House of Lords

Thursday 3rd February 2011 Lords Chamber

Thursday, 3 February 2011.

11:00

Prayers—read by the Lord Bishop of Guildford.

Introduction: Lord Gold

Thursday 3rd February 2011 Lords Chamber

11:07

David Laurence Gold, Esquire, having been created Baron Gold, of Westcliffe-on-Sea in the County of Essex, was introduced and made the solemn affirmation, supported by Lord Brittan of Spennithorne and Baroness Bottomley of Nettlestone, and signed an undertaking to abide by the Code of Conduct.

Introduction: Lord Storey

Thursday 3rd February 2011 Lords Chamber

11:13

Michael John Storey, CBE, having been created Baron Storey, of Childwall in the City of Liverpool, was introduced and took the oath, supported by Baroness Williams of Crosby and Lord Rennard, and signed an undertaking to abide by the Code of Conduct.

Congo: International Crisis Group Report

Thursday 3rd February 2011 Lords Chamber

Question

11:18

Asked by

[The Lord Bishop of Winchester]

To ask Her Majesty’s Government what is their assessment of the International Crisis Group’s recent report Congo: No Stability in Kivu despite Rapprochement with Rwanda.

[Lord Wallace of Saltaire]

My Lords, the International Crisis Group states that civilians are still suffering shocking levels of violence in the Kivus, but the Democratic Republic of Congo’s rapprochement with Rwanda significantly improves the prospect for peace. The UK has close relations with both the DRC and Rwanda. We support MONUSCO, the UN peacekeeping force, both politically and financially, and the United Kingdom is the biggest humanitarian donor in the Kivus.

[The Lord Bishop of Winchester]

My Lords, I thank the Minister for that reply, but I ask for a greater level of realism from him and from the Government. The report to which he refers—he may have been toiling with its French, but it is now translated—makes it clear that the ICG believes that that rapprochement has got nowhere. As he says, the level of violence continues, the minerals are still in the wrong hands, and a great many people are being killed or made insecure. Will he reconsider and agree with the report on those matters? Will the Government initiate with European partners, or anyone else they can find—and of course with the Congolese and other regional Governments—a fresh approach that will be non-military, whose terms will be known to the people, rather than kept secret, and that will grapple with the deepest causes of the conflict and give some hope of security, freedom from fear and even the most basic levels of economic development? Lastly, will the Government put an end to impunity for those who are causing the rape and mayhem?

[Lord Wallace of Saltaire]

My Lords, the report is indeed very depressing. The Government are not under any illusions about the enormous task there is to try to create order in the Kivus. Perhaps I might help Members by pointing out that North and South Kivu together have a population of about 11 million. It is estimated that there are nearly 2 million displaced people in the DRC, many of them in the Kivus, and there are about 20 militia groups operating outside the Congolese armed forces in the Kivu—and the Congolese armed forces leave something to be desired in terms of discipline and order. We do not underestimate the tasks ahead.

[Lord Alton of Liverpool]

My Lords, I welcome what the Minister said in terms of the practical help that is being given in the Kivus. Does he recognise the disarming of the militia to which he has just referred, in particular the Interahamwe genocidaires, who have used rape as a weapon of war throughout the Kivus, as well as the impunity that the right reverend Prelate mentioned? Will he say more about the flow of arms into that area and what we can do to halt it, and what we are doing to disarm these militia, especially the child soldiers who are involved in these depredations?

[Lord Wallace of Saltaire]

My Lords, again I must stress the sheer size of the DRC. There are 20,000 troops in MONUSCO. They operate across the entire DRC, which is roughly the same size as western Europe. At present, they have 24 helicopters. Unfortunately, the Indians withdrew their dozen helicopters some time ago. There are limits to what the international community is able to do in this area. As the noble Lord knows, some of the unofficial forces come from Rwanda and others from Uganda. Nevertheless, we are working with other members of the international community as actively as we can to try to build an effective administration in the area, which it currently lacks.

[Baroness Kinnock of Holyhead]

My Lords, has the Minister concluded that there can be no security in the DRC until there is security for women? Only this week, the UN registered that 120 women had been raped in east Congo in this year alone, and those are just the reported rapes. Is pressure being put on the Government of the DRC to push much harder on the issues of justice and impunity, and to put those issues further up the agenda? Is the noble Lord aware that only 0.1 per cent of the DRC budget is allocated to the justice sector at this time? We should surely ask what has happened to that idea of zero tolerance that the president of DRC has spoken about. Rape cannot be seen as collateral damage, cultural or inevitable.

[Lord Wallace of Saltaire]

My Lords, we are co-operating with other members of the European Union in providing assistance to improving the quality of justice in the DRC. We all recognise that the quality at present leaves a great deal to be desired. There is also an enormous task in improving the quality of training in the Congolese army. A number of countries, including Britain, are contributing in different ways to the training of the battalions. I should remark that the Chinese are also helping to improve the quality of training.

[Lord Chidgey]

My Lords, is my noble friend aware that the United States has recently committed increased funding and logistical support to the regional efforts to disband the LRA and to capture Joseph Kony and his commanders who are still operating with impunity in the region? Is he also aware that the scant intelligence available on the LRA severely constrains the effectiveness of these operations? Will the Government initiate a call at the United Nations for a panel of experts to report on improving intelligence gathering and sharing in the region?

[Lord Wallace of Saltaire]

My Lords, the noble Lord will be aware that the problem with the LRA is partly that it operates across the borders of Uganda, the DRC, southern Sudan and the Central African Republic, and it has not always proved easy to ensure that the different UN operations in some of those countries manage to co-ordinate among themselves. The latest information I have is that the LRA is now well under 1,000 strong but that it continues to cause an enormous amount of damage as its members maraud across those borders.

[Lord Anderson of Swansea]

My Lords, the report describes the DRC as the “heart of darkness” and concludes that the conflict continues,

“without credible hope for an improvement”.

Government troops act with impunity, the United Nations troops are discredited, there is widespread rape, and yet the international community is intervention-weary. The African Union has a poor record in relation to Somalia. Are there any signs of hope at all? What can the European Union do that we are not doing at the moment?

[Lord Wallace of Saltaire]

One obvious thing is that MONUSCO needs more helicopters, more support and more troops. At present, the majority of the troops in MONUSCO are from south Asia. The noble Lord may know that the African Union forces are now extremely stretched, given the various different peacekeeping operations under way in Africa. We have to recognise that this is going to be a very long haul. The UK, I repeat, is one of the largest donors under a number of different programmes to deal with the various problems that the DRC is currently facing.

Palestine

Thursday 3rd February 2011 Lords Chamber

Question

11:26

Asked By

[Baroness Tonge]

To ask Her Majesty’s Government what plans they have to recognise Palestine as a sovereign state.

[Lord Wallace of Saltaire]

My Lords, we are aware of the steps that some countries have taken in recognising the state of Palestine. However, we are clear that the only way to achieve a sovereign, viable and contiguous Palestinian state is through negotiations with Israel. Equally, the best way Israel can ensure its peace and security is through negotiations with the Palestinians. We urge both parties to return to talks urgently to reach agreement by September on all final status issues, leading to the creation of a Palestinian state.

[Baroness Tonge]

Does my noble friend agree that recent leaks about the Israel/Palestine negotiations in the past show that Israel has had no intention of making peace and continues to acquire more Palestinian land illegally, particularly in East Jerusalem? Does he also agree that, in order to put the two parties on a more equal footing, we should join the 109 countries, including Brazil, that recognise Palestine as a sovereign state and define its borders internationally as based on the Green Line? If we do not enforce this, does he agree that the two-state solution is dead and that, as a consequence, Israel’s days will be numbered?

[Lord Wallace of Saltaire]

My Lords, the noble Baroness asks a large number of questions and I will try to answer some of them. The expansion of the settlements across East Jerusalem is illegal under both international and Israeli law, and we deplore that. We recognise the current push for the recognition of a Palestinian state, but such a state needs to be in control of its own territory and to have secure borders. Palestine is still under Israeli occupation and Israel is still the occupying power.

[Lord Wright of Richmond]

My Lords, the reports to which the noble Baroness referred make it abundantly clear that, at the moment, Mr Netanyahu’s Government are not prepared to make any moves on a Middle East peace process in spite of some remarkable compromises apparently made by the Palestinian negotiators. Does the Minister not agree that it is time to recognise publicly that a two-state solution is the only possible remedy for the future of the Israeli and Palestinian peoples? Please may I ask one specific question? There have been press reports that the Government are considering upgrading the status of the Palestinian General Delegation in London to that of a full diplomatic mission. Can the Minister tell us where that now stands and will he do what he can to make it urgent?

[Lord Wallace of Saltaire]

My Lords, that was also a large number of questions. As the noble Lord will understand, it is not the policy of Her Majesty’s Government to comment on leaked documents. The status of the Palestinian papers is still not entirely clear. It remains the settled policy of this Government, as it was of previous British Governments, that a two-state solution of a viable Palestinian state with secure boundaries is the only way to secure a peaceful solution between the two sides.

On the question of the Palestinian General Delegation in London, we are aware of the steps that some other EU member states have taken to upgrade its status in their capitals to diplomatic missions. The same request has been made to the UK, which we are considering in accordance with our long support for Palestinian stakeholding. No decision has yet been taken.

[Lord Janner of Braunstone]

My Lords, the entire House would wish to see created a Palestinian state living alongside a secure Israel. However, does the Minister agree that any recognition of such a state must accept previous agreements which call for a negotiated settlement? Does he further agree that the unilateral delegations and declarations such as we have witnessed recently from Latin America serve no purpose in advancing the required and vital peace process?

Lord Wallace of Saltaire: My Lords, none of us should underestimate the seriousness of the current situation in terms of the future of the Middle East peace process. I read in an Israeli newspaper some weeks ago a statement that we have to understand that if the peace process collapses, the war process will start. That is the danger we are now in and it requires active and rapid movement from both sides.

[Baroness Morris of Bolton]

My Lords, I declare an interest as chairman of the Conservative Middle East Council and a trustee of the Disability Partnership, which helps severely disabled children in the West Bank. Does my noble friend agree that, while the talks are going on, the Palestinians are in limbo, without the normal courtesies that we as citizens of this country are able to enjoy? If Israeli citizens—and there are many of them—protest against what is happening in the West Bank, they are treated with courtesy; if the Palestinians protest, they are thrown in prison. What are we doing to monitor some of the more brutal acts of the Israeli army in the West Bank?

[Lord Wallace of Saltaire]

My Lords, there are allegations and, indeed, proven occasions of brutality on both sides. I do not wish to go into that now but will re-emphasise where we are. Given the expansion of settlements, the achievement of an acceptable two-state solution is increasingly difficult. I noted that Ehud Barak, who is still in the Israeli Government, said nearly two years ago that the Israelis want three things—for Israel to be a Jewish state, to be a democracy and to include all the land between the Mediterranean and the River Jordan. The problem is that they have to choose which two of those three they can have, because all three are not possible.

[Baroness Symons of Vernham Dean]

My Lords, I associate these Benches with everything that the Minister said in his opening Answer. Does he share the widespread dismay at the stagnation of the Middle East peace process? Does he also believe that the current state of turmoil in the Middle East—particularly in Egypt and, to a lesser extent, in Jordan—serves to undermine the peace process and causes intense worry throughout the region about the future of the peace process?

[Lord Wallace of Saltaire]

My Lords, the current turmoil across a number of middle eastern states clearly has serious implications for both the peace process and Israel’s future security. I reiterate that this Government, as were our predecessors, are strongly committed to the view that a secure Israel, associated with a secure Palestine, is the only answer to the current tensions.

Consumer Credit

Thursday 3rd February 2011 Lords Chamber

Question

11:34

Asked By

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what assessment they have made of the interest charged by loan and credit companies.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, the Government are looking at a number of additional protections for consumers in the credit market through the consumer credit and personal insolvency review, which is now going on. The review is headed up by the Department for Business, Innovation and Skills, which includes consumer affairs, and the Treasury. We are currently considering the evidence submitted in support of the review.

[Lord Kennedy of Southwark]

I thank the Minister for her reply. Does she agree that it is just wrong for some of the poorest and most vulnerable people in our society to pay interest rates of up to 3,000 per cent for credit? Does she further agree that the Government need to actively support the growth of the credit union sector and to support the link-up with the Post Office, and thereby give people access to an affordable, wide range of credit to meet their needs in their high street?

[Baroness Wilcox]

Yes, my Lords, of course I agree. The Government are aware of concerns about the high-cost credit market and suggestions that there should be a cap on high-cost credit products. We have been here before. There have been three reviews, from when the Opposition were in government and when we were in government before—we have reviewed this over and over again. The first time was 15 years ago, when I chaired the National Consumer Council. We are worried that people would go to illegal loan sharks to borrow money if there were capping. On the second part of the noble Lord’s question, we are doing everything we can to reinforce the link-up between the Post Office and the credit unions. It is a marvellous system and I hope to see it flourish.

[Lord Marlesford]

My Lords, are the Government concerned at all that at the present time there is some £60 billion of credit card debt, on which some £9 billion a year of interest has to be paid, and that a large number of the debtors of this credit card debt are unable to pay the interest? Do the Government recognise that this probably represents a substantial reservoir of toxic debt held by the banks of this country?

[Baroness Wilcox]

My Lords, there are enormous worries surrounding such debt. This is why the consumer credit and personal insolvency review is taking place. I am sure that the review would be open to hearing any evidence that the noble Lord might like to give. However, we cannot answer any questions now, until just before the Budget, so that will be in about April.

[Baroness Coussins]

Is the Minister aware of the independent research by Nottingham University, which forecasts that an extra 200,000 people will need help with their debts this year? Given the end of the Financial Inclusion Fund, and the reports that we have heard just this morning about the cuts to Citizens Advice, what help can the Government provide to ensure that the most vulnerable people get help and are kept out of the hands of loan sharks? I declare an interest as the president of the Money Advice Trust charity.

[Baroness Wilcox]

This Government, like the previous Government, are constantly trying to find ways to help people get the best possible information to make sure that the decisions they make lead to debts that they can fulfil. It is very difficult. This is why another review is taking place. We are looking yet again to see what we can do so that people do not have to go to loan sharks. However, I am worried about putting a cap on any of the very, very high interest rate products. At least we know that when people get into trouble they can come to us for help. Countries such as Germany and France capped at 25 per cent years ago. The problem is that there is no access for the very poorest people who need to borrow. It is important that they have access to some facility.

[Lord Sugar]

My Lords, the noble Baroness and I have spoken about this subject once before across the Floor and I reiterate my question about the misleading advertising by credit card companies and loan organisations. It is about time that the Advertising Standards Authority imposed strict regulations about the prominence of warnings in respect of interest payable in those adverts so that they are approximately the same size as the headlines trying to lure the consumers in. Will the Minister, once and for all, take this matter up with the Advertising Standards Authority?

[Baroness Wilcox]

If the Advertising Standards Authority was answering instead of me, it would say that it is complying with everything it should be doing. However, the question the noble Lord, Lord Sugar, asks demonstrates that there is continuing concern about this. I will of course take this on board and reflect again upon what the noble Lord has said and see if there is anything I can do to help things along.

[Lord Razzall]

Is the Minister aware that this issue is being debated today in another place on a Motion tabled by the Labour Party? Is she also aware that the proposal in that Motion is that a total-cost-of-credit cap should be imposed? Would she agree that, on the basis of the consultation that the previous Government undertook, that would not protect the vulnerable in the way being suggested in another place?

[Baroness Wilcox]

I am aware of the debate this afternoon in another place and shall be interested to hear what comes out of it. I am interested in what the noble Lord said, but for the moment I cannot comment because the review is not out.

[Lord Elystan-Morgan]

While I appreciate the efforts made by Her Majesty's Government in relation to credit unions, does the Minister not agree that the scale has to be upped very considerably? In the Republic of Ireland, 50 per cent of personal credit is through credit unions. In Canada and Australia, the figure is roughly 20 per cent, but in this country it is only 0.5 per cent.

[Baroness Wilcox]

We have tried for years to interest the British and Northern Irish public in credit unions. It is just something that we never seem to have got the general public to sign up to. I know that in Canada and Germany credit unions are regarded as a wonderful idea, and so they are. You put your money in and can take a little bit out. It is a very simple system. In fact, I think one of the most successful credit unions in London at the moment is the black cab credit union. It does not take more than 12 people to get together to form one. It may be that this is a good advertisement, yet again, for credit unions.

EU: Emissions Trading Scheme

Thursday 3rd February 2011 Lords Chamber

Question

11:41

Asked By

[Lord Bradshaw]

To ask Her Majesty’s Government what assessment they have made of the European Union’s emissions trading scheme in the light of recent allegations of fraud in the trading of permits.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)]

My Lords, the European Union emissions trading system continues to provide an effective means of incentivising cost-effective reductions in emissions from heavy industry. The UK’s ETS registry is widely seen as the most secure in Europe and has not suffered any cyberattacks. The Government have been working closely with the European Commission to demonstrate the security of the UK registry, and I can confirm that it will reopen tomorrow morning. We will continue to work to ensure improved levels of security in other member states’ registries. I refer the noble Lord to the Written Ministerial Statement made to the House of Commons by Gregory Barker this morning.

[Lord Bradshaw]

I thank the Minister for that reply. Does he agree that the trading scheme is the basis on which airlines are able, for example, to claim credits for the fuel they burn, and that any weakness in the system and the system of certificates of origin would be a very serious blow to the industry?

[Lord Marland]

I totally agree with that statement. I would just point out to the noble Lord that airlines will not join the system until 2012, so it is hard to evaluate the role of the system in that regard. By way of evaluation, it will be very interesting to see how it works, because airlines will be registering their carbon in the country to which they send their planes most often rather than in the country where they are domiciled. So there are one or two things that need to be looked at before 2012. However, I completely agree with the noble Lord in the sentiment of his question.

[Lord Tomlinson]

My Lords, I express my gratitude to the Minister for his clear statement that there were no cyberattacks on the emissions scheme, because there are all sorts of conflicting views about that. However, will he confirm that it is imperative to the interests of this country that we secure the services provided by the European Union from cyberattack to precisely the same level as we protect ourselves domestically, and that if that has implications for the European Union budget, so be it?

[Lord Marland]

The noble Lord makes a very good point. The great thing about the British system is that the International Emissions Trading Association has made it clear that we are the most secure of any European country. That does not mean for one moment that we should be complacent—in fact we must be even more vigilant given the potential for cyberattacks and the fraud attacks that have been made on other registries. That is why we recently worked with the European Union on a process to demonstrate the security of our registry—and my thanks here to the Environment Agency for the excellent work that it has done. I hope we can yet again show leadership in Europe on this issue.

[Lord Lawson of Blaby]

If my noble friend the Minister wishes to show leadership in Europe, perhaps I may ask him a question about that. I am delighted to hear that the UK registry is in good nick, but the fact is that we are part of a European emissions trading system. That system—in the accurate words of the Wall Street Journal recently—has been a story of “serial theft and fraud”, which is continuing. What are Her Majesty’s Government going to do about that?

[Lord Marland]

We are not going to do a lot about other people’s registries at this point but I can confirm that there will be a single European registry in 2013 which I think will iron out a lot of problems. I hope the leadership and direction that we have shown with our own registry will become the benchmark for the single European registry, and again I commend the work of our agencies and Government in securing this very fine example.

[Lord Brooke of Alverthorpe]

Is the Minister aware that, in 2008, Sub-Committee D of your Lordships’ European Union Committee undertook a review of the revision of the European Emissions Trading Scheme and that it produced a significant amount of evidence, part of which was from bankers who themselves complained about the inadequacy of the regulation governing ETC trading? Will the Minister look at that report? He will see that the concern is not solely about cyberattacks but also about the fundamentals of the scheme, as the noble Lord, Lord Lawson, identified. Will he also check to see whether the FSA is doing a proper job on it?

[Lord Marland]

As I said earlier, my Lords, the reality is that we have a pretty tried-and-tested system. We should not be complacent, but there is no point in going backwards in reviewing things. I want to look forward in our review to make sure that in the current environment we have an even more secure process. For your Lordships’ information, BarCap, one of the major traders in this scheme, has said that this is the best scheme in Europe. That is a very good starting point for us.

[Lord Berkeley]

My Lords, do the Government have any plans, with the European Union, to widen this scheme to other industries as part of their commitment, which I assume is still there, to reducing the carbon emissions in this country by 80 per cent by 2050?

[Lord Marland]

The short answer, obviously, is yes. As I referenced earlier, the airline industry—as the noble Lord will know as an expert in the transport field—will join it in 2012. We must look further to reduce our greenhouse gas problem.

[Baroness Maddock]

My Lords, as the Minister indicated in his earlier answers, there are other emissions trading schemes around the world. Can he tell us how many have had similar problems to the European one and whether there are any lessons that we can learn from them?

[Lord Marland]

There are a huge number of lessons that we can learn from every attempted fraud. I am not familiar with the detail of these frauds across the world but I am familiar with the detail of those in Europe. There are five or six countries which have endured fraud which is pretty well documented. I will not go through each of them now, or their extent, but we must learn from each of these problems. We live in a very sophisticated world of fraud which changes the whole time and we must make sure that our registry is fit for purpose in that regard.

Business of the House

Thursday 3rd February 2011 Lords Chamber

Timing of Debates

11:48

Moved By

[Lord McNally]

That the debate on the Motion in the name of Lord Northbourne set down for today shall be limited to two and a half hours and that in the name of the Earl of Clancarty to three hours.

Motion agreed.

Children: Parenting for Success in School

Thursday 3rd February 2011 Lords Chamber

Debate

11:49

Moved By

[Lord Northbourne]

To call attention to the role of good early parenting in preparing a child for success in school; and to move for papers.

[Lord Northbourne]

My Lords, I welcome the three maiden speakers who will speak in this debate.

Two objectives of the previous Government were to improve the standard of education of our children in schools and to reduce inequality in society. All the evidence suggests that we can address both these problems together if we pay more attention to the first three years in the lives of our most disadvantaged children. By the age of three, the child’s brain is 80 per cent formed. Experiences during that period shape the way that the brain grows and develops.

Most parents in this country are doing a good job raising their children, but some, often through circumstances beyond their control, need more help and support from us than they are getting today. At the moment, a small but significant minority of our children are not getting the sort of early childhood parenting that they need, and then they often go on to fail in school, disrupt other learners and pull down the standard of our school system as a whole. Then, when these children grow up, they have their own children, and they will tend to bring them up in the same way. This diminishes rather than increases their life chances, and so the cycle of disadvantage is handed down from one generation to the next. This is a disaster. It is very serious.

In support of what I am saying, I shall quote from two reports from opposite ends of the political spectrum—a very proper thing to do from the Cross Benches. In the report Building Character, published in November 2009, the left-wing think tank Demos cites two separate American studies that show how a child’s life chances begin to be determined even before he or she is born. The report says:

“Different pre-birth factors, including the ill-health or stress of the mother, may be hardwiring heightened susceptibility into the developing baby even before the child is born. … elevated levels of the stressor chemical cortisol in the womb during late pregnancy have also been shown to predict negative temperament in infants at age two”.

The report goes on to cite a range of studies showing how infants between birth and three years-old are more malleable than they will be at any subsequent stage in their lives. So, it says, parents are the principal architects of a fairer society.

At the other end of the political spectrum, the Conservative think tank the Centre for Social Justice reaches much the same conclusions in its recent Green Paper on the Family, which says:

“Stable, healthy families are at the heart of strong societies. It is within the family environment that an individual’s physical, emotional and psychological development occurs. It is from our family that we learn unconditional love, we understand right from wrong, and we gain empathy, respect and self-regulation. These qualities enable us to engage positively at school, at work and in society in general”.

Many noble Lords will be aware of the classic research by Bowlby and Ainsworth and other researchers, who worked with Romanian orphans. They conclude that secure attachment and committed parenting during a child’s early years are important in enabling the child to feel safe, loved and valued. A young child needs to feel safe because it is in a terrifying new world. He or she needs to be confident that there is at least one adult whom they can turn to and trust for love and sympathy, who will always be there for them. Conversely, research shows that violence, anger or discord in the family during these foundation years are strongly negatively linked to child outcomes. So is family breakdown.

The child needs to feel loved in order to begin to learn the most important social skill of all—to love and to be loved. Through a loving relationship with the mother or other principal carer, a child learns that love is about giving as well as taking and begins to learn those relationship and communication skills, even if they are only smiles and gurgles to start with, that are at the very heart of communication in later life.

Finally, a child needs to feel valued. To feel valued enables the child to begin to build identity and self-esteem. Self-esteem is the parent of hope. Every child needs to believe that they can succeed at something. Confidence is what makes success possible. A child who arrives at school without these skills will find it difficult to fit in, settle down and learn. All too often, this leads to the child rejecting school and switching off, being disruptive, playing truant and feeling excluded. That, in turn, leads to educational failure, lack of ambition and lack of hope. The director of the Oxford centre for research into parenting and children, Professor Ann Buchanan—who, I am happy to say, is with us in the Building this afternoon—put it this way:

“Escape from social exclusion is particularly difficult for children and parents who have been rendered without hope … because of discrimination, poor social conditions, community norms that may encourage low expectations, domestic violence and child abuse”.

Those children need a hand. That is why good parenting is so crucial for the zero to three year-olds, and why how parents tackle the job, the parenting style, is so important.

The Demos report that I quoted earlier says about parenting styles:

“Using a typology that measures four different parenting styles—tough love, laissez-faire, authoritarian and disengaged—we found that ‘tough love’ children are more than twice as likely to display strong character capability in the early years than those with ‘disengaged’ parents”.

Character capabilities include social and emotional skills such as application and safe self-regulation. They include the ability to defer gratification and to concentrate, or stick to something—life skills which we all know that we all need.

So why are some parents failing their children? Nearly all mothers want to love and be loved by their child. Nearly all parents want their child to succeed. The truth is that many parents face very serious problems. Some do not know how to be a good parent because they themselves have never had any experience of good parenting. Others have failed at school. They may not know how to help their children to learn. They may not even be able to read aloud to them. Then there are many parents who suffer from a whole range of disabilities and disadvantages beyond their control: physical or mental ill health, addiction to drugs or alcohol, poor housing, poverty, debt, or a partner who is violent or in prison. They may be struggling to juggle parenting, work and sometimes also a caring responsibility for an older or sick relative. As a society, we need to be much more effective in addressing these problems. It would be incredibly cost effective to do so in the long run, and even in the fairly short run.

Then, of course, 3.5 million children are today living in broken homes. By way of evidence, the Centre for Social Justice report says,

“speaking with thousands of individuals and organisations tackling poverty at the coalface, we have found that family breakdown is often at the root of”—

other problems.

“Hence a child not growing up in a two-parent family is 75 per cent more likely to fail at school, 70 per cent more likely to be a drug addict, 50 per cent more likely to have an alcohol problem”.

I interpose here that in most cases we must not blame this on the single parent at all.

I turn now to the way forward. The previous Government devoted considerable effort and substantial resources to trying to solve these problems. Frankly, it is extremely disappointing that they were not as successful as many of us hoped. However, we must learn from their successes and failures and move forward. Reports by Frank Field MP and Graham Allen MP were recently presented to government. Both confirmed what I have long suspected: problems created in the first three years of a child’s life cast a long and dark shadow over their future.

Frank Field’s report The Foundation Years: preventing poor adults becoming poor children, published just before Christmas, presents a new strategy to abolish child poverty. This report is particularly important. Frank Field asks,

“how we can prevent poor children from becoming poor adults”,

and concludes that,

“the UK needs to address the issue of child poverty in a fundamentally different way. … We have found overwhelming evidence that children’s life chances are most heavily predicated on their development in the first five years of life”.

He concludes that parents are the drivers in determining their children’s life chances. It is not so much who the parents are—what their jobs are or what social class they are—but what they do and how they nurture their children. All the evidence shows that tough love and intellectual stimulation are what matter most.

Frank Field’s report makes several key suggestions. The first is developing a life chances indicator to measure success in making life chances more equal for children at both the national and the local level. The second suggestion is for a new tripartite education system, in which the foundation stage—from conception to the age of five—has the same status as primary and secondary education have today. Thirdly, he suggests age-appropriate teaching of parenting and life skills in all schools throughout the pupil’s school career. The fourth suggestion is for greater emphasis on antenatal and postnatal care and on parenting education at this stage of the life cycle. I urge the Government to take these proposals very seriously.

The report by Graham Allen, which was also published recently, mainly concerns itself with indentifying interventions that the state can make with children at the foundation stage. It finds, significantly, that current services are variable, fragmented and not easily accessed or understood by those who might benefit from them. It is a pretty depressing report. Unfortunately, I do not have time to discuss the Allen report proposals in detail. Many of them are good, but I have one major concern. For families raising nought to three year-olds, it is very important that interventions should not be intrusive. Even when they have problems, most parents want to feel that they are still in control. For nought to three year-olds, consistent, secure and loving attachment to a mother or some other dedicated principal carer must be by far the most important ingredient in a successful parenting programme. Ever-changing carers or foster carers, however well trained, can never replace secure attachment.

It seems that professionals and experts have now come to agree that a child’s experiences in the early years are crucial to success in school and in later life. I hope that the Minister, when he replies, can assure the House that the Government intend to respond very positively to the proposals in the Frank Field report. I beg to move.

12:04

[Lord Lingfield]

My Lords, it is with a sense of considerable privilege that I address your Lordships' House for the first time. I thank the noble Lord, Lord Northbourne, for giving us the opportunity to have this debate. His efforts on behalf of the underprivileged are well known to us all.

Some noble Lords will know that I have been engaged in education policy for a good part of my life. I hope, therefore, to be able to contribute to your Lordships’ discussions on education. During the previous Conservative Administration I was appointed to lead the movement towards autonomy for state schools. This resulted in grant-maintained schools, from which the current academies programme finds its roots. However, it is about an entirely different aspect of education—special needs in education—that I want to speak today as early parenting skills are hugely important in this area.

In 2006 I was appointed by the then leader of the Opposition to chair a commission and produce a report on the reform of special educational needs. This brought home to me the huge importance of early diagnosis and early help for parents as both of those lead to success in schooling. I pay tribute to Professor John Marks, who helped me with that report, to Mr Brian Lamb, who produced the concomitant Labour report, and to those members of the Liberal Party who laid such emphasis on the early years in their manifesto.

There can be few more devastating experiences for families than finding, perhaps soon after their child is born, that he or she will need special care, possibly lifelong care. The advances in the past decades in medical technology mean that even children with the most complex and serious disabilities can not only survive birth but find much content in their life, provided they get the right attention, the right love, the right sympathy, as mentioned by the noble Lord, Lord Northbourne, and, of course, the right medication and the right schooling to follow. However, as he advised us, many parents do not possess early parenting skills and do not know where to go to get help to acquire them. If they have a disabled child, they will seek a statement of special educational needs but I am afraid that 40 per cent of them are turned down and the number of special educational needs statements is falling year on year. If they are refused, the parents concerned have an even gloomier prospect because they have to go to a special needs tribunal. All those parents who gave me evidence suggested that this was one of the most agonising things that they had encountered. Indeed, a man I spoke to last year told me that this was the most uncomfortable and difficult experience of his life—and he was a QC. How much more daunting is the experience for a young, inexperienced parent, who perhaps has little education and certainly little knowledge of judicial procedures. These processes are complicated. The papers were brought to me at this House a couple of days ago covering one girl’s tribunal. They numbered 500 sheets and I am told that this is pretty average.

Parents tell us that the tribunal system is getting longer, more adversarial and costly—they mention legal bills of about £12,000. The tribunal system was started for the best of all reasons as an arena of last resort, to be used rarely. Now it has become almost the norm. In 2008 it was moved from the Department for Children, Schools and Families to the Ministry of Justice. Appallingly, some of these tribunals now take place in magistrates’ courts. Parents have told me that they find themselves, with their young disabled child, sitting next to people arraigned for criminal activity or awaiting appeals against deportation orders.

Finally, I am delighted that the Government are considering a Green Paper on reform of special educational needs. Among the many reforms that will be required, to which I hope to return at a later date in this House, I very much hope that the Government will consider, first, dejudicialising the tribunal system and, secondly, inserting early on a process of mediation between those parents who require better facilities for their children and the local authorities, which of course are obliged to pay for them. Mediation works extremely well in other walks of life. There is no reason why it should not work well here, provided that the mediators are seen to be independent. Early parenting skills are hugely important, as the noble Lord, Lord Northbourne, told us, and are no more important than in the area of special educational needs. I very much hope that the Government will do the things that I have asked them to consider.

12:11

[Baroness Massey of Darwen]

My Lords, it is an unexpected pleasure to be welcoming the noble Lord, Lord Lingfield, to your Lordships’ House and I congratulate him on his wonderful, confident and thoughtful maiden speech. He said it was his maiden speech, so we must believe him—but I had to check on it.

The noble Lord is a man who says he has no secrets, but he has had one of the most varied careers that I have ever known—including headmaster, publisher, manager, volunteer, and pro-chancellor of Brunel University. We share an interest in cricket, and he is a knight to boot. I know that with all this experience, he will be a great asset to your Lordships’ House and I look forward to getting to know him better.

Parenting is the most important issue we can discuss, so I am most grateful to the noble Lord, Lord Northbourne, for giving us the opportunity to do so. It is a timely debate, given the recent publication of several reports which directly or indirectly refer to the role of parenting in child development. According to Family Lives, most parents and grandparents feel that the task of parenting is more challenging than it was a generation ago. Yet we know that without security, love, support and positive stimulation, children’s brains will not develop as they should, and their physical, emotional and intellectual development will be impaired. Children need early opportunities to play, explore their environment, look at books, be talked to and sung to. They also need structure, boundaries and early bonding. There are important values to be transmitted to children. They need to make sense of the world and to develop self-esteem. They need unconditional commitment and nurturing, as the Frank Field report points out.

Success in school is a spin-off from good early parenting, which encourages aspiration. However, I am highly suspicious of parenting which might be designed to prepare for success. I do not for a minute think that the noble Lord, Lord Northbourne, is simply focusing on academic success. One of the saddest stories I remember from when I was teaching was that of a father saying to me over and over again, “My daughter will be a doctor”. The girl was a talented artist, with no inclination towards science and no aptitude for it. She would not have achieved the necessary grades, however much cramming took place. Noble Lords may have read about the “dragon mother” who forced her daughters to be proficient in playing the piano. I have not read the book but I believe that one girl ended up hating the mother and the other chewing the piano. I said “chewing” not “tuning”. We all may have come across parents who attempt to live out their own ambitions through their children. The father I just mentioned may well have wanted to be a doctor.

Graham Allen’s report on early intervention speaks of enabling children to become excellent parents and of the expense of not fostering social and emotional capability. Children, even very young children, if they are lucky, have a network to support their development: grandparents—how important they can be—other relatives, pre-school education and adults with whom children come into contact. Parents need support, too. Midwives, professionals, Sure Start and family intervention programmes can all help. They may need review, but I hope that they survive the proposed cuts in spending. As the noble Lord, Lord Northbourne, said, we must spend early to save later. I hope that the Government understand that. We know that young people who end up in the criminal justice system have often suffered abuse and neglect and that this is likely to be passed on to their own children.

The UK features low down on UNICEF’s report card 9—I should declare an interest as a trustee of UNICEF. That is due not just to poverty. It is important that children do well at school and go on to succeed, and many children educate themselves out of poverty. However, they should succeed in a broad sense so that they can develop friendships, learn positive values and be happy. Yes, early intervention is important, but that must be carried through into constant intervention—not interference, but thoughtful and unselfish commitment to helping children and young people develop their full potential, whatever that potential might be.

“Parent” is a broad term. More than 200,000 grandparents bring up their grandchildren. Care placements with families are more successful than those outside the family. I find that very interesting and a testimony to the importance of security. As we have argued in this House previously, kinship carers need financial and other support.

The noble Lord, Lord Northbourne, has raised a very complex issue, but one that we must grasp for the sake of ourselves, our children and grandchildren, and of future generations.

12:16

[Baroness Walmsley]

My Lords, I am sure that we are all convinced by the excellent opening speech of the noble Lord, Lord Northbourne, by various pieces of research and by recent, thoughtful reports by Graham Allen MP and Frank Field MP that a child’s life chances are determined in the very early months and years of his life. The Feinstein research published in 2003 found that early child development is a strong predictor of later educational attainment and that social class overlays this. In other words, it does not matter too much if development at 22 months lags behind other children if your parents happen to be in demographic groups A or B, whereas if your brain development is high at a young age but you come from a deprived background, you may not achieve your early promise. This is complex enough, but we then have to overlay it with the factors that affect brain development: maternal and childhood stress, poor attachment, lack of proper development of social and emotional skill because of isolation or violence, lack of stimulation et cetera. A highly complex web of factors affects how well a child does at school.

Have we now got the full picture? Well, no, because we now have to add in parenting engagement and style. There is no reason why a poor family cannot bring up children to fulfil their potential—though it is hard—as long as the parents are fully engaged with their child’s education, put a lot of effort into it and are thoughtful about their parenting. The trouble is that this is easier said than done if you are desperately stressed about money, live in a cold, damp home with nowhere for the child to do his homework, cannot afford the enriching experiences that help a child to understand the world and even find it difficult to nourish your child well. Perhaps, too, you had a bad experience at school. You may not even be literate, so cannot read the helpful parenting materials that are widely available, including on the internet.

I think that I am trying to paint a picture where three solutions emerge from the facts. The first is that we need to raise the income of the poorest families. Secondly, we need to provide parents with support and information about how to help their child not just academically but, as the noble Baroness, Lady Massey, said, mentally and emotionally, as well as in their physical health, their ability to form relationships, their self-confidence and, most importantly, their aspiration. Thirdly, we need accessible, proven early interventions that will make up for shortcomings in other areas. These three solutions are recommended in various ways by the two reports that I mentioned.

The All-Party Parliamentary Group for Children was fortunate earlier this week to hear from and question Frank Field. One thing that he said, which stuck in my mind, was that money on its own is not enough. He cited the three year-old child of a very highly paid banker in the company’s nursery. The person in charge of the nursery asked to see the mother and said that she could not get the child to speak at all. The mother said: “I’m glad you noticed that. I have been waiting for him to speak to me”. This and other evidence made Mr Field conclude that, while we need to eradicate child poverty, other interventions are also needed in order to allow all children to flourish. He also pointed out that giving more money to some families would not help the children at all and concluded that we need to provide family support and early interventions for the sake of the children.

Early years education needs to be of high quality. If it is not, it can do more harm than good. This has long been known from the EPPE study. Less widely quoted is something else that came out of that study, which considered not just the effect of early years settings of varying quality but the importance of the child’s home environment. Kathy Sylva et al concluded:

“For all children, the quality of the home learning environment is more important for intellectual and social development than parental occupation, education or income”.

While we are offering 15 hours of free early years education to three and four year-olds, and now to the most deprived two year-olds, which I welcome, are we ensuring that it is done always in a way that is not intrusive, as the noble Lord, Lord Northbourne, said, and that involves, engages and empowers the parents? If it is not, it will just scratch at the surface of the task of helping the child to develop. Stable, loving and supportive family backgrounds, with positive parenting, are the best for children, but we do not learn to create them by osmosis.

What does this mean for public policy? Sure Start centres are now scattered all over the country and we will be asking organisations to tender for them. Part of the deal must be that they should prove how they are reaching and working with parents. The outcomes for children depend on it.

12:22

[Baroness Butler-Sloss]

My Lords, I congratulate the noble Lord, Lord Northbourne, on securing this important and timely debate and I look forward to hearing the right reverend Prelate who follows me. I declare an interest as a governor of Coram. Perhaps I ought also to say that I was a guest of Barnardo’s last night at an extremely good dinner hosted by the noble Baroness, Lady Massey of Darwen. I will speak about both those admirable organisations.

I will refer in particular to a very seriously disadvantaged group of children: those taken into care either at birth or as very young babies. There is widespread recognition of the good practice in social work of arranging the permanent placement of babies within six months. However, the problem is that by and large this does not happen. First, the baby is taken away and placed with short-term foster parents. The average number of moves before a baby is finally placed is four. There is a wonderful arrangement of concurrent planning, whereby the child is placed with foster parents who are also assessed as potential adopters. The baby may go home to their parents or may be adopted. This has been pioneered by Coram, supported by Barnardo’s, with several local authorities over the past 10 years. Sadly, there are not sufficient numbers of referrals from local authorities for it to be viable for Coram, which is having seriously to consider stopping doing it. This is due in part to the 2008 legislation on children, which has placed far greater emphasis on the rights of parents, and in part to the increasing length of time that one has to wait for a full hearing in the care court. I am told that the average is now 70 weeks; when I was president of the Family Division, it was between 40 and 50 weeks, so I am sad to hear that.

Quick, permanent placements are difficult to achieve, since there is a real tension between the need to place the child quickly, for all the reasons emerging in this debate, and the rights of parents, who can be not only adversarial but very contentious. Other factors include delays in the court process, to which I have referred, the different responsibilities of agencies that have to work together—social workers, CAFCASS and medical experts—and the need for sufficient evidence to move a child permanently. Local authorities are not referring children to Coram and into a potentially final placement until the care plan is finalised. That is perfectly understandable, but it is another delaying factor. Another problem is the contact between the mother and a baby in short-term foster care, which is often extensive and sometimes lasts for several hours every day. That can only be very bewildering for the child, although necessary, and it undoubtedly raises the question of whom the baby forms an attachment with.

We also have to bear in mind that there are inflammatory articles from journalists, such as Camilla Cavendish in the Times, if, in their opinion, children are taken away too quickly. However, I remember one case, when I was a judge, in which the mother of a baby had already had six or seven children taken into care. One might think that her track record gave little cause for hope. I am told that at least one judge has recently dealt with a mother whose previous 14 children had been taken into care.

I am encouraged by the obviously genuine desire of this Government to try to break the deadlock and to get more children adopted. If these babies are to have any real chance of success at school, and consequently in life, it is crucial that they are settled as early as possible. Coram and Barnardo’s are hoping to work together on promoting more successful permanency planning for adoption. There is a Harrow model that, working with Coram, has managed to place some children within six months. That is admirable and, I believe, quite the best that could be done, but it needs a lot of work with parents, local authorities and other agencies.

Other good projects are run by Coram, one of which involves referring children under the age of four with problems. Work is done with these children, including music therapy. Coram does excellent work in helping people through its young parents scheme. That is exactly what should be going on with parents who do not know how to look after their children. The example that we heard from the noble Baroness, Lady Walmsley, of the mother who was waiting for her child to talk is exactly the sort of work that is being done by Coram, and long may it continue. These are all important efforts in helping young children to have a reasonable future. This work must be supported and I hope that the Government will give it proper attention.

12:27

[The Lord Bishop of Oxford]

My Lords, I am most grateful to noble Lords and to our excellent support staff for all the help and practical assistance that I have received since I was introduced to the House shortly before Christmas. I have had to be rescued once or twice as I have wondered the corridors, but at least I am feeling more secure now geographically.

I pay tribute to the former Bishop of Salisbury, who has now taken to the beauties and diets of Weardale in retirement. I know that he made a tremendous contribution to this House, and it is his retirement that has caused the Writ of Summons to come to me. Bishop Stancliffe made a notable contribution through his erudition and confident performance, as well as his passion and clarity of mind. However, I have the privilege of serving the diocese of Oxford, where my predecessor, the noble and right reverend Lord, Lord Harries of Pentregarth, made such a striking impact for 19 years. He led, as I now do, one of the largest dioceses in the Church of England, with 813 churches, 620 parishes and 650 clergy. In the 1830s, Bishop Richard Bagot wrote, rather miserably, that he,

“took this diocese solely because of its smallness, quietness and the little trouble it need give one”.

That is not how I would describe the diocese of Oxford today. It is nevertheless an area of huge energy and fascination, including as it does places as diverse as Milton Keynes, Reading, High Wycombe, Windsor, Slough, Chipping Norton and the well known constituency of Witney. It contains major Armed Forces establishments. Noble Lords will know of course of Sandhurst, Brize Norton and the Defence Academy at Shrivenham. We have our own silicon valley going down the M4 and a huge educational industry, including no fewer than seven universities. Scientific research is carried out not only there but at establishments such as Harwell, the Diamond synchrotron, the Rutherford Appleton Laboratory and all sorts of other places. All this is within some of the loveliest home counties in rural England, which of course has its own challenges. It is also within the multicultural realities of places such as Slough, High Wycombe, Cowley and Reading—all of it small, quiet and of little trouble, of course.

I mentioned the importance of education in the diocese. We have 280 church schools and a very strong commitment to their inclusive and distinctive character. I have been given responsibility, which I have taken on only this week, of chairing the Church of England’s board of education. It has 4,800 schools nationwide, so I have a very particular interest in today’s debate, so helpfully introduced by the noble Lord, Lord Northbourne. I am very engaged with that.

In the midst of much vigorous educational planning by the Government, the debates that we are having today go to the root of the issue of how children flourish. Much has been and will be said about how much money can be saved by early intervention. Although that is true, good and right, surely at a much more fundamental level, we simply want childhood to be joyful and exciting. I heard earlier this week of an adult who has no happy memories of childhood. How tragic is that? I now have four very small grandchildren and I want nothing more for them than that they have an absolutely fun-filled, delightful childhood.

The reports of Frank Field and Graham Allen are excellent pieces of work and I am very grateful for them. I would, however, just add that I am not sure that they sufficiently emphasise the vital importance of a good quality adult relationship surrounding the child. Certainly it is there, but I want to emphasise it because the family structure needs supporting as well as the child. The Church of England has always emphasised that children flourish best in the context of stable, loving, couple-relationships. One of society’s tasks is to support those relationships as strongly as possible—in particular, that fantastic responsibility and privilege of guiding a small life into the wider world. There is just as great a responsibility, of course, to support single parents who may have an even harder struggle, but evidence suggests time and again, that stable, loving, couple-relationships help children to thrive best of all. Relationship support pays off a hundredfold.

My second main point concerns the huge pool of volunteers who, with a little funding, can make all the difference to a child’s life chances. Oxford diocese has an excellent organisation called PACT—parents and children together—which is celebrating 100 years of its existence this year. Among its other functions, which include fostering and adoption work, and extended schools, special work is done with children’s centres. It runs six on behalf of local authorities, one of which started 10 years ago in the aforementioned constituency of Witney. There, a curate, a health visitor and a mental-health nurse got together and got the churches together to produce a multifunctioning, multiagency, multiservice provision in a children’s centre. It has now developed with all kinds of things, such as drop-ins, teenage pregnancy counselling, parenting courses, father support, and so on. That is just one example of what energetic volunteering can do all over the country. At the last count, the Church of England had 67,000 volunteers working with under-sixes in non-church contexts—not in Sunday schools, and so on. Tens of thousands of volunteers throughout all our communities around the country do similar things. There are volunteers to train, alliances to form, partnerships to develop, all of which are doubtless grist to the mill of the big society, but they all need continuity, not the start-stop of constant new initiatives when start-up funding quickly peters out. The work of Sure Start projects, for instance, is beginning to bear real fruit and needs continuity. Support for stable, loving, couple-relationships, support for volunteers and a commitment to continuity are three elements I commend to the House as we debate the flourishing of our most precious asset—the lives of our young children.

12:34

[Baroness Sherlock]

My Lords, it is a genuine pleasure to follow the thoughtful and reflective maiden speech of the right reverent Prelate the Bishop of Oxford. I serve with Bishop John on the council of St John’s College, Durham University, of which he is president, so I am particularly pleased to be able to introduce him to the House. Bishop John started his ministry as a curate in St Martin’s in the Bullring in Birmingham. He has also served in Bath and Wells, in Taunton, and for five years as Archdeacon of Canterbury. I understand that being an archdeacon is rather like being a Whip. It is a nice mix of the pastor and the guidance, so that may stand him in very good stead in this House.

I live in Durham and the first I ever heard of Bishop John was when I had just arrived and was crossing one of its many bridges—its highest one which has an enormous flight of stairs down to the river. I asked the person who was with me whether anyone had ever walked down them and she said, “The Bishop of Jarrow ran up and down them 20 times a day preparing to climb a mountain in the Himalayas”. I encourage noble Lords that if you want to speak to him about something in the corridor move quickly as you may find that he is out of your reach in no time. Bishop John, for anyone who knows him, has a lot of learning which he wears very lightly. He has wisdom, is articulate and everyone I spoke to talked of his good humour and bad jokes. Somebody offered me a photograph—I think a pantomime was mentioned—but I decided to leave it to them. They may be prepared to give it up in return for a decent dinner in the Peers’ Dining Room some time. I will pass on the name later.

As he said, he now chairs the board of education for the Church of England and will speak on education from the Bishops’ Benches, so I know that we will hear a lot more of him and I look forward very much to that. His skills, knowledge and talent will enrich the House, and he is most welcome.

Turning to today’s subject, I, too, thank the noble Lord, Lord Northbourne, for introducing the debate, and I pay tribute to his long-standing commitment to children and families. I shall not rehearse the evidence, as others have done, about the importance of early childhood in brain development and in ensuring that children can attain their full potential, as well as educational attainment in later years. I am concerned about the degree to which we pay careful attention to the research because, as we heard earlier, it is complex. A large number of factors are at play. Social class interplays with parenting style, income, parental status and family structure, and it is hard to separate out causality from correlation, so we need to be careful in using evidence. However, it has been demonstrated that parenting is in itself a significant causal factor, even when one controls everything else. I am pleased that the debate has begun to separate out the idea that this is not about parents’ involvement in education, important though that is, but it is about parenting in the home and parenting itself, and how much difference that can make to children in later years.

I want to draw attention to two things. First, I shall pick up where the right reverend Prelate left off about the importance of couple-relationships. I have worked for some years with single parents, but I also know that most of them did not start out as single parents and never intended to be. Most children were born with both parents either married or resident at the same address, and then life had a way of intervening. One thing that tends to intervene is the arrival of children. There is a lot of established evidence that the arrival of children can place enormous pressure on the relationship between the parents, and conflict within the home can in turn have a significant effect on the child. A wonderful charity, One Plus One, uses a lot of research evidence to develop programmes to support families. Penny Mansfield, who runs it, said:

“This is where there’s a paradox. While a strong relationship between their mum and dad is good for babies, it seems that their arrival can disrupt or even weaken the relationship that should cradle their early life”.

So, support for couples is just as important as supporting children directly. I should be grateful if the Minister will say what steps the Government will be taking to support this important area of work.

Secondly, I welcome the growing acceptance that parenting skills can be learnt. So often, one talks to parents who assume that they should be able to do this naturally but when they get there, they struggle and are embarrassed to admit it and ask for help. It is as though asking for help is acknowledgement of failure as a parent, whereas if you were good you would somehow know how to do it. It is no accident that for a long time one charity had a strap line saying, “Because children come without instructions”. How best can the Government support people in getting that information across? One Plus One developed a brilliantly simple online tool called Baby Clues that parents can use to help them understand better how babies communicate and how they communicate with each other. Babies cannot talk, as the noble Lord, Lord Northbourne, pointed out, but they can communicate. Being able to read the cues that babies offer can be crucial. If a father picks up his baby daughter and she pulls or turns away from him, he may interpret that as her not wanting him to hold her. In fact, she may be signalling that she is overstimulated. Knowing that one piece of information can make a difference to how he interprets the cues coming from the baby and how he in turn feels and reciprocates.

The online nature of that service is sometimes very important. One Plus One provided that along with the Couple Connection. They found that almost half a million parents used it. One quarter of them were men, but half of them said that they would not have used a face-to-face service.

Sometimes the state is not best placed to do that. I strongly urge the Government to think about how they can support the voluntary sector—organisations such as Home Start, One Plus One, Family Lives and a range of other voluntary organisations, many of which are now struggling considerably with their finances. How will the Government support voluntary organisations in supporting parents to do the things that they can do best?

12:40

[Baroness Stowell of Beeston]

My Lords, I start my maiden speech by thanking your Lordships for the warmest of welcomes since my arrival three weeks ago. This is without doubt one of the friendliest places that I have ever joined, but arranging sleepovers is taking the friendly thing a bit too far.

I also take this opportunity publicly to thank my close friends, my noble friends Lord Coe and Lord Hill of Oareford, the Minister, whose support made my introduction to this House all the more special. Talking of special leads me naturally to remark on the impressive professionalism of all staff working in this House—and I really mean all staff. Not only do I thank them for their support and guidance, I wish to record my great respect for them and for what they do.

I congratulate the noble Lord, Lord Northbourne, on securing this debate. Before I make my contribution, I will say a little about my background and to explain why I have chosen this debate to make my maiden speech. There is much academic discussion—and rightly so —about what is termed social mobility, but I am here today because I am fortunate enough to have benefited from it. I was born and brought up in Beeston, a small town just outside Nottingham, from where I am now proud to take my title. I joined the Civil Service in 1986 and, during my time, worked in the Ministry of Defence in Whitehall, the British Embassy in Washington and the Downing Street press office. I had a brief spell in the private sector before returning to politics to run William Hague's office when he was leader of the Opposition. Until the summer of last year, I enjoyed nine busy years at the BBC, and I am now an independent communications consultant. As this is a debate about children, I must declare that the NSPCC is a client.

That is me, but I have omitted two things which are relevant to our discussion today. First, I did not attend university, probably because my comprehensive education was unremarkable. Secondly, the reason that I have none the less achieved considerable success professionally is, I believe, the parenting that I received from my mother and father, a factory worker and a painter and decorator, who encouraged us to be independent, confident and, above else, to seize opportunities that would allow us to succeed.

I share that with your Lordships because, like all new Members of this House, I am frequently asked what is my area of expertise. I am not an expert, but I want to focus my work in this House on how we can encourage ambition and create opportunities for people to succeed, especially those who come from backgrounds similar to mine. To use the policy shorthand, my area of interest is social mobility.

My recent reading has therefore included the report, which has already been referred to, by the right honourable Member for Birkenhead about what he calls the foundation years. Because of my experience, I should not have been surprised, but I was none the less heartened to read in the report not only that parents and families are the most important factor in determining a child's life chances but that their wealth and academic ability are not more important than their aspirations for their children, if those aspirations are maintained. That is the rub. The report shows that parents, particularly those from poorer backgrounds, start with high aspirations but end up with low expectations of what their children will achieve. Parents from backgrounds similar to mine are not aspiring for their children as they get older because they cannot see enough opportunities and because they do not know how their children can achieve success. In my view, addressing that disparity is our biggest challenge and should be one of our priorities. I am pleased that the Prime Minister has already made it so.

I could go on, but, in summary, I believe that we need to champion ambition everywhere and create a range of routes to success that are straightforward, even though they require commitment and hard work. We must not allow our ambition for more working-class children to attend Oxbridge to distract us from helping all young people to be ambitious in whatever they decide to do. To that end, I very much welcome the new generation of university technical colleges and the studio schools which are starting to emerge.

I am grateful for the opportunity to participate in today's debate, and I look forward to future occasions, when I hope to contribute further.

12:45

[Lord Eden of Winton]

My Lords, I am sure that you would all agree that we have just been treated to a real class act, a great speech. As she reminded us, the noble Baroness was for 10 years a civil servant, then she served for nine years at the BBC. In a sense, therefore, she has been both gamekeeper and poacher—the latter occupation, I suspect, finding particular favour with many of your Lordships. She has a reputation for being a straight talker, telling it as it is without fear or favour. We welcome that in this House and look forward to many more such worthwhile contributions from her to our debates.

The noble Lord, Lord Northbourne, has already received proper tribute for bringing this debate to our attention. He has made the welfare of children and family very much his own subject, on which his many years of study and practical engagement have made him a considerable expert. Some years ago, I was the proprietor of a private school for children aged three to 11. That experience gave me an insight, as an observer, into some fundamental truths about the relationship between parent and child.

Being a good parent is not easy. It is true that, in some cultures, it is almost instinctive. To some extent, we have lost that here. That is why it must be helpful that the practice of parenting is taught. There is a clear need for sufficient welltrained health visitors and for the provision of children's centres and the like, to which young parents can turn for advice and guidance. What parents should do is not rocket science, but it is hard work.

Were I now to be speaking directly to a new young parent, I would have the temerity to put forward three prime points. I hope that noble Lords will not find my comments too simplistic. I take courage from the fact that most, if not all, of my points have already been mentioned by other noble Lords. What I am about to say is, to my mind, fundamental to good parenting and to the preparation of a child for subsequent success.

My first point is communication. It is essential that parents talk to their children from tiny babyhood onwards. One of the saddest sights in our modern society is the pushchair with the child facing away from the parent who is pushing it. Both parent and child lose out as a result. There is no communication between them; there is not even eye contact, and eye contact is very important for a small child.

Secondly, it is important, as early as possible, to establish a routine, to do so from day one. The parent should set the parameters and be consistent. That gives the child a valuable sense of security. Thirdly, and above all, as has been said—most notably by the right reverend Prelate in his excellent maiden speech—a child needs to be loved and to feel valued. A lack of love in a child's early life will leave a scar for the rest of its life.

So, communication, order, commitment and love are the essential ingredients of good parenting, the employment of which will help to prepare the child as it confronts the challenges and opportunities that will come its way.

12:50

[Lord Ramsbotham]

My Lords, I join other noble Lords in congratulating my noble friend Lord Northbourne on obtaining this important debate and I echo the words of the noble Lord, Lord Eden, and others who have paid tribute to the tremendous work that he has done and continues to do in the cause of parenting. I absolutely agree with him on his two main points: first, inviting the Government to consider the addition of foundation years education to the current educational structure; and, secondly, concentrating on teaching life and parenting skills in schools and thereafter to potential parents.

I have to admit that my anger at and my interest in the current situation was stimulated in a young offender institution where I was introduced to a 17 year-old boy whose history was that he had been excluded from playgroup at the age of four and was never allowed to attend primary or secondary school. That seemed to me to be utterly idiotic. All that was again stimulated when I read the report by Graham Allen MP, which has already been mentioned. It showed the bleak truth that decades of expensive late intervention have failed. It is self-evident that costs are paid back by early intervention.

The best place that I know to examine what the failure of early intervention and parenting means is the statistics on those wretched children who are currently in custody. I should like to quote some of those statistics because I hope that they will resonate with those who have responsibility for doing something about the current situation. Of those children in custody, 71 per cent were involved with or in the care of the social services before entering custody; 75 per cent had lived with someone other than a parent at some time, compared with 1.5 per cent in the general population; 76 per cent had an absent father; 33 per cent had an absent mother; 39 per cent were on the child protection register or experienced neglect or abuse; 40 per cent were previously homeless; 40 per cent of girls and 25 per cent of boys reported suffering violence at home; 33 per cent of girls and 5 per cent of boys were sexually abused; 1,148 of the 2,010 children in custody in September 2010 were assessed as vulnerable; and 30 per cent of the young men in prison and 49 per cent of the young women received no visits.

In addition, the education of these children is terrible. Of these children, 46 per cent are rated as underachieving; 38 per cent are below level 1 in numeracy; 90 per cent of young men and 75 per cent of young women have been excluded from school; 40 per cent of boys and 53 per cent of girls said that they last attended school before they were aged 14; and 81 per cent have a variety of mental health problems. To take this one stage further, 41 per cent of adult prisoners report having observed violence in the home as a child. The cost goes on and on.

What can we do about it? Of course, we all know about early intervention, but I should like to make one practical suggestion, which I have made many times in this House already. It picks up on the word “communication”, which was used by the noble Lord, Lord Eden. The inability to communicate is the scourge of the 21st century. It starts with parents not talking to their children and then it continues. I discovered, when I found someone wise enough to put a speech and language therapist to assess young people in a young offender institution, that they had done so because they knew that, until and unless you enable a child to communicate with you, you do not know what to do with and for them.

Very sensibly, Northern Ireland has picked this up. Every child in Northern Ireland is assessed by a speech and language therapist at the age of two. I believe that that should be picked up and replicated here. I do not think that this can be done early enough. The figures that we produced in prisons from the age of 15 onwards showed that, if people had been assessed before they started primary school, they would have had a chance to engage with the teacher; until and unless a child can engage with a teacher, they cannot even begin down the education pathway. If I have one plea for the Minister, it is that, in order to enable all the things that people have talked about in this House to happen, this vital ability to enable children to engage is picked up and run with now.

12:55

[Baroness Benjamin]

My Lords, in my maiden speech last October, I mentioned that my mission in life is to put the well-being of children at the heart of society’s consciousness, so I should like to thank the noble Lord for securing this debate, as it focuses on children’s well-being. I also take this opportunity to congratulate all the new Members on their excellent maiden speeches, which highlighted their vision for the well-being of children.

Recent research by the University of York—the Child Well-being Index—showed that, of 29 European countries, the UK was ranked 24th. What a sad indictment that is of our country. I believe that we must strive harder than ever to unlock and unleash the creative potential in the minds of our children and teach them to use it to heal our wounded world. We must prepare our children to think outside the box—differently and creatively—to develop an analytic mind and the ability to express themselves without inhibition.

Childhood lasts a lifetime and children’s future achievements are often decided at birth, as well as through how they are brought up and where they are educated, plus the unconditional love and support that they receive not just from their family but from society. They are our responsibility. We need to excite and feed their imagination in order for them to grow into well rounded human beings. Education is their passport to life. I believe that the best way for young children to learn is through fun and play during those early foundation years, thus stimulating their creative thinking. That includes learning through positive visual and audio stimulation.

For many years I have campaigned for high-quality pre-school children’s television and radio programmes, which at their best can serve as a powerful tool to help parents from all backgrounds to learn how to develop educational and stimulating techniques to use when interacting with their children. It also allows them to watch and listen with their young children, who can use the content as a platform from which they can begin to explore the world and all its wonders.

I do not refer to programmes that encourage passive viewing and are used as surrogate parents or babysitters. Programmes like these should be banned, especially if the television sets are in children’s bedrooms. In fact, I would ban all television and computers in their bedrooms. I am referring to quality not quantity—wholesome, educational, entertaining programmes that open a window on the world and take young minds on an adventure to explore not just their environment but other cultures, too. Yet only 1 per cent of new television programmes are made in the UK and the production of such vital programmes remains under threat. That is something about which we should all be concerned, as children are exposed more and more to programmes that subtract from rather than add to their overall well-being.

I spent many of my early years in the Caribbean with no television, so the art of play was second nature to my parents. Singing songs, reciting poems, listening to stories, dressing up and playing characters from books was a bedtime ritual, which taught us how to communicate to the world. Today, unfortunately, we are living in a different world. Increased working hours, the breakdown of the extended family network and stretched personal financial situations mean that many parents do not have as much time to spend with their children as they would like.

However, high-quality television and radio can be an ally, allowing parents to let their children watch and listen safe in the knowledge that they are benefiting from the content. “Play School”, a programme which I will always be associated with and which I adored being part of, ended two decades ago. It was loved by millions of children and is still remembered fondly. I believe that it was because the producer put children’s well-being at the heart of the programme. It was a sort of mini “South Bank Show” with storytelling, dance, art, songs, mime, music and, of course, the windows that provided a portal to the wider world through which children could expand their knowledge.

Appropriate children’s television is beneficial to childhood development. It can improve attention, expressive language, comprehension, articulation and general knowledge, as well as social interaction and life skills. I urge the Government and broadcasters to wake up to the crisis in the production of quality public service broadcasting for children. I also ask the Government to find creative ways in which to secure funding to maintain the tradition of well made British pre-school programmes that contain all the necessary and essential elements required for our children’s well-being. Children may not inherit all our talents, but they certainly will absorb all our influences, so let us teach them well in order for them to lead the way in the future and to have the confidence, morality and integrity to do so.

13:01

[Lord Ahmad of Wimbledon]

My Lords, I rise to make my first contribution in your Lordships’ House and, in doing so, seek the indulgence of noble Lords for a speech that I hope will meet with the normal conventions of being both succinct and uncontroversial. I am very grateful to many noble Lords from across the Chamber and, indeed, to the officers of the House, who have extended the warmest of welcomes to me and, on the day of my introduction, to my family. The warmth of this welcome was accompanied by some kind words about my relatively youthful appearance. I am reminded of the words of a 19th-century philosopher:

“The first forty years of life give us the text; the next thirty supply the commentary on it”.

What lies beyond that, he does not say, but looking around this Chamber provides me with the hope that perhaps the best is yet to come.

Some noble Lords may recall the day of my introduction, not so much by the fact that it was my introduction, although for those who remember it for that reason alone I am truly flattered, but by the fact that my first day in this Chamber fast became my first night in the House and indeed my second day here as well. It is said that a week is long time in politics; my first week in your Lordships’ House qualified this in literal terms.

Today’s debate is about the importance of good parenting in preparing a child for success in school and success in life. As one of the new Members of your Lordships’ House, I found the empathy and assistance extended to me by many noble Lords a type of sound parenting in its own unique way. Whether this leads to success shall be assessed over time. I also extend my gratitude to the noble Lord, Lord Northbourne, in bringing this subject forward for debate. The noble Lord is someone who has spoken extensively on this subject and is widely recognised for his contributions in the area.

Early learning and the role of parents are key. This is particularly true in infancy, where the creativity of a young mind is like a sponge. From cradle to grave, a journey of learning is something to which I subscribe, but those formative years are key in aiding communication and developing the confidence of a young child. Through my own experience as a youth worker for a youth association for many years, I saw at first hand how children benefited enormously from parents who not only provided the bedrock of security and support but also spent a great deal of time developing a strong relationship with their children. Parents are the earliest role model a child associates with and, if the child is fortunate, as I was, their parents may count among the most powerful and inspiring figures in their life. Indeed, I saw in my time as a councillor and as a governor of a primary school in Wimbledon the importance of integrating parents into the child’s learning, not just at school but during the preamble to school. This had the benefit of allowing the child to be eased into a new environment and for parents to understand the nature of a child’s development.

Another project that I had the pleasure of experiencing at first hand was one in the borough of Tower Hamlets in London. This was based in essence on a mothers and daughters project and it appealed to the Bangladeshi and Somali communities. The initiative is supported through mosaic and is entitled “Seeing is Believing”. Mothers are encouraged to participate through structured classes with their daughters during the reception year. Indeed, seeing was believing, as I saw the benefits of breaking down barriers of language and culture. This assisted not just the children but also the mothers in improving their English-language skills, which enabled and empowered them to become part of their children’s learning in those early development years.

Of course, early learning is not limited to educational attainment alone. This point is well made in the independent review by Graham Allen, Early Intervention: The Next Steps. As I stand before noble Lords today, I reflect on that emotional bedrock and the social importance of developing social and emotional skills. I do so as a beneficiary of parents who, despite the challenges that they faced, spent a great deal of time and took a deep interest in developing my skills during those early years. They are two individuals whose encouragement, support and affection were unlimited and unconditional.

In closing, perhaps I may say what a privilege it is to have had the opportunity to participate in this debate, which focuses on the very foundations of how lives are built, as I begin a new chapter in my own. In this regard, I express my deep gratitude and thanks to my two supporting Peers, my noble friend Lord Howard of Lympne, for his kindness and mentoring, and my good and noble friend Lady Warsi, for her advice, good humour and friendship. I should say how honoured and humbled I am to be in such distinguished company. Entering this House was a time of reflection, in that I have joined the ranks of a quite unique Chamber, one of great history and heritage, renowned for its role in scrutiny and review. It is a place of insight and intellect, brimming with wit and wisdom, as I have seen during the day and, indeed, through the night. I assure noble Lords that, in my humble contributions, I shall always endeavour to protect and respect the best traditions and conventions of this most revered and respected of institutions.

13:07

[Baroness Hollins]

My Lords, it is a real pleasure to be able to welcome the noble Lord, Lord Ahmad of Wimbledon, and to congratulate him on his maiden speech. I want to mention that we share not just Wimbledon in our title but a great love for Wimbledon and Merton, where he is very well known. The noble Lord has already had a stellar career in the financial sector and is an expert in marketing, but we have also heard about his contributions to the voluntary sector. He has also made a huge contribution to local government. I know too that the noble Lord has a lot of international connections and I look forward to getting to know him and seeing something of his youthful energy applied to the work of this House in the future.

I am grateful to my noble friend Lord Northbourne for introducing this debate. The topic is close to my heart as I originally trained as a child psychiatrist. My daughter is also a consultant psychiatrist and psychotherapist working in the field of perinatal mental health and infant development. I am going to focus on the role of specialist mental health services in enabling vulnerable parents to be successful in preparing their children for school.

Graham Allen’s report brings something to our attention that I am particularly pleased about. On page 40 he mentions the impact that unresolved trauma in youth can have on later parenting. He also draws attention to the importance of early intervention in leading to permanent improvements in a child’s health and developmental outcomes, but he stresses that this must happen in the first months and years of life, and even during pregnancy.

Research has increased our understanding of the importance of early experience for later child health and development. The evidence is strong. The emotional and physical environment and relationships during pregnancy and infancy are crucially important in enabling a child to be successful in school and in later life. This applies equally to children with learning disabilities, whose parents must also come to terms with their disability.

The evidence tells us that the first relationships in life are central to healthy development. Professor Schore, from UCLA, says that,

“the child’s first relationship, the one with the mother, acts as a template, as it permanently molds the individual’s capacities to enter all later emotional relationships”.

This profound statement has been understood within the psychoanalytic and psychotherapeutic traditions for decades, but now this has been recognised on a neurobiological level. He explains that the architecture of the growing baby’s brain will reflect the quality of the relationships that it has adapted to. The circuits formed during these early years, when the brain is most plastic, may last a lifetime. A baby needs a mother who can help him by responding sensitively to his distress, so the baby feels understood and can begin to manage his own physical and emotional experiences, both now and in later life. This is the foundation of communication, and when communication is absent the health of this emotional attachment needs attention.

Margot Waddell’s book Inside Lives: Psychoanalysis and the Growth of the Personality gives some excellent examples—which I do not have time to share with your Lordships now—which show well how a parent helps a small child to develop a capacity for learning by helping to manage their emotional experiences. Waddell explains:

“Something happened … which enabled the child to feel understood … Inseparable from this, no doubt, is an experience of being loved and of loving, and the deepening expectation of similar feelings to, and from, others”.

Without a stable early emotional development, children will be less able to form relationships and communicate with others, to learn or to take advantage of their school experiences. The early relationship with mother impacts on peer relationships at nursery and at school, and this can further affect the child’s ability to enjoy school and to be able to share in and learn from group activities.

So what early intervention programmes or treatments can help those who are struggling? An effective intervention recommended in Graham Allen’s report is the family nurse partnership. This programme was developed in the United States over 30 years ago but it has also had impressive results here in the United Kingdom—for example, by improving educational achievement and parenting practices, and by reducing child abuse and crime.

However, some women need more specialised mental health interventions to improve outcomes for their children and will not be able to respond to social or community-level interventions alone. Serious problems can affect women of all ages, cultures and socio-economic groups—for example, parents who themselves have experienced abuse and neglect are more likely to need health-led interventions—and there are other special cases.

Research is clear that mental health problems such as depression, psychosis and anxiety during pregnancy not only carry significant risks for mother and baby but can have long-lasting effects on cognitive, emotional and behavioural development. The complexity of attachment difficulties can be better understood by carrying out psychiatric and psychotherapeutic assessments. Health-led interventions are needed to address these complex and painful situations.

Perinatal and parent-infant psychotherapy can treat distressing experiences such as depression, anxiety and terror by understanding the cause of the difficulties and by focusing on improving the relationship between mother and baby from pregnancy onwards.

Tertiary centres such as the Cassel Hospital are also needed. Sadly, the future of the Cassel is under question. I hope the Minister will recognise the importance of providing specialist mental health services for mothers and their infants rather than waiting for child psychiatry services to intervene at a later stage when problems have already become established.

[Baroness Verma]

I remind noble Lords that this is a timed debate and that they have five minutes.

13:14

[Lord Winston]

My Lords, I apologise to the noble Lord, Lord Lingfield. Against the conventions of the House, I stood up and moved across the Chamber during his maiden speech. However, frankly, he spoke with such gravitas and assurance that I assumed he was not a maiden speaker.

If, immediately after birth and before it is three weeks old, a kitten is blindfolded for merely three weeks, Dr Mower at Children’s Hospital Boston has shown that it will remain blind once the blindfold is removed. The plasticity of the brain cannot compensate for the loss as a result of damaged stimulation.

We have in our brain around 100 billion neurons, which have up to 2,000 connections, and we learn by making more connections as we grow. Most of those connections are made in childhood. However, your Lordships’ brains will be altered in their anatomy permanently as a result of sitting through this debate because, hopefully, you will have learned something—even if it is only to go to sleep. A new-born baby has a brain of about 370 grams, and by the time he is 15 or 16 it will be around 1,450 grams in size. That colossal growth occurs mostly during childhood—and what happens in the first three years of life is of crucial importance, as other speakers have already said.

In 1998, Gordon Brown, when he was Chancellor of the Exchequer, set up the Sure Start programme as a result of concern about child poverty. The programme, which was not greeted enthusiastically by the scientists at the time—indeed, there was some scepticism about its value—certainly did not show massive advantages immediately. However, as time has gone on, it is now clear that the Sure Start programme—which is, admittedly, quite expensive but is devoted mostly to children in the most deprived parts of the United Kingdom—has been of massive benefit. It has made a big difference to social cohesion, social responsibility, the reduction of crime in the affected families and to better parenting. It is, quite clearly, a very good programme.

Although there was original scepticism, a recent publication by Dr Melhuish, Dr Belsky and Dr Barnes, of Birkbeck College, shows on a proper basis that the original programme—in my view, it should have been the subject of a controlled trial from the start, but was not; that was a mistake by the Labour Government—has undoubtedly proved to be of great benefit. It is important that we recognise that today.

The noble Lord, Lord Northbourne, mentioned many things with which I agree, but he referred, in particular, to the question of the self-esteem of children. There is overwhelming scientific evidence that children who are not rewarded, who lack self-esteem, grow up to be deprived as adults. They are much more likely to be depressed and to show various psychiatric disturbances, and they will tend to pass those problems on to their children, as the noble Lord has said. For this reason, I hope the Minister will assure the House that the Government will continue to protect the Sure Start programme, which, though expensive, has been a clear indication of the value of a properly run programme in these areas.

13:19

[Lord Alton of Liverpool]

My Lords, the fact that four noble Lords have chosen to make their excellent maiden speeches today during this debate in your Lordships’ House underlines how well chosen is the Motion that my noble friend Lord Northbourne has laid before us. I join others in offering him plaudits for the way in which he has, during my 12 years here, persistently raised this question again and again and kept this important issue before us. Like some of the noble Lords who spoke before me, I shall focus my remarks on the important report of the right honourable Member for Birkenhead, Frank Field, entitled, The Foundation Years: preventing poor children becoming poor adults.

A rabbi once said, “God was too busy—so He invented mothers”. Perhaps I may be allowed, as a father of four children, to add that He also invented fathers, and that the absence of fathers in the lives of their children has become one of the major factors in the disaggregation of our communities and in the shaping of the next generation of adults. It is estimated that around three-quarters of a million children in Britain today have no contact with their fathers.

In 2002, in a report entitled Experiments in Living: The Fatherless Family, Civitas spelt out the consequences for children who are brought up without a father. It found that these children are more likely to live in poverty and deprivation, to have emotional or mental problems, to have trouble at school, to have trouble getting along with others, to have a higher risk of health problems, and that they are more likely to run away from home and be at greater risk of suffering physical, emotional or sexual abuse.

Mr Field reflects on the rejection of children by their parents:

“Since 1969 I have witnessed a growing indifference from some parents to meeting the most basic needs of children, and particularly younger children, those who are least able to fend for themselves”.

His view is supported by the Millennium Cohort Study undertaken at Bristol University, which showed that the key drivers in determining a child's life chances, measured at the age of three, are: positive and authoritative parenting, the home learning environment and other home and family-related factors. These factors, which Mr Field recommends should be used in the life chance indicators proposed in his report, are predictive of children's readiness for school and of later life outcomes.

These indicators and the foundation years strategy—which other noble Lords have referred to, and which would be the first pillar of a new tripartite education system—may not immediately end income poverty but they can break the intergenerational cycle of disadvantage. Research commissioned by the Department for Work and Pensions bears this out. The simple involvement of a mother or father who is interested in their children's education increases a child's chance of moving out of poverty as an adult by 25 per cent.

Self-evidently the teaching of parenting and life skills should become a greater priority. The extension of initiatives such as Mumsnet, the kitemarking of beneficial television programmes—a point made by the noble Baroness, Lady Benjamin—and a reassessment of the relentless and corrosive advertising aimed at children, also have their place. Sure Start children's centres can help parents put elementary parameters, essential for later progress, into place—basic things such as getting parents to teach their children how to sit still and listen, how to be aware of others, to understand words like “no” and “stop”, to master basic hygiene, and so on.

Mr Field has in no way changed his view about the importance of tackling poverty but believes, as I do, that a strategy that depends solely on income transfer to remedy child poverty is doomed to fail. My own parents left school at 14 and came from backgrounds of acute poverty—my mother was an immigrant whose first language was Irish, not English—but both knew that a positive approach to learning at home, to encouraging the education of their children and to improving their own qualifications was critical; and that despite the vicissitudes of living in poor housing and in a flat on an overspill council estate, money alone was not the key to transforming the life chances of the next generation. I saw this trump card used by many families in the inner-city neighbourhoods of Liverpool that I represented for 25 years either as a city councillor or Member of Parliament. As Frank Field remarks:

“I have increasingly come to view poverty as a much more subtle enemy than purely lack of money, and I have similarly become increasingly concerned about how the poverty that parents endure is all too often visited on their children”.

Mr Field's report reminds us that it would require £37 billion of further tax transfers per annum to cut child poverty to 5 per cent of all children by 2020. We should take his important report—which points to the need for life chance indicators in foundation years—very seriously, and I look forward to the Minister’s response to his recommendations.

13:24

[Baroness Ritchie of Brompton]

My Lords, I congratulate the noble Lord on securing this debate on this important topic, which is of great interest to me; and I welcome the contributions of other noble Lords, in particular those who are making their maiden speech. There is obviously much knowledge in this House in this area. I believe that this debate, as has been said, is timely, as it follows the publication of Frank Field's report in which he explores how the home environment and parental involvement can impact on a child's readiness for school, and the impact of poverty on children's ability to succeed in school and in later life.

I welcome the recommendations in the report to establish a foundation years service and life chances indices to aid and support parents in this vital role. A further recommendation of the report is that the fairness premium, as part of the pupil premium, should be extended to the foundation years. I look forward to hearing my noble friend the Minister’s comments on those recommendations.

There is much research to show that parental involvement both in preparing children for education and in supporting them through their educational journey is crucial. Equally, we all know that being a parent is not always easy and that, for some, their particular circumstances make it even more difficult. Parents may have complicated and disorganised lives; they may have their own health problems that prevent them helping and encouraging their children; they may have had negative educational experiences of their own, or be fearful of the authority which they perceive teachers to represent. In many cases, however, only education will ensure that vulnerable children can move out of the poverty trap, and for that they will need their parents’ help.

If we really want to improve the educational outcomes for our children and have aspirations for them we need to start when they are very young, and we need to make sure that parents are properly confident about helping their children by providing an environment in which they are happy to access services. Many disadvantaged families do not need therapeutic intervention but they do need opportunities to extend the experience of their children—through play, singing, talking, et cetera—so that normal development of the brain can be maintained. These opportunities should be accessible. A programme called the Peers Early Education Partnership—PEEP—had 14,000 visits a year in a local shopping centre where parents could feel comfortable getting support because of the attitude and skill of the staff and because it was open six days a week, for most of the day, in a place where they went regularly and felt comfortable.

Of course, a small minority need more intense and specialised support to deal with the challenges they face, and we need to provide services to address those needs. The coalition Government are clearly aware of these issues and seem committed to addressing them. There is a coincidence of a number of reports, which has already been referred to, and which I hope very much will feed into government policy in this area. Equally, I welcome the Government’s commitment to increase the number of health visitors and support for family nurse partnerships, which shows a real willingness to tackle some of the more fundamental problems in our society. Multidisciplinary working between health visitors and early years practitioners is crucial in enabling them to understand the contribution that each particular profession can make and to co-ordinate their work to make it more effective and less expensive.

This issue is important for national government but also for local government, which provides many of the services; and of course the third sector has an important part to play. In my own local authority, our services for children are underpinned by the concept of “strong families at the heart of strong communities”. We run a range of parenting programmes. One in particular is called Incredible Years and is targeted at families with babies aged up to six months and where there are parental mental health and attachment issues. Many of our programmes are run from children's centres but some can also be offered in the home.

Many noble Lords are involved with charitable and voluntary organisations that are active in this area—I have already mentioned PEEP, which is doing work nationally, and much of whose work has been evaluated by Oxford and Warwick Universities. The charity focuses on supporting parents from their child’s birth through to school age and on developing three aspects of learning with their children: numeracy and literacy, self-esteem, and learning dispositions. Home visits are made soon after birth and there is a programme for families who would benefit from the one-to-one approach.

These are important projects that are intended to help parents become more confident in helping their children to prepare for education. However, it is important, particularly in these financially tough times, that these programmes are based on rigorous evidence and properly evaluated for effectiveness. We need to use the very best research and practice, whether it is from government or the third sector, to ensure that the next generation of our children has all the opportunities that it needs to succeed in life and in education.

13:29

[Baroness Howe of Idlicote]

My Lords, I join in thanking my noble friend Lord Northbourne for securing this debate on the importance of parenting. The subject and, especially, the role of fathers in bringing up children is one where his considerable expertise and persistence in keeping the subject well up on your Lordships’ agenda have at last paid off. Above all, I want to applaud the recognition that has at last been given to why early intervention is so important in a child’s development—indeed, for their whole life—to say nothing of the value it will bring to society as a whole.

Many reports have been mentioned by my noble friend and other speakers, but I am particularly pleased about the fact that two Labour MPs—Frank Field and Graham Allen—were commissioned by the coalition Government to produce this report. I shall construe that as definitely an indication that there is all-party support for this approach. Ironically, we are also to some extent indebted to our catastrophic economic situation because the Government are increasingly looking for evidence of clear value for any money spent. Therefore, they are at last prepared to acknowledge that locking up offenders, particularly young offenders, produces an endless churn in and out of prison at huge personal, social, and financial cost. I welcome the current Government’s declared policy of keeping as many offenders out of prison as makes sense by imposing more big society-type community sentences, paying more attention within prison to education deficiencies and to training for jobs and having a clearer, more effective approach to treating drink and drug addicts and those with mental health problems. All that is certainly a good start and if combined, as it should be, with effective mentoring and help with housing and finding jobs on release, it should help reduce the level of reoffending.

However, what we are discussing today—early intervention—will be even more effective in reducing the ultimate cost of that group, and it is also clearly the right way to unlock the potential in every child, particularly those with physical or other forms of special needs who sadly appear to be growing in number. It is equally important to give support to the poorest, most deprived families, perhaps particularly to those from chaotic backgrounds whose children are at far greater risk of underachieving or worse at school and afterwards.

In all these situations, the returns are demonstrably beneficial. Overall benefit-to-cost ratios are as high as 17 per cent. Quite clearly, if those parenting a child are capable of giving it unconditional love and support, knowledge of right and wrong and that essential ability to communicate and to make and keep friends at school and beyond, then the resources the state will need to spend on those children will be considerably smaller. That does not mean that no resources should be spent on those children. Your Lordships have only to think back to the time when they all became parents. It may be a fairly terrifying world for every child to be born into, as some experts tell us, but for parents— especially, I emphasise, for mothers—it is a completely new and rather terrifying world as well. That is why the coalition's determination to see that there will eventually be enough midwives, health visitors and nurse partnerships to see all parents through those early stages is to be hugely welcomed.

The professional help and advice that they give, together with other family support, of course, will be invaluable to everyone, but if this is the way forward, two aspects are crucial. The first is that the many government departments involved will be committed to working together and to sharing experience and information about the individuals concerned. The second, which is probably of even greater importance, is that the finance involved will be made available. It is no good starting on this path unless the work can be carried through. I do not mind what sources the finance is found from, as long as they are legal, but they must be there before the Government start down this course. If we achieve this, it will in the long run result in savings at every level from reduced prison and policing costs, societal benefits from less fearful neighbourhoods, the economy and individual fulfilment to much, much more. I hope the Minister will be able to confirm that early intervention is indeed an up-and-running, active commitment of the Government.

13:29

[The Earl of Listowel]

My Lords, I, too, thank my noble friend Lord Northbourne for calling this debate. I recall Mary Crowley, the director of the Parenting Education & Support Forum, which for many years co-ordinated efforts in this area, telling me that my noble friend called a meeting in the Moses Room several years ago bringing together interested parties in this area and out of that grew the Parenting Education & Support Forum. As the noble Lord, Lord Eden of Winton, said, my noble friend has many years’ practical experience of organising holiday camps for young people from the East End.

I shall make a few quick points. The noble Lord, Lord Winston, made very important points about Sure Start. A recent report from 4Children and the Daycare Trust found that a significant number of Sure Start centres expect to close at the end of the year. One thing that might help is guidance to local authorities on the best priorities to use when some services might be cut; for instance, on choosing between a speech therapist in a children’s centre and some other practitioner, on whether one post can be lost or on looking at a Robin Hood method so that wealthier parents pay while the poorer do not. This might be something on which the Minister could work with the Department for Communities and Local Government.

The Coram Family was mentioned twice. We speak of Sure Start children’s centres, but the original model on which they are based was the Coram model. This brings me to my theme, which is the importance of having the right professional framework to support parents with complex needs, the sort of professional framework that Coram offers so outstandingly.

I am very concerned about the future of the Cassel family assessment unit, and I am most grateful to my noble friend Lady Hollins for alluding to her concerns. Will the Minister speak with the noble Earl, Lord Howe, about these concerns? We understood that the decision on its future would be taken last month, but I think there is still some hope that that decision might have been delayed because of other priorities. This centre has faced difficulties. In 2005, a decision in the Court of Appeal lifted the duty on local authorities to provide assessments at this centre of expertise in Richmond. It is a 25-bed unit that works with families, both parents and children, with very complex needs. It is a national NHS flagship institution. It has a good record of keeping families with very complex needs together. Since that 2005 ruling, it has been used less and less. It is hard to justify the continuance of this institution because not all its 25 beds are being used. The problem is that it has not been properly funded. It needs to be nationally funded. It is a specialist service. This is the question before the Government now: shall we fund it nationally? If the Government choose not to, it is currently due to close in May so that is a critical decision. I recognise that the Government have a huge range of priorities to decide upon at the moment but, given the importance of this early intervention, the complex needs and the money saved—as has been made so clear throughout this debate—by intervening at that point with those families, I hope that the Minister will pass these concerns to the noble Earl, Lord Howe. I am most grateful for the conversations I have already had with him on this matter.

I turn briefly to the model developed at Hackney of intervening on parents with complex needs. Over the past three to four years, Hackney has reduced the number of children coming into care from 500 to 270. That is a huge saving in costs on those children and in terms of the courts. That money has been saved and reinvested in the service, half of it being sent back to the local authority. That has been achieved by developing a superb expert framework, recruiting the very best social workers who are working in teams with systemic psychotherapists. Those people have eight years of formation and such high expertise that they can quickly get the children back into their families and support the parents in caring for them. I look forward to the Minister's response.

13:41

[Baroness Crawley]

My Lords, I, too, congratulate the noble Lord, Lord Northbourne, on securing this most important debate on one of the most intractable issues facing our society today. I also thank him most sincerely for his courtesy in giving me sight of his speech notes and, more broadly, for his terrier-like grip on the subject of parenting and children’s well-being over many years in this House.

We have had a number of maiden speeches today and we welcome them all. The noble Lord, Lord Lingfield, in a most informative contribution, gave us the benefit of his wide experience in this area of children’s special educational needs and mediation. The right reverend Prelate the Bishop of Oxford gave us a refreshing, moving and most amusing tour of his diocese. As a resident of north Oxfordshire, I hope that our paths will continue to cross both inside and outside this House. The noble Baroness, Lady Stowell of Beeston—I am looking for her; there she is—will be a very important asset to this House, as her clear, humorous and excellent maiden speech demonstrated, while the noble Lord, Lord Ahmad of Wimbledon, gave us an engaging, arresting, confident and highly enjoyable maiden speech, outlining his great experience with young people. He is most welcome both day and night in this House. They were all excellent maiden speeches and the House is all the richer for the contributions of our new Peers.

The Library note issued for this debate draws our attention to the bulging literature on the subject of educational outcomes and parenting. We know from Leon Feinstein's research, which the noble Baroness, Lady Walmsley, referred to in her contribution that at a very early age—by 22 months—a bright child from a disadvantaged background begins to be overtaken in cognitive ability by a less bright but privileged child. While this is not to say that parenting is more likely to be poor in poor families, it does suggest that when parenting is poor the negative effect starts to accrue very early, well before the child goes to school. Moreover, the effects are cumulative and can markedly shape the lifelong prospects of the child.

Professor Desforges and Alberto Abouchaar undertook a literature review on the impact of parenting, one of their findings being that in the primary age range,

“the impact caused by different levels of parental involvement is much bigger than differences associated with variations in the quality of schools”.

A paper by Ingrid Schoon and Samantha Parsons assessed whether growing up in a socially disadvantaged family has a lasting implication for psychosocial adjustment in childhood. It concluded that,

“generally the study indicates that a stable and supportive family environment provides the ideal context for the child to flourish. In the long run, however, even resilient children are still at least in part handicapped by the experience of early social disadvantage”.

Demos, the think tank quoted by the noble Lord, Lord Northbourne, states:

“Parents are the principle architects of a fairer society”.

Amen, I say, to that. Philip Larkin, the poet, put it in another perhaps even more succinct way. We conclude that positive, early parenting is essential for children to grow up into healthy, happy, achieving and rounded adults. We know that, and that most parents want to do the best for their children. They worry about whether they are getting parenting right.

A report was published recently by the charity Family Lives, formerly Parentline Plus, which found that a majority of parents felt under pressure to be a perfect parent—pressure mostly from the media, sometimes from Government and from their own parents. So many parents know that good parenting really matters and they want help and advice from time to time. Almost a quarter of parents in the report had sought help from the child’s school on parenting issues, which is to be welcomed. This raises questions on what role the Government—any Government—should have in supporting good parenting.

It is because of the importance of good early parenting in securing positive outcomes for children, and because parents say that they want access to advice and support when they need it, that the Labour Government were committed to developing a wide range of support for parents, including parenting classes. For example, there are all the main Sure Start children’s centres, which my noble friend Lord Winston advocated very well. We built 3,500 of them in our time, which were used by more than 2.5 million children and families. They were all required to offer parenting classes using one of the well evidenced programmes that have been shown to have lasting, positive benefits for children and their families.

The centres were funded to train staff properly to ensure that such classes were delivered effectively, which was most important. Most primary schools and many secondary schools also choose to offer parenting classes as part of the extended activities and family learning programmes, which again were funded by government, because those schools understood the benefits not only to the children and families but for the schools themselves, with improved behaviour and better learning for all. Is the Minister concerned about the proposed closures of the Sure Start children’s centres and the reduction in parenting classes that they provide?

The Daycare Trust, which was mentioned by the noble Earl, Lord Listowel, said last week that 250 Sure Start centres may shut altogether, with most others suffering deep cuts to their services. The new early intervention grant to cover Sure Start, although welcome, is considerably less than the grants it replaces, with some suggesting that there will be as much as £1.4 billion of cuts in all early intervention programmes. What impact does the Minister expect that the cuts in local government will have on parenting support?

As many noble Lords have said, by far the most effective approach is preventive—helping vulnerable parents by getting to them early—and, as we believed that to be the case, the Labour Government introduced in many areas the much acclaimed Family Nurse Partnership, developed over 25 years in the United States. This approach attaches specially trained midwives to very young, vulnerable first-time mothers, from early pregnancy and through the first two years of a child’s life. The family nurse teaches and encourages all aspects of positive parenting as well as healthy lifestyles, and helps with strong couple relationships between parents, as marvellously outlined by my noble friend Lady Sherlock. Research in the United States has demonstrated that this approach has long-lasting benefits, including in educational attainment, to children born in the most deprived circumstances, as well as significant savings by preventing problems occurring later on in the child’s life. Will the Government continue to expand the Family Nursing Partnership programme across the country?

This has been a serious and timely debate, with highly informed contributions from noble Lords. Nothing is more important than the well-being of our children, as the noble Baroness, Lady Benjamin, and my noble friend Lady Massey have said. We are living through austere, sobering times. The Minister may argue across the Dispatch Box about the rights and wrongs of cuts that are being made to services, but one thing that we absolutely agree on is that it is not the children’s fault that we are where we are economically, and that the impact on them must not lead to a lost generation. As well as responsible parenting, we always need responsible government.

13:51

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

My Lords, I congratulate the noble Lord, Lord Northbourne, on securing this debate and on setting out the issues so clearly and with his customary thoughtfulness. I thank him for the courtesy of sharing his speech with me, which helped me prepare for today’s debate.

Like the noble Baroness, Lady Crawley, I congratulate the right reverend Prelate the Bishop of Oxford and my noble friends Lord Ahmad of Wimbledon, Lord Lingfield and Lady Stowell of Beeston on their excellent maiden speeches. I cannot add much to the comments made by the noble Baroness, Lady Crawley, but I am clear that, different though they were, they were united in their quality, and we all look forward very much to the contributions that they will make in years to come.

I knew that we would have a good debate, and so it has proved. It has been a broad debate that has raised a large number of issues, and I will do my best to respond to the broad themes that have been raised. I associate myself strongly with the remarks of the noble Lord, Lord Northbourne, at the outset. This Government, like the previous one, want to improve educational outcomes in our schools and to reduce inequality in our society. I hope that it is also fair to say that this Government, like the previous Government, recognise the importance of the early years in children’s lives and development.

In headline terms, there has been a lot of agreement in this debate—first, that good parenting in the early years matters; love, communication and order are some of the themes that have been picked up repeatedly. Secondly, it has been agreed that, despite most parents doing a very good job, there is clearly a group which needs support. Thirdly, there is a cross-party consensus on the need to tackle those issues. Fourthly, we need to find a way of co-ordinating the efforts that are being made, of sharing good practice and of trying to approach the issue in the round rather than in silos. That is particularly the case when one is talking about families with multiple problems.

Today’s debate is timely, as we have heard, because the Government are considering or have commissioned reviews in four separate but interrelated areas: a review into poverty and life chances by Mr Frank Field; a review into early intervention by Mr Graham Allen; a review into the early years and foundation stage by Dame Clare Tickell; and a review into child protection by Eileen Munro. This is a reflection of the priority being given to this whole area. It is the Government’s intention, as we have been urged by noble Lords, particularly by the noble Lord, Lord Northbourne, that we will respond to the reviews by Frank Field and Graham Allen and set out a new policy statement later in the spring.

We know that what happens in a child’s early years is critical to that child’s future attainment, behaviour and happiness. Those points were set out persuasively by the noble Baroness, Lady Massey of Darwen, and my noble friend Lady Walmsley. That is why, in a difficult financial situation, the Government consciously made decisions to try to protect funding as much as possible for the earlier years, keeping spending on schools flat in cash terms, introducing a pupil premium, extending 15 hours of free early education to disadvantaged two year-olds and providing an extra 4,200 health visitors.

I want to say in passing that what we do in schools is important as well. While I fully accept the contention that the early years are crucial, it is equally not the case that a child labouring under some of the disadvantages that we have been discussing is doomed to failure. We can all think of wonderful schools that have high expectations and provide an orderly, caring environment where their pupils achieve at least as well as, or better than, pupils from more affluent backgrounds. I am thinking of schools like Mossbourne Community Academy, which has a very high number of children on free school meals but has outstanding results, or King Solomon Academy, which I was fortunate to visit last week, which is giving the structure, support, engagement and aspiration that those children well might not have been receiving at home.

We have heard a lot of convincing evidence today for why early intervention matters. I was particularly struck by the figures provided by the noble Lord, Lord Ramsbotham. I listened with care to what he had to say about assessment. It is true to say that, as part of the universal healthy child programme, all children are assessed by a health visitor or a member of their team at two and a half years, and we hope that the expansion of the number of health visitors will make the quality of that assessment better and ensure that it is carried out.

I also learnt from the noble Lord, Lord Winston, that I apparently have 100 billion neurones, which is about 100 billion more than I thought I had and probably 100 billion fewer than the noble Lord, Lord Winston. We know from research that 94 per cent of children who achieve a good level of development at age five go on to achieve expected levels of reading at key stage 1, and are five times more likely to achieve the highest level, level 3, than those who have not reached a good level of development at age five. The National Literacy Trust, of which I was fortunate to be a trustee for many years, has also shown that parental involvement in a child’s reading has been found to be the most important determinant of language and early literacy.

There may be a utilitarian argument there for reading with one’s children. I actually have far more selfish reasons for wanting to read with my children: I never found anything nicer to do. I will probably be attacked for saying this by my daughter, who is now at university, but she asked me the other day to read her a Just William story again, so I must have done something right. We also know that parental support for education continues to be important as children get older. Parental involvement in a child’s schooling between the ages of seven and 16 is a more powerful force than family background, size of family and level of parental education. The Government therefore accept fully that the quality of care and support for early learning that young children receive, and their positive engagement with parents, can make a real difference to later outcomes in life.

Quality childcare and practitioners play a crucial role in supporting the children’s learning and development and engaging with their parents, and it is important that we support the sector to continue that role. The early years foundation stage has helped to promote a consistent approach to early learning and development for children aged nought to five across the sector, and has done much to raise standards and engage parents. We have asked Dame Clare Tickell to undertake a full review of the early years foundation stage, and to look at how best to protect young children’s safety and welfare and support their development and learning. Her review covers four main areas: scope of regulation, learning and development, assessment, and welfare. Underpinning all of this, we will aim to reduce burdens on providers, prepare children for learning at school and better support parental engagement in the foundation stage. We look forward to receiving Dame Clare’s report in the spring.

I accept fully the point made by the noble Lord, Lord Winston, and the noble Baroness, Lady Crawley, about the importance of Sure Start services. I recognise the work done by the previous Government in getting that network up and running. We know from stories, some of which we have heard today, that Sure Start services can make a real difference to families’ lives. That is backed up by the 2008 and 2010 reports from the national evaluation of Sure Start, which show improved outcomes in a number of areas, including better behaviour, more positive parenting skills and home learning environments, and better physical health of children living in an area with a Sure Start programme.

Sure Start children’s centres remain at the heart of the Government’s vision for early intervention. That is why we have put resources, in a difficult financial situation, into the system to maintain the network of Sure Start children’s centres and have provided the new investment I have already mentioned to pay for extra health visitors.

Last week, the Government published their response to the Education Select Committee report on Sure Start children’s centres. That response sets out more detail about our vision for children’s centres being accessible to all but with a clear role in identifying and supporting the most vulnerable and disadvantaged, with a commitment to be more accountable for the services which they deliver. We will further set out the key role of Sure Start when we publish an early years policy statement, which I mentioned earlier, in the spring. We will develop this in partnership with the sector to set out a new vision for Sure Start children’s centres, and the practical steps for achieving it. Our aims will be to increase voluntary and community sector involvement with children’s centres, a point made by the noble Baroness, Lady Sherlock, to try to improve accountability arrangements, to increase the use of evidence-based interventions, and to see whether we can introduce greater payment by results.

I accept the point made by the noble Baroness, Lady Crawley, about the issues being faced in some local authority areas as local authorities are looking at their budgets and addressing the future of Sure Start centres. Local authorities are looking at their budgets and are working hard to make the right decisions. Section 5D of the Childcare Act 2006 places a duty on those local authorities to consult before opening, closing or significantly changing children’s centres, and to make sure that there is sufficient children’s centres provision to meet local need so far as is practicable. However, we know that in some local areas families are concerned about whether this will alter their local services. I do not dispute that people have that concern. My honourable friend Sarah Teather, the responsible Minister, is monitoring the situation carefully. Although it is raising difficult issues, which I accept, our basic position is that decisions which affect local families should be taken locally so that services can be managed in ways which best meet local needs.

The Government has announced a national recruitment drive to appoint the 4,200 new health visitor posts I have mentioned. The number of health visitors working with families will increase by almost 50 per cent. The Government have committed to doubling the capacity of the local nurse partnerships. The increase in health visitors will, we hope, reinforce the importance of the relationship between Sure Start children’s centres and health visiting provision. Each children’s centre should have access to a named health visitor. Health visitors have great expertise to deliver universal child and family health services through children’s centres; to lead health improvement on subjects such as healthy eating and accident prevention; to help families stay in touch with wider sources of support, including from the community and other parents; and to be leaders of child health locally, including trying to build partnership between GPs, midwives and children’s centres.

Some of the broad issues that have been raised include families with multiple problems. In December, the Prime Minister set out his ambition to address the concerns of troubled families. I fully accept the point that there is financial sense in doing that, but there is also of course a strong moral need. Successive Governments have grappled with the problem of coming up with approaches that deal with the needs of these families in the round rather than the traditional Whitehall way of dealing with it by department or institution. Central to the Government’s ambition, therefore, will be the development of new approaches to supporting these families, underpinned by freedoms for local authorities to establish community budgets. We are hoping to set these up in 16 local areas to pool budgets for families with complex needs and roll them out to local areas across the spending review period.

The noble and learned Baroness, Lady Butler-Sloss, raised the importance of adoption, which we have debated before in this House. Like the noble and learned Baroness, the Government are keen to see more adoptions with less delay in all aspects of the system. The noble and learned Baroness spoke eloquently about particular problems with the courts system. My honourable friend Mr Loughton is taking the lead in addressing adoption, to speed it up and find more suitable people who are able to adopt, including looking at the role of voluntary adoption agencies.

Relationships and marriage is another theme that was discussed today. All noble Lords recognise that strong and stable families of all kinds are the bedrock of a strong and stable society, a point made very persuasively by the right reverend Prelate the Bishop of Oxford. They are the key to ensuring that children grow up in a loving and nurturing environment, and develop into healthy, happy and successful adults. The coalition Government are committed to helping parents to build strong relationships and supporting families through difficult times. We therefore have plans to put funding for relationship support on a stable, long-term footing to try to make sure that couples are given greater encouragement to use existing relationship support.

The Green Paper Strengthening Families, Promoting Parental Responsibility: the Future of Child Maintenance, was published on 12 January. It places a strong emphasis on signposting separating parents to support, including relationship support. Funding of £30 million for relationship support for the spending review period was announced by the Prime Minister in December. That is an increase on current funding levels and I hope it will make some contribution towards helping couples stay together. As all noble Lords have said, the more one is able to do that, the greater the chances a child has of a fulfilled and happy life.

We have also talked today about the role of fathers. The noble Lord, Lord Alton, particularly stressed that; I very much share the views that he set out. One aspect which the Deputy Prime Minister has addressed is proposals on work and parental leave to make the load more equally spread between the mother and father. That is one way in which, in a more difficult situation for many parents today, we can help give fathers more opportunity to be involved in their children’s upbringing.

It has been, as I thought it would be, a helpful and stimulating debate. If I have failed to respond to any particular questions that were put to me I will follow those up outside this debate. I am thinking in particular of the noble Earl, Lord Listowel, and I will of course speak to my noble friend Lord Howe as he asked me to.

In closing, I cannot do better than quote from the recent report, already referred to today, by Mr Frank Field. The following sentences in particular struck me:

“The things that matter most are a healthy pregnancy; good maternal mental health; secure bonding with the child; love and responsiveness of parents along with clear boundaries, as well as opportunities for a child’s cognitive, language and social and emotional development. Good services matter too: health services, Children’s Centres and high quality childcare”.

As is so often the case, Frank Field puts things extremely concisely. He has summed up our whole debate in those sentences. I share those sentiments; the Government share those sentiments. I am extremely grateful to the noble Lord, Lord Northbourne, for providing us with the opportunity to explore these issues today.

14:10

[Lord Northbourne]

My Lords, when in your Lordships’ House 17 years ago I first mentioned parenting, noble Lords’ eyes glazed over. They clearly did not understand what I was talking about. If I may say so, noble Lords did a great deal better today. It has been a wonderful debate. I very much hope that the Minister will give the House an opportunity to debate this subject after the reports that he promised for the spring have come out. On that note, I beg leave to withdraw the Motion.

Motion withdrawn.

Arrangement of Business

Thursday 3rd February 2011 Lords Chamber

Announcement

14:11

[Baroness Anelay of St Johns]

My Lords, I congratulate the noble Earl, Lord Clancarty, on securing the next important debate. Its importance is reflected in the length of the speakers list of 25. It may be for the convenience of the House—I discussed this with the noble Earl earlier today—if I gently remind the House of the rules governing time-limited speeches. The first debate was a model of good behaviour in this House and reminded us of the respect that all Peers give to each other in keeping to time limits within time-limited debates. I know we have many new Members, whom we welcome to this House. Sometimes it is not quite understood that when the electronic clocks within the Chamber display a time—on this occasion one minute—it means that one minute has already elapsed and the second minute has begun. At that stage, one must consider giving way to others. I refer briefly to paragraph 6.66 —perhaps an inelegant number for giving good advice—of the Companion, which says:

“Speakers in time-limited debates should respect the time guidelines and keep their speeches short, so that all those who wish to speak may do so”.

Arts: Funding

Thursday 3rd February 2011 Lords Chamber

Debate

14:13

Moved By

[The Earl of Clancarty]

To call attention to public funding for the arts; and to move for papers.

[The Earl of Clancarty]

My Lords, I am very pleased that we have the opportunity today to discuss the public funding of the arts. I look forward very much to the maiden speeches of the noble Baroness, Lady Bakewell, and the noble Lord, Lord Wasserman. I look forward as well to all the other contributions to be made, including from those here today who are experts in the arts and the media. I notice that broadcasting is particularly well represented. I am confident that the debate we have ahead of us will be not only a good debate but a highly necessary one. I thank the Library for providing an excellent briefing pack.

There are several good reasons to have this debate at this time. First, there has not been a full debate in this House on the subject of the arts for more than 18 months since the debate of the noble Lord, Lord Bragg, in June 2009. In that period the landscape has changed, with a new Government and a new—although not entirely new—political philosophy, as well as the economic problems that we face. Secondly, this debate complements the debate of the noble Lord, Lord Janvrin, on philanthropy on 2 December last year. Thirdly, there is a timeliness in the light of the speeches and comments made by the Secretary of State, Ed Vaizey and others in just the last few days on corporate sponsorship, which now bring into focus a little more clearly the Government’s intended direction for the arts for the next few years.

My own background is as an artist. I have been a beneficiary of a free arts college education and Arts Council funding. I am a beneficiary also in all the other ways that every person in this country still, to a great extent, benefits both directly and indirectly from public arts funding.

It would take a book with many volumes to write the story of modern post-war public funding of the arts in Britain. It has been one of huge and continuing success, with our important national collections protected, maintained, conserved and now once again permitted free admission to; a state-aided national theatre and ballet; and considerable help given to orchestras, artists and companies working in many forms, supported often through difficult periods and—although more so in former years—when there was little thought either of an audience or necessarily of commercial return. More recently, there has been the provision of arts centres and of larger-scale projects in the regions, achieved often through lottery funding; of education and outreach programmes; and, in the 21st century, the expansion of funding of new media, as well as the establishment of the national theatres of Scotland and Wales, and the successful refurbishment of Belfast’s Ulster Museum, with hugely increased visitor numbers. There has also been much more besides.

What of the situation now? We have severe cuts across the board, including a cut of about 29 per cent to the Arts Council over four years, with 6.9 per cent cuts for this year. It has been estimated that one in six arts organisations may lose funding altogether, although the precise figures will not be known until the end of March. The national museums and galleries have received a 15 per cent cut spread over four years. It was announced just this week that the National Maritime Museum would introduce charges to the Flamsteed House galleries and the Meridian Courtyard—something that the DCMS seems happy with. Perhaps the Minister could give us a hard-and-fast definition of a core collection, and confirm that my concern about the possible creeping introduction of charges is not justified. The effects of the cuts in funding will be more complicated than at first they might appear. Central arts funding cuts come on top of local government cuts described this week by Richard Kemp, vice-chairman of the Local Government Association, as the “toughest in living memory”, and which include, notoriously in my view, the 100 per cent cut to arts provision in Barnet and Somerset.

The interdependence of organisations, individual artists, companies and institutions with each other and their sources of funding are often intricate, so that cuts to one part of the system will affect another. There is also the issue of matching funding, encouraged by the previous and current Governments, which can mean that if one source is withdrawn another may be lost.

There is the abolition of the UK Film Council and of the Museums, Libraries and Archives Council, the functions of which will be transferred to an already overstretched Arts Council England. These will include the significant Renaissance programme of museum regional development, which will have a 15 per cent reduction in funding. There is reduction in funding for library development, alongside the prospect of the closure of hundreds of libraries across the country.

I turn now to the Government’s so-called localist agenda, which has important implications for the arts. It is a long-standing issue that the arts have been more poorly served in the regions outside London. The Arts Council over the years has produced more than one report on this. The Government’s intention is to devolve powers and responsibilities down to the community level. This appears to be the thinking behind asking the eight non-national museums sponsored by the DCMS to lose their central funding by 2015. One of these is the Horniman Museum in south London. On the one hand, it has collections of an international standard, such as its musical instruments collection, to which the important Boosey and Hawkes collection was added in 2003. On the other hand, it is a museum greatly cherished by the local community; indeed, one can argue persuasively that the Horniman’s depth extending from local to international boosts its significance to the local community, and that direct funding is a validation of that.

The London authorities’ umbrella body London Councils has axed its entire £3 million arts budget, which includes grants to a number of important theatres, such as the Theatre Royal Stratford East. At least, this was the case until last Friday when a High Court ruling decided that the entire cuts of £16.6 million were unlawful because there had not been a proper consultation. This certainly has interesting implications for councils across the whole country, which may now be seen to be in breach of equality laws.

In some ways localism is a chicken-and-egg problem. At present there is a sizeable gap between the local and national tiers of government, and we simply do not— at least not yet—have the strong, stable, responsible regional political structures to allow devolution to take place in a meaningful way. But where real devolution is capable of happening, such as for Wales and Scotland, there is a sense of the emergence of young cultures proud of the importance of their arts to society. The great success of “Black Watch”, shown first at the Edinburgh Festival in 2006, and then at the Scottish National Theatre, is emblematic of this.

Coming to the heart of the debate, I want to pose three questions. First, are the cuts actually justified on financial grounds? Every sector of national life, from health to welfare and the arts, has been warned that it must face less government funding while the Treasury seeks ways to pay down the deficit and build growth. As the Arts Council said in Why the Arts Matter:

“The arts budget is tiny; it costs 17p a week per person—less than half the price of a pint of milk”.

Actually, with recent inflation, that now amounts to about a third of a pint of milk. As actor and director, Sam West, said about the theatre in the Evening Standard of 27 October last year,

“the Treasury is shooting itself in the foot by going after a profitable industry that leads the world. The writer and director of Billy Elliot”—

Lee Hall and Stephen Daldry—

“trained in subsidised theatre; the money paid back in VAT by people buying tickets to watch their work repays that subsidy hundreds of times over”.

The right reverend Prelate the Bishop of Liverpool observed in this Chamber just last week that £20 million- worth of public investment has “generated £120 million” in Liverpool’s local economy. In Tuesday’s Daily Telegraph, the noble Lord, Lord Hall of Birkenhead, chief executive of the Royal Opera House, pointed out that this sector contributes,

“£59.1 billion to the economy each year and”,

is,

“growing at a faster rate than other parts of the economy”.

I could spend all afternoon—as I am sure others could, and perhaps will—standing here reciting statistic after statistic suggesting that instead of cutting public funding to the arts we should be increasing it, and by large amounts, and that, indeed, the economic growth so produced would help the country as a whole. But, of course, as things are, the public would not stand cuts to the arts not being made when many important services are being cut.

In January 2010, the Secretary of State, then shadow culture secretary, said that the arts would “not be singled out”. Yet the severity of these cuts to the arts, as well as the length of time over which they are to take place, and the degree of cutting to the infrastructure —50 per cent to Arts Council operating costs—seem to tell another story. We have had severe cuts before. In my view, what is worrying about these cuts—and not just in the arts—is that they are happening at the same time that other forms of funding are being strongly encouraged to step into the void.

This then brings me to my second question, which is: how should we fund the arts? It is a topical question and an important one because there is considerable evidence that different funding models produce quite different results which will determine the arts culture of the future: whether we stay with our current system of one-third public funding, one-third box office, one-third private investment, or effect a shift in these proportions.

Philanthropy, of course, has been with us for a long time and has, indeed, provided the basis for our major museum collections. The Art Fund works exceptionally well in partnership with public funding to secure works of art for the nation, recent examples being the purchase of Pieter Brueghel’s “Procession to Calvary” and Anthony d’Offay's “Artist Rooms”. But, of course, the National Heritage Memorial Fund's grant will now remain at less than half it was before the previous Government's cuts, and there is the longer term danger that such constructive partnerships are threatened. In our mixed system, the Art Fund would like to see more contemporary artwork purchased for regional museums—something that I think should be looked at.

On the other hand, there is criticism of the USA's predominantly philanthropic model as producing a blander, more conservative, less innovative arts scene. Philanthropy is inherently undemocratic in its spread and has a metropolitan bias. Interestingly, there is a sense among most philanthropists, if not all, that philanthropy should be the junior partner in a relationship with public funding. In the Guardian of 21 October, 2010, Dame Vivien Duffield, chair of the Clore Duffield Foundation, one of our most successful and sensitive donors, is quoted as saying:

“Charity ought to be providing the icing on the cake”.

For the moment, of course, in our current economic climate the reality does not meet the Government's hopes and expectations. Last week, Arts & Business confirmed that total private investment in the arts was down 3 per cent. This in itself is an additional criticism—that both philanthropy and corporate sponsorship can be removed at a stroke, effectively putting the arts directly at the mercy of fluctuations in the economy. I am not at all against philanthropy or corporate sponsorship. Indeed, most artists will take what funds are on offer because they have a responsibility as artists to their work. However, I argue that we should retain the balance of the mixed system we have now—a system that was indeed prized over 60 years ago by John Maynard Keynes, chair of the Council for the Encouragement of Music and the Arts, the precursor of the Arts Council.

This brings me to my final and, I believe, most important question—more important than the economic one—which is this: what precisely is it that as a nation we wish to support in relation to the arts? I believe that it is the work of the artist and of the arts that is itself the contribution to society, and that if we shift the balance significantly against public funding, we will start to narrow down the options for the accomplishment of that work. The Arts Council has been, at its best, able to fund those who are off the radar as well as on it—quiet art as well as great art. At its best, it is democratic in a way that no other funding means can be. The good news is its intent to be more democratic, with a greatly simplified application form and more flexible criteria for funding, welcoming all comers. Speaking as an artist, I would like to see closer knowledgeable relationships developed between artist and arts officers, and on a more local basis, although the trend has been towards greater centralisation, but, of course, this takes money. Public funding can also look to our links with, and exploration of, other cultures, and the Arts Council's continuing support of literature translation and the Independent Foreign Fiction Prize should be applauded.

I have not been able to cover every area. For instance, the threat to higher education courses in the arts and in the humanities and social sciences is itself worthy of a full debate in this Chamber. We are fortunate in the UK to have developed a unique style of funding which has evolved naturally, resulting in such extraordinary creativity in the post-war years. We have all benefited from this phenomenon. This is not art for art's sake, but art for everyone's sake. In the end, it must be said that where audiences exist they will have been created by the art itself, not by politicians. At a time of economic uncertainty it is intuitively easier to scale down public funding, leave it to the private sector and say, “What will be will be”. Maintaining and developing the intricate funding ecosystem we have now is not safe or easy, but it is right. I beg to move.

14:27

[Lord Brooke of Sutton Mandeville]

My Lords, I declare an interest, as stated in the register, which is that I have been for 15 years the president of the British Art Market Federation. I look forward to both maiden speeches and wish the maiden speakers well.

The three most vivid indices of the debt that your Lordships’ House owes to the noble Earl, Lord Clancarty, so early in his time in your Lordships’ House, are: first, that we have been given an extra half hour; secondly, that we have been deluged by briefing from within and without; and, thirdly, that our own Library, at 10.30 this morning, had run out of its own composite briefing, which is a compliment to it, too. I congratulate the noble Earl on his speech, which has set the tone for the debate.

There is a mood of ululation about. After an overexcess of public spending, there was always going to be a hangover, although it was sad that the Treasury reverse alchemists should have believed that they had found the elixir that eliminated bust from boom. At this time we are in a mire where all the sources of financial support for the arts, save two, are in retreat. Although there is, of course, interaction between some of the financial sources, which aggravates the decline, this debate will be the better if we look forward rather than back.

I propose to run through the various financial sources via the briefing that we have received, although in no particular order. We shall not know how severe the local authorities’ decline will be precisely until the local government elections in May, but the Performers Alliance has given us an harbinger foretaste, triggered, of course, by the decline in local government central funding. Arts & Business told us last year that all sectors of private support were down from the year before except trusts and foundations. We must hold our breath to see how that element develops hereafter. The sensible qualitative briefing by the Corporation of London warned that changing the culture of private philanthropy—the American version is always quoted—is not simply a matter of turning a switch. As this is the Secretary of State’s preferred option, we must hope that his confidence in metaphorically placing his chips on the number 31, which is of course the highest prime number on a roulette board, pays off before his credit runs out. However, the City of London Corporation’s cautionary advice is prudent, and private support in the mean time is not the best bet to fill a revenue gap.

The Arts Council briefing, coming after its excellent booklet, Achieving Great Art for Everyone, is greatly to be commended for repeating its advice that any applicant for funds—and, admirably, that every hungry mouth must apply if it wishes to receive money—must show that they are contributing to at least two of the council’s five goals, as adumbrated in the booklet. Nor does the council disguise the scale of the revenue gap and the consequent disappointments that will be felt—a matter that is being sensitively and intelligently handled.

However, greater clarity and illumination are needed in the degree of meeting of minds between the Arts Council and the department on how they each see, on the one hand, the difference between administrative and operating costs and, on the other, the difference within private sector funding between sponsorship and donations. Words are cheap; misunderstanding is expensive.

Where the Arts Council deserves praise and support is in its intentions towards the lottery as a financial support, which is the second source of funds that is increasing. In Dame Liz Forgan’s garden, the rose called additionality is being guarded and fertilised and the grants for the arts programme—the GAP—will be one acronymic gap less in hazard, in consequence.

Where the Arts Council has been handed a hot potato is on the proposal to replace the Museums, Libraries and Archives Council and to provide less funding. We shall not know the exact dimensions of the challenge and of the concordat between the council and the department until such sentences as,

“At a broad level we believe this new alliance will for libraries mean a closer alignment of libraries’ cultural role with other aspects of the offer, allowing us to take a holistic view of cultural provision in localities”,

are turned into English. Bears of little brain, such as me, reckon that the ice is thin when the language becomes complex. The great Lord Goodman, at the end of his life, regretted the arm’s-length principle, but less brainy bears regard it and the additionality principle as insurance policies. We may also miss the MLA in its sounding-off role as a commentator on the national scene, as the City of London’s briefing averred.

Finally, we have no direct briefing on ticket sales. Like children, we must hope that the goose that lays the golden egg is not force fed by institutional management, or we shall be still worse off. Those who eat foie gras should not be treated as geese themselves. Where there is doubt as to whether it is the department or the Arts Council that has taken a particular unpopular decision, it is best if the arm’s-length principle is not used to obfuscate and if intellectual honesty prevails.

14:32

[Baroness Bakewell]

My Lords, it is with great pride that I rise to give my maiden speech in this House on a subject that has played a sustained and sustaining role throughout my own life. However, I first wish to thank noble Lords from all sides of the House who have given me such a warm welcome and to acknowledge the help that I continue to receive from the outstanding staff who work here. It is with pleasure that I thank my two distinguished sponsors, the noble Baroness, Lady Kennedy of The Shaws, and the noble Lord, Lord Puttnam.

I understand that I must first declare an interest. I am chair of the touring theatre company Shared Experience. I was for six years the arts correspondent of BBC television and for six years the chair of the National Campaign for the Arts. I have served on, among others, the council of the Aldeburgh Festival, the board of the National Theatre, the BFI, the council of Friends of the Tate and the Film Council.

It sounds, perhaps, as though I was to the manner born—that this came as some sort of birthright—but it is not so. My grandfather, an iron turner in a Salford factory, died at the age of 33 and my father was sent to Chetham’s Hospital, then an orphanage for poor boys in Manchester and now a world-famous music school. Chetham’s had, and still has, one of the finest 17th-century libraries in the country. My father grew up loving books. The importance of libraries in the life of a child should not be underestimated. He left school at 13 to work in a foundry and enjoyed a career in engineering. My mother, the daughter of a cooper in a Manchester brewery, also left school at 13. Many years into their marriage they made up for the lost years by studying at the Workers’ Educational Association. I am the child of their aspirations. I grew up in the 40s and 50s, enjoying a grammar school and university education without fees and without debt. My life is a testament to social mobility. My arrival in this House is surely its crowning glory.

This, then, is the life that has turned to the arts to understand the world about me. From reading that encompassed Jane Eyre and Mrs Gaskell’s novels about industrial Lancashire, visits to Manchester City Art Gallery and concerts by the Hallé Orchestra, I have continued to find nourishment in the sensitivities of those who create and perform works of art. I believe profoundly that the arts are more than the entertainment that awaits us at the end of the working day—a light relief from the real business of living. I believe the arts to be a core essential in shaping and sustaining our human values. So it is not surprising that I am passionate that the rewards should be available to everyone in our society.

Let me speak particularly about how public funding of the arts outreach programmes touches ordinary lives. Not long ago, I opened an art exhibition at the QUAD arts centre in Derby. The exhibition was called Objects of Delight and was curated by 14 people between the ages of 55 and 75, who were given total freedom to select their own show, with works of art freely lent from the Arts Council’s wonderful collection. The show was full of surprises. It included art by Hockney, Ken Kiff, Gillian Ayres and Grayson Perry. The ferment of the curator’s excitement spread throughout Derby, with friends and family catching the mood. This one modest venture was, for those involved, transformational.

It is important to stress that the central purpose of arts funding is to encourage the artistic spirit; that is its absolute undertaking. Art is not a form of social work but, if the enjoyment of art is to be confined to those who can easily afford high prices, public money is not being responsibly spent. Outreach features in the budgets of all our major companies. The Tate currently works with 70 children in Orkney creating art. The sums of money involved are relatively small, but they are important. They are less likely to attract sponsorship or media attention, but they change lives— 76 per cent of adults engaged in the arts in the past year. This is why I commend the matter of the debate today and urge your Lordships not only to enjoy the arts to the full but to endorse a funding strategy that gives all our citizens access to and participation in work that can be uplifting and life changing.

14:37

[Lord Puttnam]

My Lords, it happily falls to me to warmly congratulate my noble friend Lady Bakewell on a wonderful maiden speech. The fact that it was knowledgeable and eloquent was no surprise at all, but it was a tremendous bonus that she allowed us into the background to her achievement. It speaks volumes for your Lordships’ House that in their time both the noble Baroness and my noble friend Lord Bragg, who I am happy to see is in his place, have respectively and respectfully been described as the “thinking person’s crumpet”—no Andy Gray moment for me. I was reminded of that last week when, during her introduction, I glanced across at a packed Bishops’ Bench to see what I can only describe as a group of men glowing with anticipation at her arrival. I am sure that the rest of us felt similarly and I hope that we will hear from her much more and at much greater length over the coming years.

I, too, am extremely grateful to the noble Earl, Lord Clancarty, for securing this timely debate. I should begin by declaring an interest as chair of the altogether excellent Sage Gateshead and as president of the Film Distributors’ Association.

Aneurin Bevan, when drawing attention to the capacity of Governments to pursue counterproductive policies in moments of crisis, famously observed in 1945:

“This island is made mainly of coal and surrounded by fish. Only an organising genius could produce a shortage of coal and fish at the same time”.

Today, at a time when this island is in desperate need of every scrap of creative energy and imagination, it would require a very particular genius to fail to support and nurture both. The fulcrum around which originality leading to the development of intellectual property is based—the coal and iron of the 21st century—is access to and enjoyment of the arts; that is to say, all of the arts and for all of the people.

On 18 March 1998, I had the privilege of introducing a debate in this House to call attention to the importance of the arts in the life of the nation. During that debate, I suggested:

“The arts are an essential element of the cultural and creative lifeblood of any nation. They sustain the conscience and vitality of a society. One measure of any community wishing to regard itself as truly civilised is the quality and depth of its artistic achievement … Even in the most enlightened state, there will never be enough funding for the arts”.—[Official Report, 18/3/98; cols. 717-19.]

That was the challenge that I set out for the then newly minted Labour Government. Despite the enormous changes that we have witnessed in the world of art and culture since that debate, some things have not changed. I continue to stand by my assertion in that debate that, if we want the arts, we find a way of paying for them. For a society such as ours to consider itself civilised, there is, to echo one of the coalition’s favourite phrases, simply no alternative.

During the past 20 years, successive and extremely engaged Secretaries of State consistently sought to expand access to and participation in all forms of the arts, to the benefit of audiences and creators in every discipline right across the UK. At the same time, these policies sought to bring together the arts with education in new and innovative ways. As they did so, it became generally accepted that the type of skills fostered by engagement with the arts—among them, self-confidence, empathy and teamwork—have a value both for the individual’s self-development and for nurturing our sense of connection to others.

This sea change was made possible by combining a sufficiency of funding with a series of strategic interventions designed to maximise the value of that funding and connect it with the widest possible range of audiences and creators, while all the time seeking to raise the bar for artistic and cultural excellence.

Free admission to our wealth of museums and galleries was just one way in which the then Government sought to achieve this. So popular and successful has that policy proved that even the coalition has come to the reluctant conclusion that it dare not touch it. According to the National Museum Directors’ Conference, in 2008-09 24 million people visited just our national museums; that is, a 70 per cent increase in 10 years.

The enhanced popularity of our museums has also had a very positive impact on tourism, now accounting for eight out of the top 10 visitor attractions here in the UK. At the same time, there was also an early recognition of the power of digital technologies massively to increase access to the arts and to allow people to create, share and re-use artistic ideas in ways that were previously quite undreamt of.

A year ago, when it came to the arts, we had a very great deal to be proud of, but, in the space of barely nine months, I am afraid that the coalition has managed to undo or at least put in jeopardy many of the most effective achievements of the past decade. I regret that time does not permit one to list the full extent of them.

Of course, we all recognise the financial challenges that the nation faces, even if many of us on these Benches reject the coalition’s rather broad-brush and cynically inaccurate explanation of how we came to find ourselves in our present position. Self-evidently, the arts and culture more generally are not and cannot stay immune from the financial pressures that are being brought to bear, most particularly on the public sector. But what I find truly egregious is the arbitrary and ill thought through way in which many of the cuts are being implemented, seemingly devoid of any meaningful attempt to assess their likely impact or, indeed, the value of individual initiatives, the roots of which are being hacked away at. I fear for the arts. I fear for the ill considered impact of cuts on UK tourism, on UK jobs, on UK education, on this country’s sense of self-confidence and on the sustainability of its future as a culturally vibrant nation.

14:44

[Baroness Bonham-Carter of Yarnbury]

My Lords, I declare an interest as a member of the board of the National Campaign for the Arts. I join others in thanking the noble Earl, Lord Clancarty, for the opportunity to debate this important topic. One thing that I can claim to have in common with the noble Baroness, Lady Bakewell, whom I congratulate and welcome, is that we are both alumni of “Newsnight”—although there may be two things, because I think that we both appeared on Michael Crick’s blog in that context.

Oscar Wilde said:

“Art is not something which you can take or leave. It is a necessity of human life”.

I have made many speeches agreeing with him. The arts bring happiness to practitioners and consumers alike; they define and bind communities; they provide understanding of the world we live in and what makes us human. They also contribute to the economy and to the esteem in which we are held abroad.

The arts are flourishing, as the noble Lord, Lord Puttnam, said, and we wish them to continue to flourish. The coalition has restored National Lottery funding to its original good causes, which means an additional £50 million a year. We hope to introduce a gross-profits tax regime, which will further enhance receipts. Also, after the 2012 Olympics, lottery funding will be fully restored. However, due to the financial circumstances in which we find ourselves, the arts sector has to accommodate funding cuts that reflect wider pressure on public spending. Consequently, helping arts organisations to raise money from other sources is important.

Philanthropy must be encouraged. To that end, last year’s announcement of a match-funding scheme of £80 million from public funds is to be welcomed. In 2008, the Labour Government introduced a similar scheme to encourage donations to UK universities, which has been hugely successful. However, a crucial lesson was learnt: the importance of investing in the teaching of fundraising skills.

I read the other day of a rather underhand test that eight regional museums were subject to which illustrates the point. A fictional, recently widowed woman sent a letter to each museum saying how much she enjoyed them and how she wanted a new hobby, making it clear that she had money at her disposal. She included a £10 note. Only one museum responded, and only with a brief note of thanks. Can the Minister confirm that part of the £80 million will be used to support small and medium-sized organisations that may not have a history of fundraising?

Looking forward, as my noble friend Lord Brooke rightly said we must, we see opportunities on offer as a result of new technologies. We should investigate how these can be harnessed both to boost fundraising and to extend access to the arts. A type of scheme has emerged on the internet called crowd funding. This involves encouraging large numbers of people to give small amounts of money through the web to causes that they support. WeDidThis is a recently launched site whose manifesto is, “Art for everyone, funded by everyone”. Citizen philanthropy connects the giver with the particular work to which they are donating. A company called Digital Theatre uses its own equipment to record theatre productions, which they then sell for far less than the cost of a ticket to watch online, but from the best seat in the house. The money made is shared with the production, so as well as extending access this is another potential new source of income.

Another, rather different way of alleviating funding cuts is also, happily, good for the planet. I have recently come across a young woman, Rachel Madan, who has created a company called Greener Museums. She helps museums and other cultural organisations of all sizes to identify and develop sustainable practices. The consequence of this is both to reduce costs and to attract sustainability funding. The Beacon Museum in Cumbria has changed its habits in such a way as to allow it to reduce operating costs by £10,000 year on year. Warrington Museum has managed to reduce electricity consumption by 14 per cent in just one month. I believe that the Tate, through its own initiative, has reduced utilities costs by £237,000 over three years.

Finally, I am sorry that funding for the Creative Partnerships scheme, which so successfully encouraged creativity in schools by sending artists into them to work with teachers and pupils, has been cut by both the Government and Arts Council England. I urge the Minister to encourage the Arts Council and the Department for Education not to throw away their very valuable relationship and experience.

I started off by talking about philanthropy. While a lot is written and said about the great contribution of so-called cultural giving in the United States, I am sure that the Minister will agree with me that this coalition does not believe in importing the US model into the UK. The connection that is made between the citizen and culture as a result of funding through direct taxation is a crucial part of the equation. Public money dispensed by arm’s-length bodies free from commercial or, for that matter, political consideration is an essential part of a thriving arts sector—an arts sector that produces the risky and the challenging as well that which soothes the soul.

14:49

[Baroness Young of Hornsey]

My Lords, I thank my noble friend the Earl of Clancarty for securing this debate, which is already proving to be a landmark occasion, and for providing a comprehensive and subtle overview. I also welcome the noble Baroness, Lady Bakewell, and hope that I can extend as warm a welcome to her as she extended to me when we both served on the board of the National Theatre. I am very pleased to see her contributing today.

I should declare a number of interests. In short, I have been a researcher, consultant, adviser and creative producer and have served on numerous boards in the cultural and creative sector, working, for example, with the Arts Council, the Heritage Lottery Fund, the BFI, the Cultural Leadership Programme and so on. My contribution today will echo what some other noble Lords have said, but what I am driving for is much more clarity about the intentions for the arts from the coalition Government. In that sense, I echo what my noble friend the Earl of Clancarty said earlier. I want to know the longer-term vision of the Government for the arts and the creative and cultural sector, what the strategy is for achieving that vision and, perhaps most important, what the underlying principles are of that vision and strategy.

Public subsidy might be a major part of those underlying principles. If we are going to say that substantial public subsidy for the arts is at an end, that it will not recover but will be reshaped forever, we need to know that now. One issue faced by many arts organisations, in particular those that are not large, national and urban, is that they do not have the capacity—I refer to human and financial resources—to take advantage of what few opportunities there are. Often, because they are firefighting a lot of the time, they do not have the capacity to think forward and work out how they might take advantage of some of the opportunities that might arise or produce some opportunities for themselves. That capacity building is necessary. This was alluded to by the noble Baroness, Lady Bonham-Carter, who is no longer in her place.

I will look at some of the work that I have been involved in over the past couple of years, which has been about the socially engaged arts, culture and critical practice. I agree with the noble Baroness, Lady Bakewell, that artists should not be social workers. However, a number of arts organisations, and indeed artists, have a strong commitment to producing work that will have an impact on people's lives, with a determined set of social objectives lying behind that commitment.

When asking about the strategy of the Government, I am concerned not only about some factors referred to earlier by the noble Earl that will impinge on the arts sector but about a number of other issues, such as cuts in department budgets. Much of the work that I referred to, which concerns reducing reoffending, working with young offenders, working with children in deprived areas and so on, is dependent on obtaining funds from other government departments. The issue is not just the lack of money available from sources directly related to arts activities.

I am a strong supporter of public subsidy for the arts because I believe that the market alone will not give us the creative edge, the innovation and the risk taking that artists, practitioners and entrepreneurs in a thriving arts sector need. We are globally very competitive in the arts and creative sector because we have had an ongoing commitment to invest public funds in the arts. It is possible to see that as an investment because of what comes out in future.

Talk of philanthropy and corporate sponsorship is all very well—we have had that to an extent over the years, so we are not starting from scratch—but we do not have an embedded culture of philanthropy or corporate sponsorship that can see beyond the needs of certain kinds of organisations. I get very concerned that, not only in government discourse but elsewhere, the kinds of organisations that are referred to as being the arts sector often fall into the category of national, London-based bodies, which are quite well funded in comparison with smaller organisations. That issue must be addressed.

Bearing in mind the reminder about timing that we were given at the outset of the debate, I have not been able to make all the points that I wanted to make. The key question is: how do the Government see the long-term future of the arts and the role of public subsidy within that?

14:55

[Lord Moser]

My Lords, I, too, thank the noble Earl for giving us this opportunity for debate, and congratulate the noble Baroness, Lady Bakewell, on her remarkable maiden speech and on all that she has done and will continue to do for the arts. I have spent much of my own life involved in the arts, and sometimes have not been popular. Years ago, an Arts Minister said in Parliament, “We are all used to Claus Moser’s annual whingeing for the arts”. Today, however, I will not be whingeing, but I will express some concerns.

The arts are in the most flourishing state that they have been in for decades. I refer not just to the great London institutions but to all the small, innovative, risk-taking activities up and down the country. There is massive outreach, wider access everywhere, festivals and lots of personal creativity. At the centre is the vital and highly successful Arts Council, created by Keynes in 1946.

We all know the benefits. Economically, the creative industries earn 7 per cent of GDP and employ 2 million people. They are a great help to tourism and invisible exports; they help to regenerate poor communities; and they enhance the quality of life and happiness of all of us. Now come the cuts, and the damage that they will cause is inevitable and visible. As we heard from the noble Earl, the Arts Council is facing a tough 29 per cent cut, so inevitably many of its clients will suffer.

However, at least the Arts Council is dealing with this in as rational and helpful a way as possible. I say “at least” because my greatest worry is not the Arts Council clients but those of local authorities. The local authorities do not have any central guidance or leadership. Some of them have already decided to abolish arts funding totally. Others, including Birmingham, are cutting by 50 per cent, and we have not seen the end of it by any means. As if that were not enough, the regional development agencies—a very helpful source of arts funding—are being abolished.

Schools are probably more important than anything else that I will talk about. The schools world is hesitating about what to do with music in future. Universities are cutting the arts and humanities. The combined effect of all this must be to threaten our flourishing arts scene and its obvious benefits, so we must look to the Government to do all that they can to limit the damage.

Private philanthropy is already being urged by Ministers although, as the Economist stated some weeks ago, the practical steps taken so far, including the £8 million spread over four years, will not go very far. The Government must seriously research what chances there might be for helpful taxation changes, with both philanthropy and corporate giving in mind. This possibility is much more realistic for the corporate sector, not least in areas where the local authorities are turning their backs.

What matters most is the atmosphere created by the Government. We want, not least from the Prime Minister himself, encouragement for everybody in the arts world in line with the words of President Kennedy. I have quoted them before and quote them again now in conclusion:

“The life of the arts, far from being an interruption, a distraction, in the life of a nation, is very close to the center of a nation’s purpose—and is a test of the quality of a nation’s civilization”.

That is the kind of idealism that I want from this Government and from all of us, followed of course not just by words but by action.

15:00

[Lord Black of Brentwood]

My Lords, I declare an interest as a member of the Council of the Royal College of Music and as a trustee of both the mayor’s fund for young musicians and the Imperial War Museum.

I want to talk about the vital role of our music conservatoires to the artistic life of our country and the importance of maintaining a crucial element of public funding for them. Our country is fortunate to have a remarkable musical heritage and educational infrastructure that makes us a beacon of international music excellence and London the world’s most vibrant cultural hub. Our major orchestras, the opera, music theatre, dance companies and our chamber ensembles all contribute to a rich cultural life which is not just centred in London but lives in every community. Britain is also home to an astonishing culture of amateur and semi-professional music making—from church choirs to village bands—that enlivens the whole country and is part of the cultural big society in action.

However, none of this comes about by accident. Our national musical life depends on a steady stream of highly trained professional music graduates from our conservatoires. These conservatoires have been the backbone of British music since the mid-19th century. From them, the greatest British composers—Parry, Vaughan Williams, Howells and Britten—have emerged, and over many generations they have acted as teaching magnets for the world’s most celebrated musicians. Even more important, their talented graduates, who in recent years have benefited from a much broader curriculum, populate the orchestras, ensembles and opera companies that are the foundation of the UK’s musical life. More than 90 per cent of conservatoire graduates work exclusively in music, often doing two or three different musical jobs. They are music’s future, and without their throughput of expertise it is no exaggeration to say that our musical life would wither.

These conservatoires are therefore vital national institutions of tangible public value and international renown. They need to be nourished, particularly at a time not just when, as we have heard, there is pressure on corporate philanthropic giving but when we will be looking to their graduates to play a key cultural role in the big society through outreach activities to widen access to music teaching, such as the successful RCM sparks programme.

However, there is an issue that we need to acknowledge. Training professional musicians takes time and is expensive because it relies on one-to-one tuition in a high-quality environment. The conservatoires require concert halls with broadcast facilities, recital halls, opera theatres, high-quality keyboard instruments, sound-protected rehearsal rooms and, above all, the best possible teaching from dedicated professors.

I studied history at university and all I needed was a library, a lecture hall and a teacher; the training of musicians requires a significant and expensive infrastructure, just as do engineering and medicine. Over the years, these high costs have been recognised by the Higher Education Funding Council—most recently in a review in 2008—which has provided a modest amount of exceptional funding on top of its normal teaching grant to allow these institutions to fulfil their specialist function. That is less than £15 million across our four English music conservatoires—a tiny amount in comparison with the huge, catalytic contribution that they make to our cultural life.

I know that the conservatoires accept the need to make savings, which are already being implemented, and they already have well-developed fundraising operations. However, the core issue of the exceptional funding, which cannot be met by these means, is central to their future. If that funding is withdrawn, there is no way that it could be recouped from higher tuition fees, as the quantum involved would be impractical. While the normal teaching grant can be replaced through higher fees, the exceptional funding cannot because fees would need to rise well beyond the new government cap. To date, HEFCE has not clarified whether this exceptional funding will continue to be recognised in the future financial landscape, but it is vital that the funding continue. I know that my noble friend will not be able to give us any commitments today, but I ask her to take note of this issue and to talk about it to her colleagues across a range of government departments while decisions are being made that will reverberate down the generations.

Confucius said,

“Music produces a kind of pleasure which human nature cannot do without”.

I recognise the power of those words, for throughout my life music has been a constant companion and the source of my emotional nourishment—a wonderful word used by the noble Baroness, Lady Bakewell, in her fantastic maiden speech—consoling, coaxing and civilising in a way that no other art form can. I believe that the Government also recognise the power that music has to raise aspirations, as the Secretary of State for Education made clear in his welcome comments on the Henley review of music education.

All of us in this House have over the years been lucky and privileged enough to have our lives enriched by a remarkable musical heritage built on the back of the conservatoires. We have a duty now to safeguard them for those who will come after us.

15:05

[Lord Howarth of Newport]

My Lords, I add my warm congratulations to the noble Earl and to my noble friend Lady Bakewell. The House had high expectations of her maiden speech and they were well fulfilled.

We had seven fat years for the arts under the previous Government—I think that I can say that objectively—and I very much hope that we shall have fewer than seven lean years under this Government. It was entirely unnecessary for the Government to compound the damage of the recession to the arts. Public spending on culture is 1 per cent of that spent on the health service. If we abolished the whole of the cultural budget, it would make no difference whatever to the assessment by the markets of Britain’s fiscal deficit. As it is, the cuts that are to be faced will have a significant effect on the possibilities of future growth in our economy. There is so much more to be lost both economically and culturally by cutting public spending on the arts than to be gained. Be that as it may, the Government have taken the decision that the arts must make a contribution—hefty for them—to reducing the deficit.

In this situation, what are the essential responsibilities of government? I suggest that they are threefold.

First, the Government should do everything they can, within their self-imposed fiscal constraints, to keep the show on the road and to nurse the arts through to the recovery phase of the economy. Therefore, the pacing and timing of cuts in public expenditure are extremely important. Against the background of the reductions in business investment in the arts, it is devastatingly damaging that local government—a major funder of the arts, museums, galleries and the heritage—is to be required to cut 16 per cent from its spending in the first year. Indeed, the impact on the arts will be worse because support for the arts is not a statutory duty of local authorities—and we have seen that Somerset and Barnet are taking the opportunity to cut their funding for the arts by 100 per cent. The Government need to nurse the system through to at least 2013, when we may hope that there is a stronger economic recovery and when, at any rate, the arts and heritage lottery funds will have significant additional sums to spend—a decision for which I applaud the Government. I believe that Lord Keynes would certainly have advocated counter-cyclical public spending for the arts in these circumstances, so why does the reduction to the Arts Council England budget have to be implemented as to 80 per cent in the first two years? Will the noble Baroness tell us what the prospects are for phasing the cuts to the Renaissance in the Regions budget?

In this situation, the Government should concentrate the resources that they have to spend on the basic necessities and refrain from indulging in expensive new initiatives. A new fund of £1 million for technology in the arts is a good idea but one for prosperous times. They should also concentrate on the cost-free changes that they can bring in to assist the arts, cutting in particular the regulatory costs, which, as Neil MacGregor pointed out in his report, bear heavily as it is on arts institutions and inhibit philanthropic giving. I am pleased that the Government have started to act, at any rate, on reserves. They should not have mucked about with institutions that were functioning very well, such as Public Lending Right, the MLA, Arts & Business, Creative Partnerships and CABE. They should have continued to support agencies that themselves support the arts and heritage to build capacity, achieve best practice, and improve fundraising, marketing, exploitation of intellectual property and their understanding of how to participate in the procurement processes of other public bodies.

The Government should also act coherently across government as a whole. The Secretary of State should be the great advocate and champion for the arts across Whitehall departments to ensure that they understand the potential contribution of the arts and heritage to their programmes and that they can benefit from their budgets. Support for the creative economy should be unambiguous. The Secretary of State for Schools should have understood the extraordinary benefit that the Creative Partnerships programme has conferred on attendance and grades that young people in disadvantaged areas achieve. The English baccalaureate should embrace the arts. The barbarism of removing all public support for teaching arts and humanities in universities should never have been contemplated. There is much else that one might say about what the Secretary of State should be aiming to achieve across Whitehall.

I shall say finally that the Government should move intelligently towards a more plural and balanced pattern of funding. They are right to support philanthropy and the development of endowments but those will be gradual processes. In the mean time we need specific decisions and action taken fairly and squarely by Ministers, not hiding behind their quangos, to ensure that the arts right across the country get the help they need. It takes a long time to build up but very little time to dismantle. I look forward very much to hearing the noble Baroness affirm her belief in the value of the arts—no one doubts her own commitment—and describe the Government’s ambition and vision for the arts.

15:12

[Baroness Benjamin]

My Lords, I congratulate the noble Earl, Lord Clancarty, on securing this timely debate. There is a cold wind blowing through the arts world as cuts loom on the horizon and, as usual, the ones who will suffer most are children and young people—our nation’s future.

Article 31 of the UN Convention on the Rights of the Child states:

“Every child has the right to rest and leisure, to engage in play and recreational activities and to participate freely in cultural life and the arts”.

Yet, in this country we are facing the prospect of a whole generation of children and young people growing up in a sterile environment in which art and cultural activities are relegated to the fringes of our society. Organisations, such as Action for Children’s Arts—I am a patron, so I declare an interest—believe that this cannot be allowed to happen. Creativity is central to almost every human activity, as well as being part of a happy and fulfilled life, as expressed so passionately by the noble Baroness, Lady Bakewell, in her maiden speech. Without creative ideas, business and industry would fail. If we neglect the imagination of our young, we restrict our futures. But many children’s theatre companies, and art organisations, which pride themselves in providing vital creative assets to our children, are very worried about future funding. The next 12 months will be the most challenging that they have ever experienced as it will be a struggle to protect all that is so dear to them.

Like many others, Big Brum, an excellent theatre-in-education company, has voiced its concerns, saying:

“To cut arts funding is to betray young people and the future of our country, by denying those that need access most, to that which makes them truly human”.

Nowadays we blame children and young people for joining gangs, graffiti on buildings and developing their own ways of speaking and dressing. Is this behaviour not evidence that it is a basic human instinct to be creative and to form tribal culture? Unless this creative instinct is given direction it could well manifest itself into anti-social ways. In the world of art, experimentation and anti-establishment, ideas often begin with young people and lead to social change. However, without a framework and direction, nihilistic doctrines can develop at a cultural cost to society.

When the right honourable Ed Vaizey was shadow Arts Minister, he said:

“We’re blessed in this country with hundreds of arts organisations which achieve artistic excellence. Their role in education, particularly their ability to inspire and engage, needs to be recognised. Far from being an add-on or a nice-to-have, the role of arts companies in the education of our children is essential and needs as much support as possible”.

It was with that in mind that Action for Children’s Arts suggested that a children’s arts alliance should be formed to bring together interested organisations that have a children’s arts agenda. The purpose of the alliance was to celebrate the work on similarities and forge a way forward, while maintaining each organisation’s differences. The alliance would include organisations, such as the Prince’s Foundation for Children and the Arts, Kids in Museums, the Campaign for Drawing, Theatre for Young Audiences, the Council for Dance Education and Training and the British Film Institute.

To achieve that, I ask the Minister whether the Government would consider the idea of calling for a review of arts for children in England. I also ask my noble friend to consider the need to ring-fence resources and allocate an agreed percentage of arts funding for children’s arts to represent their number, presence and importance in the population of England.

I declare an interest in the debate as I have spent the past 40 years of my life in the arts both in front and behind the camera, as well as being on various boards. That experience has taught me that to help our children’s spiritual and physical well-being, it is very important that children’s access to the arts is not jeopardised by the financial mistakes of their elders. We must not let that happen.

15:17

[Lord Aberdare]

My Lords, I am delighted to speak in this debate and congratulate my noble friend Lord Clancarty on initiating it. I shall focus on classical music, which, of all the arts, is closest to my heart. Music is a great success story for the UK. We have world leading orchestras, performers and conservatoires recognised across the globe and generating substantial benefits for the nation. These include economic benefits from employment, tourism and overseas earnings, estimated at 7 per cent to 8 per cent of GDP for the creative sector as a whole. The arts is one of the major reasons for tourists to visit London and other parts of the UK.

The less tangible benefits are perhaps even more important. Those of your Lordships who watched the BBC's “The Choir” programmes with Gareth Malone will have seen how choral singing can build confidence, discipline, teamwork, aspiration and a sense of achievement, even among seemingly unpromising groups. Above all, music is an essential part of a good quality of life for an enormous number of people, and surely is central to the big society and to our nation, as the noble Lord, Lord Moser, said.

The UK's strength in classical music is founded on our mixed funding model, with support coming from a combination of public funding, commercial income and private support. All of those are currently under stress. Orchestras and other music bodies have shown creativity in expanding their earned income through initiatives such as the London Symphony Orchestra’s own record label, LSO Live, or the Royal Opera House’s live cinema relays. Orchestras already generate 50 per cent or more of their income through their earnings.

The Government are also, rightly, keen to increase arts bodies' income from private sources, but the latest figures from Arts and Business—which is itself losing its Arts Council grant—show that business support fell by 11 per cent in 2009-10 and seems unlikely to resume its previous upward trend before 2013. Individual philanthropy also fell by 4 per cent, and private support as a whole was down by 3 per cent in real terms to £657 million.

The UK does not have a culture of philanthropy like that in the US, where as much as 90 per cent of arts funding comes from private sources. Incentives are needed to drive the growth of private support, such as new tax concessions, matched funding or improvements to the gift aid scheme. Individual giving is often focused on specific projects rather than on core activity. So private funding will remain a supplement to, not a substitute for, public support. Continued public support is essential to maintain the health of the arts and music and to protect their huge contribution to the UK.

Arts Council England supports 15 symphony orchestras nationally, which receive about one-third of their income from public sources. Germany has no less than 129 professional symphony orchestras with anything up to 80 per cent or 90 per cent public funding. The returns generated by that funding are several times greater than the investment, as noble Lords have already mentioned. A recent study valued the impact of the Welsh National Opera on the Welsh economy at £22.5 million, more than five times its annual grant from Arts Council Wales. The funding of classical music represents incredible value for money.

The Arts Council England subsidy is being reduced by 6.9 per cent in 2011-12. Orchestras and music organisations accept the need for that, and will find ways to manage it, but they have also been asked to show how they would manage cuts of 25 per cent to 30 per cent, which would be far more damaging, facing some major institutions with a real possibility of closure. Local authority funding is equally important, not just for many orchestras but for the venues where they perform, which are equally subject to cuts.

A crucial factor in the UK's arts leadership is the quality of its education at all levels, from schools and regional initiatives to the elite arts training bodies and conservatoires in London and other major cities. I add to the list of names cited by the noble Lord, Lord Black of Brentwood, major UK revenue earners such as Sir Elton John, a graduate of the Royal Academy of Music, and Sir James Dyson, from the Royal College of Art. Because they need to provide intensive one-on-one tuition and attract leading international artists and musicians, their costs are too high to be recovered entirely through student fees, and they depend on a small but vital quantity of exceptional funding from DCMS. That must be retained to avoid putting any of our great music and arts education bodies at real risk.

At a time when all elements of the mixed funding model are under threat, and until private and lottery funding start to grow again, we must be sure that public support is managed in a way that protects our leading arts bodies from the possibility of irreparable damage. As Jo Cole, head of strings at the RAM, said in a letter to the Times last week:

“The Big Society isn't going to have much of a soundtrack unless it acknowledges the exceptional part music could play in building and defining it”.

15:23

[Lord Ramsbotham]

My Lords, I, too, thank my noble friend Lord Clancarty for obtaining this important debate and for enabling many of us to raise issues that are dear to our heart. I declare an interest as president of the Arts Alliance, which is a coalition of all the organisations working to bring arts to offenders. I was therefore very interested to hear the noble Baroness, Lady Benjamin, suggest that the need might be the same for children. I can assure her that it works.

I have two requests to make to the Minister. First, I ask that she will thank the officials from her department who play their part in the Arts Forum, which is the cross-government organisation formed to work with the Arts Alliance by the previous Government. Secondly, I would request her to pass what I am going to say to her colleagues in the Ministry of Justice.

When I was the Chief Inspector of Prisons, several times I went to Low Newton women’s prison in County Durham where I talked with the outstanding director of learning and skills. One day she told me that the writer in residence had achieved something that no one else had been able to do. A woman had gone in who was incapable of speech thanks to the violence to which she had been subjected from her husband. The writer in residence encouraged her to write down her experiences and then to write them in verse, which people read out. One morning, she said to the woman, “Come on, you read it”, and she did. After that the woman could be rehabilitated.

I mention that because I want to put forward clearly for the Ministry of Justice that the arts has an enormous role to play in the rehabilitation of offenders because of its ability to get to the heart of what is wrong and what has failed with some people. Every work of art—it does not matter what it is—is a personal achievement. Every personal achievement can be recognised. Every recognised achievement equals self esteem. Self esteem is absolutely vital in getting people on the right road towards work, education and training, which are the keys to successful prevention of reoffending. Therefore, the arts are a crucial part of any rehabilitation programme, not as something that can be measured as an end in itself but as a means to an end.

What worries me, which is the burden of my message to the Minister, is that present attention in the rehabilitation revolution centres on the phrase “payment by results”, under which it is said that organisations working with offenders will be paid for their results, which will be related to whether or not they contribute to the reduction in reoffending. The organisations which deliver the arts—many of which are voluntary and/or small—cannot afford to wait all the years that it may take to assess whether they have made a contribution to the ultimate prevention of reoffending. The money to help them do the work has to be provided.

If rehabilitation is to work, it is absolutely essential that the arts are included in the syllabus of every prison, every young offender institution and every probation area. I would go further and say that contracts for art work should be for not less than three years, but preferably for not less than five, so that proper investment can be made in that work. I say that not just because I have seen the work—of which I have given one example—but because I really believe that the arts have a crucial role to play in the protection of the public by the prevention of reoffending.

15:27

[Lord Wasserman]

My Lords, three weeks ago today I was introduced in your Lordships’ House. These have been action-packed weeks and I know that some noble Lords have found them tiring and perhaps even a bit tiresome. But for a new boy like me, these busy days and long nights have provided a marvellous opportunity to find one’s way around the House and to get to know one’s fellow Peers.

I feel enormously privileged to be a Member of this historic institution. I want to thank my supporters, the noble Lord, Lord Gavron, and my noble friend Lord Taverne. Both have made enormous contributions to this country over many years and I am deeply honoured that they were prepared to overlook my party affiliation and introduce me. I also want to join the other maiden speaker, the noble Baroness, Lady Bakewell, in thanking the officers and staff of this House for their kindness and patience, and for helping us to find our way around both geographically and in terms of process and procedures.

When I decided to make my maiden speech in this important and timely debate, initiated by the noble Earl, Lord Clancarty, I had no idea that the list of speakers would include so many of the brightest stars in Britain’s cultural firmament. I feel rather like a football fan whose knowledge and experience of the game is derived entirely from “Match of the Day” but who somehow finds himself addressing a meeting of Premier League club executives and managers. I therefore beg the indulgence of the House if I express views that might appear to some to be naive and simplistic, but I speak as an amateur in this field, although one who cares deeply about the arts and regards them as a national treasure to be protected and nourished.

We are very privileged in this country to have access to a world-class arts scene: theatre, opera, dance, music, museums, galleries and much more. All this is made possible through a combination of state funding and the generosity of a relatively small number of public-spirited individuals and corporations. As far as the state’s contribution to the arts is concerned, the amount involved will always be a matter for heated debate, in common with every other aspect of public expenditure. As noble Lords will know, the level of state funding for the arts in Britain is extremely generous when compared with the United States, where I lived for 12 of the last 15 years. Where the Americans do score, however, is in relation to funding by what are now called “high net worth individuals”—we used to call them “the rich”—and corporate sponsors. Taken together, these private benefactors account for the vast majority of support for the arts in that country, as other noble Lords have pointed out. The reason for this is not that Americans are by nature a more generous people. I say this as someone who was born and brought up in Canada and knows Americans well. It is because their tax system encourages giving by making it deductible before income tax is paid.

Giving money is not the only way of supporting the arts. Active participation by attending concerts and joining choirs, visiting galleries and even occasionally buying a picture or two, preferably by living artists, may be an even more effective way of building a rich national cultural life. But, for me, the most important thing that we can do to support the arts, no matter how rich or poor we may be, is to encourage young people to develop a love for the arts and, where appropriate, to help them develop any latent artistic talents they may have. We can do this by encouraging children to learn to play a musical instrument, write stories, act, dance, paint or express themselves in any one of countless artistic forms. We can do this by encouraging local schools and youth groups to devote more attention to the arts and by volunteering to help them to do so. We can do this also by encouraging young people with real talent who are tempted to pursue a career in the arts to follow that dream.

I believe that there is much more to public support for the arts than state funding. Public support includes what all of us can do, in our families and in our communities, to encourage a new generation of artists to build upon our cultural heritage and take it forward into the future. It is this kind of public support that we must develop and expand.

15:33

[Lord Freyberg]

My Lords, it gives me great pleasure to follow the noble Lord, Lord Wasserman, and to congratulate him on behalf of the whole House on his excellent and very thought-provoking speech. He comes to the House with huge experience in policing. A former Rhodes scholar, he served as a special adviser to the New York and Philadelphia police chiefs. He is an internationally known expert in criminal justice, science and technology, and for 12 years was the Assistant Under-Secretary of State for police science and technology in the Home Office. I know we shall all look forward to his contributions on this important area and others in the near future.

I thank the noble Earl, Lord Clancarty, for giving us the opportunity today to discuss public funding of the arts. On an occasion such as this, I would normally hope to draw the House’s attention to the pressing issues facing museums and galleries, but today I must make a plea for museums’ less glamorous siblings, libraries and archives. Why is that? It is not because all is rosy for museums at this time of austerity. However, there are nearly 4,500 libraries in the UK, the vast majority of which are funded through local authorities. Nearly 400, and at least 48 mobile libraries, are certainly under threat of closure, and we may learn of others once we know the outcome of individual councils’ local spending reviews.

Meanwhile, archive services—although a statutory responsibility of counties and designated county boroughs—also face an uncertain future. Reductions in funding are likely to result in drastic reductions of opening hours and staff numbers. The ability of archives to manage the collections they have, let alone to embrace new collections for posterity, will be severely hampered.

In recent weeks there has been much public discussion of this subject, and it has consistently been suggested that there is a choice between keeping libraries, keeping schools and healthcare provision, or caring for the elderly and vulnerable children. But that is not a proper way to think about it. Libraries must remain because they are at the heart of our communities. They are places where people can come to learn and meet and place where lives can be changed through the empowerment that those things bring. I know that that is true by having seen my own children’s joy at paying a visit to our local library. There is no question but that the archives also must continue. They are our nation’s memory and without them we cannot know ourselves.

So what are we to do when the axe must inevitably fall? First, closures that are based on short-term cost cutting will be irreversible and must be avoided at all costs. But who will be there to oversee all this now that MLA, the organisation overseeing museums, libraries and archives policy, is being disbanded? Arts Council England will take in libraries, but archives have been orphaned and are without a policy home. I implore the Minister to consider carefully who will advocate for archives from now onwards. Can he tell the House what plans are in place to oversee the archives?

Secondly, archives have for too long missed out on funding that has been forthcoming for museums. With the closure of MLA, it is extremely important that whoever oversees the archives in future can help the sector to gain fairer access to public money than they have enjoyed in recent years. Thirdly, I ask the Government to keep a close watch over progress on this and to ensure that the situation is reviewed at regular intervals.

The Arts Council is having to take over libraries policy at a time when it already faces a budget cut of 30 per cent in relation to its current responsibilities, on top of which it will have to make a 50 per cent cut in administrative costs over four years. That is a huge challenge. Surely checks and balances need to be in place to ensure that the Arts Council has the knowledge to deal with its new responsibilities. A governance review should be instigated immediately so that knowledge within the organisation properly reflects the weighting of its new responsibilities. More importantly, there must be a review within a year or so of how these new arrangements are working and of their impact.

15:38

[Lord Bragg]

My Lords, I, too, thank the noble Earl, Lord Clancarty, for securing this debate. I also congratulate my noble friend Lady Bakewell on an exceptional maiden speech. I declare an interest as president of the National Campaign for the Arts.

We are seeing a rather mindless scything down across the land—“swish, swish” goes the scythe, and down come the weeds; but down, too, come the crops and the blooms. And who is scattering the good seed on the land? They swish and chop away, the coalition cutters, with little discrimination and less differentiation, but above all they fail to identify that which will grow the future—the knowledge industry; niche, high quality, intelligent, globally marketable; we are good at it, and have been for a very long time, in the sciences, technology and the arts.

How much more do the arts in this country have to prove? It bears repeating that for every pound the Government invest, up to £15 is generated. About 2 million highly skilled people are employed in the field. From a modest start after World War II they have burgeoned into an aurora of lights—London, the world centre of music and theatre, as we heard, and a constellation of interdependent disciplines; more book festivals than any other country on the planet; contesting with America for the lead in musicals, the fine arts, films and pop music, with our television and radio richly irrigating the process. It works, it grows. Why slash it? What gain is there? I would appreciate an answer from the noble Baroness, Lady Rawlings.

Over the past half century we have forged a creative economy that is not only envied but magnetic in its galvanising effect. Recent intensive research in America has shown that when there is fierce and successful economic growth, it is essentially bound up with an arts culture that is in itself fierce and successful. The Silicon Valley story, for instance, owes a great deal to the technology of the west coast, but it has been convincingly proved that it also owes a great deal to the creative pulse that rocked and rolled and flower-powered through California in the 1960s and 1970s. When we consider the past, we find that these nodal points of prosperity and advancement share that characteristic—none more than in the glory that was Athens in the 5th and 4th centuries BC. By chance, I did a radio programme on Aristotle last week. What he wrote is central to this debate. He has influenced civilisations for two and half thousand years, so I am sure that your Lordships will give him a hearing here today in your House.

Aristotle lived at a time when creativity and intellectual excellence across the waterfront—science, technology, the economy and the arts—were seamlessly plaited together, and appreciated and supported. The result was a marvel of dynamic growth and a world-changing civilisation. Professor Angie Hobbs of Warwick University pointed out that Aristotle thought of art as much more central to human existence than mere pleasure. He believed that the correct appreciation of art was crucial for the formation of a person’s character and would improve their behaviour in society as a whole. He developed this in his other works, and, importantly for this debate, he included it in his description of the best way to educate children.

This is a truth stated then which we can see, and see working now. For instance, a few years ago I made a film with the composer Howard Goodall to show how the introduction of choirs and orchestras into schools had a spectacular effect on the children. Their discipline improved and their self-worth soared. In those schools we saw children—particularly children from underprivileged backgrounds, soon to be more underprivileged—discover, through playing instruments and singing in choirs, the joy, the self-respect and the pleasure of learning, which was a revelation to them. The disadvantaged were given an opportunity and they seized it. These institutions will now be cut.

I suggest that this debate is not only about funding of the arts or the strength of the unique UK tripod of public funding—30 years in the making—through a newly effective Arts Council, of business investment and the box office. It is about giving fuller, democratic advantage to people, especially the children in this country, so that through knowledge and skill in the arts they can have a chance to make the best of themselves and the best of a society that badly needs to look after its own more carefully. This debate is in many ways every bit as much about funding our future as it is about funding the arts.

15:44

[Lord Colwyn]

My Lords, I take the opportunity that this debate, expertly introduced by the noble Earl, allows to remind your Lordships of the significant contribution of jazz to the economy. According to a new survey carried out by Mykaell Riley and Dave Laing at the University of Westminster for Jazz Services, called Value of Jazz in Britain II, jazz is worth more than £80 million to the British economy. There is an increased interest in jazz among the 15 to 34 age group and a rise in the number of women active in jazz. Yet, most British jazz musicians earn a wage below the national average. The report found that jazz contributes to economic, educational and cultural life at all levels. I declare an interest as a very mediocre jazz musician myself; co-chairman of the All-Party Jazz Appreciation Group, which is supported by PPL; a patron, along with the noble Lords, Lord Bragg and Lord Puttnam, of the National Youth Jazz Orchestra; and as someone involved with the Yamaha annual jazz scholarships for young people.

There is an active jazz scene in all major UK cities. Musicians with established reputations and young musicians, many with great flair and originality, seek a serious audience who can understand and enjoy their music. Many UK jazz musicians have developed international reputations for live performance and have recordings that are seen and bought by a worldwide audience. Every year there are jazz festivals all over the country, many featuring some of the finest jazz musicians in the world. More than 3 million people patronise these events with five times that number expressing a definable interest in jazz.

While jazz continues to attract these audiences, 80 per cent of its musicians earn less than £25,000 a year. This is not helped by the current economic climate where there seems to be increasing public reluctance to pay for music. Yet falling CD sales in a download culture are having a smaller impact on jazz income than might have been expected, and ticket sales and public and private subsidy all showed modest but significant increases between 2005 and 2008. The report also reveals a thriving small-scale recording scene among British jazz musicians with widespread and growing use of the internet to sell recorded music.

A different kind of jazz venue has emerged located in a church, library, museum or community centre in response to the new licensing law’s red-tape challenge to pub gigs. Jazz festivals also expanded and brought new money. The current situation over the licensing of live music, which has had such a detrimental effect on young musicians, is confusing. My noble friend Lord Clement-Jones is waiting for the second Second Reading of his Live Music Bill. The noble Lord, Lord Davies of Oldham, was encouraging in June 2009, and the coalition Administration have made sympathetic noises, but the problem is not resolved. The Licensing Minister, John Penrose, has suggested that plans to cut red tape for live music are out of his hands and are dependent on consent from the Department for Work and Pensions and the Home Office. In a Westminster Hall debate on Tuesday 25 January, he referred to the many aspects of licensing for live music that are covered by existing legislation, but live music at small events is not exempt. The only arguable justification for a licensing regime pre-emptively criminalising the provision of live music subject to prior consent from the public or the local authority, or both, is where there is the potential for a significant negative impact on the local community that cannot be adequately regulated by existing legislation. This is clearly not the case for the vast majority of small gigs taking place within reasonable hours. It would be very helpful if the Minister would write to me with an easy-to-read explanation of the current licensing situation on live music and small venue exemptions.

The annual turnover of the jazz sector of the British music industry is in excess of £88 million. The report by Jazz Services, as part of its Arts Council England development project, found that sales of CDs through shops and websites and at gigs reached almost £40 million, while ticket sales for jazz concerts and festivals were worth £22.5 million. The report estimated that there were 45,000 jazz performances per year in the UK and that jazz received more than £4 million per year in public funding and a much smaller amount in commercial sponsorship. Audience research on music and other art forms showed that more than 3 million adults had attended at least one jazz performance in the previous year, with a core audience for jazz estimated at 500,000 compared to 400,000 for classical music concerts and 100,000 for folk music events. I hope that the Arts Council will recognise this when the new funding arrangements are considered in March.

15:49

[Lord Luce]

My Lords, my noble friend Lord Clancarty has done a great service in introducing this timely debate on arts funding today. I declare an interest as president of the King George V Fund for Actors and Actresses, president of the Voluntary Arts Network, the amateur arts parent body, and president of the newly formed Commonwealth Youth Orchestra. It was just over 20 years ago that I retired as Minister of Arts having had the privilege of five years in that job. Just before I retired, I recall that the journalist Melanie Phillips wrote this:

“The best thing to do with Richard Luce is to have him stuffed and tucked away in the Natural History Museum”.

I took that as a great compliment. Unfortunately, in the past 20 years I have not had time to visit the museum but I have had time to watch with interest and pleasure the improvements that we have seen in the arts world. One great pleasure today is of course to welcome the noble Baroness, Lady Bakewell, whom I recall so well from my time as Minister of Arts. She will make a great contribution in this House.

Perhaps I may make a few reflections on how things have improved in the past 20 years or so. First, the introduction of the National Lottery was a massive improvement for the arts and I welcome the fresh injection now of another £50 million in that area. Secondly, there is the expansion of the creative industries, on which the noble Lord, Lord Bragg, led a debate just under two years ago and which today make a major contribution to the wealth of the nation. Thirdly, the credit must go to the Labour Government for the increase in resources that they gave to the arts over the past 10 or 12 years, although it is sad that the economic crisis that is now being faced leads to such volatility in the funding of the arts, let alone in other areas.

I want to reflect on one or two other things in my short time. First, it is vital that we maintain through this time of adversity the standards of excellence and access to all, because everybody has the capacity to enjoy and to participate in the arts. Secondly, we have to recognise an important change: it is not just about London, which we used to be told was the only real centre of excellence. All parts of the country now enjoy standards of excellence in the arts, from Edinburgh to Glasgow, from Cardiff to Leeds and Chichester, and so on. That is a major improvement. Thirdly, we must not underestimate the importance of the amateur arts—I declare an interest as president of Voluntary Arts—where nearly 10 million adults participate actively in drama, crafts, painting and all kinds of arts. There are 49,000 arts bodies in this country. They do not demand money but what they want, to enable them to flourish, is to be freed from all the regulations and red tape that exist today.

That leads me to my main point, which is the funding structure. I agree with other noble Lords who have said that we are placed somewhere between the United States, which gives very little public support to the arts, and the continent, where there is much more of it. That we are somewhere in the middle is illustrated by the experience of the clients of Arts Council England. On average, one-third of their income is from box office, one-third from sponsorship and one-third from the taxpayer. Now, long may that last, because diversity and plurality of funding are absolutely essential to the arts to give them independence from any one source of funding—and certainly from state control.

In 1980, the National Theatre depended on taxpayer funding for 60 per cent of its support. It is quite a remarkable achievement that today the figure is down to 30 per cent. The Royal Academy—I declare an interest as an emeritus trustee—is totally self-generating. There, more than 90,000 friends give vital support, which is a lesson to be learnt for many other organisations: that the support from friends can do so much to finance arts bodies and that retaining the arm’s-length principle is absolutely essential.

That leads me to my final point about the background of these cuts. They are familiar to me. Much of the language that I hear today I can recall from the 1980s. I recall one day when I was able to go to the then Chancellor, the noble Lord, Lord Lawson, and prove to him that for every £1 of taxpayers’ money I could get back £5 from the private sector. I believe that might be more difficult to achieve today. Nevertheless, that kind of partnership or challenge funding needs to be the way that we go. I end on the point that the chance now is for this Government to produce a whole range and battery of proposals which will encourage the climate of giving in this country—not so that we can ever be like the United States but so that we can at least know that there is a wide range of incentives to enable us to give more to the arts. We should take this time as a challenge to do just that.

15:54

[Lord Scott of Foscote]

My Lords, I thank the noble Earl, Lord Clancarty, for initiating this debate and congratulate both the noble Baroness, Lady Bakewell, and the noble Lord, Lord Wasserman, on their notable maiden speeches, which have contributed significantly to the debate.

I declare an interest, which is not a personal interest, in that my wife is the chair of the Arts & Heritage Alliance Milton Keynes and a member of various constituent organisations in that alliance. Due to her offices, I was acquainted with the report produced by an organisation called the Culture Forum, which was formed under the initiative of the National Campaign for the Arts some time last year so that a collective voice for the arts and heritage sectors could respond to the Government’s call for a national debate on the economy and, among other things, speak for the public funding of those two sectors.

The Culture Forum’s report from last December—I believe that a copy was sent to Ministers, but in any event I have provided a copy to the Minister who will respond to this debate—contains practically all that needs to be said on this important question of the value of funding for the arts and the manner in which the possibility of cuts for that funding should be approached. The forum makes a powerful case for the importance of public funding of the arts. It makes clear the influence of initial public funding for a particular cultural activity or cultural organisation that acts as a magnet to attract private funding for the event or organisation. Together, those funding streams can create economic activity that produces a value of many times the amount of the initial public funding. That multiplier effect of public funding is highly important and should be borne in mind by the Government when considering what, if any, cuts to make to the public funded arts sector.

I shall give an example of that close to my personal home. When Milton Keynes staged an international festival for the arts for the first time last year—Milton Keynes is something of a new city anyway—the festival got off the ground with public funding of something like £600,000 from Milton Keynes Council and other public bodies. That public funding enabled the sponsors to attract private funding of something like £1.8 million. As a whole, that funding led to a very successful festival that lasted nine days, attracted some 90,000 people and generated an estimated £45 million-worth of economic activity in the Milton Keynes area. Similar evidence can be given from other examples—I think of Liverpool’s experience when it was the culture capital of Europe in 2008.

Another feature that the Culture Forum report makes clear is the value of the arts and heritage sectors in promoting the health and well-being of society generally. We hear a good deal of talk these days about the so-called “big society”, but I doubt whether there can be a big society without a healthy cultural sector. Correspondingly, an impoverished cultural sector in the community is likely to be a sure sign of a community impoverished in many other respects. There may be an unanswerable case—there probably is—for cuts to be made in public spending of various sorts, but of course the Government and other public authorities have to decide where the cuts will fall. In deciding what cuts, if any, should be imposed on the arts and heritage sectors, the value of those sectors must, I suggest, be borne clearly in mind.

The first paragraph of the Culture Forum report states:

“Arts and Heritage is one of this country’s greatest success stories. It goes to the heart of what it is to be human. It is a force for good in health, education and strong communities. It is vital for tourism, foreign earnings and urban and rural regeneration. In this field we are world class”.

If cuts there must be, let the Government be careful not to achieve through those cuts the result—for which they would not easily be forgiven—of drowning the baby or throwing it out with the bathwater.

16:00

[Viscount Eccles]

My Lords, I add my thanks to the noble Earl. I cannot resist commenting on the contribution of the noble Lord, Lord Moser. I remind him that more and less difficult times come and go. More importantly, I wonder whether it was my father who accused him of whingeing; come to think of it, that would sound very like him.

My point is about how we deal with the present situation, rather than how we got there. I am informed by the Arts Council that one of its five rubrics is that arts organisations need to be sustainable, resilient and innovative. There might be an overlap between sustainability and resilience. Of course, there are different views about innovation. Even some of the recent performances of “Hamlet” have created cries of “Well innovated!”

I could talk about quite a number of different organisations, because I am a sort of long grass-roots fundraiser, but I will talk about the Georgian Theatre Royal, Richmond, and its finances. It is a small organisation. In one of our briefings, it is threatened. The theatre was built in 1788 and went dark in 1842, but it came alive again in 1963. Much credit goes to the wives of previous members of your Lordships’ House. The wife of the late Lord Crathorne was instrumental in leading the recreation of the theatre, as then was her sister, the late Baroness Elliot of Harwood. Finally, there has been the present noble Lord, Lord Crathorne, and his wife, who sadly died about 18 months ago.

The theatre has two charities: it is itself a charity, and it has a fundraising and investment charity. It keeps underlying control of its finances separate from the management of the theatre, which is probably wise because theatre managers are not always fired up by a close control of money. It is lucky because it is in Richmond, which is of course much older than 1788 and has a castle, a fine cobbled square, the Landmark Trust’s Culloden Tower and the Green Howards Regimental Museum. Richmond is not a place that welcomes top-down instructions. It has an amateur drama company and an amateur opera company. The staff of the theatre is small—sometimes very small—and not paid very much, so the theatre depends strongly on amateurs.

How is the theatre funded? Of course, it has had the lessons of history. There were hard times before, in 1842, and also when we were switched from Northern Arts to Yorkshire Arts. At that time, the policy of Yorkshire Arts was radically different from that of Northern Arts. We were thought to be rather unsuitable for funding by the people from Sheffield. We developed a model that we had in mind from experience. Our experience has been that we can generate about 50 per cent of our total costs from people coming to the theatre. We have one advantage, which is that we have heritage tourists as well as others who attend the about 100 performances of music, drama and opera—some professional and some amateur—that we have in the theatre in a year. That compares with a figure in the mid-40s, which is more the average number of performances.

Ever since the death of the first Lady Crathorne, we have been building up an endowment fund. That has been slow—it takes time—but our target is that income from that will fund 25 per cent of the cost of the theatre. We are more than halfway to that target, and I am confident that if we keep on down the same road we will get there. If you have 75 per cent covered, that is not too bad. It also gives you that flexibility and independence, which, if you are a citizen of Richmond who wishes to escape from being told what to do next, you will find very welcome.

16:05

[Lord Myners]

My Lords, I also express my appreciation to the noble Earl for securing this debate and congratulate my noble friend Lady Bakewell and the noble Lord, Lord Wasserman, on their excellent maiden speeches, which show us all that they will be most welcome to our House and will be important contributors to many of our debates in the future.

I declare my interest: I am a trustee of the Tate Foundation and of Glyndebourne. I was previously chair of the trustees of Tate, briefly a trustee of the National Gallery and a trustee of the Royal Academy. My wife is the chair of the Institute of Contemporary Arts, having previously been chair of the Contemporary Art Society. The depth of declarations made by noble Lords in today’s debate speaks powerfully about the experience of the House and how we can bring many wide and different perspectives to debates and discussions, not only on culture, as we do today, but on other issues.

I will not speak about the role of culture and art; others have done that admirably. Culture is certainly uplifting and helps us to understand ourselves and the context and society in which we live, but we have also been told by my noble friend Lord Puttnam how important the arts are as an economic sector. They employ more than 2 million people. I have seen for myself the impact that an arts institution can have on a local community, with Tate St Ives revitalising the economy of west Penwith in Cornwall. I have also seen the impact of an organisation such as Tate. Under the extraordinary leadership of its director, Sir Nicholas Serota, Tate now attracts 8 million visitors a year and is the most visited contemporary art museum in the world. There are more visitors to Tate Modern than to Pompidou and MoMA together. This is an important part of our economy and society. We all get joy when we go to these institutions, but we also see the joy that others get from sharing in the art that has been accumulated over so many generations.

I am sympathetic to the fact that the noble Baroness, Lady Rawlings, is very supportive of the arts. I know we can look to the noble Baroness for sentiments that we will find encouraging. However, she is in turn limited by the interface and negotiations that the DCMS is required to have with the Treasury. I add that I am delighted that this Government continue to endorse the concept of free entry to our major museums and galleries—one of the great achievements of the previous Government.

However, the simple fact is that this Government have concluded that they will not direct as much money towards culture as previous Governments. We have seen draconian cuts in national funding, and these are being exacerbated by cutbacks in local funding as well, which often affect the smaller institutions in the regions. We have already seen how this can lead to brutal actions in Somerset and Barnet. I fear that there is more of this to come. We are very fortunate that the Arts Council is responding to this challenge in a constructive way. It is highly efficient, well governed and economical, and it has worked well with arts institutions to explain the new reality and move to a new stage of funding for the future.

But what can we do to improve this situation? The Government can do a number of things. First, they can move to simplify gift aid. It is ridiculous that gift aid is still paper based rather than digitally based. This costs the arts sector and the charitable sector a great deal. That would be a simple thing for the Government to do. They could also encourage greater contributions through admitting higher-rate taxpayers into gift aid.

The Government could also extend the acceptance in lieu scheme. In reality, the most tax efficient way of giving in this country is through dying. We need to ensure that people can give in their own lifetime. In the same way that we allow acceptance in lieu against inheritance tax, we should allow it against other taxes. I particularly welcome the opportunity to advance the case that it should be permissible as a means by which non-doms can make their contribution to the £30,000 which they are required to pay. Non-doms are very important in our cultural sector. An opportunity for them to give to a higher value than the tax they are offsetting would be helpful. I hope that the Government will encourage the introduction of charitable remainder trusts, which have proved so successful in other jurisdictions, and that they will repeal Section 6 of the Finance Act 2010 to substitute a more practical implementation of the Persche decision.

Finally, we need to cultivate a new generation of philanthropists. I look forward to the report being produced by the committee chaired by Mr Tom Hughes-Hallett as there is an opportunity here, with the great riches that we now see in the City and in the financial community, to encourage a new generation of committed philanthropists. We need to see corporates giving more. As Mr Simon Robey, the chairman of the Royal Opera House, has recently pointed out, less than a third of our major FTSE-100 companies give any money at all to the arts and culture. We should seek to improve this situation and I look to the Government to take the appropriate steps.

16:11

[Lord Shipley]

My Lords, I thank the noble Earl, Lord Clancarty, for initiating this debate and for reminding us of the importance of free admission to museums and galleries, and that public funding of the arts costs only 17 pence per person per week. However, I feel that the distribution of public spending on arts and culture in England is too heavily weighted towards London. In the next financial year of DCMS funding, three-quarters will be spent in London. Of Arts Council funding in 2011-12, £21.92 will be spent in London per head of population compared with just £3.44 in the rest of England.

I fully understand that London has many centres of artistic excellence and that people from all over the UK can benefit from them but that presumes that people, particularly families, can afford it—and, of course, the reality is that not many can. Therefore, I find the difference in spending between London and the English regions stark. It is even more so when lottery funding and private sector sponsorship are taken into account. An examination of lottery grants to arts and heritage over the past 15 years shows that 31 per cent of the total sum has gone to London, yet Londoners play the lottery less than any other English region, with only 32 per cent of households participating. In the north-east—here I declare my interest as a councillor in Newcastle and a board member of the Newcastle Theatre Royal Trust—56 per cent of households participate, with an average spend 60p higher than the average spend in London.

In addition, 75 per cent of all private sector sponsorship goes to London, so this is a plea for the English regions. Just last week the Royal Shakespeare Company, whose third home has been in Newcastle since 1977, announced that it would not be coming this year because it could not afford it, to the massive disappointment of thousands of theatregoers, but this is the consequence of the way arts public funding works. I sincerely hope that this can be addressed so that the RSC returns for the long term in 2012.

I turn briefly to film and media. Regional funds have been lost with the decision to close the regional development agency. Here I declare my interest as a board member of One North East. National funding is being lost because of the abolition of the UK Film Council with the regional screen agencies. Although there will be a replacement in Creative England through the British Film Institute, there are suggestions that Creative England will receive a reduced amount of grant in aid, compared to the old screen agency network, and will need to use most or all of its grant to cover its establishment costs and overheads, leaving very little to distribute. The film sector needs urgent advice on its future funding levels. The problem is that, with its existing agency abolished and replacement agents wrapped up in their own internal change, the sector is being told very little.

The fundamental changes being made in the management and distribution of funds for film in the UK are complex and will clearly take time to be resolved. However, in the mean time, the immediate danger is that while these new structures are put in place, a vacuum is opening up which could threaten the UK’s film infrastructure in the coming year. Therefore, with just a few weeks to go to the start of the new financial year, I hope that the Minister can clarify what transitional funding arrangements for 2011-12 DCMS has planned for the numerous small independent arts cinema and film festivals across the country that make up the real heart of Britain’s specialised film culture. I should like my noble friend to reassure us that DCMS and the Arts Council will remember that England has regions which need fair and equitable treatment.

16:16

[Lord Chorley]

My Lords, I thank the noble Earl for giving us the opportunity to discuss this important subject. The lengthy list of speakers—my goodness, what a range of experience has been shown—is a testimony to the importance of the subject. I intend to restrict my remarks to one, in a sense, rather narrow subject that is different from all the earlier speeches, with the possible exception of the remarks of the noble Viscount, Lord Eccles—the importance and relevance of endowment funding. It is an insurance against the vagaries and ups and downs of annual government grants. The trouble is that endowment funding in a period of government cuts, as today, appears peculiarly unattractive. However, I understand from the noble Viscount that Richmond has good endowments and shows a degree of buffering.

I start with a few words of historical background. Many years ago, in the early years of my association with the National Trust—many years later, I was privileged to be its chairman—it was experiencing financing difficulties with the stately homes and estates that it had taken on with inadequate endowments. I was asked by the trust’s then finance committee to come up with ideas. The result was what became known as the Chorley formula. This is neither the place nor the time to go into the details of that. Suffice it to say that the formula was relatively simple, but to some it appeared to be unduly expensive. Nevertheless, the formula has worked pretty well and is still being used 50 or so years later, in spite of inflation.

The big breakthrough in its adoption came when that splendid organisation, the National Heritage Memorial Fund, gave its support for the formula in relation to future properties that we wanted to take on. The formula was endorsed by the fund, particularly by its then chairman Lord Charteris, who alas is no longer with us. It was hugely important to have his support, because the formula was strongly opposed by Whitehall, which considered that it tied up far too much funding and was too much “belt and braces”. You did not get much bang for your buck, as it were. This short-termism has always been the great problem of Whitehall.

The important point about the formula was that it was designed to deal with the ongoing costs of the operating deficits of heritage and arts organisations, with a reasonable certainty that it could cope with future inflation. Future inflation was, and remains, the problem. In other words, the formula would deal with ongoing costs, not the initial or acquisition costs—for example, the cost of acquiring a great work of art that needed to be saved for the nation. Put simply, endowments have their role, which is to cover the basic operating costs or overheads—for example, staff salaries or building running costs—of an organisation which has charitable status. The National Theatre would be an example.

I am a fan of endowment funding in the appropriate circumstances. I suggest that the Government look at developing greater use of it. If there had been more endowment funding in the past few years, I suspect that we would have had a rather different debate today. I was therefore surprised, indeed, rather pleased, to learn that the Government had commissioned a paper on endowment funding by Alan Davey. Given that he is the chief executive of the Arts Council, it deserves to be taken seriously. While it is not easy going in all respects, it is thoughtful and thorough. I conclude by quoting just a few sentences of the concluding paragraphs:

“Recommendations for action are split into two key areas … action that the Arts Council will take to help support the organisational development of arts organisations towards the goal of increasing private funding sources, and as part of that, the use of endowments … action that the Arts Council suggests could be taken elsewhere to more greatly incentivise giving in England, easing the conditions under which arts organisations undertake their fundraising activities”.

16:21

[Lord Evans of Temple Guiting]

My Lords, I join everybody in thanking the noble Earl, Lord Clancarty, for initiating this debate. He told us that this was the House’s first debate on the arts for 18 months, since a debate initiated by my noble friend Lord Bragg. This has been such a wonderfully interesting afternoon that I hope that, from now on, we will sit all night talking about the arts rather than other matters.

We heard two very good maiden speeches. It is good for the arts to have my noble friend Lady Bakewell making a contribution here. I also congratulate the noble Lord, Lord Wasserman, on his contribution.

The question before us is quite simple. Although funding is the subject of the debate, a far greater issue than simply money is at stake. The question must be: what sort of country do we want for ourselves, and, most significantly, what do we insist upon for the future? The noble Earl, Lord Clancarty, raised that issue in his opening speech.

As many noble Lords have made clear, the arts make a huge contribution to the financial wealth of the nation. Earlier this week newspapers reported that manufacturing output increased in January by the highest percentage since January 1992. It was also widely commented that sterling rose. However, as a footnote, economists emphasised that the manufacturing sector accounted for less than 13 per cent of the economy. We have the huge task of making our political masters and the press realise that the creative economy contributes as much to gross national product as manufacturing does. Various figures have been mentioned today, including 7 per cent and 9 per cent. I have given a few lectures on the creative economy and always use the figures 12 to 14 per cent. It would be interesting to hear from the Minister, either today or by letter, the Treasury’s latest estimate. When did we hear a Prime Minister, Chancellor of the Exchequer or a senior Treasury Minister identify the fastest-growing sector of our economy, namely the creative industries, fuelled by public funding of the arts?

I will give a current example. Many noble Lords will have seen a film called “The King’s Speech”. It cost less than £10 million to make, it is doing very well in America—I do not have the figures—and here it has grossed $27 million to date. It has 14 BAFTA nominations and will be the biggest grossing independent film of all time. This huge, developing success will make a significant contribution to the creative economy. Yet amazingly, given the British record in filmmaking, the Film Council is being abolished.

I turn from the economic contribution of the arts to the equally important contribution that they make to society. What sort of country do we want? The answer to that should inform how we treat the arts and how the Government should respond to their responsibilities. What is the benefit to the people of the United Kingdom from the feast of fantasy, imagination and history that makes up our culture? Do we not understand the educational and emotional benefits of being able to absorb, on our doorsteps, in cities, towns and villages around the country, the presentation of the past as well as, critically, the future fruits of artists, designers, writers and composers working today?

I will quote from the New York Times. Philip Pullman, author of the His Dark Materials trilogy, gave a speech in Oxfordshire. The subject was Oxford County Council's plan to stop financing 20 of its 43 public libraries. He said that,

“there are things that are above profit, things that profit knows nothing about … things that stand for civic decency and public respect for imagination and knowledge and the value of simple delight”.

He continued to attack,

“the greedy ghost of market fundamentalism”.

What he registered so forcibly is the fact that a hidebound Conservative approach to deficit reduction creates a social austerity far more harmful than the deficit itself. I look at the Arts Council budget being cut by 30 per cent over four years in the light of this statement.

While huge strides have been made in attracting private philanthropy for the arts, such largesse cannot be a substitute for continued government support. While we owe great gratitude to corporations and individuals for their generous support of favoured institutions and events, what about less fashionable projects? As the noble Earl, Lord Clancarty, wrote in the Guardian last year:

“Philanthropy cannot be a replacement for bodies such as the Arts Council, which reaches out … and provides the necessary, often long-term funding without which much … work would otherwise be lost”.

It would also help if a central appeal made in the 2004 Goodison review of the funding for museums and acquisitions could be revisited and fully implemented. John Whittingdale, the Conservative chair of the Culture, Media and Sport Select Committee, asked in 2007:

“When will the Treasury respond to the report's tax recommendations, which have universal support in the arts world as a means of substantially increasing private giving at relatively modest cost?”.

I was the first chair of the MLA, which is to be merged with the Arts Council. I will ask the Minister two or three questions because, as the MLA’s first chairman, I thought that it was a wonderful organisation, and think it continues to be so. One of our first reports was Renaissance in the Regions. We hear that its funding is to be cut. I would be very grateful if the Minister could tell us where the cuts are going to be made and the precise percentage of those cuts. My recollection is that it has been an extremely successful and important initiative.

I should also like to ask what the Government’s reaction is to the ferocious and spontaneous opposition to public library cuts that is emerging daily throughout our country. In her maiden speech, the noble Baroness, Lady Bakewell, stressed that the importance of libraries in the life of young children cannot be overstated.

I have one final question about archives—a matter referred to by the noble Lord, Lord Freyberg. I agree with him that they are incredibly important, and they were a central part of the MLA’a agenda. What is happening, and where will the investment come from? Does the Minister recognise the absolute importance of archives?

We must recognise that the arts are not a mere add-on; they are as much a part of our way of life as the National Health Service and they are a major generator of national wealth, both economic and cultural. I look forward to the response of the noble Baroness, Lady Rawlings, to some of the points that have been made in this debate.

16:31

[Baroness Rawlings]

My Lords, I, too, congratulate the noble Earl, Lord Clancarty, on securing this debate and on his informed and valuable introduction. As an artist in his own right, his contribution is all the more valuable to this discussion. I am grateful to him for his consistency in keeping the subject on the public agenda.

Your Lordships’ House counts among it several distinguished Peers who have highly responsible positions in the arts, including many artists, writers, composers and impresarios, as well as art lovers, many of whom have spoken in this remarkable debate today. It is indeed encouraging that we, as a nation, are so passionate about the arts and that their future is being discussed again today in this Chamber. I am so pleased that the noble Lord, Lord Evans, has answered this debate for the Opposition. He has spent much of his life involved in the arts and he understands how important they are. I shall write to him with details about Renaissance and the MLA, as there is not an enormous amount of time in which to respond to him now.

The arts are important for countless reasons, many of which have been highlighted by noble Lords this afternoon. They are important to our nation because they give a sense of who we are. Britain evokes thoughts of Shakespeare, Orwell, Turner, Elgar, the Beatles and many more. I agree with my noble friend Lady Bonham-Carter that the arts are important because they communicate the tremendous joy at being alive, and they can communicate, too, the sadness that one can experience. As Pablo Picasso said:

“Art washes away from the soul the dust of everyday life”.

They are important because regular participation in the arts is proven to make us healthier and happier. The noble Lord, Lord Evans, is right: the arts also contribute to our country financially; we are a nation famous for our cultural exports.

I reassure the noble Lord, Lord Howarth, the noble Baroness, Lady Young, and my noble friend Lord Brooke that this Government do indeed value the arts in every sense. We recognise their vital role in British society. I thank the noble and learned Lord, Lord Scott, for stressing the value of the arts in heritage. They also play a vital role in the big society and we will continue to support them during our time in government.

Many noble Lords have shown concern about cuts, including the noble Lord, Lord Puttnam, whose expertise in this area is well known. The Minister for Culture, Ed Vaizey, recently told a Commons Select Committee that he would give a blank cheque to the arts sector if he could, as would we all. His and our hands are tied somewhat by our inheritance of the worst peacetime economic conditions in living memory. The coalition Government, however, have made a commitment to eliminate the structural deficit by 2014-15 and our challenge is to fulfil that without causing irreparable damage to British cultural life. The former is under way; the latter is still a challenge, especially for services such as schools, hospitals and our Armed Forces.

As a department, DCMS has had to contribute towards achieving that through the spending review. The arts budget is not immune and the Arts Council’s grant from DCMS has been cut by 29.6 per cent. Within that, the budget that immediately supports organisations that create or enable art will be cut by no more than 15 per cent over the next four years. The Arts Council will announce its funding portfolio for the next three years within two months of this discussion. Understandably, some organisations may see their funding reduced and some may see their public funding cut entirely, but the British system has always shown itself to be resilient in challenging times.

I add my congratulations at this point to my noble friend Lord Wasserman on his eloquent and witty maiden speech. He spoke so many words so dear to my heart and I agree with his pleas for active participation and for buying young artists’ work. Perhaps I should declare an interest in having owned a contemporary art gallery from 1969 to 1988. We need public support for the arts as well as state funding. This House and the Government will benefit from his knowledge, especially of philanthropy tax measures, which, as he knows, are a matter for the Chancellor of the Exchequer.

That leads me to philanthropy, which, in my view, should mean charitable giving without counting the cost. Much has been made of this Government’s plan to foster philanthropy, as many noble Lords have mentioned. Let me reassure the House that this is not a plan to replace government funding for the arts but a route to help arts bodies to diversify their income sources. Philanthropy and business support will continue to be key income streams for culture in the years ahead. It will not be easy. We know from many years of experience that relationships take time to be nurtured and we believe that there is still considerable scope for growth in private giving to culture. We are committed to supporting culture in fundraising activities. There is some concern that fundraising is more challenging in the regions outside London. I am sure that that is broadly right, but it is not impossible that many cultural bodies outside London are already securing significant investment from donors and corporate support. I appreciate the kind words from the noble Lord, Lord Myners, and support what he said regarding our outstanding museums and galleries. I will take away his important suggestions concerning “in lieu”.

Some concern was expressed by several noble Lords that cultural education programmes will be most badly hit by these cuts. I thank my noble friend Lady Benjamin for her passionate contribution. She continues to be a wonderful advocate for both the arts and young people and I shall write to her on her specific questions. I understand her concerns and those of many others. I believe that it was Sophocles who said:

“Whoever neglects the arts when he is young has lost the past and is dead to the future”.

I agree with the request of the noble Lord, Lord Moser, for the Government to have a vision; the concern of the noble Lord, Lord Aberdare, regarding the support for music; and the plea of my noble friend Lord Colwyn for more support for jazz. One of our priorities for arts and cultural education is to make certain that all children learn an instrument and learn to sing—which is, I dare say, music to the ears of the noble Lord, Lord Moser. It will, I hope, provide reassurance to say that children and young people are one of the Arts Council’s priorities for the next 10 years, as mentioned by my noble friend Lord Eccles. The Government will make certain that the young do not miss out on artistic involvement. I am sure that noble Lords will look forward to reading Darren Henley’s independent review of music education, which will be published imminently.

I shall say a few words on higher education and, specifically, the role of conservatoires, as raised in the eloquent speech made by my noble friend Lord Black. As he is aware, that is a decision for the Higher Education Funding Council for England, but I reassure him that the Government are well aware of his concerns. The noble Lord, Lord Bragg, mentioned education. He has great experience in that field. His programme on Aristotle tied into the debate concerning education. If I may add one of my favourite quotations, Aristotle said:

“The roots of education are bitter, but the fruit is sweet”.

Several noble Lords, including my noble friend Lord Shipley, raised the issue of local authorities that have had to cut their support to arts organisations and libraries. I spoke about libraries the other day. I understand the concern about that development. It is the Government’s belief, however, that decisions are best taken at local level. We believe that local government best knows the people and the communities that it serves. We may not always agree with the decisions being taken at local level, but we support each council’s right to make them.

I welcome the noble Baroness, Lady Bakewell. I cannot claim to compete with her on the crumpet stakes but, whatever her merits are in that field, they pale into insignificance alongside her knowledge, experience and lifetime contribution to the world of the arts. I reassure her that this Government believe in the arts reaching everyone.

I thank the noble Lord, Lord Luce, for his work in the voluntary arts sector. We will continue to work with that sector to encourage participation.

I thank the noble Lord, Lord Ramsbotham, for his informative contribution on the arts in the criminal justice system. I thank him for his tireless work as president of the Arts Alliance and hope to reassure him when I say that DCMS officials will continue to work with Ministry of Justice colleagues in that area.

The Government are well aware that the next few years will be difficult for the artistic world. We are a nation of art lovers. People are encouraged to visit us to experience the quality of our culture. I am confident that, as long as artists continue to produce exciting, innovative and challenging work—work that the public want to experience—they will go from strength to strength under this Government. I am confident, too, that the financial support provided by this Government will continue to support a strong arts infrastructure. With the correct measures put in place, this Government will oversee a considerable increase in the amount of charitable giving to the arts.

Your Lordships’ House can boast the most distinguished and experienced group of people, unrivalled anywhere. We have had a most outstanding, constructive debate, from which I am sure that we have all learnt a great deal. This is the House of Lords at its best. I thank noble Lords for their knowledgeable and wise contributions to this debate, especially the two maiden speakers, the noble Baroness, Lady Bakewell, and my noble friend Lord Wasserman.

I apologise to those noble Lords who have contributed but to whose many points I have not been able to respond. Unfortunately, time is limited. I will of course write to my noble friend Lord Colwyn and to all noble Lords to whom I have not responded. I will look into their points and take them back to the department. Once again, I thank the noble Earl, Lord Clancarty, for giving us this special opportunity. I look forward to future discussions on this issue.

16:46

[The Earl of Clancarty]

My Lords, we have had a remarkable debate today with a nerve being struck not just by the number of speakers that we have had but by their passionate and varied opinions, as well as the considerable concerns voiced about the Government’s commitment to the arts and the direction being taken. I thank all noble Lords who have taken part. In particular, I congratulate our two maiden speakers, the noble Baroness, Lady Bakewell, and the noble Lord, Lord Wasserman, on their excellent and thoughtful speeches. I am sure that we will hear much more from both of them. I thank the noble Baroness, Lady Rawlings, for her considered reply and I hope that we will return to many of the issues raised sooner rather than later. In the mean time, I beg leave to withdraw the Motion.

Motion withdrawn.

Investment Bank Special Administration Regulations 2011

Thursday 3rd February 2011 Lords Chamber

Motion to Approve

16:47

Moved By

[Lord Sassoon]

That the draft Regulations laid before the House on 10 January be approved.

Relevant Documents: 12th Report from the Joint Committee on Statutory Instruments.

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

My Lords, I beg to move that the draft regulations and the draft order laid before the House be approved. The global financial crisis and ensuing economic woes have shown us all the huge costs of inappropriate regulation, excessive risk-taking and overconfidence in the banking system. This was no more apparent than with the collapse of Lehman Brothers in 2008, where widespread panic gripped the financial markets and where clients in the United Kingdom were unsure as to whether they would ever recover the billions of pounds-worth of assets and money that they had invested. In fact, that is still being resolved.

We simply cannot afford a repeat of what flowed from the Lehman collapse. It is now our responsibility to develop an insolvency regime robust enough to handle the failure of investment banks. This is essential if we are to maintain the UK’s position as the world’s leading centre for financial services. However, let us be clear: while the regime being debated today is a step towards addressing this issue, the new regime by itself is not enough. That is why the Government are undertaking comprehensive reforms on both the domestic and international stage.

At home, we are overhauling the failed tripartite structure of financial regulation and strengthening our resolution frameworks. We have also set up the Independent Commission on Banking to advise on how to mitigate systemic risk in our financial system. We are looking forward to receiving the commission’s recommendations in September. Internationally, the Government are working closely with the Financial Stability Board and the European Commission to develop a globally consistent approach to resolving systemic firms. This will help to create a level playing field, which is important to ensuring that UK competitiveness does not suffer.

Let me now turn to the focus of this afternoon’s debate, which is the special administration regime. The current insolvency arrangements under the Insolvency Act 1986, although perfectly suitable for winding up most firms, do not take into account the complexities and conflicts that an administrator faces when winding up an investment bank. The administrator does not have an explicit objective to return client assets or to co-operate with market infrastructure bodies. Instead, the administrator must act solely under its objective to either rescue the company or maximise returns to creditors before winding it up. This potentially places the administrator in a difficult position if additional focus is required to return client assets or to resolve counter-party positions. The administrator is likely to require frequent directions from the court before taking the necessary actions, and this is extremely costly. The existing regime also creates uncertainty for investors as it is not clear that the administrator has a duty to work to return their assets and money. This is harmful to the UK’s reputation as a safe place for investors to entrust their assets.

The special administration regime we are debating today addresses this uncertainty by giving the administrator a specific objective to ensure the return of client assets. It will also reduce the length of a potential administration and minimise the costs for creditors and for the wider economy, and it has undergone extensive public scrutiny to ensure that this will be the case. The proposed regime has benefited from the input of an advisory panel of over 30 industry practitioners. We have also consulted on the regulations themselves, and the introduction of the regime has the full support of many in the financial sector. This is because no one wants to see another failure like Lehman Brothers, where the administration is entering its third year with substantial sums of client assets still to be returned.

I shall now provide a brief summary of the two statutory instruments we are considering today, starting first with the Investment Bank Special Administration Regulations 2011. These regulations provide administrators with three statutory objectives. The first objective will give the administrator a duty to return client assets because it is essential that client assets are returned as quickly as possible to prevent any undue suffering and financial hardship. Having this first objective will allow the Financial Services Authority, if necessary, to instruct an administrator to prioritise the return of client assets above the other aims, a power I will return to later. Under these regulations, in order to achieve objective 1, the administrator will also be able to set a bar date for claims to client assets. This will significantly improve the speed at which client assets can be returned. The bar date will include safeguards to reduce the possibility of a client losing out from its implementation—for example, by failing to submit a claim. These safeguards will be set out in the insolvency rules which will be laid separately before Parliament shortly after these regulations come into force.

The second objective ensures that an administrator shares information with market infrastructure bodies. It is essential that when an institution becomes insolvent, the administrator works with the relevant clearing houses and exchanges, and with the authorities, to resolve all failed trades and all open positions. Without this co-operation, market confidence and the stability of our financial markets would be seriously undermined. It is also important that the administrator works with the FSA to facilitate any actions the authorities might need to take as a result of an investment bank becoming insolvent.

Moving on to the third special administration objective, this follows the example set out under the Insolvency Act 1986 to ensure that, in the event of an investment bank special administration, the administrator will continue to work in the best interests of all creditors in either rescuing the investment bank, if that is at all possible, or in winding it up. Having this objective means that the administrator is unlikely to be successfully challenged for working in the best interests of the creditors in winding up the firm. Under the new regime, the Financial Services Authority will have the power to direct the administrator to prioritise one or more of the special administration objectives over the others, although I should stress that the regulations make it clear that this power can only be used if it is in the interests of financial market stability.

Another important part of this regime is that if the administrator continues to meet payments, suppliers of key services to that investment bank will not be allowed to terminate their services. The proposal is relevant to all suppliers of equipment used by the investment bank in connection with the trading of securities or derivatives; suppliers of financial data and infrastructure permitting electronic communications services; suppliers of secure data networks provided by an accredited network supplier; and suppliers of data processing capabilities.

On the second statutory instrument, the Investment Bank (Amendment of Definition) Order, the Banking Act currently stipulates that only firms holding client assets are within the scope of the special administration regime. This order widens the scope of the special administration regime to ensure that firms holding client moneys are also included. This is because the Government and their investment banking advisory panel agree that it does not make sense to have two different insolvency regimes—one for firms holding client assets and one for firms holding client money. It is right that the new regime should apply in both instances as it is suitably flexible to do so. Separate insolvency regimes for firms holding client money versus those holding client assets would serve only to complicate further what is already a complicated process.

The Government have, however, excluded from the scope of the special administration regime institutions that hold client assets only for the purpose of carrying out an insurance mediation activity. We have done this for the simple reason that the special administration regime is not designed for these types of business activity. Firms conducting these activities will enter the same insolvency proceedings as before.

This legislation will help preserve the UK’s reputation as a leading destination for investment banking. It is a clear demonstration that we have learned from past mistakes, that we are serious about financial reform and that we will do everything in our power to ensure that financial stability is placed at the heart of our regulatory agenda. The legislation is good for the industry and good for the customer.

17:00

[Lord Myners]

My Lords, I support both the Investment Bank Special Administration Regulations 2011 and the Investment Bank (Amendment of Definition) Order 2011. The policy objective is to create a special administrative regime in the form of an administration procedure. The aim is to provide administrators with clarity and direction to resolve the firm without needing to approach the court on a frequent basis. These adjustments to current insolvency law will make the process less expensive and less disruptive for an investment firm, its clients and creditors and the market.

The Government have consulted widely and the response has been broadly supportive. It is important that we express our thanks to those who sit on the investment banking liaison panel for the time they have spent working on complex legislation and regulation to ensure that they achieve the Government’s purpose.

The regulations and the order are being made, of course, under the enabling powers in Sections 233 and 234 of the Banking Act 2009, which I had the honour to take through the House. This arose as a consequence of the insolvency of Lehman Brothers, when unanticipated complexities emerged in resolving that investment bank, particularly in connection with client money.

The Financial Services Authority has taken significant steps to improve the supervision of client money and to address a number of areas where there were shortcomings and deficiencies. In particular, it has put a very strong team under excellent leadership in place to be responsible for the supervision of client money. These regulations are important to maintaining public confidence in the stability of UK financial markets and the integrity of institutions and firms operating in these markets.

I have two questions for the Minister. When Lehman Brothers collapsed, one of the difficulties we experienced was that Lehman was holding money in client accounts which were appropriately designated as client accounts and, accordingly, should have been kept separate from the assets of Lehman Brothers when it came to administration. However, Lehman had placed this money on deposit with a separately incorporated Lehman bank in Germany. The German authorities, after the collapse of Lehman Brothers, passed legislation to say that client money held on the accounts of this German banking subsidiary, when placed by an affiliated Lehman body, would not be deemed to be client money under German law. Is the Minister aware of whether any progress has been made on that point? Has this been raised at ministerial level recently with the German Government? It seems to strike at the very heart of the concept of the segregation of client assets which is intended to make sure that those clients are protected from any failure on the part of the institution with which they thought they had an agency rather than a principal relationship.

My second question relates to omnibus accounts. Will the Minister reflect on whether omnibus accounts are in themselves a source of hazard, and whether the practice of using omnibus accounts is one that the regulators should review in favour of looking at the case for requiring all accounts to be designated? Certainly in my experience, omnibus accounts undoubtedly increase confusion over the ownership of assets and the execution of certain fiduciary responsibility including, in particular, the voting rights of shares in UK companies at shareholder meetings.

Finally, I also express my support for the measures that the Government are taking in respect of the continuity of service arrangements, another problem that emerged with Lehman. The House should support the measures that the Government are bringing forward.

In closing I wish to mention a very crude term that is currently being used: banker bashing. Many members of the Government are engaged in banker bashing. The Secretary of State for Business and the Chief Secretary to the Treasury have made wholly uncomplimentary remarks about banks. Last night I was watching BBC “Newsnight” and was surprised to find the Mayor of London making uncharitable comments about banks. It is quite a volte-face, although it really takes him back to where he originally started.

It is important that we recognise that we have very many talented people working in investment banking in this country. I have had the privilege of working with them—they are in very many cases the best in the world, and they do not work only for our own banks. I would happily hear names like Royal Bank of Scotland. It is very easy to regard that as a bank associated with failure, but there are extraordinarily good people working there. Likewise, many people here in London work for firms such as Morgan Stanley and Citicorp, or for our own pre-eminent investment bank, BarCap. We need to maintain context here. Of course some of these problems continue to be self-inflicted by the banks, and I wish the Government well in their talks under Project Merlin, which are intended to bring some sense to bank bonus decisions. However, we need to keep in mind that investment banking, and banking in general, are a source of incredible competitive and comparative advantage for the UK economy. These regulations are entirely consistent with providing the support for a reputable, solid and prudent banking sector of the sort that we should seek to encourage in this country.

[Baroness Falkner of Margravine]

In his defence of the banking industry, with which I broadly agree, will the noble Lord accept that the idea behind the Government asking bankers to be more responsible and to have a social conscience is not to imply that individual bankers are not worthy of their role and status in the industry, which is very important to us, but is directed at certain levels of remuneration? Irrespective of how talented an individual is, no single individual can add the kind of value-added that we have started to see in terms of remuneration and the bonus pool.

[Lord Myners]

I had almost concluded my speech but the noble Baroness’s intervention has provided me with an opportunity to carry on and say more. There are very talented people working in UK banking and some of them are among the world’s very best. They earn their remuneration. Sir Philip Hampton, the chairman of Royal Bank of Scotland, referred to a gangmaster culture in some of the banks. I put down a Question for the Minister on this subject, to which he gave his standard Answer on bank bonuses which I can now recite. Regardless of the Question I ask, I get the same Answer. Perhaps it will change at some point, but I am beginning to lose any great hope that the Minister will seek to answer the Questions that I ask him on these subjects.

[The Archbishop of York]

The noble Lord, Lord Myners, normally speaks with great sense and clarity on matters of money, but the question is not that banking is not an honourable profession. People who work in the banks are people of good will and good respect, and they do a very good job. The first question is about bonuses. People in this country find the bonus culture indefensible. The second question is about the gambling casinos around banking. Will they get rid of those gambling casinos? Many people say they do not like them. The question that the noble Lord asked the Minister about Lehman Brothers and deposit accounts in Germany illustrated the point. Some people say that that is not the honourable business of banking. Anybody who is having a go at banking is saying not that banking is not an honourable profession or that bankers are not very able people doing a good job but that these bonuses and the gambling casinos taint the entire profession of banking.

[Lord Myners]

I can only say that there are failures of agency functions here. The shareholders are not holding the boards to account, and the boards are not asking the right questions or building depth of talent. It may be that the Minister, with his great experience in this area, can share with us his thoughts about why banking has this problem of high bonuses. My father was a fisherman, and there was not a big bonus culture in fishing. There is no bonus culture in making ball bearings, in engineering or in the hospitality industry. I think the answer possibly lies with the work that the Independent Commission on Banking is doing. The Minister always treats anything I say positively with considerable scepticism and caution, but I repeat my strong endorsement of the creation of the Independent Commission on Banking. It may well raise some interesting perspectives on the points that have been made. I close by simply saying that I fully support the administrative orders being tabled today.

[Baroness Maddock]

My Lords, I strongly support many of the things that the noble Lord, Lord Myners, said in support of these orders, particularly the measures that allow for clients’ assets to be recovered more readily. I have three questions.

Not only will administrators be able to prioritise the three objectives outlined in the instrument as they see fit, but they will also be able to continue to administer their organisations with a guarantee that suppliers must provide their services for up to a period of 28 days without pay. Have the Government fully identified the potential costs to suppliers who have to continue to provide their services for this period?

Secondly, I understand that the regulations allow suppliers to gain a court order to exempt them from this duty if they can prove hardship. Again, can the Government expand a little on the definition of hardship?

Lastly, on the bar date by which time claims for assets must be made, will the Government consider setting out what they think might be a reasonable amount of time to allow for claimants to properly state their case?

Having posed those questions, in summary I support these regulations and hope that the Government will give proper attention to the suppliers who must provide their services without pay and, of course, those clients who seek to recover their assets.

[Lord Davies of Oldham]

My Lords, I bring some comfort to the Minister, as he has already had a plethora of questions, which I know he will dutifully answer in his wind-up. I have a few questions of my own but I begin by saying that we welcome these regulations, which bring investment banks within the terms of the special administration or wind-up rules for banks contained in the Banking Act, which otherwise apply only to deposit-taking banks. As my noble friend Lord Myners reminded the House, this goes back to the Banking Act 2009 on which he led for the Government—I was pleased to give him some minimal support at the time and enjoyed that experience—but there was always going to be considerable secondary legislation attendant upon that Act. The regulations are part of that process, and we welcome them and commend them to the House, as the Minister will do in his final speech.

I also want to reassure the Minister that I do not think I will go far down the line on which my noble friend Lord Myners managed to stir up the attendant House—the issue of bankers’ bonuses. There will be a time for debates on that and he will know that we are all watching the work of the independent commission on banking and awaiting its outcome. He will also know that the country expects the industry to be responsive to the obvious fact that mistakes were made and calamities visited both on this country and on the wider world economy because of the significance of the banks. In particular, he will know that their return to the bonuses concept affects our nation adversely in circumstances in which so many people are hard pressed for resources. That applies especially to the banks in which the taxpayer has a substantial stake. The Government must respond to this fundamental question: how is it that, when the rest of the country is suffering such privation, people can pay themselves such enormous sums in bonuses and do so on the basis of a taxpayer bailout? However, that is a debate for another day.

As I indicated to the Minister, I shall concentrate on one or two detailed questions. I want to ask about Regulation 6(1)(b), under which there can be an application for special administration if that is deemed “fair”. Fair by whom? Presumably, the decision is made by the Financial Services Authority or the Secretary of State, but who defines what is fair? This seems a very loose term, in what are otherwise tightly drawn regulations, so I ask the Minister to comment on that point.

Secondly, an important element in reducing the vulnerability of investment banks is to require them to hold more capital and, especially, to limit their leverage. Can the Minister outline what steps are being taken to implement either of those measures?

In what ways is this legislation future-proof? Which agency will be responsible once the FSA is wound up? There is an important element of client protection in these regulations, which my noble friend Lord Myners referred to. Who is actually going to ensure that there is consumer protection? Investment banks deal predominantly in wholesale markets, so it might be thought that the Bank of England was relevant. It is clear, however, that once the FSA goes we need to know who is going to take responsibility regarding consumers in both areas.

17:15

One of the key problems in winding up an investment bank is that it is not easy to identify client assets. Again, my noble friend Lord Myners identified some of these issues. That was a crucial element in the collapse of Lehman Brothers. There is nothing in the regulations to facilitate the matching of assets and liabilities for the firm as a whole. What steps are the Government taking to remedy this issue? What answers are they going to give on the issue that my noble friend first identified?

As my noble friend has introduced the subject of German legislation and the way in which the Germans have responded, is it not also the case that US authorities have taken important steps to facilitate netting by requiring derivative instruments to be traded with central counterparties? What is the position in Britain? We do not know what the UK Government are doing about these matters. The German and US Governments have already acted, and we need to know what our Government intend to do on these matters.

A truly effective resolution regime—that is, a special administration or wind-up regime—would embody a requirement that firms develop living wills. Will the Government require investment banks to do this? Have we any proposals on that point?

The legislation suggests that at this stage the Government appear to have learnt very little over the past three years. All that they are doing is putting in place the power to wind up investment banks without at the same time making the regulatory changes that would reduce the probability of failure and provide for orderly wind-up. We do not just need a mechanism; we need a process that ensures that the mechanism works speedily and fairly. I suggest to the Minister that these regulations, welcome though they are, are such a partial dimension of the total picture that the House will need reassurance on these wider matters.

[Lord Sassoon]

My Lords, this has been an interesting debate, perhaps a little more interesting because of one or two of the little side conversations that got going, and certainly more interesting than the perhaps slightly dry but very important regulations had led me to expect. I am grateful not only for all the contributions made but for the general support for the proposed regulations. The past few years have shown that investment banks can fail and can cause huge disruption, not just to investors but to the wider economy. That is why the Government are putting in place this new regime.

I said at the beginning that the regime is being developed with the input of industry experts. I should like to echo the thanks of the noble Lord, Lord Myners, for the input and help that we have had. These have been complex instruments to develop. I am also happy to acknowledge the process that has resulted in these regulations today was one that the noble Lord himself kicked off when he was in the Government. It has taken a couple of years to get the regulations right and to achieve a regime that I believe is fit for purpose.

In addition, in accordance with Section 236 of the Banking Act, the regime will be reviewed within two years of the regulations coming into force. That review will consider how far the regulations are achieving the objectives set out in Section 233 of the Banking Act and whether the regulations should continue to have effect. A copy of that report will be laid before Parliament. That goes some way to answering the questions of the noble Lord, Lord Davies of Oldham, about future-proofing, continuity and the connection to the wider regime. These are important questions, but they have been taken account of within the regime that the Banking Act sets up.

On the specific question on the future of the Financial Services Authority, I would not presume, until your Lordships’ House had passed the necessary legislation that will come forward, to talk too much about what happens after the Financial Services Authority comes to the end of its life. However, in that legislation, we will take full account of all the functions, including those under these instruments, which the FSA currently covers.

The noble Lord, Lord Myners, asked about the situation with Germany. In particular, in response to that situation, the FSA has consulted on introducing a 20 per cent cap on intra-group deposits of client money so that the scope for exposure to overseas regimes that may have some bar on the return of money is significantly reduced. Of course, as I have already indicated, we work as a Government to ensure that resolution regimes, in so far as is possible, can be made consistent on both a European and global basis.

[Lord Myners]

The capping of exposures may be a good thing in itself, but what happened here was that, after the collapse of Lehman brothers, the Germans effectively said, “These are no longer client assets. They will be deemed to be the assets of Lehman Brothers International”. That is the core of the matter. It strikes me as quite extraordinary that a fellow European nation should have done this. To date, we have not been successful in unwinding what could only be regarded as a hostile action to the concept of client money. I welcome what has already been done, but I urge the Minister to take an interest in this and to see whether, perhaps with the FSA, we could give one more push on this subject.

[Lord Sassoon]

My Lords, the noble Lord, Lord Myners, knows very well the difficult background to this, as well as the fact that the German situation is, in the first instance, a matter for the courts. It is therefore difficult to go into it in much detail. That is where it principally lies, rather than being a government to government matter. As I have explained, the sensible response to cover the generality of these situations is to ensure that investment banks do not in future overexpose the intra-group excessively. That is why they have introduced the 20 per cent restriction. We will wait to see how this matter is resolved in the courts and what further lessons, if any, that leads to.

The noble Lord then asked a second question about sources of moral hazard in omnibus accounts. Again, the Financial Services Authority has certainly focused attention on this area. It has committed to enhancing the client assets source book, where regulatory failures in the general area of protection of clients’ assets were very much exposed by the Lehman Brothers case. It is not the case that omnibus accounts are, in themselves, a source of hazard, as long as there is proper segregation of clients’ money, which is the critical issue here.

As has been said, today is not the time to get into the questions that came up at the end of the speech of the noble Lord, Lord Myners, about bonuses, the importance of the City and so on. We will definitely come back to these things. I am grateful for the noble Lord’s confirmation that he supports the Independent Commission on Banking. I very much hope that it will shed light—as Sir John Vickers’s recent speech indicates it will—on all these issues. The noble Lord also referred to Project Merlin, which we are working on very hard to ensure that banks pay out bonuses that are less than they otherwise would have been and lend more than they otherwise would have done.

[Lord Myners]

I make one last intervention on this. Can the Minister tell us simply how the Government will find out what bonuses otherwise would have been and how much money would have been lent in the absence of Merlin? It seems that the Minister yesterday, in using the terms “demonstrable” and “verifiable”, overreached himself in suggesting that there was a way in which the outcome of Merlin could be proved. Can the Minister, in very simple, straightforward terms, explain how he will prove these issues on bonuses and credit extension?

[Lord Sassoon]

My Lords, when we have a Project Merlin outcome to announce, the noble Lord will no doubt have every opportunity to cross-question me on these matters. I also note, just in case noble Lords missed it, that the noble Lord committed himself to that being his final intervention. He is certainly well below his batting average for interventions in my closing remarks but we will see whether he holds to it. I shall try not to provoke him. The only further thing that I wanted to say in response to the noble Lord was that, despite what I just said about banking and unfinished business on bonuses, I very much echo what he said about the importance of the City. Extraordinarily skilled work is done by many experts across the financial and business services in the City, and the City adds great value to the UK economy; we should not forget that.

I will respond to a couple of the points raised by my noble friend Lady Maddock. The supplier proposal adapts existing provisions in insolvency law, specifically within the Insolvency Act 1986. We are trying to ensure that, in the case of investment banks, those critical suppliers without whom the resolution of the investment bank cannot take place—the positions cannot be closed out—continue to supply. When we talk about 28 days, it is important that the supply is paid for but it is a question of whether it is paid for within the 28 days. The supplier can stop supplying if any charges in respect of the supply remain unpaid for more than 28 days, if the administrator consents to the termination, or if the supplier has the permission of the court. In that context, the definition of hardship will be left to the judgment of the court.

As regards the bar date, the critical protection is that sufficient time has to be allowed for publicity to be given to the fact that the investment bank has gone into special administration. There has to be sufficient time for affected clients to calculate and submit their claims and for practical difficulties in establishing claims to be sorted out. Therefore, I believe that there are sufficient protections in the regime.

The noble Lord, Lord Davies of Oldham, asked me a number of questions. I hope that I have dealt with the future-proofing and questions around the Financial Services Authority. Consumer protection will be fully taken into account in the architecture that we will propose to replace the Financial Services Authority. Central counterparties and the regulation of over-the-counter derivatives is an area which falls within the general heading that I addressed: namely, that we must work to achieve international and global solutions. I see some nodding and shaking of the head from the Benches opposite. That indicates that these things are not easy. We need to have a regime in place that is safe and appropriate for the markets in the UK, but equally we need to ensure that we have something consistent within the EU and the G20 framework as mechanisms which could provide safe solutions that might work against free investment flows. We have to ensure that this is not one of those issues where protectionism comes to the fore under the cloak of providing safe solutions. I absolutely take the point that the settlement of transactions is ongoing business in which the Government take an active part.

As regards how living wills fit with this new regime, recovery and resolution plans are again a core part of both our and the G20 authorities’ response to the “too big to fail” problem and will be required of all systemically important financial institutions. That is the critical definition in that context. It is not a question of an arbitrary definition that splits investment banks from other banks in the way that the noble Lord suggested might be the case.

On the protection of client assets, it is worth remembering that the FSA has set up a new client asset unit, which is a centre of excellence and expertise within the FSA, in further recognition of the important issues raised by the lessons learnt from Lehman. That further stresses the fact that although these instruments being put in place today are critical, they are in many respects only a part of a wider construct.

The first point that the noble Lord raised, but the last one which I should address, concerns the definition of fairness. The relevant provision is based on existing provisions in the Insolvency Act 1986 and the Financial Services and Markets Act 2000. “Fair” is the modern term for the previously used “just and equitable”. While I do not profess to be an expert on these matters, I am assured that the term “fair”—its use is based on a lot of case law defining “just and equitable”—is well defined under court rulings and will be well understood by those administering the special administration regime.

That has been a long response to a short but important debate.

[The Archbishop of York]

I did not clearly hear the noble Lord’s answer to the question of the noble Baroness, Lady Maddock, about the bar. Who will determine what sufficient time is? How would I know that as a client? Who will determine that it is sufficient?

[Lord Sassoon]

I thank the most reverend Primate for pressing me on that. The critical thing, as I said before, is not that some arbitrary time is laid down, because that will relate to the complexity of the individual administration case. The objective has to be for the administrator to fulfil his objectives. The principal objective that we are looking for is the return of the money as quickly as possible. That will be the objective that the administrator will be looking to fulfil, subject to these safeguards that I have tried to explain to make sure that absolutely everything is being done so that those with money at risk are informed and have time to calculate their claims. A date cannot be fixed in a way that applies to all circumstances, because, if so, there would be a backstop date that might disadvantage people in a simple administration.

Motion agreed.

Investment Bank (Amendment of Definition) Order 2011

Thursday 3rd February 2011 Lords Chamber

Motion to Approve

17:36

Moved By

[Lord Sassoon]

That the draft Order laid before the House on 10 January be approved.

Relevant Documents: 12th Report from the Joint Committee on Statutory Instruments.

Motion agreed.

House adjourned at 5.37 pm.