours, L.

Macdonald of Tradeston, L.

Carter, L.

McIntosh of Haringey, L.

Chan, L.

McIntosh of Hudnall, B.

Christopher, L.

MacKenzie of Culkein, L.

Clark of Windermere, L.

Mackenzie of Framwellgate, L.

Clarke of Hampstead, L.

Mason of Barnsley, L.

Clinton-Davis, L.

Massey of Darwen, B.

David, B.

Merlyn-Rees, L.

Davies of Coity, L.

Mitchell, L.

Davies of Oldham, L. [Teller]

Morgan, L.

Dean of Thornton-le-Fylde, B.

Nicol, B.

Dixon, L.

Orme, L.

Eatwell, L.

Parekh, L.

Elder, L.

Patel of Blackburn, L.

Evans of Parkside, L.

Pendry, L.

Evans of Temple Guiting, L.

Pitkeathley, B.

Falconer of Thoroton, L. (Lord Chancellor)

Plant of Highfield, L.

Prys-Davies, L.

Farrington of Ribbleton, B.

Radice, L.

Faulkner of Worcester, L.

Ramsay of Cartvale, B.

Filkin, L.

Randall of St. Budeaux, L.

Finlay of Llandaff, B.

Rendell of Babergh, B.

Fyfe of Fairfield, L.

Richard, L.

Gibson of Market Rasen, B.

Rooker, L.

Golding, B.

Sainsbury of Turville, L.

Goldsmith, L.

Sawyer, L.

Gordon of Strathblane, L.

Sheldon, L.

Goudie, B.

Simon, V.

Graham of Edmonton, L.

Smith of Leigh, L.

Grenfell, L.

Stone of Blackheath, L.

Grocott, L. [Teller]

Sutherland of Houndwood, L.

Harris of Haringey, L.

Symons of Vernham Dean, B.

Harrison, L.

Taylor of Blackburn, L.

Haskel, L.

Temple-Morris, L.

Hayman, B.

Thornton, B.

Hilton of Eggardon, B.

Triesman, L.

638

Turnberg, L.

Whitty, L.

Turner of Camden, B.

Wilkins, B.

Warner, L.

Warwick of Undercliffe, B.

Williams of Elvel, L.

Whitaker, B.

Woolmer of Leeds, L

Resolved in the affirmative, and amendment agreed to accordingly.
Lord Higgins Lord Higgins moved Amendment No. 184B:
After Clause 90, insert the following new clause—
"INTERFERENCE WITH SAFETY OF NAVIGATION
In assessing whether installations and the safety zones around them present a danger to navigation, the Secretary of State shall ensure that their cumulative effects on safety of navigation are taken fully into account."
The noble Lord said: My Lords, the amendment relates to interference with the safety of navigation, which is an issue that we have already considered in some detail. In the course of earlier debates, the Minister recognised the importance of taking into account the cumulative effect of these wind farms. There may be a series of them dotted along a sea route requiring ships to divert a number of times. In dealing with some of these issues, the Minister said that the Coast Protection Act would be the main legislative tool that the Government would use to protect safety and, for proposed installations within the territorial waters of England and Wales, developers will also be able to seek approval in applying the order under the Transport and Works Act 1992.
Experience under round one indicates that this legislative route, while expensive, will be attractive to developers since it is possible to extinguish rights to navigation under this arrangement. Furthermore, this procedure does not cover danger to navigation. As I understand it, it does not refer to dangers to navigation or to the safety of navigation and it expressly excludes the requirement to obtain the consent of the Secretary of State under the Coast Protection Act. Consequently, using the Transport and Works Act route, there is no statutory requirement for wind farms causing a hazard to navigation to be addressed. If that route is taken there is a serious weakness in the legislative machinery to protect against wind farms causing a hazard to navigation. Therefore safety could be compromised. We therefore believe that the amendment is necessary. I beg to move.
6 p.m.
Lord Greenway: My Lords, I support this amendment. I inadvertently referred to it earlier, for which I apologise. I fully support the sentiments that lie behind it.
Lord Davies of Oldham: My Lords, we have had a substantial debate on safety issues. During the course of that debate, I indicated that the Government recognise the importance of the issue and the salience of the point that the noble Lord, Lord Higgins, raised. We regard it as essential that when the Government are considering the impact of wind farms on the safety of navigation, installations are considered separately and the cumulative effect is taken into account. We accept that point entirely.

639
On round two wind farms, I give the noble Lord the firm assurance that the cumulative impact of wind farm sites in neighbouring locations will be a very important factor in deciding whether development consent can be given for such projects. This will apply whether the developer seeks consent under the Coast Protection Act, to which the noble Lord referred, or the Transport and Works Act 1992. Developers will need to work closely with each other and with shipping interests to understand these cumulative impacts. We shall ensure that that is done. The regulatory framework in the Bill is already flexible enough to take account of cumulative impact so, although I hear what the noble Lord has said, the position of the Government is that we do not think that this amendment is necessary. We regard the noble Lord's point as very important and I reassure the House that we have it covered in the way in which the legislation is framed.
Lord Higgins: My Lords, I note what the Minister says but he has not replied to my point about the danger of developers being able to bypass the normal procedures under other legislation, to which he referred. We believe that this is a danger and that this amendment would reinforce the need for the cumulative effect to be taken into account and for these procedures to be dealt with adequately. In the light of the Minister's reply, and the point made by my noble friend Lord Greenway, I feel we should seek the opinion of the House on this issue.
6.4 p.m.
On Question, Whether the said amendment (No. 184B) shall be agreed to?
Their Lordships divided: Contents, 147; Not-Contents, 108.

Division No. 3

CONTENTS

Addington, L.

Craig of Radley, L.

Anelay of St Johns, B.

Crathorne, L.

Astor, V.

Crickhowell, L.

Astor of Hever, L.

Dahrendorf, L.

Attlee, E.

Dixon-Smith, L.

Avebury, L.

Donaldson of Lymington, L.

Barker, B.

Donoughue, L.

Biffen, L.

Dundee, E.

Blaker, L.

Eames, L.

Bowness, L.

Eden of Winton, L.

Bridgeman, V.

Elles, B.

Brooke of Sutton Mandeville, L.

Erroll, E.

Brookeborough, V.

Ezra, L.

Brougham and Vaux, L.

Falkland, V.

Burnham, L.

Feldman, L.

Buscombe, B.

Ferrers, E.

Byford, B.

Fookes, B.

Caithness, E.

Fowler, L.

Carlisle of Bucklow, L.

Freeman, L.

Carnegy of Lour, B.

Geddes, L.

Chorley, L.

Glenarthur, L.

Colwyn, L.

Glentoran, L.

Cope of Berkeley, L. [Teller]

Goodhart, L.

Cox, B.

Gray of Contin, L.

640

Greaves, L.

Patten, L.

Greenway, L.

Peel, E.

Hamwee, B.

Phillips of Sudbury, L.

Hayhoe, L.

Plumb, L.

Higgins, L.

Powell of Bayswater, L.

Holme of Cheltenham, L.

Rawlings, B.

Howe, E.

Razzall, L.

Howe of Idlicote, B.

Reay, L.

Howie of Troon, L.

Redesdale, L.

HurdofWestwell, L.

Rees, L.

Jenkin of Roding, L.

Renfrew of Kaimsthorn, L.

Jopling, L.

Rennard, L.

Kimball, L.

Renton, L.

King of Bridgwater, L.

Renton of Mount Harry, L.

Kingsland, L.

Rodgers of Quarry Bank, L.

Knight of Collingtree, B.

Rogan, L.

Lamont of Lerwick, L.

Roper, L.

Lester of Herne Hill, L.

Rotherwick, L.

Liverpool, E.

Russell, E.

Luke, L.

St.John of Bletso, L.

McColl of Dulwich, L.

Saltoun of Abemethy, Ly.

MacGregor of Pulham Market, L

Sandwich, E.

Scott of Needham Market, B.

MacLaurin of Knebworth, L.

Seccombe, B.[Teller]

McNally, L.

Selsdon, L.

Maddock, B.

Sharp of Guildford, B.

Maginnis of Drumglass, L.

Sharples, B.

Mancroft, L.

Shaw of Northstead, L.

Mar, C.

Shutt of Greetland, L.

Mar and Kellie, E.

Skelmersdale, L.

Marlesford, L.

Slim, V.

Masham of Ilton, B.

Smith of Clifton, L.

Mayhew of Twysden, L.

Steel of Aikwood, L.

Methuen, L.

Stoddart of Swindon, L.

Miller of Chilthorne Domer, B.

Strange, B.

Miller of Hendon, B.

Swinfen, L.

Monro of Langholm, L.

Thomas of Gwydir, L.

Monson, L.

Thomson of Monifieth. L.

Montagu of Beaulieu, L.

Tope, L.

Murton of Lindisfarne, L.

Trefgarne, L.

Naseby, L.

Trumpington, B.

Newby, L.

Ullswater, V.

Northbrook, L.

Vinson, L.

Northesk, E.

Waddington, L.

Norton of Louth, L.

Wakeham, L.

Oakeshott of Seagrove Bay, L.

Walmsley, B.

O'Cathain, B.

Walton of Detchant, L.

Palmer, L.

Weatherill, L.

Park of Monmouth, B.

Wilcox, B.

Parkinson, L.

Williams of Crosby, B.

NOT-CONTENTS

Acton, L.

Davies of Oldham, L. [Teller]

Ahmed, L.

Dean of Thornton-le-Fylde, B.

Amos, B. (Lord President of the Council)

Dixon, L.

Eatwell, L.

Andrews, B.

Elder, L.

Ashley of Stoke, L.

Evans of Parkside, L.

Ashton of Upholland, B.

Evans of Temple Guiting, L.

Bassam of Brighton, L.

Falconer of Thoroton, L. (Lord Chancellor)

Berkeley, L.

Blackstone, B.

Farrington of Ribbleton, B.

Blood, B.

Faulkner of Worcester, L.

Borrie, L.

Filkin, L.

Brooke of Alverthorpe, L.

Finlay of Llandaff, B.

Brookman, L.

Fyfe of Fairfield, L.

Brooks of Tremorfa, L.

Gibson of Market Rasen, B.

Campbell-Savours, L.

Golding, B.

Carter, L.

Goldsmith, L.

Christopher, L.

Gordon of Strathblane, L.

Clark of Windermere, L,

Goudie, B.

Clarke of Hampstead, L.

Grenfell, L.

Clinton-Davis, L.

Grocott, L. [Teller]

David, B.

Harris of Haringey, L.

Davies of Coity, L.

Harrison, L.

641

Haskel, L.

Patel of Blackburn, L.

Hayman, B.

Pendry, L.

Hilton of Eggardon, B.

Pitkeathley, B.

Hogg of Cumbernauld, L.

Plant of Highfield, L.

Hollis of Heigham, B.

Radice, L.

Hoyle, L.

Ramsay of Cartvale, B.

Hughes of Woodside, L.

Randall of St. Budeaux, L.

Hunt of Chesterton, L.

Rea, L.

Hunt of Kings Heath, L.

Rendell of Babergh, B.

Irvine of Lairg, L.

Robertson of Port Ellen, L.

Janner of Braunstone, L.

Rooker, L.

Jay of Paddington, B.

Sainsbury of Turville, L.

Jones, L.

Sawyer, L.

King of West Bromwich, L.

Sheldon, L.

Kirkhill, L.

Simon, V.

Layard, L.

Smith of Leigh, L.

Lea of Crondall, L.

Stone of Blackheath, L.

Lipsey, L.

Sutherland of Houndwood, L.

Lockwood, B.

Symons of Vernham Dean, B.

Lofthouse of Pontefract, L.

Taylor of Blackburn, L.

Macdonald of Tradeston, L.

Temple-Morris, L.

McIntosh of Haringey, L.

Thornton, B.

McIntosh of Hudnall, B.

Triesman, L.

MacKenzie of Culkein, L.

Turnberg, L.

Mackenzie of Framwellgate, L.

Turner of Camden, B.

Mason of Barnsley, L.

Warner, L.

Massey of Darwen, B.

Warwick of UnderclifFe, B.

Merlyn-Rees, L.

Whitaker, B.

Mitchell, L.

Whitty, L.

Nicol, B.

Wilkins, B.

Onne, L.

Williams of Elvel, L.

Parekh, L.

Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.
6.16 p.m.
Clause 91 [Extinguishment etc. of public rights of navigation]:
Lord Higgins Lord Higgins moved Amendment No. 185:
Leave out Clause 91.
The noble Lord said: My Lords, we move into somewhat calmer waters. The clause with which this amendment is concerned deals with the rights of navigation. Some of the points which are affected by that have been touched upon by the Minister. I have one or two questions and seek to clarify his remarks.
This clause is concerned with declarations extinguishing public rights of navigation. In his earlier remarks, the Minister pointed out that we were concerned with energy zones, within which apparently there were to be specific projects for approval. But there also seems to be an intermediate stage which the Crown Estate has gone ahead and published for stage two sites. To put it another way, there is the overall zone, which the Minister referred to, which on the map provided by the Crown Estate is a dotted line covering a very large area. Within that there are a number of specific sites, and then finally one comes to an actual approval of the construction of the wind farm by a particular developer.
At what stage are the public rights of navigation extinguished and over what area? That is clearly not over the entire renewable energy resources area and must be for the particular development. But is it proposed that public rights of navigation will be
642
extinguished within what the Crown Estate calls a "site"? What puzzled me about the map which it provided, was that alongside the particular sites there were the names of particular developers. Those sites cover a larger area than I imagine the actual farm itself would cover. To what extent have decisions already been reached by the Crown Estate or by the Minister as to which of those sites should be allocated to particular developers? If decisions have been made, is it proposed to extinguish the public rights of navigation in the intermediate stage?
The other problem which has arisen is in relation to the United Nations treaty and the Article 60 obligation. As for extinguishing public rights of navigation, presumably that will affect the shipping routes which normally would be protected under the UN treaty.
We seem to be concerned with territorial waters in their widest extent, the 200-mile limit. which I understand the Government do not propose to declare. Within that there is, apparently, an intermediate renewable energy zone. If the Government are to extinguish public rights of navigation of international ships, we are not clear why they consider that they do not need to put on the face of the Bill a common regime regarding the renewable energy zone. I am not sure that I have explained that clearly; it is extremely complicated.
What I seek to establish is to what extent—we can return to the matter at a later stage in the Bill—an intermediate stage exists where renewable energy zones are likely to affect or extinguish public rights of navigation. The Government still take the view that the relevant matter does not need to be put on the face of the Bill as it is covered by the treaty. However, the intermediate stage does not seem to be covered by the treaty. I hope that the Minister can clarify the position or perhaps we can have a further discussion on it. Serious points relating to the treaty and the extinguishing of international rights are not entirely clear at this stage. I beg to move.
Lord Dixon-Smith: My Lords, if my noble friend has concerns after the long debate that we have had, I am bound to say that I must support him. I was beginning very much to hope that the only places where rights of navigation would be extinguished were in those areas that were either covered by construction or by the buffer zone necessary to protect that construction. If there is any question in my noble friend's mind—which there obviously is—that the extinguishment of navigation rights will go any wider than that, it seems to me that we are in considerable difficulties and very great trouble. I await the Minister's clarification of the point with great interest. It is absolutely essential that we know precisely which part of—I was going to say "ground", but I suppose that I should refer to the sea bed—the sea bed this all rests on.
The Earl of Caithness: My Lords, I should like to support my noble friend Lord Higgins. I too am concerned about the map produced by the Crown Estates. It seems to indicate that sites have been allocated for wind farms that will affect our obligations under the United Nations Convention on the Law of the Sea (UNCLOS).

643
I mentioned this on an earlier amendment. I refer to the international right of passage. No country is allowed to impede that. Looking at the map in front of me, it appears that we have already taken decisions that will impede the international right of passage.
Lord Donaldson of Lymington: My Lords, I have not had any advance notice of this matter. There is no reason why I should have. It is entirely my fault for not having informed myself of it. Therefore, I have not studied UNCLOS carefully. However, from my recollection of first principles, I am not entirely sure that the international rights of innocent passage and the rather different international rights through straits depend on UNCLOS. I think that they may depend on what one might almost describe as the common law maritime law of the sea, which UNCLOS will to some extent, perhaps wholly, have confirmed.
However, I have pondered the question of whether one could build a wind farm which would narrow the Straits of Dover. I wonder what the answer to that would be in terms of international rights. I came to the conclusion that that possibly would be all right so long as one left something for international ships to pass through. However, one could not extinguish their rights of passage. If they choose to thread their way through a wind farm, I shall not say, "good luck to them", but I think that one would have to establish an exclusion zone for the purposes of preventing pollution. You can do that under the merchant shipping Act. However, the measure that we are discussing seems to me to be an entirely new concept. I should be much happier if it could be explained to me how the United Kingdom Parliament can designate areas over which there is at the moment an international right of innocent passage or an international right of free passage through straits. If that can be done, that is very interesting, but I should like to know how.
Lord Greenway: My Lords, following what the noble and learned Lord has just said, with regard to the Straits of Dover I believe that there is, indeed, a planned installation of wind turbines somewhere off Ramsgate, which is fairly close to the English Channel and the Straits of Dover. However, as I see it, the problem would not arise in that regard because we would already have properly designated separation lanes in the Straits of Dover that are sacrosanct.
Lord Jenkin of Roding: My Lords, I should like to ask a question in this regard. Do the rights of navigation referred to in the clause that we are discussing include rights of navigation on the part of fishing vessels? If a zone were declared, could fishing vessels be excluded from the whole of it under the clause? I may return to the matter on a later amendment in connection with the issue of compensation. However, I should like to know whether fishing vessels are covered by the clause that we are currently debating.
Lord Triesman: My Lords, this is an important provision in the legislation and I wish to resist its
644
removal strongly. As the legislation stands it is not entirely clear whether a consent for the construction and operation of a generating station under Section 36 of the Electricity Act extinguishes public rights of navigation. The result for a developer is that although he has a consent from the Government to build, say, a wind farm in territorial waters, he is laid open to the possibility of being sued in the courts for causing a public nuisance because the wind farm is interfering with rights of navigation. This situation is plainly not conducive to attracting investment in offshore renewable energy projects. Investors need certainty before they will commit the significant funds needed to bring a wind farm to fruition. They will need to know how they stand.
The concept of extinguishing the right of navigation is not novel. An order under the Transport and Works Act 1992 can include provision to extinguish rights of navigation and several offshore wind farm developers have already used this legislation to gain development consent for their projects. What we want to achieve by this provision is to make the Electricity Act more appropriate for offshore generating stations. Without this power developers will be forced to use the Transport and Works Act for projects in territorial waters if they want to extinguish the right of navigation. This Act was not drafted with offshore wind farms in mind. We would have lost a real opportunity to bring the Electricity Act up to date and to make it more appropriate to marine projects. I make those comments to set the scene in terms of the purpose of the clause.
The point needs to be borne in mind that the power to extinguish the right of navigation applies only to the physical structure itself. I believe that that was one of the key questions that noble Lords have asked. It does not extend to any of the waters around the installation, so that, if they are small enough, vessels can continue to navigate through a wind turbine array, so long as a safety zone is not in place which may prevent their entry. Fishing vessels may well be small enough to navigate through such areas whereas vessels with a much greater draught may not be able to do so.
It is probably an appropriate moment to clear up another question. The proposal here relates to the extinguishment of domestic public rights of navigation, not international rights. It is not intended to touch upon international rights. Public rights will be extinguished out only to the limits of the territorial sea and not beyond in the renewable energy zone, which addresses the question noble Lords have understandably asked.
We recognise that extinguishing a public right of navigation is a serious matter and that there must be a robust, fair and open process in place for the Secretary of State to decide whether the issue of a declaration is justified. Clause 91 amends Section 36 of the Electricity Act, so that the well tried and tested process for deciding whether to grant a consent for the construction and operation of a generating station will also apply to applications for a declaration extinguishing rights of navigation. There will be full consultation with all stakeholders with an interest in the matter, and there is provision for the holding of a public inquiry where the

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issues raised are of particular importance. I emphasise that the Electricity Act process has stood the test of time well, and it seems to be the best way of ensuring that this process is one that would be conducted in the interest of all parties and stakeholders, in the fairest possible way.
6.30 p.m.
Lord Donaldson of Lymington: My Lords, before the Minister sits down, can he help me? I fully accept the point about international passage on the high seas. But am I wrong in thinking that there is a right of innocent passage through our territorial waters? In so far as this is merely confined to the actual site of the turbine, clearly there is no problem. If it goes further than that, may there be a problem?
Lord Triesman: My Lords, it is the site of the installation that we are trying to ensure is properly protected, and I would not want to get the two things confused. That is the exclusion I have referred to.
The Earl of Caithness: My Lords, before the Minister sits down, can he help me? I understood that within each wind farm there was going to be a safety zone, from which all vessels were going to be prohibited. The Minister now seems to lead me to believe that it is only for the structure of the turbine that there might be—not automatically, but might be—a safety zone as well. Could he clarify that for me?
Lord Triesman: My Lords, in response to the noble Earl, Lord Caithness, there might be a safety zone. The safety considerations at stake will be the way that is determined. I do not want to speculate about much, because I do not think it is particularly helpful to do so, but you could imagine a site in which the individual wind turbines were very well spaced out, and some where they were much closer together. I can imagine that different kinds of considerations about whether it was navigable in one circumstance, rather than the other, would apply.
Lord Jenkin of Roding: My Lords, it follows from what the Minister has just said in response to my noble friend Lord Caithness that a safety zone could be declared which would exclude fishermen from what might well be very valuable traditional fishing grounds. Could he confirm that this is indeed the case?
Lord Triesman: My Lords, I do confirm it. I think it was me who confirmed it when asked a question in Committee as well. I recall saying on that occasion—no doubt someone will check the record to make sure that I did—that the establishment of one of these zones, for the purposes of making sure that we could generate clean energy, could not be achieved with absolutely no conceivable downside. That would be a fiction. I certainly would not wish to be party to a fiction of that kind. As I said in Committee, safety will be the forefront issue. The exclusion of shipping, including small shipping, must be a safety judgment in the interests of the mariners.
Baroness Byford: My Lords, before the Minister sits down, can he help me? I hope I am not out of order,
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because he has described the safety issue and that is the one I want to keep to. If my memory serves me correctly—I am sure that the Minister will correct me if I am wrong—my understanding in Committee was that while the wind farms were being constructed you would have a safety zone. Once they were constructed, there would be no safety zone. I am a little confused by the contribution he has just made because it seems to differ from what we were doing at Committee. I do apologise, because I do not normally come back but I think we need clarification.
Lord Howie of Troon: My Lords—
Lord Davies of Oldham: My Lords, this is Report stage of the Bill. It is right, of course, that questions can be addressed on the issue of clarification. But we cannot have the Minister subjected to cross-examination after he has completed his speech as if this were Committee stage, because it clearly is not. Certainly, the noble Baroness, Lady Byford, has asked a question and she should be replied to. But that really ought to be the end of this particular part of the deliberations.
Lord Triesman: My Lords, while I have the opportunity to reply to the noble Baroness, Lady Byford, this clause does not deal with safety specifically. I was trying to illustrate a point by making reference to the different sorts of circumstances that might arise. It is certainly one of the circumstances that, while construction is going on, a safety zone might well be a sensible and necessary precaution. It may also be the case that after construction is completed, were it to be a completely non-safely navigable area, that that might continue. In general, that is not expected to be the case.
Lord Lawson of Blaby: My Lords, there is just one point of clarification that might be of help to this House. As former Secretary of State for Energy I have a lot of nostalgic feelings towards all energy Bills and such issues. The Minister referred to the Transport and Public Works Act, and the provisions there which up until now have had to be used for this purpose. Could he clarify in precisely what way the provisions to be inserted in this Bill go beyond the provisions in the Transport and Public Works Act?
Lord Triesman: My Lords, the belief is—I think this is probably the best way I can explain it—that an amendment to the Electricity Act would make it a great deal easier and more transparent than other available routes. That has been the experience of the industry in making applications more generally. That is the reason that this change is being contemplated: it involves transparency, simplicity and greater relevance.
Lord Higgins: My Lords, I think I am in order in coming in at this point. Unfortunately, we have the next amendment on the Order Paper which relates to the following clause, on which the same issues will arise. No doubt the noble Lord, Lord Howie of Troon, will be able to raise his point then if he wishes to do so.

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It is very inhibiting to have a Report stage rule, but I certainly believe it is right that we should seek to adhere to it.
I am now somewhat puzzled by what the Minister has said. I am not asking him to reply to it again, but perhaps he might like to do so on the next amendment. We have got a clause here, as well as the following clause, about extinguishing public rights of navigation. But I am now not at all clear what sort of area—I cannot find another word for it—the Government are proposing to extinguish the rights in. From what has just been said, it seems to involve just the turbines themselves. I would have thought it would normally include the safety zone. Or am Ito understand that you can have a safety zone within which the public rights of navigation will not be extinguished? Will it apply to some sizes of vessels and not others? I am not in the least bit clear about that. The other thing is, over how large an area beyond the safety zone is the public right of navigation going to be extinguished? For example, will it be extinguished within the relative territorial limits of the sites set out in the Crown Estate's documentation?
Finally, during the day we have had a great deal of discussion about the Transport and Works Act. I am nowhere near as familiar with that Act—indeed, I am totally unfamiliar with it—as is my noble friend Lord Lawson. It would seem that the existence of that Act is a positive disadvantage to this legislation. It provides a loophole whereby developers can get around the restraints that would otherwise be put on them—albeit a more expensive option.
Would the Government care to consider whether the operation of the Transport and Works Act ought to be excluded from the operation of this legislation?
Lord Triesman: My Lords, I shall deal with the last point first. We are not disapplying the Transport and Works Act, so developers could, if they wished, continue to use it. It is a matter for them if they wish to use it in relation to projects in territorial waters. We are giving developers a choice. For reasons I gave earlier, we expect that they will want to use the Electricity Act, which will prove more efficacious for their purposes. The Transport and Works Act process requires a lot of input by lawyers and the costs to developers are estimated to be much higher by using that route. The Electricity Act process is a good deal more streamlined, but it is robust at the same time. Far be it from me to wish to interfere with the legitimate earnings of the legal profession, but it may well be that one or two people will feel that it is as effective and a tiny bit more economical, which would be helpful.
On the question of which area, I had hoped that I had been clear. I apologise if I have not been sufficiently clear. The safety zones are designed to exclude the passage of shipping for reasons described in exchanges between myself and the noble Baroness, Lady Byford. The area of installation is the subject of this clause and I have described the arrangements contained in it. The public right of navigation will be extinguished for the installation only. I had hoped that I had made that clear. This is to deal with the problems of claims in law for
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nuisance, to which a developer would become liable if he did not have the protection. Safety zones, if applied, may stop navigation through them. I said "may" because we said that it was conditional. However, they do not need to distinguish the public rights of navigation. It is merely a practical matter to exclude vehicles under particular circumstances because there is no legal concern relating to the nuisance of the safety zone and the kind of risks that might be run. That is the distinction which the clause tries to make clear and I hope that in this effort I have made it somewhat clearer, too.
Lord Higgins: My Lords, in the light of the Minister's reply, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 92: [Further provision relating to public rights of navigation]:
Lord Triesman Lord Triesman moved Amendment No. 186:
Page 74, line 8, leave out "or all"
The noble Lord said: My Lords, happily this may be the shortest contribution to the debate. In Committee, the noble Baroness, Lady Byford, made a drafting amendment which considerably improved the drafting of Clause 91(1) in regard to the rights of navigation which might be extinguished. I thank her for having done so. The amendment seeks simply to make the same changes to Clause 92(3) and to make the Bill consistent. I beg to move.
Baroness Byford: My Lords, I thank the Minister. Success has been slow in certain parts of the Bill, but the provision was a nonsense. I am grateful to the Minister for putting the matter right.
On Question, amendment agreed to.
6.45 p.m.
Lord Higgins Lord Higgins moved Amendment No. 187:
Leave out Clause 92.
The noble Lord said: My Lords, this is a probing amendment. It is a question of tidying up one or two points. The Minister's previous reply was helpful in a number of respects and we will need to consider carefully what was said.
Perhaps I may clarify one point. Suddenly the Electricity Act has appeared in our debates—at least during my presence. If a developer goes through the Electricity Act process, are there sufficient powers for the Secretary of State to prevent a development taking place which would endanger the safety of navigation? Although there seems to be some disagreement between the two sides, we understand that there is a loophole under the Transport and Works Act. It is now suggested that developers might alternatively use the Electricity Act. In the context of wind farms, which presumably were not necessarily envisaged at the earlier stage, might that not be another loophole which one would want to cover? I beg to move.
Lord Davies of Oldham: My Lords—
Baroness Miller of Chilthorne Domer: My Lords, I see that the Minister is anxious to get on with his reply.

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However, having disallowed further questions in the previous debate, I hope that he will allow us to have our say in this one.
I gather that under Clause 87(3), safety zones can be declared by the Secretary of State, or an applicant may apply to the Secretary of State and he can then choose whether or not to declare a safety zone. If the application is made and the Secretary of State decides not to grant the safety zone and an accident happens within that area, who will be liable? Will it be the applicant for the safety zone—the person who developed the renewable energy installations—or will it be the Secretary of State who decided not to grant a safety zone?
The Earl of Caithness: My Lords, at page 73, line 47, the phrase "relevant waters" appears. Given what the Minister said on the previous amendment, I presume that "relevant" means territorial waters. That is what the Minister concerned himself with on the last amendment.
As regards Amendment No. 187, what happens to the right to navigation in waters outside the 12-mile territorial waters but inside the renewable energy zone? That point was not covered. How will the rights of navigation be extinguished to prevent structures being hit in those waters?
Lord Jenkin of Roding: My Lords, I want to return to the question of fishing vessels. The noble Lord, Lord Triesman, in his last couple of interventions left me more confused than when he started. I am no great expert in offshore fishing, but as I understand it one of the common methods of fishing is that the trawler trawls a substantial net behind it hoping to catch the fish. They are then pulled in and hauled up on to the deck. I am not going to get involved in the common fisheries policy or the conservation of marine resources—both of which are hugely important subjects—but I want to know what is the impact of this clause on fishermen coming out from an established fishing port and wanting to fish in what may well be traditional fishing grounds?
As I understood the Minister, he said that the only exclusion zone is several metres broad and covers the pillar on which the turbine sits, and that people are excluded only from the part of the sea which is occupied by each wind turbine standing on its pillar. But then came the question of how big the extension would be after taking into account the safety zones. Looking at this from the point of view of a trawler fisherman, I can tell the noble Lord that there is no way that a fisherman trailing nets perhaps 100 metres or more behind a boat will go anywhere near those places. In fact, he will be excluded from fishing anywhere within an area where many wind turbines are installed. In a sense, that will be the case irrespective of the area of the sea—the circle drawn on the chart—where the individual turbines are located. That is an important point.
Will the declarations made under this clause cover a wider area so that it is perfectly clear where people may not go once the wind farm has been established, or are we playing around with small circles on a chart as the
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only areas from which vessels are to be excluded? If the latter is the case, that is nonsensical because it bears absolutely no relation to what seamen, fishermen or anyone else would do in the circumstances. If that is all that is involved, one seriously wonders what is the point of doing it.
The Minister seems to be saying that, while the wind farms are being built and once they are established, it is important that there is an area around them from which navigation is excluded, presumably to ensure that the wind farms continue to generate their renewable energy so that we can all keep the lights on. That is the object of the exercise and it will not be helped if fishermen travel too close to the turbines, their nets become tangled and everything must be stopped while they are untangled. I cannot believe that the clause is directed only at the circles on the charts; there must be a significant area around the turbines, such as the safety zone, which my noble friend mentioned during debate on the previous amendment. I believe that this is the opportunity for Ministers to clarify the matter so that we know what the two clauses mean.
Lord Dixon-Smith: My Lords, I am sorry if this is becoming repetitious but it is a fundamental point. I thought that we had reached the point where a wind farm was a wind farm and shipping was excluded. From what he said at the end of the debate on the previous amendment, the Minister seemed to envisage what I can only describe as a dispersed wind farm from which shipping might not be excluded. However, it seems that if there is to be a series of individual points, as my noble friend Lord Jenkin of Roding has just enunciated, an even worse hazard for shipping will be created.
It is one thing to have a defined area where one knows that wind turbine generators are spaced at 200, 300 or 400-metre intervals, surrounded by a buffer zone, from which shipping is excluded; it is entirely another to say, "We'll have a turbine generator here and a turbine generator a mile away and another a mile away and navigation can continue through that". From the point of view of those who are to erect these installations, separating the generators to such an extent, with all the additional transmission costs that would be involved in trying to link the turbines, would appear impossible and an idea in which they would not be interested. In sheer practical terms, a wind farm must be just that: it must be as tight and as dense as is sensible and practical. However, that of course makes it a potentially greater hazard to shipping.
If we enter a debate about shipping accessing these areas, how shall we draw the line? It is one thing for a 50-foot shipping vessel to enter the area and pass through it, but will there be a distinction between that vessel, many of the medium-sized freighters which go through the North Sea or even, heaven help us, a supertanker? Heaven forbid that a supertanker should ever get anywhere near such an installation. However, in some sea conditions, who can say what might

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happen? I know that, in theory, it should not, and my guess is that a vessel would hit the bottom before it hit the wind turbine.
However, I do not believe that we can begin to distinguish between one type of ship and another. Either one prevents navigation, including fishing vessels, which seems to be the practical option, or there is a free-for-all. The Minister paid specific attention to the safety issue and said that that would be the driver. If safety is the driver, shipping should be excluded from a wind farm, whether it is a deep-sea or inshore installation or wherever it is. That is the beginning and end of it. At the end of his remarks, the Minister left me very confused as to whether or not that would be the situation. He said that the exclusion zone would be in place only during the construction period. I believe that I am right in saying that. But if that is the case, that will create huge problems in the future.
Lord Greenway: My Lords, I, too, would like to see this uncertainty cleared up because I know that it has been a subject of concern for the yachting authorities. Such people are quite used to sailing close to all kinds of obstructions in the water and they feel that they may be unnecessarily penalised if they are totally excluded from the areas surrounding some wind farms where, I understand, the turbines will be quite far apart. Also, I believe that the height of the turbine blades has been raised so that most yachts can get underneath them.
I also want to confirm the surmisal of the noble Lord, Lord Jenkin of Roding, with regard to trawling. A couple of weeks ago, a meeting took place of the All-Party Parliamentary Maritime Group that was very well attended. If my memory serves me correctly, the fishermen present stated explicitly that they would not trawl within the site of the wind farms because it would be too dangerous.
Baroness Carnegy of Lour: My Lords, fishermen do not only trawl; they set lobster pots. It would be extremely difficult to service a wind farm if it were full of lobster pots.
Lord Donaldson of Lymington: My Lords, perhaps I may reminisce for one moment. I was asked by the previous Administration to conduct an inquiry into the best methods of command and control and state intervention in salvage projects or other situations in which there was a potential for pollution. I had the happy idea that we could adapt the whole of merchant shipping to platforms, which is what we were considering, by simply redefining a ship as including a platform. However, I found at once that that was unacceptable to the DTI, which said, "Oh no. We have our own regime".
The essence of my conclusions, which were accepted by the government of the day and by the present Government, was that one man must be in charge whenever an incident occurs. Not only should one man be in charge but Ministers should keep out. They must either back him or sack him. That was obviously a problem. But as the DTI insisted on having its own
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SOSREP, I did at least receive an undertaking that the same man would be appointed by both Secretaries of State.
However, the underlying point was that there was no instinct for joined-up government; there was a turf-war element—perhaps not at ministerial level but lower down. I wonder to what extent this legislation has been discussed with the Department for Transport at a level rather lower than ministerial. It is at that lower level that people are aware of the nuts and bolts of the problems.
7 p.m.
Baroness Byford: My Lords, my noble friend Lord Higgins asked whether there is a loophole in the Electricity Act and whether it would be possible to prevent a development from taking place if it were not in a suitable place, which would affect our discussions on shipping access. I have one or two questions to ask the Minister.
On the renewables obligation and the way in which the Government are trying to reduce the CO2 emissions, can the Minister indicate how many wind farms and individual wind turbines the Government have in mind? The answer could make a huge difference to our present discussions. If there are to be three pockets, that is one matter, but I suspect from the lobbying that I have received from those who are concerned about productivity on wind farms, that many more will be needed than was originally anticipated. I do not know what evaluation the Government have carried out in advance of presenting the Bill, but I would be interested to know.
On the existing wind farms, were there any difficulties or dissatisfaction when previous Bills were enacted? The Government have an understanding of what has happened already with those wind farms. Returning to my noble friend's original question, was the existing legislation good enough, strong enough and sufficient to undertake what the Government are trying to do under this Bill, or is the previous experience partly the reason for greater clarification in this Bill? I would be grateful if the Minister could answer those questions.
Lord Davies of Oldham: My Lords, I owe the House and particularly the noble Baroness, Lady Miller, an apology. I was not seeking to cut off an extremely fruitful and interesting debate. I actually have a very clear answer to the question posed by the noble Lord, Lord Higgins, and for some ridiculous reason I thought that no one else was rising to speak. I was eager to respond to him in as positive a way as possible. That was why I rose when I did and in no way was I trying to constrain debate. The House will recognise that being a Whip—ensuring that a self-regulating House stays broadly in order—sometimes can be difficult when one is also responding to a debate. In that respect I made an error and I apologise.
The noble Lord, Lord Higgins, specifically asked whether the Secretary of State had sufficient power to deal with the situation and to reject or to agree to matters. The answer is in the affirmative. I was eager

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to rise to my feet to assure him of that. Under this Bill we shall ensure that that power exists for the Secretary of State.
I have been asked a plethora of questions on the amendment about safety and wind farms. One could almost have forgotten the original amendment. I shall be asking the noble Lord to withdraw his amendment. The simple fact is that we need both clauses in the Bill. I do not want to repeat all the arguments in relation to preceding amendments, but I can give the noble Lord a positive answer to his most trenchant and searching question. On that basis, I hope that he will withdraw the amendment, although I recognise that there is a whole range of questions that require answers. I shall do my best.
I was grateful to the noble Baroness, Lady Carnegy, for introducing the lobster pot fishermen. I had thought that we were all caught up with major vessels. The noble Lord, Lord Jenkin, quite rightly expressed concern about the fishing interests, with their vast trawling nets that will steer well clear of installations such as wind farms for all the obvious reasons. All noble Lords recognise that there are other fishermen besides deep-sea trawler fishermen. We are eager to preserve the rights of fishermen as best as we can. We are not seeking to limit them. Nor are we seeking to limit competent yachtsmen, people with pleasure craft or anyone who is in control of a vessel that will not cause enormous damage to an installation—one that can extricate itself.
When a safety zone is put in place we would expect a clear indication of who and what must be kept clear. It may not be everyone. It may depend on the safety zone. The noble Baroness, Lady Byford, indicated that through her questions. One of her questions related to the number of wind farm installations that we intend to construct. I have some indication of how many turbines there will be in each wind farm. In round one we are expecting about 30 turbines in each wind farm and in round two we are expecting as many as 200, but there will be smaller wind farms as well. There will be a great variety. The upper number may be as great as 200. That will be an extensive complex and it will need governing and a safety zone around it.
In answer to the question posed by the noble Lord, Lord Dixon-Smith, we shall certainly require safety precautions while the installations are being erected. A great deal of activity will take place while the large turbines are being installed, but a safety zone can last beyond installation for the necessary protection of shipping if the circumstances indicate that that is necessary. In a large installation of 200 turbines that may be important.
Noble Lords should recognise that we are seeking to meet the principles identified by noble Lords in terms of safety, but we are also seeking to preserve the freedom of the seas as regards access so that these installations do not necessarily restrict that freedom. Some installations will cause small vessels very little problem and it would be wise for others to steer clear of the installations. The definition of a safety zone will indicate whether that is necessary.
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That is against a background of the range of turbines that may be constructed at any one installation. The difference between the smallest and the largest will be a factor of nearly seven. That is a considerable difference. There is also no immediate prescription on how far away the turbines will be from each other. A range of factors have to be taken into account, but it should be recognised that it would not be sensible to be unduly prescriptive about the nature of the safety zone on the face of the Bill. We need extensive consultation. One theme that has run through the whole of this debate on shipping is that consultation is required to get these matters right.
In the course of the debate two noble Lords spoke about fishing, which is an important element. Fishermen's interests need to be taken into account, including the interest in access. There is also the issue of navigational channels that vessels use. I sought to indicate earlier that major channels of navigation are bound to be protected and that installations will be placed away from those. It is also clear that at times there may be a trade off between the requirement to build a wind farm installation and some change to the pattern that mariners are asked to pursue in setting out from particular locations. In each instance, those kinds of trade off will be the subject of considerable discussion and negotiation. However, one cannot generalise and be prescriptive in any precise way about such matters.
I regret to tell the noble Baroness that I do not have global figures for how many wind farms are proposed. I hope she will recognise that it would be helpful to obtain information about the size of the sea installations. If and when we have an estimate of the number at sea, I shall be only too happy to communicate it to the House in writing. Alternatively, as we still have not quite completed all the stages of the Bill, I may be able to exploit a fertile opportunity to provide that information.
With regard to the point raised by the noble Earl, Lord Caithness, there is no public right of navigation in these zones. The public right of navigation is governed by a domestic law that applies particularly to inshore waters, not to these zones. As has been indicated, the zone can extend as far out as the median line away from the coast. However, we recognise—we have debated some of these issues in relation to earlier amendments—our obvious international obligations with regard to the big navigational routes, and we are also well aware of the fact that this country uses the sea for both pleasure and enjoyment and necessary economic activity. We are still a substantial trading nation, carrying on a great deal of trade by cargo-bearing vessels, and we have to protect those interests. It will be necessary to strike a balance between the installation of wind farms and the necessary economic activity enjoyed by all those exploiting rights at sea—
7.15 p.m.
The Earl of Caithness: My Lords, I thank the Minister for giving way. Will he answer the question that I asked him? For instance, at least 12 major shipping routes pass through the proposed national wind-powered farm coming up to the Humber. That

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wind farm will be outside the territorial waters, within the renewable energy zone. How do the Government intend to alter the rights of navigation in such a situation? Under what powers can they do that?
Lord Davies of Oldham: My Lords, the granting of applications to develop those positions will be taken into account against the necessary rights of navigation. In distant waters beyond our immediate territorial waters—we have been down this path previously—there exist oil and gas installations in relation to which it is very necessary to consider what may be the navigation rights. I do not have to hand the benefit of enormous maps or statistics. However, like many other noble Lords, I have stood on the beach at Felixstowe or Lowestoft and seen installations that are both visible from the land and in the path of an extensive amount of shipping. That problem had to be addressed when we dealt with the Acts that gave authorisation to the exploitation of North Sea oil and gas, and a similar process is envisaged with regard to this Bill. Because we have in place the Electricity Act, which governs some of those issues, we do not need to write on to the face of the Bill powers that we already enjoy for conditioning such issues.
I can see by the wracked faces opposite that I have not satisfied each and every answer. It will be recognised that this has been not so much a debate as a volley of questions. I have not sought to dodge the questions. The ones that I have missed are those that I am quite incapable of answering, for which noble Lords will have to forgive me.
Lord Higgins: My Lords, we are grateful to the Minister for that sympathetic response and for his exploration of the various issues. Some of the questions that have been asked remain unanswered. If necessary, we shall no doubt return to them at Third Reading. However, we appreciate the trouble that the Minister has taken in replying. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 188:
After Clause 92, insert the following new clause—
"COMPENSATION UNDER SECTION 91 OR 92
(1) If the Secretary of State shall grant any consent or make any declaration under section 91 or 92 which shall interfere with the private or commercial interests of any person or corporation, he or it shall be entitled to compensation.
(2) Such compensation shall not be limited to the financial or other benefit received by the person in whose favour the consent or declaration is made."
The noble Baroness said: My Lords, when I introduced this amendment in Grand Committee. I began, as I do today, by reminding your Lordships that, in presenting the Bill to Parliament, the noble Lord, Lord Whiny, made a statement under Section 19(1)(a) of the Human Rights Act 1998.
Clauses 91 and 92 provide for the extinguishment and modification of public rights of navigation. The need to extinguish or interfere with those public rights
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is most likely to be caused by the erection of offshore windmills. It is not necessary for us to consider whether any other causes of such extinguishment might arise.
A "public right" is a public right, and a right is a right. To take away such a right is to deprive someone of a possession. That is contrary to the first protocol of the European Convention on Human Rights. which states:
"Every natural or legal person is entitled to the peaceful enjoyment of his possessions".
It is perfectly clear, without any convoluted exercise of interpretation, that to deprive people of public rights of navigation, or to interfere with such rights, is at the same time to deprive them of a possession.
I am not arguing that the measures provided for in these two sections are wrong, unreasonable or unnecessary. On the contrary, it may be perfectly reasonable to have an exclusion zone at sea or to modify access to waterways, or even a harbour, for the public good derived from wind farms as a renewable source of energy. However, it is not right that those who have lost their rights, in whole or in part, should receive no compensation or that they should in effect contribute to the cost. I need say no more about the merits of the amendment, which I submit are self evident.
The Minister's reply was that a public right is not an individual right and that a right of navigation is not a possession. As a kind of long stop back up, he then said that even if such a right were a possession in normal parlance, it did not lead to the inescapable conclusion that compensation should be paid. He concluded his remarks by saying that he did not believe that any normal reading of English or the Convention on Human Rights would lead to any claim for compensation.
My noble friend Lord Kingsland had anticipated and dealt with such an argument in his speech during the debate, when he quoted the case of Beveler v Italy, which established that:
"The concept of 'possessions' in Article 1 has an autonomous meaning which is not limited to ownership of physical goods, and is independent from the formal classification of domestic law; certain other rights and interests constituting assets can also be regarded as property rights, and thus as possessions".
I should also briefly and in passing mention new subsection (2) which defines the compensation to be paid to the person adversely affected as the loss he suffers, and not the benefit received by the person in whose favour the modification of rights is made. That resolves the problem of calculating compensation, because it puts the onus squarely on the person making the claim.
Reverting to the legal concept of a right to compensation, first, I do not understand why the Government should insist that other people should have to bear the financial consequences of any benefits given to commercial concerns, such as the owners of wind farms, even if being built for the public good. If the Government have to bear the initial cost, that is something that can be passed on to the generator as part of the licence conditions.
Secondly, with due respect to the Minister, I prefer the legal opinion of my noble friend, with his wide legal experience and knowledge of EC law, to the opinion expressed by the Minister on the last occasion we discussed this matter. I hope that since then the Minister has had the opportunity to further consider the matter with his advisers and will now concede that both law and justice demand that persons suffering from an administrative action of the Secretary of State shall be compensated for what is an act of confiscation of those rights by the state. I beg to move.
Baroness Miller of Chilthorne Domer: My Lords, the amendment enables us to continue with an interesting discussion in Committee. I agree with the noble Baroness that a number of issues are involved. However, I have some misgivings about the amendment.
Compensation for the fishing industry is complicated considerably by the effect of the future of the common fisheries policy. Without doubt there will be established no fish zones, a limit on days fished and so forth. It is difficult to see how the compensation clauses in the Bill will fit in with that. That is a question which the Government may want to address.
Furthermore, as a supporter of renewable energy, there are arguments for the establishment of wind farms being in the public interest. The same argument could be run in terms of public access issues. In any case the arguments are not cut and dried. I think that everyone is agreed that the overriding public interest here must be to try to combat climate change.
On 18 March the Government sent a helpful reply on the issue of compensation stating that it would be tailored to each renewable energy installation and that the DTI would work with the fishing industry to establish in what circumstances fishing vessels could safely enter a safety zone, whether on size of vessel, type of fishing activity and so forth. That is a helpful and practical approach.
However, in the penultimate paragraph is an issue which I should like the Minister to clarify. The Government state that:
"We take the view that the question of compensation whether for the establishment of a safety zone or the operation of the renewable energy installation itself must be one for the commercial judgment of the developer".
Given that the right to have a safety zone rests with the Secretary of State, as I raised with the Minister, and that it is by no means clear that all the applications for a safety zone would be granted, that raises two issues. First, who is liable if the application is not granted? Secondly, if it is granted, the Secretary of State thereby takes responsibility for the fact that that zone is necessary. As I have just quoted, it is up to the commercial judgment of the developer whether to give compensation. Surely, that is very curious and is a matter which in any case should be decided in this House and another place rather than left to the commercial judgment of the developer.
Lord Jenkin of Boding: My Lords, I should like briefly to follow the comments made by the noble Baroness, Lady Miller of Chilthorne Domer, and then
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to come back to the question of fishing. This is why I was rather keen to establish from Ministers that we are not talking just about little rings on the chart but about significant areas, from which fishermen, trawlers in particular, might need to be excluded. One comes back to the question of compensation for that.
I have re-read the debate held in Grand Committee and I understand the point then made by the noble Lord, Lord Whitty, that this is primarily, or at least in the first stage, a matter as between any fisherman likely to be affected by a proposal put by a developer, and the developers. Indeed, if there were a case for compensation for the fishermen, it would be for the developers to agree that before going ahead.
The noble Lord, Lord Whitty, also recognised that there may be cases where the developers are reluctant to agree to pay compensation yet where compensation may be necessary. However, my noble friend Lady Miller of Hendon failed to get from the Minister what would happen then. The noble Lord said that they might consider that as a reason for refusing consent to the developer. That would be a fairly extreme case. There might well be cases where, because of a traditional fishing ground for fishermen who have fished there for some time, it would be perfectly reasonable to grant permission for the development but to compensate the fishermen for being kept off their traditional fishing grounds.
The reason I raise these issues is because of the substantial report published by the Royal Society of Edinburgh—I declare an interest as an honorary fellow, of which I am very proud—which has considered the whole question of the future of the Scottish fishing industry. As noble Lords will know, the largest proportion of the fishing industry in the United Kingdom is in Scotland. As has been said, and was certainly said in Grand Committee, many other factors currently affect the fishing industry. It is not right for us to go into those today. However, paragraph 11 of Chapter 1 states:
"In the whitefish sector, there has been a collapse in profitability as a result of quota restrictions. Although it catches a diversity of species, its difficulties have been dominated by cod and haddock".
It goes on to talk about the decline both in landings and employment.
If one is to find in addition an exclusion from what has hitherto been regarded as profitable fishing grounds because of the construction of a wind farm, it seems to me that in those circumstances the Bill should include a right to compensation. As I read my noble friend's amendment, it should cover compensation for that loss of fishing. I should like the Minister to confirm that that would, indeed, be the case and then to try to justify why that should not be put into the Bill. As the noble Lord, Lord Greenway, stated, there is no doubt that the fishing interests are considerably worried by what could happen to them as a result of the substantial expansion of wind farms in their traditional fishing grounds.

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It is not enough simply to rest this on the question of getting an agreement between the developer and the relevant fishing industry. The fact of the matter is that it could be a very unequal bargain. The developers are sometimes very large and powerful companies, and the fishermen, as is shown in this report, are often quite small partnerships of individuals who run their boats as individuals. To expect a fair result from that could be very difficult. So, it seems to me that there is a case for writing into the Bill a clear right to compensation for fishermen who are excluded from traditional fishing grounds as a result of developments given under consents by the Secretary of State. I hope that we shall get a very clear statement from Ministers that that will indeed be the case.
7.30 p.m.
Lord Whitty: Well, my Lords, I am sorry to disappoint the noble Lord, Lord Jenkin, again, and indeed the noble Baroness, Lady Miller. My understanding of the legal position, based on what I regard as good legal advice, remains the same.
I shall deal with the basic legal point first. We are talking about a public right of navigation. I shall turn in a moment to the special case of fishermen. The public right of navigation is in normal parlance and in English legal experience not a possession in the normal sense of the word. The noble Lord, Lord Kingsland, in a previous debate was clearly right that possession is an autonomous concept—that is, that Strasbourg can make up its mind at any given time about what is and what is not a possession. But it seems fairly unlikely that a public right of navigation would be regarded as a possession.
As the noble Baroness rightly pointed out, I said that—as lawyers frequently do, although I am not a lawyer—even if I am wrong on that and the public right of navigation were to be found to be a possession, the question would be whether its extinguishment is a deprivation or control of use, which is the more accurate situation in this case, and whether that would amount to a control of use for which compensation would be appropriate.
On the public right of navigation, we are talking about a restriction, which, if we have a turbine site with 200 or so turbines, relates to quite a sizeable turbine site. I think that there have been some serious problems in the course of today's debate, and to some extent in Grand Committee, between the zone—the site, which is awarded for exploration and other purposes to the contractor—and the actual installation, which would be substantially smaller. Even the biggest installations would leave plenty of space for most navigation channels to be achieved. Clearly, if installations threatened that achievement that would be a major factor in whether the consent was given in the first place. A turbine that was blocking the Humber, the Mersey or whatever, would be a major consideration that the Secretary of State would have to take into account before he granted the consent in the first place. I think the restriction would be pretty limited and therefore the
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degree of deprivation, which could be established in terms of commercial loss, would be fairly small in relation to the rights of navigation as such.
Therefore, I think it is extremely unlikely that any court would find that any compensation was appropriate in those circumstances. That is why I think the Bill as it stands remains in conformity with the European Convention on Human Rights.
In relation to the case of fishing, on which we had a separate debate in Grand Committee, the two issues have now become slightly elided. Clearly, a traditional fishing ground may or may not be a main channel of navigation in the sense of commercial traffic from fishermen, whether they are lobster or inshore fishermen. That might actually be a serious problem for them.
In those circumstances, compensation may or may not be appropriate. That situation is essentially no different—to answer the point made by the noble Baroness, Lady Miller, and supported by the noble Lord, Lord Jenkin—from a road scheme, where if a developer comes forward with a proposition which would effectively cut off the garage from access to the road, normally part of the deal is that compensation is paid to that garage owner, either by giving him a different site or by paying him cash. Those kinds of deals would no doubt be part of the development process. Either there will be a negotiated deal to the fishermen affected, if they could establish a reasonable case, or it could be—as I think I said in response to the noble Lord, Lord Jenkin, in the earlier debate—that one of the conditions of the consent was that such compensation should be paid.
Should the developer be less than willing to offer such compensation there could be an intervention, which effectively ensured that the developer did pay such compensation. As a former roads Minister, I have to say that that is not unknown in relation to developers of road schemes.
So, I think the principle is well established. It is not written in legislation but is part of development law and practice in general terms. Of course whether or not the fisherman actually suffered a loss is hugely complicated by the wider issues touched on by the noble Lord, Lord Jenkin, and the noble Baroness, Lady Miller, in relation to whether we are restricting fishing for other purposes, and whether or not that could actually be a benign proposition if they have moved away from one fishing site. That would have to be argued case by case. In other words, there could be situations where part of the developing consents, either voluntarily or as a condition of that consent, would be compensation. I do not think it is sensible for the Bill to provide for a general system of compensation.
I do not think that the limit of the right of navigation would give rise to compensation, and I think the situation of fishermen, and potentially others, would be dealt with in the same way as it is dealt with in other planning situations. I therefore do not think that we would need a scheme of compensation written in these terms into the Bill.
Baroness Miller of Hendon: My Lords, I am sorry that the Minister did not see some merit in the amendment. I think that the issue will cause a problem for a lot of people. He was saying that you might be able to appeal to someone. To whom? I do not know to whom you would appeal if you were not happy or content or what you could do about it.
Moreover, this involves not just one installation but an awful lot of them. There might be very many people who will be, if you like, not able to do the things that they want to do. I do not know quite why the Minister has set his face so much against it.
This is not to say we are not for wind farms. Nobody has ever said that. We have always said that it is probably a very good source of energy. The bottom line is that nothing is free; there is no such thing as a free lunch. Some people are going to be very badly disturbed by the idea that compensation is not payable under any circumstances.
If there are cases where compensation might be paid, to whom does one actually go? Perhaps the Minister could answer that before I withdraw my amendment. While on my feet, I thank the noble Baroness and my noble friend for intervening in the short debate.
Lord Whitty: My Lords, perhaps I may take the analogy of a road scheme. In the process of the planning permission being given to the road scheme, the garage owner would object that he was being deprived of his livelihood as a result of that scheme. Either the developer would then offer him cash or an alternative site, or the planning officer, and the planning inquiry if necessary, would say that it is a condition of his going ahead with this scheme that he pays such compensation in some form or the other.
Exactly the same applies in this case. If the fishermen think that they are going to be deprived of their livelihood as a result of the scheme, that will arise during the course of the process of giving consent. Either the developer will recognise that as compared with the developer's potential outlay and profit it would be a relatively small amount that would be payable to the fishermen, and it might be very sensible for him to recognise that on a voluntary basis, or it would be for the Secretary of State in giving that consent to make it subject to paying compensation.
All I am saying is that that could arise in particular situations, but it would not arise in general because of this part of the Bill, which relates to the public right of navigation for everybody. In general, the public right of navigation would not be significantly inhibited, such as to lead to commercial loss of that nature.
Baroness Miller of Hendon: My Lords, I thank the noble Lord for that further clarification and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Triesman: My Lords, I beg to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.

Patents Bill [H.L.]
7.39 p.m.
Report received.
Clause 1 [Methods of treatment or diagnosis]:
Earl Attlee Earl Attlee moved Amendment No. 1:
Page 1, line 20, at end insert—
"(2) In section 130(7) of that Act, leave out "(4)" and insert "(4A)"."
The noble Earl said: My Lords, the amendment stands in my name and that of my noble friend Lord Lyell. Before speaking to the amendment, it may be helpful to the House if I explain why we are not pursuing our concerns about what are now Clauses 10 and 13. It would be preferable for another place to receive and debate the Bill more or less as the Government intended.
Returning to the amendment, its objective is to increase certainty and to keep UK patent law as closely as possible in line with the practice of the European Patent Office. The 1997 Act has a "same effect" proviso, similar to that in Clause 2(5), to bring the UK law into line the that of Europe. It applies to specified sections only. Without the amendment, the proviso will not apply to new subsection (1)(1) of the 1997 Act, although it will apply to others. Slight and unnecessary differences between UK and European law make matters more complicated, and hence more expensive, for UK inventors. The amendment would make it less likely that the laws would diverge.
It might make sense to apply the proviso even more widely. It is not clear how the sections to which it will apply differ from the rest. I beg to move.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, if I may, I shall preface my remarks with one or two words about Clause 1. The present position is that methods of treatment or diagnosis are not considered to be patentable because they are not, in the words of the 1977 Act, "capable of industrial application". That was regarded as an undesirable position to uphold in the revised European Patent Convention, since medical methods are not patentable in the interests of public health. Thus, Clause 1 makes clear that inventions consisting of such medical methods cannot be patented and conforms with how such methods are dealt with under the revised EPC. The scope of the exclusion will remain the same as that under current provisions.
Clause 1 also concerns the patentability of substances and compositions that are to be used in medical methods. In particular, an invention may comprise taking a known substance, which has already been used in a medical method, and finding a new

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medical use for that substance. Clause 1 does not extend the availability of patent protection in respect of such inventions, but it does allow such inventions to be patented in a more simple and direct form than is possible at present.
New Section 4A, inserted by Clause 1, is drafted to implement articles 53(c), 54(4) and 54(5) of the revised EPC. I agree with the noble Lord that legal certainty for users is important and that any discrepancy between practice under the EPC and practice in the UK should be minimised. Noble Lords want to ensure that new Section 4A falls within the scope of Section 130(7) of the 1977 Act, but the amendment is unnecessary, because that is already the case.
If noble Lords turn to the Act, they will see that Section 130(7) applies to Sections 2 to 6. It states that the following sections are covered: from 1(1) to (4) and Sections 2 to 6. That would already include new Section 4A, so there is no doubt that the new section will have, as nearly as practicable, the same effect as the corresponding provisions of the revised European Patent Convention.
I trust that, with that explanation, the noble Earl will withdraw the amendment.
Earl Attlee: My Lords, I am grateful for the Minister's explanation. I am afraid that I did not understand it; I shall read it carefully and take advice, but I doubt that I shall return to that. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Razzall Lord Razzall moved Amendment No. 2:
After Clause 6, insert the following new clause—
"INVENTOR CONFIDENTIALITY
In section 13 of the 1977 Act (mention of inventor), after subsection (1) there is inserted—
"(1A) When the applicant for a patent is not the inventor or joint inventor of the invention, the inventor or joint inventor shall have a right not to have their names and addresses mentioned on any patent granted for the invention and shall also have a right not to be so mentioned if possible in any published application for a patent for the invention and, if not so mentioned, a right not to be so mentioned in accordance with rules in a prescribed document.""
The noble Lord said: My Lords, the amendment had a good run through in Grand Committee. I fear that, having listened to the Minister explain why the amendment was not being accepted by the Government, I must return to it on Report. For many people, this Bill is somewhat dry—albeit at this relatively late hour, the attendance in the House indicates the dryness of the topic. It is nice to see the noble Lord, Lord Haskel, in his place, adding to the general jollity of the occasion.
Of all the points made and amendments tabled to the Bill, this is the one that goes wider than the dry dust of patent legislation. What we are talking about here is potential threats to the lives of inventors if names and addresses appear on patent applications. We are aware that in applications made by bio-science companies, there is currently a practice, especially by animal welfare extremists, of putting the individual's personal
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details on the Internet and in other public media. That means that the development of the Internet has significantly increased the risk for inventors who, as we know, have had significant threats to their lives.
My amendment would make a small step to protect those inventors, especially in those the field of bio-science. In every other field, in which there is no possible life-threatening implication to having their name published, most inventors would be delighted to have their name published, because it goes to their credit for their career. So my amendment does not say that no one should have their names and addresses mentioned; it simply gives the right to an inventor who is worried—that is likely to be in the bio-science area—to have his name excluded.
The two arguments made by the Government were that this is of course a finely balanced argument and that those of us who table amendments perhaps make the case too strongly and do not recognise the balance of the argument. That does not mean that we do not think we are right, but we recognise that that argument is finely balanced.
The first argument is that when the Government consulted, they received an adverse response to that suggestion, especially from the patent industry—the agents—who all said that that would make it difficult to perform proper searches and would make their lives much more difficult. That may make their life more difficult, but that is not quite the same as the life-threatening risks to inventors in the small number of cases where the right would be exercised. So I am not persuaded by that argument. I understand it, and I understand what the patent agency community said—it is a perfectly respectable argument; but it does not override the need for the Government to give certain inventors the ability to have that protection. The second argument made is that other countries, especially the United States, do not have this protection. As I understand it, in the United States, the inventor must be the applicant. Again, that is fine, but the inventor does not have to choose to put the application forward. If an inventor who is working for XYZ Ltd or XYZ plc fears that if the application is made, his or her life will be under threat, he or she does not have to do it. So, again, there is a self-protection provision. He or she can say to his or her employer, "Actually, I am not prepared to make this application because I think that if I do, my life could be in danger". Again, I do not think that that is a satisfactory argument. So I urge the Government to think again. I suspect that when the matter went out to consultation, they may have been minded to go down that route.
The third argument used in this regard—the Minister will no doubt use it—is that the intention is to involve the option for addresses not to be disclosed. That is all very well, but with modern search engines, as I said in Grand Committee, with a name like mine, or that of the noble Earl, Lord Attlee, you would not need to be a nuclear physicist of utmost renown to be able to discover where we live. Smith might be harder, or even Sainsbury—they might get the wrong Sainsbury—but the ability to exclude addresses does not really give the protection that

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any inventor needs in terms of confidentiality. I hope that the Minister has had an opportunity to think about what we discussed in Grand Committee. I beg to move.
Earl Attlee: My Lords, I am afraid that I omitted to put my name to the amendment proposed by the noble Lord, Lord Razzall, but I fully support his reasoning, and I would support him if he chose to test the opinion of the House.
We are living in different times. In the 1950s, the noble Earl, my grandfather, used to go home by public transport, and everyone knew where he lived. It is now easy to work out an address, given a name, especially if it happens to be Razzall or Attlee, as mentioned by the noble Lord. It is true that other countries require the name and address of an inventor to be published, but there will be other significant differences in their legal system. They will have other checks and balances to protect the individual. If we stop making the release of the inventor's name compulsory, other countries might consider whether their arrangements need to be reviewed.
The Minister will point to the requirement of researchers to know the inventor's name. The noble Lord, Lord Razzall, suggested that it would be a small number of inventors who would want to keep their names confidential. In Committee, I suggested that it should be possible to give an inventor who requests it an anonymous reference number. Of course, once he starts using that reference number, he must keep using it. Most inventors would want their names to be published—in fact, it is thought that is the reason behind the significant number of patent applications. However, there will always be some who desire privacy. In Grand Committee, the Minister said that the public had a right to know the inventor's name, as part of the deal when the state bestows a right in the form of a patent. It is important to remember that the applicant enjoys the right, not the employee inventor, who normally gets only his usual reward as an employee, except if he is enjoying compensation under Section 40. I support the amendment proposed by the noble Lord, Lord Razzall.
Lord Sainsbury of Turville: My Lords, the noble Lord, Lord Razzall, argued in Committee and again today that there is a balance to be struck between the right of the public at large to have access to information that is relevant to patents, and the right of a more limited group of individuals to have their personal details protected. Other noble Lords supported his view. I have had time to reflect on the arguments put to me in Committee, and I have listened carefully to the points made by the noble Lord today.
I remain of the view that it will be only of fairly limited benefit to an inventor if he can have his name and address kept confidential in the UK. In many cases, patents will have been applied for in other countries where the inventor's details will be made public. The noble Lord, Lord Razzall, was somewhat dismissive of this point in Committee and again today, on the rather curious argument that you did not have to apply for a patent, but with patents, particularly in
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the biosciences, almost the first place you go to is America to do that. That does not stop it from being an obviously relevant point.
In light of what I have heard from the noble Lords opposite, both today and in Committee, I am prepared to provide the limited benefit that will result from changing UK practice in this respect. We will therefore bring forward an amendment at Third Reading that will ensure that an inventor may have his name and address kept confidential at the patent office in appropriate circumstances. This amendment may simply make one or two minor adjustments to the 1977 Act, which will clear the way for the necessary procedures to be set out in secondary legislation. We will be looking carefully at the drafting necessary to achieve this. It will not become possible for a patent applicant or patent holder to keep his name and address confidential, but we will no doubt wish to consult users of the patent systems before setting out the detailed mechanism in rules. I hope that the noble Lord will accept our undertaking and withdraw his amendment.
Lord Razzall: My Lords, I am obviously delighted to have made some progress on this point. I thank the Minister for his courtesy in dealing with it, and I am happy to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 [Restrictions on applications abroad by United Kingdom residents]:
Earl Attlee Earl Attlee moved Amendment No. 3:
Page 4, line 3, leave out from "security;" to end of line 5.
The noble Earl said: My Lords, the objective of this amendment is to make the law clearer and lift vague and unnecessary burdens from industry and its advisers. Under current law, Section 22 of the 1977 Act gives the comptroller power to control publication of information in patent specifications if to do so would be prejudicial to the defence of the realm or the safety of the public. To allow for this, Section 23 provides that patent applicants must not file abroad until six weeks after filing in the UK without special leave. To make life easier, the Bill as amended abolishes the six-week period for all information not prejudicial to national security or the safety of the public. This is most welcome. However, it is not completely clear what is meant by the safety of the public. No doubt it overlaps largely with national security. If it overlaps completely, it is redundant, and if not, what else does it include? Many applications include information that is capable of misuse; for example, toxicity data for drugs or pesticides. The problem is that applicants may have to err on the side of caution and adhere to the Section 23 provisions, thus negating the Government's laudable deregulation aims.
The Minister will say that the safety of the public has been in the Act since 1978, and has not caused problems. That is a reference to Section 22, the power of the comptroller to restrict the release of information. The comptroller must make the judgement on behalf of the applicant's Section 23 notification, if I may put it

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that way. The Bill as drafted will require the applicant to make that judgment, but he may not be well equipped to do so. I beg to move.
Lord Triesman: My Lords, as I said in Grand Committee, the provisions now in Clause 7 would provide considerable benefit for UK residents wishing to file patent applications in other countries. The existing general restrictions on the filing of such applications in Section 23 of the 1977 Act would be deregulated by this clause. They would only apply where the application contained information which, if published, might be prejudicial to national security or the safety of the public. The noble Earl, Lord Attlee, asked what the distinction between those might be. I have also sought to satisfy myself as to what the distinction might be. To be candid, it is not easy to give detailed examples, but it is certainly the case that the security services believe that the comprehensive nature of the two expressions covers every kind of eventuality that could be conceived. That is advice that it would be better to take. Therefore, retention of references to the safety of the public in Section 22 and including it in Section 23 achieves that. It is possible to come up with some sorts of hypothetical examples, but that would not be particularly sensible.
The effect of the amendment would be to further limit the application of Section 23, and it would remove restrictions where publishing the information in the application might be prejudicial to the safety of the public. As I hope I made clear in Committee, an important reason for referring to both national security and the safety of the public in this section is for parity with Section 22 of the 1977 Act. It provides continuity in that sense. Section 22, which sets out procedures restricting or prohibiting publication of information in patent applications filed at the UK patent office has, for more than 25 years, covered information prejudicial to the safety of the public and information that is required to be restricted for the defence of the realm.
It is true that the provision in Section 22 relating to the safety of the public has been invoked on few occasions. Although there may be relatively few circumstances in which the provision might be needed, an application could contain information that might not fall within the ambit of national security but could be of a nature such as to necessitate prohibition, in order to protect the public. Moreover, we cannot always predict the future direction of innovation or the ingenuity of inventors, so we would want to ensure that the provision could serve a more important purpose in safeguarding the public in the future.
In order to ensure that no necessary protection for the public is lost—now and until the next time that we have an opportunity to update patents law—the simple and safe solution is to follow the precedents and retain the provision in this form. I hope that, in the circumstances, the noble Earl, Lord Attlee, and the noble Lord, Lord Lyell, who is also rightly
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associated with it—he is not in his place this evening—will feel that it is appropriate to withdraw the amendment.
8 p.m.
Earl Attlee: My Lords, I thank the Minister for his response. He said that the two phrases would cover every eventuality. That is what worries me. Applicants will play safe, and my fear is that the deregulation will not work as well as the Minister intends.
I am also not convinced that the Minister has grasped all my points, but I do not think that it matters. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 12 [Threats of infringement proceedings]:
Earl Attlee Earl Attlee moved Amendment No. 4:
Page 6, leave out lines 25 to 28 and insert—
"(b) either—

(i) the patent alleged to be infringed is not shown by the claimant to be invalid in a relevant respect, or

(ii) the patent alleged to be infringed is shown by the claimant to be invalid in a relevant respect and the defendant or defender proves that the time of making the threat he had no basis for believing the patent to be invalid in that respect.""

The noble Earl said: My Lords, the objective of the amendment is to hold the balance between honest patentees who believe that their legitimate rights are being infringed and honest third parties who are entitled to continue lawful activities without harassment.
The object of Section 70 is to prevent powerful patentees oppressing small traders by claiming dubious rights that the latter cannot afford to contest. It also hinders all patentees, large and small, from enforcing legitimate rights. There is no point in having rights that cannot be asserted. It should be possible to challenge apparent infringers without having to issue a writ first.
The useful reforms of the legal system brought about by the noble and learned Lord, Lord Woolf, emphasise the importance of reasonable discussion to achieve settlement. Section 70 obstructs such discussions. Just as threats may be issued oppressively or for purely tactical reasons, so may actions for threats. Suing a lawyer for issuing threats on behalf of his client can drive a wedge between the client and his adviser and deny the client justice. Although lawyers may find it convenient to be exempted completely from threats actions, the provision might also allow them to evade the intentions of Section 70. That is why I opposed the amendment tabled by the noble Lord, Lord Razzall, on that point in Grand Committee.
The amendment would allow patentees and their lawyers to issue threats believed in good faith to be justified. The burden would be on the issuer of the threats to prove his good faith. I beg to move.
Lord Sainsbury of Turville: My Lords, I am grateful to the noble Earl for the explanation of the thinking behind the amendment. Taking the amendment at face value, as it is on the Marshalled List, I find it puzzling. It would involve substituting our proposed new Section 70(4)(b) with some new wording. The new wording does not follow from the wording of the proposed new subsection (4)(a), either grammatically or logically. I strongly suspect that the noble Earl's intention is to replace existing subsection (2)(b) of Section 70. The noble Earl's proposed paragraph (b)(i) reproduces the wording of subsection (2)(b). The proposed paragraph (b)(ii) then adds to that existing wording.
I am helped in that piece of deduction—I hope that it is correct—by having seen a paper from the Chartered Institute of Patent Agents that contains exactly that proposal. My reply will therefore reflect the proposal put forward in that paper. I think that it mirrors the noble Earl's proposal.
The amendment proposes an additional way in which a patent holder may successfully defend himself against an action for making unjustified threats. The patent holder may genuinely believe that he has a valid patent and that it is being infringed. If he is sued for making threats against someone, the court may find that the acts under dispute amount to infringement of the patent. In that case, the patent holder is excused, as no unjustified threats were made. However, in those circumstances, the court may also find that the patent is invalid. If so, the patent holder is robbed of his defence and is found to have made unjustified threats, despite the fact that he was right in his assessment that infringement was taking place.
I agree that that seems unfair and may dissuade a genuine patent holder who has correctly assessed that infringement is taking place from seeking to resolve the dispute. As I understand it, the amendment addresses the apparent unfairness. If the court has found that the acts under dispute would have constituted infringement but also that the patent is invalid, the patent holder will not be held liable for making unjustified threats, provided that he shows that he genuinely had no reason for realising that his patent was invalid.
The point was not raised with us during the consultation. Had it been, we would, I think, have welcomed it. I am therefore prepared to agree an amendment that addresses the noble Earl's concerns and will table such an amendment at Third Reading. In other words, we have put the most favourable interpretation that we can on the noble Earl's amendment and will table amendments to take action on the point. We could not be more helpful than that, and I hope that the noble Earl will withdraw his amendment on that basis.
Earl Attlee: My Lords, I am extremely grateful for the Minister's interpretation of my amendment. I apologise for the drafting. I must confess that, when I studied the detail of it, I could not quite work it out myself.
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The Minister has given a helpful reply, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Attlee Earl Attlee moved Amendment No. 5:
Page 6, line 41, leave out "best endeavours" and insert "reasonable endeavours in all circumstances"
The noble Earl said: My Lords, we return to the issue of the meaning of the phrase "best endeavours", in what is now Clause 12.
I remind the House that Clause 12 provides for the insertion of new subsections into Section 70 of the Patents Act. 1977. They give a defence in threats proceedings, when a person finds that he needs to resort to pursuing secondary infringers—often retailers or wholesalers. The defence is that he has used his "best endeavours" to determine who was the primary infringer or importer.
In support of his argument, the noble Lord, Lord Triesman, referred to the IBM case, decided in the Court of Appeal. It is true that the finding watered down the phrase "best endeavours", but I understand that, previously, it meant "to the point of commercial ruin". However, it still meant that IBM was expected to appeal a planning decision which, presumably, it reluctantly agreed with.
I believe that the Bill as drafted will not achieve what the Minister desires and that Clause 12 will be far less valuable. If my amendment is agreed to, the patent holder will still be obliged to try very hard o identify the primary infringer. However, the courts will be able to take into consideration all the circumstances and the reasonableness of the patent holder's actions. I beg to move.
Lord Lyell: My Lords, I support my noble friend Lord Attlee, who has raised an interesting point. I will not weary your Lordships tonight with the case of IBM; I think it was Mr Justice Laddie who had things to say about it.
My noble friend has argued his case cogently—I think there is, or can be, some difficulty with the interpretation of "best endeavours" or other words in quite how far the patent holder or the defendant will go in these cases. Perhaps the Minister can explain. I think that my noble friend's amendment has merit, and we are looking for clarity.
Lord Sainsbury of Turville: My Lords, it was clear in Committee that the noble Earl, Lord Attlee, had reservations about the best endeavours threshold setting too high a standard. In particular, he was concerned that it would, as he put it, hit SMEs hardest. I recall that the noble Lord, Lord Lyell, also expressed his concern about this point in Committee. I have listened carefully to the arguments put forward again this evening.

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As my noble friend Lord Triesman made clear in Committee, the intention of our best endeavours threshold is not to set an impossibly high standard. If we thought that it did so, we would not be putting it forward. Neither is it our intention to set a threshold which is easier for some to achieve than others. In particular, we would not wish to weigh the scales unfairly against the small or medium-sized patent holder. However, I am not convinced that this is what the threshold actually does.
The wording in Clause 12(4) makes it clear that the person concerned—I emphasise that point—must use his best endeavours. It does not measure his best against an absolute standard. Instead, the standard that he must attain is to make the efforts that a prudent, determined and reasonable person in his position would make. Since this is the case, the circumstances in which he finds himself—that includes the resources that are available to him—are an important consideration.
The endeavours that a multinational firm can make may well, when all the circumstances are considered, go further than the endeavours that can be made by a small business with five employees. So the person concerned will not necessarily be required to match what someone else with more time, money and resources could do. He must do his best to track down the alleged primary infringer, but that does not necessarily mean that he is required to do more than he is reasonably capable of doing.
I hope that, with those words, I have been able to allay the fears of noble Lords opposite in this respect and that they will agree that the current wording achieves the right balance without being unreasonably hard on any particular person or size of business.
Earl Attlee: My Lords, unfortunately, my legal advice differs from that of the Minister. I fear there will not be a meeting of minds on this issue. Therefore, I wish to test the opinion of the House.
8.12 p.m.
On Question. Whether the said amendment (No. 5) shall be agreed to?
Their Lordships divided: Contents, 28; Not-Contents, 93.

Division No. 4

CONTENTS

Attlee, E.

MacGregor of Pulham Market, L

Baker of Dorking, L.

Bridgeman, V.

Monro of Langholm, L.

Brookeborough, V.

Naseby, L.

Byford, B.

Norton of Louth, L.

Carnegy of Lour, B.

O'Cathain, B.

Cope of Berkeley, L.

Patten, L.

Dixon-Smith, L.

Reay, L.

Fookes, B.

Renfrew of Kaimsthorn, L

Glenarthur, L.

Laird, L.

Rotherwick, L. [Teller]

Lamont of Lerwick, L.

Seccombe, B. [Teller]

Lyell, L.

Sharples, B.

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Shaw of Northstead, L.

Waddington, L.

Thomas of Gwydir, L.

Windlesham, L.

NOT-CONTENTS

Acton, L.

Jones, L.

Amos, B. (Lord President of the Council)

Layard, L.

Lea of Crondall, L.

Andrews, B.

Livsey of Talgarth, L.

Ashley of Stoke, L.

Lockwood, B.

Barker, B.

Lofthouse of Pontefract, L.

Bassam of Brighton, L.

Macdonald of Tradeston, L.

Berkeley, L.

McIntosh of Haringey, L.

Brooke of Alverthorpe, L.

McIntosh of Hudnall, B.

Brookman, L.

MacKenzie of Culkein, L.

Campbell-Savours, L.

Maddock, B.

Carter, L.

Mar and Kellie, E.

Chandos, V.

Masham of Ilton, B.

Clark of Windermere, L.

Clarke of Hampstead, L.

Massey of Darwen, B.

Cohen of Pimlico, B.

Miller of Chilthorne Domer, B.

Dahrendorf, L.

Newby, L.

David, B.

Palmer, L.

Davies of Coity, L.

Pendry, L.

Davies of Oldham, L. [Teller]

Phillips of Sudbury, L.

Dean of Thornton-le-Fylde, B.

Pitkeathley, B.

Dixon, L.

Radice, L.

Eatwell, L.

Ramsay of Cartvale, B.

Elder, L.

Razzall, L.

Evans of Parkside, L.

Rendell of Babergh, B.

Evans of Temple Guiting, L.

Robertson of Port Ellen, L.

Farrington of Ribbleton, B.

Rooker, L.

Faulkner of Worcester, L.

Sainsbury of Turville, L.

Filkin, L.

Scotland of Asthal, B.

Finlay of Llandaff, B.

Shutt of Greetland, L.

Fyfe of Fairfield, L.

Simon, V.

Gibson of Market Rasen, B.

Smith of Clifton, L.

Golding, B.

Smith of Leigh, L.

Gordon of Strathblane, L.

Steel of Aikwood, L.

Goudie, B.

Stone of Blackheath, L.

Graham of Edmonton, L.

Symons of Vernham Dean, B.

Greaves, L.

Taylor of Blackburn, L.

Grocott, L. [Teller]

Harris of Haringey, L.

Thomson of Monifieth, L.

Harrison, L.

Thornton, B.

Haskel, L.

Triesman, L.

Hilton of Eggardon, B.

Turnberg, L.

Hogg of Cumbernauld, L.

Walmsley, B.

Howie of Troon, L.

Warwick of Undercliffe, B.

Hoyle, L.

Whitaker, B.

Hughes of Woodside, L.

Whitty, L.

Hunt of Kings Heath, L.

Wigoder, L.

Janner of Braunstone, L.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
8.21 p.m.
Clause 13 [Opinions by Patent Office as to validity or infringement]:
Earl Attlee Earl Attlee moved Amendment No. 6:
Page 7, line 29, at end insert—
"( ) The examiner shall seek comment from any third party proprietor, licensee or alleged infringer before giving an opinion adverse to that party."
The noble Earl said: My Lords, the amendment relates to opinions given by the Patent Office on what is now Clause 13. We believe that the proposed system would be open to abuse and undesirable outcomes if official opinions were given by the Patent Office without the knowledge of third parties. There could be a ridiculous situation in which the Patent Office has

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correctly given an opinion that a patent is being infringed but the alleged infringer knows that the patent is invalid by reason of very clear prior art. If the alleged infringer knew that an infringement opinion was being sought, he could easily apply for a validity opinion himself.
The amendment states:
"The examiner shall seek comment from any third party proprietor, licensee or alleged infringer before giving an opinion adverse to that party".
If the examiner believes that the person seeking the opinion has no case, there will be no need to trouble other parties. I beg to move.
Lord Sainsbury of Turville: My Lords, before considering the amendment tabled by the noble Earl, Lord Attlee, and the noble Lord, Lord Lyell, I should first like to make some general points regarding the proposed opinion procedure, partly in response to comments made in our debate in Grand Committee.
The noble Earl, Lord Attlee, spoke in Committee of his concern that proposed new Section 74B(2)(d) was not compliant with TRIPS or Article 6 of the European Convention on Human Rights. However, let me reassure the noble Earl that the proposed new section does not contravene either TRIPS or the convention. The provision is in place to remove any overlap or confusion with existing procedures. It ensures that, in those instances where there will already be a sufficient means of challenging the outcome of a review, an automatic right of appeal from the new procedure for review of an opinion by the Patent Office can be excluded. The power will be exercised only in appropriate cases.
In Committee, the noble Earl, Lord Attlee, stated of opinions that,
"I am of the view that the only use would be as a sanity check".—[Official Report, 8/3/04; col. GC 377.]
I agree wholeheartedly with the idea that opinions will help to introduce greater sanity into the area of patent enforcement. What is needed is a procedure which, because of its non-binding nature, can be used at any stage in the life of a patent to help the patent holder or a third party in their decision-making processes and which does not compel them to act in a particular way.
It is for that reason that the Patent Office is best placed to be the provider of such opinions. The Patent Office has an excellent reputation for the quality of its work granting patents, as evidenced by its recent success in achieving the international ISO 9001:2000 quality accreditation, and is experienced in dealing with issues of validity and infringement. The advantages of the opinion procedure, which is a generally rapid, paper-based procedure, militate strongly against making it a binding one. This is to ensure that, precisely because the Patent Office is, as the noble Lord, Lord Razzall, said in Committee,
"an organ of the state",—[Official Report, 8/3/04; col. GC 374.]
a patent holder or third party will have every right to ignore the opinion if he so chooses. In our various discussions with the patent judges on this issue, they could see a greater need for a non-binding opinion
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process that could assist in the early settlement of disputes rather than the need for another binding litigation procedure.
I now turn to the amendment itself, which would make a change to new Section 74A(5) to require an examiner to obtain comment from a number of parties likely to be affected prior to issuing an adverse opinion. As I said in Committee and at Second Reading, much of the detail for the opinion procedure will be laid down in secondary legislation following further consultation with stakeholders on implementation. However, in order to ensure that the maximum benefit is derived from the opinion process, it has always been our intention to ensure that the request for an opinion is widely notified. This would ensure that those who are directly affected, for example, the patent holder, as well as those who have an interest can all submit their comments and observations for consideration by the examiner. However, at all times, we must make sure that the key advantages of the opinion procedure—its low cost and its speed—are not compromised.
There are a number of steps that we can take in order to ensure that a request for an opinion is widely advertised and notified. Clause 13(3) ensures that notification of the request for an opinion and of the outcome of the opinion can be made on the patents register. Any party who has an interest in a particular patent, such as the patent holder, a licensee or a third party competitor of the patent holder, can ask to be informed whenever such an entry on the register is made. This is a service that the Patent Office can provide upon payment of the appropriate fee.
In the case where the requester is not the patent holder we envisage that the Patent Office will notify the patent holder directly that a request for an opinion as to the validity or infringement of his patent has been received. We also propose to consult on whether or not it would be appropriate for the Patent Office to notify directly any party identified by the requester as having an interest. They could then be invited to submit observations on the question at issue within the appropriate time limit.
It is also proposed to notify all requests for an opinion in the Patents & Design Journal, which records the progress and status of all patent applications and granted patents and is readily available in electronic as well as paper form.
I hope that this will reassure noble Lords that requests for opinions will be widely notified and that all parties who have an interest will be able to be involved before the examiner issues an opinion. I believe that this will ensure that the interests of all, including the public interest, are safeguarded and will avoid the type of uncontested pre-emptive strike referred to by the noble Lord, Lord Razzall, in Grand Committee.
It is appropriate, and more consistent with what happens for other procedures under the 1977 Act, for details of the procedure to be laid out in secondary legislation, the Patent Rules. I would therefore ask noble Lords to accept my reassurance that their concerns will

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inform how we draw up the secondary legislation to follow from the Bill. With this reassurance, I would ask them to withdraw this amendment.
Earl Attlee: My Lords, I thank the Minister for his reference to the concerns that I raised at Grand Committee. Our concerns about the opinions provisions still remain. However, I thank the Minister for his interesting and illuminating reply. I think that it meets my concerns, I hope that it does, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

Paternity and Adoption Leave (Amendment) Regulations 2004
8.28 p.m.
Lord Davies of Oldham Lord Davies of Oldham rose to move, That the draft regulations laid before the House on 9 February be approved [10th Report from the Joint Committee].
The noble Lord said: The Government introduced an important set of measures in April 2003 that gave parents more choice and more support than ever before to balance work and family life.
All mothers can now take 26 weeks ordinary maternity leave with most able to take an additional 26 weeks additional maternity leave, giving up to one year off in total. Statutory maternity pay and maternity allowance are now paid for 26 weeks and the standard rate was increased to £100 per week. These provisions give mothers far more choice in the vital first year of a child's life.
The Government also introduced a brand new right to two weeks' paid paternity leave. This acknowledged the crucial role played by fathers at birth both in supporting the mother and in caring for the child. For the first time the important role of adopters was recognised as they were given similar entitlements to birth parents. They can now take one year's adoption leave with 26 weeks' statutory adoption pay. As this was important new legislation we have been carefully monitoring its implementation. In doing so we have discovered a few minor oversights. The amendments we are debating today will smooth out the glitches and ensure that the new rights work as we said they would.
There are three amendments within the two statutory instruments before your Lordships today. The first removes the condition that an employee has to supply the name and date of birth of the child to be adopted if the employer requests it. There can be no doubt that the privacy of the child should be protected. Employers can still ask to see evidence of the expected placement if they suspect that the claim is false.
The second amendment deals with employees returning to work after taking adoption leave. It makes sure that they have the right to return to work on terms and conditions no less favourable than would have applied if they had not been absent. The Government clearly stated their intention to treat adoptive parents the same as mothers on maternity
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leave as far as possible—a principle that was widely accepted during the extensive consultation on the new laws for working parents. This amendment brings adopters in line with women returning from maternity leave.
The third amendment aligns the payment process for statutory paternity pay with that for statutory maternity pay and statutory adoption pay. It will make certain that employees whose second week of statutory paternity pay begins on or after the date of any increase to the statutory rate will receive the higher amount in the second week rather than the existing rate. The existing legislation was drafted to deal with paternity periods that were taken before 6 April 2003 by fathers whose babies arrived early. This change will simplify the process for both employers and employees.
These are minor technical amendments intended to fine-tune the existing regulations. There will be little impact on employers but it will make a difference to employees and their children as the right to privacy will be upheld and neither adopters nor fathers will be disadvantaged by taking their statutory entitlements to leave. I commend the regulations to the House.
Moved, That the draft regulations laid before the House on 9 February be approved [10th Report from the Joint Committee].—(Lord Davies of Oldham.)
Earl Attlee: My Lords, I thank the Minister for his explanation of these two very straightforward regulations. Both of them were described by the Minister and his colleagues in the Standing Committee on Delegated Legislation in the other place as "fine-tuning" of the original regulations which came into effect just under a year ago.
Perhaps I can remind your Lordships of what my honourable friend, the Member for Malden and Chelmsford East, then the Shadow Secretary of State for the DTI, said about the Employment Act 2002 during its passage through Parliament. He said:
"We welcome measures to help parents maintain their place in employment while at the same time spending time with their family, particularly during their children's early years".
For that same reason, we support the regulations which clarify those regulatory measures.
The removal of the right of an employer to demand details of the name and date of birth of the adopted child must be right. That was a piece of over-regulation which impinged on the child's right to privacy, which is carefully guarded in the case of adopted children. The number of possible cases where some dishonest employee might try to pretend to adopt a child to get some benefit must be so negligible as to make that particular requirement a gigantic hammer to smash a tiny nut.
The other two amendments, one to refine the terms and conditions on which an employee will return to work, and the other, in the weekly pay rates regulation to adjust the method of calculating pay, both seem to be innocuous.

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I have only one question for the Minister. His colleague told the Standing Committee in the other place that:
"The cost … to employers is negligible".—[Official Report, Commons, 8th Standing Committee on Delegated Legislation, 10/3/04; col. 6.]
But he could not give any figures of the actual cost because the Government are waiting for the Inland Revenue to report via the annual PAYE returns, which are due in May.
I ask the Minister to ensure that, when the whole PAYE report is available, the figures for the cost of these regulations are extracted from it and made available in the form of a Written Statement on the record for the benefit of noble Lords and other interested parties, including employers' associations and particularly the Federation of Small Businesses and the Small Business Bureau.
As I said earlier, we see no objection to either of these two sets of regulations.
Baroness Barker: My Lords, I, too, thank the Minister for introducing the regulations. I agree with him and the noble Earl, Lord Attlee, that they constitute very welcome tidying up amendments. I am very glad that the Government have taken on board the points made by adoption agencies and others that the regulations as they were previously would not work.
I have a couple of questions for the Minister that I accept he may not be able to answer this evening. First, will the regulations, along with other changes that were made to improve the employment terms and conditions of adoptive parents, be evaluated in the long term? This is a worthwhile policy which had the support of these Benches when it was going through. However, it would be good to know whether there is to be a longitudinal study of the economic effects and benefits of keeping families, and particularly fathers, in touch with children but also in touch with the world of work.
Secondly, are the provisions of the Adoption and Children Act that relate to special guardianship similarly covered in terms of a right to employment leave? I too noted the point made by the noble Earl, Lord Attlee, that, unhappily, the Federation of Small Businesses has raised some objections to these regulations. I believe that the noble Earl's suggestion concerning a report would be welcome, not least to small businesses, to enable them to see the overall effect of the benefits of the measure. Those of us who are normally more concerned with adoption regulations than employment regulations know how important in psychological terms the presence of parents can be at an early point of a child's placement. I am sure that the presence of fathers at an early stage in a placement must have a beneficial effect on the long-term stability of that placement. It would be good to know whether there is research to that effect.
Lord Davies of Oldham: My Lords, I am grateful to the noble Earl and to the noble Baroness for their broad welcome for the regulations which, as we have indicated, are minor in their effect hut, none the less, important.
The noble Earl, Lord Attlee, asked me about the effect on employers. I can assure him that there will be minimal costs on employers because of the technical nature of the changes. They merely implement the policy that should have obtained over the past year but which, due to slight defects which we have now put right, did not. There are only 3,500 adoptions a year so adoption leave will be a rare occurrence even for the very largest of employers.
I emphasise to the noble Baroness, Lady Barker, that the costs involved are marginal. The noble Baroness struck a welcome note when she talked of the necessity of studying the impact of legislation, and particularly the necessity of studying what we all recognise is a very important social feature that we need to get a grip on; namely, the whole question of the costs of parenting and the advantage to the child of policies being pursued that encourage both parents to play a full role right from the birth of the child.
I do not think that anyone is in any doubt that one of the great social challenges that we face is enhancing family life and support for children and making sure that they are well looked after. The relatively minor costs in early years can reap great dividends if children behave in a social manner in their teens and later. Consequently, this is investment well spent, and why the Government address themselves to these issues with considerable enthusiasm. I can therefore say to the noble Baroness, Lady Barker, that we do have a longitudinal study in progress on the question of the extent to which fathers are in touch with their children. We certainly intend to make sure that we have the evidence which both identifies whether we are pursuing the right policies, and which will give us a guide to any changes that need to be effected. That is most welcome.
I cannot reply to her on the issue of guardianship. We have no information on that, and the orders do not directly apply to that. But I will be happy to write to her if I have additional information.
On the basis of those responses, I commend the regulations to the House.
On Question, Motion agreed to.

Statutory Paternity Pay and Statutory Adoption Pay (Weekly Rates) (Amendment) Regulations 2004
Lord Davies of Oldham: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the draft regulations laid before the House on 9 February be approved [10th Report from the Joint Committee].—(Lord Davies of Oldham.)
On Question, Motion agreed to.

Renewables Obligation (Amendment) Order 2004
8.42 p.m.
Lord Davies of Oldham Lord Davies of Oldham rose to move, That the draft order laid before the House on 24 February be approved [10th Report from the Joint Committee].
The noble Lord said: My Lords, the draft order is the culmination of a technical review of the Renewables Obligation Order 2002, set up to check that the order was working as originally intended. It also represents the outcome of a consultation on the issue of late payments made into the buy-out fund. The changes proposed are divided into two types: those designed to enhance the likelihood of achieving a 10 per cent target by 2010, and those of a more administrative nature. In explaining the provision, I will of course focus primarily on the former.
I would like to say a little at this point on how effective the obligation has been since it came into force in April 2002. We have seen a step change in renewable energy projects commissioned and planned. When I say "planned" I mean the number of projects which have now come off the drawing board and for which planning consent is being sought. The wind industry trade association has calculated that nearly 500 megawatts of new capacity will be built this year, out of 2,000 megawatts of consented projects. Offshore wind and electricity production is now really taking off, with over 1,200 megawatts consented under round one and, of that, North Hoyle at 60 megawatts has now been commissioned. A further 7.2 gigawatts of offshore wind projects have been offered site leases under round two. It is the renewables obligation that has stimulated this level of renewables development, and the order before us today is designed to improve the investment climate for renewables even further.
Investor confidence is clearly very important and the extension of the profile of the obligation—from 10.4 per cent in 2010–11 to 15.4 per cent in 2015–16—will also be an important factor in this. We have already announced this, and we shall be consulting on it later this year with the intention of legislating in a year's time. The Renewables Innovation Review confirmed that 10 per cent renewables electricity by 2010 is achievable, while highlighting the importance of wind energy in achieving this.
Let me turn to the main provisions of the order. There are five main provisions on which I wish to focus: co-firing, conversion of fossil fuel stations to biomass, smaller generating stations, NFFO sites and the recycling of late payments into the buy-out fund. Of these, the most significant change is to the rules for co-firing.
By co-firing, we mean the dual firing of biomass with fossil fuel, usually coal. We are using the co-firing of biomass, which includes energy crops, as a transitional measure to encourage the planting and use of energy crops
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as a fuel for electricity generation. Our existing fossil-fuelled generating stations are able to burn a proportion of biomass, including energy crops, and this is what the renewables obligation encourages by awarding ROCs for the electricity produced from the biomass element. At the moment, to be eligible for renewable obligation certificates—with the leave of the House, I shall now refer to them as ROCs—co-firing generating stations must have 75 per cent of their biomass by energy content as energy crops from 2006 and the eligibility of co-firing for ROCs ceases in 2011. After a detailed study on co-firing, we have concluded that more time is needed to develop energy crops and that farmers and generators need greater security. The requirement for some biomass to be energy crops has therefore been deferred until 2009, rather than 2006, and thereafter there will be a stepped increase. Co-firing stations will continue to be eligible for ROCs until 2016, giving time for farmers to harvest three full crops of new short rotation coppice. To balance this and to reduce the risk of co-firing ROCs flooding the market, the amendment order tightens the cap on co-fired ROCs that may be used to meet an individual supplier's obligation. This will be progressively reduced from 25 per cent currently to 10 per cent in 2006 and to 5 per cent in 2011 until 2016.
I am aware that concerns have been raised that we have not limited energy crops to those grown in this country. I should like to comment on that briefly. Electricity generated from biomass is eligible for ROCs whether the biomass is imported or produced here. This will not change as a result of the order. The obligation is a market mechanism, leaving generators free to decide on the source of their fuel. Any restriction on the source of the fuel would not be permissible under international trade rules and would also deprive generators of a source of fuel, some of which is waste with no other end use. However, we expect the amount of imported biomass to decline as home grown energy crops increase. DRAX power station, one of our largest, last week announced trials of UK-sourced biomass for its co-firing; it has previously been using imported fuel.
Staying with biomass, the amendment order will permit fossil fuel generating stations to convert to biomass without refurbishment. At present, most generating stations, other than co-fired stations and micro hydro, if built before 1990, have to refurbish before they can claim ROCs. By eliminating this requirement for stations converting to biomass, we shall give a boost to this sector.
We have also made provision for small generating stations—those of 50 kilowatts DNC or less—to accumulate output and to claim ROCs on the basis of their annual rather than their monthly output. Although eligible for ROCs, at present their monthly output is often too low to claim any ROCs, but in future they would be able to acquire a few on the basis of their annual use. This will benefit those such as homeowners who have put a PV panel on the roof of their house.
Another of the changes relates to NFFO contract sites that have not been developed. There are a large number of NFFO contracts not yet commissioned—some 1,500MW of capacity. As the order currently stands, projects on those sites are deterred from being developed by others as they would not attract ROCs. The amendment order will now allow third parties who are not connected or linked persons to the NFFO contractor to develop renewables projects on these sites and qualify for ROCs for eligible output. It also has the effect of encouraging NFFO contract holders to move ahead and develop their, as yet, undeveloped projects as there is now no point in holding off in the hope that they will in time be able to qualify for ROCs. This amendment will be beneficial all round, encouraging NFFO contractors to develop their projects and, if they fail to do so, making ROCs available to those who will move ahead with these developments.
Finally, as a result of TXU going into administration last year, it became clear that the current order did not make provision for any late payments and their recycling to suppliers. There is now a provision in the amendment order that allows any late payments received into the buy-out fund to be recycled to eligible suppliers for the relevant obligation period.
As the other changes are mainly designed to facilitate the administration of the obligation, I do not believe that I need to go into detail. I confirm that, in my view, the provisions in the amendment order are compatible with convention rights, as defined by Section 1 of the Human Rights Act 1998. Accordingly, I beg to move.
Moved, That the draft order laid before the House on 24 February be approved [10th Report from the Joint Committee].—(Lord Davies of Oldham.)
Earl Attlee: My Lords, I thank the Minister for his detailed and interesting explanation of the order, whose complexity may be judged by the fact that his department's Explanatory Memorandum is just about double the length of the order itself. I say at once, as my honourable friend the Member for Tewkesbury told the Standing Committee on Delegated Legislation in the other place, that we do not oppose the order.
Your Lordships have had the benefit that another place has not yet enjoyed: we have had a lengthy and well informed Second Reading debate, followed by 11 sessions in Grand Committee and, so far, three days on the Report stage of the Energy Bill. I suspect that some of your Lordships may, by now, be suffering from what sounds like a paradox—energy fatigue.
The purpose of the order is to give a stimulant to an important renewable source of energy, both to assist in our Kyoto commitment and—to my mind, no less importantly—to reduce the United Kingdom's reliance on fuel from abroad while our own domestic
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sources almost totally disappear over the next 15 years or so. So far, we are woefully short of our target for renewables. I do not say that in any recriminatory sense, but facts are facts.
The Minister quoted some impressive figures, but by far and away the largest component is wind. Therefore, anything that can stimulate growth in our use of renewables is to be welcomed. Biomass can be a reliable and non-intermittent source of fuel and, to repeat the word, a stimulant to our agriculture industry at the same time. It is hoped that the co-firing concept for this new source of fuel will rely on homegrown material without the need for further imports. However, I listened carefully to what the Minister said about the temporary need for imports.
As a result of an opposition amendment to the Energy Bill passed by your Lordships on 18 March by a majority of 22, the Government are required to provide annual reports of information on various sources of renewable energy, including biomass. In supporting this order, perhaps I may say that we look forward to that report so that we may see the progress made in this area.
Baroness Miller of Chilthorne Domer: My Lords, first, I apologise for missing the first few words of the Minister's opening statement. As mentioned by the noble Earl, I, too, believe that I am suffering from energy fatigue. I recognise that the Minister must be suffering in the same way, having spent all day on the Report stage of the Energy Bill.
I very much welcome the order and the practical approach that it takes further to encourage biomass. I also welcome the recognition that the Government have given to the fact that more time and encouragement is needed so that farmers can develop energy crops, as the Minister said.
I noted the Minister's comment about home-grown crops. At some stage—I certainly do not expect him to comment on this tonight—it would be useful to have a joint letter from Defra and the DTI explaining how growers of energy crops, and in particular short-rotation coppice, will fare under the CAP reforms as proposed and also how they will fit into the entry level or higher-tier agri-environment payment system. Coppice may well qualify as a higher-tier environment, although I suppose that if coppicing has taken place frequently, it may not. I simply seek, at some stage, a letter which lays out how farmers looking to their future see the attitude of the two departments interrelating.
My second comment on the order is that it recognises that small generating stations can earn ROCs. They should be allowed to accumulate and be put on an annual basis. The Explanatory Notes spell out what is in the mind of the Government: that the change will enable smaller generators to offset some of the cost of their investment. Although that is true, if

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the Government really wanted to help small generators—I mean domestic households—they would look at net metering. That means that people who invest in a small generator could sell the electricity that they generate into the grid at the same price at which they buy their electricity. At the moment they have to sell it at a pathetically low price and buy it at a more expensive price. That is the true disincentive. I hope that that is the next matter that the Government address in what is otherwise a welcome commitment to fulfilling their obligations under Kyoto.
Lord Davies of Oldham: My Lords, I am grateful for the positive, sympathetic way in which noble Lords have responded to the order. One cannot be fatigued by the Energy Bill. It provides such stimulation to the intellect and keeps us occupied. I am sure that we have all enjoyed every sitting on the Bill, not least today. I recognise that the order represents a slight return to old haunts. Only an hour after we suspended discussions on Report stage of the Energy Bill, we find ourselves discussing an energy order.
I hear what the noble Earl, Lord Attlee, says. We shall have an annual report, which will monitor progress in the area. He will know that we disagreed on that and that was why we voted in different Lobbies on the question. There is a necessity for an annual report on progress in those terms but he has the obvious right to delight in the victory secured in an earlier stage of the Bill. I can confidently predict that as the reports come through they will show the stimulus that the Government are providing to essential developments of alternative energy strategy and we shall be pleased and encouraged by the results. He is right to say that one cannot disavow the central issue on wind energy which is to reach the targets by 2010 and 2015. However, it is important that we recognise the contribution that other technologies can make and, with encouragement, will make as the years go by.
I am grateful to the noble Baroness for her comments. She will recognise that I appreciate that there is a danger that coppicing—I am not sure of the correct verb for developing coppice—may fall within different categories of the CAP. I shall write to her on that point as I do not have the details to hand. She will appreciate, as I am sure all sides of the House do, that a great deterrent to the lack of stimulus for the development of coppicing is less a matter of the CAP and its position, and rather more the fact that one needs to know that there is a market for it. Inevitably, such investments take time to mature, so there is a long-term nature to that market and to the guarantees. Under the order we have sought to give assurances in that area so that the generating stations have the assurance that there will be an increased amount of home-produced biofuel that they will be able to use and that farmers will have a longer-run projection of how worth while it will be to invest in development. That is the purpose.
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On the issue of very small generators, I hear what the noble Baroness says. It is not the first time that I have heard it. I am sure that we have not progressed far enough through our consideration of the Energy Bill to prevent me from hearing the noble Baroness press her point on a third occasion. I recognise the validity of a great deal of what the noble Baroness says. However, she will also know that there are considerable on costs involved in the development of the link-up to the national grid, and we cannot at this stage pretend that we have ready and easy solutions to that. Of course, that does not mean that we should in any way underestimate the contribution that individual householders and small generators can make to our future energy production, nor the inevitable lesson that goes alongside electricity generation; namely, the obligation on all of us in smaller units to conserve energy.
On the basis of those constructive responses, I hope that I have answered the points made. I commend the order to the House.
On Question, Motion agreed to.

National Minimum Wage Regulations 1999 (Amendment) Regulations 2004
9 p.m.
Lord Davies of Oldham Lord Davies of Oldham rose to move, That the draft regulations laid before the House on 23 February be approved [12th Report from the Joint Committee].
The noble Lord said: My Lords, there has been a slight procedural hiccup in relation to these regulations. There is a mistake on the Order Paper. The Motion refers to a draft laid on 23 February and the 12th Report of the Joint Committee on Statutory Instruments. It should refer to a new draft laid on 18 March and the 13th report of the JCSI, which was published today. Furthermore, until 7 o'clock, the Printed Paper Office was distributing the 23 February text, not the 18 March text. That has been corrected in the intervening two hours. I do not believe that either error was entirely the Government's fault. Nevertheless, I apologise on behalf of the Government. The usual channels have agreed that we should debate these regulations today, as planned, at the end of which I shall withdraw the Motion because it is not accurate. The correct Motion will then be moved and hopefully agreed formally on Thursday.
The only difference between the drafts relates to paragraph 26A(1)(a), which has been clarified in response to the recommendation made in the 12th Report of the JCSI. Today's 13th Report of the JCSI clears the new regulations without comment. I therefore believe that, far from wasting our time today, we shall be engaging in a debate to which we have all looked forward, and I apologise for that small hiccup in the proceedings.
The House will recognise that discussion of the national minimum wage always represents an occasion of joy for these Benches, because it is one of the Government's great successes. The regulations before the House today are concerned with how the minimum wage applies to output workers, including home workers. They replace the present system of fair estimate agreements with a system of fair piece rates linked to the minimum wage.
As noble Lords will know, the Government introduced the minimum wage in April 1999. We were absolutely determined that the minimum wage should be successful and that it should not lead to increased unemployment for the very people we were trying to help, nor that it should damage the economy. I believe that we have succeeded in achieving both goals.
Last week we announced that the minimum hourly rate would go up from £4.50 to £4.85 in October and that a new hourly rate of £3 would be introduced for 16 and 17 year-olds where there has been some evidence of exploitation. The minimum wage has made an enormous difference for more than a million low paid workers in the United Kingdom and has helped us to tackle the very low rates of pay that were so prevalent under the last government. There has been little or no evidence so far of any adverse impact on the employment prospects of low-paid workers. The minimum wage has been widely recognised as a success. In my view the Government can be proud of their achievement.
However, we cannot be complacent. The vast majority of employers are complying with the minimum wage. But there is some evidence that homeworkers are not receiving it. The regulations we are discussing tonight will attempt to remedy that. They will help all workers who are paid on the basis of the number of goods they produce or tasks they perform rather than the hours they work. The main beneficiaries are likely to be homeworkers who include, as I think will be recognised in all parts of the House, some of the most vulnerable people in the workforce.
The regulations replace the system of "fair estimate agreements" with a new system called "rated output work". Under the fair estimate agreements system, employers set a fair estimate of the hours needed to complete a block of work and then pay the worker the hourly rate of the national minimum wage for the hours actually worked up to the limit set in the estimate. Such a limit must be fair and will not be if it is less than four-fifths of the time that an average worker would take to do the same amount of work in the same conditions.
It seems clear that the "fair estimates" regime has been widely ignored. Part of the problem is that it is complex and difficult to administer. In practice, it has been difficult to predict the estimated hours for each block of work taken on by an individual homeworker from week to week. Also, the fact that an estimate will be fair if it is only four-fifths of the time that an average worker takes to do the block of work is very unpopular among workers. Most employers who apply the fair
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estimates system routinely set the estimate at this four-fifths level; that is, they do not take into account all of the time spent by the average worker. The regulations we are debating provide for a more straightforward system which will be easier for employers and employees to understand and apply.
We consulted all interested parties fully when drawing up the regulations. Perhaps it would help if I explain them in more detail. They extend to Great Britain and Northern Ireland and amend the National Minimum Wage Regulations 1999. They mainly come into force on 1 October 2004 with an amendment coming into force on 6 April 2005.
Regulation 1 provides for the new "rated output work" system to come into force on 1 October 2004. That will give affected employers sufficient time to prepare and plan for the changes. In addition, Regulation 1 provides for the coming into effect of an amendment to the system on 6 April 2005.
Regulation 2 amends the principal regulations by substituting new Regulations 24, 25 and 26 and inserting Regulation 26A. The effect of new Regulation 24 of the principal regulations is t o provide that, in relation to a type of piece produced or a type of task performed, output workers must be paid the hourly rate of the national minimum wage for all hours actually worked unless the work in question is "rated output work". Work will be rated output work only if various conditions are satisfied.
New Regulation 25 of the principal regulations sets out the various conditions. Those are that the work in relation to a type of piece produced or type of task performed is work in relation to which the contract between the employer and the worker does not set any normal minimum or maximum working hours; that the employer does not control the hours that the worker works (for example, does not set his starting or finishing time or the length of time spent in producing the piece or performing the task); that the employer has arrived at the "mean hourly output" (the average number of pieces that can be produced or tasks that can be performed in an hour) in relation to a piece or task; and that a written notice containing specified information has been given to the worker to whom the "rated output work" system is to apply.
New Regulation 25 of the principal regulations also provides that the written notice must be given to the worker before the beginning of the pay reference period (which, broadly speaking, is the period of work for which a worker is paid) and sets out the specified information to be included in the notice.
Regulation 26 provides that where the conditions relating to "rated output work" are satisfied, to determine whether the worker has been paid the minimum wage the employer must calculate the number of hours that the worker is deemed to have worked. The number of hours taken by a worker in producing the piece or performing the task is deemed to be the same number of hours as a worker working at the "mean hourly output rate" would have taken.

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New Regulation 26 also defines "mean hourly output rate", that is, the average number of pieces or tasks produced or performed by workers of the employer.
New Regulation 26A of the principal regulations contains provisions relating to the determination of the "mean hourly output rate" in relation to a type of piece or task. The employer must test the speed at which all his workers, or a representative sample, who produce—in similar working circumstances—the piece or perform the task work, and then divide the number of pieces produced or tasks performed in an hour by the number of workers thus tested.
Alternatively, the employer may, in certain circumstances, estimate the average speed by making an adjustment to a pre-existing test result. He may do so where the piece or task is reasonably similar to, but not the same as, the piece or task that has been the subject of the test and is being produced/performed in the same working circumstances; or where the piece or task is the same as the piece or task that has been the subject of the test, but is being produced/performed in different working circumstances.
Subsequent changes in the identity or number of the employer's workers producing the piece in question or performing the task in question do not, generally speaking, require the employer to retest or re-estimate to determine the average speed.
The effect of these provisions is that the average worker will be entitled to the national minimum wage from October this year. We want to provide some time for employers to understand and operate the new system. But by definition this means that workers who are a little slower than the average—which could be half of the relevant homeworkers—will not receive the minimum wage.
Accordingly, the effect of Regulation 3 is to provide that, from 6 April next year, most people, including those who work a little slower than the average worker, will be entitled to the minimum wage. That is achieved because Regulation 3 will ensure that the number of hours taken by a worker in producing pieces or performing tasks during the pay reference period will be treated as being 120 per cent of the number of hours that a worker working at the mean hourly output rate would have taken to produce or perform the same number of the same type of pieces or tasks.
According to the regulatory impact assessment prepared by the Department of Trade and Industry, approximately 170,000 homeworkers will be covered by the new "rated output work" system from April 2005, equating to an average benefit per worker of around £3,000 per year, before adjusting for taxes and any benefit entitlements. These proposed changes to the law will be especially important to ethnic minority and women workers, who make up a large proportion of people who work at home.
We recognise that some people are concerned about possible job losses. That is why we have agreed that the full effect to the proposals—the 120 per cent uplift—should be delayed until April next year to give business the opportunity to plan for its introduction. But the current position with tens of thousands of homeworkers earning less than the minimum wage is completely unacceptable. We will never be able to compete with countries such as India or China on the basis of pay costs, nor should we even aim to do so. We need to build the skills of our workforce to achieve high performance work places delivering quality output and not of course on low wages.
Finally, we are aware that employers and homeworkers need to be aware of the new regulations and have already produced draft guidance which we will update once the regulations have been approved by both Houses of Parliament. We are discussing with the National Group on Homeworking how we can generate publicity surrounding the changes, but our aim will be first to warn employers about the changes, encouraging them to prepare by conducting necessary tests, followed by a campaign in the autumn advising homeworkers of their new rights. I commend the regulations to the House.
Moved, That the draft regulations laid before the House on 23 February be approved [12th Report from the Joint Committee].—(Lord Davies of Oldham.)
Earl Attlee: My Lords, I thank the Minister for his detailed explanation of these important regulations.
We fully understand the difficulties with the drafts explained by the Minister and we have no problem with the proposed solution.
The fact is that workers on piece work are among those likely to find that they are being paid less than the national minimum wage, and those who work from home are faced with, in a phrase coined by my right honourable friend the Member for Rushcliffe, "a double whammy".
People who do piece work at home are among the most vulnerable in society. I refer, for example, to the disabled, or those who have family commitments which prevent them from seeking regular outside work. These same people are often the least able to complain about exploitation by unscrupulous employers, or the most fearful about their already small income to risk doing so.
Of course, not all companies employing outworkers are wicked exploiters, and I have no doubt that most of them behave honourably. It is also probably true that for various reasons it may be difficult for the Inland Revenue, which is responsible for catching out those defaulting on their national minimum wage obligations, to do so in this case. However, that is no reason why a proper legal framework for calculating outworking pieceworkers should not be established and what appears to be a loophole in the existing regulations should not be closed. We support the regulations.
Baroness Miller of Chilthorne Domer: My Lords, we note the drafting problem, and we are happy that the

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regulations be formally moved on Thursday. I will not repeat the benefits of this, which have already been welcomed by the noble Earl, Lord Attlee. We too welcome the regulations, in particular since they apply to a large number of people—170,000. That is a lot of people who will, I hope, benefit from the regulations.
Lord Davies of Oldham: My Lords, I am most grateful to both noble Lords, not only for their comments on the regulations, but for the understanding way in which they have accepted our apology for the slight hiccup with regard to the regulations, which we will put right at the earliest
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opportunity. We can all finish today united in this commitment to a fair day's work for a fair day's pay. Accordingly, I commend the regulations, but I beg leave to withdraw the Motion.
Motion, by leave, withdrawn.

London Local Authorities Bill [H.L.]
Returned from the Commons agreed to with amendments.
House adjourned at seventeen minutes past nine o'clock.