House of Lords

Thursday 21st October 2010 Lords Chamber

Thursday, 21 October 2010.

11:00

Prayers—read by the Lord Bishop of Blackburn.

BBC and British Council

Thursday 21st October 2010 Lords Chamber

Question

11:07

Asked By

[Lord Judd]

To ask Her Majesty’s Government what discussions they have had with the BBC and the British Council concerning the political situation in Burma, Russia and the North Caucasus; and what was the outcome.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, we regularly discuss our mutual global priorities with the BBC World Service and the British Council, both in the UK and in posts overseas, including the ones which the noble Lord mentions. This in no way detracts from the independence of the two organisations, which we strongly support. My right honourable friend the Foreign Secretary has made plain the importance he places on both these institutions as key partners in projecting British values.

[Lord Judd]

I thank the noble Lord for that reply and I do not for a moment doubt his personal commitment to these organisations. Does he agree that the BBC and the British Council are very special assets in the history of Britain? With their commitment to integrity, learning and expertise, they have been an invaluable lifeline to those struggling for freedom and yearning for access to reliable information and analysis. Does he further agree that whatever financial manoeuvres may currently be under way, nothing must be done to undermine the effectiveness of these organisations or to water down the contribution that they make? It is not just the size of the audience, it is the importance to people who are leading the struggle for freedom.

[Lord Howell of Guildford]

I do not just agree but most strongly agree with what the noble Lord says. His commitment is also very admirable in relation to these two institutions. They are taking, over four years, some budget cuts. That must be accepted, but practically every institution except one or two is also taking some reductions. To concentrate on the World Service, its new position within the BBC overall, but still under the strong governance of the Foreign and Commonwealth Office, will be enhanced and strengthened. As to purposes, while I cannot say the same in terms of precise expenditure, we will see a strengthened performance for these brilliant institutions.

[Baroness Falkner of Margravine]

Will my noble friend assure the House that, while the budget for the World Service has transferred to the BBC, the Foreign Office and its priorities, particularly its emphasis in the strategic review on adaptability, will still be at the forefront of the decisions that are taken? As regards the Burmese service, one hour of broadcasting has 8.3 million listeners in a country which is desperately in need of free and impartial information. Will our foreign priorities still determine what decisions are taken in Bush House?

[Lord Howell of Guildford]

The short answer to my noble friend is yes. The BBC will remain in the same relation of governance to the Foreign Office as now, and in fact no language service can be closed without the written approval of my right honourable friend the Foreign Secretary. On the Burmese service, there were some media reports about closures, but they were speculation—and inaccurate speculation at that—and my right honourable friend made clear to the Foreign Affairs Committee in the other place the value he places on the Burmese service of the BBC World Service. My noble friend can be reassured on the point she has rightly raised.

[Lord Wright of Richmond]

My Lords, I fully endorse the remarks of the Minister on the value of the BBC World Service and its independence. Can he give an assurance that the spending review will not affect the ability of our posts in this part of Europe to analyse and report on political developments in those countries?

[Lord Howell of Guildford]

I hope not and that certainly is not the intention. The noble Lord has raised the broader question of the overall effect of budget disciplines on the Foreign Office and on posts. There will be some effects, but they will be mitigated by the fact that the Foreign Office will draw on the support of the Department for International Development and other sources to ensure that, together, the various departments represented in overseas posts remain as strongly and as acutely plugged into local events as ever.

[Baroness Kinnock of Holyhead]

My Lords, is it not clear that cuts to the Chevening scholarships, the British Council and the BBC World Service completely contradict the Government’s declared interest in public diplomacy? Is it not also clear that such cuts in this country mean reduced engagement in other countries, and that less engagement means less influence for the UK? Is this really in the national interest?

[Lord Howell of Guildford]

I like to agree with the noble Baroness on as many things as I can, but I just do not agree on this. It does not completely contradict anything. If anything, the position of the BBC World Service will be enhanced. The service is taking a cut in real terms of 16 per cent over four years. Final negotiations at the British Council are still going on, but it will have to make some reductions as well. However, we should remember that the British Council is only 30 per cent financed by the Foreign and Commonwealth Office. It raises the other 70 per cent of its finance through its highly successful and growing commercial activities, which I would expect to see expand. So, far from completely contradicting anything, what we are doing probably reinforces the importance of these two organisations.

[Lord Marlesford]

Given that we are all totally supportive of the wonderful work of the BBC World Service and given that it has a major role in nation-building and in the salvation of nations from oppressive regimes, would it not be appropriate for the service to be financed from the DfID budget, which is not being cut, rather than the FCO budget?

[Lord Howell of Guildford]

As I have explained and as I think my noble friend understands, it is not going to be financed from the FCO budget but by the BBC. However, there are activities that fall clearly within the definition of overseas aid activities which can be financed from that source as well. So I do not think the problem my noble friend is concerned about actually arises any more, or will not arise two years ahead, when this new arrangement is put into place.

[Lord Soley]

On Tuesday the Government announced in the defence review that they wanted an enhanced soft power. On Wednesday we saw a dramatic cut for the BBC over the next six years, with the licence fee and the incorporation of the World Service into the BBC generally. What discussions have taken place between the Minister’s department, the Chancellor and the Secretary of State for Defence on how you enhance and protect soft power if you are also cutting the budget?

[Lord Howell of Guildford]

My Lords, we have a lot of discussions all the time with the other departments concerned, including the Treasury. The broader question of co-ordination of our soft power projection and our positioning in the world is, of course, a central part of the agenda of the National Security Council, where it is discussed frequently. The noble Lord is right to talk about our soft power as an overall effort involving all overseas departments. We have the co-ordination in place to do that and it is working extremely effectively.

Pensions

Thursday 21st October 2010 Lords Chamber

Question

11:16

Asked By

[Baroness Greengross]

To ask Her Majesty’s Government how they will ensure that people get value for money when purchasing a pension annuity.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

The Government believe that it is important to incentivise individuals to save for retirement and recognise the importance of the annuities market. We support the open market option, which enables individuals to shop around for the best rate, and continue to consider ways to make this more effective. Complementing this, we will continue to work with interested groups to improve the quality of pre-retirement advice, including seeking independent financial advice, so that consumers can make an informed choice on how best to draw benefits from their pension fund.

[Baroness Greengross]

I thank the Minister for that helpful reply. However, as we know, many potential annuitants do not realise that there is an open market option. Has the noble Lord considered introducing the approach that the Pension Income Choice Association, PICA, has put forward? It believes that the default option should be for everyone to have the opportunity to review their options when they retire. It would like to see the production of a personalised statement—a sort of passport—which would contain sufficient information for people to use to obtain quotations.

[Lord Sassoon]

My Lords, I am grateful to the noble Baroness for raising this important topic. Some 450,000 annuity policies are written every year, with around £11 billion in annual premiums. I am aware that the Pension Income Choice Association has recently met my honourable friend the Financial Secretary to discuss its proposals. We encourage consumers to shop around under the open market option and we welcome all suggestions as to how this can be made more effective.

[Baroness Hayter of Kentish Town]

My Lords, given the importance of this issue, particularly for those with small pots of money, can the Minister assure the House that nothing in the spending review will undermine the plans for a generic financial advice service to help those with small pots, for whom the choice of a good annuity is so important?

[Lord Sassoon]

My Lords, I can confirm that we want to push on with our proposals for financial education underpinning choices about retirement savings and other important financial services. The Consumer Financial Education Body has been asked by the Government to work up its plans for an annual health check. It publishes a guide on retirement savings. I certainly take the point very well.

[Lord Newby]

My Lords, following on from that question, does the Minister accept that the key problem with people deciding which annuity to purchase is often that they are not experts and want impartial advice at that point? That is why the Consumer Financial Education Body is so important. Will he redouble the Government’s efforts to get the Consumer Financial Education Body to develop an online tool so that people who are looking to decide which annuity they purchase can go not only to the company from which they are taking their pension pot but also to someone who is clearly impartial?

[Lord Sassoon]

My Lords, I agree with my noble friend that we need to look at all options to make it easier for people to access online and other sources of independent advice. The CFEB was a significant initiative of the previous Government and we are encouraging it to press forward on this issue.

[Earl Cathcart]

My Lords, I ask this question with a certain amount of self-interest. Is it the Government’s intention to remove the requirement to buy an annuity when a person gets to a certain age? If it was made optional for the owner of the pension pot, they could receive the annual income from that pension, albeit probably smaller than the annuity, and then the capital sum would fall into the estate on death.

[Lord Sassoon]

My Lords, I am happy to confirm to my noble friend that the Government have announced that compulsory annuitisation at age 75 will end. As an interim measure, we have raised the limit from 75 to 77 years to make sure that people are not trapped in compulsory annuitisation while we consult—as we have been doing—on a new system that gives people greater choice as to how they save for their retirement.

[Baroness Browning]

Will my noble friend look at the length of time it takes for people who exercise an open-market option to receive their money? Very often, they are quoted two to three months. Of course, there have to be exchanges of paperwork and documentation has to be verified, but there can be significant changes in the fund during that time of process.

[Lord Sassoon]

My Lords, my understanding is that, thanks to work being done by the Association of British Insurers and others and the introduction of a new electronic transfer system, the actual time taken to make the transfer has come down from 35 days to 11 days. However, if there are other ways of making the transfer process easier, we will of course look at them.

[Lord Davies of Oldham]

My Lords, is not the real problem for the foreseeable future that, with interest rates low, the returns on annuities will be well below people’s expectations? Could not the Government think more radically about this in the longer term? Could we not think of following the pattern adopted by some other European Governments on annuities, whereby people would be able to purchase government bonds at a slightly better rate of interest than obtains at present and at the same time contribute to the Government in the shorter term sums which would help the Exchequer?

[Lord Sassoon]

My Lords, low interest rates are vital to the growth of the economy. In that context, it is important that people are able to choose between a wide variety of savings products. As well as making more flexible people’s choices about their retirement savings, the Government offer not only the opportunity to invest in gilt-edged securities but a range of products through NS&I.

Cyclists: Deaths

Thursday 21st October 2010 Lords Chamber

Question

11:23

Asked By

[Lord Janner of Braunstone]

To ask Her Majesty’s Government how many deaths and serious injuries occurred in 2009 owing to pedal cyclists not wearing a helmet.

[Earl Attlee]

My Lords, reported casualty statistics do not record the type of injury or whether a cycle helmet was worn. The Transport Research Laboratory’s published review of on-road cycle helmet effectiveness, dated 15 December 2009, is available online. The report estimates that 10 per cent to 16 per cent of fatalities could have been prevented and that 30 per cent of serious injures mitigated or prevented if cyclists had worn a helmet that was a good fit and was worn correctly.

[Lord Janner of Braunstone]

I thank the noble Earl for his Answer. I am sure the whole House will join me in congratulating Mayor Boris Johnson on launching the Barclays bike hire scheme, which has recently had its millionth journey. However, does the noble Earl share my concern for the safety of the scheme, which has placed an additional 5,000 bicycles on our roads in London, with most journeys taking place without a helmet? How are the Government planning to ensure that the wearing of helmets continues to increase, especially as Boris’s bikes come with no helmets and you normally own a helmet only if you own the bicycle that you are riding?

[Earl Attlee]

The noble Lord raises an important point. The Boris bikes have indeed been very successful and the accident rate has been very low. The noble Lord correctly identifies an obvious difficulty. To be effective, the helmet has to be a good fit and be worn effectively. The only solution is for the rider to bring his own helmet. That presents obvious difficulties for an ad hoc journey but the statistics show that the benefits of bicycling far outweigh any risks, in a ratio of 20:1, even taking into account the current rates of helmet-wearing.

[Baroness Knight of Collingtree]

My Lords, do cyclists have to pass a test of any kind anywhere prior to taking up their cycling? Is it not the case that many of them seem quite unaware that it is not legal even to pedal the wrong way up a one-way street or to sail past a red light?

[Earl Attlee]

The noble Baroness raises an important point. No test is required to ride a bicycle. However, the Bikeability instructors are properly qualified. The enforcement of traffic offences—and riding a bike illegally is a traffic offence—is an operational matter for the police.

[Lord Rosser]

My Lords, there will be obvious concern about the effect of the proposed abolition of Cycling England on safety. Perhaps the Minister will wish to comment on that. Apart from the wearing of the helmet, a number of measures can of course be taken to reduce deaths and serious injuries among pedal cyclists. Local government plays a fundamental role in that area. Assuming that it will still have sufficient staff numbers in future to enable it to play a continuing, meaningful role in road safety, what assessment did the Department for Transport make of the impact on making further improvements in road safety for pedal cyclists of the future removal of the ring-fencing of nearly all local authority revenue grants, at a time when local authority budgets are being reduced? Did the Department for Transport make such an assessment at all and, if so, what did it show?

[Earl Attlee]

I am grateful to the noble Lord for giving me the opportunity to explain the situation regarding Cycling England. The noble Lord will remember that the Bikeability project is part of Cycling England. The functions of Cycling England will be absorbed into the Department for Transport. However, the Bikeability project will continue. Funding for it is available until at least the end of this Parliament. As for the issue of local authorities, we believe in localism but it is inconceivable that they will not promote bicycling, because of its obvious benefits.

[Lord Greaves]

My Lords, I thank the Minister for his comments on the health benefits of cycling which, as he said, far outweigh any risks in a ratio of 20:1. Does he agree that any siren calls for making helmet wearing compulsory should be resisted, particularly in view of the evidence that in Australia, when helmet wearing was made compulsory, some 30 per cent or more of regular cycle users stopped riding their bikes?

[Earl Attlee]

My Lords, I am grateful for the noble Lord’s comments. We have no intention of making the wearing of helmets compulsory because it can be extremely difficult to enforce with the youngsters who are our targets. If we can get youngsters to wear helmets from an early age, we hope that they will carry on wearing them as adults. Wearing rates are, slowly but surely, increasing and we have no plans to interfere with that process.

[Baroness Howarth of Breckland]

My Lords, this question is about brain injuries and deaths. I am sure the Minister will agree that rehabilitation units that treat those who have been injured can make the difference between new life and living death for those people hurt and their families. Will the Minister, although he is a transport Minister, convey to his health colleagues the need to ensure that specialist units dealing with those with brain injury are protected in the reconstructed health service?

[Earl Attlee]

My Lords, I take on board the noble Baroness’s point about brain injuries. They are devastating and often mean that the victim can no longer take a full part in society. Obviously I answer for Her Majesty’s Government, and I shall raise the noble Baroness’s point with health Ministers.

Housing

Thursday 21st October 2010 Lords Chamber

Question

11:30

Asked By

[Lord Knight of Weymouth]

To ask Her Majesty’s Government what is their most recent assessment of housing need in England; and what plans they have to meet that need.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

My Lords, unlike housing demand, housing need relates to the incidence of particularly poor housing outcomes: overcrowding, affordability problems, homelessness and unsuitability of accommodation. Our focus in addressing housing need will devolve power to local people and stimulate private investment in new housing through measures such as the new homes bonus. In addition, we have protected many important measures for vulnerable people, including grants for supporting people, homelessness and disabled facilities grants, securing £7.6 billion in investment over the next four years.

[Lord Knight of Weymouth]

My Lords, the most basic security wanted by families in this country is a job and a home. Yesterday’s spending review is at the cost of at least 1 million jobs, but how many will also lose their homes? Government plans allow increases in rents to 80 per cent of the market rent, potentially trebling the weekly rent. This, coupled with a cap on household benefits, means families will be priced out of some areas. When will the Government bring forward a plan that we can scrutinise that shows how cutting the housing budget by 60 per cent yesterday will allow many more affordable houses to be built?

[Baroness Hanham]

My Lords, the process for affordable housing in future will be that most of the money for housing has been passed down to local authorities, so that they will then make the decisions for themselves about how much housing is needed and at what rents. The new homes bonus will mean that where they build houses, they will get more money for that on the basis of the matching of the council tax. There will be plenty of housing built in future—probably more than was built under the previous Government. Even Andy Burnham admitted that they had not done enough.

[Lord Taylor of Goss Moor]

My Lords, I declare my interest, which is registered, as chairman of the National Housing Federation. Will the Minister explain what discussions took place with the Department for Work and Pensions so that any new tenant in the affordable homes proposed by the Government at 80 per cent of market rents can be assured that both now and in future, under the new benefits systems, they will be able to be protected by the assurance of the availability of housing benefit to cover their full rent?

[Baroness Hanham]

My Lords, so far as I am aware, the housing benefit will continue to be paid but there will be a cap on the amount of benefit available for housing. Effectively, that will mean that some people will not be able to afford the rent that they are currently paying. We have drawn attention before in this House to the fact that there are some people in London living in accommodation that could not be afforded even by investment bankers.

[Lord Martin of Springburn]

My Lords, in most cases, the housing estates throughout the United Kingdom are excellent communities to live in because the tenants themselves run the tenants’ associations, pensioners’ clubs and community centres. If the Government are going to start offering people nothing other than temporary tenancies, that is not going to help stability in our housing communities.

[Baroness Hanham]

My Lords, I happily endorse what the noble Lord has said about the actions of tenants’ and residents’ associations. The improvements in estates are a result of such interest being taken.

The new tenancy arrangements will of course be available to housing associations for the variation in tenure. That will not be a diktat. The tenure and affordable rents will be governed by what is required by those obtaining that accommodation. If their situation subsequently changes, discussions will take place as to whether it is correct for them to continue to use social housing, or whether they should be housed in other ways.

[Baroness Hollis of Heigham]

My Lords, on social housing, is it not the case that if you cannot find a job your HB is cut after 12 months, your rent arrears mount up, you are evicted and you become homeless? Equally, however, if you find a job with an adequate income, you are also likely to lose your home and be encouraged to move into a different form of tenure. So, fail to get a job and you are out; get a job and you are out. Is that decent?

[Baroness Hanham]

My Lords, I think it is.

[Noble Lords]

Oh!

[Baroness Hanham]

My Lords, when the income of some people who are living in subsidised accommodation rises after taking that accommodation, their change in circumstances needs to be taken into account.

We have just discussed housing benefit levels. As far as I can see from the proposals, nobody will be evicted. Everyone will be given an opportunity. Local housing authorities will have the responsibility to ensure that they deal with people decently and respectfully.

[Lord Skelmersdale]

My Lords, are the Government looking at the knotty subject of succession tenancy in social and local authority subsidised housing?

[Baroness Hanham]

My Lords, the answer is yes for future tenancies, and no for existing tenancies and arrangements.

[Lord Best]

My Lords, on housing benefit, am I right in thinking that, following yesterday’s announcement in the CSR, somebody in their 30s in a one-bedroom flat who loses their job will find that if they need housing benefit they will have to leave that flat, where they might have lived for some time, and find somewhere to share with other people? That is a fairly tall order in many parts of the country. Is that the position we find ourselves in with the raising of the level for housing benefit?

[Baroness Hanham]

My Lords, I need to write to the noble Lord about that, if I may. His question is quite technical.

[A noble Lord]

Too bad.

[Baroness Hollis of Heigham]

It was in the Statement.

Budget Responsibility and National Audit Bill [HL]

Thursday 21st October 2010 Lords Chamber

First Reading

11:37

A Bill to make provision for a charter for Budget responsibility and for the publication of financial statements and Budget reports; to establish the Office for Budget Responsibility; to make provision about the Comptroller and Auditor-General and to establish a body corporate called the National Audit Office; to amend Schedules 5 and 7 to the Government of Wales Act 2006 in relation to the Auditor-General for Wales; and for connected purposes.

The Bill was introduced by Lord Sassoon, read a first time and ordered to be printed.

Business of the House

Thursday 21st October 2010 Lords Chamber

Timing of Debates

11:38

Moved By

[Lord Strathclyde]

That the debate on the Motion in the name of Baroness Valentine set down for today shall be limited to three hours and that in the name of Baroness Warnock to two hours.

Motion agreed.

Arrangement of Business

Thursday 21st October 2010 Lords Chamber

Announcement

11:39

[Baroness Anelay of St Johns]

My Lords, I have already announced to the House the dates of the Christmas Recess: the House will rise at the close of Business on Wednesday 22 December and return on Monday 10 January 2011. I am now in a position to announce Recess dates up to the next Christmas, in December 2011. I appreciate that I am about to give rather more information about dates than is usually possible. To save noble Lords from reaching for their diaries, they might like to know that a full note is already available in the Printed Paper Office.

The dates are as follows. The House will rise for the February half-term at the close of business on Wednesday 16 February and return on Monday 28 February. The House will rise for Easter at the close of business on Wednesday 6 April and return on Tuesday 26 April. The House will rise for Whitsun at the close of business on Wednesday 25 May and return on Monday 6 June. The House will rise for the summer at the close of business on Wednesday 20 July. There will be a September Sitting in 2011. The House will return on Monday 5 September and rise at the close of business on Thursday 15 September. The House will then return on Monday 10 October. Finally, the House will rise for Christmas at the close of business on Wednesday 21 December 2011 and return on Tuesday 10 January 2012. As ever, Recess dates are subject to the progress of business.

Privileges and Conduct Committee: Fourth Report

Thursday 21st October 2010 Lords Chamber

Motion to Agree

11:41

Moved by

[The Chairman of Committees]

That the Report from the Select Committee on the Conduct of Lord Paul (4th Report, HL Paper 37) be agreed to.

[The Chairman of Committees (Lord Brabazon of Tara)]

My Lords, I beg to move that the fourth report from the Committee for Privileges and Conduct be agreed to.

The House is being invited today to agree three reports from the Committee for Privileges and Conduct and three consequential suspension Motions. We are debating these reports together, which I hope will be convenient for the House, but I should emphasise that these are three separate reports, relating to three separate cases, and the Motions are entirely free-standing. On the other hand, the three suspension Motions are consequential upon agreement to the relevant reports, as they simply implement the committee’s main recommendation in each case.

This is a difficult day for the House, and the task before us in considering these Motions is not one that I—or, I am sure, any noble Lord—will relish. It is made no easier by the fact that the contents of the reports now before your Lordships’ House were leaked to the media over the weekend in advance of publication. I can assure the House that we took all reasonable steps to prevent any leak, and I deeply regret that there was a leak, particularly in so far as it caused any distress to the three noble Lords who are the subjects of the reports.

The three reports all relate to claims for expenses made under the Members’ reimbursement scheme. In each case the Member concerned designated one or more properties outside Greater London as his or her main residence and, as a result, claimed money under the night subsistence and travel expenses headings in the scheme. The key question in each case, which both the Sub-Committee on Lords’ Conduct and the Committee for Privileges and Conduct have considered in turn, is whether the Member correctly designated the property or properties in question as his or her main residence.

I wish at this point to pay tribute to the members and staff of the Sub-Committee on Lords’ Conduct. They have taken on a vital, hugely difficult and, frankly, painful task. They have done their job with efficiency, rigour and fairness. I put on the record my personal thanks to the chairman, the noble Baroness, Lady Manningham-Buller, and her colleagues on the sub-committee.

In the three cases before us, the sub-committee concluded, in each case, that the noble Lord concerned had wrongly designated the property in question as his or her main residence, and had wrongly claimed sums varying from £27,000, in the case of the noble Lord, Lord Bhatia, to £125,000, in the case of the noble Baroness, Lady Uddin. In each case the sub-committee concluded that the noble Lord concerned had made these claims in bad faith. All three noble Lords appealed against these findings to the Committee for Privileges and Conduct, which I chair. We considered the appeals on Monday 11 October. Our reports speak for themselves but it may be useful if I briefly summarise our most important conclusions, first on points of principle and finally on the specifics of each of the three cases.

First, on the points of principle, we accept entirely the sub-committee’s conclusion that in each case money was wrongly claimed, and its calculations as to the amount of money wrongly claimed. However, we regard the repayment of this money as a matter of restitution rather than sanction, and therefore concluded that the length of suspension should not be linked to repayment. Secondly, the appeals contained a number of complaints as to the procedural fairness of the investigations. Although the sub-committee acted entirely properly throughout, and in full accordance with the procedure agreed by the House, we accepted that the procedure itself presents some difficulties.

As we say in our report on the noble Baroness, Lady Uddin, there is a tension between ensuring that noble Lords under investigation enjoy appropriate procedural safeguards and preserving the informal and parliamentary nature of such proceedings. I believe that the House would not wish to turn internal disciplinary hearings into full-blown, adversarial court proceedings, with prosecution and defence lawyers and the cross-examination of witnesses. In fact, the House has explicitly agreed, more than once, that proceedings should be kept relatively informal. On the other hand, we need to ensure, in accordance with the principles of natural justice and fairness, that all evidence is properly tested and that no noble Lord is found guilty on the basis of hearsay.

I should at this point remind noble Lords that these three investigations were all initiated in the previous Parliament, and so were conducted in accordance with the procedures agreed in December 2008. They are the last investigations to be conducted under these procedures. We now have a new Code of Conduct and a new set of procedures. The independent Commissioner for Standards, Mr Paul Kernaghan, will conduct any future investigations and present his findings to the sub-committee, which will, where appropriate, recommend a sanction to the main committee. This is, I believe, a better and clearer procedure. It separates the investigative and sentencing functions, and allows for an appeal against both elements to the main committee. The commissioner will have considerable freedom of action, and will be able to test all relevant evidence thoroughly. At the same time, I am sure that the sub-committee, along with the commissioner, will wish to reflect on the findings in these reports in the coming weeks, and consider whether our procedures could be improved still further.

I now turn to the three cases. In each case we found that the so-called “main residences” designated by the noble Lords were not appropriately designated. They were properties outside London, designated as main residences by noble Lords who, before, during and after the periods in question, resided substantially inside London. They did not reflect any natural interpretation of the term “main residence”. No entitlement to public money should have been claimed on such a basis.

In the case of the noble Lord, Lord Paul, we disagreed, on the balance of probabilities, with the sub-committee’s conclusion that he had acted in bad faith in wrongly claiming amounts under the expenses scheme. However, as paragraph 8 of our report states, noble Lords have a duty to take reasonable steps to ensure that any money claimed from public funds is properly payable. We consider that the noble Lord, Lord Paul, was grossly irresponsible and negligent in this regard. For that reason, and bearing in mind that he repaid a total of £42,000 to the House at the start of the investigation, we recommend that he be suspended from the service of the House for four months.

In the case of the noble Lord, Lord Bhatia, we dismissed his appeal and upheld the sub-committee’s finding that he wrongly claimed over £27,000, and that in so doing he did not act in good faith. In judging the relative severity of sanction in the noble Lord’s case, we took into account the relatively short period within which he made his claims, and the fact that, after receiving the sub-committee’s report and shortly before the committee met, he repaid the money to the House. However, he has not apologised or acknowledged that he acted wrongly. We therefore recommend that he be suspended from the service of the House for eight months.

Finally, I turn to the sixth report, on the conduct of the noble Baroness, Lady Uddin. I have already indicated our concerns over the status of untested third-party evidence, such as the statements made to the police by her neighbours in Maidstone. We decided, after careful consideration and without intending any reflection on the quality of the evidence, that it would not be fair in her case to attach any weight to it. We then considered the noble Baroness’s own evidence, her letters, written statements, oral evidence and her appeal. It was clear to us that she had not advanced any reasonable interpretation of the term “main residence”. As the sub-committee points out, in so far as she attempted to offer an interpretation, it was one in which the word “main” had no meaning. She chose, over a period of years, to designate as main residences properties which she repeatedly described as “bolt-holes”. A bolt-hole is not a main residence, and the noble Baroness’s designations were wholly unreasonable. We therefore upheld the sub-committee’s finding that she wrongly claimed just over £125,000 over a four-year period, and that she should repay this money to the House. It will be for the Clerk of the Parliaments to arrange repayment.

We further found that in making these claims, the noble Baroness, Lady Uddin, did not act in good faith. She has not acknowledged that she claimed the money wrongly; nor has she apologised in terms. In view of the length of time over which these claims were made, and the sums involved, we recommend that she be suspended from the service of the House for the remainder of the current Session of Parliament—in other words, until Easter 2012.

In conclusion, we cannot ignore what has happened in these cases. It is clear that there was abuse of the Members’ reimbursement scheme and that the House has a duty to act in those cases where such abuse occurred. I therefore commend these three reports to the House.

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

My Lords, I support the Motion in the name of the Chairman of Committees. As the noble Lord said, we find ourselves on an extremely difficult and sad day for this House. The allegations made against the three Members of this House were serious, and the findings of the Sub-Committee on Lords’ Conduct and the Committee for Privileges and Conduct are serious. Their recommendations and the reports speak for themselves.

I join the noble Lord, Lord Brabazon of Tara, in expressing gratitude to the members of the Sub-Committee on Lords’ Conduct, chaired by the noble Baroness, Lady Manningham-Buller, for the thoroughness with which they conducted their investigations. I should also like to express my thanks to the Clerks of the House for the exemplary service given to the sub-committee and to the Committee for Privileges and Conduct.

As a member of the Privileges and Conduct Committee, I believe that all three Peers concerned fell short of the standard of conduct that the House and the public are entitled to expect, and we must as a House act decisively. The public expect us to react with firmness and unity to demonstrate our abhorrence at wrongdoing.

The one light in this sorry situation is that the House has already taken decisive action to reform an outdated system of expenses. As from the start of October, we introduced a new transparent system of daily allowance based on attendance. I firmly hope that, as a result, this will be the last time that we as a House find ourselves in this position.

The committee’s findings are disturbing and the conclusions reached are grave, but they are, in my judgment, fair and just. I commend the reports to the House and hope that noble Lords on all sides will join me in supporting the Motions before us.

[Baroness Royall of Blaisdon]

My Lords, I, too, support the Motions. These are serious matters—serious for the Members involved, serious for this House and serious for Parliament, politics and the public beyond. We should not forget either that a number of parliamentarians, including two Members of your Lordships' House, are currently facing criminal charges to be tried in court on similar serious matters. But important though the matters before us today unquestionably are, it is important to remember that these are matters that relate to a different moment. When allegations on a number of issues were first made last year against Members of your Lordships' House, we were, in retrospect, in a poor position, our machinery outdated, our procedures similarly so, and our systems not suited to modern scrutiny.

As has been said, on these issues we have come a long way. No system is ever perfect. Any system or procedure is of course capable of improvement. We must not be complacent, but at the same time we now have a new procedure for making complaints, a new system for considering complaints, a new code of conduct against which complaints can be considered, and a new system of financial support for Members of this House. All of that has been reviewed, considered, examined and adopted within a relatively short space of time. Perhaps it was not at the speed which some outside this House would have wanted, but we have done it and what we now have—what this House has itself brought into play—is a whole range of new machinery and new procedures. Getting to this point has not been easy, but whatever we have been able to do has been right.

Today is again another day which is not easy or comfortable for anyone in your Lordships’ House. I feel great sadness. But I believe that the committee has come to the right conclusions on the cases before us and on the report from the sub-committee, and the House should support the Motions before us. The sub-committee did indeed face a very difficult task in dealing with the matters before it, and I, too, thank the members of the sub-committee and their staff for their work. At the same time, however, I believe that the main committee’s judgments in relation to the sub-committee’s report, including where it has diverged from the sub-committee’s recommendations, are right. I believe that the language of the sub-committee’s reports was in part misplaced. I believe that its inclusion of untested hearsay evidence was incorrect and that the penalties proposed by the sub-committee were not appropriate.

As a member of the full committee, I believe that we are right to make the recommendations we are putting before the House today. I welcome especially the proposal for the new Commissioner for Standards to examine issues relating to process that have arisen in the course of bringing the committee’s report before your Lordships’ House and, in particular, to addressing the question of the means by which all relevant evidence can be taken into account in our procedures. That shows that we are ready to examine, and examine continually if necessary, our procedures to make sure that they work and continue to work and to ensure that they are just. This is the right way forward for this House.

On the explicit sanctions before this House today, some may suggest that we were wrong, for instance, to alter the penalties proposed by the sub-committee, but I do not believe that we were wrong to do so. I believe that the approach taken by the full committee is the right one. The committee has judged that the three Members of your Lordships’ House did wrong and we are proposing stringent penalties in response. Just as last year when we took the decision to suspend members of your Lordships’ House for the first time since the age of Cromwell, so today we are proposing that we impose penalties of a severity never seen before in either House of Parliament. That is a tough action to take and a tough action for Members of this House to bear. Although they did wrong, as the report before you correctly concludes, I do not believe that this House will not feel sympathy for the Members involved. I know that I do. However, being aware of their difficulties and indeed, sympathising with them as colleagues in your Lordships’ House, should not for a moment pull us away from our responsibilities. We have a duty to this House, the Members of this House, to Parliament and to politics as a whole to right the wrongs where we find them and to take action as necessary to put our House in order. I have no doubt that this House will do so today.

[Baroness D'Souza]

My Lords, this is a most uncomfortable and disagreeable business, but one from which this House must not, indeed cannot, shirk. I add my thanks on behalf of the Cross Benches to all officials and Peers alike who have been involved in bringing these reports to your Lordships’ House.

Adherence to the code of conduct is a weighty personal responsibility. We in the Privileges and Conduct Committee have been obliged to judge our colleagues—a task that all of us would have preferred to avoid. However, the cases before us affect us all in many different ways. We are undoubtedly tainted by evidence of wrongdoing. The reputation of the House is at stake, which in turn affects the work that we do. The press, grossly duplicitous as it has been in some methods of investigation, has allowed—encouraged, even—the wider public to perceive this House and its work as redundant at best and unworthy of public funds at worst.

We have to face these charges. We must acknowledge and never underestimate how we are now regarded; and we have to do something to redress the balance. Much has been achieved in recent months but part of the long journey back is how we respond to the report of the Committee for Privileges and Conduct before us today and the evidence contained therein. In arriving at our conclusions, the committee relied almost entirely on the evidence directly gained by the sub-committee’s, and our own, questioning, and not on press reports. Our findings uphold the sub-committee’s main conclusions with some adjustments to the recommended sanctions. In particular, we found that any acceptable or natural meaning of “principal” or “main” residence did not and could not apply in these cases no matter how generously the criteria are interpreted.

Distasteful as it is, none of us here can ignore such evidence painstakingly developed by the sub-committee on noble Lords’ conduct, nor can we by our decisions minimise the culpability or impact. To do so would be to deal with these cases less robustly than warranted and, in effect, pull up the drawbridge and refuse to take account of public anger. We have chosen to invoke serious sanctions which I believe are entirely justified by the sub-committee’s report. In so doing, the intention is not only to apply standards that prevail in the world beyond this House but to strengthen the code of conduct and to help restore public confidence in this House.

[Lord Alli]

My Lords, I have thought long and hard about whether or not to intervene in today's debate. There are those who advised me to keep quiet and not rock the boat, but I have some serious worries about these reports and I believe that it is right and proper to share them with the House. By way of background, I have read the committee's reports on each of the three cases, and two aspects of these investigations trouble me. The case I am most familiar with is that of the noble Baroness, Lady Uddin, so perhaps I might be allowed to use the committee's finding in her case to illustrate my concerns.

My first concern relates to the process and natural justice. As the House will recall, the initial investigation arose out of an article that appeared in the Sunday Times. A sub-committee of the Committee for Privileges was set up to investigate and to determine the facts of the case, and the subsequent appeal happened on 11 October. My concerns centre on the procedural failures of the sub-committee, the standard of proof adopted by the sub-committee and the weight that the sub-committee gave to the information collected by the Sunday Times. The sub-committee is mandated by this House to apply a civil standard of proof to its deliberations. This was not the standard used in the case of the noble Baroness, Lady Uddin, and I welcome the full committee's recognition that the sub-committee should not have placed the weight that it did on the information published by the Sunday Times from the neighbours of the noble Baroness. In doing so, the sub-committee did not give the noble Baroness the ability to address the evidence, call witnesses or cross-examine any of the individuals quoted in the Sunday Times, but relied instead on hearsay.

I also note from the report of the full committee that it accepted that the procedures followed by the sub-committee were unsatisfactory, and it has recommended that the new commissioner and sub-committee review those procedures. I hope that the Chairman of Committees will today confirm that the findings of the review will be published.

It also seems unjust, unreasonable and unfair that any noble Lords facing such a serious set of allegations should not be entitled to legal representation. I note with some concern the comments made by my noble friend Lady McDonagh in her letter to the committee, which is on page 215. I believe that we should now amend our procedure to ensure that it is the right of any Member of this House to be properly represented in any investigation, particularly where the outcome could lead to the suspension of that Member. I am, however, perplexed, given that the procedures were so at fault, that the evidence was untested and that there was a lack of legal representation, how the committee could apply the heaviest of sanctions in this case without itself testing the evidence.

I now want to address a second and equally troubling aspect of all three cases. That is the element of race. Let me say from the outset that I do not in any way wish to accuse any member of the committee or the sub-committee of racism. That would be quite improper and wrong, but it cannot have escaped your Lordships’ attention that the only three Members of your Lordships' House who were referred to the Committee for Privileges and Conduct and subsequently investigated under these procedures were all Asian. I have reviewed the list of Members—some 20 in total—who have had expense complaints referred to the Clerk of Parliaments, and I cannot find any consistent pattern for the referrals. When one combines inconsistency in approach and the disproportionality of the sanctions, my concerns deepen. Something clearly has gone wrong, so I ask that the Leader of the House, with the support of other noble Lords who perhaps have more experience in this field, look into the matter and report back to the House. I further ask the noble Lord, if there has been inconsistency on the basis of race or otherwise, that the House be allowed to review these sanctions to ensure equal treatment.

I said at the beginning that I thought carefully before speaking today and that it was a very difficult decision to make, but I hope that noble Lords will accept that I do so out of genuine concern for the reputation of this House. I recognise that members of the public have a right to expect the highest standards of behaviour from Members of your Lordships' House, and those who do not meet them should rightly be punished. However, in the rush to apologise for an expense system for which we should all be embarrassed, it should not be at the cost of justice or fairness for all, regardless of race.

[Baroness Flather]

My Lords, I, too, want to say a few words, but they are rather different from those of the noble Lord, Lord Alli. This is a very sad day for me personally, because the three Peers are all Asians. When you are a member of a minority and you read in the press that three members of the same minority have been found to have cheated on their expenses, it is hard to bear. I do not say this to suggest that the committee and sub-committee behaved in any way incorrectly; I do not mean that. I have looked at the reports and I have no complaint to make.

What I want to say is how distressing it is for me personally to find the 80th richest man, the noble Lord, Lord Paul, saying that he did not understand what “main” and “residence” meant. When I made my submission to the SSRB, I said that perhaps he did not understand the English language and the meaning of “main” and “residence”. Those words are fairly straightforward; we all know what they mean. If we do not, I suggest that we should not be sitting in this Chamber, as all the proceedings are conducted in the English language.

The noble Lord, Lord Alli, says that the noble Baroness, Lady Uddin, has been treated badly and that things have not been looked at properly. As far as I remember, the Chairman of Committees said that she had herself admitted that the two places that she called her main residence were bolt-holes. The basis on which the decision was taken was possibly what she herself admitted about that.

We ought to let this matter rest. I think that it is very sad. Frankly, I do not have any sympathy for the two very rich gentlemen, the noble Lords, Lord Bhatia and Lord Paul. I do have sympathy for the noble Baroness, Lady Uddin, but this is how things have come out. I have looked at the reports fairly carefully. They are clear and readable and they answer nearly all the questions for me.

We call ourselves “noble Lords”. When I came here in 1990, the behaviour of Members of the House of Lords was expected to be above this kind of thing; we were not expected to do this sort of thing. I remember clearly that, if I did not understand anything, I went to the finance department or to the clerks to the Parliament and asked them what I should do. They were always available to us to give advice. If we are in doubt, clearly we should take advice. We should not just carry on and say that we did not understand. I do not accept that someone cannot understand that, if they never stay somewhere, that place is not their main residence.

I am disappointed and distressed and I am sad that this involves three Asian Peers. The noble Lord, Lord Paul, said something about Indian culture. I do not know which Indian culture he was speaking of; I do not know of that culture. The only Indian culture that I know of in this regard is buying honours, which certainly is Indian culture. I hope that it does not apply to him.

[The Chairman of Committees]

My Lords, the noble Lord, Lord Alli, asked me a number of questions, to which I hope I can reply and give him and the House some assistance. He asked whether the findings of the review would be published. Indeed they will be. Any changes to the procedure that were agreed by the Committee for Privileges and Conduct would of course require a report to the House and the agreement of the House. I think that that answers that point. He also referred to the letter in the Uddin report from the noble Baroness, Lady McDonagh. I refer him to the letter that followed from the noble Baroness, Lady Manningham-Buller, which is on pages 216 and 217 of the report. I and the other members of the Privileges and Conduct Committee were satisfied by that letter.

The main question raised by the noble Lord, Lord Alli, was why these three Peers were referred to the sub-committee for investigation whereas most other Peers facing allegations of wrongdoing were cleared by the Clerk of the Parliaments. Under the procedure agreed by the House in 2008, the Clerk of the Parliaments investigated complaints about alleged abuses of the system of financial support, resolving them himself where possible. He was able to do so in the vast majority of cases. However, the House also agreed that he could request the Sub-Committee on Lords’ Conduct to assist him in investigating a complex or serious complaint. The Clerk of the Parliaments took the view that cases that had been subject to formal police investigation were, by definition, of a serious nature. This is why he referred the cases of the noble Lord, Lord Paul, and the noble Baroness, Lady Uddin, to the sub-committee. In addition, the House Committee in January discussed the extent to which the Clerk of the Parliaments in conducting these investigations should rely on written assurances from Members. The committee agreed that he would be,

“justified in relying on explicit written assurances”.

In the case of the noble Lord, Lord Bhatia, no such written assurances were provided, and the Clerk was therefore unable to reach a conclusion on the case. He therefore had no option but to refer the case to the sub-committee. I can give the noble Lord an absolute assurance that it was not in the least bit because the three Peers were Asians. I do not think there is anyone on the committee or the sub-committee who would not endorse that completely. I hope that helps the noble Lord, Lord Alli, on the points that he made.

Motion agreed.

Privileges and Conduct Committee: Fourth Report

Thursday 21st October 2010 Lords Chamber

Motion to Resolve

12:11

Moved By

[The Chairman of Committees]

That Lord Paul be suspended from the service of the House for four months.

Motion agreed.

Privileges and Conduct Committee: Fifth Report

Thursday 21st October 2010 Lords Chamber

Motion to Agree

12:12

Moved By

[The Chairman of Committees]

That the Report from the Select Committee on the Conduct of Lord Bhatia (5th Report, HL Paper 38) be agreed to.

Motion agreed.

Privileges and Conduct Committee: Fifth Report

Thursday 21st October 2010 Lords Chamber

Motion to Resolve

Moved By

[The Chairman of Committees]

That Lord Bhatia be suspended from the service of the House for eight months.

Motion agreed.

Privileges and Conduct Committee: Sixth Report

Thursday 21st October 2010 Lords Chamber

Motion to Agree

12:13

Moved By

[The Chairman of Committees]

That the Report from the Select Committee on the Conduct of Baroness Uddin (6th Report, HL Paper 39) be agreed to.

Motion agreed.

Privileges and Conduct Committee: Sixth Report

Thursday 21st October 2010 Lords Chamber

Motion to Resolve

Moved By

[The Chairman of Committees]

That Baroness Uddin be suspended from the service of the House until the end of the current session of Parliament.

Motion agreed.

Immigration

Thursday 21st October 2010 Lords Chamber

Debate

12:13

Moved By

[Baroness Valentine]

To call attention to the economic and cultural impacts of immigration in the United Kingdom; and to move for papers.

[Baroness Valentine]

My Lords, before opening this debate I would like to declare that I am chief executive of London First, a not-for-profit business membership organisation.

It is a great pleasure to introduce this debate today; I thank my noble friend Lady D’Souza for allocating me the time. I look forward to the contributions of noble Lords from all sides of the House; there is much expertise and experience to draw on. In particular I would like to pay tribute to the excellent report prepared by the Economic Affairs Committee back in 2008 which sought to deal with many facets of this complicated subject. The committee concluded that any immigration policy should have at its core the principle that existing UK residents should be better off as a result.

There have been significant recent developments in government policy on immigration. A decision has been made to introduce a permanent cap in April of next year, and in order to avoid an influx ahead of this date a temporary cap was implemented in July. The aim of this cap is to accelerate the reduction of immigration into the UK, a trend that had begun under the points-based system introduced by the previous Government.

Her Majesty's new coalition Government are right to be concerned about migration. Politicians reflect the views of the voters, and immigration was undoubtedly an election-time door-step issue. As recession has hit, people are understandably concerned that immigrants may be taking their jobs or creating an unwelcome burden on public services. In some respects, both concerns are valid: foreign waiters are prepared to live and work in more challenging conditions than their British counterparts, while the cost of education provision to immigrants and their dependants was recently estimated at £13 billion.

The other side of the argument is equally politically and economically obvious: the Government are reliant on economic growth as a pathway out of recession. As the public sector shrinks, so the private sector is expected to take up the slack. That private sector growth is partly reliant on the attraction of world-class talent to work in the UK.

One of the UK's strengths is the global reach of its service sector economy. It is the second highest exporter of professional services worldwide. London, which is particularly successful in this sector, contributes more in tax than it receives in public spending by some £15 billion or more a year. One seventh of London's businesses are foreign-owned. Many of the world's largest companies have invested in substantial bases here. These are global organisations; they compete with the best worldwide. They must be able to recruit the best people and move people and teams from A to B as and when required. If they are not allowed to, then the A or B in which they eventually base themselves will not be Aberdeen or Birmingham but Amsterdam or even Beijing. I am more concerned about highly talented international business people and academics leaving the UK than I am about limiting their entry.

I was struck by a lecture given by Sir Howard Davies, where he argued that an economy such as London's—a varied and global centre of excellence—ebbed and flowed according to the combination and concentration of talent. Rather than a fixed number of ever present companies in certain sectors, London's economy is a fluid agglomeration of the world's brightest and best. The UK must build upon its considerable

“combination and concentration of talent”,

not cap it.

Beyond the political and economic arguments there is a question of what kind of Britain we want—of what we value about the country in which we live. I know what my answer is. I value the academics who make our universities among the best in the world; the students whom we educate and send back to their countries with vital ties and connections to our country; the 13 scientists working at the Medical Research Council’s laboratory of molecular biology who have received Nobel prizes, only five of whom are British. I value the Russian ballet dancers, the European fine artists, the American sports stars, the Caribbean reggae artists and even the Australian soap stars, all of whom add vibrancy to our society.

Let me offer some names and achievements: Rudolf Nureyev at Covent Garden; Anish Kapoor at the Royal Academy of Arts; our Olympic aquatic centre designed by Iraqi-born architect Zaha Hadid; the structure of DNA, discovered at Cambridge University by James D Watson, who came here from Chicago. I understand, however, that Karl Marx had his application turned down.

What should inform an effective policy response to the Government’s twin ambitions of managing migration and growing the economy? Let me explore the different types of migration in more detail. First, illegal immigration is undoubtedly an issue, on which I would urge the Government to focus with urgency. Secondly, there are the asylum seekers, of whom those with legitimate cases should be given appropriate protection. Indeed, we should pay tribute to waves of migrants, such as Huguenots in the 17th century or the east African Asians in my lifetime, who have enhanced our culture and our economy. Thirdly, there is a difference between EU and non-EU immigration. The Government have no direct power to limit EU migration. Finally, there are the categories identified by the UK Border Agency. Tiers 1 and 2 migrants are defined as highly skilled and skilled respectively, tier 3 migrants are low skilled and tier 4 are students.

Taking tier 4 first, I understand that students from within and outside the EU accounted for roughly 230,000 migrants in 2009—40 per cent of the total. We should value students for their subsidy, in effect, of our world-class learning institutions and for their contribution towards forging links between the UK and fast-growing developing world economies. Cambridge University trains the world’s leading mathematicians and South Tyneside College trains the world’s leading marine navigators. However, poor monitoring of this category has allowed for bogus colleges and bogus students, so I encourage the Government to take firm steps to address this issue.

On tier 3 migrants, while entry for low-skilled workers from outside the EU has been closed since the points-based system was introduced, low-skilled migrants from inside the EU enter this country freely. These people are the greatest threat to British workers and the most likely net users of public services. The solution certainly lies in making work pay, so I welcome the Government’s focus on the relationship between welfare benefits and employment. However, once in the job market, if British workers are to compete with their continental European counterparts, they must be at least comparably skilled to do so. There is no quick fix on this front. Apprenticeships, job-related training and a concerted focus on employability in our education system are the only solutions. This takes time and effort on the part of both the Government and employers.

Finally, let me focus on tiers 1 and 2—highly skilled and skilled—non-EU migrants. This is the group that we drive away at our peril, and the group most likely to make UK residents better off with their presence, as the Economic Affairs Committee recommended. There were 55,000 such migrants last year, making up less than 10 per cent of the 567,000 total. This was a decline from 66,000 in 2008, following the introduction of the points-based system. These individuals are almost exclusively net contributors to UK plc, contributing directly to the Exchequer through tax and national insurance, and indirectly, through their employers or the businesses that they set up, the extra UK jobs created as a result and their spending power. Their interaction with public services and the benefits system is low.

The most striking statistic about those in tiers 1 and 2 is that they are net emigrants from the UK. When those 66,000 non-EU migrants entered the UK to work in 2008, 74,000 left. In other words, what we have in this country is a brain-drain of top talent. The UK is already exporting the talent on which the Government are reliant for private sector growth. In a global market, UK residents are increasingly looking overseas for top employment opportunities, which is an issue that, I am afraid, we cannot address directly, short of shackling people to their desks or confiscating their passports.

Let me comment further on the categorisation within tier 2. Tier 2 sanctions entry of skilled workers who fill skills gaps. First, I suggest that experience and business culture should count alongside a narrow definition of skills. Let me give some examples. A global engineering company may need Japanese speakers with knowledge and experience of infrastructure projects in Asia—knowledge and experience that a British engineer just will not have. A Moroccan bank may want to get a toe-hold in Britain and to bring in a Moroccan chief executive to set it up. Someone who has worked on the multinational acquisition of an energy company by a water company may be helpful to a comparable deal being facilitated in the UK.

Secondly, we should seize skills opportunities as well as simply meeting gaps. Think about the concentration of expertise in a place such as Silicon Valley. It is the most successful centre for IT entrepreneurship in the world and has achieved that by attracting talent worldwide. Sequoia, the venture capital company that backed Google, Cisco and Oracle, has said that it likes backing first-generation immigrants because of their hunger and drive. Motivated, talented people brought together with capital in a culture of enterprise provide a potent recipe for success. In my view, this is how we need to think about London and the UK—a centre for ideas, talent and experience drawn from around the world which, given the fuel of additional motivated talent, can create further economic added value and promote growth.

To sum up, as is perhaps apparent from what I have said so far, I am not persuaded that the Government will achieve either their political or their economic objectives by implementing a tier 1 and tier 2 cap on non-EU migrants. However, I understand the bind that the Government are in. What we are trying to achieve is to grow the economy while tackling voters’ migration worries. Therefore, my plea to the Home Secretary and officials in the Home Office is that they work with business and, jointly, think a little out of the box. To misuse a phrase, they should find a third way.

Let me throw some ideas into the mix. Perhaps it is worth lifting the bar a little for tier 2 entry and say to companies, “Yes, you can employ non-EU immigrants, but only if you really need them and if they really are the best”. Perhaps employers could be asked to demonstrate the net positive impact on UK residents as a result of recruiting employees from non-EU countries. Perhaps employers could pay a deposit on each worker that they bring in, refundable only when that amount has been repaid in income tax and national insurance. Perhaps employers could sponsor an apprentice for every migrant that they recruit.

If the Government say to business, “We want the best businesses here in the UK and we are prepared to work with you to make that happen”, I am inclined to believe that, complex though the issue is, with our multi-talented public and private sectors, a solution can be found. I eagerly await all that follows. I beg to move.

12:27

[Lord Ryder of Wensum]

My Lords, I thank the noble Baroness for securing this debate and I am delighted to see my noble friend on the Front Bench. I begin by declaring an interest as chairman of the Institute of Cancer Research, a college of the University of London. The institute employs 850 scientists drawn from no fewer than 55 countries. Following the Government’s research assessment exercise in 2008, we were ranked as the United Kingdom’s leading academic research institution—above Oxford, above Cambridge, above Imperial College and above every other university in this country. During the past five years, we have discovered and developed more anti-cancer drugs than any other organisation in the world and have secured more journal citations than any other institution. I am proud to proclaim that the Institute of Cancer Research is the world’s leading cancer research organisation. It is a global centre of excellence in the heart of London. Yet it cannot be sure of retaining its international pre-eminence unless the Government adapt their interim cap on immigration. Not only does the cap jeopardise our global status as a world centre of excellence, it also endangers the country’s status as a world centre of scientific innovation and excellence.

World-class institutions such as ours must be free to bring in the right people at the right time, the brightest and the best. Our principal complaint is over tier 2 visas affecting the recruitment of clinical research fellows and post-docs. Let me cite an institute example to underline my case. Peter Fong, a clinical research fellow from New Zealand, was the lead author in the New England Journal of Medicine in 2009. He reported on the phase 1 trial of the PARP inhibitor Olaparib. This drug has shown spectacular results in targeting tumours and, according to the former president of the American National Academy of Sciences, Fong’s work will,

“change the face of cancer research”.

Today we could not recruit Peter Fong. Instead, no doubt, he would be working in the United States.

Research of our quality cannot be mothballed and restarted at a later date. We shall be left behind, to the detriment of cancer patients and the growth of the British economy by way of the pharmaceutical industry. The pharmaceutical and medicinal industry ranks first in the trade league table of our 16 major industrial sectors, providing us in this country with a trade surplus of well over £3 billion a year. GSK and AstraZeneca are two of the top six pharmaceutical firms in the world, exporting to China, India and the USA. They could not achieve their successes without the talents of the international scientists discovering drugs at the Institute of Cancer Research and elsewhere in our nation.

Clearly the Business Secretary grasps the meaning of this argument otherwise he would not have stated that the cap is damaging British industry. If he cannot persuade his colleagues in the Home Office to see sense, then the Prime Minister must intervene without delay. It is all very well for the Chancellor to talk the talk about economic growth but, when his own Government are staunching economic growth, surely the system should be changed, and changed soon. After all, Britain can boast at least seven immigrants as Nobel laureates. How many of them would have plied their trade in our country under the existing system? I share the view of Sir Paul Nurse, a cancer scientist and a Nobel Prize winner: what sort of policy allows footballers into our country but not scientists who can stimulate economic growth?

Let me end with some good news and another warning. A fortnight ago the institute announced that our drug Abiraterone will be on the market next year. It will revolutionise the treatment of advanced prostate cancer across the world, bringing in huge revenues to this country. Unless the cap is adjusted—and one cap should not fit all—I wonder how many more of these revolutionary and wealth-creating drugs will be invented by the Institute of Cancer Research and our brilliant scientists drawn from 55 countries. If my noble friend cannot enlighten us—I do not envy his position today—the Prime Minister should be approached for an answer. All the best Prime Ministers come to realise that the shortest mistakes are better than the longer ones.

12:34

[Lord Giddens]

My Lords, I congratulate the noble Baroness, Lady Valentine, on initiating this debate and on her compelling and eloquent presentation of it.

Immigration is one of the most contentious issues of our time, not only in this country but in Europe, the United States and elsewhere. In the Netherlands, two murders linked to immigration and cultural divisions have served to polarise the country. The German Chancellor, Angela Merkel, only a couple of days ago on television, declared multiculturalism dead in her country. A well known and best selling book recently published in Germany argues that “Deutschland muss Deutschland bleiben”—Germany must remain Germany.

Against this backdrop, Britain stands out as a multicultural success story, with London in the lead. Whatever problems there may be around ethnicity in London, there is nothing like the levels of physical separation and deprivation that mark the huge housing estates around the edges of Paris, or the ghetto neighbourhoods of Antwerp and Rotterdam. London’s pre-eminence as a global city, mentioned by the noble Baroness, is directly related to its dazzling cultural diversity. Even in this country, multiculturalism seems to have become unpopular in some political circles but I stress that it is the only political philosophy which is compatible with a globalising world and an open economy such as ours.

The notion of multiculturalism, however, has been tarnished by those who, more or less, completely misunderstand it. I would include—if I am allowed to say this in the context of the British Parliament—the German Chancellor in this category. Multiculturalism does not mean accepting value relativism. It means, on the contrary, promoting active dialogue between those who hold different values to produce common perspectives on the world. Multiculturalism does not mean letting different communities develop as they will. It means, on the contrary, seeking to establish contacts between communities; making sure that ghetto neighbourhoods do not develop; introducing active policies such that one prevents those sorts of developments which one sees in so many other countries around the world. In this respect so far, as I mentioned, not only in London but in other cities we have been remarkably successful.

Multiculturalism does not mean sacrificing national identity. It is entirely compatible with, and indeed a core part of, the establishing of a national history—Britain is already an extremely diverse country from several centuries back—and it is compatible with an overall framework of democracy and an overall framework of ethics associated with democratic politics. Do the Government actively support multiculturalism such as I have defined it?

I welcome the cultural diversity arising from immigration as a positive value. However, it is also true, as the noble Baroness clearly said, that immigration has created significant economic benefits. Large segments of the economy over the past 20 years would have been almost inoperable without it. The NHS is a prime example, as is the university sector. One quarter of all immigrants are students, paying for the courses they take and bringing about £2 billion into the country. There are many hidden benefits from students who enter universities here because they go back to their own countries and propagate the virtues of British education and of British society more generally.

The coalition paints a picture of Labour progressively losing control of immigration, but I would say that the opposite is the case. Labour floundered at the beginning of its period of tenure, but developed a progressively more sophisticated system as time moved on. The points system instituted towards the end of the Labour Government mirrors those of Canada and Australia, which are the most successful multicultural countries in the world.

Like the two previous speakers, I have serious reservations about the Government’s policies in this area. First, the idea of a cap on non-EU migration has already been criticised. That criticism seemed mild, because I think that it is the worst example of electoral populism and is actively dysfunctional. As has been mentioned, none other than the Business Secretary Vince Cable has said that it will be “very damaging” to the economy. Many companies are already deciding not to invest in projects because of worries about the availability of specially skilled labour power. The Government must surely think again on this issue, whether in the way in which the noble Baroness suggested or otherwise. It will not do as a policy which could be reconciled with the demands of a recovery from recession and job creation.

Secondly, as has been mentioned by the noble Lord, Lord Ryder—I shall put it more generically—the Browne report, if implemented as it stands and placed in the context of the cap, could be seriously destructive. Simply, it is likely to cause top scholars not to want to come to this country or not to stay in the country. It will deter the overseas students that we need from coming to the country. The combination of these two policies looks to be lethal. I am a great admirer of the Minister, who is an esteemed colleague of mine at the LSE, but I do not see how he can accept the policy of a cap on migration as it currently stands and as it seems to be planned for the future.

12:41

[Baroness Hamwee]

My Lords, I, too, thank the noble Baroness, Lady Valentine. She has expressed far more powerfully than I could the connections between immigration, skills, training and so on. However, I was glad to see the Home Office’s consultation paper acknowledge that connection. Like other noble Lords who have spoken already, I would like to see that thought followed through more effectively, because this is not just a narrow regulatory function of the Home Office and the UK Border Agency.

Although the consultation has closed, I am sure that the Government are still listening. It was about how limits should work in practice. I am glad to say that, from what I have seen, the public have interpreted that very widely, making representations not just about how the cap should fit but about how big it should be. They make the point that underlying policy is to strengthen the UK’s economic base by boosting trade and employment.

I follow the noble Baroness in finding it perverse that the debate is driven partly by how many people leave the UK. We talk about net immigration figures, with a base which seems to be artificially low because it was taken at the worst point of the recession. Taking net figures rather obscures the numbers coming in and going out.

I knew that comment would be made today on the many types as well as levels of skills and sectors, as well as on the training needs of the country. The issue is not directly referred to in the Home Office consultation, but I should say that, coming as I do from west London, where plumbers and builders have been difficult to find over the years, I know that west London now realises what a good thing it is that Poland joined the EU, and there has come about an enthusiasm for Polish workmanship.

Other noble Lords will no doubt speak of the tax take. That tax is available to the Treasury. The better the availability of tax, the better is the economy. The IFS has published research that shows that migrant workers from eastern Europe are net contributors to UK public finances, while native Britons are sadly a net drain. That must make us think about the likelihood of workers from outside the EU contributing even more.

The academic and scientific communities have quite properly achieved some coverage of their concerns about the restrictions. There are parallels in the creative industries. The UK’s cultural sector is of huge importance to our economy. Tourism and sales of recorded product are direct benefits. Indirect benefits are our reputation and the factors which encourage major companies to locate here. They make the UK a place, among its global competitors, in which people want to be and to work.

I have nothing against elite sports people, but I am unclear as to why sport, coupled with religion, is singled out for the special treatment to which reference has already been made. There are others who are sought after in different sectors for a range of activities but who are not as high up the scale as the elite. We could not function if we had only elite people working here. Thinking just of the performing arts, I stress that it is necessary to facilitate immigration. In some cases, it should be done on a medium-term or longer-term basis; for instance, for dancers who are members of a company. Sometimes, shorter visas are needed; for instance, if one of our companies is involved in a co-production with a foreign company. Through the Industry and Parliament Trust, I have been lucky enough to see close up how some of our companies in this sector operate. What one sees on the stage is only a part of it. The focus on education and outreach work is impressive. Skills are required to dress, design and light a production. When I went to the Royal Opera House, I met a young woman working in the armoury who had undertaken an apprenticeship. These skills are transferable—although I accept that armourers may need a little adjustment.

It is a big subject, and six minutes is too short for it. I end by asking the Government to keep at the forefront of their mind the UK’s role as a global player in so many sectors. Our immigration rules should be a facilitator, not a constraint.

12:47

[Baroness Prashar]

My Lords, I, too, thank the noble Baroness, Lady Valentine, for securing this debate. I welcome her constructive, balanced and creative approach to this very difficult and complex area.

The economic consequences of immigration and its effect on cultural identity and social cohesion have always invoked strong feelings. Regulations concerning immigration are frequently adjusted in response to changes in the economic situation or to accommodate shifts in public attitudes towards immigration.

The Government's pledge to lower the number of people coming to the UK from outside Europe and to introduce an annual cap on non-EU immigration is a response to such concerns. But this response is flawed, because the imposition of a cap to limit immigration from non-EU countries is not in the economic interests of the UK. It will send, and has already sent, a negative message to the very countries that we want to engage with. We have been warned of that by businesses, banks and lawyers, and we have seen articles in the Times of India and in Australia about this approach. The Law Society warned that the UK could lose large volumes of legal transactional work to other jurisdictions if we are not allowed access to the best talent in strong and emerging economies such as India and China, as well as in the USA and Australia.

Indeed, as has already been stated, Vince Cable said that if we are going to attract more investment from foreign companies, whether from India, Japan, America, Korea or wherever, we need access to high-level manpower. That has to be respected. As the noble Baroness, Lady Valentine, said—and as Vince Cable recognised—the dilemma facing the Government is in trying to reconcile two different objectives, one of which is to assure the British public that immigration is under control while the other is to have an open economy where we can bring talents from round the world.

The current approach seems to be playing to populist sentiments at the expense of the economic importance of what needs to happen. We have for some time operated a managed immigration approach and the current demand-driven scheme already affords adequate controls and meets employers’ real-time needs for specific skills. Attracting those falling within the entrepreneurial and investor categories cannot be separated from overall reductions in immigration levels. There is some empirical research showing that the two are interlinked. There is a link between trade and investment levels and immigration levels, which shows that stronger and more extensive migrant networks make it easier for would-be entrepreneurs and investors to invest.

In today’s global economy, which is becoming increasingly fluid, companies want labour to move with greater ease between jurisdictions. A cap could inadvertently prevent global businesses from moving employees with specialist skills. This concern has already been voiced by some large companies. On any grounds, a cap on the non-EU immigrants is not a sensible policy. It contradicts the Government’s commercially driven foreign policy and will not address the issues for which immigration ultimately acts as a proxy—for example, to deal with poor housing and the strain on public services.

Our managed immigration approach allows immigrants under those schemes to bring skills into the UK which are in short supply. Figures show that the numbers coming in have declined in any event, other than those coming in for the purpose of study. Yet increasing the number of international students should be welcomed because international students, as it has now been widely recognised, bring substantial income to our institutions and to the wider UK economy. UK universities receive approximately £30 million in fees, with a similar amount being spent on living expenses. In addition, there is income for our public and private sector colleges. Following the recent review by the noble Lord, Lord Browne, and the likely changes to higher education funding, this income will be even more vital in the future. It is unfortunate that, amid controversy over net immigration, an impression is being given that international students are in some way part of the economic and social problems. It is forgotten that international students have to pay—and prove that they can pay—the full cost of the education. They have no recourse to public funds and very limited entitlement to work.

With the changes introduced in March and August this year, the system is considerably tightened with restrictions on which institutions can offer which courses and who can come for what amount of time, with or without dependents. I would like to hear whether the noble Lord can assure the House that international students who come for a temporary period to learn, and who bring benefits in terms of trade, diplomacy and international relations, will remain outside any target for a reduction in net immigration. Will the Minister also tell the House whether the Government will reconsider their policy of capping, in the light of representations that they have had from businesses, bankers and lawyers and the responses that they have had to their consultation?

12:54

[Baroness Manningham-Buller]

My Lords, first, I join others in thanking the noble Baroness, Lady Valentine, for initiating this debate. I want to declare a number of interests. First, I am a governor of the Wellcome Trust, which funds to the tune of about £600 million a year fantastic and extraordinary research, primarily in this country but also around the world to improve human health with real, therapeutic outcomes. Secondly, in that capacity, I am also a governor of the Sanger Institute, which mapped a third of the human genome and whose current difficulties with immigration rules were recently outlined very graphically in the Times; I shall say more about that anon. Thirdly, I am a vice-chair of the council of Imperial College, which is also affected by these current arrangements.

I start by saying, first, that I very much welcome the ring-fencing of the science budget in yesterday’s comprehensive spending review, but there is no point doing that and keeping the current arrangements on the senior cap. I will come on to describe what is happening there. Others, notably the noble Lord, Lord Ryder, have described that the UK is a world leader in science. I can say that because I am an arts graduate who barely knows what a molecule is but, in my time in these wonderful organisations that I am now associated with, I have been fantastically impressed by their skill and the scale of, and dedication to, what is undertaken.

Secondly, our universities need to be globally competitive. Universities elsewhere in the world are coming forward in leaps and bounds. There is a whole lot of further discussion on that to do with the report of the noble Lord, Lord Browne, but those universities and institutions need to be able to attract the brightest and the best students and academics, from wherever they come. That phrase, about the brightest and the best, was indeed used in the Government’s consultation paper. We need them for research—research which is making incredible discoveries every day—and to train the best in the next generation of students. Yet what we have at the moment is artificial protectionism that is, in some respects, actually preventing a brain drain in.

We are told that the knowledge economy is key. Wherever they come from, if we bar academics of the highest talent from coming here, they will be snapped up elsewhere in the world. Our key institutes are already suffering from the restrictions on skilled people; we have already heard about the area of the noble Lord, Lord Ryder. For example, the Sanger Institute, which is doing breathtaking work moving what we have learnt from the genome into therapeutic benefits for patients, has 17 people from outside the EU working there, only three of whom would now get in.

On Monday and Tuesday I, with other Wellcome governors, spent two fascinating days in Cambridge visiting a lot of institutes which are partly funded by the Wellcome Trust. I heard tales of some of the current research. I do not pretend to your Lordships that I understood it all, but I understood enough to recognise that there was some exceptional work going on. If I say that I heard from a PhD student who came from Belarus, a fellow who came from China and from others from around the globe, your Lordships will understand that I found this very exciting. In my past career, within my service, I worked only with British citizens and their children and grandchildren, but science attracts a range of different people from around the world. If we have a cap that makes it almost impossible for them to get here, we are doing not only them but our science and our economy grave damage.

Noble Lords might imagine that, in my bath at night, I am reading the new national security strategy. Your Lordships might wonder how I am going to connect that with today’s debate, but I shall read a bit of it out because it is absolutely pertinent to what we are discussing:

“We are a global leader in science and technology, medicine, creative industries, media and sport, and home to some of the top universities in the world. We continue to attract large flows of inward investment … Economic growth in the coming decades is likely to be driven by the world knowledge economy”—

and there is reference to our world-class universities. Investment does not mean only money coming in; it is people—students and academics.

I hope that the Minister will be able to reassure us that the sentiment expressed elsewhere in this document—that our prosperity and security require us to retain open markets and resources, and be a strong advocate of free trade—applies also to the most skilled people who want at the moment to come here, who have been coming here for generations and who we need to continue to come here.

At the very least, if nothing else, in refining this blunt instrument, I hope that the Government may consider why, in the guidelines for why a person should come in, their previous earnings earn them double what their qualifications do. This is extremely foolish and dangerous.

12:59

[Baroness Gardner of Parkes]

My Lords, I, too, congratulate the noble Baroness, Lady Valentine, on this debate. I agree with all the points that have been raised about the tier 1 and tier 2 people and how important it is. I know so many young bright Australians who come over and not only learn a lot but make a great contribution to science here.

In the title of the debate, “Economic and cultural impacts of immigration in the United Kingdom”, the word “in” makes it easy to spread the debate a bit. Is it on, into or within it? It could be anything. So, I intend to talk about a basic group that is already in the UK: the invisibles. I am not for a moment suggesting a general amnesty; I am not going into that. However, we had a question only yesterday about tax avoidance and tax evasion. We have thousands of people, long-term residents in the UK, who are totally invisible. They could be people living next door to you. If we could bring those people forward—I am talking specifically about long-term residence, which is a qualification for the right to settle in the UK, or at least to be here with indefinite leave to remain—this would be a great source of income tax and national insurance. These people are certainly not paying those things now because they have no idea how they would even get on to the ladder and into a position where they were entitled to be here legally.

During the time that I have handled one particular case—the only case that I have ever dealt with; it has taken three years, but the person has now obtained indefinite leave to remain—I have come into contact with quite a lot of the Latin American community. They have brought to my attention an issue that is important for the Government to look at. They say that if you arrived 10 years ago, the goalpost for long-term residence was 10 years. They quoted one person who, after nine and a half years, found that the goalpost was moved to 12 years. After eleven and a half years here, he found that it had moved to 14 years, which is where it is now. It is a bit of an injustice, rather like an employment contract where your employment arrangement is based on the laws and rules at the time of your engagement, that people should be moving the goalposts like that, as well as wrong and a bit anti-British. The Government should look at that. This is just a small thing.

I asked a Question in this House in June 2007 about how one helped someone, and the reply of the noble Lord, Lord Bassam, was interesting. He said that the person I referred to,

“should apply to the Home Office Border and Immigration Agency … for indefinite leave to remain; that is, to settle in the United Kingdom entirely legally. The Immigration Rules allow for that”.—[Official Report, 25/6/07; col. 410.]

Sure enough, they do allow for that, but there are difficulties. This person was referred regularly to pro bono advisers who, after she met them, then told her that it would cost about £10,000 to deal with her papers. That is how I got stuck with her case in the end, and I found that it took three years.

Another thing that the Home Office needs to look at is the wording of some of the documents regarding evidence of residence. The department says that it requires 10 documents for each year of your time here, and it sends you an unbelievable list of the sort of things that it would like you to send in: your credit card, your bank statement, your insurance policies, payslips, P60s and so on. This is for people who are invisible here; they have none of these things, so how on earth could they possibly produce enough of them? Then the Home Office says, “The evidence cannot be from a friend”, although it could be from a doctor or a vicar or something. Eventually we sent in 26 documents, and the Home Office wrote back and said, “Not enough”. We started looking for more. Then I wrote to the Minister saying, “Most people are advised not to hang on to all these documents for years and years, and this woman has been here for 27 years”. Incidentally, the department wanted documents only for the previous 14 years, although she had plenty of documents for the period before then. The situation was extremely difficult. I wrote to say, “How is one expected to produce 140 documents?”. The Home Office replied saying no, that was not what its letter meant—it meant 10 documents in all, covering the whole 14 years. I wrote back to say that I thought it would be a good thing if the department sorted its English out a bit so that what it said it wanted was what it actually wanted.

After all this time, this person has managed to get her leave to remain, and I am so pleased that she has got it at last, but the application form is 20 pages long and unbelievably difficult to complete. So many people in this country could make a contribution, and would welcome the opportunity to become legal taxpayers and become part of this society, if only these things could be made clearer. I understand that representatives from other countries—I am talking about Latin Americans in particular, but this probably applies to all—say that if only they could have meetings with the Minister, they could sort out the things that can be done and the things that they find impossible to do. Any additional income from people who are already here, not occupying any additional accommodation because they are already in accommodation, and in so many facets of the system—although they are not already with a medical doctor because they cannot be; they have to pay their own bills—would be welcome. It would cost this country nothing, and we might get the benefit from it.

13:06

[Lord Judd]

My Lords, I join those who have thanked the noble Baroness, Lady Valentine, for having introduced the debate today and for the thoughtful way in which she set off our deliberations. The richness of humanity— of creation, some would say—is obviously its diversity. Any civilised objective for our society would get to the point where we were celebrating diversity rather than seeing it as a threat to be managed. Probably most of us, if we were to look at our own genes, owe something to immigration at some stage in our family life, however far back, and each wave of immigration can be seen in a historic perspective to have added to the quality of our society. It is hard to see any contradiction of that observation.

The quality of our academic and research institutions, as we have heard powerfully expressed in this debate, owes a great deal to migration and to the processes of learning, because learning has nothing to do with national barriers. The very presence of an international community of scholars adds to the quality of the scholarship itself. I make only one qualifying remark in all this: as a responsible society that, in the present economic situation, has ring-fenced our overseas aid and development budget because we feel so strongly about these issues, we should think hard about any inadvertent drain on scarce and invaluable resources of the developing countries themselves that may be generated by our own needs.

We must, however, be realistic. We are told that the market is the way forward. I am one of those who believe that the market has an important part to play but it is far from the whole story. There is a fundamental flaw here: if we talk about the free movement of goods, investment and finance but put a bar on the free movement of people, where is the market? People will follow the money, investments and so on. If we accept that reality, it has important lessons for us in our contribution to international institutions that are concerned with the economic and social management of world affairs. We must accept that we are not operating a global market in any meaningful sense.

The pressures of migration in our society have so often fallen most severely on those communities least prepared to handle them, where the schools, housing, hospitals, general social provision and jobs are not so good. If we want to make a success of our own immigration policy, we cannot separate it from our own economic and social priorities in areas of disadvantage and deprivation. There will be some acute challenges in the context of current economic policy.

Integrated society cannot be forced on people. It has to grow. I do not know whether other noble Lords share my anxiety about the process of the oath of citizenship, with all the qualifications, learning and exams necessary. I wonder how many of our own citizens would be able to acquit themselves satisfactorily in those exams. If we are to be a success in this, some kind of transparent consistency in what we say is terribly important.

We must again face up to our inconsistencies with this business of the imperfect market. Our society applauds the father who, faced with unemployment or community decline, goes off to some other part of the country to get a job. We are told that we live in an international market, yet we deplore the responsible father from the other side of the world who goes off to seek a job and ends up here. We talk about him in almost disparaging terms, as an “economic migrant”, as though there is something wrong with that. That is an absolutely clear contradiction in our approach to what we believe is responsible citizenship and parenthood.

All this means that we must show great sensitivity and respect in our handling of the immigrant community. That is why the kinds of things that we discussed at Question time yesterday are so alarming. It is not good enough that we do not have the kind of leadership which means that everyone operating in our border agencies, and related activities, inherently understands that they are dealing with people under acute pressure. The inadequacies, failures and contractions in our own society lead to the predicaments in which people find themselves. We must therefore treat them with respect, sensitivity, care and concern. It is worrying when that does not happen.

What I am saying is closely related to security. We know that militants and extremists are recruiting from areas of alienation and disaffection. If we do not get our handling of migration right, and do not have the right culture at every point, we are playing into the hands of the militant and extremist recruiters, who will play on the alienation and disillusionment that so often occur.

All of this requires two things. We will not be able to solve it all on our own and must therefore have an intelligent and committed role in European and global institutions to get it right. Most importantly, however, we must have consistency in our political leadership. It is no good playing to the gallery and to prejudice in the search for votes one day—I am not making a partisan point here, but one that goes right across politics—and the next day blaming the chap in the migration service who mishandles the case. Where, then, are the leadership and context for the culture that matters?

13:13

[Lord Newby]

My Lords, I, too, thank the noble Baroness, Lady Valentine, for initiating this debate. The recent general election is the first in my political lifetime in which the party leaders have spent much time publically discussing immigration. I am afraid that that debate generated a lot more heat than light. Today’s debate gives us a much better chance of a measured discussion of an extremely complicated question.

Harking back to the general election, I am tempted to take up the involvement of the noble Baroness, Lady Gardner of Parkes, in the amnesty issue. However, I would like to speak briefly about three aspects: first, highly skilled immigration; secondly, students; and, thirdly, less highly skilled immigrants.

The issue of highly skilled immigrants has dominated this debate. We clearly need a much more sophisticated approach than that currently being adopted by the Government. A small number of people here have a disproportionately significant impact on our economic life. We have been given a number of examples of how the cap doesn’t fit. I will give two more, from the oil and gas sector. Tata currently employs 38 non-EU nationals in Aberdeen, which is less than 5 per cent of its UK staff but they are hugely important people. It has been allocated two certificates of sponsorship for the period ending next April. This is undermining its ability to continue basing its geoscience research centre in Aberdeen because the centre is dependent on being able to recruit the most highly skilled and specialist people in this field, wherever they come from around the world. Shell finds itself facing exactly the same problems. Its inability to bring in non-EU citizens for specialist positions is leading it to consider whether it should move some of its specialist functions, possibly to the Netherlands where it already has its headquarters.

These problems are not just in one or two sectors. We need to recruit people for some key country and language specialisms from outside the UK if we are to improve our competitiveness. China, Japan and India are just three such countries. The importance of this, and the significance of the problem, was borne out by the recent Think London FDI barometer, conducted in May and June this year. Of those companies from the Asia-Pacific region, 89 per cent said that the immigration cap was likely adversely to affect their business over the months ahead. The cap does not fit, and it must change.

The noble Lord, Lord Ryder, and the noble Baroness, Lady Manningham-Buller, have spoken eloquently about the need for the best academics to come in to the country. I echo the comments of the noble Baroness, Lady Prashar, on the importance of students from around the world. We have a comparative advantage over much of the rest of the world. We often talk about shifting the balance away from financial services. Promoting our academic sector is one way in which we can do this. An example of how far our attractiveness reaches was impressed upon me by a British Council description of a recent poll in Chile in which students were asked where they would like to go if they could study abroad. While 28 per cent said that they would like to go to the US, 27.5 per cent said that they would like to come here. Chile is on the other side of the planet, a country where English is not the language. Yet we are hugely important to it, and need to build on that strength rather than undermine it.

Less-skilled immigrants from the EU and elsewhere —by far the largest group—are, in a sense, a bigger issue. Unemployment in London is currently 9.1 per cent, the second highest in the English regions. However, within London there are huge numbers of immigrants from the entire world doing jobs that could relatively easily be done by Londoners. This principle applies to a greater or lesser extent elsewhere, but in London it is particularly stark. It was brought home to me a couple of weeks ago. Within a couple of hours, I first bought a sandwich at a branch of Pret a Manger in which every member of staff was non-UK born, and then had a meeting with the policy director of Gingerbread, the charity that works with one-parent families. He talked about the vital need for part-time work for single mothers. I am not suggesting that every single mother goes to work at Pret a Manger between 10 am and 2 pm, but the retail sector has huge potential for that group that is not being exploited. The Government and employers should be looking at how we can fill some vacancies through better training of people who are currently looking for work.

Another sector to which relatively large numbers of people come, particularly from the Far East, is the care sector, where the easy option is to import care assistants from the Philippines. I wish the large healthcare providers, in both the public and the private sectors, but possibly particularly in the private sector, would spend more time ensuring that they recruit more local people, who need only an NVQ-level qualification to be able to do the job.

Immigration can and does bring great benefits to the UK. It has to be managed but, with a more nuanced and rigorous approach by government, there is no reason why that cannot be successfully done.

13:20

[Lord Rowe-Beddoe]

My Lords, I, too, congratulate the noble Baroness, Lady Valentine, on securing this debate. Her experience as chief executive of London First—a most successful organisation in promoting investment, both inward and domestic—and its resulting job creation give particular authority to what she said.

I declare an interest as a deputy chairman of the United Kingdom Statistics Authority. Indeed, “lies, damned lies and statistics” are at the very root of what we are discussing. Immigration is perceived to be an opportunity or a problem, depending on the position in which any country finds itself in the economic cycle. The perception is also influenced by demographics when considering size and infrastructure. For example, projections indicate that by 2050 we could have the biggest population in Europe. Currently we are second only to Malta as the most densely populated country.

While I am sure the Government are well intentioned in introducing a cap, it seems that they propose to use a proverbial sledgehammer to crack a nut. I have a most serious concern as to whether the correct nut is being attacked. Our country is in great and continuous need of attracting and keeping, in the Government’s own words, the “brightest and the best”. We need them for academia, ICT—we have heard eloquent arguments for this today—banking, business, high-value-added manufacturing, the arts and, yes, even for football, though I feel that the proposed exemption is really a pander too far.

The Office for National Statistics’s Migration Statistics Quarterly Report from August 2010 shows in provisional figures that net immigration in 2009 was 196,000 people into this country. This represents an increase of some 20 per cent from the previous year. This net figure resulted, however, from 567,000 persons in and 371,000 persons out. Most importantly, 55,000 of those coming in—less than 10 per cent of the 567,000—were work-related non-EU citizens, and 79,000 work-related non-EU migrants departed, as was mentioned earlier. We need these people in our economy.

Referring only to the arts sector, while the number of skilled classical ballet and contemporary dancers, orchestral musicians and other creative workers coming to Britain under tiers 1 and 2 is relatively low, their importance to the sponsoring organisations and our cultural life in general is extremely high. The arts sector’s economic contribution impacts most favourably, both indirectly and directly, on the Exchequer and places only very low demand on public services. I remind your Lordships that, according to the Department for Culture, Media and Sport, the creative industries in the United Kingdom, excluding crafts and design, account for 6.2 per cent of gross value added and some 4.5 per cent of UK exports, and in 2008 provided nearly 2 million jobs. It is an industry for which we have worldwide recognition for excellence and receive much applause.

Immigration controls are, I fear, necessary. However, implementing a cap on a small minority—largely comprised of persons whose skills and expertise we need—without addressing the elephant in the room by initiating discussions with the European Union, so as to manage better the current largely unlimited and oft-abused free movement of people within it, would be to the nation’s long-term detriment.

13:25

[Lord Taylor of Warwick]

My Lords, I also thank the noble Baroness, Lady Valentine, for securing this debate, which is both important and timely.

In the United Kingdom, we have only two seasons: this winter and next winter. Although immigration is a controversial issue, I hope we can at least all agree that immigrants do not come here for the good weather. I do not start in this way because I think this is not a serious issue. The fact that immigration has so rarely been discussed in either House, or by the wider public, over the last 12 months indicates that the topic needs to be tackled more often, without fear of causing offence. The immigration debate is too often—sadly, encouraged by the media—conducted in angry terms. You cannot shake hands with a clenched fist.

My children are very proud to be typically British: that is, they are a mixture of African-Caribbean, Polish, Irish, Scottish, Jewish and Indian. Immigration has enriched our culture and enhanced our nation. Many British icons are immigrants or descended from immigrants. We need only to look at the medical profession, our sports stars, showbiz celebrities and, increasingly, the business world.

It was a very different Britain when my father first arrived from Jamaica in the late 1940s, to try to make the grade playing county cricket for Warwickshire. He also hoped to use his skills as a qualified accountant, but the only job he could get initially was cleaning the toilets at the Lucas factory. When he was trying to find accommodation, all he could see were signs in house windows that read “No blacks, no Irish, no dogs”. However, he did not become bitter; he got better and eventually made a life for himself. He discovered that whatever nationality or colour you are, this country loves winners, not whiners. Scoring a century for Warwickshire against Leicestershire in 1949 instantly transformed him from being described in the local newspaper as “Jamaican Taylor” to “adopted Brummie Taylor”. I certainly learnt from him that when you are going through adversity, you do not give up, you get up.

Clearly, the United Kingdom has benefited from immigration. It is vital to continue to attract the world’s most talented to come here and drive strong economic growth. Immigration is a big topic with many facets to it, but the noble Baroness, Lady Valentine, has rightly focused on a particular issue of the non-European Union migrant cap. I personally do not believe in unlimited immigration, but I share the concerns of John Cridland, deputy director-general of the Confederation of British Industry, who feels that the interim cap is,

“causing serious problems for many firms”,

as the figures used for setting it,

“were artificially low as they were based on numbers at the height of the recession in 2009”.

If it is essential to have a cap, skilled migrants with a job offer should be given priority since they are able to pay taxes, are relatively few in number and, of course, place low demands on public services. We have heard a lot already from other noble Lords about the need for companies to transfer staff from one country to another, and to keep Britain attractive as a global location for investment for jobs. As the economy gears up for growth, the UK must demonstrate that it is open for business. Companies must still be able to access the best and the brightest talent from all over the world, and not only in the business sector. As we have heard so eloquently from other noble Lords, this applies also to students, academics, researchers and those in the performing arts.

There is evidence that this interim system is being poorly managed and proving a problem for firms trying to keep on valued foreign members of staff or to recruit specialists from abroad. These difficulties will undermine confidence that the permanent cap will work. The migration system must support, not stifle, growth. Research by the International Organization for Migration warns that, on present demographic projections, developed countries will experience labour shortages due to falling birth rates and ageing working populations. So managed immigration can be the solution, not the problem. Yes, the history of immigration has been a chequered one, but there is only one race—the human race. We should not use this interim cap literally to bash a very small section of migrants. They are talented people and we need them. The Government now have the opportunity to help build bridges, not walls, between our diverse communities.

13:33

[Lord Bilimoria]

My Lords, right up front I declare my interest as an immigrant. When I first moved to the UK from India in the early 1980s as a 19 year-old student, I was warned by my family and friends that, as a foreigner, I would never be allowed to get to the top because there was a glass ceiling in this country. How right they were three decades ago, but today I look around this country and see people in the Asian community and from all over the world reaching the very top in every field. Over the past two and a half decades, I have seen with my own eyes the glass ceiling well and truly shattered. Today in Britain anyone can get as far as they want to and as far as their aspirations and abilities take them regardless of race, religion, or background. We are one of the most open and truly multicultural countries in the world. Yet, in spite of this, this Government have imposed a cap on immigration.

I thank the noble Baroness, Lady Valentine, for securing this debate at this crucial time. There is no denying that the previous Government lost control of immigration and of our borders and that hundreds of thousands of illegal immigrants come to this country not to contribute but to sponge off our overly generous welfare state. The Government are absolutely right, and have the backing of the British people, to stop this abuse of our generous nation. But to do this by imposing a cap on all immigrants is not only crude but sheer stupidity, as we are shooting ourselves in the foot by depriving our nation of the immigrant talent that has been a huge factor in, and made a huge contribution to, making this tiny nation a global power and one of the six largest economies in the world.

I must issue a warning. People all over the world are being warned about the dangers of economic protectionism brought about by the economic crisis. Treating immigration with a cap in a closed-minded way and with a kneejerk reaction, as this Government have done, is just as serious for our country as economic protectionism, if not more. Immigrants contribute to just about every sector of our economy in both the public and private sectors—just look at our beloved Gurkhas in the Army and at the NHS, as we have heard. In my own business, I have seen the curry restaurant industry make Indian food a way of life in this country. This year, the Bangladesh Caterers Association celebrates its fiftieth anniversary, yet it has been hit by the points system and now the immigration cap, and is struggling to get skilled staff, particularly chefs. This is a community of pioneering entrepreneurs who are living examples of the Prime Minister’s big society initiative. They integrate into their local communities and, most importantly, they put back into their communities. Instead of being grateful to them for the hundreds of thousands of jobs that they create and the billions of pounds of revenue that they generate, we slap them in the face. This is sheer unfairness and sheer ingratitude.

In the catering industry hard work is a mantra and perspiration is a creed. When others play, its staff work; and when others are asleep, they are awake. When noble Lords go into restaurants and hotels around the country do they notice that often there are more non-British-born employees—whether from the EU or outside it—than British-born employees working in those establishments? We need look no further than our very own Peers’ Dining Room and the Barry Room, where British-born staff are by far the minority. But would we have it any other way? Our staff are the best in the world and I would not change them for anything.

My five year-old daughter is privileged to be at one of the best primary schools in this country. She needs special needs help. Recently, we received a letter from her Australian occupational therapist. It states:

“Very sadly in light of the immigration cap imposed by the new Government, certificates of sponsorship have been drastically limited and my company will not be able to sponsor me. I am incredibly disappointed at the thought of having to leave. My company has been trying to recruit a suitable therapist to replace me but to no avail”.

Where is the sense in this? Where is the sense in me, my family and my five year-old daughter suffering because of a stupid immigrant cap—a blunt tool? In this debate we have heard from noble Lords example after example of their personal experiences. This is a crude instrument as it does not take into account the skills that we as a country in economic turmoil so desperately need if we are to drive forward in the fields of science, technology, manufacturing, engineering and enterprise—the list goes on.

A letter published in the Times earlier this month from eight Nobel prize winners was a stern warning of the dangerous effects that this cap could have. Since 2007, five out of six Nobel laureates based at British universities were born outside the UK, such as Venki Ramakrishnan at my old university, Cambridge. More than 10 per cent of academics at British universities are foreigners. We can pride ourselves on having some of the best universities in the world. Foreign students, as the noble Baroness, Lady Prashar, said, and foreign academics play a huge role in making this the case. Do we really want to jeopardise this by implementing rules that make it hard for some of the world’s greatest minds to come here and enrich us, as the noble Lord, Lord Ryder, said?

The Indian community in this country makes up just under 2 per cent of the population and yet it contributes double that percentage to the economy. But you cannot merely put a price on immigration; it is priceless and enriches our lives in every way. As we have heard, London is a great example of that.

I conclude by recounting my father’s advice to me when I came to this country. He said, “Son, wherever you live in the world, integrate fully with the community you live in, but never forget your roots”. I am very proud of my Zoroastrian Parsi roots. I am very proud to be Indian. I am very proud to be an Asian in Britain and, most importantly, I am very proud to be British.

I implore the Government: do not throw the baby out with the bathwater. Control the immigration that needs controlling, but do not deprive this nation of the immigrants that we desperately need and the immigrants that have made this wonderful nation of ours world famous for our world-beating talent and for our world-renowned sense of fairness and justice.

13:40

[Lord James of Blackheath]

My Lords, I too thank the noble Baroness, Lady Valentine, for procuring this debate. I have to say that those who follow me might wish to add a rider to their own congratulations, deploring the fact that she did not stop me speaking, because we had a conversation in advance in which I told her that I had absolutely nothing to contribute to this debate, given that I have no experience of immigration or multiculturalism. To demonstrate that, I told her an anecdote that she thought was good enough to be repeated today, and that is what noble Lords are about to get. You must blame it on her afterwards.

My story starts in the trenches of the Somme in 1916 with a Major Alexander Crombie, who came out alive but deeply scarred from the experience and decided that he wanted to make a contribution to world peace. He took what little fortune he had and created a small academic academy with the express purpose of bringing in boys from European nations whom he could then groom for the common entrance examination and place somewhere in the public school system in Britain. This establishment prospered through even the Second World War and had arrived in 1947 at a point at which it had some 25 boys—all bright and intelligent fellows.

In parallel with that, I had been having my own educational crisis which had resulted in my being classified as mentally defective by the London education authority and sent to a school for mental defectives. My father was unamused at this and decided that I had to be removed immediately from that school and that he had to find somewhere to send me. Someone suggested that he talk to Major Crombie, who was then quite an old man. Major Crombie said, “We can’t have this fellow in; he can’t read and could not even do the 11-plus”. My father said, “Never mind; that proves that he is a refugee from the London County Council, so you’ve got to have him”. Crombie looked at a list and said, “What did you say your name was? James? We have 25 boys here—one for every letter of the alphabet except J. We’ll take him”. So I got in.

We had an amazing roll call every morning. It began with Adybaya, Baptista, Chinchialla and Dukszta, and ended gloriously with Xyrus, Yballa and Zabialski. I used to think that if I could get through life and remember the entire roll call, I would know that Alzheimer’s had not yet reached me. After I had my stroke, I said this to my physician, who said, “No, old boy. You may remember all the other 25, but your trouble is when you cannot remember who the J was”. So far, so good—but not for long, I am sure.

This was a remarkable gathering. We had some really fine brains in the class, but we were all under the control of a former Coldstream Guard padre called the Reverend Wynn, who was one of the great men of my life. He decided that he would have no nonsense with us at all. He was going to have a morning service or gathering. When we said, “Father, we have 17 nationalities and eight religions here, so we cannot possibly have a religious gathering in the morning”, he said, “Of course you can. It does not matter which god you have—you are going to celebrate the glory of this world. Bring your god with you, whoever he is, and we will all celebrate the glory of the world together”. And we did. We could not have any readings from the Bible, the Koran or anything else. He formed a committee of us to find suitable prose or a poem every day which would celebrate something of beauty in the world.

There were to be no hymns sung, so he decided—very unwisely, as it turned out—that we could all, in rotation, sing our national anthems, to which we could write our own words of a non-jingoistic nature. The honour went first to the three British boys. We decided to use “Pomp and Circumstance” and rewrite the words to, “Land of cut the call-up, how do we dodge this nonsense?”. That did not get us any merit points. The situation completely fell to pieces when the two German Jewish refugee boys at the school decided to write their own version of “Deutschland Über Alles” and got their little bit of revenge on Germany in the process. They decided to devote the words to the most obscene account of Hermann Göring having sexual congress with a lady kangaroo, which ultimately proved fatal to him because it would not stop jumping. After that, the Reverend Wynn decided that there should be no more of that.

This extraordinary gathering of boys with huge talent had one great skill that united us. We had a lot of Eastern bloc boys among us with a huge capability at chess. We had one of the strongest chess teams that you could ever put into the field—even at the age of 11 or 12. After we got into the quarter finals of the London schools knock-out competition with a team of 12 year-olds in 1947, we asked the Reverend Wynn to issue a challenge invitation to Eton and Winchester. I do not know whether there are any Wykehamists or Etonians in this assembly, but if there are, I have to say, “Oh, what a bunch of wimps you were—you would not take the challenge”. I hope that you have that to your eternal shame, gentlemen.

The gathering continued very successfully and nearly everyone in the class got into one of the better public schools. We had a wonderful time together. I am sorry that the noble Lord, Lord Giddens, is no longer present, because this is probably the antidote to his comments about multiculturalism. Oh, here he is. This is probably the noble Lord’s nightmare of multiculturalism gone wrong, but it was in fact brilliant. Of the 17 nations from which we came, about half had been trying to exterminate the other half during the previous five or six years, yet everyone got on so well together because we were completely without the preconceptions instilled by too much political correctness and preconditioning as to what we ought to think of each other and how we ought to react. We were the biggest bunch of mutual support people ever gathered together in one place. Today I cannot see what the problem is with the interracial problems of immigration. We did it fine. We were young, we just got on well with each other, and that was a natural instinct. If we stop dictating to and preconditioning people, it works very well.

13:46

[Lord Clinton-Davis]

My Lords, I thank the noble Baroness, Lady Valentine, for initiating this important debate.

My grandparents were immigrants, and I like to think that despite their extreme poverty they made a worthwhile input to our society—albeit in a very small way.

I speak as someone who was raised in Hackney, served on Hackney Council and was then MP for Hackney Central. I speak with some authority on immigration because so many of my constituents at that time were from all parts of the world. When I grew up in Hackney, there was scarcely a black or brown face. Today, that has dramatically changed. When I go back there, I can see that immigrants from all over the globe people the area. They are black, brown and white. All bring their own talents and experiences, and that is worth while.

Music, of course, has enormous diversity and has undoubtedly played an important part in the development of the area. That is true also of the proliferation, exchange and understanding of ideas and views which undoubtedly exist. There is, however, also a downside which, regrettably, is often distorted. Of course, extremist groups exist among immigrants and others. They engage in wild and divisive talk. Some have rightly suffered custodial sentences.

In general, however, poor areas such as Hackney have been richly rewarded by multiculturalism. Public transport—buses and railways—could not function without the input of the immigrant community and their progeny.

The same is true of education, the National Health Service, law and so many aspects of our society. Still, however, there are too many barriers—some thoughtlessly erected, perhaps unwillingly—but many have the support of some of the community, which is a matter of regret. There are some unhappy examples but one could say the same of our entire society. In the main, there is no doubt that areas, such as Hackney, have been enriched enormously. That has spilled over to the wider community. I speak with some knowledge of the subject as many of my clients were from immigrant communities. Many were worth while—not all, but many of them—and I am very proud to have represented so many of them. I hope that that will remain so for a very long time. Any threats, such as we have witnessed already, must be attacked and resisted. I am very proud of my background; I was proud to be in the Commons and I am proud to be here. When I think of what has happened it is remarkable, is it not?

13:52

[Viscount Falkland]

My Lords, I, too, am grateful to the noble Baroness for introducing this riveting debate. I apologise for arriving a couple of moments late for her introductory remarks. I was keeping an eye on the screens while talking to a young Muslim human rights lawyer who was telling me about things to do with immigration which are for another day. They were mainly to do with connections between Muslim immigration and terrorism and the reasons why we are where we are today.

Rather than addressing the economic or cultural issues, I shall take noble Lords back. I now find that I am at that difficult moment of being above the average age of Members of your Lordships’ House, so can be forgiven for going back in time. When I first came to your Lordships’ House, my maiden speech was on a subject that I knew something about—third world Africa. As a result I got into a number of debates on subjects allied to that and made great friends with Lord Pitt of Hampstead. He and I sat on the other side of the Chamber together and he introduced me to a lot of very interesting reading about the development of the Caribbean, its economy, the slave trade, and so on. At an early stage in our relationship he said that the greatest mishap for immigration and the Afro-Caribbean community here was the decision to go down the path of multiculturalism. He pointed out that it resulted in the ghettoisation of his community. As the younger generation succeeded their parents, the limitations placed on young Afro-Caribbean men, in particular, was a great shame. We all know about that. It was a black spot in our immigration history and policy.

However, it has not been all bad; we have generally opened our doors to those who have come here for various reasons, such as fleeing persecution, natural disasters, and so on. The noble Baroness mentioned the Huguenots. They were more of a problem for the French who created a problem themselves by getting rid of the Huguenots. They were the motor of manufacturing and innovation and their ability to create wealth in France was lost when the Huguenots were dismissed and came here with a great deal of expertise. They contributed enormously to our society. They were mostly educated, of course, and did not have some of the problems that we face today with people coming from agricultural communities. The Huguenot population was enormously influential in the textile industry and, curiously enough, also in the Army. A lot of people seem to forget that the most successful soldier in the 18th century was Field Marshal Ligonier who I do not think ever lost a battle.

Immigrants have played a very important part in our lives. They have invigorated us, as has been said by other noble Lords, and still do, but we have missed many opportunities. Going back to the Afro-Caribbean community, a lot of young men on the streets are pessimistic about their future and take the wrong path. However, there are many, particularly in the arts, in the world of music and dance, who make a great impact on our community. Short-termism in immigration policy, which continues to this day, has been wasteful.

I was reminded again of the immigration of those who escaped persecution when the sculptured head of the Queen by Oscar Nemon was unveiled in the Royal Gallery. He came here as an immigrant from Brussels. He was an infant prodigy in sculpture and the arts and got early warning that Belgium would be overrun by the Nazis. He dropped a successful career and came here. After the war he sculpted most of the important members of British society at the time. He became a British citizen and created a family. All his original family, bar one sister, were eliminated in the Holocaust. He married a British wife and created an English family. His impact on the arts in the post-war period is immense. One could give many other examples.

I was impressed by the speech of the noble Lord, Lord Taylor of Warwick. The remarks of Lord Pitt of Hampstead about the obstacles to the Afro-Caribbean community were expressed in his speech. Immigrants from the West Indies came here to do jobs that nobody else wanted to do.

Governments now must take a long-term, strategic view on immigration. It is no good making it bureaucracy-led. The points system which has been described is so damaging that it needs to be reviewed by people who are committed to thinking about the issue in the long term so that we have a sensible policy, not only in terms of admitting people who are needed for their skills to create wealth but for the way in which we deal with those who come here because of persecution and other reasons. It is no good having a piecemeal system that requires constant adjustment.

13:59

[Baroness Coussins]

My Lords, I, too, am grateful to my noble friend Lady Valentine for initiating this debate in which I want to raise one relatively small and specific issue about the way in which the immigration rules inhibit cultural and economic benefits to this country. I refer to exchanges that are designed to last a full academic year between school students in state-maintained secondary schools and their opposite numbers in non-EU countries.

One such scheme is the Rotary Youth Exchange, which has been recognised internationally as one of, if not the, best student exchange programmes in the world. Before 2009, when the tier-based immigration rules were introduced, about 60 school students a year were able to do an exchange as part of this programme. Typically, they are in year 12, or the lower sixth, but now only those wanting to exchange with a student from an EU country are able to participate, because the immigration rules disallow the non-EU school student from coming to the UK for a full academic year. Before 2009, there had been an exemption for exchange students in schools, enabling a 12-month visa to be issued, but this concession has been withdrawn.

It is worth spelling out what the advantages of exchange programmes are, not only for the young people from abroad who come and experience British school life for a year, but for our teenagers, who gain enormously from their leg of the exchange and the opportunity to understand and appreciate other cultures, to learn another language and to live in a host family, while having their safety and welfare overseen by the Rotary.

The Foreign Secretary, in a speech earlier this year, warned that Britain’s place in the world would inevitably decline if it did not embrace an agile and energetic foreign policy that cultivated ties beyond the narrow circle of western powers. What better way of cultivating ties than through young people, particularly if they are guided and assisted on their journey by such a prestigious and well established organisation as Rotary International? The educational and cultural benefits to those young individuals today will turn into competitive and economic benefits to the UK as a whole as they grow up, enter the labour market and drive international business and national reputation.

Three out of the four countries mentioned by the Foreign Secretary—India, Brazil and Turkey—are eager to participate in the Rotary Youth Exchange. The programme is also strong in Taiwan, where UK students can learn the main language and culture of China, the fourth country mentioned by the Foreign Secretary, yet the school students from those countries are precisely the ones who are no longer able to come to the UK to spend an academic year in a state school as an exchange student. Consequently, our school students are denied the opportunity to do likewise.

The Government argue that six months should be the limit on school exchanges, and that is the extent to which tier 4 of the points-based system will go. It is argued that, beyond six months, it counts as replacement education for non-EU nationals, which should not be provided at the taxpayer’s expense, but that is somewhat illogical, given that exactly the same costs are incurred for EU children on the same scheme. Furthermore, given that, by definition, the scheme is reciprocal, for each foreign student here one from the UK is placed abroad. In any case, there is a strong argument for saying that both the short-term and long-term benefits significantly outweigh the immediate costs, in a global environment where intercultural understanding and co-operation, particularly at a personal level, are so vital in fostering better relationships.

Given that before 2009 there was no problem or issue with granting 12-month visas to non-EU school students coming in on exchanges, I ask the Minister to accept that the current situation is in fact an unintended and unforeseen consequence of the points-based system. It seems to me that the Department for Education’s argument about six months being adequate is something of a post hoc rationalisation of a situation that it was not expecting and certainly had not been responsible for creating. Will the Minister be good enough to undertake to correct that anomaly and amend the relevant immigration rule, and perhaps consider granting highly trusted status to the Rotary organisation, so that children aged under 18 from schools in non-EU countries are once again able to participate in the full academic year youth exchange with state schools in the UK?

14:04

[Lord Turnberg]

My Lords, I, too, thank the noble Baroness, Lady Valentine, for introducing this debate in such an eloquent way. I shall focus on the impact of the immigration cap on scientific research. Here, I can only re-emphasise many of the comments of the noble Baroness, Lady Manningham-Buller.

Yesterday, the Chancellor emphasised his commitment to the science base and to spending on medical research, but the Government's current policy on immigration seems designed to run in exactly the opposite direction. If you want an example of globalisation, you do not need to look at the banking or financial world; you should look at the scientific world. Science is the most international of activities and it knows no boundaries—or at least it did not until we put up these barriers to free flow of the scarce talent that makes up the scientific community. Although we are in a competitive market, we are also extremely fortunate in the UK, because the high quality of our research can attract the best. Three recent Nobel prizes speaks volumes and, as a loyal Mancunian, I am delighted with the success of our two physicists in Manchester. However, both of those physicists came from Russia, and it is quite likely that at least one of them might have been prevented from coming here because he could not have fulfilled the criteria now needed to gain access.

I must step back a moment to expose my bias and interest as scientific adviser to the Association of Medical Research Charities and as a trustee of a number of medical research charities, but you do not have to be as biased as me to recognise the value of research both to society and to the economy of the country. Your Lordships will remember the calculation a year or so ago showing that we get a return of 37 per cent a year on every pound that we invest in medical research. A recent publication from an impeccable source, Haskel and Wallis—you cannot get more impeccable than the son of the noble Lord, Lord Haskel—showed that if research funding decreased by £1 million a year, GDP would fall by £10 million.

So the question now arises why we should be threatening the very basis of excellence in research. Let me give your Lordships some examples of the damage being caused even now by application of the cap to scientists. At the Sanger Institute, which the noble Baroness, Lady Manningham-Buller, mentioned, research into the human genome leads the world and it is already the home of at least one Nobel prize. Currently, there are 19 non-EU scientists working—I make it 19, rather than 17—of whom only four would meet the new criteria to gain a visa. Previously, your PhD counted for quite a lot of points and your salary relatively few. Now, qualifications count for less and earnings count for more—more than most post-docs can ever hope to earn. The problem is compounded because visas last only three years while most research posts are for four years, so if you are already here you have to apply again for your final year, and as the criteria have changed in the mean time you are very likely to be thrown out before you have finished your research. For tier 2 posts, one has to advertise in the local jobcentre, to give the locals a chance to apply. It is hardly a surprise that, for the 64 vacancies advertised by the Sanger last year locally, it received not one application. Of course, there are very few zebrafish geneticists or bioinformaticians hanging around jobcentres these days. What a waste of time and resource. You can get such expertise only by an international search. The Beatson Cancer Institute in Glasgow has been allocated just one visa application, but the Beatson, which attracts an average of five new non-EU immigrant scientists a year already has an American, Canadian and an Israeli working there, who will need another visa to complete their four-year programme, so it is placed in an impossible position.

At the Rutherford Appleton laboratory, a collaboration with the Japanese physical research institute, in which scientists are constantly exchanged, is severely threatened. This type of story can be repeated for every major research institute across the country. It is an outcome that can hardly have been the Government’s intention when they introduced this cap. Will the Minister look again at how the system could be made less damaging to research, which the Government say that they are keen to support? It cannot be that difficult.

14:09

[Lord Hall of Birkenhead]

My Lords, I, too, thank the noble Baroness, Lady Valentine, for securing this debate. I should like to add my voice to those who have talked about the impact on the creative industries and culture. I declare my interests as chief executive of the Royal Opera House, chair of the Cultural Olympiad and a non-executive director of Channel 4.

Across the UK, the creative and cultural industries employ more than 700,000 people and contribute nearly £25 billion gross value added to the UK economy each year. The sector is growing fast. This is something that we are extremely good at. However, without a shadow of doubt, the interim limits on migration brought in in July are having a damaging effect, while even tighter limits from April would make a bad situation worse.

Let me give a couple of examples of what I mean. The UK is very good at animation and visual effects. However, while we are good at the creative side of things, we do not have enough people in this country who are good at the programming to make the creative ideas work. Programmers have rightly been accepted under the route that allows shortages to be addressed but, if you cut back on the numbers allowed in under tier 2, you could have a British success story under threat. Much the same applies to our computer games sector, which, with software and electronic publishing, contributes a third of the value of the exports of all our creative industries. Here again, we have the creative talent; the problem is on the technical and software side.

The long-term solution is clear to me. Skillset, the skills council for this area, is working closely with universities to increase the supply of UK workers with these skills, but of course we need to start earlier than that, making children at school aware of the opportunities. We also need to think about expanding the number of apprenticeships and work placements in these areas. However, that will take some time—five, eight or 10 years. In the mean time, we cannot and should not put at risk what are successful sectors of the UK economy because they cannot get the skills that they need.

I hope that the coalition Government will look again at caps on immigration. I hope first and foremost that they will not change those things that were previously working well. I further urge the Government to assess the economic impact on growing and specific sectors of our creative economy and to link in to that by seeing how best we can increase the skills in this country in these important areas in the longer term.

Will the Government—this is another issue—review the cap as it applies to artists coming into the country? As has been said, orchestras and dance companies in particular are already finding the current limits difficult, never mind the tighter ones that are scheduled for April. It is vital for arts and cultural organisations in the UK to be able to get the best people from around the world to come and work here. We pride ourselves as being the cultural capital of the world. This is something that we are really good at. It has been achieved by allowing, over many years, talented artists from all over the world to live and work here. Our diverse society, where so many different currents from around the world meet, is an exciting, creative and challenging place where people want to be. It is something that we want to show off in 2012 with our Olympic cultural festival. We want our dance companies and orchestras to be at the top of their game. Rather than throwing up barriers in their way, we should celebrate when international artists, such as Carlos Acosta, the Cuban dancer, want to come and live here.

Interestingly, as has been said, this argument has been made and accepted by the Government for elite sportsmen and sportswomen, who are quite rightly exempted from the limits. My question is: why should not elite artists—the world’s best performers, dancers and musicians—and perhaps others, too, be given the same status? I have put this argument to both the Home Secretary and the Migration Advisory Committee.

It is not just tier 2 and the cap that are causing problems for the cultural sector in attracting the world’s best; the problem is also the application of the broader visa system in other areas. Last year, we at the Royal Opera House had such difficulty getting a visa for a Russian designer that it was easier for my team to fly out to Moscow than for him to come to London. In the end he got in, but it was a real obstacle course. An Australian principal dancer with the Royal Ballet had incredible difficulty getting a visa to return to the company in London. It took nine weeks and an Australian MP had to intervene on his behalf.

I mention our experience only because it is closest to me, but I know that this issue has an impact right across the cultural sector, from world music to our great museums, whose cultural exchange programmes do so much to build up relationships across the globe. The free movement of artists and thinkers is fundamental to the British way of life. It is something that we used to take pride in and we still should.

14:15

[Lord Lucas]

My Lords, I, too, am grateful for the opportunity to listen to the excellent speech of the noble Baroness, Lady Valentine. I declare an interest; I run the Good Schools Guide. I shall talk mostly about students, therefore, but I start by saying how much I agree with many of the speeches that have been made today, including those by my noble friends Lord Ryder and Lord Newby, pointing out what a daft situation we have got ourselves into so quickly under our new Government. With this cap, we are going for the practice of central planning. We are doling out places in ones or twos. The people doing it have no understanding of the requirements of the various industries. It is all too evident to me, from education, how completely at sea they are when it comes to the real requirements of the industry. We will do ourselves immeasurable and long-term damage.

The City, the higher levels of academia, bits of the arts and other industries, as the noble Lord, Lord Newby, pointed out, are not British businesses; they are international businesses that happen to be here. Once they are here, people come to them. If you want to go somewhere good to do something, you go where other people are already doing something good. If we destroy those businesses by refusing them the infusions of international expertise that they need, we will not get them back within a couple of generations. This is a daft way of trying to address the economic problems of this country. The difference between what the Home Office is doing and what my right honourable friend the Chancellor of the Exchequer said yesterday is just astonishing. I very much hope that the Home Office will come to its senses.

Schools and colleges are a major, but rather funny, exporter; we do not export goods, we import our customers. This country has an excellent reputation for education. Education provides many jobs. We are a growing sector. We face fierce competition, not just from the established providers in America and Australia, but also from Europe, which is getting much better at providing international education. Indeed, people are starting international schools all around the world and some of them are extremely good. However, we are still succeeding in this market.

What we need and expect is strong support from the Government, but what we get is the UK Border Agency. The UK Border Agency has in its hands our reputation as providers of education. It is our front end. However, it is inefficient. It delays. It has a pettifogging attachment to incredibly complex and bureaucratic rules. All too often, there is hostility and unhelpfulness.

Let me give a few examples. I start with independent schools, because that is where most of my knowledge is. I am not aware that there has ever been an instance of a foreign pupil at an independent school becoming an illegal migrant—at least, not while they were at school—or turning into a terrorist threat. However, we are in a position in this country where, on the border of half term, 60 students who wish to come to independent schools are stuck abroad because they cannot get through the regulations. The bureaucracy and systems that are imposed on schools are extraordinary. Our officers overseas lack training and do not know the rules as they apply to schools. The limitations on CAS forms mean that, even if you are successful in selling a few more places to overseas students, those students cannot come, because the wait to be issued with more forms is something like five months. For what is all this bureaucracy and waste? What benefit does this bring to anybody? There is nothing but loss to our reputation and damage to our business. I cannot see a single benefit to it.

Further education also seems to be suffering in this system. Someone has dreamt up the crazy rule that you cannot study a course for more than six months unless it has been accredited by Ofqual. Does the Home Office not realise what Ofqual is? It exists just to deal with school qualifications in the context of the English state system. The rule means that you cannot come here to study such courses as air traffic control or predictive maintenance in the oil industry, which is a pretty important course in view of what has been going on in the Gulf and, indeed, what we are proposing to do in the deep North Sea. It is a serious course and as good as anything that is provided in a university, but it is not a university course, and it is not listed by Ofqual, which is not surprising because it is not what you do at school, so you cannot get a visa to come here to study it. If you want to start up something new, if you have a new idea for a course that you can sell to students internationally, how do you do it? Under the new rules, you cannot even begin to get the permissions you need to establish your business.

I really hope that we will see some sense brought into the system. I understand that the continual changes of rules have been a result of building up the points system and the difficulties the previous Government had in having to respond to every twitch of the Daily Mail by producing another regulation. I think we had nine changes of guidance in 14 months, which is not helpful in this area. I know we are dealing with a difficult situation, but we must develop this concept of the highly trusted sponsor. If you are going to trust someone, trust them. No one escapes from independent schools. They are locked down solid, so if an independent school that has achieved highly trusted sponsor status says, “We want that guy”, let him in. Why do you need to do anything else? As the noble Baroness, Lady Coussins, said, rotary clubs are not exactly short of reputation. If they say, “We have ticked this student exchange”, why is there a need for any other bureaucracy? That principle also ought to apply to universities, further education colleges, both state and independent, and to those who have earned the status because they have so much to lose if they lose that status, as so much of their income is dependent on having it. They will protect it. You do not need all the bureaucracy and controls to go with it.

The Home Office must work with the Department for Education to develop a proper understanding of what education in this country is, how it works, its variety, its strength, what it can be trusted to do and all the opportunity there is for creating jobs, business and wealth in this country if the Immigration Service does not get in the way. The Immigration Service is being paid to do a job. It charges for this business. It ought, like a commercial company, to be crisp, efficient and fast in providing the services that we need. If we do not get that, we will get a lot of damage to an industry that means a lot to me and to this country.

14:22

[Lord Desai]

My Lords, I join noble Lords who have spoken so far in congratulating the noble Baroness, Lady Valentine, on securing this debate. I, too, speak as an immigrant. When I arrived, I think the London School of Economics had to get a labour permit to allow me to work. All I can say is that it must have been very easy to get a labour permit in those days. As a matter of principle, I believe in the free movement of capital, commodities and labour. In the best of all possible worlds, there should be no restriction on immigration anywhere, and preferably not even passports. That having been said, we are in the situation that we are in. That used to be the liberal position: liberal with a small “l”. The big “L” people have been trapped, so they cannot express their desires.

As other noble Lords have given instances, I shall give the House an instance of how much people from abroad coming here as students helps us. I recently had the privilege of representing the Lord Speaker at a meeting of Speakers of G20 nations in Ottawa. The person heading the Chinese delegation sought me out and said how happy he was at Durham and Bristol. He was a solid-state physicist. He fondly remembered this country and talked to me enthusiastically because he had been able to come here to do his research and then go back. He is now the vice-chairman of the Standing Committee of the National People’s Congress of the People’s Republic of China, and we have a friend of Britain because he was able to come here and research. That is the kind of intangible advantage that we have across the world because we are able to admit students freely. There was a panic under the previous Government, especially at the height of the recession when they were facing an election, and quite frankly we lost our nerve. Having built a very liberal immigration policy inside the European Union, noises began to be made about restricting immigration and how we had to explain to our core supporters that we are not actually in favour of immigration. We have to stop being apologetic about this.

Enough people have spoken about the advantages of immigration, but let me advance an argument that has not been made so far. The standard crude argument about immigration is that we cannot afford extra population in this country, that population is a burden and therefore some kind of Malthusian spectre will rise because our population will go from 60 million to 70 million and perhaps to 80 million by 2075 or whatever, and that is bad. Contrast that with the common debate going on in the global economy about China and India. Everybody is saying that China adopted a one-child policy and is prematurely about to have an ageing population. India did not adopt a one-child policy and is going to get a demographic dividend. The Malthusian spectre has turned around in the modern globalised economy and become a Malthusian blessing. The current state of the debate is that a larger population is not economically harmful. People are saying how much India will gain from the fact that it will have a young working population much longer than China.

In Europe, we have a stagnant, ageing population. One way out of it would be to encourage immigration. If we are going to make our dependency ratios better so that not my pension but the pension of my children is paid properly, we will need a different kind of economy with a much larger proportion of people in the working-age population than we are expected to have if we restrict immigration. From a macroeconomic perspective, the whole argument about immigration can be turned around because there is already evidence in the global economy that people are beginning to realise that countries with expanding populations—the United States, Brazil and India—will have an advantage over countries with stagnant or ageing populations. That argument could cogently be made. We can say that people should be free to come, leave and go where they like. We should be able to say that our future growth prospects depend very much upon having no limit on how our population can grow.

The point has already been made that if we could get reform of the benefits system, the incentive for British people to work would be greater, in which case immigration may settle itself according to the economic incentive of whether there are jobs here for immigrants. As the noble Lord, Lord Taylor, said, nobody comes here for the weather; they come for the jobs. If we could alter the conditions of supply of British-resident workers, immigration might reach some kind of equilibrium. I beseech the Government to go back to their instincts and be much more free-market than they have been able to be. If it all goes wrong, they can blame it on me.

14:29

[Lord Roberts of Llandudno]

My Lords, I also thank the noble Baroness for giving us the opportunity to discuss the many different aspects of this problem. The noble Lord, Lord Desai, mentioned stagnation. My feeling is that a stagnant economy—an economy which has pulled up all the drawbridges—is a very unhealthy economy. People move for many different reasons: they want to flee persecution and poverty; they dream of a better life; they want to escape war and oppression. Over the centuries the compassionate nations have understood their predicament and made them as welcome as they possibly can. Mind you, in some cases our response has been very hesitant and we have later looked back on it with perhaps a sense of shame. During the 1939-45 war, and in the years before, it took special pleading to allow in many of the people trying to escape from Hitler's Holocaust. One thinks of what happened with the kindertransport and one hopes we would not act in that way today. We ask: could we have done things differently?

Some come to the United Kingdom imagining that the streets are paved with gold—in parts of my work I deal with many such migrant workers and people. I know how disappointed so many thousands of them are when they come here and find that life is not as paradisiacal as they thought it would be. I would like to express a word of gratitude to the organisations that try to help those who come here as migrant workers but who then are faced with such great problems. Perhaps I may also say how distressed I am that, in one of the newspapers this morning, there is still an attack on migration and overseas aid and some of the other things that make some of us feel pretty proud. Their approach is different from ours.

Some have come here seeking their fortune and some have succeeded. I know that London would be without any milk at all if not for the Welsh dairymen who came to London. In the 1920s and 1930s there were 3,600 Welsh-owned dairies in London. You know, I am so proud to be a Welshman when I am able to relate such facts. And then there are the shops: in London there is DH Evans and Dickens & Jones; and half the shops in Liverpool were founded by Welsh people—people such as Owen Owen and TJ Hughes. People have always moved, so I do not know why we are so judgmental of economic migration. People want to make a better life. People want to venture to new areas. So many Welsh people have found their opportunity by coming to the large cities on this side of the border.

We can also see the way in which the compliment has been returned. In the 1930s there was desperate depression in much of Wales, particularly in the south Wales valleys. The noble Lord, Lord Rowlands—formerly Ted Rowlands, the MP for Merthyr Tydfil—in his book about that period, entitled Something Must be Done, says that most of the inward entrepreneurs to south Wales were of Jewish origin. No fewer than 48 of the 78 companies to establish themselves at Treforest were Jewish companies. One Cabinet paper of the late 1930s stated:

“It would be in the public interest to try to secure for the country prominent Jews who were being expelled from Germany”.

We welcomed migration. We saw the advantage of migration, in and out. Trying to halt migration is a King Canute act: it seeks to stem the tide of history. Imagine Parliament itself. Where would we be without the newcomers who work here? I looked at the catering department in the House of Lords itself and was able to count over 18 different nationalities. People have come here from Algeria, from South Africa, from the Philippines, and they contribute to us. It is a world in which we belong to each other. I must not preach a sermon, much as I am tempted to. But I do ask: am I my brother’s keeper? Sometimes we are. Sometimes we look to the brother; other times the brother cares for us. We are in one world.

Time permits me to mention only in passing the mass movement from our four UK countries to the new world. I know that we do not have a colony as Welsh people but we have a settlement in Patagonia. We have many Welsh communities in other parts of the world. I must mention before going any further that both Abraham Lincoln and Thomas Jefferson had a drop of Welsh blood in their veins. I am sorry—I could keep you for hours with the names of other people who have contributed in many ways, but I do not think that you would appreciate a long sermon this afternoon.

There is a general feeling of suspicion towards people other than ourselves. Instead of that, as has been mentioned time and again, we should see them as the people who have broken the stagnant waters. They have brought the fresh ideas here. The new people who went to south Wales created a better economy for the people of south Wales. We should treat the folk who want to come here not in an unwelcoming and harsh way, but in a way that says, “We will do our best to see that you, particularly if you flee from oppression or extreme poverty, can live a worthwhile life here, and in so doing you will enrich our community in the United Kingdom”.

14:36

[The Earl of Erroll]

My Lords, we should all thank my noble friend Lady Valentine for securing this essential and timely debate, because things are about to go badly wrong if we do not listen.

The speech of my noble friend Lord Rowe-Beddoe contained a succinct breakdown of the figures, and it has very much reinforced what I have been thinking. The trouble is that we are speaking the language of control about something that we cannot control. The trouble is that we are conflating three different sets of things and movements.

The first is the free movement of EEA and A8 nationals around the European economic area and the wider area. We have to allow that because we are now part of Europe. It is not really migration; it is the free movement of people moving their residency, possibly temporarily or possibly more permanently. We have to accept that this is like being part of the United States of America and we do not have rights to keep them out. They are not immigrants in the traditional sense of the word. Including them in the figures causes confusion because they are the larger part of the figures. When the newspapers say, “All these horrible foreigners are here”, they are very often talking about people who have every right to be here, as we have every right to move to their countries as well.

As for the other two categories, I shall describe the first simply as economic migrants—people who want to better themselves. Bringing them here does not seem to offer any particular attractions up front, but they can offer benefits. If we allow them to work and do not set up artificial barriers, they can contribute and fill essential jobs at the bottom of the economy. They also help their own their countries with the remittances they send home. I think that these remittances are much more effective than the foreign aid that we try to disseminate downwards through central Governments. It creates energy at the bottom end of those countries, on top of which the middle classes in those countries can build an economy—which probably destabilises dictators at the top. So I am not against economic migrants but I realise that that is probably the area in which we need controls. Such migration uncontrolled could cause a lot of instability.

Most speakers have concentrated on the third area and I should like to do the same: the movement of talent and talented people—people in the cultural, creative, artistic and scientific spheres—as part of what we call the knowledge economy. The knowledge economy is not, as some think, about people doing business online but about the movement of people with creative knowledge in the arts and sciences generating wealth and business. That is the knowledge economy and free movement is essential to it. Britain needs to become a brain magnet and bring people here. It would be absolute lunacy if we had a crude, crippling cap rather than seeking to create centres which bring together the talent that creates and nurtures new ideas and businesses.

Some good points have been made about the fact that we often do not have people with the right skills to support those with the creative ideas so that those ideas can be turned into something that you can do, use or whatever. Creative people—because skill is creative in itself, I include people who may be using their talent with their hands—are impatient and will move to wherever the pool of other talent is. When you have lost them, you have lost the entire centre. Our people—British-born people whom we think of as native —will move, too. We saw this in the 1960s. We will suffer a brain drain. We will not be a brain magnet, but will watch them all going away. Other people will follow and many will not come back—well, not until they retire, when they can be a burden on the state again.

How on earth did the Government arrive at a figure of 24,100? Did they just throw darts at a board? I do not understand it. According to one newspaper, they have just accepted 135,000 failed asylum seekers as a preliminary to dealing with the backlog of 500,000—although they are not sure how many duplicates there are—and in order to clear a big anomaly in the system. We are going to deal with that, and I am not saying that we should not do it that way: I do not want to get drawn into that argument, because it is one of the ways in which we will probably have to do it, or else every aeroplane and ship will be clogged up with people returning to countries that do not want them.

How did the Government choose 24,100 people whom we are going to use to grow our wealth? We have a huge debt crisis and are told that the Government want to nurture SMEs as the engine of growth in the future. We also do not want to lose the big companies that are already employing people and that will move terribly easily abroad if they have to. Now we have certificates of sponsorship, which are limited. Here I declare an interest that was drawn to my attention. I sit on the advisory board of a New Zealand company that wishes to come over here and set up a research unit, aided by the Welsh Government, because there are some highly attractive deals. One chap has just been doing a PhD at Swansea University. He is a Chinese speaker from Hong Kong. He is working on search engine technology for China. He has been working for the company already and we would like to get a certificate of sponsorship. I have no idea whether we will get it or not, but the New Zealand company will move its research department abroad if we do not. That would be absolute lunacy. On top of that—talk about sledgehammers cracking nuts—two people came down for half a day to go through all the paperwork of our policies on this and that, our P60s and P45s, and to examine the workforce that does not exist yet. It is lunacy. Is that a good use of government money? We must make this more sensible.

The briefing from the House of Lords Library was hugely useful. It contained many studies that showed the cultural and economic benefits of immigration. We in this Parliament should think strategically, leading the Executive to go the right way. The coalition has inherited a lunatic socialist idea of control. We need to put incentives like taxes in place in order to nurture creative talent. If we want to discourage people, we should change the benefit system, which we are doing. We must do something more positive to get out of the debt crisis than stopping talent from coming here.

14:42

[Lord Hunt of Kings Heath]

My Lords, first I welcome this debate and congratulate the noble Baroness, Lady Valentine, both on her initiative in allowing us to debate this very important matter, and also on the quality of her contribution. It has been an impressive and wide-ranging debate and I very much look forward to the Minister’s response. Whether he, as a widely respected and humane internationalist, is looking forward quite so much to responding might be open to doubt. The debate has clearly exposed the illogicality and potential risk to the UK’s interests of the Government’s approach to immigration.

We all recognise that immigration is as challenging an area as is possible for any Government. Over the centuries, this country has experienced wave after wave of migrants, and we have benefited mightily from the commitment and talent of those people. We continue to do so. They have enriched our community, and the noble Baroness, Lady Valentine, and other noble Lords gave us some excellent examples of the benefit that migrants have brought to the United Kingdom. However, we must also recognise the pressures that immigration can bring to many of our own communities. That is why the previous Government committed themselves to an immigration system that both promoted and protected British values. We considered that people needed to know that immigration was controlled, that the rules were fair and firm and that there was support for communities that had to deal with change.

As a result of the action that we took, our borders are stronger than ever. The UK Border Agency has police-level power and thousands more immigration officers, and 100 per cent of visas are now biometric. We recognised the pressure that immigration can place on housing and public places in many communities, and we had planned to expand the Migration Impact Fund, paid for by contributions from migrants, to help local areas. We also know that migrants who are fluent in English are more likely to work and find it easier to integrate, so we took action to make the English test harder.

I know that the noble Earl, Lord Erroll, thought that those characteristics summed up a golden nirvana of controlled socialist planning. However, what is certain—as my noble friend Lord Giddens suggested—is that we can clearly see the progress that was made, with the reduction in net migration to the UK in the past year, with applications for asylum having dropped 30 per cent in the fourth quarter of 2009, with asylum claims now being a third of the level that they were in 2002, and with the cost of asylum claims supported by the taxpayer having been cut by half in the past six years.

We introduced the new points system to ensure that we got the migrants that the British economy needs. Our aim was gradually to tighten the criteria in line with the needs of the economy. However, we are very concerned about the arbitrary nature of the cap that the Government have now introduced. I ask the noble Lord to respond, because it appears that the cap is clearly designed to give the impression of new government action on immigration, when in reality the points system that my Government had established was dealing with the problem in a much more sensible way. More than 20 noble Lords have spoken in this debate and identified the fact that the Government have taken away the flexibility of the points-based system and brought about many of the problems that we have heard about in this debate.

The cap is clearly bad for business. Instead of clamping down on illegal immigration, the policy seems to be focusing on a minority of skilled migrants for whom employers can demonstrate a business case. According to the Government’s own forecasting models, a cap will impact on economic growth. If the Prime Minister were to achieve his pledge to bring down net immigration to the level of the 1990s, the estimates that I have seen suggest that output will be hit by as much as 1 per cent and cost the Exchequer £9 billion a year in forgone tax revenues by the end of the Parliament. No wonder we have heard quote after quote this afternoon from businesses and universities about this impact. Imperial College said that immigration changes were of great concern in respect of its ability to recruit and attract leading scientists and researchers to achieve its academic mission.

We have already heard about the London First perspective. There is concern among international companies that are based in London or have substantial operations here, which are operating in global talent markets and need to recruit employees with distinctive and perhaps unique skills and experience from across the globe, but which are inhibited from doing so because of the cap. The central issue for City of London businesses is the nature of the proposed cap on those non-EU workers who are skilled or highly skilled. They say that the arbitrary cap could exclude those individuals who bring tangible benefits to the UK and who do not displace existing British workers. These individuals could be investors, entrepreneurs or key staff of international firms here. My noble friend Lord Turnberg has a strong involvement with the Association of Medical Research Charities, which, in joint evidence with the Wellcome Trust and Universities UK, makes it clear that if we want the UK’s universities and research institutes to remain internationally competitive, continuing access to the best global talent and expertise will be critical. And so on.

The noble Lord, Lord Ryder, made an important point about the pharmaceutical industry. When I had responsibility for the industry, 2 per cent of global turnover in drugs and medicines was in the UK, but it was 10 per cent of global R&D. It is one of our most important and successful industries. It would be mad to put at risk the success of that industry. The noble Lord, Lord Newby, talked about the energy sector, another sector with which I have experience. Again, we have a very strong global centre based in the UK. How can we possibly put that at risk because of this arbitrary cap?

The noble Lord, Lord Lucas, made some mildly critical comments of the way in which the UK Border Agency conducted its affairs, particularly in relation to independent schools. I have no doubt that the agency will wish to look at that. He seemed to suggest that we should let in anyone who was going to an independent school. Given the 20 per cent cut in the budget of the UK Border Agency announced yesterday, perhaps that will have to be its policy in the future.

I hope that when the Minister sums up, he will be able to respond constructively to the debate. We are all aware of the comments of his right honourable friend Mr Vince Cable, the Business Secretary, who noted its impact on UK business only a few weeks ago. He said:

“The brutal fact is that the way the system is currently being applied is very damaging … If we are going to be an open economy”—

which I support strongly—

“thinking globally and acting globally, we have to be flexible in the way that we treat people of this kind”.

Finally, I should just like to inform the more than 20 speakers who have spoken in this debate and called on the Government to change their view that we will be debating on Monday a statutory instrument in my name which calls on the Government to change their policy. We will have an opportunity to put the views of this House to the test.

14:52

[Lord Wallace of Saltaire]

My Lords, let me start by saying that I had noticed next Monday’s business. I thank everyone who has taken part in this sometimes passionate debate and the noble Baroness, Lady Valentine, for opening it. As the noble Lord remarked, it is an uncomfortable position for a Liberal to have to defend limitations on immigration. Liberals believe in open societies, in an open global economy and in the principles of free trade and free movement of goods, capital, services and people. Sadly, however, we all recognise that such openness is not possible now or in the foreseeable future as far as the global free movement of people is concerned. We all recognise that that is where we are.

There are intense immigration pressures on the rich, secure and law-abiding world from bright, determined, or sometimes desperate, people in the poorer, insecure, more conflict-ridden countries of the world. There are pressures arising from global population growth, which is likely to continue for the next 20 or 30 years. There are pressures from those countries which are now producing many more graduates than they can absorb within their own economies, in the Middle East in particular. There are the natural desires of millions of individuals to better themselves or their families. Each of those might be a worthwhile cause on its own but, cumulatively, they are more than we or other developed democracies can cope with. There are also the global ambitions of the highly talented, of which many have spoken in this debate, in a global economy.

The response to this in all developed democracies has been to attempt to strike a balance between setting limits on immigration and allowing continued access for the talented, for the most desperate and for those who will contribute to and enrich our society and our economy. It is immensely difficult to design a fair and balanced immigration policy. Successive Governments have struggled with this objective for 50 years since the first restrictions on Commonwealth migration were imposed.

In the past 15 years, there has been a surge in net migration into this country. The ONS projects that the British population will rise to 70 million and beyond and that the driving force in that rise in population will be immigration and the children born to recent immigrants. That produces pressures on resources, housing, space and public facilities, above all in the south-east of England, which now rivals the Netherlands as the most densely populated part of Europe with a population density that is approaching the levels of Singapore. That in turn puts pressures on jobs, particularly competition for low-skilled and low-paid jobs. The noble Lord, Lord Judd, rightly remarked that often the poorer areas and the poorer people are most at risk from the pressures of immigration.

I must correct the noble Earl, Lord Erroll, a little about his impressions of what has happened with net migration. The Government’s figures for net migration in 2009 are that, of the net migration into and out of Britain of just under 200,000, the figures for those coming from the European Union and European economic area were roughly in balance. There were a mere 12,000 more returning British citizens and EU residents coming in, whereas there were 184,000 migrants from outside the European economic area. I should also say that, in terms of working and retirement, the noble Earl suggested that people would leave Britain and only come back to retire. The figures are that more than 2 million British citizens have retired elsewhere within the European Union—that may have something to do with the weather, of course. Indeed, we now have a substantial French colony in the south-east of England who have come here to work, but many of whom, anecdotally, have said to me that they will certainly go back to southern France when they retire. Britain is a good place to work and the diversity of our population—the very substantial French, American and Japanese communities in London—suggests that we are a very attractive place to work.

The noble Lord, Lord Giddens, asked me on behalf of the Government to reassure the House of their commitment to multiculturalism. We do so happily. I come from a party whose previous party president was the noble Lord, Lord Dholakia. I am now in coalition with a party whose chair is the noble Baroness, Lady Warsi. We live and work in a happily multicultural society, although we recognise the complexities of multicultural society and of societies that continue to undergo new waves of immigration. I am sure that I do not need to remind the noble Lord of Rob Putnam’s work on community and diversity and on the problem of solidarity that rapidly increasing diversity raises for communities.

I have certainly found from my own working and political life in Yorkshire and Lancashire that recently settled communities often feel threatened by further migration. I found that even 40 years ago when I was a candidate in Huddersfield. I still find it as I work in Bradford, Leeds and elsewhere. Many in the south Asian community in Bradford who are first-generation immigrants or the children of immigrants express active anxiety about the undercutting of their job opportunities and of their wage rates by Poles and Ukrainians. This is not simply a question of race or of ethnicity; there are some real, complex economic and social pressures, to which continuing immigration leads.

Our country has stubbornly high levels of unemployment. There are 2.5 million unemployed people in Britain, many of whom are long-term unemployed. Those are above all the low-skilled and those who have not entered apprenticeships or begun to pick up the skills that to take them into work, although we already have almost 200,000 recent graduates on our unemployment registers. Under the previous Government, too little investment was made in skills training or in apprenticeships, but as noble Lords know, my right honourable friend and colleague Vince Cable is actively concerned to increase the number of apprenticeships.

Part of the context of the debate, therefore, comes from popular suspicion and press stories—and some evidence—that companies find importing skills easier than paying for training and that immigrants competing for jobs drive down wages. Like the predecessor Government, we have attempted to respond. As the noble Lord, Lord Hunt, remarked, in 2008 the previous Government introduced the points-based system with its five tiers. A constant aim, as the noble Lord, Lord Bilimoria, suggested, of the Labour scheme as well as all previous schemes, has been to let in the right people and to keep out the wrong ones. That is a wonderful aim but it is not easy for any Government to apply in practice as we constantly rediscover how immensely difficult it is to discriminate between the many talented candidates, between the deserving and the very slightly less deserving whom one would nevertheless like to take on. There are so many promising and talented individuals—sadly, sometimes too many.

We all have our candidates as to how to get around the problem. The noble Baroness, Lady Valentine, suggested that we should put a further squeeze on bogus students and bogus colleges. The Government are trying to do that, as did the previous Government. Another suggestion is a tighter squeeze on illegals and on people smuggling. Again, the predecessor Government tried and we too are trying. That overlaps with the problems of human trafficking. We all recognise what a morally ambiguous policy quagmire we are all in as we attempt to manage immigration. There is no easy and perfect policy to adopt.

I recognise that this debate is largely focused on tiers 1 and 2 and on the application of the cap that is to be applied to those tiers. The interim cap was imposed to avoid a surge of applicants before the new system is introduced in April 2011. The reduction in the cap was of a matter of 1,300 places. There will be an annual cap, which is intended to reduce the steady rise in the British population. A very large number of anxieties and concerns have been expressed to the Government over its application, and I have read a great many submissions on what would happen and what could happen, but I have to say that there were not many on what has happened. The Government’s consultation received 3,500 responses, so we are involved in a continuing dialogue with all those concerned, including London First. We want the best for Britain’s society and economy, and we all recognise that we have to respond to changing international conditions and trends in migration as they move up and down. The Government are now responding to the consultation and we expect that response to be made public within the next few weeks.

The balance between tier 1 and tier 2 is one issue that we will discuss. The figures suggest that around 10 per cent of those who have come in under tier 1 are not currently employed and that a further 20 per cent are employed in lower-skilled occupations than those that they claimed to be pursuing when they came into the country, so there is a case for expanding tier 2 and shrinking tier 1. We recognise the problems of scientific research and of universities, which need to be able to attract the best people. I declare a small interest in that I have spent some time over the past two weeks trying to help my son get a renewal of his visa to move from being a student in the United States to holding a post-doctoral fellowship there, although I should say that the Haskel and Wallis report referred to by the noble Lord, Lord Turnberg, was not a reference to a member of my family.

We recognise also the concern that banks, accountants, law firms, engineering consultancies and others in the City have with regard to access to globally mobile people of different citizenship, as well as the whole question of the cultural world. I thank the noble Baroness, Lady Valentine, for her suggestions on how to find ways to pursue the dialogue further, and I thank her in particular for her suggestion on training and apprenticeships. That is something that the Government would very much like to take further. Again, I declare an interest in that for many years I was involved as an academic in training for Barclays bank. I recall the day on which a new CEO arrived and shrank very radically the bank’s training programme as a non-essential part of what the bank should do. We want to make sure that all the firms in the City with which we work are investing in their workforce and in those whom they recruit and are not tempted to take the easy option of recruiting people already trained by others abroad. That is cherry picking, as the noble Lord, Lord Judd, said. We should be contributing rather than simply taking talent out of other countries.

We recognise that internal company transfers are also an issue. Some 22,000 of the 36,000 admitted last year under tier 2 were inter-company transfers. Of those, 12,000 were Indian nationals and 11,000 were in IT. At the same time, IT is the area of graduate employment with the highest percentage of unemployed in this country. We need to look at this area and talk to companies and banks about how to ensure that our own graduates get into the right jobs. We need a wider dialogue with UK employers about investment in developing the skills of their employees and of those whom they recruit.

On cultural talent, we recognise that there is a continuing problem. They are listed under tier 5 and tier 2 as a particularly important area, and I ask simply that we continue to talk about individual cases as often as we can. On Rotary Youth Exchange, I enjoyed the argument between the noble Lord, Lord Lucas, and the noble Baroness, Lady Coussins, as to whether independent schools or the Rotary are more reliable partners for the UK Border Agency. I would say simply to the noble Baroness that perhaps we need to talk further about this, and that the understanding of school exchanges is that they are for separate terms or for six months, not for a year. Perhaps that is something about which we need to talk further.

The Home Office has taken a certain amount of flak, in particular from the noble Lord, Lord Lucas, about extraordinary bureaucracy at the UK Border Agency. This is not easy work. Officials, particularly in the Indian subcontinent and the Middle East, have to deal with a large number of determined and needy applicants. It does not always work out as easily as it should, and sometimes people have to be more patient than they would have wished. When I was a student going to the United States, I used to suffer in long lines. That is one of the problems of the world pressures of population and migration. There is popular anxiety about migration and it is not just populist exaggeration or tabloid scaremongering.

Often the highest anxiety is among our most disadvantaged and within our settled immigrant communities, but we are attempting to design the fairest compromise that we can. We have consulted and we are continuing to consult. We will announce policy priorities for 2010 and beyond in the coming weeks, and we look forward to a continuing dialogue with all interested partners, from London First to the Royal Opera House to the Institute of Cancer Research to Universities UK and beyond on how immigration policies can best be balanced. We are committed to an open society and an open economy within the limits that sadly we all have to accept.

15:09

[Baroness Valentine]

My Lords, I thank everyone for their fascinating and multifaceted contributions to today’s debate and I hope that the Government will take account of the weight of opinion expressed. I thank the Minister specifically for his constructive reply on this thorny issue and I look forward to a continuing and constructive dialogue. It is critical to get this right.

I point the Home Office, again, towards the report of the Economic Affairs Committee of this House, which concluded that any immigration policy should have at its core the principle that existing UK residents should be better off as a result. I am afraid that capping tier 1 and tier 2 immigration will do the opposite. I encourage the Government to make clear that the policy that they are pursuing is in line with the outcomes that they seek.

Finally, I remind your Lordships that chicken tikka masala is Britain’s favourite dish. I beg leave to withdraw the Motion.

Motion withdrawn.

Education: Special Educational Needs

Thursday 21st October 2010 Lords Chamber

Debate

15:10

Moved by

[Baroness Warnock]

To call attention to the Government’s policy on special educational needs following the Ofsted special educational needs and disability review published in September; and to move for papers.

[Baroness Warnock]

My Lords, I am grateful for the opportunity to introduce the debate and I look forward to hearing the contributions of all those who can be here. I particularly look forward to the maiden speech of the noble Lord, Lord Stevenson of Balmacara.

In calling the attention of the House to the Ofsted review, I hope that the Government will not simply disregard it—a view which I am sure is shared by all noble Lords. I know that there is a Green Paper in the offing but, because we do not know when it will arrive, I hope that there is time still to take account of the Ofsted review in the Green Paper.

In 2007, the all-party Select Committee on Education and Skills, chaired by Mr Barry Sheerman, chose special educational needs as its subject and later published two powerful reports. In these reports, the committee suggested that the current framework within which special educational needs are provided for had outgrown its usefulness and that there should be a new quango to look at the whole framework from the start. I very strongly expressed that view when giving evidence to that committee, and although one has to admit that times have changed and we cannot expect a new quango, as this Ofsted report points out, matters can be addressed short of rethinking the whole issue from the very beginning.

To those who have criticised the Ofsted report, saying that it is exaggerated or false, I say only that Ofsted took and examined a fairly large sample and that its findings are reflected in my almost daily postbag from parents who are extremely unhappy with the way in which their children’s special needs are being addressed. I shall take the Ofsted report as read and if other people wish to criticise it, so be it.

One of the matters about which the Select Committee report was most critical was the system of issuing statements of special need for some children but not all. It pointed out all kinds of difficulties with statementing, the main ones being that it is contentious in every single case, it leads to an enormous amount of anxiety and misery on the parts of both parents and children, and it is extremely costly in both time and money—money that can ill be taken away from the educational purposes to which it properly belongs.

I have no wish to defend the concept of the statement—noble Lords will realise that I cannot disclaim all responsibility for the idea of it—but it should have been glaringly obvious, and it was extraordinarily short-sighted of us not to realise, that if a local authority had to assess a child and its needs for a statement, and the same body had to fund those needs, it would in the end look not to what the child needed but to what it thought it could get away with: what it thought it could possibly afford. That was not obvious to the committee that reported in 1978. I think we were so bedazzled by the light that we thought we were going to shed on special education that we were blinded to the obvious financial consequences of statements for which the local authority had responsibility for both assessing and funding. One of the main objectives of the Ofsted report was to separate the funding from the assessing in such cases. I go along with that.

However, the main body of criticism in the Ofsted report is not so much of the statement itself but of the procedure for those children—by far the majority—who do not receive statements but are assessed within schools at two grades of special need. One is where it is considered that the school can provide for their needs. The second is the Schools Plus assessment, where it is recognised that help needs to be brought in from outside. The criticism targets those children who are being assessed in school.

The number of statements issued is marginally smaller than it was five or six years ago, but the children who are issued with assessments that they need special help, in school or partly from outside, are in far greater danger of being neglected or mishandled than children whose needs are so extreme or complex that they were probably picked up and noticed at an early pre-school stage, possibly soon after birth, and who will therefore slide quite easily into the issuing of statements and will have their needs attended to as far as possible. It is the children who are less severely disabled in one way or another and whose needs are less acute who are both the more numerous and more at risk of getting a very poor education. The conclusions of Ofsted are very much borne out by what I hear from parents up and down the country. These children start by being assessed for special needs, at the request either of their parents or of a class teacher, and are then given help or support according to how the assessment rates them.

The review finds that many more children are being assessed as having special needs than should properly be so assessed—I repeat that these statements have been disputed—and gives two main reasons for it. Rather brutally perhaps, I denominate them, first, as laziness and, secondly, as greed. It is laziness that makes teachers anxious to categorise pupils who make slow progress in learning, show little inclination to learn or are very hard to control in class. It is laziness that makes teachers often assess the children as having special needs, when in fact, as Ofsted states, their needs are no different from those of most children. What they need is better teaching. Like all children, they would benefit from dedicated, observant, sympathetic and, above all, exciting teachers. There can be no one in your Lordships' House who cannot testify, either from personal experience or from that of children and grandchildren, to the enormous difference that can be made to the ability to learn and the ability to want to learn when one moves, somehow miraculously, from the class of a bad teacher to the class of a good one. This is true of all ages and at all levels of academic or practical competence.

I do not deny that there are many children in mainstream schools with special needs, and many who can be identified very early on in their school career by well trained and vigilant teachers. That is to the great advantage both of the rest of the class and of the children so assessed. However, I also note Ofsted’s conclusion that,

“schools should stop identifying pupils as having special educational needs when they simply need better teaching and pastoral support”.

I hope that this will be addressed in the Green Paper when we have it.

The greed is displayed at managerial level. More children with special needs at school, especially at Schools Plus level, means more classroom assistants and perhaps other perks in the form of equipment or refurbishing. Perhaps a school can gain in reputation for being apparently so caring of its pupils as to bring in classroom assistants whenever it can, but extra classroom help does not necessarily solve the problem of learning difficulties. Merely providing extra classroom help does not necessarily improve the educational outcomes of children. On the contrary, many parents testify that very often the support provided to a child is totally inappropriate. Many children find themselves being taught almost exclusively, and sometimes on their own, by classroom assistants who have not been trained as teachers, still less as teachers with the proper skills to teach children who for one reason or another—there are very many different reasons—are finding it difficult to learn. The latter case tends to be worse than the first. In the past, Ministers have sometimes spoken as if one-to-one teaching is the best form of support for a child with learning difficulties and as if that sort of idea should be aspired to, but I very much doubt the truth of that. There is nothing in the ideal world so good as good classroom teaching, where children learn from one another as well as from their teachers. They are competitive and appreciate one another’s efforts. My belief is that the class is the place where children should be taught, if possible.

What makes it worse is that inexperienced teachers, when they have either a child on their own or just two or three children together, very often tend to intervene too soon. Amateur teachers are nearly always guilty of this, and even parents trying to help their children with their homework are guilty of intervening too soon. In the end they do the child’s work for them and do not wait to find out whether the child has really understood. If the assignment has been completed, that is okay. They do not know enough to know how to help people understand what the work has involved.

Some years ago—I think it was in 2005 or thereabouts —the Audit Commission published a report in which complaints that a number of children who had special needs were being taught almost entirely by untrained amateur assistants were very clear. The then Government disregarded it, just as they disregarded the Sheerman report in 2007. At the time, of course, no reason was given. I blame no particular Government for this; it is just Ministers’ habit of saying, “We do not think it is a good time to do this”, or “We do not think it is necessary”, without giving the faintest answer to the criticism or explanation of the point.

I have some questions for the Minister. First, do the Government have any solution to this overassessing? Secondly, there is a great difficulty for some children whose school time ends at 16 if they are disabled or have learning difficulties. There is no automatic transition from that stage to college, where they do not have a guaranteed place. Can the Government look very seriously at the need that everybody has to continue with their education from 16 to 19, as that should be as of right? It is an age when children with learning difficulties often make huge steps, as long as they are not kept hanging about.

My third question is rather more complicated. Can the Minister possibly contrive a way to persuade his colleagues that mixing up the terminology of disability discrimination with special educational needs has been a disaster? That happened in 2002. I believe simply that those two concepts are completely different—the concept of trying, lovingly and caringly, to help a child overcome or at least make the best of his educational difficulties, and the concept of making it illegal to discriminate unfairly against disabled people in the workplace or in society. Those concepts need to be separated out, and the Ofsted report calls attention to the extremely confusing nature of the terminology used to discuss these problems. I beg to move.

15:28

[Baroness Ritchie of Brompton]

My Lords, I congratulate the noble Baroness, Lady Warnock, on initiating this very timely debate, coming as it does a week after the deadline for submissions of evidence to the Government’s SEN Green Paper. I chair the Local Government Group’s children and young people’s board; my remarks therefore reflect the views of local councils, for whom the needs of the child and the young person are of paramount importance.

I shall concentrate briefly on two important issues: the need for a single system for assessing and supporting children and young people with special educational need; and the important role that schools play in meeting the needs of those with less complex special educational needs. Everyone shares the concern that the current SEN arrangements are too complex and bureaucratic. The Ofsted review said that parents felt that they had to,

“fight for the rights of their children”.

This cannot be right when parents already have to deal with a number of stressful situations. Equally, when there are delays and bureaucracy the people who suffer the most are the young people themselves.

A key part of the problem is that, in reality, there are two different assessment and funding arrangements for children with special educational needs: the SEN system, which applies to children up to the age of 19 who remain in school or in a special school, and then another system for those with a learning difficulty or disability who study outside school settings—for example, at a further education college. The reason for having these two systems goes back to a series of legislative changes that took responsibility for funding further education away from councils and gave it to a series of national quangos: first, the Further Education Council, then the learning and skills councils and now the Young People’s Learning Agency.

The responsibility for commissioning education for young people with learning disabilities aged 16 to 25 has recently been passed back to councils, however, although for now the funding remains with the YPLA. This seems to be an unhelpful and overly complex split. Instead, we need to think of the children and young people whom we want to help. We need a single system for assessing and supporting those with special educational needs up to the age of 25. This would allow us to bring together the contributions of all the agencies involved in a seamless way that would benefit both parents and children. That would be in line with the Ofsted recommendation that future changes should simplify arrangements and make them more consistent across different age groups and levels of need.

Councils can take the lead in this area. They already have a wealth of experience and expertise in leading on SEN assessment and support. Equally, as children grow up, it is councils that take on the responsibility for those who continue to need support as adults. They have also developed local partnerships with other agencies involved in SEN support, such as schools and the health service and with the voluntary sector. I argue that national quangos such as the YPLA, with no local connections and little involvement in local partnerships, are not best placed to have a role in the assessment, support or funding of young people with a learning disability.

This is not about extending the role of local councils, but rather about recognising their democratic mandate and local accountability which can make this process quicker, fairer, less bureaucratic and, above all, improve choice for parents and their children. Recently local authorities have been making decisions about 16 to 25 year-olds with special educational needs. The early evidence is that they are working successfully with providers, increasing the range of local provision, which many young people prefer, and often at a lower cost.

I turn to the important role which schools play in supporting children and young people with less complex SEN. This is particularly topical in the light of the coalition Government’s intention to give schools more freedom and autonomy. Schools already receive funding to support pupils with less complex special needs but, although the majority of school funding—around 90 per cent—is passported directly to schools on the basis of pupil numbers, the funding for SEN services comes from the 10 per cent that is allocated locally, following discussion in their schools forum. This is what is commonly but mistakenly called the “10 per cent centrally retained by councils”. The fact is that this money is spent on schools, or on services provided to schools, following local discussion about whether it can be more cost-effectively spent on services procured by the council. Chief among the services bought in this way is SEN support, with councils buying in specialist services such as educational psychologists or speech therapists on behalf of schools, which then really meet the needs of the individual children.

Schools that are keen to become academies or free schools and which take control of the 10 per cent of the so-called “centrally retained money” need to recognise that the funding is there to support, among other things, children with special needs. If they have this funding, they will have responsibility for making sure that the provision needed is available. Schools have a vital role in supporting children with lower-end special educational needs, and councils should provide the extra support to children with formal statements and assessments. In a system where we have more autonomous schools, we will need to find a way to make sure that they can continue to provide this support and that the children and young people who need it have fair and, above all, speedy access to help and support.

15:33

[Lord Stevenson of Balmacara]

My Lords, it is a great honour and privilege to address your Lordships’ House for the first time, in this important debate initiated by the noble Baroness, Lady Warnock, whose long and distinguished contribution to public life includes, of course, the seminal Warnock Report on Special Education of 1978. I associate myself with the remarks of the noble Baroness, Lady Ritchie, about what a pleasure it was to hear her give us both an insight into the thinking during the initial discussions on that report—somewhat regretful, I gather—and an update on her thinking on where things have got to since 1978.

My contribution to this debate will be about schools for children who have a SEN statement which identifies behavioural, emotional and social difficulties as their primary need. As is traditional with a maiden speech, however, I start by thanking the many people who have facilitated my arrival in this House. In particular, I acknowledge the staff, not only for putting on a very effective and informative induction programme but, at every level, for being so informative and helpful in the early days and weeks of my time here. I have already benefited from the work of the Library staff, which is simply superb, and I also thank my sponsors, my noble friend Lord Evans and my noble friend Lord Haskel, who has also acted as my mentor.

One thing new Members are not short of is advice, which is offered on a regular basis. It is warm and friendly, not threatening. One of the key decisions for new Members is of course the point at which they give their maiden speech: when to do it, on what topic and how it should be pitched. On this issue, advice to the new Member is divided. Many people recommend getting your maiden speech over with as soon as possible, but just as many say, “Hold on. Wait for the right topic”. I decided to hold on but I confess that, as the days passed, my mentor, my noble friend Lord Haskel, has been getting more and more agitated. Recently, he started making suggestions about what I should speak on. The first—which I did not object to, but turned out not to work—was that I should initiate, which I thought was a big step for somebody so new, a debate on the threats to our honey bees from pesticides and disease. I keep bees, so I have a little to say on that. The Library confirmed for me that this House has not debated the issue since May 2009. That is two whole seasons of honey making. What a joy it would have been to regale noble Lords with my success in honey making, out at my house in Buckinghamshire. I had even begun to develop a rather complicated metaphor involving Parliament as a successful hive. You may imagine how I anticipated describing the queen being superseded by another only a few months ago, and interesting roles as drones and worker bees for the various parts of your Lordships’ House. Another time, perhaps.

My noble friend Lord Haskel’s second suggestion was that I should wait for some of the constitutional reforms due to arrive in this House shortly. This is an interest of mine because when I worked in a think tank we did a number of pieces of work on constitutional reform, which I think have been helpful. When I was working in the policy unit at 10 Downing Street just before the election, it was part of my brief. As Members may have noticed, with so much of that material having been picked up and espoused by the coalition Government, I would probably have something interesting to say as we went forward to discuss it.

However, luckily, I became interested in special education, and I declare an interest as a governor of the Chiltern Way Federation, a special school in Bucks. This debate caught my attention. To my noble friend Lord Haskel's great relief, I resolved to speak today and got him off the hook; so much so that I am afraid that the excitement may have been too much for him and he is unable to be present to hear the results of all his coaching and support.

The Chiltern Way Federation is currently composed of two highly regarded special schools for boys aged 11 to 16, and each school has 65 students on roll. All of these boys have a statement of special educational needs which identifies behavioural, emotional and social difficulties—BESD, in the jargon—as the primary need. Both schools are permanently oversubscribed, forcing Buckinghamshire County Council to seek out-of-county placements for a considerable number of children, at great expense to the ratepayer. As Buckinghamshire currently makes no provision at all for BESD girls, some 20 out-of-county placements have to be found for them, at a cost which I estimate must be about £1 million a year.

Traditionally, a school's distinctive contribution was to be found in excellent learning, provided through excellent teaching. The task of BESD schools, therefore, should be said to be providing all that excellence, with the added dimension of trying to manage and improve very challenging behaviour. However, if we are to be successful in getting the best outcomes for our children, the simplistic notion that BESD schools can deal with bad behaviour within the school day, as a sort of add-on in splendid isolation, needs to change. As the Warnock report was not allowed to point out all those years ago, there is a link between deprivation and educational failure that is pervasive and remains central to the issue today.

It may seem strange to find extreme deprivation in lush and leafy Buckinghamshire but it certainly exists. I have been struck by the fact that a disproportionately high number of our students come from poor homes, where in many cases there is or has been a history of alcohol or drug dependency and/or mental health problems, and where there may also be a history of criminal activity within the family. In this context, the work done on early intervention over the last few years by my friends in another place, Iain Duncan Smith and Graham Allen, has many valuable lessons for what we face in the BESD sector.

In my brief involvement with the Buckinghamshire BESD schools, I have been hugely impressed by the work done by the staff day in and day out. I also acknowledge the excellent support offered by the local authority, both in funding and through its specialist advisory staff. The previous Government’s report, Every Child Matters, has provided a common and widely supported policy framework for their work. I hope it will continue to be the touchstone for the Government going forward. I confess that I knew virtually nothing about the BESD sector, or indeed special education, before I became a governor. My motivation for accepting the position, which will be shared by many noble Lords, was simply to give something back. Seeing these schools develop and flourish in the last few years has been one of the most rewarding experiences of my life.

I close by asking the Minister to take on board three points that will be helpful as he responds to the debate. First, I echo some of the points that have already been made about the need for one proper definition of BESD, since all the services involved—health, social care and education—have slightly different ones at present, which simply causes confusion. Secondly, could the Minister do as much as he can to ensure that BESD schools are treated as a distinct sector by his department, and that the work they are doing to ensure that every child matters is properly supported for what it has achieved and can achieve? Finally, I have explained the steps that we have taken in the Chiltern Way Federation to work with parents and students in school, and that we work with a range of other service providers, including health, social services and the police. It occurs to me that the Minister might enjoy visiting our schools to see this approach in practice and the partnership that works around it. If so, I would be happy to facilitate such a visit.

15:42

[Baroness Walmsley]

My Lords, it is my pleasure to follow the excellent maiden speech of the noble Lord, Lord Stevenson of Balmacara. The noble Lord hails from the north-west of Scotland and read natural sciences and chemistry at Oxford. He was a senior policy adviser to the former Prime Minister Gordon Brown. For 11 years he had a most distinguished career as director of the Smith Institute, which, as noble Lords will know, is a centre-left think tank, established in the name of the late, great John Smith, former leader of the Labour Party. The institute describes its purpose as pursuing,

“policies for a fairer society”,

and aims to build on John Smith’s passion for social justice—a passion many of us in this Chamber share. The noble Lord has a hinterland and I am delighted to welcome a fellow gardener to your Lordships’ House. No doubt the noble Lord, Lord Puttnam, will be pleased that the noble Lord is also very keen on cinema and was the director of the British Film Institute. However, the noble Lord will be pleased to learn that he is not alone in your Lordships’ House in having an interest in beekeeping. Here he will find plenty of workers and not a few queens. He will also find a tremendous cross-pollination of ideas in this Chamber, to which he has already begun to make a valuable contribution. I think we can assure him that we will keep him very busy. I look forward to many more excellent speeches from the noble Lord.

I turn now to my own thoughts about the Government’s policy on special educational needs, following the Ofsted report. I will concentrate on speech and language needs and teacher training. The previous Government found that children with speech and language needs were not being well served and set up the Bercow review, led by the now Speaker of the House of Commons. Its report has served as a useful basis to allow us to move on. Your Lordships will be aware that my honourable friend Sarah Teather, the Minister of State for Children, has now sent out a call for views about the experience of children with SEN and their parents, with a view to making further improvements. Ministers are considering options on how to give parents a choice of educational settings to meet their children’s needs; transform funding for children with SEN and disabilities; make the system more transparent and cost-effective while maintaining quality; involve parents in any decisions about the future of special schools; support young people with SEN and disabilities post-16; and improve diagnosis and assessment to identify children with additional needs early. All these objectives are important to children with speech and language impairment.

Following the publication of the Ofsted report, a great deal was made of the suggestion that there may have been a large amount of misdiagnosis of children with special needs. I am convinced that this was something of a distortion of what the report actually said. However, it is true to say that if teachers were better trained about special needs, and if leadership teams were more focused on them, there might be less necessity to attach a label to some children and their needs could be fulfilled by more flexible interventions in the classroom. This would avoid the need for parents to have to battle for additional services. While I am all in favour of improving the qualifications of teachers and turning the profession into a Masters level one, it is important to emphasise the value of teachers learning about SEN and child development during their initial teacher training. This will underpin their practice for the rest of their careers and allow them to make sounder professional judgments. We must not lose that in initial teacher training as we move to more classroom-based training. As we free up the curriculum and rely more on the expertise of teachers, we have to move from training teachers to deliver the national curriculum to training them in pedagogy and child development. Then perhaps we will have teachers who understand how to use the tools already available to them for recognising and diagnosing special needs, and who have real ambition and aspiration for all children with special needs.

It is true that most children with speech and language impairment and hearing impairment are just as able as the rest of the population to get good GCSEs and A-levels and to go to university, given the right interventions. However, sadly, some children are labelled as having learning difficulties just because of speech impairment. It is sad to hear a parent say, “They think my child is stupid”, when all he needs is speech therapy. However, as with many things, early intervention is important. I welcome my Government’s announcement that all children will be screened at five. However, I urge the Minister that we need screening in the early years, and perhaps yesterday’s announcement about two year-olds will give us more opportunity to do that. This is already Liberal Democrat policy. We need to screen children soon after they move to secondary school, perhaps after the transition year when they have settled down, and always if a young person enters the criminal justice system. As the noble Lord, Lord Ramsbotham, is not able to be here today, let me be the one to remind the Minister about the large number of young offenders with speech and language impairment. Will he therefore say how the focus on avoiding custody and having community penalties for young people will affect the drive to identify and deal with this sort of special need among young offenders?

15:47

[Baroness Grey-Thompson]

My Lords, I thank the noble Baroness, Lady Warnock, for this debate. I also express my personal gratitude to her as, without the Warnock report, my life as a disabled person would have been very different.

My experience of education was in a mainstream, inclusive environment, before anyone knew those words. I went to a local primary school and was paralysed at the age of seven. My head teacher was, luckily, too busy to let the local education authority know of my change in circumstances, as this would have resulted in my being immediately removed from the school. The head teacher of my local high school, on finding out that I was a wheelchair user, wrote to my parents and informed them that I was not welcome—they did not take pupils like me. I still have the letter.

There were options: going to a special school; being assessed for a year and hoping that I would get through; or, as my parents did, fight. It was 1980; my parents found the Warnock report and had a discussion with the local education authority. My parents were persistent. Parents of children with special needs should not face the same battles today that my parents did.

The school I eventually attended was 10 miles away from my home and was the only mainstream school in South Glamorgan at that time allowed to accept wheelchair users—and there were 30 of us. The number was capped. There were few ramps and the local education authority employed six women to carry the wheelchair users up and down the stairs at break-time—a lift was considered too expensive. It was great for my education but not holistic in terms of socialising with students my age because of access issues. I was repeatedly tested by psychologists, who asked me mostly if I knew what day of the week it was. Later on, specialist careers advisers told me that I was wasting my time going to university because the best job I could ever get would be answering phones. What shocked us at the time was the lack of expectation from some people in authority of what disabled people could achieve—and labelling was not the answer.

How much has changed? In the 30 years since, there have been many positive changes, but if you have a child with special educational needs it can feel like a constant battle. Rightly or wrongly, a statement is the only way that parents can feel that their child’s rights are protected and cannot be ignored. What parent would not want to be in a position to do this?

What I do see, however, is that there is a challenging system that is hard to regulate and change effectively. There is a lot of complexity, and this is highlighted by such things as a link between disadvantage and special educational need. At secondary-school level, pupils with special educational needs are more than twice as likely to be eligible for free school meals. The figure is 25.9 per cent for those with SEN but without statements, and 24.9 per cent for those with statements. This compares with just 11 per cent of those who have no special educational need.

It is not enough for a child with special educational needs just to be part of an education system; they must leave school with an education of body and mind, and with an experience that is as close as possible to someone who is not labelled SEN. Children with SEN are not one homogenous group; there have to be many solutions to this issue, and individual needs should be put at the centre and protected. Statementing should not be a tick-box exercise to show parents what they can get and what the minimum provision is. Where we are now is an evolution of relationships between government, education providers and the voluntary sector, but we cannot lower our expectations. Children with special educational needs must be encouraged and motivated, as must their parents and teachers, and provision needs continually to be improved.

I welcome the Ofsted report because it shows us where we are but, more importantly, what we still need to do. We still need to look at the more deeply held views of what our society thinks about disability, impairment or special needs. We should also listen to children’s aspirations when we have the opportunity to positively influence. If children with special needs feel that they are excluded, how can they learn to contribute? When I told my parents that I was going to be an athlete at the age of 13, there were no professional disabled athletes in the UK. No one knew the Paralympics, but my parents did not hold me back.

There also needs to be strategic and integrated provision which does not end at GCSEs or at 19. It needs to line up with realistic educational and work opportunities, employers who are open, a society that is accessible in all forms, and a transport system that enables people to travel. We have continually to challenge assumptions of what people can and cannot do, and this starts with an education for those with and without special educational needs. I have been very interested to hear proposals for personal budgets for children with SEN and what that might mean. Training and education is, again, key. I look forward to seeing more details on the positive impact that this could have.

If I have one disappointment in all the years since the Warnock report, it is that we have not moved further in including the provision of physical activity in this process. I would like to see this change. This is not a fluffy add-on; it is about the right of children to be included in play, physical activity or indeed a sporting environment where they are not excluded for reasons of health and safety, or because it is too hard. The benefits are extensive—and for the whole of their lives. This can easily be changed by looking at teacher-training practices across the board.

The question is: what do we want from children with special educational needs? If we want them to work, to contribute, to be healthy and to be the best they can, we have to get their education right.

15:53

[Baroness Linklater of Butterstone]

My Lords, I am grateful to the noble Baroness, Lady Warnock, for initiating this debate. She is a towering figure in the world of SEN since her seminal report in 1978, followed by her pamphlet in 2005 reappraising SEN provision and practice and showing where things ought to change. Hers is a voice of sweet reason and we all owe her a great deal.

I declare an interest as the founder and first chairman 18 years ago of a small, specialist school for children with SEN in Scotland. I was inspired by the experience of our daughter, who was borderline for a statement in England. She endured four miserable years in mainstream schools in England and Scotland and failed to learn or thrive in that experience. That changed for her and all those who have since come to the New School, Butterstone, which is my school. By the time they leave us, these children are resilient—having had a full, appropriate curriculum—ready to go on to college or work and, most importantly, visibly more confident and happy human beings who know what it is like to have friends, to be valued and to have a life to look forward to. That is not the fate of many children in this field.

The Ofsted review, A Statement is not Enough, resonates all too strongly. The truth is that large numbers of children identified with SEN are being failed by the system—1.7 million children in England alone. In the school population, 2.7 per cent of children have a statement of need, and school action or school action plus applies to a further 18.2 per cent. Of course, there is a huge variation in standards and Ofsted was quick to show that provision was good or outstanding in 41 per cent of visited providers and 36 per cent of their case studies.

The key messages from the Ofsted review are that there must be a shift to a proper focus on outcomes for children rather than on process; that the standards of assessment must be improved in quality and consistency; and that statements are not used as a panacea for inadequate teaching or indeed straight laziness, as the noble Baroness, Lady Warnock, has said. That last comment is particularly damaging. As has already been said, the system has become confusing and complex in its legislation and language. Identification should come much earlier for most children. In turn, that demonstrates the urgent need for better training of teachers in SEN generally, a greater understanding of needs and an ability to deliver. With appropriately trained teachers and good assessments, children’s outcomes are vastly improved in terms of academic achievement and, so importantly, of their life chances.

There is powerful evidence in the review of the battles that families go through in getting assessments, appropriate help and provision for their needs. It is a miserable, frustrating and lonely experience, which often reflects the child’s experiences in school. Parents and siblings pay a price and much more account should be taken of their needs and wishes too. Inclusion in mainstream is the key challenge and it is where most with SEN will spend their whole life. Just being avoided, let alone bullied, can mean that you are as excluded as if you were on a desert island. Hardly a child comes to my school who has not experienced significant teasing and bullying, where their crime is being vulnerable and different. It can make learning impossible. The noble Baroness, Lady Warnock, describes inclusion as a feeling of belonging, which underpins well-being and successful learning, too. When unconditional acceptance is truly felt, it is wonderful to see how self-esteem grows, starting with eye contact, changed body language, and so on, followed by achievements in the classroom which exceed all expectations. Without true inclusion, the long-term price to be paid by these children, their families, the adult services, the criminal justice system and others is high indeed, as I know both from my social work and from prison life.

The specialist school TreeHouse’s findings for autistic children’s life chances, of which we shall hear more shortly from my noble friend, show that, after school, 15 per cent can look forward to a full-time job and 90 per cent will be living at home with carers or in residential homes. The latest and only relevant figures I could find for 2009-10 show that, of the adults in the general population with broader learning disabilities, aged 18 to 64 and known to the adult social services, only 6.4 per cent were in employment of some kind. We must do better by this group, whose life chances depend so much on their early life opportunities. That is not a future a child with SEN should have to aspire to.

The Minister, Sarah Teather, is producing a Green Paper and has outlined her priorities as: the improvement of parental choice and a less adversarial system; preventing the unnecessary closure of special schools; a transformation of funding to a more transparent, cost-effective and high-quality process; better support post-16; and better early diagnosis. She has definitely got the message, and I look forward to seeing her deliver.

15:59

[Lord Low of Dalston]

My Lords, it is a pleasure to follow the noble Baroness, Lady Linklater, whom I first met during a slightly fractious discussion—as such discussions are apt to be—of a report on special education by the noble Baroness, Lady Warnock. Like all other noble Lords, I congratulate the noble Baroness, Lady Warnock, on bringing forward this subject for debate this afternoon. She speaks with unique authority on these issues, and we all listen to what she has to say with the greatest respect, although I think that Ofsted points to solutions to the problems that it has identified which are slightly more humdrum and workaday than she suggests.

I take as my starting point the sentence in the coalition's programme for government which reads:

“We will improve diagnostic assessment for school children, prevent the unnecessary closure of special schools and remove the bias towards inclusion”.

Throughout most of its history, the field of special education has been bedevilled by dogma. For a long time, this asserted that disabled children could thrive only in special schools. For the past 20 or 30 years, however, the field has been blessedly free from such dogma. A settlement has been arrived at based on a mixed economy of provision, which acknowledges a decisive shift towards inclusion, with progressive re-engineering of the system to support inclusion as the goal, but with a place reserved for specialist provision for those whose needs cannot be met in the mainstream, either now or in future. This seems to me to get it about right, and is the position for which I have argued all of my adult life.

In other words, I think that there should be a bias towards inclusion, provided that the needs of the child can be met within a mainstream placement. Special schools can have a segregating effect and help to foster the perception that disabled children are different. Conversely, mainstream schools can help to normalise disability. Separate socialisation restricts the full development of disabled and non-disabled people alike. The education system can do much to remove the barriers of ignorance, prejudice, intolerance and misunderstanding that ultimately lead to discrimination and a refusal to accept disabled people as full members of the community.

There is a threat to that enlightened consensus posed by those who believe in what one might call total inclusion, with all disabled children being educated in mainstream schools and all special schools being closed. It is a substantial threat. Its thinking largely informs the education provisions in Article 24 of the recently adopted UN Convention on the Rights of Persons with Disabilities, which was negotiated by the disabled elite, who are best able to cope with inclusion. Organisations representing blind, deaf and deaf-blind children—I declare my interest as being associated with several such organisations—had their work cut out to retain the option of specialist provision to meet their particular needs.

So where once opposition to an enlightened approach to the inclusion of disabled children came from the right, today it comes from the left. People sometimes ask me whether my views about inclusion have changed over the years, to which I reply, “No, but the emphasis may have needed to change”. Where once the advocates of moderate inclusion policies had to argue for the creation of inclusive options, today they may need to defend the retention of some specialist provision. Notwithstanding the challenge from those who believe in total inclusion, I believe that the enlightened consensus around moderate inclusion policies and a mixed economy of provision remains largely intact and that there is not a bias towards inclusion which goes beyond what is warranted and which needs to be removed.

I was once inclined to think that a bias towards inclusion which went too far might have been developing in education legislation when Section 316 of the Education Act 1996 was amended to remove consideration of the needs of the child as a safeguard against inappropriate inclusion, but I am now clear that the duty to educate children with special educational needs in mainstream schools does not apply if that is against the wishes of the parent. I therefore do not think that the legal framework needs to be altered, although it would probably be wise to retain the interpretive declaration entered by the previous Government, on ratifying the UN convention, to make clear that the UK general education system includes both mainstream and special schools, as well as the reservation to allow for circumstances where disabled children's needs may best be met through specialist provision some way from their home, meaning that they would need to be educated outside their local community, which is against the model of provision enjoined by the UN convention. The effect of these is to maintain the present policy and legislative framework regarding inclusion—what I have termed the enlightened consensus around moderate inclusion.

What of the Ofsted review? One of its conclusions—that schools should not identify pupils as having special educational needs when they simply need better teaching—chimes in rather well with the thinking of those who espouse a strongly inclusive approach. They focus attention on improving the learning experience for all children in such a way that those traditionally conceived of as having SEN are benefited, albeit indirectly rather than directly, by whole-school approaches.

For the rest, despite florid misinterpretations of Ofsted—to the effect that as many as half of children with SEN might be wrongly diagnosed as such—the review’s main conclusions seem eminently sensible. They reflect a growing consensus emerging from recent reports that the emphasis should be on working more smartly and in a better-targeted way to improve school practice, focusing on outcomes, quality of assessment and the effectiveness of additional support rather than on a major redesign of the system. There may be some overidentification at the school action stage—there almost certainly is, as the noble Baroness, Lady Warnock, demonstrated—but that is not to say that there should not be a school action stage at all at which children are identified as needing additional support, ideally mobilised as early as possible. There may also be a need, as the noble Baroness, Lady Warnock, suggested, to simplify the legislation, which has rather growed like Topsy, with some rationalisation of its SEN and disability discrimination components.

16:07

[Lord Clement-Jones]

My Lords, I join others in congratulating the noble Baroness, Lady Warnock, on initiating this debate. She always speaks with huge authority and lucidity and, over the years, she has been tenacious in her focus on SEN provision. I also congratulate the noble Lord, Lord Stevenson, on an excellent maiden speech.

It is impossible to tackle all the issues that are set out in the review and I dare say that noble Lords are taking slices of the report as we go along. I speak from the perspective of a former chair of TreeHouse, the autism education charity, and a former vice-chairman of the All-Party Group on Autism, so I shall concentrate on that area. It is clear that outcomes for children and young people with autism are currently very poor. Recent research suggests that only 15 per cent of adults with autism are in paid employment, while 90 per cent are living either with their parents or other family carers or in residential care.

Today, I want briefly to concentrate on the assessment and statementing process, particularly as we know that the Government will be producing—later this year, I hope—a Green Paper on SEN that will encompass statementing and assessment. Progress has been made in a number of significant ways since the All-Party Group on Autism published its manifesto in 2003, and I appreciate the previous Government’s efforts in that respect. However, in its manifesto, the all-party group set a modest target of all children with autism being diagnosed by the age of five, which certainly has not yet been achieved. We need to do more, and I hope that this Government—my Government—will.

Assessment and statementing are emotionally difficult; in my experience, this is a difficult time for parents, particularly in relation to the profoundly autistic. The paradox is that, although the condition may be more obvious, local authorities often drag their heels because of the sheer costs involved in sending children on the autistic spectrum to special schools. As has been noted, Ofsted was critical in its report of the ponderous mechanism for assessments and issuing statements. It said that in some areas it was well done and that that led to better outcomes, but that in general assessments were inconsistent, which led to confusion and a sense of unfairness among parents. Sometimes children were prevented from accessing specialist education provision unless they had a medical diagnosis. It said that the quality of assessment should be improved. I hope that in the Green Paper, the Government will take that on board.

We know that early intervention is vital to enable children with autism to fulfil their potential. In practical terms, this means getting an assessment of need as soon as difficulties arise and then providing support without delay to help children overcome or manage some of the core challenges associated with autism. Too many children with autism are not getting diagnosed early enough. TreeHouse research has found that the average age of diagnosis is six years and seven months, when diagnosis should be possible at 18 months. Ofsted recommended that any further changes to improve the system of assessment should focus on quality and improving outcomes. It also recommended that a common system of assessment should be used across different services, and I listened with great interest to what the noble Baroness, Lady Ritchie, had to say. In 2007, the Children, Schools and Families Select Committee recommended that different service models should be piloted to test the separation between assessment and funding so that a full and frank assessment of the child’s needs could be made independently of budgetary decisions. The noble Baroness, Lady Warnock, referred to this. It should lead to earlier and more accurate assessments of need and a support package quickly following the assessment. This was then recommended by the Lamb inquiry.

What happens now? Do we wait for the Green Paper before proceeding with that implementation or will an implementation strategy for the Lamb inquiry recommendations proceed apace? Ofsted also suggested that incentivising local authorities to provide appropriate support as soon as a child’s needs have been identified, rather than allowing costs to escalate through exclusion to more expensive provision, would create better outcomes for children and families and would be a more cost-effective solution for local authorities.

At the end of the day on this topic, parents whom I have talked to have said that the worst experience is having to go through the special needs tribunals—the SENDIST process. I hope the Green Paper will address the procedures used in those tribunals and the way they operate.

Finally, we also have to reflect the concerns of organisations in the autism community at the higher end of the spectrum, particularly about school reforms and SEN. The Academies Act 2010 represents a major change in state education, and it is important that children with autism and other SEN conditions do not lose out. The Act makes it easier for schools to gain academy status and allows the setting up of free schools. Schools with academy status enjoy less regulation in areas such as exclusions and admissions. They will also receive a central-spend equivalent grant in lieu of services, including for children with SEN, that are no longer provided by the local authority. We need to be very clear about where responsibilities and budgets lie. Is it the Secretary of State who is now accountable to Parliament for ensuring that academies fully meet the needs of children with SEN? In academies set up under the previous Government, exclusion levels were twice as high as in other state secondary schools. We must ensure that exclusion levels for children with SEN do not increase through the new academies programme.

I look forward to the Minister’s reply and to the Green Paper to come.

16:09

[Baroness Howe of Idlicote]

My Lords, I add my thanks to my noble friend Lady Warnock for this debate, which will certainly give the Minister the opportunity to spell out in more detail the degree of priority that will be given to SEN and disabled children within the education system. It was good news to hear that the education budget will rise and that there will be a £2.5 billion pupil premium to support the education of disadvantaged children, but we know that there will be many demands on that budget.

Ofsted has done a thorough job visiting and taking evidence from schools in different parts of the country and from a wide range of those involved, including the pupils themselves and their parents, who, as we have already heard, are a fairly unsatisfied group. If one remembers, too, that the 1978 report of the noble Baroness, Lady Warnock, estimated that as many as 20 per cent of all children had SEN, it is clear that the group which we are concerned with is certainly a significant one. If one adds to that the figures emphasised as important by the Special Educational Consortium—that 87 per cent of exclusions from primary and 60 per cent from secondary schools are SEN pupils, and that at secondary school those with SEN are more than twice as likely to be eligible for free school meals—it is clear that a high proportion of these children do indeed come from the most deprived backgrounds and therefore are doubly in need of support if they are to be enabled to reach their potential.

Ofsted's conclusions are important. Clearly, statemented children need the maximum help that the state can provide. However, as other noble Lords have said, it is disturbing to read that as many as half of the pupils identified for school action and school action plus would apparently not need to be so labelled if the school concerned had focused on improving teaching and learning for all pupils.

Three things stand out for me after reading the report, and on which I hope the Minister will comment. The first is the clear need to simplify the procedures by which pupils are assessed for SEN or disability help, ensuring that the system is clearer for parents, schools and other education and training providers, and, equally important, that the same assessment procedures are wherever possible used by all the services involved.

Secondly, the diagnosis procedures should begin as early in the child's life as possible. The noble Lord, Lord Clement-Jones, has already quoted the evidence given by TreeHouse that the average age for diagnosing autism is six years and seven months, and so on. We know—again, as we have heard—that such diagnosis can begin to be made for a child at 18 months. That clearly illustrates that today's children with SEN will already be unnecessarily falling behind the rate of progress of some of their classmates. In an earlier education Bill some of your Lordships, headed by the noble Lord, Lord Elton, tried to include a provision ensuring that all children were tested for potential complications of this kind before they started school, but, alas, that amendment was lost in a previous wash-up. I hope from what I have heard today that there is an indication that—even if it is not early enough, but at least before five—the coalition Government will give a commitment to make the tests necessary.

The third point seems basic to achieving better results in future. It is to include in all teacher-training courses a basic element of SEN. There will of course be a need for more specific training for those teachers who will specialise, but the main need will be enough training for all teachers to enable them to realise when a child should be referred for more expert assessment.

16:18

[Lord Addington]

My Lords, when it comes to a debate on special educational needs, I am afraid that I start to reminisce. It is about 24 years ago that I made my maiden speech in this House on the problems of dyslexia. If memory serves, I was standing almost diagonally across the Chamber from where I am standing now. The consistencies of the arguments are very much apparent to me: we have a much better system, and everyone is much better informed. Like the noble Baroness, Lady Grey-Thompson, I can thank the noble Baroness, Lady Warnock, for the fact that I was allowed to get through and complete an education process. I say to the noble Baroness, Lady Grey-Thompson, that I think the worry was more about what one might say than about what one actually had said.

However, many of the issues raised initially remain. We have heard from various speakers about the problems of inclusion versus specialist education. I remember that the noble Baroness, Lady Warnock, almost had a fatwa declared against her by various people who had decided that she had changed her mind and said that we did not need mass inclusion any more. “How dare you change your mind?”, was their attitude. Other people said that no special school should ever be shut. The fact is that your experience will depend on the disability group with which you are most associated, and on your experience or, more usually, on that of your child. That will depend very much on the time you are living in and where you are living. That is the consistency. When the noble Lord responds, I am afraid that he has got this historical problem.

We have a complicated system, which I have been talking about for so long. The summary of the report points out, on page 8, that it is a very complicated system that we have added to over the years. I and others in this Chamber have helped to make it complicated. There are no two ways about it: many of the biggest offenders are in this Chamber, even if they are not all here today. We have added to it because we are always frightened that we will be ignored or not taken seriously because the measures are difficult or expensive.

The previous Government tried to get rid of statementing. I was one of the people who said no, because, although it was imperfect, it was the only show in town. This means that if you have special educational needs and want to get the best out of our state education system, you should select your parents well. I reckon that the best combination is a lawyer and a journalist. Then you have a hold on the system, because no teacher or education authority likes being hauled up in front of a court or exposed in a paper. That is the most efficient club that you can have—and we need clubs. This Government, of whom I am a supporter, have given an undertaking that they will do initial assessments. Also, it is clear that we need assessment processes for all the different disability groups that are represented within about four metres of me now—and there are many more noble Lords who know about them. A different assessment process is required for each one. Dyslexia is a disability that you will not be able to spot at two. You may well spot it at five now: we used to say at about seven.

The report also says that many people who are said to have SEN might respond to better teaching. I raise one big caveat. I know dyslexia well, and moderate dyslexia does not come from a background where education or the use of literature is in any way regarded as abnormal in the household. You may well say, “They could do with a little bit of extra teaching” when actually they are dyslexic. I am afraid that if you want to check this out, the experiment has been done and you will find the results in the prison system, alongside many sufferers from Asperger's. We have a reverse battlefield medicine idea about this—an expression that I have used too often in this House. On the battlefield, you patch up the easy ones first. Here, the most obvious problems are dealt with first and attract funding, so we miss the large group.

If you come from a working-class background and perhaps your parents have literacy problems, your chances of getting the best out of the system at the moment are very slim. If you come from a middle-class background and have a good accent and plenty of money, you will take them on and get the best out of the system—if we have a series of assessments and better teacher training for identifying problems. I am not asking for everybody to be an expert. The British Dyslexia Association, of which I am a vice-president, reckons that it can run a scheme that takes three hours for identification—no more than identification, but if you at least identify the problem and do not compound it by doing the wrong thing and labelling the child as stupid, you have taken an incredibly important first step. If you can do that with dyslexia, similar programmes can be provided for other groups. If we can work this in, back up any assessment programme—because whichever way you do it, you will miss people—and accept that we do not have one easy answer, we stand a chance of getting this right. Any progress that I hear about today will make me very glad.

16:24

[Lord Condon]

My Lords, I declare an interest in that I have a grandson with a statement of special educational needs in the state education system. I, too, thank the noble Baroness, Lady Warnock, for initiating this debate and I acknowledge her great experience and contribution. I also admired the maiden speech of the noble Lord, Lord Stevenson of Balmacara.

My focus is the needs of, and the response to, children who have a statement of special educational needs. The Lamb report on special educational needs published last year, followed by the Ofsted report this year, clearly set out what needs to be done, and there is no mystery about what needs to be done. In his letter to the then Secretary of State for Education, dated April 2009, Brian Lamb wrote that too many parents,

“reported that the system was not on their side and said they had to ‘fight’ or ‘do battle’ with the system to get what they needed for their child”.

Two brief quotes from the Ofsted report also summarise the current situation. Ofsted states:

“The review found both widespread weaknesses in the quality of what was provided for children with special educational needs and evidence that the way the system is currently designed contributes to these problems. Too often, the agencies focused simply on whether a service was or was not being provided rather than whether it was effective”.

Lamb, Ofsted, parents and professionals all know what needs to be done. The challenge is to make it happen.

Since 2003, while the proportion of pupils with less intensive needs has increased from 14 per cent to 18.2 per cent, the proportion of pupils with a statement decreased from 3 per cent to 2.7 per cent. Because of the resource implications of statementing for local authorities and schools, parents encounter an application process which is complex, intimidating and adversarial, and which tests them to breaking point and beyond. When parents are at their most vulnerable and physically and emotionally drained, they can be made to feel inadequate at best and, at worst, conspiratorial cheats. Well educated parents in supportive relationships with extended family networks can almost be broken by the process. What must it be like for parents with no support, multiple problems or limited verbal or written skills?

My concern, my challenge, is not about the good and dedicated professionals in schools, local authorities or health and specialist services. It is, as others have described today, with the system and with the outcomes. Let us assume that a child with genuine needs receives a statement. The next challenge for the parents is to ensure that the statement is translated into meaningful action and education. Mainstream schools struggle to deliver the requirements of the statement and we do not have sufficient special schools to provide facilities or outreach programmes to support the mainstream schools. I believe that there is a real danger that under the current system statemented children in mainstream schools, despite all the love and care given to them so freely, are most likely to be maintained and contained at a lower plateau of educational achievement than their potential deserves.

The statement review process tends to focus on inputs rather than outputs and achievements. There is often a total disconnect between the plan and what parents experience and know happens. Speech, language and occupational therapy can be specified, but parents know that well meaning and untrained support staff in the classroom rarely have the skill or expertise to make a difference. Parents know that if they challenge the endless box-ticking approach relating to inputs, they risk being labelled as difficult or trouble-makers. Despite the warmth, friendship and care which many professionals give so freely to parents and children, parents are too often left with a sense that they are in an adversarial struggle with a system whose default position will constantly fail their children unless they constantly push back against it.

The Lamb report and the Ofsted report have clearly benchmarked the strengths and weaknesses of the current system. No one in your Lordships’ House can be satisfied with the status quo. In addition to fulfilling our legal and moral obligations and demonstrating that as a civilised society we care about, and care for, these children and their families, there is a compelling business case for us to improve. Because the system fails so many children and young people, they remain overly dependent on state support throughout their lives. If developed to their full potential, many children and young people could live more independent, fulfilling and dignified lives with substantially less reliance on the state.

The parents and families of these children are too often ground down and exhausted by the system. However, they are also blessed by the discovery of reservoirs of love and inspiration by being at the centre of their wonderful children’s lives. Let us find ways, even in these difficult financial times, to support their ambitions and not confound them. I hope that the Minister will commit the Government to action and progress.

16:29

[Lord Williamson of Horton]

My Lords, the Minister will recall that the Academies Bill, which I believe was his baptism, was one of the first Bills of the coalition Government to go through this House. There was concern that it did not make specific provision for special educational needs pupils in the new academies. The Government rightly responded to that omission during the passage of the Bill, but that demonstrated that this House is watchful of special educational needs, and today it is good to have this debate. I thank the noble Baroness, Lady Warnock, for initiating it following the very full report from Ofsted that was published last month. Like the noble Baroness, I stress that, although there have been criticisms of the report, the sample taken was a large one and that must be taken fully into account.

The report evaluates as best it can how well the legislative framework and the arrangements serve children and young people with SEN and/or disabilities. In my view, the report points clearly to areas where we can do better. I will refer to those areas, but I do not do so in a critical way because I recognise that the problems confronting children, parents, teachers, schools and local authorities are difficult, diverse and therefore often not easy to solve simply by setting out a structure for action. However, I will highlight some points to which the report draws attention and which underlie, in some cases, more than one of their recommendations. In particular—I know there has been criticism of this—is the identification of pupils with SEN, currently 1.7 million of school age, appropriate? In short, is the division between school action, in the form of additional support within the school or school action plus in the form of additional support bolstered by outside help and those with a statement of SEN who clearly need intensive support, working well? The report makes specific criticisms of the workings of the system. I have to say that I do not object to the definitions and the action which ought to be taken because the vital question is how schools and other authorities respond to those needs. We know from a number of sources how unhappy parents are with the way that the arrangements operate on the ground. We know that we should take account of it.

What the report is really about is the working of the system, and we ought to concentrate on that. I shall now pick up on the points made in the report about the system to which I attach most importance, and I hope that the Minister will comment on them. First, the report shows that some schools have thrown the net of school action very wide and have attributed SEN to some pupils very broadly. It states that half the schools used low attainment and relatively slow progress as the principal indicator of special education needs, while in other schools SEN pupils had needs that were no different from many other pupils in that they were not being taught well enough and, perhaps even more important, their expectations were allowed to be too low. On page 8, the Ofsted report states quite forcefully that any change in the system should focus inter alia on—here I give the only quote that I shall make from the report—

“ensuring that schools do not identify pupils as having special educational needs when they simply need better teaching”.

Secondly, I am concerned that the quality of effective identification and good-quality provision was not common. In particular, where a child was identified as having SEN requiring school action plus or even at statement level, further resources were provided from outside the school but this was often—I repeat, often—not of good quality and did not lead to a better outcome for the child or young person. That is certainly a disappointing conclusion and we ought to take account of it.

Thirdly, monitoring and evaluation were, in some cases examined by the inspectors, insufficient or almost non-existent. I am sure that some excellent work is being done, but when the inspectors use the word “often” in relation to provision not of good quality, it is again a cause for concern. It seems that some agencies concentrate on ensuring that a service is being provided, which is a good thing, but less on whether it is effectively meeting the need. On the contrary, where there was close evaluation of the outcomes, the additional support was valuable. So the potential is there. I conclude on this point that that is not basically a fault of the system but more a call for greater emphasis on the effectiveness of what is provided.

In some other areas of legislation and guidance it seems that the cumulative effect of minor changes has made things difficult for all of us, particularly for the parents and the children with SEN, who are the ones who run up against all the problems in interpreting and navigating the system. This is also an important point and we ought to do our best to remove this difficulty because it is depressing to hear that the parents of these children take that view in many cases.

I hope, therefore, that the Minister will reflect on all these questions: the too broad a use of the term SEN; the quality of additional provision for school action plus and statemented children and young persons with SEN; better evaluation of that provision; and, possibly, the simplification of legislation and guidance.

16:36

[Baroness Morgan of Drefelin]

My Lords, I, too, congratulate the noble Baroness, Lady Warnock, on securing the debate, and I add to the many remarks that have already been made about the wisdom she brings to it, especially given her seminal report in 1978. I was still at school and, as someone who had a special interest in it, I can remember the Warnock report being published at the time. I also found my noble friend’s maiden speech very enjoyable. I remember that when I came into the House we had a debate about jam; I therefore do not see why we cannot have a debate about honey. I very much enjoyed my noble friend’s maiden speech.

In preparing for the debate I read an article by the noble Baroness, Lady Warnock, that was recently published in the Daily Telegraph. In it she describes the changing attitudes in society to children with special educational needs and disabilities. She also referred to the fact that when her report was published there was the shadow of the 1980s education cuts still to come. I thought that was an interesting context in her first seminal work, and today’s debate is timely because of what we can all see coming down the track for education.

I agree with the noble Baroness that the Ofsted report is an important contribution to the debate and to how we go forward. I agree also that when we were in government we considered the recommendations of the Lamb report an extremely important contribution as to how we should take forward provision for children with special educational needs. I feel strongly that we must have the highest expectations for children with special educational needs and disabled children. I believe, as do others on my Benches, that these children should have every opportunity to fulfil their potential and pursue their talents. As the noble Baroness, Lady Walmsley, pointed out, access to support for achieving their aspirations should not be a battle for parents. I think that we agree across the House on that.

The education and children’s social care system, particularly schools, should be held to account for how well it meets the needs of children with special educational needs. As others have generously said, the previous Government worked in close partnership with the voluntary sector and providers to attempt to develop a system capable of meeting those needs. Our contribution has been recognised in comments from around the Chamber and by the Government. At the election, we made a clear commitment to expanding the number of specialist dyslexia teachers, to improving teacher training for children with autism, to improving the statementing process to give more support to parents and to increasing the supply of teachers with specialist skills, particularly those working with children with severe learning disabilities in special schools. We on these Benches took the concerns very seriously. However, we were never complacent and we are under no illusion about the challenge facing the Government now. That is why we commissioned the Lamb and Ofsted reports and why this debate is so timely and so important.

However, we face the coming clouds of education funding challenges. I have a number of questions for the Minister, which I hope he will be able to help me with today. If he does not have the notes to hand, I would be very happy to receive a letter from him. Yesterday was a very dark day for children’s services. It is now clear that in order to write the great fiction of protected education spending into the story of the spending review, children and family services will bear the lion’s share of the 12 per cent cut to the budget of the Department for Education. We can now perhaps see why it was so important to change its name from the Department for Children, Schools and Families and to write out children and families from the title. As the noble Baroness, Lady Ritchie, eloquently explained, schools rely on local authorities for significant funding. As we see the national indicator set and the ring-fenced funding disappear, I fear that children’s services will suffer a very quiet and invisible demise. I look forward to reassurance from the Minister. Children with SEN and disabled children rely on those services. Given that the Chancellor was prepared to be very clear about the provision of social care for adults, could the Minister be very clear for us about the importance of the provision of social care for children. Can he provide reassurance about specialist services for children with SEN?

We have heard much about the pupil premium, which I hope, but have yet to be convinced, is more than a rebranding exercise. We were promised in the coalition agreement that the premium would be drawn from outside the schools budget and would provide additional funding for disadvantaged children, many of whom have SEN. However, the spending review document states clearly that the premium will “sit within” the settlement for schools. We are given to understand that the premium will simply lump together existing budgets, which may result—I look forward to being reassured otherwise—in borrowing from Peter to pay Paul, with the regrettable effect that Peter's school will face cuts.

Will the Minister please explain for the benefit of the House how his Government can justify calling the pupil premium additional when it is simply a rebranding exercise? These are important questions for the support of children with special educational needs. There will be winners and losers following this reorganisation of the schools budgets, so will the Minister give us assurances that there will be proper support for schools as they go through transition? Will he ensure that there will not be a repeat of the fiasco with the Building Schools for the Future announcements?

The Department for Education has yet to publish its business plan, so will the Minister tell the House whether the Government intend to fund the pupil premium through the abolition of the implicit free school meals premium that already exists? The IFS has already described that implicit premium as having a value of £2,460 for primary schools and £3,370 for secondary schools, so the concern is that the premium will be funded by reallocating the same pot of money in a different way. If that were to be the case, it would represent a flat line in funding; if it were the worst case, it could be extremely bad news for disabled children and children with special educational needs.

I turn briefly to the academies programme. We have already heard that during the passage of the Academies Act, the Government accepted a number of amendments to retain funding for specialist support services within local authorities and that a working group would be set up to consider long-term solutions to that issue. Will the Minister confirm that progress has been made with establishing the working group and say whether disability organisations such as SEC, RNIB and Sense are to be represented? It would be important to hear about that.

The Government also committed to monitoring the impact of the Act on services for children with low-incidence specialist support needs. What monitoring and assessment has taken place to date, or are there plans to take this forward? What is the Government’s plan for ensuring the sustainability of services in low-incidence specialist support needs? Local authorities—or some authorities, at least—need to plan for providing specialist support services. The low-incidence needs of children with SEN or a disability such as visual or hearing impairment mean that the market available for the private sector to enter is highly restricted and may not be financially viable. There is strong concern about the stability of these services, given the impact that academies and free schools will have as they take money away from local authorities and are free to commission services, either from the private sector or from a local authority. There is the additional complexity that free schools and academies may not have the relevant expertise to commission the support required by a child with special educational needs or a disability.

That situation could well be made worse—I am sure that the noble Lord will reassure me to the contrary—by yesterday’s announcement of cuts to the tune of 28.4 per cent in local authority funding over the course of the Parliament. There is so much more to discuss about special educational needs, but I know that the noble Lord has limited time to respond to the debate, so I will ask no more questions—except to say that I look forward very much to hearing his response.

16:49

[The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford)]

My Lords, I knew that this would be an extremely good debate and the House has not disappointed. Like many other noble Lords, I congratulate the noble Baroness, Lady Warnock, on securing this debate and for giving us the chance to discuss this important issue. Given her long experience and her pivotal role in the first SEN legislation, nearly 30 years ago, her words carry particular weight and the whole House will have listened, as I did, to what she had to say with special care. On one of her first points, wanting reassurance on whether the Government will take the Ofsted review into account in connection with the Green Paper, I absolutely give her that reassurance. I spoke to my honourable friend the Minister of State for Children and Families, Sarah Teather, about the noble Baroness’s debate, and it is the case that the points that all noble Lords have raised today, which are extremely timely, will feed in to that process. I hope that that provides some reassurance.

Like others, I congratulate the noble Lord, Lord Stevenson of Balmacara, on his excellent maiden speech. I look forward to the contributions that he will make in this area and on education more generally. I know that he is a governor of a special school. To me, governors are often the unsung heroes and heroines of our school system, and I would appreciate it if he would spare the time to talk about his experience as a governor at that school; I would like to hear more.

I also see that he edited a number of speeches by the former Prime Minister, Mr Gordon Brown. As someone who was involved myself in speechwriting for another former Prime Minister, this tells me a number of things about the noble Lord: that he is patient, that he has great stamina and that he must be a man of great tact. These are all qualities which will stand him in very good stead in the deliberations of this House, and I know that we all welcome him to our debates.

I learnt early on how much Members of this House take children with special educational needs and disabilities to their hearts; the noble Lord, Lord Williamson of Horton, kindly reminded me of the passage of the Academies Act. We have seen that again today in the quality of the debate and the thoughtful way in which the argument has been made by noble Lords in all parts of the House.

I thought that I would start with a couple of statistics to set the issue in contrast, and these have already been alluded to. First, it is clearly still the case that too many young people are not achieving what they are capable of; there is broad agreement on that. Ofsted found that achievement was “good or outstanding” in 41 per cent of the education providers that it visited, which means that 59 per cent were merely satisfactory or below. In fact, it rated 14 per cent as inadequate.

We know from our own data that children with SEN account for 63 per cent of fixed-period exclusions and over 70 per cent of all permanent exclusions. Like other noble Lords who have spoken today, the Government are keen to try to break the link between a child’s background and circumstances and their achievement.

Listening to the debate, it also struck me that there was a large degree of agreement and unanimity around the Chamber, and there were a number of principles on which we would all agree: we are keen to raise the quality of education for all our children; we want parents to have as much choice as possible and as much involvement as possible in decisions that affect their child; we want to give professionals—teachers and social workers—as much freedom as possible to do the best job they can; and, perhaps above all in the harder economic times to which the noble Baroness, Lady Morgan of Drefelin, referred, we will do all we can to think about and look after the interests of the most disadvantaged children in the country.

It may be better, in terms of the debate about SEN, if I pick up on some of the noble Baroness’s specific points outside this Chamber, but I know that she has concerns overall about the budget that has been secured for the Department for Education. There will be difficult decisions. On specific funding, my honourable friend the Minister for Children and Families will be setting out in fairly short order the next level of spending commitments, how they work through and what funding will be available for them. Overall, though, we take some comfort at the department, when we have to think about these allocations, that the settlement that the department got means that we will be able to deal as well as we can with the pressures that we face. I hope that I will be able to convince the noble Baroness that some of her concerns about the pupil premium and the other issues that she raised are unnecessary.

On rereading the Ofsted report again last night, five main points struck me, reflecting many of the observations that have been made this afternoon. First, there are clearly issues around identification of need, a point made by the noble Baroness, Lady Warnock, at the outset; I will come back to that. Secondly, there is clearly a problem with consistency of identification. The report refers to the fact that different children in both the same and different parts of the country are getting very different treatment out of the system. That does not seem acceptable in principle.

Thirdly, legislation in these areas has become very complex. As my noble friend Lord Addington was honest enough to admit, he and others have, perhaps, added to that complexity. That complexity is clearly a barrier to comprehension. The noble Baroness, Lady Warnock, referred to the use of language that obscures meaning and makes the whole process more difficult. Fourthly, a point made eloquently by the noble Baroness, Lady Grey-Thompson, and the noble Lord, Lord Condon, was that parents feel that the system is so adversarial that they must “fight for their rights”, the phrase used in the Ofsted report.

Fifthly—a point which has not come up this afternoon thus far—the Ofsted report seemed clearly to say that no one model of provision seems to work better than any other, but rigorous monitoring and early intervention are key. So is early assessment, a point made by noble friend Lady Walmsley and the noble Baroness, Lady Howe. I take that to heart. The final point brought to my attention in the course of the debate, by my noble friend Lady Linklater, is the need for a shift from process to outcomes.

Those were, for me, the main conclusions of the report, and I feel they have been borne out by the nature of the debate we have had this afternoon. Overall, therefore, the report tells us that we need to have a thorough look at the system of SEN provision. Although our children’s services professionals are generally working hard, and there is evidence of excellent practice, the system as whole does not seem to be accessible. It is difficult to navigate and does not seem to be delivering equal opportunities.

These are all important points on which we need to reflect, and which I know from my conversation this morning are very much in the mind of my honourable friend Sarah Teather, the Minister for Children and Families. As noble Lords will know, the Government intend to publish a Green Paper on SEN and disability. To update noble Lords on the timing, the aim is to get that published by the end of this year. That will provide the opportunity to take those points into account.

Identification is one of the core issues, and one of the issues about which there was most coverage in the media. I accept the point that there was a fair amount of misreporting about some of the detail in the report. The report seemed to say that, although identification of children with very severe or complex needs is generally consistent and well managed, there is a problem. There are disparities in the identification of less severe needs at both local and national level. That seems to highlight a need to consider the definition, or how that definition is applied in schools. With one in five children now identified as having a special educational need, we must consider how broadly we apply that definition.

The figures tell a clear story. The first part of this point was made by the noble Baroness, Lady Warnock. For pupils with statements, the figures have been consistent over time; the most recent figures are 2.9 per cent in 2006, 2.8 per cent in 2007, 2.8 per cent in 2008, 2.7 per cent in 2009 and 2.7 in 2010, so there is a great deal of consistency. Over the same period, however, when overall pupil rolls were falling, the number of children on school action rose from 843,000 to nearly 916,000, and on school action plus by nearly 100,000.

I also looked at some international comparisons to see whether they told us anything. Those are not straightforward but it seems to be the case, yet again, that the percentage of children with statements is broadly comparable with other countries. However, there seems to be less consistency and comparability, from looking at a range of other countries, when it comes to children with SEN who are not statemented. I know there has been speculation as to why this might be. There has been some speculation about value added. I think the noble Baroness, Lady Warnock, talked about laziness and greed. I am not sure it is clear to us that that is the reason; we should not rush to judgment. However, we clearly have to look at what is going on as part of the Green Paper process. Ofsted has done a helpful job in highlighting these disparities and getting us to look at these questions.

Of the education providers it visited, Ofsted found that around half are principally using low attainment and slow progress as indicators of a special educational need. It saw this as self-perpetuating, as continued lack of progress was put down to special educational need. It is right and important to emphasise that teachers work extremely hard to develop their pupils and support those children with additional needs as they do so. However, if a child’s needs were more clearly defined, a better assessment could be made of a child’s capability and educational potential. I will reflect on the points made by my noble friend Lady Walmsley and others about the importance of teacher training and making sure that special educational needs training is considered part of that.

I will touch briefly on inclusion, which was initially raised by my noble friend Lady Linklater. I will also respond to some powerful points made by the noble Lord, Lord Low, on what he described as the enlightened consensus. My noble friend Lord Addington also raised points around this. I think we are broadly in agreement. I do not think the noble Lord, Lord Low, is saying that he is afraid that the Government have an agenda to force children with SEN into special schools. We absolutely do not want to do that; nor do we want to force them into mainstream schools or, indeed, any particular type of provision. Our aim, which is shared across this House on both sides, is to create real choice for parents so far as we can, so that they are able to make those decisions for their children, as is their natural right.

We are committed in the coalition agreement to ending the unnecessary closure of special schools, which serve so many children and their parents well. That does not imply that we believe all children should be shoehorned into special schools. I very much agree with the noble Lord, Lord Low, and others that many children with special educational needs certainly benefit from mainstream education. The Ofsted report itself stated that enabling children to be as independent as possible often supported good achievement. However, we think that judgment should be made by parents, with the support and advice of children’s services professionals. There was an interesting report by the National Autistic Society in 2006, which found that, given a theoretical choice, parents were fairly evenly split between those who wanted mainstream schools, those who wanted special schools and those who wanted resource bases in mainstream schools as the best option for their child. What we must try to do is ensure that we can make the choice not theoretical but real. Overall, our aim is to focus on raising standards in all schools so that, whatever option parents choose, they can be assured that their child is receiving the highest quality of education.

I will say a little about academies and exclusions, which was raised by my noble friend Lord Clement-Jones. Academies get a slightly bad press on this. The overall level of exclusions from academies has fallen and has done so for every year. In 2002-03 the percentage was 0.96; in 2008-09 it fell to 0.31 per cent. It is also the case that as many academies have exclusion rates below the national average as have exclusion rates above the national average. I was very conscious of the concerns that were raised about SEN during the passage of the Academies Bill and will continue to keep a close eye on that as the Minister responsible for academies. However, I have not been able to discern any pattern at all. Overall, there is a higher proportion of pupils with special needs without statements in academies than there is in maintained secondary schools.

A specific point was raised about the separation of assessment and funding—I think originally by the noble Baroness, Lady Warnock. The separation of assessment and funding is an option that the Government ought to consider and it is one that I know my honourable friend Sarah Teather will consider as part of the Green Paper discussions. We had an interesting debate about language and definition. I certainly take the point made by a number of noble Lords about complexity of language, especially the potential overlap of definitions, about which the noble Baroness was particularly concerned. We have to try to produce a simpler and more comprehensible SEN and disability system. We will certainly consider whether there need to be any changes to statutory definitions as they apply to children.

I wish to say a few words on the SEN Green Paper. Last month, the Minister of State outlined the plans for a Green Paper. It will cover a whole range of issues from school choice to early identification and assessment, funding and support for families. It is crucial that parents and children feel confident in the services that they are receiving from all children’s services professionals, that where assessments and onward referrals are needed they happen quickly, clearly and effectively, and that services are fair and always in the child’s best interests.

We are therefore considering a range of options to look at how to give parents real choice in the educational settings which can meet their child’s needs, make the system more transparent, cost-effective and high quality, prevent the unnecessary closure of special schools, improve diagnosis and assessment to identify children with additional needs earlier—that echoes the point made by my noble friend Lord Clement-Jones on the importance of early assessment of autism—and to support young people with SEN and disabilities post-16, beyond their compulsory schooling. That picks up on a point made by my noble friend Lady Ritchie. We have already run an initial consultation process. We had 1,600 responses and we will be running a further consultation on the Green Paper itself.

This has been an excellent debate, and one in which there has been much consensus, both on our ambitions for young people with special educational needs and on our appreciation of the problems caused by the current system. I have certainly listened carefully to the concerns raised and I will pass them on to my honourable friend the Minister of State for Children and Families. I spoke to her this morning. She is very keen to hear from Members of this House. If it is convenient for noble Lords, I will suggest that we organise a meeting with my honourable friend to discuss these issues and take the matter further.

17:08

[Baroness Warnock]

My Lords, I thank all noble Lords who have taken part in this debate. It has been extremely enlightening, enjoyable and very good. I particularly thank the noble Lord, Lord Stevenson of Balmacara, for his maiden speech. I loved it. He comes from the most difficult and recalcitrant of all areas of special educational need. I therefore congratulate him on that as well.

I especially thank the noble Baroness, Lady Grey-Thompson, because what came through to me from her admirable speech was the need for optimism, which informed our report all those years ago. We felt that there was hope for children with special needs, whatever they were. She spoke of the low expectations that in her early days would have inhibited her progress if she had not had such admirable expectations of herself. She made a marvellous and inspiring speech which reminded us of the attitudes towards special educational needs that informed the late 1970s, before the horrors of the cuts came.

I thank the noble Baroness, Lady Morgan, for taking the whole issue so seriously—she always has—for what she said, and for providing the hope for more discussions. I finally thank very much the Minister, who was extremely interested and in learning mode before this debate. He is obviously interested and well informed. I thank him for his reply and I beg leave to withdraw the Motion.

Motion withdrawn.

House adjourned at 5.11 pm.