Lords Sitting of 14 January 2005

Preamble
The House met at eleven of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers —Read by the Lord Bishop of Worcester.

Renewable Energy Bill [H.L.]
Lord Redesdale: My Lords, I beg to move that this Bill be now read a second time.
The purpose of this Private Member's Bill is to remove difficulties faced by those wishing to become involved in the renewable energy sector. Presently, development of a potentially lucrative and important part of our economy is being stunted. This is in turn hampering the Government's efforts to meet Kyoto and their own targets for carbon abatement.
I applaud the Government for their rhetoric in the area of climate change. However, without action it is unlikely that the major breakthrough in reducing carbon emissions will be achieved. To achieve even some of the minimum targets it will be necessary for us all to embrace some form of renewable technology.
The Bill offers straightforward and practical steps that can contribute to our attempts to create the low carbon economy proposed by the 2003 energy White Paper.
The first three clauses are concerned with microgeneration. I wish to point out that the Distributed Generation Co-ordinating Group was set up and is jointly chaired by Ofgem and the DTI. Its paper entitled System Integration of Additional Micro-Generation notes the significant benefits of a high microgeneration scenario by 2020. Economically, it estimates a possible net benefit of £35 million per annum. Environmentally, there would be significant gains as a result of reduced loss through distribution and the fact that most microgenerators are high efficiency or utilise renewable, low carbon energy sources. For example, a small domestic wind turbine of, say, 6.5 kilowatts could save 4.5 tonnes of carbon dioxide per year.
The Government can be commended for recognising these benefits. The inclusion of the microgeneration clause in the Energy Act is testament to that. I await with interest the forthcoming publication of a strategy for the promotion of microgeneration in Great Britain. Unfortunately, there is still over a year until publication of this strategy, and one suspects that further delays will be incurred before implementation.
The measures proposed in the Bill do not constitute, nor do they in any way pre-empt, a promotion strategy. They are intended to be common-sense measures that remove a few unnecessary barriers that microgenerators currently have to overcome.
The fourth clause aims to resolve an apparent oversight by the Government. Energy used for heating represents approximately a third of the UK's demand. However, this fact is not reflected in the incentives being offered by government to renewable generators.
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I shall now explain each of the clauses of the Bill in greater detail. Clause 1 deals with metering for domestic microgeneration. It relates to the fact that microgenerators such as photovoltaic panels and wind turbines during some periods produce more energy than is needed for the households which operate them. This extra energy can be dissipated on site; this is referred to as "rate limiting". Alternatively, this energy can be spilt on to the local network for no reward. The Distributed Generation Co-ordinating Group in its paper Reward Mechanisms for Micro-Generation points out that neither of these options "promotes economic efficiency".
The DGCG recommends the implementation of a third option—rewarding owners of domestic microgenerators for the output that they contribute to the grid. Should this option be taken up there would be two principal benefits. First, it would increase the incentives for individuals to install microgenerators; and, secondly, it would fulfil the moral requirement that providers should pay for electricity that they can benefit from.
According to Ofgem, the current situation is one where the electricity suppliers can purchase the excess electricity if they wish. The results of this state of affairs are threefold; low levels of participation, confusion and the inhibition of competition.
Of 12 electricity providers I contacted, only four were able to tell me that they had any reward mechanism whatever in place. Of the four that did offer any reward mechanism, two in their customer literature, contrary to Ofgem's statement of the current situation, announce to their customers that they could not really legally "buy" electricity produced by microgeneration. This is a fact as yet untested in the courts, but is an issue hotly disputed by the industry body representing the sector, the Micropower Council, set up last year by my noble friend Lord Ezra and now presided over by another of my noble friends Lady Maddock, who, I am very glad to say, will speak later this morning.
Most seriously, the current stale of affairs represents a failure of the regulator Ofgem to fulfil its function. Ofgem's stated role is to,
"protect and advance the interests of consumers by promoting competition where possible, and through regulation only where necessary".
By failing to stipulate that the providers must have a mechanism in place through which they can reward microgenerators for the electricity they receive from them, Ofgem is failing either to promote competition between large and small-scale generators of electricity or to advance the interests of those consumers who own microgenerators. It would appear in fact in this case to be promoting the interests of the oligopoly of the large electricity suppliers through regulation and preventing progressive consumers competing.
Subsection (1) is intended to enable the Secretary of State to eradicate confusion by giving him power to establish a specific scheme to allow electricity from microgeneration to be sold. Subsection (2) is intended to solve the problems of participation and competition. It

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creates an obligation for all suppliers to purchase electricity from microgenerators that they will be supplying electricity to for the periods during which their microgenerator is producing less power than they need.
Clause 2 deals with microgeneration and local authority targets. Both the energy White Paper and PPS22 call for central government to work in partnership with regional and local bodies to achieve the targets—though revised recently, unfortunately— which they have set themselves. Unfortunately, there have been failings in the achievement of this, as evidenced by ODPM's failure to use the property performance indicator information for benchmarking purposes and its subsequent decision to no longer require these figures.
There appears to be a range of levels of commitment from local authorities. Few can boast of achievements equal to those of Woking and Merton. Clause 2 is intended to reduce the size of the problem. It is based on the belief that the variation is caused by differing degrees to which local authorities are informed about microgeneration. The first subsection requires local authorities to set their own targets. The purpose is simply to ensure that local authorities consider microgeneration and its implementation in their communities. That, in turn, will assist the diffusion of knowledge about those valuable technologies.
These targets would also give us the opportunity to develop a much clearer and less anecdotal picture of the state of microgeneration in the nation. In that respect they would contribute to the forthcoming strategy for the technology's promotion. Moreover, the second subsection proposes that the targets should then constitute a minor part of the forthcoming promotion strategy. Although I appreciate that the Government may be cautious about imposing too many rules and targets on local government, allowing local authorities to set their own targets will limit the cost of the operation while still achieving the main goal of raising awareness.
A further good reason behind the clause is that, although local authorities can set their own targets under the remit of PPS22, it does not mean that it happens automatically. It requires a great deal of lobbying by the microgeneration industry of every local authority to get them to set such targets. Although the more progressive local authorities— Merton and Woking being obvious examples—will voluntarily set such targets, a statutory requirement is the only way to ensure that it is given the priority it deserves throughout the entire country.
Clause 3 is concerned with small renewable energy developments. It is designed to contribute towards solving a problem highlighted by Brook Lyndhurst during a study that it conducted for the ODPM. It noted that:
"A general barrier within the planning system is that not all local authorities treat planning for renewables in a uniform way".
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Clause 3 is expected to provide part of the solution to that at microgeneration scale. In addition, obtaining planning permission for a microgenerator creates further unnecessary barriers and costs, which may jeopardize the completion of the project, a highly undesirable state of affairs for a country aiming for high microgeneration.
The third clause would render certain specific types of microgenerator permitted developments, putting them into the same category as swimming pools and satellite dishes for which, in most cases, it is unnecessary to apply for planning permission. There are, however safeguards against what some may consider inappropriate developments. Although I would happily see photovoltaic panelling adorn all our historic buildings, out of sight of the roof line—I say that advisedly as the secretary of the All-Party Group on Archaeology—I appreciate that others may not. In this case, individual authorities can issue Article 4 directions for specific areas and listed buildings, which would result in these types of development still requiring an application for planning permission. Perhaps I should mention a personal interest: I have recently applied for planning permission for a small wind turbine.
Clause 4 deals with energy from non-fossil fuel sources. I praise the Government for their implementation of the renewables obligation. It has added a significant incentive to promote the development of renewable electricity generation in this country. Unfortunately, there is also a criticism. Despite the significant share that heating constitutes of our energy usage—it contributes up to one-third of domestic usage—incentives for the implementation of renewable technologies in this area are extremely limited. A dedicated and adequate incentive scheme is needed. In the light of the apparent success of the renewables obligation, Clause 4 proposes the setting up of a parallel scheme to deal with heat energy in the same manner in which the renewables obligation deals with electricity.
In addition to its significant economic promise, microgeneration has significant potential to address climate change, not only through the direct impact of each installation in reducing carbon emissions but also because it can act to engage the public in ways that have so far eluded us. It is essential to capture the people's imagination and offer visible evidence that, individually, they can make a difference.
The measures in this Bill are simple, practical ways of addressing regulatory barriers that currently stand in the way. Allowing consumers to be paid a reasonable rate for their power generation, streamlining the planning system centrally and recognising the need to offer proper incentives for renewable heat as well as electricity will go a long way towards achieving the targets set out in the Kyoto protocol and the Government's carbon abatement goals. I commend the Bill to the House.
Moved, That the Bill be now read a second time.— (Lord Redesdale. )
11.17a.m.
Lord Hunt of Chesterton: My Lords, I welcome the Bill. It urges the Government to encourage individuals and communities to play their part in using the Earth's natural resources more efficiently, and in doing so to reduce greenhouse gas emissions. That will reduce the rise in global temperatures, whose devastating effects we are already seeing, particularly in high temperatures but also in relation to food—in China, for example—and eventually in sea levels. Higher sea levels mean that coastal communities are much more susceptible to the kind of earth-shattering events of the past month.
The Government should use the Bill to show how Parliament is supporting their mission to highlight climate change during the G8 presidency and the EU chairmanship. I am very pleased that the Bill constitutes practical support by the House of Lords to endorse the unanimous and cross-party recommendations of the two House of Lords committees that urged the Government to take seriously the examples and practical developments of Woking Borough Council and other local authorities, which have introduced community-based combined heat and power systems.
The Greater London Authority has now appointed Mr Allan Jones from Woking to its climate agency and is now pursuing those policies. While the noble Lord, Lord Redesdale, moved the Motion, I saw some noble Lords on other Benches shake their heads disapprovingly but there is very strong cross-party support for the measures. Greenpeace has also written to make some of those points.
It was remarkable that in Woking Borough Council's own facilities, after 15 years of sustained effort it reduced energy consumption by 45 per cent and carbon emissions by 70 per cent. Use of combined heat and power and other renewable energies was one aspect of the programme, but it also required a new approach in the distribution of electricity by going off the National Grid and using its own grid. That enabled it to use other renewable energy systems more effectively and indeed to reduce the cost of electricity in the borough by a proportion that is 20 per cent lower than in other areas, and to make their electricity more reliable. When the lights went out in the rest of the south of the UK in August 2003, they did not go out in Woking. An intelligent approach to long-term funding was also a vital part of the council's success.
I think that the other point is fairly obvious. There is much greater public involvement in Woking, which one might not imagine as the world's greatest revolutionary centre, in this extraordinary programme, showing therefore the point also made by the mover of the Bill that it will require a great deal of public involvement to be effective and is a very good first step.
As regards the detailed clauses, I have already emphasised that a local authority having targets is clearly an important way forward, as in Clause 1. Perhaps that may be refined to require local authorities to meet more stringent energy efficiency targets across their estates. Interestingly, the Scottish Executive has committed £20 million to energy efficiency measures that it
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calculates will generate £70 million of savings over three years. That again makes the point about the economic benefits of that approach.
It is important to lift planning permission for microrenewables, as the mover of the Bill emphasised. Changing the planning permission will stimulate a culture change where, instead of divorcing energy users from energy generation, they already think about the energy source.
Clause 3 on metering is also extremely important. There is a strong case for promoting net metering as part of a comprehensive and user-friendly retail package, so that people who are introducing new energy-saving methods can see exactly what they are doing. The Government are very keen on targets and measurements in every aspect of their programme. Energy should not be excluded. Joined-up government should go down to the individual household.
Greenpeace is concerned, as are a lot of other NGOs, to see renewable energy policies properly integrated with a sustainable design and construction agenda. There have been some Questions in this House—I have tabled some—about the need for building regulations to be integrated with energy policy.
The renewables heat obligation in Clause 4 is also important because it should emphasise the importance of thermal energy in the United Kingdom using all of the resources that we have available—for example, from biomass and geothermal energy. Currently, these policies are perhaps not working as well as they should. I understand that there is anecdotal evidence that we are importing bulky biomass from other countries as opposed to using our own. The noble Lord, Lord Palmer, often talks about biomass. He is also a noble kinsman of mine, so I need to make that point.
Finally, the House should take this Bill seriously and support it. The Government should advertise that this is the kind of Bill that has been considered in the House and by Parliament. The Government have not done a particularly good job so far in their programme of climate change in emphasising the practical steps that have been taken in the UK. They quite rightly emphasise the kind of research done at the Hadley Centre and universities, which is fine, as is the Prime Minister's conference in the first week in February. I shall probably be there. But they should also be talking about Woking: I have not heard the Prime Minister talk about Woking yet.
11.23 a.m.
The Lord Bishop of Chester: My Lords, it has been suggested that a debate on wind would not be complete without a contribution from these Benches. We should be grateful to the noble Lord, Lord Redesdale, for promoting the Bill. The sheer volume of Questions asked in your Lordships' House on the various aspects of energy policy indicates the very wide concerns that exist in all parts of the House. The Starred Questions have sometimes seemed a bit repetitive; this Bill and debate have an entirely fresh and innovative feel to them.

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The Bill is about the microgeneration of electricity, but the wider concerns on energy policy provide a powerful context for it. UK energy policy and use are undergoing something of a revolution. From an easy availability of indigenous fossil fuels and a policy to generate up to a quarter of our electricity from nuclear power, we are seeing a growing reliance on natural gas and imported natural gas. The DTI estimates that, by 2020, around 70 per cent of our electricity might be generated from the burning of natural gas, up to 90 per cent of which might be imported, often over considerable distances.
That reliance on the burning of natural gas raises many obvious concerns—security of supply and ever-rising costs, for example. Of course, it is a key part of the UK's strategy to meet its Kyoto obligations because the burning of natural gas generates only about 40 per cent of the carbon dioxide that is released by the burning of coal per unit of electricity. It is also relatively clean in other ways, but it seems rather short-sighted to burn so much gas to generate electricity. Future generations may well look back in astonishment at the profligate use that we are making of such a splendid and adaptable natural resource.
The need to replace our nuclear generating capacity as plants are decommissioned is adding greatly to the pressures on UK electricity supply and our attempts to meet our Kyoto targets in particular. I wonder whether a future energy mix with no nuclear component is credible. Be that as it may, those and other factors provide a powerful rationale for the Bill.
I would marshal my support under three headings. First, the level of dependency on imported natural gas, to which I have already referred, cannot be sensible. The Government, in their Planning Policy Statement 22: Renewable Energy, issued last August, called for a,
"prudent use of natural resources—by reducing the nation's reliance on everdiminishing supplies of fossil fuels".
Prudence requires as diverse an energy mix as is reasonably possible. What diversity will mean in practice is not entirely predictable, given the uncertainty of relative costs and other factors in the future. So I see a greater encouragement and facilitation of microgeneration of electricity as simply prudent as part of a policy of having as much diversity of supply as possible.
I recognise that the Government have already taken various initiatives in this area, as set out in the speech by the Minister of State for Energy at the launch in September 2004 of the Green Alliance's microgeneration manifesto, although it was clear from his speech that the Government's thinking had yet to develop into a fully-considered strategy. Microgeneration at a basic level is just part of the prudent diversification that must be a cornerstone of our energy policy.
Secondly, the microgeneration of electricity has important environmental aspects. Obviously, any generation of electricity from renewable sources will assist the UK to meet its Kyoto and renewable obligations. Here, as is well known, we started from a
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very weak base. We have seen too much reliance on natural gas combustion to reduce our CO2 emissions and large wind turbines to meet our renewables obligations. Understandable as that has been in the pressing circumstances that we have faced, I look for a much broader mix in overall UK energy policy.
There has, of course, been much debate over the possible adverse impact of wind farms with their huge wind turbines. Time will tell how that debate runs, but I think that the overall environmental impact of smaller-scale electricity generation from small wind-driven propellers to small-scale harnessing of water power, photovoltaic panels and so forth, will not cause undue problems, precisely because they are small scale.
The sight of photovoltaic panels or thermal panels on roofs, of small wind-driven propellers on houses or in gardens, of small hydroelectric plants on rivers and streams may come to be seen as enhancements of our environment rather than problems—like the windmills of old.
That leads me finally to my third point; that is, the broader cultural aspects of the microgeneration of electricity. Last summer, our family holiday was spent in Denmark, where my wife has many relatives. Denmark, of course, has a considerable start on the UK in its development of renewable energy. By 2000, it was already generating 17 per cent of its electricity requirements from renewable sources, and its target for 2010 is nearly 30 per cent. The bulk of Denmark's generation is from wind, although biomass is also important.
It was interesting that, in addition to concentrated wind farms, it was common to see in Denmark wind turbines dotted across the land in ones, twos and threes. They are an accepted feature of the landscape in a country that prides itself on a high standard of design in urban and rural landscapes alike.
I was also struck by the way in which a greater environmental consciousness pervades Danish society compared with Britain, for all the strides that we have made in recent years. One could see that not only in the Danish approach to the recycling of goods, for example, but also on the roads. I would estimate that the speed of the average car on an open road in Denmark is at least 10 miles per hour less than that in Britain, and yet speed cameras and traffic police are hardly to be seen. From the perspective of both fuel economy and road safety, it is simply accepted in Danish society that a lower speed is better—for the environment and for road safety, as well as being cheaper and easier on the nerves of drivers.
Today's debate is more about fuel economy than road safety, but I observe that more than 10 times the number of Britons likely to have been killed in the recent Indian Ocean disaster will be killed on our roads during the current year. Just as we need a much higher consciousness of road safety issues, which will come only when our society faces up to them, so the energy-related aspects of our environmental crisis need solutions that will galvanise the whole of our society.

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This is where the case for encouraging the microgeneration of electricity has a wider cultural relevance. I am not sure precisely what ultimate potential exists for its contribution to the targets we are setting ourselves, but I am sure that we have yet to achieve the necessary level of consciousness of their importance in society as a whole, despite the good work that goes on in our schools and elsewhere.
So much of our lives are lived in rather artificial and abstract ways, dislocated from the realities of life in the down-to-earth, physical world that we inhabit and share. I recall the old joke of a school child being asked where milk comes from, and replying, "From the jug in the fridge". I had a recent illustration of that dislocation in my own home. I keep a few hens. They are organic and free range, although sometimes rather more free range than I intend. I took a group of school children who were at a garden party at my home down to see the hens. I showed them the boxes where the hens lay their eggs. A newly laid egg was there, still warm. I offered it to the girl at the front of the group to take home for her supper. "Oh, no", she said. "I couldn't eat that". For her, real eggs come from the supermarket, or perhaps from the fridge in the kitchen, with a little lion stamped on them.
Dust we are and to dust we shall return. Human beings are part of the earth, and whatever view we take of our ultimate significance, we are creatures of flesh and blood. In a consumerist and economically expansionist world, we need urgently and constantly to find new ways of living in greater harmony with our world and our environment. We are making ever greater impacts upon the physical environment, and the closer we can live our lives to the world in which we are set, the better. More local, small-scale electricity generation surely has an important part to play in the broader education and evolution of our society in the years to come.
For all those reasons, I hope that the Bill receives a fair wind as the Government consider their strategy for the microgeneration of electricity.
11.33 a.m.
Baroness Maddock: My Lords, I rise to support my noble friend in his endeavours with this Private Member's Bill. He has put the case very fully and eloquently, and he referred to an interest that I must declare. I am president of the Micropower Council, a lobby group of interested and like-minded people who see the value of microgeneration in supporting what I think we all want to see, a sustainable environment.
The majority of people today, not only in Britain, recognise the importance of climate change and the need to be proactive in mitigating its impact on both our global and local environments. It is interesting to note that despite the fact that America as a nation has not attached its support to world initiatives like Kyoto, in individual towns, cities and states action is being taken to limit carbon dioxide emissions and to promote the more sustainable use of resources. For someone on these Benches, I muse the fact that
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America has a federal constitution. It enables people to take action even if the national government are not doing so.
Even if everyone does not accept the science concerning climate change—although the majority of scientists do, of course—as the right reverend Prelate pointed out, for the good of future generations, surely we should live out our time on this planet in as sustainable a way as possible. I believe that we have a duty to look after the earth on which we all live our lives.
Like my noble friend, I am pleased that the Government, in particular the Prime Minister, have recognised the importance of climate change. I, too, applaud the Government for what they have said, for the various reports that have been produced and the committees set up, and for the way they have tried to tackle these issues. But like both my noble friend and the noble Lord, Lord Hunt of Chesterton, I am always disappointed that the rhetoric is not matched by action to make things happen. Once again, we are here with a Private Member's Bill that seeks to spur the Government to action by setting a firm framework and providing strong incentives to ensure that measures to tackle climate change are undertaken, and to ensure that we can meet the targets set by the Government, particularly their target for reducing carbon dioxide emissions.
As others have said, upping significantly the amount of heat and power produced by microgeneration could play a very much greater part in reaching the Government's own targets for reducing CO2 emissions, particularly if we can remove some of the barriers that are preventing uptake. The "expert terms" clauses in the Bill are one important way of ensuring that it will be easier for people to take up microgeneration in their homes.
Energy suppliers would be required in law to offer terms to microgeneration customers, which would have two main advantages. First, they would be forced to devote time and attention to the true economic basis for rewarding microgeneration. The onus would be placed on suppliers to offer terms rather than have customers seek to engage with them, something which many people fail to do at the moment. An obligation to offer terms is also likely to place reputational pressure on those suppliers that offer poor rates of reward.
Secondly, energy suppliers would be forced to engage in the associated institutional and settlement system issues. This would be particularly valuable in developing changes to the relevant rules that currently prevent something closer to the true economic value of microgeneration being realised.
An article in the Financial Times of 18 December 2004 pointed out how much it would cost to link wind farms in this country to the national electricity network. Ofgem has upped the amount of money that can be spent on this. The sum is a great deal more than has already been allocated, and the cost is to be passed on to customers. However, in microgeneration the network is already in

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place. We are missing a huge opportunity. Having read the article, I am spurred on even more to support my noble friend.
It is very important that we send a message to the industries developing the technology for people to use small combined heat and power units in their homes. I declare an interest as someone who works with the Energy Saving Trust. I serve on a committee which gives out grants for innovative measures to help towards sustainability. One of those is a scheme in Northern Ireland where small combined heat and power units are being fitted into social housing. But it is not easy because the industry does not see the right messages coming from the Government. Therefore, trying to develop the capacity of the industry is quite difficult. At the moment the technology is being imported from New Zealand. I hope that this Bill will progress these issues.
As someone who now lives in a rural area of Britain, I can confirm that microgeneration is very important for those not connected to the gas network, and where we have had an enormous amount of wind over the past few days. Indeed, we had so much wind that no one could use their generators. They were in danger of being blown over.
Local authority targets are important. I believe that we should give as much freedom as possible to local authorities—I am always in a dilemma about these matters—and at the moment local authorities can set targets. Indeed, they are asked to set targets under the Home Energy Conservation Act, which I introduced into another place some years ago. Other noble Lords have also referred to planning policy statement 22. However, if local authorities do not want to be forced into action by legislation, we will have to find incentives which ensure that they take up these issues rather more positively.
The noble Lord, Lord Hunt, explained how successful Woking had been. I shall not repeat the story, but it is interesting that Woking works under the same framework as all other local authorities in Britain, including those which have not been so successful. So it is important that we should look at what it is that makes the difference. I believe that it is because successful authorities have passionate champions of the case for sustainable communities. Alan Jones is a classic example. He has been so passionate that he has been recruited to do the same in London. I know from my work in this area over a number years that, up and down the country, where you find a success story you will find behind it a champion pushing forward the cause.
Unfortunately, there are not too many champions of that nature within government. I have been active in this area, both in Parliament and before I came here, and I have come across many champions in local government but, with a small number of exceptions, very few here in Parliament.
It is even more depressing that in the legislation which comes before this House—and in recent times we have debated Bills on housing, local government and energy—
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the Government fail to take advantage and set a framework to enable and encourage sustainable development. It is left to people like those speaking in the debate today, through amendments to government Bills or through Private Member's Bills such as this one, to try to push the matter forward. Why is this always so?
The clauses dealing with permitted development status could have been inserted into previous government Bills, such as the Planning and Compulsory Purchase Bill which was introduced last year. I tried to do so, but with little success. But sometimes the Government listen and sometimes we win votes on the issue and they are forced to listen.
Throughout my life in this area, I and others have tried to convince the civil servants of our case, but they always brief Ministers as to why they cannot possibly do what we are asking. Let us have more champions within government corridors because that is the only way in which we will change matters. We need a "can do" and not a "cannot do" mentality in this area. The Bill encourages a "can do" mentality and it has my full support.
11.43 a.m.
Lord Berkeley: My Lords, when my noble friend Lord Lea came in and asked me why there were so many references to Woking, his answer was, "I have seen a notice on South West Trains this morning which stated 'Please do not use this lavatory at a station', and someone had scribbled underneath it 'except at Woking'". I do not know whether there is any connection, but it seemed quite funny. I am sorry that the noble Lord, Lord Hunt of Chesterton, is no longer in his place.
I support the Bill. I declare an interest as a member of the European Energy and Transport Forum. I see it as a significant contribution towards reducing the dependency on imported oil and gas, as the right reverend Prelate the Bishop of Chester pointed out. He did not name the countries where most of the gas will come from, which I think are Algeria, Russia and around the Caspian Sea—perhaps three of the most politically stable regions we can imagine these days.
Before my noble friend the Minister replies that nuclear is the answer, I should point out that, although it does not produce CO2, it will not be an answer until a solution is found to the problem of disposal of the waste. Long ago, I worked on nuclear as a civil engineer. It always struck me that we were still trying to preserve waste with a half-life of 1,000 years in concrete that had been around for about 100 years. We are making the problem even worse at the moment by importing waste from Italy. Why are we doing it? I do not know. I do not believe that nuclear should come into it.
It is comforting to know that the European institutions support the intentions of the Bill. I shall not read out a great list of statistics about the problem in Europe, but the Energy and Transport Forum's response to the intelligent energy programme for Europe states that the present implementation procedures, financial and contractual, present an

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important barrier to the participation of numerous market sectors, including SMEs. Of course, SMEs are at the core of Europe's policy in promoting competitiveness. They also help to encourage new ideas in fields such as this. The report goes on to state that:
"Simplification of procedures is therefore absolutely necessary".
This is the purpose of the noble Lord's Bill.
It would be nice to see the Government supporting SMEs and private individuals rather than listening only to the big business generators and transmission companies, which one often feels may be the case. I believe that microgeneration by renewable means should be a significant contributor to our energy needs. It will give an opportunity for those providing it to understand better the importance of energy conservation and local ownership of the facility.
The right reverend Prelate the Bishop of Chester referred to his experiences in Denmark. From my own experience there, I believe he is absolutely right. I was a member of the European Union Sub-Committee B on energy at the time and we went to Denmark to study renewable energy. We stood under a one megawatt wind turbine and we could hardly hear it. I know that they are bigger now, but noise is not the problem; we have an education problem in this country. I was talking to an A-level student this year and I asked him what he was studying. He said that he was studying energy and wind turbines. I said, "Well, what do you know about them?" and he said, "They are noisy". I said, "Where did you learn this from?". He said, "The text book". Perhaps we should work at getting the text books changed, allow people to stand under modern wind turbines and let them decide for themselves.
I understand that in Denmark many small villages have their own little generators. The community therefore feels that it owns them. Compare that with this country. Again for the same sub-committee, I went to Oxford with Lord Montague of Oxford—who, sadly, is no longer with us—to visit an academic who had built a show house to demonstrate energy conservation. It had photovoltaic cells on the roof, triple glazing and everything else one needed.
But I was interested in the trouble that she had had negotiating with the electricity supply company. Occasionally in the summer she wanted to export electricity back into the grid. The price she paid to buy it was five times the price at which the company would buy it back from her. The sting in the tail was that the company reserved the right for an inspector to visit her at least once a day to check that she was not diddling it or sending back the wrong type of electricity. Each visit was going to be charged at £30 a time. Is not that a real disincentive to sell electricity back to the grid?
As the noble Lord, Lord Redesdale, said, electricity suppliers can purchase if they wish to do so. He then related some of the problems that people have had with this. We have to get this right. Who is going to go through the hassle—unless you are an academic trying to demonstrate a very good point? But even she had serious trouble. It is clear that the generators and
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distributors do not like the idea of people doing it for themselves. I question whether it is always desirable to rely on bigger and fewer generators and sources of fuel.
I came across an interesting academic paper by someone called Robert Shaw, published in a National Academy of Engineering journal two years ago in summer 2003. I know it is a little out of date but the points he makes are very relevant. He compares the cost of generation at the bus bar, as he calls it, with the cost of distribution. He says that, in some circumstances,
"Transmission and distribution … costs (including capital, as well as operating costs, such as tree trimming, transformer replacement, and resistance loss)"—
we all know these things—
"can be two to three times the cost of bulk power".
That is significant and I am sure that Ofgem takes it into account in all its calculations. But if one adds to it the unreliability that we saw in the United States two years ago, and on the Continent, it is worth thinking about the importance of local generation.
Something that came up at the last meeting of the European Energy and Transport Forum, and which surprised me greatly, was that the European Commission says that it can bring very little influence to bear on transmission between member states, as it is now all private. So if the Commission believes, on a European basis, that Switzerland ought to be supplying Italy with a bit more electricity on occasion, there is nothing it can do apart from a bit of persuasion. We have not sorted out the problem of transmission, but it needs sorting out. The arguments for local generation are important.
I was very pleased to see that a couple of years ago Ofgem had a seminar on microgeneration with the Institution of Electrical Engineers. The seminar stated that it was very important that there are:
"simple, low cost metering solutions, fair arrangements in place to recognise the contribution that microgeneration makes to network costs [and] … simple, standardised arrangements for network connection".
In conclusion, I would like to see anybody with a reasonably sized garden able to put up a wind generator. People make a fuss about wind generators, compared with electric pylons. At least generators do not have wires between them, whereas pylons do. I think generators generally look much nicer. The whole planning and technical process should be supported so that people can do it themselves more easily, without the need for planning permission. After all, mobile phone masts do not need planning permission, so why should little generators? I hope that my noble friend, on behalf of the Government, will support the principles behind the Bill.
11.52 a.m.
Lord Beaumont of Whitley: My Lords, I support the Bill, as does my party, the Green Party. I congratulate the noble Lord, Lord Redesdale, on introducing it. I shall turn away from climate change, which is what most people talk about, to the point made by noble Lord, Lord Berkeley, about energy security.

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An article in the New York Times supplement, published in the Daily Telegraph yesterday, stated about oil:
"Now that worldwide production is running at full speed, there is no cushion left in the system to absorb a potential blow to producers like Iraq, Venezuela, Iran, Russia or Nigeria".
An international expert in energy security was quoted as saying:
"Saudi Arabia's oil industry is no longer seen as being impenetrable to terrorist attacks; tensions in the Persian Gulf could swell over Iran's nuclear program; Nigerian factions may erupt in violence; and the fighting in Iraq goes on".
Energy is not something that we can count on being able to import from abroad. We must be able to produce it ourselves, and we must be able to produce it in a way that does not help climate change.
In its spring conference, which will take place next month, my party will be taking energy policy as the main subject of debate. My party says that the primary solution to this problem is for us to reduce our need for energy radically by energy conservation measures and, in the long run, by reorganising our economy and built environment. But in addition to that, we want to generate, store and distribute energy as close to the point of use as practicable. On that point, I join with what the right reverend Prelate the Bishop of Chester. It is very important that we have small-scale and local energy generation.
Building regulations should be amended from simple insulation values to prescribed energy performance values and should be applied to existing as well as to new buildings. Tenants should have the right to demand that their dwellings be brought into line with prevailing energy performance values at their landlords' expense. We need to have as much small energy and as much local energy as we can. The Bill will help us do that.
We need to do other things as well. We need many more incentives for running vehicles on fuels that produce little or no harmful emissions. We need as much wind energy as possible. The use of small fields of wind energy is to be seriously commended and the Government should be doing much more than they are towards making them possible. The Bill will help by removing a lot of the disincentives to produce energy in that manner and scale. I wish it very well. We will do our best to take part in the debate and to help to improve the Bill as it makes its way through Parliament.
11.57 a.m.
Baroness Miller of Chilthorne Domer: My Lords, we warmly congratulate our noble friend Lord Redesdale on introducing this necessary Bill. It is regrettable that it is necessary to introduce it so soon after the Government put their own Energy Bill through both Houses. That could have incorporated some of these measures, had they chosen to do so.Indeed, some of these measures were amendments that the Government resisted during the passage of that Bill.
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My noble friend has taken some of those ideas, developed them further and presented a practical Bill to the House this morning. He is absolutely right in saying that we all need to do our bit as households. The role of the Government should be to facilitate that, but they have not done that to date. They have done little to make it easier for individual households, beyond giving a few grants. If you are clever at using the web, you may discover what is on offer. The grants are not widely publicised, and the forms are quite difficult. However, I should declare an interest as a recent recipient of a grant and should not be too rude about them, but they are not easy to access.
Clause 1 is a key clause when encouraging households to see that it is a good idea to make an investment. After all, we are asking people to make an investment in renewable energy for their future and for the future of the planet. It is perfectly reasonable to expect to receive a return on that investment. The mean-spirited way in which the industry and the Government have dealt with net metering needs urgent review. We need to reward households that invest in various forms of microgeneration.
Clause 2 deals with microgeneration and local authority targets. I declare an interest as a Somerset county councillor. I am pleased to tell the House that the council has recently won a Green Apple award for its renewable energy strategy. Somerset County Council has been recognised for practising some of what it preaches by putting photovoltaics on its county hall. It has also gone much further and encouraged communities, through small grant schemes and a lot of help and advice, to develop a range of energies from biomass to a very innovative partnership with Wessex Grain and the Ford Motor Company. Grain will be converted to fuel and made available to the car fleets of participating bodies. Interested bodies include the police force, county hall and various other partners. In addition, there is combined heat and power in various community buildings throughout the county.
My noble friend is right: even given the will that exists at Somerset County Council, we could do more with individual households. I hesitate, as my noble friend Lady Maddock said, to set stringent targets; local authorities have had enough of the Government setting targets and never providing funding. In thinking about target setting, the Minister might like to consider that the funding currently goes to the Carbon Trust and the Energy Saving Trust. Perhaps if targets were set for local authorities, they might receive directly some of that funding to help them meet those targets.
Clause 3 deals with planning for renewables. My noble friend Lord Redesdale is absolutely right: one of the main difficulties is that the picture is unclear. As he said, different planning authorities take a different approach. It is a disincentive when households are not clear about whether they need planning permission. Applying for planning permission is time-consuming, difficult and bears a cost, so removing such a need would be a big help. Perhaps the Minister could say whether, in their current review of permitted development orders and general

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development orders, the Office of the Deputy Prime Minister is considering anything along the lines suggested in the Bill.
I was delighted to hear the general welcome for the Bill from the House and pleased that the noble Lord, Lord Hunt of Chesterton, reminded us of its importance in the context of global warming. Along with other speakers, he mentioned the necessity of the reliability of many small sources. At a time when, as the noble Lord, Lord Beaumont of Whitley, reminded us, energy security is important, having many small diverse sources is a lesson that the Government should take to heart.
The right reverend Prelate the Bishop of Chester reminded us that we cannot afford to be profligate with our resources. Anything we can do to be less profligate is to be welcomed. The spirit in the country is that people would like help to be less profligate, but it is so difficult at the moment that they find it impossible.
My noble friend Lady Maddock has done as much as anybody, and probably a great deal more than anybody in either House, to promote renewable energy and energy-saving measures. I listened to her speech with great interest. Her point about federalism was made in conjunction with the example of Scotland given earlier. The people of Scotland have made much greater progress than we have.
The noble Lord, Lord Berkeley, reminded us of the issues surrounding long-distance electricity transmission. That is one of the most important points for the Government to consider in the context of the Bill. If we can have microgeneration on a domestic scale, all the wastage of money and electricity that is part of long-distance transmission would be overcome. That point is particularly important.
I share the noble Lord's view that nuclear energy is not the answer. We have heard many questions from the Conservative Benches about the efficacy of renewable energy, particularly wind power, over the past few months. Many on the Conservative Benches are heavily promoting nuclear energy as the answer. But as I have said on previous occasions, it is not the answer, particularly while we have so many outstanding questions about what to do with the waste we have as well as the waste that the noble Lord, Lord Berkeley, reminded us is being imported from other countries, notably Italy, which has had permission to export its waste. The Italians, quite rightly, recognise that there is no answer at the moment to the safe storage or disposal of such waste, and have managed to offload it on to the UK.
Finally, I was interested to hear from the noble Lord, Lord Beaumont of Whitley, that the Green Party's spring conference is in February this year. That is indeed an indication of climate change, with spring coming ever earlier. I am grateful to him for the Green Party's support for the Bill.
I look forward with great interest to finding out whether the Government will support my noble friend's Bill. I very much hope that they will.
12.7 p.m.
Baroness Miller of Hendon: My Lords, this is a very short Bill which has four main components, most of which deal with encouraging microgeneration, either by removing barriers or by adding incentives. The noble Lord, Lord Redesdale, in promoting the Bill, has explained those methods very clearly.
There have been some very interesting speeches in the debate. I shall not add anything other than to say that the noble Baroness, Lady Miller of Chilthorne Domer, has commented on what everyone has said, so there is no purpose in my doing so again.
The noble Baroness said that she had heard many Conservatives heavily promoting nuclear energy. I am not sure that that is correct; like the Government, we say that the nuclear energy option should be kept open. But that is a subject for another day.
There is a slight problem with the Bill. I think that it will involve some heavy costs, which have not been mentioned. Although the noble Baroness, Lady Maddock, said that the infrastructure is already in place, my understanding was that this would all go on to the grid, so those costs would have to be taken into account. However, that would not make me oppose the Bill—indeed, we are certainly not opposing it.
Lord Hunt of Chesterton: My Lords, I am sure that the noble Baroness will remember that Woking went off the grid. These things can be done off the grid.
Baroness Miller of Hendon: My Lords, my understanding was that the Bill supported another way, but the noble Lord, Lord Hunt of Chesterton, may very well be right. The noble Baroness who comes from Woking had already left the Chamber before I was able to check that with her, but never mind.
I feel that probably, at best, the Bill will not be able to do much more than scratch the surface. However, on the basis that every little helps, we certainly wish it well.
12.10 p.m.
Lord Triesman: My Lords, like many noble Lords, I really welcome the opportunity to debate the vital issues that have been raised by this Bill. I thank the noble Lord, Lord Redesdale, for giving us this opportunity and all the other noble Lords who have taken part in the debate, not as a matter of ritual but because their comments have added to fundamental discussions. I have taken note of some of the good examples of local authorities that have been introduced as adding weight to the clauses—in Merton and Woking. I am sorry to hear about what is being written in train lavatories about Woking. I do not know Woking at all, but I am sure that it is entirely unjustified.
I welcome the support of the GLA for the energy goals that the Government have announced. London is obviously in a position to make a significant contribution to reducing carbon emissions. We will read with interest the detailed strategy which was published last year but still needs a good deal of study.

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In relation to microgeneration, officials in the DTI have already had constructive meetings with the GLA to discuss its strategy and I will be brought up to date on them. Having said all that, I will explain why the Government will not be supporting the Bill.
The Government have long considered micro-generation an important strand of the long-term energy policy. Indeed, the energy White Paper provided a vision of the energy system in 2020, suggesting that there will be much more microgeneration and that it will generate excess capacity, which can be sold back into the network. It is not fair to say, as the noble Baroness, Lady Miller of Chilthorne Domer, suggested, that the Government have not done a great deal. I can illustrate in the next few moments that we have really done rather a lot. However, I do not want be churlish. I congratulate her on that grant and look forward to hearing how it has been deployed.
As I said, microgeneration is an important strand and it is worth putting that into the context of the Government's commitments to renewable forms of energy: providing 20 per cent of the UK's electricity needs by 2020. That aspiration will drive a significant increase in investment in renewable technologies. Energy provision is indispensable to a thriving modern economy and essential to our society. We need to reflect that the world of energy supply and the diversity of sources is changing, as many noble Lords have emphasised. In the past, we relied on the United Kingdom's domestic fossil fuels with all the problems of carbon emission that they then caused. Our aspiration in the changed circumstances is to meet our energy demands in an environmentally sustainable way and to ensure, so far as we can, that we control the extent to which we are required to import energy from abroad—a point to which I shall return later when I comment on what some noble Lords have said about that.
We have four key aims. The first is that we aim to cut the UK's carbon emissions by some 60 per cent by about 2050. We share the understanding of noble Lords—the right reverend Prelate the Bishop of Chester made the point about global warming and I wholly agree with what he had to say—that global warming is a problem of massive significance; the Prime Minister has said so repeatedly.
Secondly, we aim to maintain security of supply and we are committed to the reliability of energy supplies. Thirdly, we aim to promote competitive markets, including those beyond the United Kingdom, to exchange and enhance sustainable economic growth and to improve our own productivity. Fourthly, we aim to ensure that every home is adequately, affordably and, with proper insulation, efficiently heated. Fuel poverty should be a sad historic memory in every United Kingdom household by 2016–18. Together those aims speak clearly about the Government's green aspirations.
However, aspirations must be translated into action. The renewables obligation introduced in April 2002, backed by direct government investment of £500 million sets a direction of travel and puts in place the milestones over the years. The investment has
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embraced major capital grants for emerging technologies and some of those technologies, like all emerging technologies, are not yet fully known. What they will be capable of achieving is not altogether proven. That is still to come, as always happens with emerging technologies. New resources for energy research and development are also in the funding stream that I described.
The Energy Act 2004 provides a framework for renewable energy sources to succeed. I mention a few of them because as I said, microgeneration is one strand and it is important to recognise the other strands in this fabric. In the marine sphere, the Government recognise the potential of wave and tidal sources. My right honourable friend Patricia Hewitt announced on 2 August last year £50 million for a marine renewables development fund, which will accelerate commercial development, and promote and underpin sustainable manufacturing for marine energy technologies.
In respect of wind, we have an industry growing in economic efficiency. There has been an improvement of 80 per cent in efficiency in the past two years. We retain our commitment to a renewables contribution of 10 per cent to the UK's needs by 2010. Wind farms will obviously make the key contribution.
I now turn to the issues in this particular strand of renewables. The Government are committed to a development of photovoltaic means and the first phase of the major photovoltaic demonstration programme worth £31 million runs from 2002–08. In addition, a research and development programme of £2.5 million per annum is in place. I was very grateful to hear from the noble Baroness, Lady Miller of Chilthorne Domer, about the Somerset example in trying to take up and make use of some of those initiatives. Some £66 million in capital grants is pledged to crop and biomass development and the DTI and the New Opportunities Fund have announced a further £4.2 million for the installation of biomass boilers in 11 areas of the United Kingdom. Biofuels are supported by a 20 pence in a litre fuel duty reduction. We are committed to achieving at least 10 megawatts of combined heat and power by 2010.
So alongside the green aspirations, we can claim that there are real green programmes. Some 8,000 jobs are already in existence in the industries that I have mentioned and we believe that that figure will rise to about 35,000 new jobs in the United Kingdom over 15 years in the renewables industry. It is hard to describe that as a mean-spirited programme.
The right reverend Prelate the Bishop of Chester also mentioned other initiatives that should be seen alongside those developments. The recycling industry is a very important element and I applaud the fact that he mentioned it. Its excellent work is exemplified, for example, by the work of organisations such as the Waste and Resources Action Programme and by London Remade and we are pressing rapidly, as technologies allow, into green policy in those areas as well. I personally feel great enthusiasm for this subject.

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Plainly, the key objective of all of this is climate change. The right reverend Prelate the Bishop of Chester, my noble friend Lord Berkeley, and the noble Lord, Lord Beaumont of Whitley, all mentioned climate change as did the noble Lord, Lord Hunt of Chesterton and the noble Baroness, Lady Maddock—indeed,
"a duty to look after the earth",
was the phrase that she used; and I completely agree. Many of the noble Lords I mentioned also talked about security of supply. That must also be one of the guiding principles, although that issue has come up quite frequently and over a long period.
People have quite often pointed to the areas in which there are oil fields or natural gas resources and have anticipated calamity in all of them. Yet, certainly with regard to natural gas, whatever the political changes in many of the countries involved the fact is that the supply has been secure and uninterrupted in a period of, I believe—and I hope that my memory is correct— some 35 years. We are also trying to increase the number of jobs by stimulating new industries. A good deal of discussion goes on with New Zealand. Alongside the Prime Minister, Helen Clark, the Prime Minister of New Zealand, is very enthusiastic about all those developments.
Microgeneration has to be a significant strand in those developments. By 2020, it should be capable of generating excess capacity that should be sold back into the network. To achieve that long-term vision, we have been giving significant support to microgeneration technologies. We have funded PV installations to the tune of £25 million through the major PV demonstration programme. We have provided a further £10 million to fund large-scale and domestic field trials of PV technologies. With another £10 million we set up the Clear Skies initiative to support community and household renewable energy sources. Last summer, my honourable friend Mike O'Brien announced in another place an extra £6 million of funding for the major PV demonstration programme and an additional £2.5 million for the Clear Skies initiative. That brings the total support for the programmes that we are discussing in the context of today's debate to £53.5 million.
However, effective support is not only about providing money for grants. We have also been working closely with Ofgem and other key stakeholders to address various technical issues relating to metering and grid connection. Last year, we amended the renewables obligation order to make it easier for small generators to claim renewable obligation certificates—ROCs. Generators producing under 50 kilowatts can now claim ROCs on the basis of annual output rather than monthly output. The forthcoming review of the renewables obligation will consider yet further steps to simplify the process for microgenerators to claim ROCs. I believe that that will help, and I know that the noble Lord, Lord Redesdale, has argued for precisely that kind of approach.
A 50 per cent uplift for innovative technologies, such as micro-CHP, is included in the second phase of the energy efficiency commitment, which runs between 2005
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and 2008. As I am sure all noble Lords will remember, the Government signalled their overall support for microgeneration through the incorporation of a specific clause in the Energy Act 2004. Based on an amendment tabled by the noble Lord, Lord Ezra, the clause commits us to producing a strategy for the promotion of microgeneration in Great Britain. Work has been progressing on the strategy but it is too early to be legislating on specific measures. To be effective the strategy must be based on suitable evidence and analysis. Rushing measures into legislation before the preparatory work has been completed would be harmful to the overall strategy.
I must break off for a moment to correct the record. Apparently, I said—and I am sure that the officials are right—that the Government have a 10 megawatt target for CHP; in fact, it is a 10gigawatt target, which is considerably bigger. I am glad to be among the first Ministers to have dramatically understated the case.
I turn to the specifics of the Bill. Clause 1 gives the Secretary of State the power to establish a scheme enabling the sale of electricity by domestic microgenerators. If such a scheme were established, under Clause 1 electricity suppliers would automatically be required to purchase electricity from microgenerating customers at the market rate. Microgenerators already sell their electricity, and legislation is not required to achieve that. To go a step further and to require suppliers to buy the electricity at the market price risks distorting the electricity supply market and would be incompatible with the liberalised arrangements of the British electricity market.
The framework underpinning our competitive energy markets was established to provide market-based solutions to our energy needs, governed by an independent regulator. That: provides certainty and gives confidence that those who we need to invest will do so, and will deliver our energy supply as a consequence. Intervention of the kind envisaged in Clause 1 is likely, we believe—though not by any intention—to deliver the opposite. Clearly, microgenerators will be concerned that they can sell any excess electricity generated. I can assure the noble Lord, Lord Redesdale, that we are looking carefully at that matter as part of the work on the strategy for the future. It is important that, within the framework of competitive energy markets, there are no barriers to entry for microgenerators.
Clause 2 obliges the Secretary of State to require local authorities to set targets for microgeneration. Like other noble Lords, I have heard the example of Merton and other places. Last year, Merton introduced a policy expecting all new non-residential developments over a certain size to reduce predicted carbon emissions by 10 per cent through the use of onsite renewable energy sources. It did this without any requirement from the Secretary of State to set such targets. The Government made it clear in planning policy statement 22 in August 2004 that local authorities could include such policies in their local development documents. I understand that a number of local authorities have similar policies in place, or are

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planning to introduce them in future. So it would appear that local authorities are taking the lead in that area without the need for added intervention.
It is not clear whether anything like a majority of local authorities would welcome government legislation. Indeed, we believe that they would not. That point was made by noble Lords. Therefore, the problem does not seem to mean that there is a need for further statute, but I take the point made by the noble Baroness, Lady Maddock, on the potential for other incentives. Without trying to elaborate on that, I would welcome the opportunity of a discussion with her about what she believes might be an interesting approach.
We shall continue to monitor progress in this area and will make a proper assessment of the effectiveness of the updated planning policy before making a judgment as to whether further legislation is needed. In the mean time, I can only applaud the authorities that have taken innovative steps to promote embedded generation, and would encourage others to look at implementing similar policies.
Clause 3 requires the Secretary of State to make an order classifying small renewable energy developments as permitted developments under the Town and Country Planning (General Permitted Development) Order 1995. The Office of the Deputy Prime Minister is currently undertaking a review of that order. Although the noble Baroness, Lady Miller of Chilthorne Domer, asked me to anticipate Mr Prescott's announcement, I have no intention of doing so at this stage.
However, no one would find it particularly useful if we took a casual attitude to planning at any stage of significant developments. Like the windmills of old, people may come to love them; but, at the moment, I notice that people keep tilting at the windmills of new. They do not seem to treat them with the same affection, although I hope that that will not be true of the windmill that the noble Lord, Lord Redesdale, may potentially establish in north London.
Clause 4 would create an obligation similar to the current renewables obligation, but with reference to energy rather than electricity. I understand what the noble Lord is trying to create in what he refers to as a "renewable heat obligation". Such an obligation would be much more complex than the current electricity obligation. The heat market involves a wider range of fuels and types of suppliers than the electricity market, and there is not a suitable regulator that could replicate the role played by Ofgem in terms of administering that obligation.
It is also not clear what level of carbon savings would be achieved through the obligation. Enforcement costs are likely to be very high and perhaps out of proportion to the benefit of any heat that would be achieved through renewable sources resulting from this measure. The noble Baroness, Lady Maddock, made the point that time and attention would have to be given to the detail and that that would in itself require probably quite large resources and at pretty high cost. The DTI has commissioned a study of the market of heat generated
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from renewable sources and the heat produced by combined heat and power plants. I think that we should wait for that before trying a legislative fix.
Clause 7 extends the Bill to cover devolved administrations. That would be problematic in Northern Ireland as responsibility for energy policy has been transferred to the Northern Ireland Assembly. I shall not go into the detail of the arrangements that have been devolved to Scotland.
Baroness Maddock: My Lords, I am very grateful to the Minister for giving way. I cannot accept that we cannot devolve these matters to Northern Ireland. When the Home Energy Conservation Act came through, we managed to do so through the Northern Ireland Housing Executive. It is possible and we have done it with many other Bills.
Lord Triesman: My Lords, I do not want to add to what I have said about the state of devolution. The responsibilities, in my view, plainly lie with the devolved authorities.
In conclusion, I should simply like to say that I am not unsympathetic and the Government are not unsympathetic to what the Bill seeks to achieve. The real question is whether the approach is rhetorical or practical. We obviously need a practical response—the point which the noble Baroness, Lady Miller of Hendon, made. I think that that is absolutely right. We need realistic thinking and realistic action.
I was intrigued by what my noble friend Lord Berkeley said about a number of matters including whether the wrong type of electricity might get into the grid. That added to my thinking on the wrong kind of leaves and the wrong kind of snow. I had thought that there were only two sorts of electricity—DC and AC—but it may very well be that my physics is behind the times.
We shall continue to work hard with key stakeholders to develop an effective strategy that will make a significant contribution to the growth in the number of microgeneration institutions. Our principles on this are the same; the practicalities are the problems. However, with those words, I hope that I have indicated that we have a great deal of sympathy and will ourselves continue to press this important strand.
12.22 p.m.
Lord Redesdale: My Lords, I thank all noble Lords who have spoken in this debate, most of whom have been entirely positive and expected the Bill to be passed. Of course my heart sank like a stone when the Minister said that he was not 100 per cent behind all the measures and did not see them moving forward with great speed. Perhaps I may pick up some of the points on which he said that he saw problems with the Bill.
The Bill has not been easy to draft. We attempted to draft it in a way that provided as much flexibility as possible. In Clause 1, on metering, we added the term "market rate" to raise this very problem. The Minister mentioned the comment by the noble Lord, Lord Berkeley, about the wrong sort of electricity.

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The real problem with microgeneration is the voltage at which electricity would be fed into the grid. That could cause problems. However, it seems very unfair that at present one buys electricity at between 5p and 8p per kilowatt while those who are seen as providers receive only 2p to 3p per kilowatt for selling it back to the grid. That is obviously due to the skew in the market towards the very large producers. I have a massive briefing on how many megawatts, gigawatts or kilowatts one has to produce over a half-hour period to be described as an electricity provider and on the rate that one would receive. Seeing the time, however, I do not think that I should go into it at great depth at the moment.
Secondly, the Minister said that local authorities may well not appreciate further statutory instruments and burdens being placed on their shoulders. I happily take on board that point. The Minister also mentioned Merton and Woking, which are the two greatest examples. However, he said that we will have to look at how other authorities address the issue. How will the environment benefit from our spending a couple of years looking at hundreds of other local authorities that are doing absolutely nothing on the issue? The Minister indicates that that is not the case, but in many cases it is not a real issue.
The city of Newcastle has declared itself carbon neutral and is now trying very hard to achieve that end. However, for many reasons, a vast number of local authorities do not see this as a priority and are not working hard towards it—despite the fact that, as the noble Lord, Lord Hunt of Chesterton, said, not only could they achieve a 70 per cent reduction in carbon; they could also make millions of pounds of savings over a number of years in the amount they spend on energy.
The Minister raised the issue of planning, which is an issue. My small wind turbine is being built in Northumberland, not north London. I look forward to the day that I am allowed to stick up a large mast and wind turbine in my very small back garden. I used the example because I am in the middle of the planning process at the moment, and I very much hope that permission will come through. Objections are being raised because many people see wind turbines with a capacity of 1 gigawatt to 3 gigawatts rather than of 6.2 kilowatt. I have, therefore, had objections saying that it will cause television interference. That is plainly not the case as something so small would have no effect at all. But people raise such issues. Planning authorities need to be given as much guidance as possible to ensure that they do not stop the development of small renewables on the basis of erroneous information.
Many noble Lords have raised some of the issues behind the Bill. The right reverend Prelate raised the issue of a changing culture, which is one of the fundamental issues. As has often been said, far more energy could be saved if people actually switched off light bulbs. If everyone in the Chamber made the switch today to energy-saving light bulbs at home—they are incredibly cheap;£1.98 buys you one at Tesco—there would be a significant saving. However, that will not always be the case.
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The noble Baroness, Lady Miller of Hendon, said that this legislation is only scratching at the surface and will have no real effect. The noble Baroness, Lady Maddock, raised the issue of combined heat and power. I strongly believe that in future it will probably be mandatory to install combined heat and power boilers, just as it is now mandatory to install condensing gas boilers. The cost differential is coming down as we speak.
It seems very unfortunate that the only CHP boilers that we can buy in this country at the moment are from Whisper Tech. As those have to be shipped over from New Zealand, it obviously has carbon implications in transportation and boiler miles. However, there is a real possibility that such companies would build in this country if there were a large market. With an average of 2 million boilers being changed in this country each year, we have a massive market. If each boiler produced 1 kilowatt per hour, hundreds of thousands and perhaps millions of tonnes of carbon could be saved.
If every house in a new development was fitted with solar thermal, or every house that could be fitted was fitted, it would save millions of tonnes of carbon dioxide and have a significant impact on meeting the Kyoto targets. Solar thermal is a form of renewable technology that takes the heat of the sun and drops it into the hot water tank.
Many other noble Lords raised other points, but I am conscious that the Minister answered many of them. I would put forward just this final thought. I understand that the Minister is moving forward and that a great many schemes are being undertaken by the DTI and Defra, many of which are innovative. However, we should not be under any misapprehension. The figures seem large, in the millions of pounds, but the problem that we are facing with global warming, as has been shown by the changing climate, could cost us tens of millions to billions of pounds. Therefore, we have to act quickly.
One of the real issues at the moment is that there is a perception that renewables are spreading everywhere, but that is not the reality. It is interesting that everyone talks about wind turbines in their backyard, but most people have never seen them. Last year a small by-election occurred in Hartlepool, which we came very close to winning. Enormous wind turbines can be seen along the Hartlepool skyline, which I think are very beautiful. At the time of the by-election I asked people in Hartlepool whether they were bothered by the wind turbines. The wind turbines overshadow the town but not one person that I asked cared about that. Hartlepool, of course, also has a nuclear power station on its doorstep. It appears that the perception of people complaining about wind turbines is very different from the reality of the view of wind turbines held by tens of thousands of people who live in Hartlepool. We need to act quickly on the matter for this industry to take off.
I wish to share with the noble Lord a simple calculation devised by someone who has tried to introduce renewable technology; that is, regulation over local government bureaucracy times the cost of renewables equals inertia. One of the major problems

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with regard to renewables is that people do not install them as it takes so much time and effort to do so. I very much hope that the Government's work on the subject will result in our discussing this subject on many occasions, even if by some small margin the Bill should fail to complete its passage through both Houses of Parliament, which I very much hope will not be the case. I hope that we shall return to this issue and that, like my noble friend Lady Miller and I, many more noble Lords will install renewables in their homes. I ask that the House give the Bill a Second Reading.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Succession to the Crown Bill [H.L.]
12.42 p.m.
The Secretary of State for Constitutional Affairs and Lord Chancellor (Lord Falconer of Thoroton): My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Succession to the Crown Bill, has consented to place her Prerogative and Interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Lord Dubs: My Lords, I beg to move that this Bill be now read a second time.
There is a view that Parliament should hesitate before legislating on the monarchy. Indeed, there is almost a taboo on royal reform—a taboo which I hope that we can dispel today. This is a breathtakingly modest Bill. People have said that it is radical to introduce a Bill concerning the monarchy, but it is so breathtakingly modest and moderate that I do not believe that anyone can oppose its contents.
At the outset, I thank the staff in the Public Bill Office, who have been enormously helpful to me in drafting the Bill and getting it right. That was technically quite a difficult thing to do, and I am very grateful to them. My friends who have looked at the Bill say that its provisions are so obvious that it should have been enacted years and years ago. They ask why it has taken so long to be introduced. I am enormously gratified by the widespread support for the Bill in the media and among parliamentary colleagues of all parties. Indeed, the press has been almost entirely supportive—not something that a humble Back-Bencher normally achieves with a Private Member's Bill.
The Bill stems from the Fabian Commission on the Future of the Monarchy—a commission that the Fabian Society set up and which reported last year. I should add that I have chaired the Fabian Society and am an elected member of its executive. The Bill would give effect to some of the recommendations in the report of the Fabian Commission.
Why is this important? It is important because I consider—I am sure that this view is shared—that the monarchy should symbolise the values of this country.
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What we do not want is a situation where the values of the country have moved on and the monarchy is centuries behind the times.
We are surely all opposed to discrimination on the ground of gender. We are surely also opposed to discrimination against Catholics. That in a nutshell is the subject of the Bill. It is a particularly good time to have such a measure because there is a male heir apparent with two sons, so no one would be directly, immediately and adversely affected by the Bill. This is therefore the right time for such legislation; otherwise, it might seem to undermine the position of a particular member of the Royal Family. It is emphatically not doing that.
I turn to the details of the Bill. Essentially, there are three main issues. The first is to end the practice of male primogeniture. Surely, we should stop giving preference to younger brothers over older sisters in succession to the throne. Under the present arrangements, if and when Prince William comes to have children, if his eldest is a girl, she will not succeed but her younger brother will. Under my Bill, the eldest child of either gender would inherit the throne. After a successful reign of over 50 years by the Queen, no one can argue that the job cannot be done by a woman. Indeed, by all accounts, the Queen has done the job extremely well.
The second aspect of the Bill concerns who the monarch may marry. At present, the monarch may not marry a Catholic; yet, there is no bar on marriage to any denomination of Christian or to a Hindu, a Muslim or to people belonging to other religions. Such discrimination against Catholics is surely unacceptable in this day and age. What must many people in Commonwealth countries such as Canada and Australia think, given that they have large Catholic populations? Indeed, coming nearer home, how must this be seen by the Catholic population of Northern Ireland? The anomaly in the present arrangements is that, if the monarch were to marry a non-Catholic who subsequently converted to Catholicism, that would be all right. That, surely, is another absurdity of the present arrangements.
I make it clear that the Bill is not about the disestablishment of the Church of England nor about the religion of the monarch. Those are much too difficult issues for a Bill of this sort and, indeed, my aim is to make progress and not simply to put up arguments that might well be shot down. The Bill is about whom the monarch may marry.
The third proposal in the Bill is to abolish the Royal Marriages Act 1772. It is generally acknowledged that it was passed by George III in a fit of pique regarding some members of his family. That is not a good basis for legislation, as has been shown by subsequent such legislation introduced by many governments. When governments get into a fit of pique, legislation does not always work very well. Even in the 17th century, the Bill was regarded as archaic and badly drafted. The Act requires all descendants of George II—why George II?—except princesses marrying into a foreign family, to ask the monarch's permission for their marriage to be valid, or, alternatively, for those subject to the Act and over the age of 25, to give notice to the

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Privy Council of an intention to marry and then go ahead after 12 months, as long as both Houses of Parliament have not expressly disapproved of the marriage. That is fairly complicated and fairly bizarre. Vernon Bogdanor, the well known constitutional expert, has said that,
"there are few more absurd pieces of legislation on the statute book".
There is competition for that place, but that Act seems to have the lead.
In any case, the abdication crisis in 1936–37 showed that, where the government are opposed, a royal marriage cannot in effect take place. More recently, in relation to another royal marriage, Harold Wilson, the former Prime Minister, devised the following formula:
"The Cabinet have advised the Queen to give her consent and Her Majesty has signified her intention to do so".
None of the complicated rigmarole of legislation, just a simple basis of dialogue between the monarch and the government.
I fully understand the tradition that new legislation on the monarchy should be a government measure rather than a Private Member's Bill. Indeed, that was the subject of discussions some years ago. My aim is very clear: I hope to persuade the Government that this is a sensible and long-overdue measure, so that in turn the Government will bring forward their own Bill in the near future—I hope soon after the election.
We had some discussions on the measure six years ago. On 27 February 1998, the House debated a Bill that included some of the proposals in the Bill that I am presenting today. The earlier Bill was concerned with equality between males and females in the rules of succession. The late Lord Williams of Mostyn said on behalf of the Government on that occasion:
"There can be no real reason for not giving equal treatment to men and women in this respect … We do not think that, whatever its merits, a Private Peer's Bill is an appropriate vehicle for so important a change as the one we have been debating".— [OfficialReport, 27/2/98; cols. 916–17.]
That is a clear statement, and it is clearly the case. He went on:
"A major constitutional measure of this sort ought properly to be the subject of a government Bill. We shall be considering how best to carry this forward within government and in consultation with the Royal Family".—[Official Report, 27/2/98; col. 917.]
That is a clear commitment from the Government, made six years ago.
There is an important additional consideration, which is that, apart from the United Kingdom, there are 15 Commonwealth countries of which the Queen is the monarch, for example, Canada, Australia, Barbados, Jamaica and others. Those countries would have to be persuaded to enact similar legislation, otherwise the succession would become seriously confused. Obviously, it is beyond my ability and powers of persuasion to contact 15 Commonwealth countries to suggest that they enact similar legislation. That is another reason why this is something that the Government should do. The House will understand that, when six years have elapsed since a commitment by the Government, it is not unreasonable
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that I should seek the opportunity presented to me today to argue the case again and to lean on the Government as hard as I can.
Before I close, let me refer to one other matter in the other place. My right honourable friend Ann Taylor MP will, on 4 March, present a Crown Succession Bill. It is in most respects, if not all, identical to the Bill that I am putting forward. She is putting it forward under the Private Member's Bill procedure in the other place. Clearly, there is support not only at this end of the Palace of Westminster but in the other place. I will watch with interest to see the progress made by that Bill. We both face the difficulty that an election is coming and the legislation might not work its way through. My key argument is that in the end, this is not for a private Member, this is a matter for the Government. I look forward to enthusiastic support from the Government in this debate. I commend the Bill to the House.
12.52 p.m.
Lord Campbell of Alloway:My Lords, I have an interest to declare; I support, under the aegis of Her Majesty the Queen, retention of the Commonwealth united by common allegiance to the Crown. I also support the retention of the established Church. Whatever may be the intendment, and I say this with respect to the noble Lord, Lord Dubs, it simply is not possible to ring-fence the consequence of enactment of this Bill touching the succession to the throne as affecting the Commonwealth or the established Church as proposed by Clause 6(2). It just is not possible.
The preamble to the Statute of Westminster 1931 requires the assent of all Parliaments of all dominions to an alteration of the law touching accession to the throne. Albeit that according to our indigenous rules of statutory construction the preamble has no legal efficacy, we are involved with a serious matter of comity. Has there been—apparently not—any due consultation on the substance of this Bill as explained just now by the noble Lord, Lord Dubs, with those who advise the monarch, with the dominion realms, or with the established Church, all of whose interests are involved? Is this nothing but pre-emption? As regards the interests of the established Church, I defer to the right reverend Prelate who is due to speak, and I shall say no more.
No Motion has been tabled as to commitment in the event of this Bill being read a second time. Is it the intention to withdraw the Motion? Is this, so to speak, but a trailer for a government Bill? If not, what is it? Is it a vehicle for discussion? If so, in the course of debate today, it shall be discussed. That surely does not mean that it should be read a second time. The question of commitment no longer lies within the remit of the Procedure Committee; it is a matter for the whole House to decide on the Motion, and no such Motion has been tabled. Is it appropriate that this Bill be given a Second Reading, albeit that it is the convention that Private Members' Bills opposed in debate are given a Second Reading and in due course pass your Lordships' House. This convention has not been

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adhered to in exceptional circumstances, and the intrinsic value of a convention, as distinct from mandatory, codified rules, is flexibility. The opinion of the House on this is flexible; this is a matter for discussion on 26 January, but assuredly not today.
Inevitably, if this Bill were to pass this House, and if it were taken up in another place, it would fail on a single objection. I think that I heard the noble Lord, Lord Dubs, concede this: is not succession to the Crown a matter that more properly lies within the exclusive remit of a Government Bill? The Bill proposed by the noble Lord, Lord Archer of Weston-Super-Mare, was withdrawn on 27 February 1998. My noble friend Lord Forsyth of Drumlean had his Motion for a Humble Address on his Bill rejected by your Lordships' House on 3 December 1999. Such consent, albeit obtained by the noble Lord, Lord Dubs, is no longer required according to extant rules.
If the object is to serve today as a vehicle for debate, surely the Bill shall by the end of today, without a Second Reading, have served that purpose.
12.59 p.m.
The Lord Bishop of Winchester:My Lords, we could spend fascinating days exploring the potential implications of those provisions that the noble Lord, Lord Dubs, has included in his Bill, but also speculating why he has not included other closely related and logically connected provisions that have been energetically canvassed in recent years by the Fabian commission, as he mentioned, among others.
I shall concentrate on Clause 2, headed "Roman Catholic consorts". Looking in passing at Clause 1, however, I am puzzled by the import of subsection (2). I wonder—I think that the noble Lord, Lord Dubs, wonders too, given his quotations from 1998 and the late Lord Williams—about the wisdom and indeed the fairness of separating succession to the Crown from succession to most if not all peerages and other hereditary titles, with their rights, privileges and dignities.
I should declare that, under another hat, I am co-chair with a Roman Catholic bishop of a body called the English Anglican-Roman Catholic Committee, which is made up of members—lay and ordained—of the Roman Catholic Church in England and Wales and of the Church of England and the Church in Wales. The committee is tasked with furthering and monitoring the developing and—thank God—ever-closer relationships between our Churches, although it has not discussed the issues before the House, during my short membership at any rate.
I read with a lot of interest the noble Lord's article in the Guardian of 9 December, and valued the opportunity to listen to his speech introducing the Bill. In the article, he wrote that the provision in Section 2 of the Act of Settlement, which he seeks to repeal in Clause 2(4) of the Bill, and the equivalents to it, to which the Bill's Clause 2(2), (6) and (8) seek to attend, were,
"an outdated piece of religious bigotry".
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That is rather tougher language than he has graced us with today.
The noble Lord went on to say in the article, and has effectively said again today, that,
"the proposal in my Bill would not in itself affect the position of the Crown as the Head of the Established Church".
I imagine that it is for that reason that he does not seek to repeal the Act of Settlement as a whole, and with it its close relatives, which also refuse the Crown to Roman Catholics, but I noted his inclusion of "in itself"in the article. I wonder whether his confidence that,
"the position of the Crown as the Head of the Established Church",
is not affected even by his Bill is well founded. I should have wished him to distinguish between the historical roots of the provisions—when placed on the statute book, they were understood to be, to quote the Act of Settlement,
"absolutely necessary for the safety peace and quiet of this realm",
so they therefore seem not sufficiently described simply by the language of religious bigotry—and their contemporary significance
I want also to remind your Lordships—it seems fundamental—that a Church is established to serve, sustain and encourage the establishment of the Christian faith as the ultimate point of reference for government. Behind even this apparently quite unambitious Bill therefore lies this significant question: what kind of state have we, and what kind of state do we want? What kind of public life do we have, with what ultimate accountability for those who carry the honourable responsibilities of government? Were it to prove the case by some chance that the end product of the Bill—if it were somehow to become law—was the separation of the Crown from not only the Church of England but its anchorage in the Christian faith of this land, however expressed, we should be embarking on a unique experiment for these islands of a state whose basis was explicitly secular. The evidence of the 19th and 20th centuries—indeed, of this century so far, and not far from here—is that such a state would be markedly less tolerant and inclusive than our present arrangements.
It seems important to be clear—I say this without any critique or animosity at all—about three things when looking at Clause 2. First, it is the doctrinal convictions—which I respect and the reasons for which I appreciate and hope that I understand—of the Roman Catholic Church, not those of the Church of England, and the teaching and regulations based on them, which still preclude a Roman Catholic from,
"(being joined) in communion with the Church of England as by law established".
Again, that is a quotation from the Act of Settlement.
Secondly, it remains the case that although much less explicit pressure is today brought on parents, one of whom is a Roman Catholic, to bring up their children as Roman Catholic Christians, clearly expressed expectations remain—which again I understand and respect, and can see myself sharing.

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Thirdly, if the Bill became law and made it in time for a Roman Catholic consort, in a generation we could therefore have a Roman Catholic heir to the throne who could not join in communion with the Church of England. Although I pray earnestly for that reconciliation of the Roman Catholic and Anglican Churches which for me is the only proper solution to the admitted embarrassments and misunderstandings which the Bill seeks to resolve, I doubt very much whether it is wise for your Lordships' House or the other place either to bank on the timing of that reconciliation or to seek to bring pressure to bear on its achievement.
Finally, there is the intriguing set of legal conundrums to which the noble Lord, Lord Campbell of Alloway, pointed, and the very curious and unsustainable tailpiece to the Bill—its final line, which is:
"This Act extends to the United Kingdom only".
There is the need, approached in part in the Statute of Westminster Act 1931, to maintain a uniform succession to the throne by ensuring that precisely the same rules govern that succession in each of the independent monarchies of which Her Majesty is Queen. My understanding is that any change in those rules would have to be precisely replicated in the law of each of—by my count—the 16 other Commonwealth countries affected.
Those are some of the reasons why I share the view of the noble Lord. Lord Campbell of Alloway, that it is really not at all wise to give the noble Lord's Bill a Second Reading.
1.8 p.m.
Baroness Morgan of Drefelin:My Lords, I should like to focus on gender. I am delighted to be able to make a very short contribution to the debate, and I start by congratulating my noble friend on bringing forward the Bill. I too believe that it is breathtakingly modest but symbolically important, as is this discussion.
The British monarchy is a great institution that is respected throughout the world and much loved at home. I have had the honour to see that at first hand as chief executive of Breakthrough Breast Cancer. His Royal Highness the Prince of Wales is patron of our charity, and I have seen his incredible effect on many thousands of supporters, who have welcomed him as patron and been truly inspired by his hard work and contribution to the charity, and to many other cancer charities. If that position of great respect and love is to be maintained, the institution will need to evolve and change with the times, as it is already trying to do. It is simply unacceptable for discrimination on the grounds of gender to be enshrined at the heart of our society in our most cherished institution. As such, I hope that the Government will respond very positively to the ideas that my noble friend is bringing forward in this debate.
I hope that your Lordships will indulge me in making one short and slightly tangential point that might illustrate the symbolic importance of the Bill. There is another gender issue that is not unconnected
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and relates to the peerage. Why. when men are ennobled, do their wives adopt a title, but when women become Peers, their spouses do not? I have been able to discover no logical answer to that. When applying 21st century values, it is incomprehensible that that should be the case. Either all Peers' spouses should have a title or none should. I would be most interested to hear the thoughts of my noble and learned friend the Lord Chancellor in that regard.
I am delighted that a significant taboo around debating the monarchy should be broken. I am pleased to have been able to contribute to this debate and I look forward to hearing how this discussion progresses in another place.
1.11 p.m.
The Lord Bishop of Worcester:My Lords, I hope that it is helpful to say that while I feel reasonably confident that the views of my colleague, the right reverend Prelate the Bishop of Winchester are representative of where most bishops in the Church of England might be thought to stand on an issue of this kind, there are those of us who think differently. It is important to place that on the record and I support the comments, ideas and, to some extent, the Bill of the noble Lord, Lord Dubs.
The strategy that is generally deployed in the face of proposals to amend things that people do not want amended is the "where will it end?" argument and to say that if we do this, the constitution is likely to unravel and we shall end up with a secular society with no levers against the untrammelled power of government. That is a deplorable strategy in the face of British history, my reading of which suggests that the solidity of our national lives and the stability of our society has been jeopardised when the sovereign— whether the monarch personally, in former days, or the government—has refused to display flexibility in the face of perfectly proper demands for change.
Because some of our forebears resisted small but significant and symbolically important changes when they became necessary, all sorts of revolutionary ideas started to gain currency—and the 17th century is marred by that sort of development. It is also extremely important, when considering this matter, to take responsibility for what has actually happened to Catholic and non-Catholic relations as a result of legislation, of which this may be the last remaining grin of the Cheshire cat—but it is a pretty malicious grin if you consider our history.
There is absolutely no reason at all why a person married to a Roman Catholic could not be the supreme governor of the Church of England. There is no reason why a Roman Catholic, advised by Ministers, who can be of any religious persuasion or none, could not be the supreme governor of the Church of England. There is no truth in the contention that a change of this kind will unravel the constitution. It is also presumptuous to assume that we know that the Roman Catholic Church would be incapable of, or unwilling to, make the adjustments necessary to allow the sovereign to discharge her or his responsibilities and have her or his

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correct relationship with the established Church, while remaining a Roman Catholic. Historically, the Roman Catholic Church has not shown itself to be inflexible in situations of that kind, when it has been in its interests to show that flexibility.
The continuation of the respect in which our monarchy is now held will be jeopardised by an inflexible adherence to ways of doing things that belong to a particularly suspect piece of our history. The noble Lord, Lord Dubs, has admitted that a Private Member's Bill will not be the way in which this matter is eventually changed. He is right. It is also correct to admit that this "breathtakingly modest" Bill, as he put it, could logically be extended in many directions. It has not been—because its purpose is to ameliorate a situation that is not of immediate importance, not, perhaps, even of overwhelming importance, but that none the less represents the survival of a degree of offensiveness in the relationships between different groups of citizens in this country, which, in the end, stands a greater chance of prejudicing the credibility of the Christian basis of our society than making minor changes of this kind.
For that reason, it is extremely important that this matter should be discussed—fearlessly so—and that we should not allow ourselves to be frightened by the threat that they might lead to all sorts of other discussions. If they do, we should have the maturity and the intelligence to engage in those discussions on their merits.
1.16 p.m.
Lord Monson:My Lords, perhaps I may be permitted to make a couple of points in the gap. I pay tribute to the characteristic idealism of the noble Lord, Lord Dubs, in relation to Clause 1, but on this occasion his idealism runs up against the sad realities of our time. No one disputes for one moment that, as he said, a female monarch can carry out her duties just as splendidly as any male monarch. That has been obvious for over four centuries and never more so than in the past 52 years.
But the problem today arises from the altered status and perception of the monarch's consort in our intrusive and irreverent age. Some 50 or 55 years ago things were different. Television was in its infancy, there was no commercial radio, there were no talk shows or phone-in programmes and the BBC was still suffused with the spirit of Lord Reith. Populist tabloids certainly existed, but neither they nor the broadsheets felt it their duty to knock from their pedestals anyone and everyone of status or influence. Paparazzo was an obscure Italian word which meant nothing to 99.9 per cent of our population.
How utterly different things are today. A woman contemplating marriage into the monarchy will be treated a little more gallantly by the media, but there will be no mercy for a man. Telephoto lenses, illegal bugging, acquaintances bribed to reveal juicy gossip—this will be his lot. He will know, moreover, that once his wife inherits the throne and he shares with her time-consuming and exhausting royal duties to the best of his ability, he will, nevertheless, be pilloried by the media for
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not having a "proper" salaried 9 to 5—or, more realistically, 8 to 7—job. If he as much as glances at a girl in a bikini, he will be accused of serial adultery. Such a prospect would deter the bravest of suitable men— although there may be a few unsuitable men—and we would be likely to end up with another virgin queen, or a series of them, but unhappily and unwillingly so in today's climate. We are never going to return to the restrained and well mannered world of 50 years ago.
I have fractionally more sympathy with Clause 2. The religious affiliation of the monarch's consort is relatively unimportant, provided that he or she is prepared, with good grace, to accompany the monarch to churches, cathedrals, cenotaph services and so on. Adherents of most Christian faiths and many non-Christian faiths would be happy to do just that. However, the important issue—and here I echo the right reverend Prelate the Bishop of Winchester—is that the children of such a union (the prospective heirs to the Throne) should be brought up in a broad, tolerant Christian faith which does not claim a monopoly of the truth nor believe, overtly or covertly, that it is the one true religion and that all other branches of Christianity are in error. With that vital—absolutely vital—proviso that the children of the union shall be brought up in the Church of England, the religious adherence of the consort ceases to matter so much.
1.20 p.m.
The Earl of Mar and Kellie:My Lords, I am attracted to the Bill for several reasons and I congratulate the noble Lord, Lord Dubs, on having introduced it. I begin by declaring that I am the beneficiary of systems of male primogeniture which have obviously led to my becoming a double-headed Earl and Hereditary Keeper of Stirling Castle, as well as becoming what the Lord Lyon King-of-Arms calls the Head of the name of Erskine—a fine definition among lowlanders.
These are all hereditary positions presumed to be determined by male primogeniture. In passing, the situation of my noble kinsman, the noble Countess, Lady Mar—the ancient Earldom of Mar dating from 1104—reminds us that the old titles were succeeded to by heirs general rather than by heirs male. The earldoms of Kellie and Mar, dating from 1619 and 1565, must have been among the first in Scotland to have been succeeded to by heirs male—or, to spell it out differently, by male primogeniture.
The Bill sets out in Clause 1 to alter the succession to the Crown from heirs general to strict primogeniture. This would be perfectly reasonable in today's context. It would have no immediate impact in these kingdoms, for Prince Charles is the eldest, as is Prince William. However, it would mean promotion for Princess Anne, who would follow Prince Harry in line to the Throne. Given the Princess Royal's revered position in the Kingdom of Scotland, this would receive a general welcome there.

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Among Scotland's non-British neighbours, we have only to cross the North Sea to Norway to find that the Crown Prince has an older sister. So perhaps members of the Storting will be studying today's Hansard, as well as the Norwegian royal family in Asker.
I am sure that Clause 1 meets with approval in anti-discrimination terms. However, I note that it does not allow the Crown Prince, or Crown Princess in her own right, to be a Roman Catholic. I am also attracted to the Bill because it deals with legislation with which my most controversial ancestor, the 6th Earl of Mar, was involved. The Act of Settlement was passed by the Parliament of England and Wales to deal with the crisis brought to a head by the death of the deposed King, James VII and II, in 1701. That was the moment at which his son, James Francis Edward Stuart, should have become King. However, the Parliament of England and Wales chose his sister, Mary, and her husband, alias King Billy, and then his other sister Anne.
As none of these ever visited Scotland, the Scots and the Parliament of Scotland had little real choice on the matter. However, the Parliament of Scotland passed the Act of Security in 1704, reserving to Scotland the right to choose its own sovereign. For me, a Scots Presbyterian, the Act of Settlement should be off the statute book, not just because of its discrimination against Roman Catholics, but also because Prince James Francis Edward no longer poses any threat.
I recognise that the Church of England would have a problem—or believes that it would. I would remind that Church that the sovereign's position in the Church of Scotland is that of a special but ordinary member with the right to be present at the General Assembly or to be represented by a Lord High Commissioner such as my noble friend Lord Steel of Aikwood. But the sovereign attends without even the status of an ordained elder. The Church of England could learn from its neighbour up north.
In Clause 2, the Bill partially redeems itself by allowing the sovereign or Crown Prince, or Crown Princess in her own right, to marry a Roman Catholic. In this clause, I enjoy the opportunity to amend the Union with England Act for which the 6th Earl of Mar was the Minister who spent the winter of 1706 and the spring of 1707 pushing through the Parliament of Scotland, aided, I fear, by the parcel of rogues in our nation. That Earl ultimately raised the Standard of James Francis Edward Stuart in 1715. Your Lordships will be pleased to learn that that is the end of my family history lesson.
The repeal of the whole of the Royal Marriages Act may have wider repercussions than I can imagine, but I suspect that the Act contravenes the Charter of Human Rights—and here I have in mind the section on the right to found a family. I note that the Bill extends only to the United Kingdom, a matter already raised. That is an unusual extension. Clearly, it could lead to a situation in which the Dominions and other states for which Queen Elizabeth is also the Queen could have a different sovereign head unless they all followed suit with the Bill. That would not necessarily be impossible.
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The problems which I can foresee are these. First, there might be more than one claimant to be Head of the Commonwealth if the Act were not copied by all the other states. Secondly, the problem of the change of the family surname, unless the convention of a lady taking her husband's surname were discarded. Any development of Windsor-Mountbatten would become as complicated as Saxe-Coburg-Gotha. But then I may be over-familiar with the 300-plus years of the House of Stuart.
Thirdly, there is no challenge to primogeniture. I have heard my father's youngest brother describe a system of ultimogeniture, where the youngest child stayed at home to look after their parents and ultimately inherited their home, while the older ones made their way in the world on their own account.
Fourthly, there is no system offered whereby the Crown can be declined or resigned, except in disgrace. I hope that a culturally more neutral system might evolve. Finally, I am surprised, without checking, that we do not have to amend the Union with Ireland Act 1801.
In conclusion, the Bill would do the right thing for women in this modern age and would begin the process of completing the Catholic emancipation.
1.27 p.m.
Lord Strathclyde:My Lords, it is a great pleasure to follow on in the debate, so ably introduced by the noble Lord, Lord Dubs. He follows in the footsteps of the noble Lord, Lord Archer of Weston-Super-Mare. I am sure that both noble Lords take great pride in that fact.
I do not have strong feelings about the subject matter of the Bill. It is good PR, but it is no great shakes against the life-and-death issues of filthy hospitals and dangerous and disorderly streets which we are normally used to debating.
The issue of succession does not arise at the moment. You could argue, as did the noble Lord, Lord Dubs, that this would be a good time to change the law, or you could argue that if there ever is again a first-born female in the line of succession, that would be the time to change the law in the light of the then feelings of the nation, the Royal Family and the public.
That is a matter of judgment, but let us not run away with the view that those who say there are more important matters to deal with are hostile to women. After all, I have not lived all my life in the reign of Queen Elizabeth II to hold some antiquated view that a woman cannot rule equally well. Indeed, I suspect that there is not a single Englishman who has held that view since the time of the first Elizabeth—surely one of England's greatest monarchs, despite her regrettable high-handedness towards her Scottish cousins. The present system has given us Queens for 117 of the past 168 years of excellent service.
I understand the good reasons that have led the noble Lord, Lord Dubs, to put the Bill forward, and I was pleased to hear him recognise the fundamental point made by the late Lord Williams of Mostyn in 1998 when speaking on behalf of the Government. I

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shall quote him, as the noble Lord, Lord Dubs, did, but it is worth repeating because it goes to the heart of the process. He said:
"We do not think that, whatever its merits, a Private Peer's Bill is an appropriate vehicle for so important a change as the one we have been debating. A major constitutional measure of this sort ought properly to be the subject of a government Bill".
That was true in 1998 and it must be true, I think, in 2005. So, I ask the noble Lord, Lord Dubs—it may not be the most important point but it follows that raised by my noble friend Lord Campbell of Alloway: why did he decide to bring forward a Bill rather than have a thorough debate on the Floor of the House? If, when he replies, the noble and learned Lord the Lord Chancellor says that these ideas deserve to be looked at, I ask: did not Lord Williams of Mostyn say in 1998, that,
"the only issue on which a decision has been taken is that which is … equality of treatment for men and women in relation to the succession to the Throne"?
I hope that he will be able to tell us whatever happened to that decision. We have had plenty of opportunities for legislation since then. After all, we have found time to legislate for Sinn Fein/IRA men to stand for two Parliaments in two different countries but no time to follow up this decision, which so many people regard as being of great importance.
The noble and learned Lord the Lord Chancellor cannot do today what Gareth Williams did in 1998— show his ankle and then do nothing. Either he should tell the House that the Government intend to alter the Act of Succession or say that he will leave well alone. Seven years after Lord Williams said what he said, the noble and learned Lord cannot say the same thing and expect anyone to believe a word that he or the Government say on the matter.
Noble Lords:Oh!
Lord Strathclyde:That is my view, my Lords. If I were the noble Lord, Lord Dubs, I would be rather less worried about sibling jealousies in a future Buckingham Palace and rather more concerned about fraternal relationships in Downing Street.
I turn to the practical problems in legislating in this area. Again, Gareth Williams told the House in 1998:
"Under the Statute of Westminster 1931, before any alteration in the law touching the succession to the Throne can take effect the assent of all those countries of which Her Majesty is Queen is required. The United Kingdom cannot act unilaterally. That is another good reason for introducing a government measure. It would seem very odd to the legislatures of the 15 Realms to be invited to consider assenting to legislation instigated by an individual Member of your Lordships' House". —[Official Report, 27/2/98; col. 917.]
I agree with that. I know that the noble Lord, Lord Dubs, also agrees with it, so perhaps the noble and learned Lord the Lord Chancellor can report to the House on the consultations that the Government have had with the other nations affected in the seven years since their decision in 1998. Would all those nations see this change as a legislative priority, including Australia, where the public reaffirmed their
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support for the present monarchy in a referendum in 1999? Australia is one of our closest allies. I wonder whether Mr John Howard is keen to reopen a debate on the monarchy. Has he urged the Prime Minister to put him in the position of having to introduce a Bill in Australia to change the law on the Crown?
If all nations did not agree, as the noble Earl, Lord Mar and Kellie, explained, in due course we might have a situation such as the one in 1837 where Queen Victoria became Queen here but, under Salic law, her uncle became ruler of Hanover. I think that that would loosen the Commonwealth ties that exist in the Crown with no benefit either to the Crown or to the Commonwealth.
The real problem with some of the issues in the Bill is that, when you tug at the string, a complex knot then begins to unravel. The noble Lord, Lord Dubs, was at his most beguiling in his introduction. He said that it was breathtakingly modest. But I think that real complexities are involved—not least those enunciated by the right reverend Prelate the Bishop of Winchester.
Of course, on the face of it, a Catholic debarment is discriminatory and, in an ideal world, it would not exist. But in an ideal world, the Catholic Church would recognise Anglican orders and a Catholic King could be validly married by the Archbishop of Canterbury. But the world is not ideal. Members of the Royal Family can marry a Roman Catholic—some have— but they cannot currently do so, I believe, and aspire to become head of the Church of England. I know that the right reverend Prelate the Bishop of Worcester suspected that that could be the case, but I would need to discuss that far more fully to be convinced of the possibility.
I am not a member of the Church of England and it is not for me to pronounce on establishment, or otherwise. But the time to address that—and, with it, the future of the right reverend Prelates in this House—is not in an incomplete provision in a Private Member's Bill.
I have sympathy with the noble Lord, Lord Dubs. It is easy to say that things should not be as they are, but efforts to end what is perceived as divisive could end up creating new forms of division. We should all pray for ecumenical accommodation between Canterbury and Rome and, when that is reached in a spirit of parity, these matters could and should be carefully addressed.
The final issue in the Bill is a suggestion that the Royal Marriages Act be totally repealed. I was not entirely convinced by the arguments of the noble Lord, Lord Dubs, on this. It is true that modern Royal Dukes are not as raffish as the Duke of Cumberland and the Duke of Gloucester, who gave so much trouble in the 18th century, but I wonder whether there is not some sense in allowing Crown and Parliament to control those who can become the consort of a monarch. I know that that is an old-fashioned view but perhaps the House will bear with me for a moment.
As the Act itself says in its preamble, marriages in the Royal Family are of the highest importance to the state. That is not just 18th century guff; it is a fact. It is also not a unique power. Very recently in one major

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Royal House in Europe, a prince was stripped of the right to succession because he was felt to have misled the public about criminal connections in his intended spouse's family. Two other members of the same Royal Family have also been debarred in the past 30 years.
In Spain, those with a right of succession to the throne who marry against the prohibition of King and Cortes are excluded from succession to the Crown, as are their descendants. In Norway, only the King can give permission for a wedding of an heir, in dialogue with Parliament. Even in liberal Holland, anyone in line of succession who marries without permission of Parliament loses the right of succession. Sweden this week is mourning Count Lennart Bernadotte, who was debarred for contracting an unapproved marriage. Other nations still see the importance of having an element of control over who enters the close family of a hereditary head of state. I wonder why we should strip ourselves of a power that other countries have found necessary far more recently than Britain.
The Bill touches difficult issues. All can be looked at if the Government believe it to be an overriding priority. Whatever government we have in the future should take this up only after very careful cross-party and international consultation, which must of course involve the Royal Family and the Churches. If the Government want to discuss this matter as a priority, then we, as the Official Opposition, will play our part constructively in any discussions that they want to have.
In the weeks that are left of this Parliament, I would prefer to attend to the crises in pensions and public services rather than change an institution which has given us unblemished public service for generations and which I pray will continue to do so for many years to come.
1.38 p.m.
Lord Falconer of Thoroton:My Lords, this has been a fascinating debate for a variety of reasons. First, we heard two right reverend Prelates set out diametrically opposed positions. Secondly, we were treated to a genuinely fascinating account from the noble Earl, Lord Mar and Kellie, about how to inherit an earldom in Scotland. We also heard from the noble Lord, Lord Monson. I may not have understood his speech but the first part of it said that from now on only men can inherit the Crown, thus going even further than was suggested. We heard from the noble Earl, Lord Mar and Kellie, a reference to the principle of ultimogeniture, which personally I find very attractive. And perhaps most fascinating of all was the encyclopaedic knowledge of the noble Lord, Lord Strathclyde, of the procedural requirements to marry a member of a European Royal Family. For Members of the Lords who are interested, it was very useful and I am grateful to him for that.
Taking a more serious note, I think that the interventions from all sides of the House indicate that there is a degree of complexity to these matters which may not be apparent at first sight. I should like to deal
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with the three subjects raised by the Bill one by one. I shall start with the Act of Settlement, which is not the first point in the Bill, but many of the other matters follow from the Act of Settlement. The Government are very conscious that this is a subject on which Catholics, Anglicans and many others have deeply held views which must be treated with respect.
The Act of Settlement 1701, to which the noble Earl, Lord Mar and Kellie, alluded, is part of a political and constitutional settlement with complex historical roots which continues, after 300 years, to have wide-ranging constitutional implications for the United Kingdom and the Commonwealth. The Act excludes from the throne a person who is, or who marries, a Roman Catholic. The critical ongoing relevance of the Act, as both right reverend Prelates identified, is that the English established church is the Church of England, of which the sovereign is supreme governor.
The Act does not prevent members of the Royal Family from becoming or marrying Roman Catholics, but it removes them from the line of succession if they do. The Act also effectively excludes from the throne others whose religion prevents them from being in communion with the Church of England.
Amending those provisions, as proposed by the Bill, raises such issues while the Roman Catholic Church continues to have restrictions on mixed marriages, in particular any that confer an obligation, however tenuous, on the Roman Catholic partner to seek to have children of the marriage baptised and brought up in the Roman Catholic faith. While that Church remains out of communion with the Church of England, the Act's requirement that,
"whosoever shall hereafter come to the possession of this Crown shall join in communion with the Church of England as by law established",
is plainly relevant. I do not say how one deals with it, but one certainly needs to address that issue, as I believe both right reverend Prelates did, but they came to slightly different conclusions.
To bring about changes to the law would be a complex and controversial undertaking, raising major constitutional issues which would involve the amendment or repeal of a number of pieces of related legislation. Legislation that would need to be reviewed includes the Bill of Rights 1688, the Coronation Oath Act 1688, the Union with Scotland Act 1707, the Princess Sophia's Precedence Act 1711 —I hope no one will intervene on that one—the Royal Marriages Act 1772, the Union with Ireland Act 1800, the Accession Declaration Act 1910, and the Regency Act 1937. I recognise that my noble friend's Bill deals with obvious aspects of the Union with Scotland Act and, indeed, the parallel Union with England Act of the pre-Union Scottish Parliament, but it has not addressed any of the issues raised by the other Acts to which I have referred.
I understand—the noble Lord, Lord Campbell of Alloway, referred to this when referring to the Statute of Westminster—that any changes in the law affecting the succession could also possibly require the assent of the legislatures of all the countries of which Her

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Majesty is Queen. They would need to look to their own legislation. Again, I recognise that my noble friend is aware of this issue by limiting his Bill to the United Kingdom only, but that does not deal with the real issues raised by the possibility of the succession to the Crown diverging among the various countries of which Her Majesty is Queen.
I should make it clear that this Government stand firmly against discrimination in all its forms, including discrimination against Catholics, and will continue to do so. The Government would never support discrimination against Catholics, or indeed any others, on the grounds of religion. The terms of the Act are discriminatory, but we should be clear that for all practical purposes, its effects are limited.
There are 22 members of the Royal Family in line of succession after the Prince of Wales, all of whom are eligible to succeed and have been unaffected by the Act of Settlement. Only four living members of the Royal Family can be said to have been affected by the Act, but they come after the 22nd person in line to the throne. Therefore, to claim that the Act has a discriminatory impact is to ignore the improbability that any of those members of the Royal Family could, in practice, have succeeded.
There is a difference between applying new legislation such as the Human Rights Act to existing legislation, and altering legislation which is part of the backbone of our constitutional arrangements. Indeed, this legislation is interwoven within the very fabric of the constitution and has evolved over centuries. It is not a simple matter that can be tinkered with lightly. While we would wish to remove all forms of discrimination, for a variety of reasons that have been well understood in the course of this debate, this is not the appropriate form.
I turn to the second issue, namely, the succession to the throne and the issue of male primogeniture—the right of succession belonging to the first-born son. It has been raised from time to time, with a view to giving female descendants of the sovereign the same rights as their male siblings. The title of the Crown derives both from statute and from common rules of descent. The sons of the sovereign and their descendants have precedence over daughters in succeeding to the throne, although daughters take precedence over any brother of the sovereign. Any proposals to allow female succession would inevitably, and quite understandably, throw up calls for a re-examination of succession to peerages and titles generally, as specifically raised by the all-perceptive noble Earl, Lord Mar and Kellie.
Such change would be a significant constitutional measure. In an ideal world, changes to succession law to ensure it was based on primogeniture irrespective of gender might be a suitable candidate for legislation. It would ensure that there was no discrimination based on gender. But, given the Government's current legislative programme, the issue is not seen as urgent, particularly as it has no practical discriminatory effect today. It would, in any event, for the reasons that I have given, have to be part of a larger examination of
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constitutional issues, such as the Act of Settlement, and would probably also require the consent of the relevant Commonwealth countries.
Lastly, I turn to the Royal Marriages Act. This provides that no descendant, male or female, of George II, other than the issue of princesses who may marry into foreign families—I was surprised that the noble Lord, Lord Strathclyde, did not draw that particular aspect of the Royal Marriages Act to our attention—shall be capable of contracting matrimony without the previous consent of the sovereign. Any such marriage so contracted, without consent, shall be null and void.
An exception is provided for any descendant over the age of 25 years who, despite the opposition of the sovereign, persists in his or her resolution to contract marriage. On giving notice of this intention to the Privy Council Office, they may marry 12 months later provided, in the mean time, that neither House of Parliament has declared its disapproval.
There is an argument for amending the Act to remove the need for all descendants of George II having to obtain the Queen's consent before marrying. The longer the current provisions remain on the statute book, the more couples there will be who are covered by the requirements of the Act. Noble Lords should draw their own conclusions from the procedural description that I have just given. However, given the Government's current legislative programme, the issue cannot be seen as urgent and would, again, have to be part of any larger examination of constitutional issues, such as the Act of Settlement.
The Government have not said that the laws we have considered today should never be changed. They do not rule out change in the future, but we have no immediate plans to legislate in this area.
As has been pointed out in the past, it is a complex undertaking and we must be careful not to embark on it before proper consultation with all parties involved. As the noble and right reverend Lord, Lord Habgood, has pointed out on another occasion,
"as a country without a written constitution, we depend, more than most, on symbolism, on historical precedent and subtle linkages between Crown, Parliament and Church. None of those is unalterable, but we need to get out of our minds the idea that it is possible to make a few simple changes without the risk of triggering off a whole series of other changes which might be far from what we want".
Specific work needs to be done on the proposals made in this Bill, such as on the Commonwealth and the other bits of the constitution that need to be looked at.
In conclusion, the Government recognise that many people feel strongly about this matter. However, this Bill would make major constitutional changes, requiring consultation throughout the Commonwealth. It is not needed at the moment as there is no practical discriminatory effect on the current line of royal succession. I therefore tell the House that, although in accordance with our own practices, the Government will not seek to oppose the Bill if it is pressed to a Second

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Reading in this House, if it were to pass to the other House and find a sponsor there, I shall ask my honourable friends in that House to oppose it.
There is one further matter that I should deal with. It is the very important question raised by my noble friend Lady Morgan. She asked why the wives of Peers can receive a title arising from their peerage whereas the husbands of Peers do not. The advice I have been given is that the arrangements are a long-standing tradition and follow that in wider society where it was always the practice that a woman took her husband's surname and status but never retained her own.
Before I tread into this area, the issue of the title taken needs to be addressed not only in this House but also in society as a whole.
The Lord Bishop of Worcester:My Lords, I thank the noble and learned Lord for giving way. When the Government's legislative programme allows, will he give urgent attention to the fact that the wives of the Lords Spiritual remain untitled? It is a very serious discriminatory matter.
Lord Falconer of Thoroton:My Lords, I sympathise, but I have to be honest and say that I cannot see the current pressure of work subsiding to such an extent that that will get urgent consideration.
The Earl of Erroll:My Lords, I just point out that there are a couple of circumstances in which the wife does retain her status. Daughters of Peers marrying a commoner or someone of lower rank retain their original status. For instance, the daughter of a duke marrying a baron would retain her status. My mother, the Countess of Erroll, on marrying Captain Ian Moncrieff retained her status as the Countess of Erroll. Even when he was promoted to baronet she still retained her status as the Countess of Erroll.
Lord Falconer of Thoroton:My Lords, we have all learned a lot during the course of this debate. I hope that in the light of what I have said my noble friend Lord Dubs will not press the Bill to a Second Reading.
1.53 p.m.
Lord Dubs:My Lords, I thank all noble Lords who have contributed to a very interesting debate. It has confirmed my view that there are depths of knowledge in this House about all sorts of issues which only surface when debates of this kind take place.
I have to read the speech of the noble Earl, Lord Mar and Kellie, to convince myself that it is not all his fault, or that of his forefathers. I am left with less than enthusiasm about the reply of my noble and learned friend the Lord Chancellor. He did not fill me with the sense that the Government will do anything about it, even after the election. I had assumed that the present legislative pressures were such that there would not be any progress at the moment, but in the fullness of time I had hoped that the Government would think again.
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The difficulty is that when the day comes that the issue of succession is before us, legislation will then seem to be discriminatory as against the man about to succeed compared with the woman who might succeed. Then it is much more difficult to legislate. The easiest time to legislate is when there are no personal implications for individual members of the Royal Family. That is why there is an argument for legislating before that happens. Of course there is a little bit of time. I assure my noble friend that if the Government are willing to come forward in the next Parliament with such legislation, most of us will be very interested and consider giving it their support.
Perhaps I may just briefly say that I am humbled by the knowledge and the historical sense of many Members of this House. It makes me feel that two or three years' homework might have been appropriate for me. But, there we are; it is not given to us to spend quite so much time on a single issue.
Of course some of the opposition is based upon what I call the utter "conservative"—with a small "c"— opposition to change. Running through some of the speeches has been the thread that this is too difficult, that we may not need to do anything and that we need not bother when the present arrangement is working not too badly. There is such an innate conservatism, not just in this House, but I have heard it in some of today's speeches.
I think that the right reverend Prelate put his finger on the other thread running against change. He said that people use the argument, "Where will it all end?". In a more basic manual labour sort of sense is it not the "thin end of the wedge" argument? The argument that if we make some changes we shall lose control of it is an argument against any change, any time and about anything. Surely, we do not subscribe to that.
On the point made by the noble Lord, Lord Strathclyde, on the Royal Marriages Act, I would refer him only to the fact that the Abdication Act enabled the government of the day to take action which determined the succession. I have quoted what Harold Wilson said when the Cabinet advised the Queen about a royal marriage and the Queen gave her consent to the views of the Cabinet. So one does not need archaic legislation to achieve the particular end as regards the suitability of the marriage by the successor to the throne. I think that there are simpler ways of doing it and that the Harold Wilson government showed that it could be done.
I am left with a slight feeling of disappointment. This has not quite ended on the high note that I had hoped. I am sorry that the Government feel the way they do. I hope that after the election the Government—they will of course be the same government—will look at this again. We should make some progress. We cannot for ever keep saying that we cannot change things because it is too difficult or that we do not believe enough in change. I do not wish to prejudice in any way the similar Bill that my right honourable friend Ann Taylor is going to introduce into the Commons on 4 March, and I hope that it will not be seen in that sense.

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I shall withdraw the Motion for Second Reading, simply because the Bill is too difficult for a Back-Bencher to get through. It requires, as the noble Lord, Lord Campbell of Alloway, said, a lot of consultation and negotiations with the Commonwealth governments, all of which only the Government can do. For that reason, and not because I have lost interest in the Bill, I beg leave to withdraw the Motion for Second Reading.
Motion for Second Reading, by leave, withdrawn.

Caribbean Banana Growers
1.57 p.m.
Lord Newbyrose to ask Her Majesty's Government what action they plan to take to safeguard the interests of Caribbean banana growers.
The noble Lord said: My Lords, anybody who thinks that trade matters can be reduced to simple slogans and resolved by simplistic policies should look at the history of the Caribbean banana industry. Trade in bananas between the UK and the Caribbean began in 1901 when Joe Chamberlain, as part of his imperial policy, signed a 10-year deal for fortnightly shipments of bananas from Jamaica, for which the shipping company was paid an annual subsidy of £40,000, some £2 million in today's prices.
Since then the UK has consistently sought to safeguard the interests of the Commonwealth Caribbean banana producers because the industry still remains of great economic and social importance to the region. It does, however, now face its most serious threat to survival and must look again to Her Majesty's Government for support. I declare a former interest as a former adviser to the Caribbean Banana Exporters Association.
The threat arises from the negotiations currently underway to change the EU banana import regime. Under the current system of tariff quotas, the ACP countries have a reserved share of the Community market. This is to be replaced by a simple flat rate tariff, with a duty preference for the ACP. This could destroy the Caribbean banana export trade unless the new single tariff is fixed at a level that will prevent the risk of greatly increased volumes and depressed prices.
The move to a tariff-only regime is required under the agreements between the EU and the USA and Ecuador that brought to an end the lengthy dispute in the WTO over the EU banana import regime. The European Commission has consistently made clear that the objective of this move is not to reduce the total level of protection currently provided for ACP states, but to provide it in a form that is compatible with WTO rules. It should therefore be an exercise in changing the system of support, not of reducing its level. Unfortunately, this now seems unlikely to be the case.
At present, the full rate tariff on bananas from third countries—principally those in Latin America—is 680 euros per tonne, which in practice is a prohibitive duty. But there is a much lower rate of 75 euros for a
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fixed import quota. The quota was 2.65 million tonnes for the 15 member states prior to enlargement and has since been increased to cater for the 10 new states. Imports from ACP states enter duty free and have a reserve quota of 750,000 tonnes. ACP imports beyond this level will be subject to a preferential but still prohibitive duty of 380 euros for imports above that volume.
The Commission has proposed that the new single tariff for non-ACP countries should be 230 euros per tonne. It claims that that figure has been calculated on the basis of the most thorough economic analysis to be equivalent in its effect to the two existing tariffs. Unfortunately, however, the Commission analysis provides only a static snapshot of the "price gap" between Community and external prices. It fails to take account of the dynamic changes in the market that would inevitably follow the removal of the existing quantitative limits on imports through the tariff quotas.
Market prices are obviously set by the level of supply in relation to demand. Currently, supply in the Community is constrained by the tariff quotas, which effectively limit the total volume of imports and so maintain market stability. Once the constraint of the tariff quota is removed, supplies are bound to increase, given that there is a structural surplus of bananas on the world market. The only restraint on this increase will be an increased tariff, and without a sufficient tariff to limit increased volumes, prices will inevitably fall. The Caribbean is convinced that the figure of 230 euros proposed is not enough to prevent that.
The Caribbean view is supported by the fact that some importers already pay as much as 200 euros for licences to import bananas from Latin America under the reduced-rate quota, so they also pay the 750 euros duty as well. That supports the contention of ACP states that the new single tariff should be at least 275 euros. The realities of the marketplace are, I suspect, a more reliable guide than the academic economic models used by the Commission.
It becomes a difficult issue because the interests of developing countries in Latin America are also profoundly affected. There is great concern there about the proposed change of the regime, but from a diametrically opposed viewpoint. Most Latin American governments and trading companies have insisted that the flat-rate tariff should be no higher than 75 euros a tonne, even though that must lead to a fall in prices. Moreover, they argue that an increase in the tariff inevitably increases the margin of preference for ACP countries because their bananas enter duty free. They fear that that will encourage greater production in the more cost-effective ACP countries in Africa. Incidentally, those ACP countries strongly contest that. Most Latin American countries have therefore declared that they would prefer to keep the present regime rather than face a higher tariff without quotas. From the outset, Costa Rica has argued for the retention of the current regime, at least for a further period.
To make matters even more complicated, a number of EU member states, led by Sweden, are also campaigning for the 75 euro tariff to reduce the

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already low prices to consumers. They make the unrealistic suggestion that the vulnerable ACP producers who will be driven out of the market by the consequent fall in prices paid to them should simply diversify into other products with the benefit of Community aid. If only it were so simple.
Although banana prices in Europe are higher than in some other markets, they are already very low by historic standards and cheaper than almost any other fruit. In the UK, which now has some of the lowest prices in Europe, average retail prices have fallen by 25 per cent in the past three years to historically low levels, even in monetary terms. A flat-rate tariff of 75 euros, as the Swedes urge, would cause a further big price fall. It is the individual growers in developing countries, whether Caribbean or Latin American, who would bear the brunt of those price reductions. Obviously, in a free market for a commodity that is in surplus with a substantial labour cost element, the winners are those willing to accept the lowest living standards. It seems bizarre, therefore, for any European state to propose a tariff that would lead to a race to the bottom simply to get the odd penny off a pound of bananas.
The banana export trade remains vital to the Caribbean, economically and socially, even though exports have fallen substantially, largely as a result of the changes to the common regime that followed the WTO rulings. Indeed, the Caribbean share of the EU banana market fell from 10 per cent to 4 per cent in the decade since 1993. With Community aid, the industry is nevertheless now on a sounder footing than in the past, and in the Windward Islands is benefiting also from the support of the Fair Trade movement. But the volume of output there has declined to a critical level, below which it risks sudden collapse, because any significantly lower volume would make shipping uneconomic and make it impossible to meet regular customer requirements. That is why a tariff level that results in higher import volumes and lower prices would have such disastrous results. It is also why it would be extremely unwise simply to fall back on aid for diversification, as the European Union sometimes seems tempted to do.
Loss of the industry would bring considerable hardship to small island economies, particularly those such as Dominica, with very few natural resources or alternative sources of employment, and which have already suffered greatly increased unemployment, poverty and emigration with the decline in their banana production.
In the WTO the most recent agreement on the ongoing Doha round recognises the importance of longstanding preferences, such as the Community's preference for ACP bananas. Moreover, there has been increasing recognition in the WTO and elsewhere of the need to take special account of the problems of small economies. Of course, the Treaty of Rome long ago recognised the need for special consideration for regions within the Community that were handicapped by their remoteness, small size, difficult topography, climate or dependence on a few products. That is the justification for the very high level of support given to Community banana
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growers, such as those in the Canaries, Martinique and Guadeloupe, which are all situated in peripheral regions—Martinique and Guadeloupe are situated very close to the Commonwealth ACP banana-producing countries. Those EU producers, however, benefit not just from the tariff protection but also from a form of deficiency payment that at times has exceeded half of growers' incomes. Similar principles are enshrined in the Cotonou agreement between the EU and the ACP. That renders all the stronger the moral case for the Community to ensure that its measures on bananas do not harm the Caribbean where the Windward Islands, in particular, present a classic example of small island states with precisely the same handicaps of terrain, topography, size and dependence on a few products, which are so widely regarded as justifying special consideration.
The Commission, however, now faces a very difficult challenge. It can either seek to negotiate a tariff rate that is high enough to support continuing Caribbean production, which would almost certainly lead to arbitration and very considerable uncertainty, or it could support the Costa Rican approach for a continuation of the current system, which is probably the fairest solution all round, if the interested parties and especially the parties to the 2001 agreements were prepared to accept that. It is interesting that recently the Ecuadorians also seem to be coming around to supporting that view. It is therefore disappointing that the EU Trade Commissioner, Peter Mandelson, appeared unwilling to explore that option during his trip to the Caribbean a week or so ago.
Either way, the EU continues to have a moral responsibility towards its former Caribbean colonies that grow bananas. It must be very tempting for Ministers to argue that as trade is now an EU competence, it is simply for the Commission to get a deal, however dire that might prove for the Caribbean, and for the UK to row in behind it.
It is, however, a temptation that the UK Government must resist. They have a Trade Commissioner who is known very well. They have, I believe, a genuine desire to promote the interests of poor Caribbean states. They will soon assume the EU presidency and can, therefore, seriously influence the next crucial decisions on the banana regime. My plea today is that they exert that influence for the benefit of the Caribbean banana industry as they have so consistently in the past.
2.10 p.m.
Lord Faulkner of Worcester: My Lords. I congratulate the noble Lord, Lord Newby, on raising this matter today. I very much hoped that he would go into some of the complexities of the tariff system because that would spare me the need to try to understand it and explain it to your Lordships. He has done that admirably, so my comments on the details of tariff references will be a little limited.
As the noble Lord has explained, these are matters of huge significance. Indeed, the continuation of a banana business in some small Caribbean countries is literally a matter of life and death for them. I am a vice-chair of the parliamentary all-party British-Caribbean

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group. During my business career before I entered your Lordships' House, I was for more than 25 years an adviser to the Fyffes Group, the company that has imported Caribbean bananas to Britain for more than a century.
The Caribbean country that I got to know best was Jamaica, which at its peak in the 1930s was exporting more than a quarter of a million tonnes of bananas to the United Kingdom. By the late 1990s that had fallen to less than 90,000 tonnes and was down to 40,000 tonnes in 2002. But despite that, according to the Caribbean Banana Exporters Association, banana production, transportation and distribution still account for between 5 and 10 per cent of total employment in Jamaica and it is still second only to sugar in economic significance in the country's agriculture.
As we have heard from the noble Lord, Lord Newby, there are other Caribbean countries in the Commonwealth—particularly three of the four Windward Islands—that are almost wholly dependent on bananas for their economic existence, where they are grown on small family farms in remote and often difficult-to-farm areas. As the International Labour Organization has commented,
"no other economic activity in the Eastern Caribbean has similar multiplier-effects on employment levels".
So it goes well beyond the number of farmers who are just growing the fruit.
What we must appreciate is that the development of the Caribbean banana business throughout the 20th century, interrupted only in war-time, was a remarkable success story, which reflected credit on everyone involved in it: that is, the farmers who strove to improve quality and reliability; the packers, distributors and shippers; the companies—Fyffes, Geest, Jamaica Producers and others; and the governments of the United Kingdom and the Caribbean countries, which did everything in their power to ensure that this business flourished. Credit is also due, most importantly, to the British consumer who loves the Caribbean banana, which has so much more taste, is of much better quality and is of a much more convenient size than the huge rather tasteless object that comes to us from Latin America.
The key to all that has been protection through tariff quotas, giving the Commonwealth Caribbean countries and other members of the ACP the first crack at the European market through the Lome agreement. That system worked reasonably well, even since the advent of the single market in Europe in 1993. It was not an easy deal to do. No other EU member had the same sort of post-colonial links that we had with banana-exporting countries, although the United Kingdom was able to find some common cause with France, which was a banana grower in its own right because of Martinique and Guadeloupe—as the noble Lord, Lord Newby, said—its overseas department territories in the Caribbean, and it also had former colonies in West Africa.
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Five EU states operated no limits on the quantity of bananas they imported, and Germany managed to maintain an extraordinary arrangement whereby it imported bananas from anywhere it liked duty free. Despite these differences, the deal struck during the time of the British presidency of the EU—here John Gummer, the agriculture Minister at the time, deserves a great deal of credit for taking it through—has maintained some stability.
Levels of employment in the banana growing countries have continued to fall, but at least the business has survived. It has maintained supply to the point that in Britain the banana is now our favourite fruit. We Britons eat 10 kilograms a year. This morning, as I was having my breakfast banana, which weighed 15 grams, I calculated that the average consumption must be between 65 and 70 bananas per head. I probably eat rather more in a year, but those statistics make it by far the most popular fruit in this country. If the banana was promoted better, with a particular emphasis placed on more fair trade bananas of the sort that come from the Windward Islands in the way Switzerland does, I think that we would be able to sell even more.
Despite all those good things, as the noble Lord, Lord Newby, has told us, the 1993 agreement went wrong because of the challenge through the WTO. I have to say that I find the approach of the United States Administration to this matter absolutely extraordinary. There is scarcely a single banana grown commercially in the United States, aside from a few in Hawaii, but because the Latin American banana growing business is dominated by US multinationals, an action was taken under Section 301 of the US Trade Act at the instigation of Chiquita, which has 40,000 workers, nearly all of whom are in Honduras and Guadeloupe.
It is widely believed that the United States trade representative got involved as a payback for political favours, because it is well known that the boss of Chiquita, Mr Carl Lindner, had made huge political donations to both the Republican and Democrat parties. The US backed up its action with trade sanctions and, as we have heard, the World Trade Organisation upheld the US complaint and found against most of the measures taken by the EU to fulfil the commitment to the ACP countries under Lome. Fortunately, a temporary agreement was reached in 2001 which retained the tariff quota system, but that expires at the end of this year and, as the noble Lord has explained, the EU now has to move to a single tariff or a tariff-only system.
The issue now, and the one which will determine whether there is to be any Caribbean banana export business in the future, is the level of that tariff. If it is set too low, it will simply disappear. The FAO has conducted an independent study and reckons that the tariff will need to be around 300 euros to leave import volumes unchanged, so the Commission's current proposal of 230 euros is clearly not enough.
We hear vague talk about "diversification" as a way out of poverty for destitute farmers, but it really does not help very much. Indeed, the attack made by the

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United States on the economies of poor countries in the Caribbean is particularly short-sighted as one of the consequences of wiping out the banana growing industries on those islands will be to increase the attractiveness of alternative, less desirable crops.
In March 1998, Oxfam published a paper entitled, A Future for Caribbean Bananas. On the threat to the preference arrangements for Caribbean growers it stated that:
"The significant achievements of the islands' governments in pursuing democracy and good governance would be severely threatened, as those in power struggled to cope with rising deprivation and social unrest. Low prices, together with the uncertainty over the future of the banana industry, have led to a loss of confidence among farmers. Some are already leaving the land, and unemployment is rising. There is a very real danger that farmers could resort to what, for many, would be their only economic alternative: illegal drugs.
"A plot with a few dozen marijuana plants on a smallholding will fetch up to 30 times more per kilo than a farmer's banana crop. It is reckoned that St Vincent can now count marijuana as its principal export crop. The cultivation is also … on the increase in Grenada and Dominica".
The article goes on to say that there is also a good living to be made from cocaine transhipment from Central America to the United States. So let us be quite clear what so-called "diversification" is likely to mean in a number of those countries.
I conclude with the words of the Minister of Foreign Affairs of St Vincent and the Grenadines, Mr Allen Alpian:
"Money and greed have been elevated to the status of a religion and care and concern are now regarded as a vice. Our future is now on a life support system. However, I am confident that our resourcefulness and faith will see us through".
I believe that it is our duty and that of our Government and the EU to support that resourcefulness and faith, and we must not let them down.
2.20 p.m.
Baroness Miller of Chilthorne Domer: My Lords, I congratulate my noble friend on securing the debate on this urgent issue. The number of speakers in the debate should not be taken as an indication of the interest in the issue. A number of noble Lords have said to me that they would have spoken in the debate but for the fact that it was scheduled for a Friday afternoon and they were unable to do so. They want my noble friend Lord Newby to know that they have great sympathy with the points they believed he would put forward.
My noble friend Lord Newby and the noble Lord, Lord Faulkner, have, with their usual clarity, outlined all the historical issues, and I shall not repeat them. However, the original complaint to the WTO was made by the United States and Ecuador. Ecuador is now at the forefront of gathering Latin American support for a complete reversal of its original complaint and is spearheading a campaign for at least the status quo to be maintained in the interests of its neighbours in the Caribbean, as it does not want to see the start of another banana war. What conversations has the UK had with the Ecuador Government about the issue? What representations have the UK and the EU received?
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Both previous speakers referred to Fairtrade, which has really taken off in this country. Fairtrade is a way of informing consumers that they are buying something that has been traded fairly and for which the producers have received a fair return on their efforts. It is an extremely important movement. It supports 5 million farmers worldwide in 49 developing countries. Indeed, 750 out of the 1,000 banana farmers in Dominica are Fairtrade producers.
The Fairtrade Foundation fears that if the problems are not solved, because bananas form such a critical part of its income, the Fairtrade movement will be threatened. So, as both previous speakers have said, it is not only the Caribbean islands which are at risk. It is an issue of such gravity that it is difficult to perceive how we could contemplate not only taking away the livelihood of those who live on those islands but destroying a movement that produces real benefits for many small producers throughout the world.
The Fairtrade movement is set to grow—it has been growing exponentially over the past two or three years—and Oxfam and other such organisations have been supporting it with strong campaigns. It would be criminal to undermine the movement by any short-sighted way of satisfying what is now an historical complaint.
The importance of Fairtrade lies not only in giving producers a fair return for what they produce but in the sound sense with which it interprets the meaning of "sustainability". Fairtrade also sets levels for social projects. The fairer returns that the farmers receive for their produce have a small premium attached to them, and there is an obligation for that premium to be returned into the community to be used for various projects such as healthcare centres and schools. The community projects for which the premiums are to be used are decided through a democratic, accountable system whereby the producers come together and decide which ones they will support.
Fairtrade also has a significant environmental impact. Fairtrade producers use less herbicide and less pesticide. That has been noticeable in the Windward Islands, for example, where there was a downward trend in the fish in the rivers. Since many producers have switched to higher environmental standards, as Fairtrade has enabled them to do, the fish have returned. Pesticides were also having an effect on coral reefs. Given their understanding of what was happening to their reefs through the use of pesticide, the islanders saw Fairtrade as being extremely important in discouraging its further use. Fairtrade is about more than salving the consciences of western consumers; it goes to the fundamentals of the way that we want to see trade happen. Does the Minister realise the implications to the Fairtrade movement, if the banana situation is not resolved in the way that my noble friend Lord Newby suggests? At the very least, there should be no hasty move of the sort that the EU is considering. The Government need to make sure that, in the short term, a complete stop is put on any plans to change the system and, in the long term, a good look is taken at the issues raised by my noble friend.
2.25 p.m.
Baroness Miller of Hendon:My Lords, I thank the noble Lord, Lord Newby, for introducing the debate. With the reports of mounting pressure on the EU to postpone the revision of its banana import regime, discussing this matter is timely and welcome. The noble Lord fully explained the background to this complicated problem. Some people have said that, without a solution, we could face another round of the banana war.
I say from the outset that, although we on these Benches are proud of our relationship with the Commonwealth, which we have always tried to support whenever and in whatever way possible, we concede that the idea of extending protectionism goes against the values of free trade that we signed up to in Doha. I acknowledge that the Government are caught between two opposing objectives because of the treaty obligations by which we are bound.
It is argued that, in the long run, free trade will help the world's poorest countries to develop and stabilise. My party's policy is that free trade is as vital as aid. My right honourable friend the Leader of the Opposition said:
"There is an ongoing debate between free trade and fair trade. I believe in making free trade fairer, and fair trade freer".
In the case of the banana-growing industry, the leading protagonist is the United States of America, as the noble Lord, Lord Faulkner, said. That powerful country supports three major multinational corporations whose combined income exceeds the income of the tiny group of islands whose entire economies are being imperilled by the impending changes. In turn, they have to face the demands of their European supermarket customers for ever-cheaper supplies, as part of an ongoing price war. It is interesting to note that bananas seem to be the key battleground in that war. As a consequence, the retail price of bananas fell from 49p per pound in 2001 to 40p per pound in 2003, which is a drop of 18 per cent. The price fell to 36p per pound in the early part of 2004, which is a total drop of 26 per cent.
The problem faced by the Windward Islands is that not only do they have to put up with difficult terrain, but the producers are small family concerns that are unable to compete with industrial-scale, high-tech growers operating in South America, where the workers are paid wages that would not correspond to what we call fair trade standards. The paradox is, as I discovered for myself when I got involved in earlier debates about the banana wars, that the small Windward Islands bananas taste infinitely superior to the giants emanating from South America, as the noble Lord, Lord Faulkner, said. He is nodding his head vigorously. I suggest that your Lordships try them for yourselves, before it is too late, if you have not already done so. I wish that they were supplied in the Bishops' Bar.
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There is talk of diversifying from dependence on this single crop. Indeed, some steps are being taken in that regard. However, there is a danger that, without active assistance to preserve their trade and to find new ones, farmers will inevitably be tempted to start growing less acceptable crops. The examples of Colombia and Afghanistan are there for us to see.
Last June, the Defra Minister told the other place that Her Majesty's Government firmly believe that the inevitable changes to the banana regime must be phased at a rate that allows the Caribbean countries' economies to adjust. Seven months on, can the Minister tell us how well each of the countries seems to be adjusting? What funds are Her Majesty's Government and the EU providing to the area to help diversification of employment? What help is being given to ensure that the changes are being prepared for adequately and that the dispossessed workers are retrained?
I accept that the Minister may not be able to answer those questions today. If he cannot, I am perfectly happy for him to write to me in due course.
It is clear that we will see the decline, if not the total destruction, of a whole local industry which will be sacrificed for what some conceive to be the greater good. I cannot look on that with any degree of equanimity, and neither, I am sure, can anybody else. However, I do not believe that the Government are able to do much because of their treaty obligations and their obligations within the EU. All I can do is urge the Government to do all they can to support the poor independent farmers in an area which is as poor as the areas to which the trade will be shifted.
2.31 p.m.
Lord Evans of Temple Guiting: My Lords. I thank the noble Lord, Lord Newby, for securing the debate and all other noble Lords for their contributions. We have to start from a position where everybody in the Chamber has the greatest possible sympathy for the plight of the Caribbean banana growers. I hope in the next few minutes to explore what we can do with our colleagues in Europe to help.
Given the title of the Unstarred Question—to ask HMG what action they plan to take to safeguard the interests of Caribbean banana growers—I start by stating the obvious: there is little, unilaterally, that we can do to help. The responsibilities towards ACP banana exporters expressed in the Lome convention are a collective EU responsibility and not specifically that of the UK. The UK can only assist the other 24 member states in ensuring that the EU meets those responsibilities. It would also be unlawful for the UK unilaterally to use tariffs to ensure that the Caribbean banana growers continued to export their bananas to Europe. It is difficult to conceive of how a policy of paying supermarkets or banana-importing companies to make sure that they continued to buy Caribbean bananas would be acceptable to the British electorate.
The only other direct method would be directly to subsidise the banana growers. However, there are, in our view, far more cost-effective ways of transferring aid money and helping the growers to find a sustainable livelihood for the long term.

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I refer noble Lords to the Caribbean banana growers' website, which gives some extraordinarily interesting statistics about the plight of the Caribbean banana producers. The website covers the future, the 64 per cent decline in the price of bananas over the past 10 years, the production of bananas and competition from other countries of the world. The picture does not look too bright.
Today's debate has provided a welcome focus on the issues facing the banana industry in the Caribbean as a result of European trade reforms. Most importantly, it has reminded us that the banana industry still employs many of the poorest people in some Caribbean countries. In the Windward Islands alone, there are over 29,000 registered banana farmers and farm workers. In St Lucia, the banana industry employs over 10 per cent of the workforce. Those are underestimates, as many farms in the Windward Islands are worked on by family members not included in the figures.
Just to make matters worse, a number of Caribbean countries also face the prospect of a continuing decline in employment in their sugar industries, as a result of the EU's planned internal reforms. In Jamaica, up to 100,000 jobs are directly or indirectly associated with the sugar industry. Ensuring a secure future for workers and their families who are dependent on bananas or sugar must therefore be an absolute priority.
I will make three points. First, it is inevitable that the present banana regime must change. Secondly, the Caribbean needs to diversify in ways that create employment. That point was derided by my noble friend Lord Faulkner, but the Oxfam report from which he quoted— an excellent report, although it is five or six years old—recognises that,
"It is widely accepted that there must be diversification".
Alternative sources of employment are mentioned, and the report recommends that the EU helps to reduce Caribbean dependency on bananas. It is sad that there is an assumption that people in the Caribbean who do not grow bananas will immediately start to grow drugs. That is a counsel of despair and not one that I wish to entertain.
Thirdly, the question at the nub of the matter is what the UK can do, directly and through the EU, to help the Caribbean adapt to the changes. Preferential trade access to the European Union market for commodities such as bananas and sugar has played an important role in the development of the Caribbean economy. Access for bananas is controlled by a series of quotas with African, Caribbean and Pacific (ACP) banana exporters enjoying duty-free access. Producers from countries outside the ACP, who generally have lower costs, face a tariff of 75 euros per tonne within their quota, and 680 euros per tonne for imports in excess of this quota.
We have to accept that changes to the regime are inevitable. As we heard, the banana regime was challenged in the World Trade Organisation in the 1990s by Ecuador and the United States, among
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others. The resulting "banana war" was ended in 2001 only by the EU reaching understanding in the World Trade Organisation to replace the quota system with a tariff-only regime. It was agreed that the regime should be in place by 1 January 2006 and that the waiver allowing ACP bananas to enter the EU duty-free would expire at the end of 2007. Failure to act on the 2001 understandings could lead to retaliatory action by countries such as the Unites States with potentially damaging consequences.
In parallel, preferential trading relations between the EU and the ACP are being renegotiated in economic partnership agreements to start in 2008. One objective of EPAs will be to continue to allow duty-free access for ACP bananas. EPAs will provide the framework to improve and build on the region's trade and aid relationship with the EU, helping the Caribbean to respond to the challenges of preference erosion and fulfil the potential for economic development.
The noble Baroness, Lady Miller of Chilthorne Domer, asked what representations had been received by the EU from Ecuador. Ecuador raised the issue of maintaining the existing system, but it is not clear what support that has among the other exporters, who had a high-level meeting to discuss the matter on 26 January. However, the EU has undertaken in WTO to dismantle the quota system by the end of this year. A reversal of that commitment would require the express agreement of the parties to the 2001 understanding, Ecuador and the United States—an agreement in WTO on variation of the waiver which allows the EU to grant a zero tariff to ACP countries.
So where are we on the negotiations? The level of the new tariff is important to Caribbean banana producers, who struggle to compete, even now, under the current regime, because of their high costs of production. ACP producers collectively have asked for a tariff of 275 euros per tonne. The European Commission has opened negotiations in the WTO with a proposed level of 230 euros per tonne. Negotiations between the Commission, Ecuador and other exporting countries are under way. However., we understand that the positions of the parties remain very far apart. If they cannot agree, interested parties have the right to seek arbitration.
Estimates of the appropriate level of the tariff to secure the same degree of protection as the current regime have varied from as little as 75 euros per tonne, to as much as 300 euros per tonne. DfID commissioned a report to assess the impact of those changes and found that some countries in the region, such as the Dominican Republic, Suriname, Belize and, potentially, Jamaica may be able to compete with the cheaper Latin American bananas under the new regime if their industries modernise and restructure. But most producers in the Windward Islands of St Lucia, St Vincent and Dominica are unlikely to make a profit in the new tariff-only regime, because they have very high costs of production.

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There have been attempts to enhance the competitiveness of banana production by moving into Fairtrade and other niche markets. A number of noble Lords have raised that matter this afternoon. There has been some limited success in those areas, but ultimately all Windward Island bananas, whether Fairtrade, organic or not, must compete with the cheaper bananas—organic or whatever—produced in Latin America. Diversification into niche markets is unlikely to enable production to remain at current levels.
Tourism has now become the mainstay of most Caribbean economies, along with other parts of the service sector. It is the primary source of foreign exchange and contributes a significant share of GDP. But, although it has absorbed many who previously worked on bananas, many of the most vulnerable—the poor and many older people—have remained in banana production. We have to recognise that, for many in banana-producing areas, particularly the young in the Windward Islands, the best hope of a reasonable livelihood lies in being able to work in other sectors. That requires a favourable economic environment for investment and the right kind of education to create the necessary skills.
The British Government believe that the best way in which to help the Caribbean countries now is to try to ensure as smooth a transition to the new tariff regime—and ultimately to EPAs—as possible. That will mean different things for different countries, and each country must decide on its own future. For example, it may mean restructuring banana-growing industries in some countries or continuing the process of diversifying economies towards tourism, other forms of agriculture or other services.
The Government are helping directly and through the EU. Through our bilateral aid programme to the Caribbean, we are helping to create the conditions necessary to enable new job opportunities. We are helping by supporting the governments of the region to improve their economic management and by improving access to finance by small-scale producers. For example, we are working with Microfin Caribbean Ltd to provide microfmance to small-scale entrepreneurs in St Lucia. We are also helping by improving the relevance and effectiveness of the education system in the Windward Islands, where we are helping to revise school curricula to meet the needs of students better.
Through the EU, we have been providing funding through the special framework of assistance, the European aid instrument to banana-exporting countries, to help improve competitiveness and, when that is not possible, to assist with diversification into other economic activities. The SFA has already allocated nearly 180 million euros to Caribbean countries since its inception in 1999. However, implementation performance has been very poor. Less than a quarter of the funds have been paid out to date. That results from burdensome EC administrative
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requirements and also happens because Caribbean countries often do not have the capacity to implement the projects and programmes agreed to.
The British Government have recognised the need for a step change in the SFA's performance. Hilary Benn and Gareth Thomas, DfID's Parliamentary Under-secretary of State, have made a number of representations in recent months to the European Commissioner for Development to overcome these problems, both for the SFA and to ensure that its problems are not repeated in setting up transitional support for sugar. I am pleased to say that the particular internal EC problems that caused the funding for 2003–04 to be frozen and the funding delays for 1999–2002 have now been resolved. DfID's Caribbean office is also working closely with the EC delegation in Barbados to speed up the disbursement of the funds and enhance their impact
We fully realise that changes to the European banana regime pose serious challenges, both economic and social, that cannot be avoided. With successful restructuring, the banana industry will continue to play an important role in some countries, but, in many, there is a growing recognition that its role will continue to decline—as evidenced by the fact that in most Caribbean countries the majority of recent SFA allocations has been for diversification into other sectors.
The governments and people of the Caribbean need to continue to take the lead in responding to the challenges, but Britain also has an important part to play by using our bilateral aid programmes to help create the conditions for employment generation; by providing analysis of the options for EU/Caribbean trading relations post-2008 and the nature of the transition required in individual countries; by supporting the Commission's mandate to ensure that full account is taken of the needs of ACP countries; and in helping to make the EC's transitional assistance more effective.
I should like to finish on two points. The noble Lord, Lord Newby, made a point about Peter Mandelson's visit to the Caribbean and how disappointing it was. I draw the noble Lord's attention to the speech that Peter Mandelson gave in Brussels on 1 December, on the ACP/EU relationship in the global economy. Not only did I find the speech extraordinarily interesting, but, if I were a banana grower or involved in the economy of the Caribbean, I would be very encouraged by what Mr Mandelson has said on the record.
The noble Lord, Lord Newby, also asked why we could not offer the same support to ACPs as we do to community producers in the same region. The deficiency payment system referred to by the noble Lord is out of place in the post-reform common agricultural policy. The CAP has been very largely reformed to break the link between production and subsidy. The Commission's approach is strongly supported by the UK, and the removal of deficiency payments must be an eventual consequence of that approach.

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I hope that I have given your Lordships a strong and powerful feeling that the British Government acknowledge the problems and are anxious to do everything we can by working with colleagues in Europe to solve them. No one minimises the problems or disagrees about them. I can assure noble Lords that
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the Government remain absolutely committed to playing a vital and important role in this area in these industries.
House adjourned at eleven minutes before three o'clock.