Grand Committee
(13 years, 2 months ago)
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National Insurance Contributions Bill
(13 years, 2 months ago)
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The Deputy Chairman of Committees (Lord Brougham and Vaux)
Good afternoon, my Lords. If there is a Division in the Chamber while we are sitting in Committee, we will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Lord Davies of Oldham
My Lords, presumably the Minister hopes that the Committee stage of this Bill will not be as protracted as another Bill that has been before the House over the past few weeks, and I think that I can give him that assurance. However, we want to debate whether Clause 1 should stand part for the obvious reason that this is by far the most significant clause in what is an important Bill.
As the Minister will appreciate, we support the increase in national insurance contributions but our proposals were very different. He must recognise that, during the course of the detailed discussion on the clauses of the Bill that we will have this afternoon, we will identify some of those points of difference. We hope that he will be in a position to answer some of the questions that were adumbrated in general terms at Second Reading and will be dealt with in rather more detail today.
To put the Bill in context, there is a difference in perspective between the Government’s strategy and the one that my party would pursue. The Minister and the Committee will recognise that last year there were three consecutive quarters of growth followed by a quarter of negative growth, which looked marginal when the first set of figures came out but rather more serious following the subsequent revision. We are concerned about the impact of the Bill and of the Government’s general strategy on the broader economy.
We would put jobs and growth first. That is why we are concerned that the increase in national insurance contributions will prove to be difficult for growth and particularly for the protection of employment, given that the increase in NICs is being supplemented by a very significant increase in VAT. Expert opinion identifies that the increase in VAT could result in the loss of three times as many jobs as might be lost by anything to do with national insurance increases, which were the subject of considerable debate at the last general election.
We are concerned that there is no protection for those earning less than £20,000 per year. We would have sought that protection by raising the primary threshold. The Government are imposing increases without fully increasing the secondary threshold for employers. That presents obvious difficulties. Can the Minister confirm that employers will suffer nearly £1.5 billion extra in terms of commitment of resources as against rather modest savings on the secondary threshold? The Minister will say that the secondary threshold is not meant to compensate for the impact on employers because personal tax allowances will help to some degree. The trouble with that argument, which the Minister vouchsafed to the House at Second Reading, is that it takes no account of the balance on personal tax allowances, namely the very severe benefits cuts and loss of income to many of the less well-off in our society. That is why the Bill needs to be put in that broader context.
We are concerned that the Bill is being promoted against a background of government policies that threaten the recovery. We had some indication of the difficulties just before Christmas. That coincided with adverse weather conditions, which was the reason given by the Chancellor of the Exchequer at the time and looks pretty threadbare now. One cause of anxiety about the recovery is the cuts in public expenditure, which will lead to significant job losses and a severe loss in confidence among employers and consumers. The Government propose—something that they criticised the previous Administration for—to increase national insurance contributions, but they have also increased VAT and have other strategies on the economy that are the source of great anxiety.
We look at the Bill in the context of the importance of growth in the economy and strengthening employment. Declining employment, when people lose their jobs, reduces demand severely in the economy and does enormous damage to the Government’s receipts from their various forms of revenue gathering. That is why we shall be using this Committee session for detailed examination of the Bill. However, we wanted to make this series of comments on whether Clause 1 should stand part because of its significance in the Government’s wider economic strategy, on which this side has very serious doubts. I hope that the Minister will be able to give some response. I beg to move.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, I am grateful to the noble Lord, Lord Davies of Oldham, for confirming that the Committee might move more expeditiously through this Bill than some other recent Bills.
I think that the noble Lord said that I would understand why he opposes Clause 1 standing part of the Bill, but I could not quite work it out and I am even more confused now that he says that the Opposition support the 1 percentage point increase, which is the import of Clause 1. However, I guess that I will eventually get used to the way that the House operates on these things. If the purpose of this discussion is to put the Bill into a bit of context, I am certainly very happy to do that.
The Government face the twin challenges of dealing with the inherited deficit and getting the economy growing again. In this wider context, the Bill goes to the heart of those challenges. I have repeatedly said that the recovery is likely to be choppy, and so it is proving. It is not easy to stimulate growth while bringing the deficit under control. The case of national insurance exemplifies the dilemma and the challenge. The 1 per cent increase in national insurance produces revenue of the order of £9 billion to £10 billion, which is necessary to deal with the deficit. Although we will put 70 to 80 per cent of the weight of deficit reduction on spending, nevertheless increases in taxation will bear part of the burden. Therefore, we start by accepting some of the changes that the previous Government proposed. We do not know what they had in mind on VAT. There were strong indications from Ministers in the previous Government that had they been returned to office they might well have increased VAT.
In the context of national insurance increases, offsetting measures that go hand in hand with the Bill—although they are not in the Bill—will increase the secondary threshold by £21 a week and the primary threshold and the lower profits limit by £24 a week. This will significantly offset the rises in the Bill. The increase in income tax personal allowances and the reductions in the basic rate limit and in the national insurance upper earnings and profits limit will, as a combined package, go a substantial way towards offseting the effect of the national insurance rises. Compared with the plans that we inherited, employers will be more than £3 billion better off next year, and that figure will rise in future years. As I said, we are fully compensating for the £9 billion increase in labour taxation that the rate rise represents.
The threshold rises will mean that the burden that the Government add to labour costs will lessen, and there will be more to share between employers and employees so that both will benefit. As a result of the way in which we are doing this, some of the benefit will be switched from national insurance contributions to income tax, so the net rise in national insurance contributions payments will be compensated for by a larger fall in income tax payments. Employers will be better off in respect of employees earning up to £20,000, while employers who have staff among the highest earners will pay more in national insurance contributions.
We are agreed that the 1 percentage point increase is appropriate. Where we diverge from the analysis of the noble Lord, Lord Davies, is in seeing the proposed increase as a significant tax on jobs at a time when the recovery needs to be encouraged and bolstered. That is why we have made the offsetting increases in limits, and the increase in the income tax personal allowance. I am grateful to the noble Lord for enabling us to start our discussion by putting the Bill in a wider context, because that is important. Having explored the issue, I hope that we will now move on to the detailed points that he intends to raise.
Lord Davies of Oldham
My Lords, of course, I am grateful to the Minister for his general response. He referred to choppy waters, but choppy waters can be uncomfortable and people in boats can feel unwell in choppy waters. We are concerned that those waters may have sufficient movement to swamp many people. We are worried about the rate of job loss and the loss of income among many sectors of our community, which will be reflected in the overall state of the economy. Indeed, we may already have seen signs of that. The Minister is fully entitled to adopt his optimistic stance at this point but I hope that his words do not come back to haunt him given that his Administration’s proposals may lead to excessive job loss. We think that it is easy to read the signs of the very great difficulties that we shall face on the employment front and, therefore, in the economy.
The Minister will also know that there is a difference in perspective between my party and the Government. Other significant Governments in the world—not least that of the United States—take a rather different perspective on what needs to be done in policy terms in relation to the present position as compared to the policy that he has adumbrated. Nevertheless, I am grateful that the Minister has been as constructive as he always seeks to be in response to my opening remarks. As we get into closer detail on the Bill, I do not have the slightest doubt that he will enjoy being even more constructive.
Lord McKenzie of Luton
Lord McKenzie of Luton
My Lords, I shall speak also to Amendment 2. Amendment 1 seeks to probe why 50 per cent, rather than, say, 75 per cent, of the product of the additional primary rate and additional class 4 percentage rate form part of the health service allocation. Amendment 2 poses the same question for a 100 per cent—the existing percentage—allocation.
The main features of the contribution system are helpfully set out in appendix 2 of the Government Actuary’s Department report on the Social Security Benefits Uprating Order 2011. For the NHS allocation it sets out, as partly provided for in the Bill, the rates of 2.05 per cent of earnings between the primary threshold and the upper earnings limit and 1 per cent of earnings above the UEL. From April 2011, the UEL, as we have just heard from the Minister, has reduced and the primary threshold has increased. That would appear to mean that for any given level of earnings, the 2.05 per cent of the allocation will be lower because the band is narrower, and the 1 per cent will be greater because the starting point is lower. However, overall, with constant earnings, this part of the NHS allocation would appear to be reduced. Similarly, the constant 1.9 per cent NHS allocation from employer contributions would appear to be less because it starts from a higher secondary threshold. The same issue arises in respect of class 4 contributions.
Given that GAD assumes the number of jobs to be the same next year as this year, with earnings increasing by just 2.1 per cent, what estimates have been made of the overall NHS allocation? Will the Minister let us know the estimated figure for the current year and how this would change if the percentage of the additional rates applied was variously 75 per cent and 100 per cent? These issues are important in seeking to understand the projected outcome on the National Insurance Fund in the context of the funding that has been allocated to the NHS. On this matter, in responding to the Second Reading debate, the Minister said:
“I hope it is completely clear to noble Lords that nothing in the Bill affects in any way the commitment to increase NHS spending in real terms in each year of this Parliament. We can afford to do this without additional funding from national insurance contributions”.—[Official Report, 2/2/11; col. 1429.]
Anyone who followed the debate in another place, which I will not replicate today because there will be other opportunities, will understand why the Government are effectively failing in this pledge; I refer to the switch in funding to cover social care budget shortfalls, the consequences of the VAT increase on the NHS given the inflation in the costs of treatment, and the costs of the reorganisation.
Perhaps the Minister will tell us, if the Government are to struggle to reach their NHS spending commitment, where the money will come from if the moneys allocated from the National Insurance Fund are not to be used. Will he also let us know how the additional moneys retained in the National Insurance Fund and not allocated to the NHS have contributed to its balance, which is projected now to be £53 billion by 2015-16? Clearly, if the NHS allocations were greater, the balance of the fund would be less and the investment income less—but what would the other ramifications be? We probe with these amendments. I beg to move.
Lord Sassoon
My Lords, I hope that I did not give too much encouragement with my remarks on Clause 1 to indicate that I would be in too accommodating a mode this afternoon. As regards the two amendments, I find this split of the proceeds between different allocated funds rather confusing and arcane. The relevant questions are the big picture ones asked by the noble Lord, Lord McKenzie of Luton, about the impact, if any, on NHS funding.
The point is that although for government accounting purposes—which are important—the moneys need to be allocated, the allocation does not and will not have any impact on NHS funding. It is absolutely not part of government policy to cut NHS funding automatically if, for example, global conditions lead to a reduction in national insurance contribution receipts. The Government would simply make up any shortfall from lower than expected national insurance contributions from other sources.
Even though the noble Lord questions it, the overriding commitment is the one that has been given on National Health Service spending. The amendments do not have any bearing on how much the NHS will have to spend because if the money does not come out of one fund it will come out of other sources of general government expenditure. We are maintaining the level of national insurance contributions allocated to the NHS and taking the additional revenues from rate rises to the National Insurance Fund. That is what is happening here although, as I have said, it will not have any impact on the NHS but merely maintain the previous level of funding. However, putting the additional revenue into the National Insurance Fund will help to ensure that plans for the payment of pensions and other contributory benefits will be sustainable in the long term. Through that funding we can protect pensioners by the new triple lock that guarantees a rise in the basic state pension every year in line with earnings, prices or by 2.5 per cent, whichever is the greater. In ordinary circumstances we would expect contributions to rise broadly in line with earnings, and therefore to rise in real terms.
Under the Government’s proposals, we expect allocations to the NHS to rise in real terms in a typical year. I do not have the breakdown of the split under different percentages. I could get my calculator and work it out but the main point, as I have tried to explain, is that the split itself is not relevant. We are maintaining the allocation and ensuring that the National Insurance Fund continues to grow, and National Health Service expenditure is protected by the commitments that the Government have given in their broader expenditure plans. I hope that I have adequately explained what is going on and that noble Lords will withdraw the amendment.
Lord McKenzie of Luton
My Lords, I thank the Minister for his reply. Of course we will withdraw the amendment; as he knows, that is the practice in the Moses Room. I understand the broad thrust of his point about funding for the NHS, but we shall have to agree to differ on the Government’s performance in that regard. We shall have the opportunity to debate that fully on other occasions.
The Minister said that in the event of a shortfall in contributions, the Government would make up the difference. One point that I was probing concerned the respective levels of the NHS allocation for the current year and for the year we are about to enter. I accept that the Government are preserving the 1 per cent and 2.5 per cent rates. However, the bands on which they are operating are changing; the bands for next year will mean that the UEL is reducing and the primary threshold is increasing. All other things being equal, if there were constant earnings between the two years, you would expect a lower contribution to the NHS allocation than was the case before the changes were introduced. With great respect, I do not think that the Minister has fully responded to that point—but it looks as if he may be about to do so.
Lord Sassoon
I apologise for not responding earlier, but I see that the noble Lord has the Government Actuary’s report, from which the Committee can see that the NHS allocation for 2010-11 will be about £20.5 billion, and pretty much the same for 2011-12. The figures in appendix 6, towards the bottom of page 25 of the GAD report, show that the expectation is £20,608,000,000 for 2010-11 and £20,437,000,000 for 2011-12. That is after the bands change; the amount is very close.
Lord McKenzie of Luton
I had not reached that appendix, so I thank the Minister for those figures. I accept that they are very close. Nevertheless, there is a reduction year on year. Had more than 50 per cent been allocated, the outcome would have been different. It is not just a matter of comparing one year with the next. Dealing with the rates is one thing, but if the bands are changed there will be consequential effects in subsequent years as well.
I will press another point that I raised concerning the impact on the balance of the National Insurance Fund. The actuary’s report shows an increase to some £53 billion over the years to 2014-15. The effect of not allocating more to the NHS is to build up that balance, which will also have implications for the investment in the fund. If more were allocated to the NHS, what would be the effect, other than reducing that balance and changing the investment income?
Lord Sassoon
My Lords, clearly, if there was more in the fund, a greater part of NHS expenditure could come via that route, but I am not clear that there would be any significant consequence in terms of the outcomes we are talking about. NHS expenditure will be determined by the allocation that has been given in the spending review. The noble Lord may quibble about the nature of the numbers and what is covered by them, but they are set out with great clarity in the review. For this purpose we are talking about some relatively simple arithmetic in terms of what would happen if there were to be any shortfall. If there is a surplus, funds that do not go to the NHS go to the National Insurance Fund; that is what has led to the considerable current balance. We are talking about a process where a fund has accumulated over the long term and we need that surplus, although it is predicted to fall, in order to fund future pensions.
In summary, one way of looking at it is that in the short term a high balance will help to tackle a deficit. Indeed, as the noble Lord heard from his officials in the past, and as has been explained to me, that balance is invested with the Commissioners for the Reduction of the National Debt.
Lord McKenzie of Luton
I am grateful to the Minister and beg leave to withdraw the amendment.
Lord McKenzie of Luton
Lord McKenzie of Luton
My Lords, I beg to move Amendment 3 and to speak to Amendments 8 and 9. The purpose of this group of amendments is to probe a little the boundaries of the national insurance contributions holiday. As I think we made clear at Second Reading, we see merit in the scheme as an incentive to encourage employment by new businesses but wonder whether the parameters of the scheme are driving a bureaucracy that will considerably lessen its impact.
We acknowledge that the wider the scheme is drawn, the further the resources have to go but the level of take-up referred to when this was debated in the other place suggests that the Government are falling far short of their anticipated take-up. Without praying in aid the report that is due to come more officially in due course, perhaps the Minister might give us some update on the take-up to date. The scheme has effectively been under way for something like nine months. Is the expectation that this incentive will still reach 400,000 businesses over the relevant period? By limiting the holiday to new businesses, the complexity of the legislation inevitably increases as it has to address the avoidance possibilities of people recasting an existing business as a new enterprise. We will come later to the validity of the excluded regions but we accept that if they are to be part of the scheme, the boundaries of the non-excluded regions must be secure.
The purpose of Amendment 3 is straightforward: to secure that,
“the principal place at which the new business is carried on … is not in any of the excluded regions”,
not only when it is started but “throughout the period when” the benefit of the holiday is being enjoyed. There is an argument that the requirement should be satisfied throughout the relevant period, but if that were imposed you would not be able to grant the holiday and the benefit of the cash flow until the end of that period.
Amendment 8 seeks to probe why six months has been chosen as the cut-off point in determining whether a business has effectively been recycled. The Minister might explain why that is considered a more appropriate period than, say, the 12 months that the amendment suggests. Perhaps he would also take the opportunity to expand on some of the terms in Clause 5. A business is not a new business for that clause’s purposes if a person has, within the defined period, carried on a,
“business consisting of the activities of which the business consists”.
That might be abundantly clear in many circumstances but not, we suggest, in others. Will a retail business—say, a grocery store—conducted in one part of a non-excluded area consist of the same activities previously carried on by that person if the business were a retail business in a different location selling the same type of products? What if the product range were different—children’s clothing, say—but trading were from the same location and, possibly, under the same name?
The purpose of Amendment 9 is to test whether there is any leakage of the benefit of the holiday where P genuinely starts a new business which is run alongside an existing business of P. In part, that depends on whether it is a single business or there are two or more separate businesses. Organising an expansion as a branch of an existing operation would presumably not be a new business; organising via a separate company or partnership could be. What, in the arrangements in the Bill, would prevent employees being employed by the new business with some recharge to the other businesses? Does Clause 6(1)(a) require employment wholly for the purpose of the new business?
I would not expect the Minister necessarily to respond in detail to all of these points this afternoon. They are raised to highlight the fact that focusing on new businesses and having excluded regions complicates matters—sometimes, I suggest, considerably. It certainly complicates the legislation, notwithstanding the general anti-avoidance provisions of Clause 10, which we thoroughly support. It will inevitably be the case that when boundaries to a scheme are set down, there are those who will seek to circumvent them. I am not sure whether the Government have been wise in offering so many of these opportunities.
Baroness Kramer
My Lords, I apologise if my newness to the institution shows in my bobbing up at the wrong time. I wish to make a couple of small comments on the amendments in this group, although my comments are less about the detail and more, in a sense, about questioning the underlying principle.
For all of us, the notion that new business can be stimulated to be a fountain of growth and of new jobs is obviously highly desirable, so an effective take-up of the programme would, I suspect, be met with pleasure on every side of the House. However, given the potential for a review period as we move through the Bill, might it not be good to keep in the back of one’s mind that even new jobs that come from existing businesses can be valuable, even if the take-up does not reach the targets of the initial programme? It strikes me that that would not be a failure, given that economies are volatile and take-up can take time but that jobs are beneficial even if they originate from business that is already under way. It might be important to ensure that this whole category of issues is critical in any review that might come one year after the initiation of the programme so that the Government can consider whether they would be wise to expand the categories in order to achieve the underlying intention of the Bill.
Lord Sassoon
My Lord, those two interventions go to the heart of why it is necessary to strike a difficult balance—this is where judgments have to be made—between, on the one hand, providing some tight and suitable anti-avoidance provisions and, on the other, ensuring that we do not make it excessively difficult for people to take up the holiday in the Bill. Of course we need to ensure that the scheme is affordable. That is why it has been targeted at new businesses, with a cap on the number of employees. Yes, we want to stimulate and encourage employment right across the areas of economic activity, but to do so through an across-the-board national insurance holiday would be extraordinarily costly. That is why we have come up with a scheme that is targeted in this way. On the other hand, as has been pointed out, we need to have appropriate anti-avoidance provisions.
When I first saw the amendments in this group, I had considerable sympathy with Amendment 3, which seems to be aimed at ensuring that new businesses that benefit from the holiday must not only have their principal place of business in an area that is not excluded but remain outside the excluded areas for the entire period during which holiday deductions or refunds are claimed. The amendment seeks to prevent a new business that relocates to an excluded area from enjoying any further holiday. The Government certainly agree with that objective. In fact, the Bill already provides that if the new business, having made a successful application for a holiday, relocates to an address within an excluded area the holiday will cease automatically.
The necessary provisions are found in Clause 7, which provides for the appropriate amount of secondary class 1 contributions that a new business can deduct or request to be refunded under the holiday. The appropriate amount is calculated by reference to a qualifying employee’s relevant earnings. Clause 7(3) provides that:
“‘Relevant earnings’ are earnings paid to”,
an employee who is employed,
“for the purposes of the new business, at any time during the holiday period when the principal place at which the business is carried on is not in any of the excluded”,
areas. Therefore, if a new business were to move to an excluded region, any earnings paid to a qualifying employee would cease to be relevant earnings and there would be no appropriate amount to be deducted or refunded, so the protection sought by the amendment has already been provided within the Bill.
Lord McKenzie of Luton
Again, I am grateful to the Minister for his response. I would like to reflect a little on what he said on Amendment 3 and the application of Clause 7(3) but we see the import of that response. Of course, I shall not press any of these amendments this afternoon. I agree with the noble Baroness, Lady Kramer, about the take-up of the scheme as conceived; if it does not use the resources and if there is a view to possibly recasting it, the value of new jobs for existing businesses is certainly something that the Government might consider including. I entirely accept, as we all would, that you have to strike a balance on the cost of these things and on where you draw the line. I would hang on to my point and spend a little time trying to bust the anti-avoidance provisions. By and large, I think they are pretty secure. The more targeted it is, the greater the risk of avoidance arrangements and people trying to take the benefit of something which is not intended. Obviously, the broader the scheme, the less likely that is to happen. In the interim, I beg leave to withdraw the amendment.
The Deputy Chairman of Committees
My Lords, before calling Amendment 4, if Amendment 4 is agreed to I cannot call Amendment 5 due to pre-emption.
Amendment 4
Lord McKenzie of Luton
Lord McKenzie of Luton
My Lords, I shall speak also to the other amendments in this group. As we discussed at Second Reading, and as was pursued in another place, we have concerns that the national insurance holiday is targeted by crude geographical area and not by any more objective assessment of need. These amendments variously look to remove Greater London, London, the south-east and the eastern region as excluded regions. As we have just discussed and as we shall discuss further under the next grouping, there are practical ramifications and administrative costs in excluding certain parts of the UK from the benefit of the holiday.
The Government’s chosen method of targeting is to look at those areas with the greatest reliance on public sector employment and to do that at regional level. Given that the RDAs are being abolished—that is about to be debated in another place—and that different economic groupings are being established through LEPs, can the Minister say on what basis the analysis has been undertaken at a regional level? We certainly acknowledge that the scale and speed of cuts in public spending will have devastating effects on unemployment, both public and private. If the basis of targeting is reliance on public sector employment, perhaps the Minister can say a little more about how this measure is determined.
For example, does the Minister accept that direct employment in the public sector is only part of the story? Parts of the private sector are as heavily reliant on public expenditure as perhaps those in the public sector that provide direct employment. That can be for a combination of reasons, including previous outsourcing of functions of central or local government and the reliance on public sector construction contracts. For instance, the Building Schools for the Future programme would have provided significant employment opportunities. For example, we know that the Government have been recruiting via agency companies in order to keep head counts down. Perhaps the Minister can say whether those arrangements are included as part of the public sector.
Another issue to consider is the extent to which spending cuts are borne fairly and proportionately across areas. In devising this policy, what analysis was undertaken of how spending cuts are being borne across the country? Have the Government sought to differentiate between front-line and other staff? We certainly accept that levels of public sector employment are one measure of vulnerability to spending cuts, but by taking a regional perspective the Government are averaging out high reliance on the public sector in some parts of the excluded regions. Debate in another place highlighted a number of constituencies in the excluded regions which were in the top 10 for public sector employment. These include Oxford East in the south-east, Lewisham East in London and Luton North in the eastern region. It was highlighted that Newham has a public sector employment rate of 33.6 per cent but is excluded from the holiday, whereas Macclesfield, with a rate of 11.8 per cent, is included. The Government’s approach does not recognise differences within regions and could be giving rise to significant deadweight costs. However, at a regional level, London has a higher employment rate than three regions which are not excluded. It is difficult to see the sense in that.
The east of England is the region that I know best. Currently, the east of England business start-up rate is below that of London, the south-east and some international comparator regions. The region requires a skills base that better meets the needs of regional businesses. It is also underperforming in terms of levels of GVA compared with London and the south-east and has a marked east-west split in economic performance. Workplace earnings vary acutely, with workers employed in Suffolk, Norfolk and Southend-on-Sea being the lowest paid in the region. Despite the region’s overall high employment rate, areas of high and persistent unemployment remain. This has a major impact on levels of deprivation and health inequalities. While some districts in the region are among the most prosperous in the country, 11 districts are rated among the most deprived in England.
The February labour market statistics are very worrying, particularly the 66,000 increase in the unemployment rate among 16 to 24 year-olds. It appears that the benefit of the holiday is simply not available to some of the worst affected areas. Two of the top 15 constituencies in the UK with the highest unemployment rates are denied—both Luton constituencies, ranked 168th and 269th, are excluded. A detailed analysis of deprivation data suggests the same picture. Some areas of greater affluence are included in the scheme ahead of others with greater levels of deprivation.
We accept that public sector employment is in some measure a proxy for vulnerability to spending cuts and that an incentive for private sector businesses can help. It is also accepted that if there are to be geographical exclusions and inclusions, the broader these are the less likelihood there is of displacement activity. However, the scale of the exclusions fundamentally calls into question the fairness of the policy as cast. I beg to move.
Baroness Kramer
My Lords, I rise to speak because I grew up and have spent much of my political life in Greater London. Like most Londoners, I would defend to the last any opportunity or benefit that might come to London. However, I recognise that if areas such as Greater London, the south-east and the eastern region—I know the latter region less well—were included in this scheme, they would suck up the overwhelming majority of funds that the Government could make available. At a time of great prosperity that might not matter, but at present those of us who live in the better-off regions have to be conscious of how seriously difficult life can be in other parts of the country, particularly those which are losing a significant number of public sector jobs and are dependent on those jobs.
Lord Sassoon
My Lords, I am very grateful to my noble friend Lady Kramer for answering the main thrust of the questions put by the noble Lord, Lord McKenzie. This measure does need to be targeted. It cannot be targeted in a way that picks out pockets of deprivation—of which there are a significant number in London and elsewhere. However, the basis on which we came up with the holiday includes a relative regional effect. Of course, if we were to sweep away all the geographic exclusions, the thrust of the holiday, which will be to have a relative regional effect, would disappear. On the other hand, as my noble friend says, unlike other measures, this would not be an appropriate measure to target in a subregional way—that would not be feasible.
We have gone with a broad regional analysis. The simplest way to explain the basis for doing this is through the numbers for public sector employment as a percentage of total employment by region. The latest available data when the policy was formulated showed that against a national UK average of 25.1 per cent public sector employment, the three lowest regions were the south-east with 22 per cent, London with 22.5 per cent and the eastern region with 23.1 per cent. That was the principal basis on which the exclusions were made.
My noble friend made the critical point that I was going to make about cost and targeting the money. If the three excluded regions were included, that would increase the total cost of the holiday by some two-thirds. To put it another way, out of the total holiday cost, two-fifths of the benefit of the holiday would go to those regions that are least dependent on government employment, and only three-fifths would go to those regions that are more dependent—in some cases considerably more—on government public sector employment. At the heart of this measure is the belief that the funds available should go to the regions that most need them on this metric.
Indeed, the evidence in the public evidence session on the Bill supported that. For example, representatives from the Federation of Small Businesses and the British Chambers of Commerce made it clear that the south-east is more resilient than the rest of the UK and new business formation would not be significantly harmed because the holiday was not available in these regions. It is worth reminding the Committee that all new and existing businesses in the south-east will benefit from the increase in the employer national insurance contribution threshold and in the reduction in corporation tax rates. Therefore, considerable benefits go to the region through our wider package of measures.
There were questions about the different definitions of regions and so on. The LEPs do not have geographic boundaries that equate to the regions and, in theory, could cross the regional boundaries that we are using. In effect, they are groupings by local authority boundary. Yes, there are other ways of doing it. We have taken the regions as defined for the purpose of public sector employment, which we think is the most cost effective way of targeting the benefit.
Lord McKenzie of Luton
I thank the Minister for that response and the noble Baroness, Lady Kramer, for her contribution. I do not think that we will totally see eye to eye on this issue. The noble Baroness referred to better-off regions, but that does not address the point that regions are not homogeneous. For example, there are huge disparities across the eastern region, but because of areas of particular prosperity in aggregate the area is counted out. As a result, those areas where there is deprivation and high unemployment lose out. I agree that it is to be hoped that there are other arrangements which would enable jobs to be created via one mechanism or another, but I believe that the regional focus is producing unfairness in the scheme.
The Minister said that the measure could not operate at a sub-regional level. I am not quite sure why not. Exactly the same rules will apply. There simply will be a different set of boundaries and descriptions. He referred to the fact that all businesses are benefiting from the national insurance changes to the threshold and corporation tax deductions. I guess that they are all equally suffering or all suffering from the impact on consumer demand of the VAT increase. But that is probably a debate for another day. I do not think that we will make progress on this issue. Accordingly, I beg leave to withdraw the amendment.
Lord McKenzie of Luton
Lord McKenzie of Luton
My Lords, Amendment 10 focuses on the inclusion within the term “business” of “property business” and “investment business”. Section 263(6) of the Income Tax (Trading and Other Income) Act 2005 includes a UK property business and an overseas property business within the definition of “property business”. This would seem to open up the possibility that the principal place at which a new business is carried on is overseas with subsidiary business activities in the UK. Obviously, those overseas operations would not be within an excluded area.
Furthermore, even if those subsidiary activities were in the excluded regions, the national insurance holiday would still seem to apply. I ask myself whether this was what was intended. I looked again briefly at Clause 7(3), which the Minister prayed in aid in response to an earlier amendment. If you have a business where the principal place of that business is outside the excluded region, but nevertheless there are employees operating in excluded regions, what in the Bill would stop a holiday applying to them? Having just argued that I do not want any excluded regions, I might seem to be arguing against myself. However, in terms of the integrity of what is proposed here, it may be that I am missing something. Perhaps the Minister would respond to that. Even if the subsidiary activities were in the excluded region, the national insurance holiday would, I suggest, still seem to apply. There seems to be nothing which precludes a new business being carried on in any of the excluded regions or indeed for the national insurance holiday to be available to employees based in the excluded regions so long as the principal place at which the new business is carried on when it started is not in any of the excluded regions. Is that how the Minister reads the legislation?
The principal place at which the business is carried on will often be very clear, as the HMRC’s very helpful note suggests. However, for an investment business or a property business, it might be much less certain. The core of such businesses might be based on the judgment of a few individuals; it would not necessarily be where the portfolios, especially investment portfolios, are located or indeed where the back-office functions are located or where the contracts for the investments or property portfolios are executed. Where the business is primarily carried on could be quite nomadic or easy to place in a favourable location, perhaps where the guiding minds of the business meet periodically to receive investment reports and make decisions about changes to the portfolio. Does the Minister have a view on this? The noble Lord may feel able to say that it has to be determined on a case-by-case basis and I accept that that may be so. Would he accept that this probing amendment highlights a layer of potential complexity which is introduced into the scheme again by having excluded regions? I beg to move.
Lord Sassoon
My Lords, in relation to what we are trying to achieve through the holiday scheme, it is important to create employment. The question of the nature of the activity which is being engaged in is one where again we want to be as permissive as we can be, consistent with the nature of the scheme. Although the noble Lord raised a number of other points going back to the question of boundaries between excluded and non-excluded regions, what we are principally talking about in the amendment is the type of trade or business which the activity is engaged in.
In that context, as well as making the general point that what we are focusing on is maximising employment growth from a broad range of sectors, it might be worth saying a word or two about what property business includes. It covers activities including property rental, land rental and furnished holiday lettings; for example, I believe that the holiday could be particularly valuable in relation to furnished holiday lettings which, of course, would typically operate in rural areas and often provide employment where there are not other significant job opportunities. I would certainly like to think that the noble Lord, in proposing this amendment, was not intending to remove businesses from relief if that could, for example, prevent people or discourage people from providing holiday lettings, furnished cottages, apartments and so on.
Similarly, on investment business, the Government’s view is that making investments and deriving profits from them is no less inherently a business than buying and selling any other tradable item. As the noble Lord says, there will be case-by-case determination by HMRC if there are questions about the validity of the trade or of boundaries.
Lord McKenzie of Luton
I thank the Minister for his response. We propose to withdraw the amendment. The purpose of framing the amendment and focusing on property and investment business is to highlight again the particular conundrums that arise in respect of businesses of that nature, which often—particularly for smaller businesses—would be controlled by one person or two people. Where that business is principally located would often be where that individual or individuals are, and the substantive back-office-type operations could be completely separate and different. It just highlights the sort of problems that come from having these definitions and having to guard the boundaries of them.
The Minister has confirmed one point that surprised me when I happened upon it. He has confirmed that so long as the principal place at which the new business is carried on is not in any of the excluded regions, other parts of the business could be carried on anywhere including in the excluded regions, and if the employees in the excluded regions happened to be part of the first 10 they would be eligible, or count towards, the national insurance holiday. I see nodding from the Box—perhaps I have been going on too long and they are nodding off—but, if that is right, it looks a bit daft in terms of the definitions we have been probing this afternoon.
I beg leave to withdraw the amendment.
Lord Davies of Oldham
“( ) a non-trading charity”
Lord Davies of Oldham
My Lords, from the perspective of opposition I always rather approve of Bills starting in our House, the upper House. It gives us a first shot at the Minister and a chance to develop our own argument without in any way having been influenced or prejudiced by any discussions elsewhere. In opposition and in government I often found it quite a challenge with Bills starting in the Lords because Members come well informed, with their own perspective, and set the scene which is then followed elsewhere.
On this occasion, however, the amendment that we want to press the Minister on with regard to non-trading charities was dealt with extensively in the other place in Committee but I must say, and I hope the Minister will bear this in mind, we did not think the response of the Government on this issue was particularly convincing. It seemed to rest on why the Opposition were introducing charities to a Bill which is all to do with the wealth-creating sector. That may reflect a rather narrow perspective on what is called, and should be defined as, wealth in our society, but I will not go into too many philosophical—not to say economic—arguments on that.
What it does raise for us, however, is a very odd perspective indeed. As we understand it, the Government in their more benign moments are extolling the virtues of the big society—that we are all in it together and we can all contribute to it in our various ways. Among those various ways there is no doubt at all that there is an expectation, and indeed a hope, that what will be generated is greater activity by those who work in charitable activities, rather than other more formal wealth-creating organisations or public institutions.
The Government, of course, need this encouragement. After all, they are about significantly reducing the public sector. I know that the noble Lord will say—I am almost word perfect on these matters—that that is because of what they have inherited. There is never a suggestion that what the Government have inherited has perhaps nothing to do with the deficit of the last Government but is an inheritance of the philosophy with regard to society; namely, that big government is bad and small government, by definition, is inevitably better.
Small government means that functions are not going to be carried out for people with various needs by government, and those needs are going to be unrecognised. It is not often that Ministers present themselves entirely in that harsh light, although on occasion I must say there are notable exceptions to that kind generalisation. Ministers expect tasks to be done, not by public institutions but supported and sustained by public revenues. In other words, they want someone else to do it.
I recognise, of course, that wealth creation is of enormous significance to our society at all times, but particularly in the present economic situation. However, the idea that we should exclude the active contribution of other institutions seems to me to require a pretty substantial defence. Why so? Why should a non-trading charity not fit within this framework? Why are we not inclusive on the institutions that can contribute to the nation’s welfare and the employment of individuals? Why are the Government saying that in this respect, as far as charities are concerned, there is no room in the inn? That does not seem to be based upon any economic perspective, nor one outstandingly of cost, but upon the presumption that here we have a measure that is overwhelmingly concerned with business and the wealth-creating area.
I am very far from decrying that; I am all in favour of that which encourages new businesses to develop and flourish. However, I cannot see why one should just slam the door in the face of those developments which will contribute to the common good but are non-trading charities. If the noble Lord is just going to fall back on the stance that was presented in the other place, I can only say to him that sufficient time has elapsed to consider the responses made at that time. They were unsatisfactory on that occasion to many Members, certainly to my side of the committee considering the matter in the other place. They appear manifestly unsatisfactory to us at this stage and I hope that the Minister can give a response to these points.
Lord Newby
My Lords, I have a factual question to ask the Minister on this. During my life, I have been involved in setting up one or two charities where the legal basis of the charity has been a company limited by guarantee which has then got charitable status, so that we have been filling in returns to Companies House as well as to the Charity Commission. What I do not understand is: if a charity’s legal basis is corporate and that charity is then employing staff, whether trading or not, why does it not mean that it would be covered by the normal income tax and national insurance rules?
Lord Sassoon
My Lords, in answer to my noble friend Lord Newby’s point, my understanding is that there is indeed no distinction within the normal income tax and national insurance rules but that it is all a question of trading versus non-trading. I believe that is a test which is independent of whether it would be a company limited by guarantee with share capital, a partnership or anything else. If I am wrong on that point, I will correct myself but my understanding is that the question is independent of the structure of the business.
That trading/non-trading question—to express the issue in another way—goes to the heart of what we are trying to achieve by this holiday: an objective to encourage new businesses and new entrepreneurs and for those individuals to set up businesses, as we have already discussed, in areas with a high proportion of public sector employment. It is not that it could, in a wider sense, be a good thing to provide all sorts of other benefits to worthy causes, including non-trading charities. The fundamental purpose of the Bill is to encourage new entrepreneurs to set up businesses. In that context, if those business activities are structured and are charities, it is important and quite appropriate that the trading activity should benefit from the holiday in the Bill.
Of course, the Government value the important work that charities do. I heard the noble Lord, Lord Davies of Oldham, talk about the Government in their benign moments valuing the big society. We value the big society at all times. Therefore, by extension, this is indeed a benign Government and I am grateful to him for recognising that. Nevertheless, very tough choices have to be made, benign or otherwise. One of the choices we have made is to continue to provide substantial support to charities. So the total relief which charities and charitable giving get are something of the order of more than £3 billion each year. Of course, charities will also benefit from the increase in the employer’s national insurance contribution threshold.
We certainly do not forget charities in many other ways. They are a critical component of the big society. For a scheme that is intended to target a particular direction, we believe that it is appropriate for the holiday to apply to, say, a new charity business, which may be setting up a charity shop or an entrepreneurial activity, but that it should apply only in those particular circumstances. I am sure the noble Lord did not intend this, but the tone of his remarks sounded, at some points, as if we were depriving charities of something. It is not that charities in regions of the country, whether the eligible regions or the excluded regions, are being deprived of anything that they now have; it is simply that, with the resources that we now have, we believe that it is appropriate and indeed the purpose of the Bill to encourage the setting up of new businesses in areas with a high proportion of public sector employment.
Lord Davies of Oldham
I am grateful to the Minister. I was looking at Hansard and I see that the framework in which I used the word “benign” for the Government was extremely limited and confined. I think I am unlikely to use that adjective again in our debates. It was a one-off.
I appreciate that charities enjoy various advantages for the work that they do across the range of the taxation system. Here is an opportunity which the Government seek to encourage. Of course, I recognise the prime purpose of what they define as the wealth-creating sector but surely the Minister should appreciate how limited the opportunities are for legislation. Certainly, as a Treasury Minister, he will know that although the Treasury is in an advantageous position compared to other departments, when it can identify available resources—the Minister shakes his head and is engaging my sympathy at this stage, but I will not use the word “benign” again—it is not replete with opportunities to legislate any more than any other department. With its Bills, it is in some degree of competition.
Here is a very modest little Bill with a clear objective. I do not decry the clear objective, the main purpose, of the Bill. I am merely saying that within the framework of that main purpose, not a great deal is necessary to provide some opportunity for non-trading charities. I merely say that it is recognised on all sides that charities always have an important role to play, but this Government are placing increasing emphasis on the third sector in those terms. Therefore, it ill behoves them to take a negative view on what they can do to help within the framework of this modest little Bill.
Of course I shall withdraw my amendment today, but I am by no means certain that we have seen the last of this issue.
The Deputy Chairman of Committees (Baroness Gibson of Market Rasen)
The noble Lord, Lord Brougham and Vaux, told me that we were going to have a comfort break. Is this so, or shall we carry on?
Lord Davies of Oldham
Lord Davies of Oldham
The Minister will be somewhat shocked by the fact that I am being constructive at this juncture. We have a later amendment that asks the Minister to address himself to a modest change to the Bill, which he might define as an extra demand on resources, so I am being constructive with this amendment. Given the fact that we know that the vast majority of new businesses in their first year employ not many more than two persons, I think that the Government may be excessive in their proposition of 10. I suggest five against a background where the Minister will already have sniffed the air and decided that there must be an ulterior purpose. Indeed there is. As he knows, with the later amendment I want to talk about apprenticeships and to extend the definition a little more.
We think that the vast majority of new businesses will benefit from what is on offer from this measure if we restrict it to the first five employees. We have tabled the amendment to see whether the Minister agrees with us.
Lord Newby
It is a pity that Amendment 14 is not grouped with these two amendments as they clearly fall together. While everybody supports promoting apprenticeships, it seems to me that the Bill is simpler than what the noble Lord proposes. While it is a good thing to promote apprenticeships, if I am starting up a new business and am not necessarily going to employ apprentices, I could envisage a situation in which I might well employ 10 people. I raise this while declaring an interest. I formed a community interest company a year ago, which will start trading in this coming financial year. It is likely to be based in Birmingham. I do not know whether the company will qualify for this measure, given it was formed but not trading last year, but we will be employing both part-time and full-time people in the area of education and sport. It may well be, if we are successful, that we will be employing more than 10 people within three years. If some of those are coaches or if some of them are already qualified as teachers, they will have skills. They will be working for us where they would not otherwise be working in an area covered by the Bill, but technically they will not be apprentices.
I think that you would lose the opportunity to encourage companies which are employing people who would not be eligible for apprenticeships by reducing the limit down from 10 to five. Of course, if the limit stays at 10, Amendment 14 has virtually no impact because the number would go up only from 10 to 12. Therefore, partly in a self-interested sense—I have no idea whether our company would qualify and this is not the reason that I am doing it—it seems to me that you may damage employment prospects by these amendments in a way that is not really intended.
Lord Sassoon
My Lords, as ever, I am grateful to my noble friend Lord Newby for pointing out some of the logic of what the Government are proposing. But in this case it is not principally to accommodate up to 10 employees that we have put the limit where it is. We recognise, as the noble Lord, Lord Davies, says, that the average number of employees that businesses typically hire in their first year is around two. Yes, it would be nice if a business, such as that which my noble friend Lord Newby may be starting, pushes up against the limit. We would welcome lots of that.
We have set the limit at 10 rather than five for two reasons. It would enable more flexibility to accommodate staff turnover, so that although most new businesses employ only two employees in their first year, those two employees may often be different and come and go on a temporary basis. This is a way of accommodating a rolling number even if at any one time there might be only two, three or four employees. Nevertheless, within the period of the holiday, we allow 10 within the Bill.
On a similar point, we need to think about part-time employees, a point to which we will come later. Certainly, it might have been helpful if a number of these amendments had been grouped. This is the Government’s proposed way of addressing the issue of part-time employees without the need to introduce potentially complex definitions of eligible employees based on full-time equivalents. For example, some employers do not remunerate their staff by reference to the number of hours they work, but they might be remunerated according to the amount of work that they produce—piecework. Again, providing for up to 10 qualifying employees ensures that employers with part-time staff or with staff whose hours are not predictable are not disadvantaged and that such employers can take full advantage of the holiday.
As I anticipated, the noble Lord, Lord Davies, is thinking about where savings might be made in order to extend the scope of the scheme in other directions. It is perhaps worth saying that because of the distribution of new employers’ staff numbers, restricting the number of eligible employees from 10 to five would make a disproportionately small reduction in the cost of the scheme. That is not the main reason, as I have explained, for resisting the amendment. The benefit of the amendment would not be anything like what it might seem on the face of it—relevant to the headline numbers. On that basis, I would ask the noble Lord to withdraw this amendment.
Lord Davies of Oldham
My Lords, I will certainly withdraw the amendment, although I am not sure that I entirely accept the arguments made against an amendment that I have not yet even moved. I am afraid that the Committee will have to endure that burden in a moment when I come to apprenticeships. I accept the Minister's point that the number of new employees is likely to be very limited, despite what the noble Lord, Lord Newby, said about his ambitious proposal. I wish him well in personal terms while preserving strict neutrality towards the Bill.
The number of new companies will not be as extensive as he indicated. The Minister is right to call in aid that point, and to refer to the limited savings represented by the amendment. I hope that it will be accepted in the spirit in which it was intended, namely as preparatory to the marginal addition to the Bill contained in the next amendment. I beg leave to withdraw the amendment.
Lord Davies of Oldham
“( ) A new business which offers apprenticeship opportunities which are taken up during the period of the holiday period shall be allowed to extend the number of qualifying employees to 12.”
Lord Davies of Oldham
My Lords, apprenticeships are a good thing. I know that I will get nods from all sides of the Committee when I say that. We have made progress in recent years and it is important that we make greater progress. One dimension that ought to worry us all is unemployment. It is a potentially greater problem across wide ranges of our society but unemployment visited on young people is a particularly pernicious burden. We should not be surprised if we have difficulties with the attitudes of young people to our society if it is impossible for them, whatever their talents, to land a job. Apprenticeships are an important way in which people can come within the framework of work, and I suggest that our modern society will reflect rather more the significance of old-style apprenticeships.
When I say “old-style”, I refer to our great and glorious industrial past. A predecessor of mine in Oldham used to boast of there being 20,000 engineering employees in plants in the Manchester and Oldham area, and of hundreds of apprenticeships being available. Young people streamed out of education—in some cases, they might have been better advised to stay on to earn different qualifications—into guaranteed opportunities as apprentices in those big engineering works. Those days are long past; we all appreciate that. However, what may be becoming more significant in our society is the development of skills and crafts that mirror a period prior to the great industrialisation. I refer to small-scale businesses and crafts that often do not need many full-time employees to justify an apprentice who in his or her turn learns their role. That is of very great importance.
In all my time when I was greatly involved in further education, one thing that drove me to distraction was our inability to sell work experience in relation to the education experience in college. This was particularly true for young women. There might be a course leading to a career with the cleanest, most attractive technology imaginable—for example, providing the electronic back-up for pop groups, which should lighten up the heart of every youngster—but one would see engaging in those activities exactly the same proportions of men to women and boys to girls as we had in our traditional pattern in the world of work. We have to move away from that.
Apprenticeships, particularly those in small companies relating to the operations that we are defining in the Bill as worthy of support, potentially provide opportunities to break the mould of some dated employment practices. The Minister will tell me that this is a limited Bill and that the gains that will come from it are necessarily limited when viewed against the broader perspective of the Government’s policies. I recognise that all too clearly but the Bill nevertheless seeks to help a particular sector of small businesses. We should surely try to link that to the importance of developing apprenticeships in our society and, accordingly, I beg to move.
Lord Sassoon
My Lords, apprenticeships are certainly important to this Government. Since the noble Lord, Lord Davies, has talked about them at some length, as he may know, it was National Apprenticeship Week three weeks ago. I met electronic engineering apprentices working on the rebuilding of Blackfriars station and its railway bridge. It was enormously encouraging to see the enthusiasm of those apprentices, who fully understood how their apprenticeships could be the start of a very worthwhile and remunerative career path and that they had a very supportive employer—a much bigger employer than in the scheme we are discussing. However, when I asked them whether their south London schools had encouraged them down this path, it was depressing to be told that there had been absolutely no mention of apprenticeships as a route to go down on the part of those schools. Therefore, I can see that there is work to be done on fully encouraging young people to take up apprenticeships, but it will not be for lack of government money. In 2011-12, we will provide £799 million for apprenticeships in the 16 to 19 age range, which is an increase from the £780 million in 2010-11. This money will fund 230,000 apprenticeship places for that age group. Therefore, the importance of apprenticeships is absolutely not lost on me.
Apprentices and their national insurance are covered by the Bill in the same way as any other employee. On previous amendments we have talked about the number of employees that small businesses typically take on. That is a critical point. The ceiling that we have left in the Bill of 10 employees provides sufficient headroom to take on apprentices. A feature of apprentices is that there is not normally the turnover that we talked about and it is not a question of part-time work. One or two apprentices being taken on by a business should be accommodated within that headroom limit of 10. We think that is a sufficient and appropriate way to accommodate what I completely agree is a critical part of the thrust needed to rebuild the nation’s workforce with the appropriate skills base for a thriving economy in the 21st century. With that explanation, I again ask that the noble Lord follow the convention of withdrawing his amendment.
Lord Davies of Oldham
My Lords, I am grateful to the Minister for that concerted response and, of course, I withdraw the amendment.
Lord McKenzie of Luton
“( ) A new business shall be able to treat two or more part-time employees, up to the value, in terms of hours worked, of a full-time employee, as a single person for the purposes of the relief available.”
Lord McKenzie of Luton
My Lords, to a certain extent the Minister has already pre-empted this and given us a response which will be, I think, that in a sense there is room for part-time workers within the headroom that the count of 10 will provide. Nevertheless, I will seek to pursue the argument.
The technical note issued by HMRC in August adds some clarification on the maximum number of qualifying employees. In particular it makes clear that employees earning below the secondary threshold—that is the start of national insurance obligations—still count towards the 10, even if they are part-time or casual employees. Even if there is no employer national insurance due and no benefit from the holiday, they still count against the number 10.
The purpose of this amendment, which I accept would need some tidying up to be acceptable, is to enable part-time employees to be aggregated when determining the first 10 employees of a new business. It may well be that individual part-time employees do not earn above the secondary threshold so that, irrespective of their employment, a holiday would not produce a benefit for the new business, but it may allow the eleventh or twelfth employee to be counted in and the employer to enjoy the benefit of the holiday. Clearly there would need to be rules about what counts as part-time, and who gets added to whom, as it were, to determine a full-time equivalent, and what happens if a part-timer leaves, but these should be capable of being drawn up fairly simply.
Part-time working has been an increasing phenomenon of the UK labour market in recent years, although it dipped slightly in the last quarter to December 2010. Over the last year, it has increased by some 8 per cent for men and over 1 per cent for women. Nearly three-quarters of those employed part-time are women. Job sharing, especially for women, is an increasing way of balancing caring responsibilities with work, and a removal of the default retirement age, which we thoroughly support, will lead possibly to older people working longer but on a part-time basis.
Taking on part-time workers in the early stages of a new business could help lower risk to the business and increase its survival rate. There is clearly a tension between this and having full-time employees who could generate a benefit from the national insurance holiday. Being able to aggregate part-time employees on this basis would go some way to ameliorating the tension between those two positions. I beg to move.
Baroness Kramer
My Lords, I want to speak particularly to this amendment because it is, in a sense, a real request. Part-time working and job sharing are really important. The Government have done a great deal to promote, indirectly, part-time work through, in effect, a pupil premium that now goes down to the age of two. This for many women means that there is a form of very attractive childcare available from the age of two, even for disadvantaged families, making part-time working far more feasible than it might have been in the past. The culture, however, needs to change, and it seems to me that this Bill, because it resists using the language of part-time work and job sharing, falls into that ongoing trap of not challenging the culture and pushing that change forward. Part-time work is often seen as a temporary accommodation, and as the lowest skilled work—that is not always true, but it is the general image—rather than as something that can be embedded permanently into the way that a company functions.
Lord Sassoon
My Lords, I echo my noble friend Lady Kramer’s view of the importance of job sharing. I, too, could introduce a small reminiscence. I have had job-sharing personal executive assistants working for me, and I know that the arrangement can work extremely well. It gives people who, for example, have children, more opportunities to work. I have seen this in action and I and the Government encourage it.
The difficulty in this Bill is that they will be working in the technical framework of tax and national insurance legislation. One feature of the NICs and tax framework is that there is no distinction in the HMRC construct between full-time and part-time work. Therefore, we decided that the way to accommodate this was through the relatively high limit on the total number of employees. Putting together a construct for this piece of national insurance legislation that distinguished between full-time and part-time staff would be enormously challenging. This was recognised in the public evidence session by the Federation of Small Businesses, which concluded that it would add complexity for the employers who were affected.
There is nothing here that discourages part-time employees, and the 10 employee limit should fully accommodate the likely demand, except in the very marginal case of the few thousand firms—perhaps 2 per cent—that would be restricted by the limit. Again, I ask noble Lords to withdraw the amendment.
Lord McKenzie of Luton
My Lords, I will certainly withdraw the amendment in due course. I am grateful to both noble Lords who have spoken. The noble Baroness, Lady Kramer, spoke with authority and passion about the importance of part-time work and of job sharing. She made a hugely important point about cultural change and recognising that part-time work is not simply temporary work in low-level, low-paid jobs. As she explained, very senior job shares will increasingly form part of the system.
I accept what the noble Lord, Lord Sassoon, said about the difficulty of constructing this within the Bill, and I take the point about NICs and the tax system not making a difference between part-time and full-time employees. We will have some debates tomorrow on the Pensions Bill, and on the attempt to get some aggregation of people in part-time jobs for national insurance purposes so that they get credited at least for pension purposes—but that is a debate for another day.
I recognise that the level of 10 employees gives some headroom to deal with this, although I am disappointed that the Minister could not explicitly cater for part-time workers if for no other reason—it is not really the one that I had thought about—than to push the issue of the cultural change that is needed so that we properly value and encourage, where appropriate, part-time working and job sharing. I beg leave to withdraw the amendment.
Lord Davies of Oldham
“( ) HMRC will ensure that all staff dedicated to the administration of deductions or refunds under the terms of Part 2 of this Act are additional employees and not taken from other tasks necessary for the continuation of the other functions of HMRC.”
Lord Davies of Oldham
My Lords, I have no doubt that Amendment 16 may cause a slight flurry in the dovecotes. I hope that the Administration recognise that we are seeking to guarantee the success of the scheme by offering protection for the administrative resources devoted to it. However, I also see significant figures in the Treasury, not least the Minister himself, looking somewhat askance at the fact that we might have in public statute a definition of who should do the job of the Inland Revenue with regard to this issue.
This is a probing amendment and I do not expect the Minister to accept it on this occasion, although in due course he may be persuaded. The intention is to identify one obvious factor. We fully recognise that the public service is under considerable challenge at present, that lots of posts will be lost and that an awful lot of people are under pressure. Yet this scheme not only requires additional resources but has particular complexity built into it. There is no doubt that the Bill would be regarded as a matter-of-course administrative exercise if it covered all regions of the country and the excepted areas were brought in. We all appreciate the complexity and difficulty of the position, and the amount of resources that will be required to ensure that the scheme works. Of course we share with the Minister the ambition that this will prove to be successful. However, there are clear administrative implications. I am sure that the Minister has thought about these very seriously and will give me all the reassurances that I could possibly want.
Lord Sassoon
It is a high bar to be able to give the noble Lord, Lord Davies of Oldham, all the reassurances that he could wish for, but I will attempt to give him some reassurance. The way in which HMRC is going about administering the holiday is that it has devised new processes for dealing with the holiday alongside the other day-to-day tasks in its casework. Additional steps have been incorporated already in its day-to-day caseworking, so it has not been necessary to employ new staff. The training has already been done. It shows how HMRC is able to adopt a flexible approach to allocating its resources as and when schemes in tax and national insurance change. HMRC staff have been engaged in this work since September. It would not be possible to use new employees, if that was being suggested. I understand the probing nature of this discussion but using new employees would not technically work as staff are already trained and running the scheme alongside their other responsibilities without the need to employ additional staff.
I hope that the noble Lord has the reassurances he seeks, such that he might be minded to withdraw Amendment 16, as I think he said that he would.
Lord Davies of Oldham
I am grateful to the noble Lord. I feel somewhat encouraged. I did not have the slightest doubt that the issue was expressed entirely in his own words and was not drafted for him by a senior official. If that had not been the case, I would have had a few doubts. I am very grateful for the response that he gave. I beg leave to withdraw the amendment.
Lord Davies of Oldham
“Consideration of extension or modification of scheme
( ) The Treasury shall, by a date no later than six months after Royal Assent, and then again after a further 12 months, review the operation of the regional holiday scheme under Part 2 of this Act to assess if it should be reapplied to different areas of the country.
( ) If a recommendation is made to extend or modify the application of the scheme, the Secretary of State shall bring about such changes by order, to be subject to the approval of both House of Parliament.”
Lord Davies of Oldham
In moving Amendment 17, I shall speak also to Amendment 18. They clearly have the same thinking behind them; namely, the scheme’s advisability in circumstances where we recognise the challenge that the Bill presents. The noble Lord was good enough to indicate a moment ago the administrative arrangements that have been put in place regarding the Bill. It needs to succeed and we need to be able to identify its success. As we have indicated, we have real reservations about certain parts of the operation, particularly the concept of the exempted regions.
Therefore, we want a full evaluation of the virtues of the scheme. Amendment 17 proposes that we should get an early report from the Treasury on its operation and Amendment 18, which is linked in the discussion, proposes that there should be a full report on the impact of the scheme. The measure has its exempted regions, but it has a highly specific and particular approach to an important issue, which is bound to affect particular areas. As the exemptions have been made on a clear identification of where the economic need is for this stimulus—that is why the stimulus is partial rather than national—it is only right that we are in a position to evaluate whether that strategy proves to be successful. Amendment 18 seeks a report that will give us the fullest evaluation of a scheme that has its controversial elements as well as carrying a principle to which the Opposition also subscribe. I beg to move.
Lord Newby
My Lords, I support the principles behind these amendments. This is a very specific scheme and it should be possible to tell whether it has worked. If it does not work—we hope that it will—the Treasury will be in the happy position of not forgoing revenue that it had expected to forgo. There would be an unused pot, as it were. If, as I fear may be the case, the scheme as outlined does not yield the number of new jobs that the Government hope, it would be very useful, after a year, to see how—to the extent that funding is available for job creation in the regions—it might be more effectively deployed.
As I mentioned at Second Reading, an obvious extension to the scheme would be to provide a modest ability for existing businesses in the designated regions to employ additional staff and qualify for a holiday. In those circumstances, it would be perfectly possible to say that every small business in the designated areas could employ an additional person and qualify for the holiday, so that the scope of the scheme is extended but keeps within the expenditure envelope already set aside for it. Whether that is possible will depend on whether the scheme works as intended. The only way we will know that is if we have a report as set out in these amendments.
Lord Sassoon
My Lords, we certainly agree that generally tax policy-making and the effects of tax measures should be more transparent. It is for that reason and because of the commitments given in another place, which I shall run through in a moment, that we do not believe that Amendment 17 is necessary. However, we completely share the commitment to transparency. Therefore, it may be helpful to the Committee if I echo the undertaking given by my honourable friend the Exchequer Secretary in another place to provide Parliament and the public with updates after the end of the tax year on the operation of the scheme, including information at regional level, although the precise requirements set out in the amendment could raise legal issues, for example on confidentiality of taxpayer data.
The factual report that we envisage would cover, regionally and nationally, the number of new businesses applying, the number of applications rejected, the number of qualifying employees for whom a holiday has been claimed and the amount claimed. The main difference between the commitment that the Government have made and this amendment is that the latter would require a constituency level breakdown even though the scheme is regional in England and will not cover every English constituency.
I remind the Committee that during proceedings in Committee in another place, amendments put forward with the aim of altering the holiday to a constituency basis were discussed at some length. My honourable friend the Exchequer Secretary said then that the Government do not believe that a constituency-based scheme is either appropriate or feasible. Since we have a regional scheme including the whole of Wales, Scotland and Northern Ireland, it does not seem logical to provide a constituency level breakdown even if it was possible to do so. A regional scheme and a regional analysis at the end of each tax year will be available for scrutiny. Therefore, we do not think that it is necessary to enshrine that in an amendment to the Bill. I refer to Amendment 18—I said Amendment 17 at one point, and will come to that in a moment.
A technical point in the amendment refers to a budget for the scheme. For the avoidance of doubt, businesses can be confident that there is no budgetary constraint. The holiday will continue as proposed, regardless of the number of applicants. The expected costs of the scheme were set out in the policy-costing documentation at the time of the Budget last year.
Amendment 17 is aimed at providing flexibility to modify the holiday. As I have explained, the Government want to target available resources on the regions most dependent on public sector employment. We want to do so in the way that we have discussed at length with regard to the qualifying businesses, the numbers of employees and so on. However, introducing flexibility to change the details of the scheme, as proposed in the amendment, would increase uncertainty for those who might potentially benefit and would risk inhibiting decision-making for those who need to know with some certainty what the holiday permits. I hope that I have provided considerable reassurance on the questions of transparency and of the ability of the House to scrutinise the way that the scheme will operate in practice, and that noble Lords will withdraw their amendment.
Lord Davies of Oldham
I am grateful to the Minister; half a loaf is better than none. The extent to which he defined how far he was able to go in response to the amendment was some consolation. I appreciate his remarks. I am well aware of the fact that no one in Committee is particularly concerned about constituencies. I am also well aware that the issue was raised in the other place, where concerns were extensive. The Minister will forgive me for seeking to identify that this might be the basis for a degree of transparency that would be welcomed by all those who are directly answerable to the electorate. I am grateful for his response and beg leave to withdraw the amendment.
House of Lords
Independent Commission on Banking
(13 years, 2 months ago)
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Baroness Kramer
To ask Her Majesty’s Government what assessment they have made of the progress of the Independent Commission on Banking.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, the Government set up the Independent Commission on Banking to consider reforms to the banking sector. We welcome the progress that the commission has made and look forward to receiving its report in September.
Baroness Kramer
Does my noble friend agree that strengthened regulation supervision and stronger capital requirements are welcome but that neither of them deals with the underlying structural problems of “too big to fail” or “too interconnected to fail”? Will he commit the Government to act on any recommendations from the ICB for reform in this area, even if it means splitting the banks or ring-fencing activities with functional subsidiarity?
Lord Sassoon
I certainly agree with my noble friend that there were two areas that the Government needed to address urgently resulting from the failure of the previous system of regulation and the over-leveraging of our banks. The first one on which we have brought forward proposals is the system of regulation, although I completely agree with my noble friend that that is not sufficient, which is why we set up the independent commission to look into the structure of banking. I am certainly not going to pre-empt either the conclusions that it comes to in its final report or the Government’s response, but I am greatly encouraged by the papers that it put out and by the recent lecture by Sir John Vickers, which indicate that the commission is tackling all the major issues and stimulating a vigorous debate.
Lord Myners
My Lords, in light of the agreement on Project Merlin, do the Government now regard bank bonus practices and numbers as acceptable?
Lord Sassoon
My Lords, this afternoon we are talking about the Independent Commission on Banking. Questions of pay structures have not been set by the Government as part of the commission’s remit and it is sticking to a series of other questions.
Lord Lawson of Blaby
My Lords, I congratulate the Government on having set up this independent commission, which must produce the right result. I agree with the remarks of my noble friend Lady Kramer, and the speech of Sir John Vickers the other day very much echoed the identification of those problems. I hope that we can get international agreement but does my noble friend agree that it is important to do the right thing even if we cannot get that agreement?
Lord Sassoon
My Lords, I certainly agree with my noble friend. He has been thinking about these things for many years and I very much value his thoughts on them. I absolutely agree that the UK wants to do the right thing, but the remit that the commission has been given also reflects the international and global contexts, of which we have to be mindful. I wait with interest to see what the commission says and repeat that I do not want in any way to prejudge its thinking.
Lord Eatwell
My Lords, the Statement that the Chancellor of the Exchequer made on bankers’ bonuses contained a peculiar sentence about the Independent Commission on Banking. It said:
“I should make it very clear that nothing that I will say today about the settlement that we have reached with Britain's banks … in any way prejudges the outcome of the commission”.—[Official Report, Commons, 9/2/2011; col.310.]
What was peculiar about this sentence was that he was answering a question that nobody had asked. Will the noble Lord confirm that in recent weeks there have been threats of resignation from the commission if its remit is in any way constrained?
Lord Sassoon
My Lords, I am attacked one week for not answering questions that have been asked, and now my right honourable friend is being queried as to why he answers questions that he has not been asked. He wanted to make it absolutely clear, which he did in the Statement on Project Merlin, that nothing there pre-empted or in any way cut across the independent remit of the banking commission. I think the position remains clear.
Lord Newby
My Lords, does the Minister agree that one of the issues that the Vickers Commission is looking at is how to reduce risk within the banking sector and risk taken by individual institutions? In light of that, do the Government support the decision by Northern Rock to increase the proportion of loan-to-value on mortgages to 90 per cent, which many people see as the first step towards a return to the bad old days?
Lord Sassoon
My Lords, I agree with my noble friend that risk and the stability of the system go the heart of the remit of the commission. However, the individual product sets which are offered by individual banks is at the moment a matter for the Financial Services Authority, and I am sure that it will be taking its responsibilities very seriously in relation to the business models and products of all the banks it regulates.
Lord Barnett
My Lords, whatever the final recommendations of the commission, what work has the Treasury done with regards to splitting? Would it be helpful to the certain sale of our shareholdings? If it turns out to be bad, will the Minister be acting, as the noble Baroness asked, on a potential splitting?
Lord Sassoon
My Lords, there are a lot of hypothetical questions bound up in this. We will not see what the commission is proposing until September and then it will be up to the Government, in light of all the circumstances, to decide what to do with its recommendations. I can confirm that the separation of retail and investment banking is one item which goes to the heart of the remit of the commission.
Lord Tomlinson
As the noble Lord has now had plenty of time to reflect on the question that he was asked by my noble friend Lord Eatwell, will he now, as there seems to be plenty of time, get around to answering it?
Lord Sassoon
I see the clock is advancing because of the length of that question. I gave the answer I wanted to give.
Lord Campbell-Savours
Are not 90 per cent mortgages dangerous in conditions where the property market might decline by 20 per cent?
Lord Sassoon
My Lords, it is up to the banks to decide what products they offer. They have to do that within a set of rules that are set down by the regulators. It is not for me to comment on either the business model of an individual bank or the regulation and supervision of the regulators on this point.
Prisons and Young Offender Institutions: Education and Training
(13 years, 2 months ago)
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Lord Sheldon
To ask Her Majesty’s Government what arrangements are in place to provide education and training for those in prisons and young offender institutions.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, the Government believe strongly in giving offenders the skills and training they need to get and keep jobs. That reduces their likelihood of reoffending and is of clear benefit to society. A review into the efficiency and effectiveness of offender learning led jointly by DBIS and the MoJ is nearing completion and will report shortly.
Lord Sheldon
My Lords, I look forward to that response in due course. Is it not clear that education and training can reduce prison overcrowding, and that those who have not had proper education and training are three times more likely to be convicted? The overcrowding in prisons limits valuable education and training, so what action will be taken to reduce that overcrowding?
Lord McNally
The noble Lord will know that it is our intention to try to bring down the prison population in the next few years, partly by following his line of argument: that if there is a proper rehabilitation strategy for prisoners, they are likely not to reoffend, which will take the pressure off the prison population.
Lord McNally
I am afraid that that is not in my briefing but I will write to the noble Baroness and put the information in the Library. It is important to engage prisoners of all ages into the concept of learning, and I am sure that a writer in residence will be a spur to that end.
Baroness Howe of Idlicote
My Lords, considering the sizeable percentage of prisoners with mental illness, can the Minister tell us what the Government propose to provide the necessary education and training to meet the unique and challenging needs of this population?
Lord McNally
My Lords, I hate to keep saying “Shortly a paper will be published”, but the Department for Education is about to publish a Green Paper on special education needs, which will look again at the special education needs of prisoners. One of the things pointed out in the Green Paper published by the MoJ—it is still open for consultation for another four days—is that far too many prisoners have undetected mental problems. We are making every effort to ensure that opportunities and facilities are in place to detect and help to treat those problems.
Baroness McIntosh of Hudnall
My Lords, going back to the noble Lord’s answer to the noble Baroness, Lady Sharples, can he confirm that the Government value the broad educational opportunities created by the use of the arts—including the performing arts—in prisons? Will he also confirm that the Government will not fall victim to the strident voices telling us that that kind of opportunity in prison is going soft on prison life?
Lord McNally
I absolutely agree with the noble Baroness. Often our media like to leap on an initiative and present it in a way that, as she says, suggests it is soft on prison. The whole rehabilitation strategy tries to break into the ludicrous situation of people going through the prison system and reoffending shortly after being released. If we can find ways of engaging them in cultural interests by providing education, we will save public money and avoid further crime. That is plain common sense.
Lord Dholakia
My Lords, education and training has a direct impact on the rehabilitation of offenders, so will my noble friend ensure that this part of his department’s budget is ring-fenced? Will he also look at the possibility that, any time non-custodial sentencing options are considered, training will form an essential part of that programme?
Lord McNally
I am reluctant, particularly with a Treasury Minister at my shoulder, to make commitments on ring-fencing of any budget, but the kind of campaign that my noble friend has led and with which he has been associated on the rehabilitation of offenders is very much in our minds. There is illiteracy, innumeracy and a lack of various other aspects of education and training among prisoners, so it is a no-brainer to see that if we can break into that we can also break into the circle of crime.
Baroness Trumpington
The Minister has just talked about illiteracy. Does he agree that it is very difficult to get a job when you leave prison and you cannot read and write? Can he explain why the farms and gardens are closed? They provide very suitable work for people who may have a great love for that kind of work but who cannot read and write.
Lord McNally
Across the Prison Service we are trying to identify opportunities for people to be trained. As the noble Baroness says, for somebody who lacks literacy—although I hope we address that in our programmes—gardening and similar park activity may quite often provide rewarding and worthwhile employment.
Lord Elystan-Morgan
My Lords, does the Minister recollect that the prison rules still express the reformation of the prisoner as the main purpose of incarceration, and that adequate educational and training services are central to that very concept?
Lord McNally
Again, I could not agree more. Of course punishment is an aspect of prison, as is protection of the public from dangerous prisoners. However, as I mentioned, with issues such as homelessness, dysfunctional families, lack of education and lack of a job when leaving prison, if you can intervene while people are in prison and prepare them for life outside with a proper policy on the rehabilitation of offenders, then you break into the cycle of crime, lower the numbers in prison and make it a win-win situation for the public and the taxpayer.
Child Trust Fund
(13 years, 2 months ago)
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The Earl of Listowel
To ask Her Majesty’s Government what plans they have to replace the child trust fund, abolished in the Savings Accounts and Health in Pregnancy Grant Act 2010, for children in the care of local authorities.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, the Government announced in October that we will create a new tax-free children’s savings account, which is likely to be known as a junior ISA. We expect the new accounts to be available later this year. It will be possible for local authorities to open junior ISA accounts for eligible children in their care. We are also exploring the possibility of facilitating a voluntary scheme for financial institutions and the third sector to contribute to the junior ISAs of children in care.
The Earl of Listowel
My Lords, I thank the Minister for his reply and indeed, the meeting with Mark Hoban, the Financial Secretary to the Treasury, and Tim Loughton, the Minister for children, to discuss this matter. Does the Minister agree that for our own children we would seek wherever possible to ensure that they have a capital asset so that when they move on to independent living they have money for a deposit on a flat or a car to assist them? Does he not further agree that we should ensure that children leaving care have a capital asset to put down for a car or to buy a new suit to get a job? Does he recall the strength of feeling around the House at Second Reading about the need for these young people to have such a capital asset? Given that, will he understand and consider the need to put on a statutory basis the funds that he has described, so that children can be assured of a capital asset as they leave care?
Lord Sassoon
My Lords, I very much appreciate that the noble Earl, Lord Listowel, keeps these important issues under discussion and alive in our thinking. It is important for all children to understand how to handle money, to be able to make the decisions that they need to start making as soon as they leave school and move on. This is not just a matter of amounts of money that are put aside, but of making sure that the mechanisms are there for all children to learn how to handle their finances as they progress through life.
As to the question of a statutory basis, as and when we come up with the detailed plans for the junior ISA, of course draft regulations will be issued for comment. I cannot confirm that there will be special provision other than in the terms that I mentioned whereby accounts can be set up for children in care to which local authorities and others can contribute.
Lord Soley
Does the Minister accept that one reason for having the child trust fund was to encourage the culture of saving? It affects not just children in care but children from families which are poor or where the parents are not that competent, and who may leave school without any savings or culture of savings. Will the Minister get all the Ministers who are dealing with this to think how much money they have given to their own children to make sure that they survive in future life, and then to ask themselves how a child coming from such a background as described is expected to survive without the help of the child trust fund or the savings culture that it inspired?
Lord Sassoon
My Lords, very difficult choices have to be made at a time when we have been left with the biggest deficit in our peacetime history.
Lord Sassoon
Noble Lords opposite may groan and make all sorts of noises, but those are the facts of the situation. Regrettably, the child trust fund cost £500 million in a full year, and it is one of those things that we as a nation simply cannot, in these difficult times, afford. There are indeed questions about the efficacy of the scheme, but even on the assumption that it was doing all that it set out to do, that is a very large sum which unfortunately the nation cannot afford.
Baroness Walmsley
My Lords, while welcoming what the Minister has said about the junior ISA, I encourage him to go just a little further in relation to looked-after children. It strikes me that there is an opportunity here for philanthropists, charities and the third sector, as well as local authorities, to put money into savings accounts for looked-after children. Will the Government consider developing a scheme to encourage that sort of big society giving?
Lord Sassoon
I am grateful to my noble friend, because we are working on that. We have been talking, for example, to potential junior ISA providers. They have been showing some interest, I am pleased to say, in contributing to a scheme in that way. We need to continue to work on that, but if any financial institutions, charities or other groups are interested in being part of that, we would be very pleased to discuss it with them.
Lord Low of Dalston
The Minister will be aware of local authorities’ inconsistent fulfilment of their duties under the Children (Leaving Care) Act and the inconsistent provision, particularly as regards accommodation, made for children and young people leaving care. What will the Government now do to make good the deficiency in provision for that particularly vulnerable group, whose vulnerability is at its greatest at the point of leaving local authority care?
Lord Sassoon
My Lords, we are straying a bit from the Question and from my area of responsibility, but I appreciate that difficult issues are involved with those who are leaving care, which is why additional funding in the “children in care” line of the new local government formula is there to encourage local authorities to use the staying-put models of practice. From April 2011, we will be implementing provision in the Children and Young Persons Act 2008 that allows young people to resume entitlements to leaving care support up to the age of 25, where they take up education or training.
Local Government: Big Society
Lord Dubs
Does the Minister agree that many people find it difficult to understand how the whole idea of a big society can survive the many devastating cuts that are taking place particularly in the most disadvantaged areas of our country? Can the Minister explain how voluntary organisations, many of which are now under threat and might not be able to survive, can provide the services to the poor, to young people and to the mentally ill when their money is being cut from under their feet? It is not a tenable way of approaching the big society and it will not work.
Baroness Hanham
My Lords, as I made clear in my original reply, local authorities are now almost entirely responsible for the money that they receive from government. They are responsible for their budgets and, therefore, have their choices to make. However, it seems to me to be an inescapable fact that local authorities ought to continue to support the voluntary sector because, as the noble Lord said, it provides great support for the work that they do. It is also part of the Government’s policy under the Localism Bill, which we will be discussing quite soon, that the voluntary sector should have a large part to play in managing and directing the services that are in local authority control.
Lord Hodgson of Astley Abbotts
A number of local authorities now appear to be making disproportionate cuts in the grants to charities and voluntary groups. Why they are doing that is not clear. Is there not a reason for local authorities to consult with charities and voluntary groups to ensure that the right long-term solutions are arrived at to provide services for the communities that they look after at a time when we have perfectly appalling economic circumstances inherited from the last Labour Government?
Baroness Hanham
I thank my noble friend. The Government’s whole purpose is to pass responsibility and money from central to local government. Therefore, on the decisions that they have to make, they will consult with those who they will be using or who are co-operating with them. The whole question of a voluntary sector is the purpose of these questions today. The voluntary sector remains an extremely important provider not only of services but also of support. I am sure that any local authority worth its salt would recognise that.
Lord Sutherland of Houndwood
Does the Minister accept that the provision being made to charities by local authorities falls short of the standards that we might reasonably expect? Can the Government do anything to regulate the process or do they simply stand back and wash their hands of what is not part of their brief or responsibility?
Baroness Hanham
The Government are not in the business of regulating local authorities on these matters. It is for local authorities themselves to come up with sensible and sustainable answers. Not every local authority is finding itself in trouble. Many local authorities have recognised the value of the voluntary sector and are determined to continue to support it in all the ways that they can. We should not be too disheartened by all this because, as I say, there is a complete recognition that the voluntary sector is of great value.
The Lord Bishop of Liverpool
Is the Minister aware that there are those who believe in the big society concept and who also understand the need for fiscal responsibility, but who nevertheless believe that there is an unevenness in the distribution of finances across the country and in particular the financial settlement with local authorities? Will the Minister be prepared to look again at the financial settlement to ensure that there is a fair and just treatment of local authorities right across the country?
Baroness Hanham
My Lords, we are not really on the subject of local government spending at the moment. We have had several discussions on the finance settlement. All I can say is that that finance settlement was demonstrated against a formula, the relative-needs weighting was increased so that money followed socioeconomic indicators. Banded floors were put in place so that the most dependent authorities got the smallest cuts and social service authorities and shire district councils were grouped together in four bands reflecting their relative reliance on central government grant. The right reverend Prelate’s view would suggest that the Government have not taken the greatest possible care with the local government finance settlement in these very difficult circumstances, and that is not the situation.
Lord Beecham
My Lords, is the Minister aware that her right honourable friend the Minister for Decentralisation, in an article in the Local Government Chronicle last week, rightly called on local authorities considering cuts on the voluntary sector to discuss those matters? Which voluntary organisations did the Government consult when they abolished the working neighbourhoods fund, reduced the area-based grant and made massive cuts in local government funding that are inevitably going to impact on those very organisations?
Baroness Hanham
My Lords, the working neighbourhoods fund was not going to continue. Under the noble Lord’s Government, it was due to finish at the end of three years. The three years would have been up in this financial year, so I do not think that the accusation of getting rid of the working neighbourhoods fund can be levelled against this Government. Decisions have had to be made against the serious financial situation. There have been consultations with the voluntary sector during the course of these decisions. It has made its representations and has been listened to.
Public Bodies Bill [HL]
(13 years, 2 months ago)
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Lord Taylor of Holbeach
My Lords, before I beg to move that the House do now again resolve itself into a Committee upon the Bill, I should like to beg your Lordships’ indulgence by taking a few minutes to update the House on the work that has taken place since the Committee last met to improve this Bill.
During the Second Reading debate, I made it clear to this House that I intended to engage in an open dialogue with noble Lords throughout the Bill’s passage. I feel confident in saying that I have to date delivered on that promise. Since the last day in Committee, 11 January—which seems a very long time ago, and I am sure that noble Lords have shared my withdrawal symptoms—I hope the time has not been wasted. Indeed, it has been well used. The Minister for the Cabinet Office, my right honourable friend Mr Francis Maude, ministerial colleagues in this House and I have participated in a number of meetings with Peers from all sides of the House seeking constructive and proportionate solutions to concerns regarding this Bill. Such discussions are a crucial part of the work of this House, and I have no doubt that they will continue. I pay tribute to the positive spirit in which noble Lords, including those on the opposition Benches, have looked to work with the Government to achieve our shared objectives. As a result of this work, the Government have today laid a number of significant amendments to the Bill. I hope it will be helpful to the House if I briefly describe their effects as they are relevant to the debates that we shall be having over the coming weeks.
First, I am happy to inform the House that the Government continue to engage in constructive discussions with my noble friend Lord Lester of Herne Hill and my noble and learned friend Lord Mackay of Clashfern on the safeguards that should apply to orders made under the Bill, particularly in relation to Amendment 175, which has been tabled by my noble friend Lord Lester of Herne Hill. We intend to reach a solution that will offer further protection for the necessary independent exercise of public functions, including judicial functions, and we will require that orders made using the powers in this Bill are proportionate in their effects. The noble Lord, Lord Lester of Herne Hill, and the noble and learned Lord, Lord Mackay, are working closely with the Government to inform this approach, and I thank them for the rigorous and helpful analysis that they have brought to bear on this process.
I wish to address the overall structure and purpose of the Bill, with particular reference to Schedule 7. Noble Lords will be well aware that the Government’s policy is that all public bodies should be subject to regular review to ensure that their functions are still required and are delivered in the most effective and efficient manner. This is a goal to which the Government remain committed and one which I am sure will continue to receive support from all sides of the House. Schedule 7—and the corresponding power to move bodies between schedules, as described in Clause 11—was designed as a pragmatic mechanism to facilitate this goal by creating a means by which changes to public bodies could be made following future reviews without recourse to further extensive primary legislation.
The Government absolutely recognise that some public functions need to be carried out independently of Ministers. Schedule 7 was never intended to hinder or threaten that independence. However, it has become clear during the passage of this Bill to date that this House is uncomfortable with the nature of Schedule 7. As many noble Lords, including members of the Delegated Powers and Regulatory Reform Committee and the Constitution Committee, have made clear, it is a feeling that is strongly held by much of this House that Schedule 7 represents a significant delegation of power to Ministers and has the potential to hinder the independent delivery of public functions.
Noble Lords will, I hope, forgive me for maintaining a more positive interpretation of the Government’s intentions. None the less, I have listened with great care to the voice of this House and have taken its concerns to my colleagues in government. Indeed, the Minister for the Cabinet Office has met a number of noble Lords, who have taken the opportunity to put these points to him in person. Consequently, I can confirm to the House that the Government have accepted the arguments that bodies and offices should be listed in the schedules of this Bill only where Parliament has given its consent in primary legislation. On this basis, we intend that Schedule 7 and Clause 11 be removed from the Bill. I am therefore adding my name to existing amendments opposing the Question that the relevant clauses of the Bill stand part.
In this context, I should also inform the House that it will be necessary as a result of the removal of Schedule 7 to introduce a small number of amendments that move bodies currently listed in Schedule 7 to one or more of the remaining schedules. These changes shall ensure that all reforms announced as part of last year’s review of public bodies can be implemented. These amendments will be made at a later stage in the Bill’s passage, but I hope that the House will be assured by the fact that these moves, and the reforms to which they relate, will be scrutinised in primary legislation.
I will now reassure those of your Lordships’ House who have concerns about whether the provisions in the Bill on the transfer of functions could be used in a way that could undermine the independence of charities. I make it absolutely clear that the Government have not considered, nor would they ever consider, using the Bill to transfer functions to charities without their consent or make consequential changes to their constitutions without such consent. We continue to work with charities to ensure that that reassurance is made as explicit as possible. The reform of public bodies will ultimately help to empower rather than undermine the role of charities and the independence on which they rely.
Finally, I refer briefly to the clauses in the Bill that relate to forestry. As noble Lords will be aware, my right honourable friend the Secretary of State for Environment, Food and Rural Affairs made a Statement in the other place on 17 February, setting out the Government’s intention to end the consultation on the future of the public forest estate and to remove the relevant clauses from the Bill.
My noble friend Lord Henley will set out the Government's revised approach on this issue in greater detail later today. However, I can confirm that I have added my name to amendments to remove the relevant clauses and schedule entries to the Bill, including the regional advisory committees established under Section 37(1)(b) of the Forestry Act 1967, which is listed in Schedule 1.
Progress on this Bill to date has not always been smooth. It has certainly been drawn out longer than I had hoped. However, I take comfort in the knowledge that the expert scrutiny of this House has improved and will continue to improve the Bill. Again, I thank all noble Lords who contributed to this process. In tabling the significant amendments that I described today and following our existing amendments to introduce both a statutory period on consultation and the option for Parliament to select an enhanced affirmative procedure, the Government have demonstrated their commitment to engage with and respond to your Lordships' House. I hope, following these amendments, that we will be able to make progress on the Bill with a renewed sense of shared purpose and in the constructive spirit that characterises this House at its best. I beg to move.
Baroness Royall of Blaisdon
My Lords, I am grateful to the noble Lord for the statement that he made. Naturally, I warmly welcome the radical changes that he proposes, especially in relation to Clause 11, Schedule 7 and Clauses 17 and 18. I am also grateful for his willingness to engage in open dialogue and to make changes. That is this House working at its best and I am pleased that it is working in this way.
I also recognise that with a new Government, especially a coalition Government, who came to power having been elected on two different manifestos, it is difficult immediately to produce quality Bills. However, the paucity of this particular Bill was extraordinary, as was widely recognised by the Constitution Committee, the Delegated Powers and Regulatory Reform Committee and the House of Commons Public Administration Committee, all of which produced devastating critiques of the Bill. It was an unnecessarily rushed Bill and it is clear that the proposals were not properly thought through and that there was no proper consultation. It is thanks to the time that we took to scrutinise the Parliamentary Voting System and Constituencies Bill that this Bill has been recast, just as we suggested it should have been in the first place.
In the mean time, those bodies that were listed under Schedule 7 and their employees have suffered, as have the communities living in and around the forests and woodlands of our country. But I am grateful to the noble Lord and I hope that the Government will have learnt lessons from this Bill and will ensure that, in future, consultations and White Papers come before legislation in the tried and tested manner.
We continue to have concerns about the process and we will be looking to the Government to make further changes in respect of the super-affirmative procedure. We will also be looking for amendments in relation to the sunsetting of certain aspects of the Bill. Today we will discuss forests, RDAs and the UK Film Council. Thanks to the U-turn on forests—our forests seem to be secure at the moment and we are grateful for that—I hope that the Government will reconsider their proposals on RDAs and the UK Film Council. We will all want to celebrate today the brilliant British success at the Oscars last night with “The King’s Speech”. We are all terribly proud of that. I look forward to our debates later on today on these issues.
Lord Maclennan of Rogart
My Lords, I add my thanks to my noble friend Lord Taylor for the dedicated way in which he has applied himself to considering the criticisms of the Bill that were made during the earlier stages of debate. I congratulate him on the generous way in which he has involved Members not only of the coalition but of the Opposition in the dialogue, which has unquestionably moved towards much more coherent and democratic procedures for winding up bodies which are past their sell-by date. This has exemplified the maxim of John Stuart Mill that the best government is government by discussion. I strongly welcome the approach and hope that it will continue until the Bill is enacted.
Lord Goodhart
My Lords, I am extremely grateful to my noble friend Lord Taylor of Holbeach for informing us of the removal of Schedule 7 and Clause 11. I was seriously concerned about this matter because I was until the general election the chairman of the Delegated Powers Committee, and I think I am its only surviving former chairman. As it was drafted, the Bill gave power in Schedule 7 and Clause 11 for the Government to do all sorts of things whenever they decided to do so. It was entirely uncertain, and whenever I looked at it I saw in my mind the quotation from King Lear:
“I will do such things, what they are yet I know not, but they shall be the terrors of the earth”.
What is now proposed is broadly within the standards recognised by your Lordships’ House for delegated powers and I am very pleased that this difficulty is over. It will cut a very substantial amount of time from what we would have expected.
Lord Lester of Herne Hill
My Lords, the Minister was kind enough to refer to the noble and learned Lord, Lord Mackay, and myself. The noble and learned Lord, Lord Mackay, is sorry that he cannot be here today, but I explained to him what I would like now to say. We are delighted that over the past seven weeks discussions have continued with members of the Civil Service, the Cabinet Office, and so on, on what to do about Amendment 175. My noble friend Lord McNally, who is even more optimistic than I am, said seven weeks ago that he hoped and believed that we would be able to come to a satisfactory arrangement on Amendment 175, and I share his hope still. It is extremely important that this is settled by the next day this Bill is in Committee, because it goes to the architecture of the Bill. Although we are debating details today, the House will need to be quite sure that the safeguards in Amendment 175, or something very close to them, are in place before the Bill leaves Committee. Otherwise, we will be in the position of someone trying to cross a river and not knowing whether a stepping stone is solid or slippery.
Lord Warner
Lord Warner
My Lords, in this new mood of enthusiasm for constructive scrutiny, I rise to speak to the amendment standing in my name and in the names of my noble friends which would remove NESTA from Schedule 1. My purpose in tabling this amendment is to find out why the Government thought it necessary to convert NESTA from an NDPB to a charity, and to understand the processes by which they will do this and at the same time safeguard public money and the remit given to NESTA by Parliament.
NESTA was set up in 1998 with a statutory remit to support and promote talent, innovation and creativity in the fields of science, technology and the arts. It does this by leveraging private capital into the next generation of innovative, entrepreneurial businesses, running cutting edge experimental programmes to test new ways in which to solve big challenges of the future, and building an evidence base that provides policy options to promote innovation. Its work has focused on innovation for economic growth, cheaper public services, and in the creative industries. All these seem to be areas where the UK economy needs all the help that it can get.
NESTA has done many good things, and I am a supporter of it. In this connection, I declare my interest as chairman of the Health Innovation Committee for the Young Foundation, which benefits from the generous support of NESTA. However, it is not self-evident to me that most of NESTA’s work is in pursuit of a charitable purpose, as defined in the current Charities Act. What discussions have the Government had with the Charity Commission to confirm that the work of NESTA would be accepted as a charitable purpose, and when did they take place? I am assuming that there will be no significant change of functions, or do the Government have other plans? Will the Minister also tell the House what discussions there were with the board of NESTA about converting it into a charity before Francis Maude made his announcement on 14 October? Was the board enthusiastic about the idea, or did it have problems about being an NDPB, which interfered with the discharge of the role given to it by Parliament in 1998? What other options or alternatives to an NDPB or a charity have been considered by the Government?
Alongside those questions, there are some important issues relating to the substantial sum of public money that would be transferred into a charitable body if the Government turned NESTA into a charity. NESTA is funded by an endowment from the National Lottery, which has grown from the original £200 million and now stands at well over £300 million. Along the way, the National Lottery has given it repayable loans and revenue allocations. NESTA does its work through the allocations, loans and the investment income from its endowment, without grant in aid from the Government. How would NESTA’s funding work in future if it was a charity? Would the current endowment be transferred in total to the charity, bearing in mind that charities can change their charitable purpose? Do the Government have any plans to cut NESTA’s endowment when its status changes? We need answers to these questions before we include in a cavalier fashion a perfectly satisfactory body such as NESTA in Schedule 1 and create unnecessary uncertainty about its future. I beg to move.
Lord Dubs
My Lords, I, too, am a supporter of what NESTA has done and of its very innovative work and enormously important initiatives. I looked with some puzzlement at the Government’s proposals and join my noble friend in asking some further questions to see whether we can be clear about what the Government propose. My noble friend has already asked about the status of discussions between the Government and the Charity Commission on the future of NESTA. It is not always easy setting up a charity, as—quite properly—certain conditions have to be met. How far have the Government got with those discussions to be satisfied that charitable status is appropriate and proper and would be reasonably easy to achieve?
Furthermore, I understand that in the new scheme of things there is to be an individual called the “protector”, who will, presumably in addition to the Charity Commission, have supervisory responsibilities. What will be the powers and responsibilities of the protector and how will they sit alongside the responsibilities of the Charity Commission?
Will the Minister further confirm that there is at present no burden on the taxpayer because of the endowments held by NESTA? Therefore, there will really be no change in public expenditure or public responsibilities if and when NESTA becomes a charity. In other words, there is clearly no financial benefit in all this except possibly at the margin, where I am told that there might be some savings in not having to deal with civil servants or something of that sort. I am not quite clear how that will work, so maybe the Minister could explain that.
I have two further questions. If not all NESTA’s current endowments are appropriate for charitable purposes, I therefore assume that not all the money will be transferred to the new charity. However, if it is not transferred, where will it go? In other words, there are some functions of NESTA that are not totally charitable; clearly, these are now funded by the endowments. What will happen to the money appropriate to those non-charitable functions? Secondly, given that there are trustees to be appointed to run a charity if the proposal goes ahead, how will the trustees be appointed? By what process will they be appointed and what will be the safeguards?
Lord Evans of Temple Guiting
My Lords, I rise to speak briefly as a great admirer of NESTA, an organisation that works in an exciting and important area of our society to create a viable commercial future for science, technology and the arts. NESTA’s core objective is to combine capital investment with non-financial support to help innovative early-stage companies to turn their ideas into commercial success. These target companies, referred to as seed companies, are vital for the cultural success and economic growth of this country. Without this assistance in the early stages of development, these companies will be held back from reaching their full potential. We should all be grateful to NESTA for its part in facilitating the creative industries’ £50 billion annual contribution to the economy.
NESTA is a unique organisation with a world-class reputation. It is the UK’s leading expert on innovation and carries out some cutting-edge work with the creative industries. Let me give your Lordships three examples. Its creative mentoring programme brings together new creative businesses with successful figures in the industry to help them to grow. It has worked with the National Theatre to bring live theatre to more people through the power of digital distribution. It is also working with our fashion industry to encourage the best UK designers to work more closely with British high-tech manufacturers.
NESTA is also recognised as one of the UK’s leading organisations producing world-class research, concentrating on exploring future areas of economic growth. It has always enjoyed a greater level of independence than any other non-departmental public body because of its unique set-up. NESTA has an endowment from the National Lottery, as we have heard from the noble Lord, Lord Warner, and therefore operates at no cost to the Exchequer. In this case, moving NESTA from the public to the third sector will, in principle, allow it to continue its vital work as an early-stage seed funder and to act as a test bed for innovative solutions to some of our greatest challenges in the commercial creative sector.
In terms of detail, it would be helpful if the Minister could comment on the following points, which have also been raised by my noble friends Lord Warner and Lord Dubs. What consultation have the Government undertaken with the board and different interested groups about the change? What process will the Government use, as my noble friend Lord Dubs asked, to select and appoint trustees? The Minister may also like to inform the House, in light of the Public Administration Committee’s recent report on quangos, why this body is one of the few bodies to have been singled out for charitable status.
Lord Taylor of Holbeach
My Lords, I thank the noble Lord, Lord Warner, for introducing this amendment, and the noble Lords, Lord Dubs and Lord Evans of Temple Guiting, for their contributions, which give me an opportunity to explain how the Government see the role of NESTA. It is government policy to reduce the number of NDPBs and NESTA did not meet the Cabinet Office criteria for remaining an NDPB. However, NESTA and its activities are still considered highly valuable to UK growth and innovation. The Government are clear that they want that work to continue. That view will be widely held throughout the House.
We have no intention of winding down NESTA and its activities. Instead, the proposed reconstitution of NESTA as a charity, with its £329 million endowment held in a separate charitable trust, will allow it to continue its valuable work. Far from halting its activities, establishing NESTA as a charity preserves its ability to deliver its public benefit mission at no cost to the taxpayer. I confirm the analysis of the noble Lord, Lord Dubs, that there is no question of saving the taxpayer money in this matter, since the body is independent of taxpayer funding. We can further distance it from government and enhance its independence by making these changes. It will therefore cease to be classified as an NDPB and as part of the public sector. We have already worked closely with NESTA to develop the detail of this reform. We will seek Charity Commission approval for the proposed new model. This model builds on that successfully used by the Millennium Awards Trust, which similarly derived much of its funding from the National Lottery. We want to build on that model.
Once NESTA becomes a private sector charity, the Government will no longer select or appoint the trustees. The separate charitable trust, which will be created to hold the endowment in the public sector, will have a protector. The intention is for the protector to be appointed by Ministers and for NESTA the charity to be the trustee of the trust. The role and powers of the protector are yet to be defined but they will be based on the Millennium Awards Trust model. This is a very positive step that is being taken by the Government. We firmly believe that this model represents an opportunity for NESTA to continue its success. However, we also believe that NESTA’s current status as an NDPB is by no means a prerequisite for it to continue to flourish. Establishing NESTA as a charity is part of the Government’s wider commitment to hand power to the big society and not simply to rely on central bureaucracy to control public life. The Government’s proposed model reflects this objective while safeguarding the public interest in the large endowment managed by NESTA.
I have been asked by many noble Lords about the nature of the discussions that we have had with the Charity Commission. There was an initial discussion with the Charity Commission last December and there has been an exchange of correspondence since then. This is designed to ensure that the objects of NESTA are charitable. BIS and NESTA itself have carried on these discussions. They are positive and we are confident about their outcome. While there have been no public consultations, officials worked closely with NESTA’s senior management team to develop the charitable option and NESTA consulted informally with its board of trustees, which is supportive of the change in status. NESTA also consulted several key stakeholders. Its staff were informed on 14 October 2010, following the Government’s announcement on public bodies reform. Since then NESTA has held regular meetings with staff to inform them of the transitional process and provide the opportunity to address any questions or concerns that they had.
In a statement released at the time of October’s announcement, NESTA’s chair, Sir John Chisholm, said that the board welcomed the decision and described it as an extremely positive move for NESTA. The statement also contained endorsements from Sir James Dyson and from Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations. Since then, NESTA has written to key stakeholders and engaged with the public via its website and social media sites, giving details of the proposed transition and welcoming any questions regarding the change in status. In the light of these considerations, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Warner
My Lords, I am grateful to the Minister for his full explanation. I am still just a shade puzzled as to what will happen if the Charity Commission does not accept that the purposes defined by Parliament meet its requirements as to a charitable purpose. Many of those purposes defined by Parliament have at their heart economic development. Before the next stage, so that we can be absolutely clear, I would like more assurance from the Minister, perhaps in writing, that there is not going to be a slip between cup and lip over this that would damage NESTA and the work that it does. On the basis of an assurance in that area, I beg leave to withdraw my amendment.
Lord Faulkner of Worcester
My Lords, I am very pleased to continue the mood of co-operation and friendliness between the various parts of the House in relation to my Amendment 46, which is supported by two of my noble friends and by the noble Lord, Lord Inglewood, on the Benches opposite.
I start by expressing my appreciation to the Minister for his willingness to engage with me from Second Reading when, having heard my speech, he realised that what was initially proposed by the Government did not make a lot of sense, was causing a great deal of anxiety and needed to be put right. The way in which he and indeed his noble friend, the noble Earl, Lord Attlee, have engaged on this subject has been excellent, and I thank both of them very much.
I am not going to argue for the continuation of the Railway Heritage Committee as a non-departmental public body. It has had that role for only about five years. Previously it had been a committee first under the wing of the British Railways Board at the time of privatisation and subsequently under the Strategic Rail Authority.
When the SRA was abolished, it became an orphan. I declare a past interest as its unpaid chairman at the time. We thought that the Department for Transport would provide a secure, long-term home for it. That optimism was misplaced, as the department originally intended to use this Bill to get rid of it altogether on the grounds that railway heritage was not sufficiently special to justify statutory protection. The signs are now that Ministers do not take that view, and I shall outline in a few words today how I hope we will be able to establish a new arrangement which the noble Lord, Lord Taylor of Holbeach, will be able to accept on behalf of the Government.
What I shall propose achieves the Government’s two objectives behind the Bill, which were a long time ago, as he said in his initial statement. The first objective is to reduce the number of non-departmental public bodies and the second is to save taxpayers money, while at the same time, with the Railway Heritage Committee, preserving something that is really important. The RHC came into being as a direct consequence of the privatisation of the railways. When the railways were state-owned, obligations were imposed on the British Railways Board and its predecessor, the British Transport Commission, to ensure that what was significant to the history of the railways was preserved. That was a statutory obligation that was imposed on them. However, given privatisation and the fragmentation of the industry, it was necessary to create a new statutory mechanism to ensure that the process was continued. Initially, provisions in the Railways Act 1993 covered heritage items and records owned by the British Railways Board, but it was quickly realised that these measures were not adequate for dealing with the new companies that had entered the industry.
The response to that was contained in a Private Member’s Bill, introduced in the other place by a Conservative MP, Mr Mark Robinson, which achieved total cross-party support in both Houses. I read the Hansard reports of those debates, and the arguments for statutory powers of designation and for the principle that our nation’s railway history is sufficiently special to justify its legal protection were, and still are, compelling. Thereby, the Railway Heritage Act 1996 was passed, with the RHC operating initially under the auspices of the BRB.
Lord Berkeley
My Lords, my name is attached to the amendment and I fully support what my noble friend has said about the concerns and needs of the railway heritage sector. I congratulate him on the work that he has put in over many years to look after and preserve the heritage of the railway, which I think is unique. I suppose I would say that because I am very interested in it, but it is part of our national heritage.
Many noble Lords will know that the whole of the Great Western Railway was built to broad gauge by a fellow called Brunel, whom we all revere as having built wonderful smooth tracks, great bridges and excellent locomotives. However, many noble Lords might not know that not a single broad-gauge locomotive has been preserved because at the time the industry was much more interested in conversion, making money and moving forward. However, if this organisation had been around then, I am convinced that one or two locomotives and other pieces of equipment would have been preserved.
I worked on building the Channel Tunnel for 15 years. We managed to preserve one of the boring machines on the UK side and stuck it beside the motorway at Folkestone. The French half of the organisation put another one on a roundabout on the motorway at Calais. The UK one has been chopped up for scrap but the French one is still there, so we do not have a very good record in preserving these things. When something has lost its usefulness, people say, “Let’s make some money and scrap it”, or they are too busy doing something else. Therefore, this heritage committee forms a very important link in ensuring that a selection of the most important pieces of the railways is preserved.
My noble friend also mentioned the history of the heritage committee, starting off in its British Rail days. It went through the Strategic Rail Authority stage and then, as he said, became a bit of an orphan. The Government are going through another reorganisation of the railways at the moment. I do not know what it is going to produce but a similar thing has happened every five or 10 years for the past 20 years. My noble friend’s proposal that the Railway Heritage Committee responsibility should be transferred to the National Railway Museum, which I hope will have a much longer life, until the next railway restructuring is an excellent idea, so I wish him well in his onward negotiations with the Minister. I hope that the Minister in his response will give us some comfort that this might actually happen.
The Earl of Mar and Kellie
My Lords, in a single sentence I hope that my noble friend the Minister will be able to point actively to a secure and active home for railway heritage preservation.
Lord Bichard
My Lords, I have a slightly broader question for the Minister. What discussions have taken place between the Cabinet Office, the Treasury and the Office for National Statistics on what actions current NDPBs need to take in order to shed that status? I declare an interest as chairman of the Design Council, an organisation that is enthusiastically seeking to shed NDPB status and become a charity. A degree of frustration is already arising that this is not as easy as it appears on the face of it. If this frustration is being experienced by a number of similar organisations, it would be helpful if this could be clarified as soon as possible.
Lord Rosser
My Lords, I will be relatively brief, having seen a copy of the statement on the Government’s intentions for the Railway Heritage Committee. As my noble friend Lord Faulkner of Worcester has explained, the committee exercises statutory powers in designating railway artefacts and records so that they do not get damaged, destroyed or lost to ensure that what is important to our nation’s railway history is preserved. The committee also has the function of agreeing which institution shall hold the records and artefacts so designated when they are no longer required by the railway business that owns them. It also deals with the terms under which they are to be offered to such institutions. To quote its mission statement:
“The Railway Heritage Committee is established by statute to secure the preservation of evidence which is significant to the railway’s history”.
As the Government’s own briefing note recognises, most of the people involved with the committee act on a voluntary, unpaid basis and the cost of the Railway Heritage Committee is currently around £100,000 per year. Good value for money, one would have thought, and perhaps that is how the Government might have seen it from day one if their decisions last year on the future of public bodies had been taken with a little more thought and a little less speed. My noble friend Lord Faulkner of Worcester has worked tirelessly to try to ensure that the important statutory work of the committee continues, albeit not through a continuation of the Railway Heritage Committee as the Government have already announced their hasty decision in principle to abolish it. It would be interesting to know whether the Minister knew as much about the invaluable and cost-effective work of the committee at the time the decision was taken to abolish it as he does now. I suspect not. Decisions are usually better when they are based on facts following discussion rather than assumptions without discussion.
However, we recognise that the Government, subject to confirmation from the Minister, have apparently shifted their position in the light of the powerful case made by my noble friend. My noble friend’s proposal is that the Railway Heritage Committee’s power of designation should transfer to the board of trustees of the Science Museum, which also encompasses the National Railway Museum and thus has a very direct interest in railway history and the statutory work that is currently undertaken by the Railway Heritage Committee. I understand that the Minister is likely to be giving a positive response to my noble friend Lord Faulkner of Worcester’s proposal, which, from the Government’s point of view, provides a face-saving formula. The Railway Heritage Committee would still cease to exist, as the Government have already announced, but the important and invaluable statutory functions of the committee would be retained. This would enable the Government to avoid what would have been fully justified criticism that, for the sake of £100,000 a year, they were prepared to see a vital part of our nation’s history lost, damaged or destroyed and the enthusiasm and dedication of so many volunteers discarded and rejected.
The Government’s briefing document says that their decision in principle in October to abolish the Railway Heritage Committee did not include plans for a successor organisation. That statement is less than frank. At that stage, the Government had no intention of there being a successor organisation. It will be thanks only to the efforts of my noble friend Lord Faulkner of Worcester, and others who recognise the importance of preserving our railway heritage, if, as we hope he will, the Minister indicates when he responds that the Government are now involved in serious discussions to ensure that the statutory functions of the Railway Heritage Committee will continue, albeit through a different channel, and will not be abolished by this rushed, ill-thought out and high-handed Bill on which the Government are back-tracking with ever increasing rapidity.
Lord Taylor of Holbeach
My Lords, perhaps I should start with the question posed by the noble Lord, Lord Bichard. I hope that he will allow me to write to him, because the question extends somewhat beyond the brief I have on this particular body; but it points to the complexity of the reform of public bodies and why this has not been a particularly easy process.
The proposal today affects two government departments as well as the Cabinet Office, so it is frequently quite complex. However, there is a desire across government to achieve reform of the public body sector which I think is widely shared in this House. I assure the noble Lord, Lord Rosser, that I am always ready to learn from the noble Lord, Lord Faulkner of Worcester, and I have been greatly informed about the work of the Railway Heritage Committee as a result of the dialogue that I have had with him. I join in the tributes paid across the House to the work that the noble Lord did during his period as chairman of the Railway Heritage Committee. I thank him for the energetic and positive way in which he has reacted to the Government’s changes and for what he has done to bring about what I hope will be a satisfactory outcome.
I hope that the noble Lord will understand when I say that the committee’s appearance in Schedule 1 does not reflect on the distinguished service that he and his members have given to the committee over the years. The committee’s current powers are to apply a statutory designation to rail-related items of heritage interest.
The noble Lord’s amendments would move the committee from Schedule 1 to Schedule 5. They would therefore allow the committee’s powers to pass to another body while it retains its status as a public body. I understand the noble Lord’s desire for the committee’s powers to be retained, for example under the National Museum of Science and Industry, which operates the National Railway Museum—and I am delighted to hear of his involvement in that—but he should be aware that that would best be achieved by the RHC remaining in Schedule 1 and the powers being transferred at the time that the RHC is wound up.
The need to reduce the cost of government is an important consideration, but it is not the only one. The review of public bodies that took place last year began by asking whether a function needed to be carried out at all and, if so, whether it was appropriate for it to be carried out by a public body. Our analysis recognised that the railway industry already had a long and proud record of preserving its heritage, and I pay tribute to the industry itself and to the flourishing voluntary railway heritage sector for that undoubted success. Our proposal to abolish the RHC did not imply that we have no interest in railway heritage or that the good work that has already taken place would not be supported by other means. On the contrary, the Government are very sympathetic to rail heritage, and the spending review settlement for the DCMS will ensure our continuous support for the National Railway Museum. I know that the NRM and its parent body the National Museum of Science and Industry will want to engage actively to support the work of the railway industry and the voluntary railway heritage sector.
In the context of the review of public bodies, the question for the Government is therefore not only whether we can justify the cost of the committee but whether we can justify retaining a statutory power of designation in a field where there is already an impressive voluntary record of preserving the industry’s heritage. The noble Lord has presented his arguments in a positive way and they have led to further discussions within government. We see merit in the proposed transfer of the RHC power of designation to the board of the trustees of the Science Museum, the legal entity which stands behind the National Museum of Science and Industry. Positive discussions on the detail are continuing. Noble Lords will know that I am personally committed to supporting further discussions and continuing to engage with the noble Lord on his proposals. In those circumstances, and in view of the fact that his amendment would not in any case be the best means to achieve his desired goal, I hope the noble Lord will feel able to withdraw his amendment to allow the use of time between now and Report to take these positive, detailed discussions forward, and we will update the House at Report.
Lord Faulkner of Worcester
My Lords, I thank all noble Lords who have contributed to this short debate. I am a little overwhelmed by the compliments paid in one or two quarters to me on this, but this has been a collective effort by a lot of people who care about railway heritage and railway heritage preservation. Above all, I want to pay my own tribute to the Minister for the generous and gracious way in which he has listened and been willing to accept the arguments that have been put to him. The most important thing that he has said—and this is the change in government policy—is that the Government now accept that there needs to be statutory protection for railway heritage. They did not accept that, and the Department of Transport did not accept that, in the initial press release last autumn when the committee was included in Schedule 1 to the Public Bodies Bill. I accept completely his point that my amendment will not be necessary if the Government are able to come forward at Report with alternative arrangements. On that basis, and on the understanding that he has expressed today and the agreement that we have already reached and will continue to discuss, I am very happy indeed, if the Committee agrees, to withdraw the amendment.
Lord Clark of Windermere
Lord Clark of Windermere
I believe that with Amendment 47 we are also discussing a series of other amendments which relate to forestry issues. I shall carry on in the spirit of bonhomie which has engulfed the Benches in the House today but I must also say that I could not have foreseen such a situation arising a couple of weeks ago. The Government have made it very easy for us to be very positive because they have listened to what we have been trying to say—or at least I would like to think that they have been listening. The Minister has certainly been listening. I am not sure whether it was my arguments that persuaded him to move his position or whether it might have been the half-million people who signed the 38 Degrees referendum, or the 82 per cent of their own supporters who opposed their initiative, or the 86 per cent of the general public who opposed the Government’s proposals. If was not my arguments or any of those other possibilities perhaps it was the mass meetings.
What has been really encouraging over the past few months is the fact that the British people have spoken in a way that I cannot remember them speaking before. Across the country we have found protest groups—people—getting organised to fight the Government on this issue. Sometimes it has been just small groups of people with one local forest. In other cases—such as the Forest of Dean, the Lake District or Chopwell in the north-east—there have been very big demonstrations involving thousands of people, often in quite remote forests.
I think that the Government got the message, but I must say that they have caused a lot of trouble, offence and concern. Many workers in the Forestry Commission, whom I regard as some of the finest workers in this country, have been offended by some of the comments made by Mr Cameron. I am sure that he did not mean what he said, but he has caused great offence to them. The struggle in which we have been involved of late was justified in one of our local newspapers. The Cumberland News had a piece this weekend in which it held vox pops asking people what they thought about the Government's proposal for forestry. A woman said, “I am so relieved. My husband works in the forest. We have been worried sick. We have hardly slept. What a relief it is now”. It is that sort of hardship, that sort of worry, which could have been avoided if the Government had consulted instead of just rushing ahead with the proposals.
However, they have sat back and reassessed the position; and on 17 February, the Secretary of State honestly and openly announced three major retractions. I see that one name added to my amendment today is that of the Minister, and I am very grateful that he has added his weight to mine. I hope that, between us, we will carry the day. In the other place, the Secretary of State said that her announcement,
“will allow for more measured and rational debate”.—[Official Report, Commons, 17/2/11; col. 1155.]
That implies that the government proposals had not been measured and had not been rational. They had not. As I said, the Government have now said that they were wrong, and I accept their words.
My specific amendment is about the regional advisory committees—not in themselves a great part of the scheme of things, but a useful part. I could never understand why the Government were so opposed to regional advisory committees. We looked at that when I was chair of the Forestry Commission. We examined everything, because I was determined to sweat the assets of the Forestry Commission. They belong to the public, so we must get value for money from those lands and those trees. We looked at everything, including the regional advisory committees, but at the end of the day, when we added it all up, we found that their net worth to the commission was far greater than the cost.
There are nine committees. The idea is that they allow the commissioners to have an entrée into thinking on a regional basis. We had devolved a lot of our policies from the national, England level down to the regions. In some cases, we had given money to the regions and said, “You may want to spend it differently in the north-east as opposed to the south-west”. In performing those functions, we really needed the regional advisory committees. I suggest that strategy of trying to engage with local people was the right thing to do and one reason why there was so much opposition to the government proposals of a few weeks ago. We got that right.
The Chairman of Committees (Lord Brabazon of Tara)
My Lords, I should point out that if this amendment is agreed to I will not be able to call Amendment 47A.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley)
My Lords, before the noble Lord, Lord Judd, speaks, I think that it will be useful if I intervene to prevent a debate that otherwise might go on for some considerable time. I think that we can forestall that debate. I say to the noble Lord, Lord Clark of Windermere—my noble friend, if I can put it that way, in that we come from the same part of the world, support the same football team and are looking forward to seeing each other at Wembley on 3 April this year—that I always listen to him, as do my colleagues in government. Indeed, we always listen to other people, so it is not just the honeyed words of the noble Lord. We have listened to the words of everyone throughout the country, even—dare I say it?—to our local newspaper, the Cumberland News, and the vox pop in it, to which he referred.
I am grateful for what the noble Lord said and for the kind words about what my right honourable friend the Secretary of State said when she made her Statement on 17 February setting out a series of announcements concerning our forestry policy in England. I stress that these amendments relate purely to England; I think that there are others relating to Wales, which we will leave to one side for the moment. As she put it—I repeat her words—they,
“will allow for more measured and rational debate about the future direction of forestry policy”.—[Official Report, Commons, 17/2/11; col. 1155.]
She said that because—dare I say it?—despite what the noble Lord said, we were not getting a measured and rational debate on forestry as a result of misunderstandings behind what had happened. My right honourable friend announced that the consultation on the future of the public forest estate would be ended, and she has done that. This was done because it was quite clear from those early responses to the consultation that the public and many MPs and Members of this House were not happy with what we had set out.
As stated in the announcement, an independent panel to consider forestry policy will be established and, in due course, we will let the House and another place know further details about it. It will report to the Secretary of State this autumn with advice on the future direction of forestry and woodland policy in England, the role of the Forestry Commission and the role of the public forest estate. The panel will include representatives of key environmental and access organisations alongside representatives of the forestry industry. Its membership and terms of reference will be published shortly. I ought to make it clear that, although it will include a wide range of representatives, we hope that all those appointed will be appointed for their knowledge and expertise. We also hope to keep this body small so that it can be properly focused. I think that all noble Lords know the danger of allowing bodies of this sort to grow like Topsy. I confirm that the panel will have an independent chairman.
My right honourable friend also announced that the Government will support the removal of all those clauses from the Public Bodies Bill. I was very grateful to the noble Lord for not reading out all the amendments that are being taken as part of this group, but we can take it as read that they will go through in due course. As a result, there will be a number of other amendments that I think noble Lords will not wish to move because they relate to clauses that will no longer be there. We can take it that forestry is, as I put it on another occasion, purely in relation to this Bill, a dead parrot, other than forestry in Wales, and will not be debated. That means that we will remove the Forestry Commission’s regional advisory committees, which are the subject of the lead amendment.
The noble Lord also asked what we are intending to do about the Home Grown Timber Advisory Committee. He will remember that we had a debate about it earlier in Committee and that I referred to it as a dead parrot because it had not sat since 2005. It was while the noble Lord, Lord Clark of Windermere, was chairman of the Forestry Commission that it ceased to have any members. I ought to be careful about this, but I should remind the noble Lord that it was his statutory duty to have such a committee and to have members of such a committee, but he decided that there would no longer be members of the committee and that the committee would no longer meet. When he comes to answer, he may assist the House by advising us why he decided that it was no longer necessary to abide by his statutory duty to have members of that committee or even to have the committee. The simple fact is that that committee has not met since 2005. As I said on that earlier occasion, it is a dead parrot, along with all the others. It is up to the noble Lord to make the case for it. If the noble Lord wants to put a case for preserving that committee at Report, I will always look at the advice that he puts before us and I will listen to his arguments as to why we should resurrect or resuscitate that dead parrot. The noble Lord, however, made it quite clear by his actions in 2005 that he did not want it, so I do not quite see why now, in 2011, he would want to revive it—unless, just possibly, he has some mischievous reason of his own, which I would never suspect that he possibly could. Anyway, we will look at that in due course, if the noble Lord wants to bring it back at Report.
We will, as I said, remove all those clauses relating to Schedule 1 and to Clauses 17 and 18 and there will be a series of small consequential amendments. My noble friend Lord Taylor has put his name down to do that—regional forestry committees and all the others will come out. I make it clear that everything that the noble Lord wishes for the moment has been dealt with. I should also make it clear that the withdrawal of the forestry-related provisions for England from the Bill does not affect the Welsh Assembly Government’s policy proposals in relation to restructuring their arrangements for the delivery of their environmental policy, including policy on forestry in Wales. That is for another day and will be for those who will respond on these matters.
The noble Lord asked why we can sell 15 per cent. The previous Administration used these powers to sell land and I have referred beforehand to the fact that under the noble Lord’s watch, when he was chairman of the Forestry Commission under the previous Government, some 25,000 acres were sold without any protection whatsoever. We make it clear that, should we be selling any, we will make sure that there is appropriate protection offered in terms of access, the environment and biodiversity. Of course—as I think we have made clear—we will not be selling anything in advance of the panel reporting back to us. That is why we suspended those sales, having completed the sales that we had inherited from the previous Labour Government.
Lord Knight of Weymouth
I have a brief question for the Minister. When I was a Minister working with my noble friend, we were selling some forestry land, but we were also acquiring land. Does he intend to continue to acquire land on behalf of the Government and the state?
Lord Henley
Decisions will be made as appropriate. The point is that the previous Government—I will mention the figures again—sold something of the order of 25,000 acres without any protection. I accept that they bought some back, but they did not buy back as much as 25,000 acres. One has to recognise the fact that not all the land that the Forestry Commission owns is appropriate to belong in the public estate. That is why the previous Government, among whom the noble Lord was such a wonderful ornament, sold off land, or instructed the noble Lord, Lord Clark, who is about to intervene, to sell it off, as he did.
Lord Clark of Windermere
I agree with the Minister that there come occasions when it is appropriate to sell a small part of the estate. However, the difference between us and the present Government is that, under us, all the moneys received from the sale of any forest land either was used to buy new forest land—sometimes at a greater cost, because it was in the urban areas—or went back into forestry. As I understand it, with this 15 per cent sell-off, the Government are using money from forestry for the Treasury or for Defra’s general budget.
Lord Henley
No decisions have been made about any of that whatever, but I remind the noble Lord that, although it might have been said that land was sold off purely to buy back other land, some of the proceeds were used to top up the running costs of the Forestry Commission. I am not sure that that is the right way to go about these things.
I want to get back to the 15 per cent, which was the last point made by the noble Lord. The Forestry Act requires that there should be a substantial forestry estate. The noble Lord will be familiar with the 1967 Act and all the previous Acts. That estate should be placed at the disposal of the Forestry Commission to manage. I will not go into all the legal advice that we have received from lawyers, as is the convention that the noble Lord will be fully aware of, but we do not consider that the sale of 15 per cent would undermine that statutory regime. That is where we are on that matter. I hope that I have explained where we are. I am grateful—
Baroness Williams of Crosby
I apologise for intervening, but I wanted to make certain that I understood exactly what the Minister was saying. I take it that, along with the major dead parrot, all the smaller parrots die as well, including all the amendments that come under the broad heading of Clauses 17 and 18. However, on the proposed expert panel on forestry, which I understand will report back in the autumn, will there be an opportunity to raise the issue of the make-up of that panel? For example, will it include a person with knowledge of the heritage forests? If there is no opportunity to raise this, I will have to pursue the issue through Parliamentary Questions. I speak as someone who was about to make an eloquent short speech on the subject of the New Forest—the largest and most historic heritage forest. I will pass that opportunity up given whatever answer the Minister gives me on the earlier point.
Lord Henley
I will not speculate on the make-up of that panel other than what I have said already. I said that the panel should be relatively small. Most of us would agree that to create an overlarge panel would be unwieldy. Having said that, while I was abroad I received an e-mail from the noble Baroness, Lady Royall, suggesting one particular group, while many other noble Lords have sent other suggestions. We want to create a small group but it should be understood by everyone that that group would have the power to consult and to set up sub-groups to ensure that as many as possible are included. I will not give a precise figure about how small that group should be, but it should, as I said, be relatively small and focused. We want to make sure that it reaches out to all the other people and we will make it quite clear to members of that group once we have appointed it, and appointed an independent chairman, that they should be consulting with many of those who have already written to the department or made their views known.
I am not sure whether the noble Baroness will have another opportunity in our proceedings on the Bill to discuss these matters because all the forestry amendments that can be are in this group. One or two amendments cannot be in this group because they would insert clauses after Clauses 17 and 18 and, if those clauses are not there, the amendments obviously cannot be moved. I am sure that the noble Baroness will find ways of tabling amendments should she wish to do so. She will also find ways of speaking to me or to other colleagues to put forward her views about who might or might not be on the panel.
I notice that the noble Baroness has tabled Amendment 174ZB much later on, which cannot be moved because it would come after these amendments and those clauses will not exist. The amendment is also in the names of her noble friends Lord Greaves and Lord Strathclyde, but my noble friend Lord Strathclyde’s name is there in error. That amendment mentions the New Forest, Sherwood Forest, the Forest of Dean and Kielder Forest. I was intrigued to see Sherwood Forest mentioned. I had visions of sylvan glades and Errol Flynn skipping around in green tights, with the noble Baroness possibly as Maid Marion. But we will see about that in due course.
The noble Baroness will find her own way of making suggestions about who should or should not be on the committee. All I am saying is that we would like to keep it small and focused. Although they might represent certain groups, we want those on the committee to be there for their individual expertise and experience rather than for representing the particular groups involved.
Lord Clark of Windermere
My Lords, I appreciate that the Minister has been very generous with his time with me. However, in order to expedite matters later, I raise one point that he did not answer, which is quite critical. Is the 15 per cent cumulative, so to speak? When the 15 per cent has been got rid of, can this stand for 15 per cent on the next 100 per cent?
Lord Henley
That would depend on legal advice on one’s interpretation of the Forestry Act 1967. The noble Lord will be more familiar with that Act, and all previous legislation, than even I am. He will know that it imposes a duty that there should be a substantial forestry estate at the disposal of the Forestry Commission. It is a matter for interpretation as to what size that should be.
Lord Judd
I am sure that the whole House would agree that it is a great privilege to participate in a debate on an amendment initiated by my noble friend Lord Clark of Windermere. There are few people who have contributed more to the cause of the forests than has my noble friend. One thing that was particularly important about his time in the chair was that he saw to it that the commission addressed the issue of involving local communities in a sense of ownership and participation in the enjoyment of the forests. Under his stewardship, a great deal was done to open up the forests and to encourage people to use them and to have fun in them, but in a way that did not rape their very special character and heritage, in the sense that they are places of great spiritual significance and beauty. The whole House, irrespective of party difference, will want to pay tribute to my noble friend.
I endorse what my noble friend said about the spirit in which the noble Lord who is leading on this Bill has approached those issues that are put before him by people with special interests. I suppose that I shall have to say several times during our deliberations on this Bill that I should declare an interest. I am vice-president of the Campaign for National Parks and, particularly in the context of the forests, I have the great privilege of being the president of the Friends of the Lake District. One thing that my noble friend mentioned which I would like to underline is the strength, depth and spontaneity of feeling expressed when people felt that the forests were under threat. It was an extraordinary social cross-section of people, which was also impressive. The phrase one heard over and again was, “What are they doing to our forests?”. There was a deep feeling that these forests were the heritage of the British people and that they belonged to the British people. We all ought to try to make connections in government between things that are happening in different spheres and I put it to the Government that, at a time when the Prime Minister chooses to talk about British character, it is very important not to attack those things that people feel are central, in a tangible way, to being part of Britain. Their forests are certainly part of that.
I was glad to put my name to the amendment dealing with the regional advisory committees. I referred to my role in the Friends of the Lake District and in the Campaign for National Parks, which brings together groups concerned about national parks all over the country. I think that it is important that, in the commission’s administration of the forests, real efforts are made to get a local perspective, so that there is a real forum in which local issues and priorities can come forward and be taken into account in the way that things are handled. If nominated and appointed in the right way, advisory committees on a regional basis are a significant way in which to give meaning to this sense of ownership by the people as a whole, because it is possible for the local arguments to be heard and taken into account. That is why it is so important that the advisory committees should continue.
In his remarks, my noble friend made considerable reference to the issue of the 15 per cent. I hope that the Minister, whom I regard as a good Cumbrian friend, will forgive my saying that he did not convincingly answer the point. He kicked it into touch, because he said that it “all depended”. With all the blunt directness that I have come to love in the people of Cumbria, all I can say is, “Come off it”. If these forests belong to us and if we have expressed such a degree of concern, we do not want to find ourselves going down a road along which, through the back door, exactly what we have expressed ourselves as against is accomplished over a period of years. From that standpoint, we need a categorical assurance from the Government that this is not a back door to achieving the short cut that they were introducing in this Bill. On the 15 per cent issue, I hope that my noble friend Lord Clark will forgive my saying that there was a good deal of anxiety among those who were protesting about what had happened already. In a sense this is not a partisan point but one that stretches across the whole issue of the administration of the forests.
I thank my noble friend for moving the amendment. I say to the noble Lord opposite that it is time to take the message of the British people and build strongly on that—and not immediately, on day one, to start back-pedalling. The Minister referred to the importance of his advisory panel. Yes, I understand the business executive, streamlined modern management talk, which says that we must have a small, concentrated group of specialist people who will conduct this. Of course, you cannot dismiss that, because it is a very responsible job to administer the amount of forest that is there to be administered. But in the spirit of what the British people have just done and said, it will be crucial that the advisory panel is representative and is one with which the people can identify, so that it is seen transparently to bring together the different interests and communities among those who support the forests and were so aghast at what was proposed. There is a balance to be struck between business efficiency, on which the arguments of course must be taken seriously, and the job of carrying the public with whatever is proposed by seeing that it comes from a representative body with which they can identify. I am glad to be able to support the amendment.
The Lord Bishop of Gloucester
My Lords, I, too, am grateful to the noble Lords, Lord Taylor and Lord Henley, for what they have said this afternoon, because it means that there will be no need for me to move Amendment 47A relating to the Forest of Dean. As noble Lords are aware, there was particular anxiety and anger in the Forest of Dean, which falls within my diocese of Gloucester, at the proposals to legislate in regard to forestry without regard for the special status of the Forest of Dean recognised in earlier legislation. The Government have wisely withdrawn all the clauses relating to forestry. When they return with some new and different proposals relating to the future of the forests, of which we have had some hints already, I hope they will at that point recognise that when people speak of the Forest of Dean, they are not talking about a collection of trees, but about a series of communities with a common sense of identity. People call themselves foresters simply because the Forest of Dean is where they live, and their sense of identity comes more from the forest than from the particular towns, villages or hamlets that are part of it. To talk about changes in ownership with even the smallest possibility of withdrawal of access or unwelcome development is to provoke a deep emotional response in people who have, in many cases, inhabited the forest for many generations—that quite apart from the more general issues of the ownership and stewardship of the forests on which the Government have wisely changed their mind. So I am grateful to the Government for withdrawing the clauses that they have, rendering my amendment obsolete. I can assure your Lordships that the people of the Forest of Dean are both relieved and elated by the sense that they have seen off a particularly ill-thought-through policy.
Lord Rooker
My Lords, I will intervene briefly in the debate because I realise that the Minister and the noble Lord, Lord Taylor, have been incredibly helpful. It is the first time I have spoken on the Bill. I just want to raise an issue that was not really covered by the Minister’s statement—otherwise I would not be standing up. That relates to the forests being used for motor sport.
Last year, the motor sport industry contributed almost £1 million to the Forestry Commission for 41 events, 31 of which were stage rallies. There is nowhere else they can take place. Each one of those is estimated independently to bring to the local community about £2 million when it takes place. Ministry of Defence land used to be used. That is not really possible in any event because of use in the past so the forests are the only areas where these rallies can take place. There was a centrally managed agreement between the Forestry Commission and the Motorsports Association, which is the governing body for UK motor sport. I have a couple of questions, because the Minister said that a measured and rational debate was not taking place, so it is going to take place with the review.
First, will the independent chair be appointed as a result of an advertisement or a few phone calls? It is quite important that we know that. Secondly, will the Land Access and Recreation Association have a place on the body? I am making a special plea because that is the one way that the motor sport industry will be represented. It employs 38,000 people, 25,000 of whom are professional engineers, and is worth something like £4 billion to the economy. Most of the teams that we see with foreign flags are actually in this country, where the cars are designed and produced. We are talking about big business here, where the forests play an absolutely crucial part, particularly for the rally side of the industry. It is very important that they can put their piece at the table and are not reduced to external flag-waving or lobbying. If LARA is represented on the body, then I am assured that the issues relating to motor sport can be raised, because the issues have not gone away. If I can be satisfied with that, there will not be any need to raise this in future. I realise that forestry is coming out of the Bill. Nevertheless, as this body and review panel are going to be meeting, if we can get these things settled now, it will make life a lot easier for the ministry and for Defra, which, I presume, is going to have to fill a hole in its funding in due course.
Lord Greaves
My Lords, along with other noble Lords, I thank the Government, particularly my noble colleague Lord Henley, for intervening early in this debate, which was extremely helpful in setting us on the road for debate in certain areas. I want to thank the Government generally for their common sense in dropping the forestry clauses from the Bill, or at least proposing to support the dropping of them when we get to them. The Government have listened to what has been going on; I suspect as well that they have been retreating in a certain amount of disarray in the face of the public opposition which they did not expect. I am not, however, going to stand up and talk about U-turns and that kind of thing. It is always strange that when Governments put forward things that some of us might not like, they are accused of being obstinate and stubborn if they refuse to listen to what people say. However, if they agree to change and withdraw things, they are accused of making U-turns. They can be accused of anything by people who want to accuse them but I am delighted by the Government’s decision to take out these clauses.
I speak in favour of the amendment moved by the noble Lord, Lord Clark of Windermere. I would have signed it if there had been any space when I first discovered it. I have tabled several amendments in this group, which are now all dead parrots or perhaps dead budgies—or, since we are talking about trees, dead woodpeckers. I do not know; I get lost among these metaphors. The Minister talked about Sherwood and suggested that my noble friend Lady Williams of Crosby might be Maid Marian. I was not sure whether he was putting himself forward as the Sheriff of Nottingham. If he is, the right reverend Prelate could be Friar Tuck. All I can say is: please can I be Robin Hood?
When I proposed that Clauses 17, 18 and 19 should not stand part of the Bill, I originally did so for traditional House of Lords Committee reasons. These clauses needed a great deal of probing and discussion, which the stand part debates would have allowed to take place. I was also concerned about what appeared, on the face of it, to be fairly draconian Henry VIII powers being granted. In retrospect I was right to be concerned, but as time went on I became more convinced that this was not the appropriate legislation to deal with the future of the Forestry Commission and its land, woodlands and forests. Therefore, I became more serious in believing that this House ought to take these clauses out. I now believe firmly that if the Government had not seen sense on this, this House would at least have taken them out before it sent the Bill to the Commons. Nevertheless, we are now in the position that we are in.
I praise not just the Government for their action but those who have campaigned on this matter. It is easy to attack or criticise the campaigners by saying that some of their messages were a bit simplistic and not all of the 535,000 people who signed the 38 Degrees petition had a detailed knowledge of all the issues. That is absolutely true but how many people have a detailed knowledge of all the issues when they cast a vote in a general election? Once these campaigns started to mushroom, I was determined to make sure that the people running them had as much knowledge and understanding as possible of what the Government were putting forward, what the Forestry Commission does and the facts and figures about the estates, as well as parliamentary procedures. They could then at least have some slight understanding of how the Bill would go through this House. Not many people have such an understanding—including some Members of this House, probably—but I thought that was at least a useful thing to do. If I have been able to play a small part in that, I am very pleased to have done so.
The huge petition that the noble Lord, Lord Clark, mentioned was quite astonishing. Similar petitions—about, perhaps, more important things than the forests in many people’s eyes—rarely get into six figures but this one, if the Bill had got to the Commons with the forestry clauses still included, would clearly have been signed by a million people. This is an astonishing phenomenon. In addition to that, several national campaign groups were set up and campaigned mainly via the internet. They included Save England’s Forests, which got its first real boost of publicity from the celebrity letter to the Sunday Times. I see the noble Lord, Lord Hattersley, in his place. He was thought to be a celebrity who might like to sign the letter. Nobody bothered to ask me but that does not worry me at all because I am not a celebrity.
There was also Save Our Woods. The young people who run that have done a very good job in setting out a vast amount of factual information and creating a forum where people could exchange information. I believe that all this has contributed to the amount of knowledge and understanding in the campaign groups being much greater than it was at the beginning. In addition, providing huge local support to the campaigns were local organisations, some of which were enumerated by the noble Lord, Lord Clark. Some of them covered big forests such as the Forest of Dean and the New Forest, others covered larger areas such as the Lake District, and many more, springing up almost by the day, were concerned with their own local forests. Add to that all the access groups, which were absolutely united against the proposals. Towards the end of the campaign, a lot of the established groups, such as the Woodland Trust and the RSPB, were coming on board. It was an astonishing campaign. The involvement of the internet, Twitter, Facebook and all these realms that I do not know much about has been a complete eye-opener to me.
Basically, the problem was this. First, the Government, although they would put it in slightly less brutal terms, botched the entire publicity throughout the last six months of last year of what they were doing. Different Ministers, although not the noble Lord, Lord Henley, were saying different things. It was not at all clear what they were saying. That gave the campaigns a lot of fertile ground. This was also about trees. As a local councillor for many years, I learnt long ago that you mess about with trees at your peril, unless you explain to people exactly what you are doing and why you are doing it and you get them on side. It really came home to me on one occasion, when Pendle council—I declare that I am a member of Pendle council—was proposing to remove some trees outside the municipal hall, which is a council-run theatre in Colne. These trees were diseased and needed removing, yet there was huge public opposition to it. We now have some nice birches there, which are much better. Nevertheless, at the council committee meeting at which this was being decided, a lady addressed the committee in tears. She said, “Do you know, me and my husband, we had our first kiss under that tree, and you’re going to chop it down”. That is how people think about trees. If you are going to do things to trees, you have to be very careful; you have to prepare your ground and you have to take people into your confidence from the very beginning.
I support many of the comments made about the independent panel and some of the questions. How will it be chosen? It is all going to happen fairly quickly if it is to report in the autumn, as is intended, so how will it be chosen? What are the criteria and the mechanisms for deciding who should be on it, and what are its terms of reference? The Government have to come clean about these questions from the very beginning. Furthermore, will there be any ongoing information and publicity about the panel’s work until it produces its report? If not, there will be a vacuum for several months during which all sorts of rumours will develop and gain credence. The organisations that have now been set up are not going to go away. They will continue to ask questions; and if there are no answers, all sorts of information will get out there that may or may not be true. It is in the Government’s interest to be as open as possible about the work of this panel and how it will work.
There is a further question about the 15 per cent. The Government have said that they have suspended selling any more of the 15 per cent until they have better protections on access and biodiversity. That is very welcome. How will these protections be announced, when will they be announced, and will the panel be involved in that work as well as deciding the long-term future of the majority of the estate?
A major consultation was run by the Forestry Commission in 2009—not very long ago—which seems to have been dropped and forgotten. A lot of organisations fed into that consultation. Will the proposals and submissions that resulted from that consultation be fed into the panel as information on which it can consider their views, along with everything else? Will there be a means by which the public can input into the work of the panel, or is all consultation now dead? I was disappointed when the Government dropped the consultation—although I was delighted when they said that they would remove these clauses—because a lot of organisations were doing a lot of work preparatory to putting in their views. It sounds—to a cynic outside, anyhow—as though the Government have said, “We have looked at the first results of the consultation. We do not like them and therefore we are stopping the consultation”. However, a lot of work contributed to that consultation, and it would be helpful if organisations in the field, campaigning groups and everyone else were at least able to contribute to the work of panel by putting in their views.
Lord Williams of Elvel
My Lords, I do not wish to detain your Lordships with other matters, but I should like to ask the Minister about my noble friend Lord Clark’s question on the cumulative 15 per cent, which was followed up by my noble friend Lord Judd. My understanding of the Minister’s reply was that it was a question of the interpretation of the Forestry Act. I have always assumed that the Government, who are responsible for the administration of the Act, have some idea of what it actually means. Will the Minister be kind enough to write to my noble friend Lord Clark explaining what the Government think the Forestry Act actually means in that respect?
The Lord Bishop of Guildford
My Lords, I am enormously grateful to the noble Lords, Lord Taylor and Lord Henley, for their interventions this afternoon, and for the Secretary of State’s intervention in another place some time ago. I speak as one who would have supported the amendment in the name of my colleague the right reverend Prelate the Bishop of Gloucester, had the question been put.
Your Lordships’ House will be anxious to move on fairly quickly now, so I make one simple point as someone who has taken a close interest in the Forest of Dean in particular and in the general debate about forestry. I refer to the process of preparing Bills. We have heard about the huge public response to the proposals as they have been understood, or even misunderstood. Had the section on forestry been researched with close attention to the debates in your Lordships’ House in 1981 and in another place, almost all the issues that have been in the public domain and which have been debated so fiercely and strongly—although, I agree, not always accurately—would have put an amber light in the preparation of the Bill. Therefore, to save further embarrassment in government and policy, I gently propose that looking at what Parliament did on the previous occasion on an issue such as this would help in the construction of Bills.
Baroness Williams of Crosby
My Lords, I shall be extremely brief, but first perhaps I might follow the right reverend Prelate’s comments by saying that I have been puzzled from the very beginning of this Bill. I find it extraordinary that the New Forest has been protected by primary legislation dating from 1877 through to 1970, yet essentially a process of statutory orders can overtake and indeed overrun those original primary Acts. Therefore, my first question is how such Acts can be so easily set aside and whether one should reconsider the way in which consultation on legislation takes place.
My second and only other question concerns the impact of the Localism Bill. Those of us who care about the forests have now established that this legislation was very unwise. However, I am not clear whether that Bill will insist that decisions on forests are taken at the most local level. The regions where the feeling is greatest are the ones that are most closely related to the forests on which they depend. That is probably where the decisions should be taken, rather than statutory proposals being made centrally.
Let us bear in mind the lessons of this Bill—the deep lessons of how the British public hold forests as very dear and very important—and let us make sure that, when the Localism Bill emerges, there will be no attempt to go back to central control over the future of the forests.
Lord Knight of Weymouth
My Lords, to save time, I shall spare your Lordships my musings on my ramblings around the Forest of Dean which I enjoyed over two days last week. However, like the noble Baroness, Lady Williams of Crosby, I want to ask a question about the Localism Bill. When I was the Forestry Minister, I was pleased to agree with my right honourable friend Yvette Cooper—when she was at the Department for Communities and Local Government—planning policy statement 9, which protected biodiversity in forests. In the context of the changes to the planning system that are also in the Localism Bill, how will those protections to biodiversity, which I know the Minister holds dear, be retained?
Lord Foulkes of Cumnock
My Lords, perhaps I might ask one question on Scotland. Before anyone jumps up and says that this legislation does not affect the forests in Scotland, I acknowledge that it does not. However, as the headquarters of the UK Forestry Commission are in Scotland, the legislation could, as I understand it, have a significant effect on Scotland. The original proposals involved a substantial loss of jobs at Silvan House in Corstorphine. Now that there has been a U-turn and the Forestry Commission is to continue with its responsibilities for forests in England, will all the jobs held by people who are administering and dealing with the English forests be retained at Corstorphine in Edinburgh? As I understand it, no announcement has been made about a U-turn on the jobs. It was announced that 150 jobs would be lost at Corstorphine in Edinburgh, but that would seem a strange thing to do in the light of the announcement of a policy U-turn. It seems that the jobs in Edinburgh will still be necessary to carry out the tasks that have been done very well for many years.
Baroness Royall of Blaisdon
I, too, am very grateful to the Minister for the information that he provided at the beginning of this debate and for the gracious apology from the Secretary of State in the other place a couple of weeks ago. I, of course, welcome the statement and the fact that all references to “forestry” and the Forestry Commission are being deleted from the Bill. Can the Minister confirm that the Forestry Commission will not appear in any other schedule if Schedule 7 is disappearing? Can he also provide clarification on Wales? I am not entirely certain what the position is now on Wales because the Forestry Commission is mentioned in Clauses 13 to 16.
Like the noble Lord, Lord Greaves, and others, I pay tribute to the wonderful campaigns up and down the country. I, of course, pay special tribute to the people of the Forest of Dean in the Hands off our Forest campaign. It was the first campaign off the blocks and led the way for campaigns that drew widespread support, and eventually the Government listened, as they should do, and changed their mind. The sort of consultation the Government embarked on after they had produced the Bill, which said that they were going to enable forests to be sold, is not the right way of going about things. We should always have a consultation and a White Paper first.
I realise that the independent panel will listen to people’s views but, as many noble Lords have said, we need to be assured that the independent panel is going to work in a transparent and public way, and we need to know who is going to be on that panel and what their remit is. If the Minister does not have answers to those questions today, I trust that he will have answers when we debate this issue again on Thursday. While I realise that the independent panel has been tasked by the Secretary of State and Defra, we on these Benches and in the Forest of Dean strongly believe that the small percentage of forests that remain in public hands—I think it is only about 15 per cent of the country’s forests and woodlands—should remain in public ownership and continue to be managed by the Forestry Commission, which does an excellent job.
I am therefore delighted that Clauses 17, 18 and 19 are being deleted and that all the other amendments will fall. The reason why I and so many others from the Forest of Dean felt passionately about these things is because, as the right reverend Prelate said, the forest is not just the woods but a community, and we felt that our community as a whole was under threat. We enjoy customary privileges rather than established rights and, like the noble Baroness, Lady Williams of Crosby, we felt that those customary privileges were under threat.
I also added my name to amendments relating to public access, consultation, management and so much more. These issues are all of the utmost importance and I hope that they will be dealt with by the independent panel. Rights of access under the CROW Act are simply not enough when it comes to forests. We are all deeply grateful to the Forestry Commission for enabling cyclists, those who ride horses and those who practise motor sports to enjoy our forests. They simply could not do that under the CROW Act.
Likewise, I hope that the panel will consider Forestry Stewardship Council certification. The right reverend Prelate the Bishop of Liverpool tabled an amendment on this together with my noble friend Lady Quin. In 1999, the whole of the public forest estate received FSC certification, which recognises that these forests are responsibly managed according to environmental, social and economic criteria. We believe that that must continue. We want to ensure that this rigorous management standard is maintained for the future.
We should pay tribute to the way in which the Forestry Commission manages and protects our forests, ensuring maximum biodiversity and a strong ecosystem, as well as producing timber and making a huge contribution to meeting our targets under Section 1 of the Climate Change Act 2008. That is another issue that is mentioned in an amendment by my noble friend Lady Smith of Basildon.
Lord Henley
My Lords, it might be helpful if I answer some of the points raised before the noble Lord, Lord Clark of Windermere, speaks to his amendment, for which the Government have said that they have sympathy and which I understand the House is likely to accept.
There are a number of points, but the first and probably the most important is to reassure the noble Baroness, Lady Royall, that the Forestry Commission will not appear in any other schedule. It is not in Schedule 7—that schedule is coming out; it is not in Schedule 1, which we are coming to the end of; and it is not in Schedules 2, 3, 4, 5 or 6. It is dead. It is out of the Bill. We have not dealt with the amendments relating to Wales but no doubt these can be discussed, preferably by someone other than me, when we reach that stage of the Bill. I make it clear to the noble Baroness that forestry policy in Wales is a devolved matter. She will know that Wales has just gone through a referendum on extending its powers, so these matters are even more important. The House will consider in due course the clauses relating specifically to Welsh bodies. There are references to forestry in those clauses but the policy aim is linked to the Welsh Assembly Government’s proposals on restructuring the activities of the Environment Agency Wales, the Countryside Council for Wales and the Forestry Commission Wales to enable them to take a more integrated and sustainable view of environmental management based on an ecosystems approach. We can discuss that in greater detail when we get to it in the Bill.
The next point that I want to deal with is the advisory panel. I am not sure that I can say much more to noble Lords who have spoken about this. The noble Lord, Lord Judd, as always, wanted a much larger panel that included everyone possible. I happen to feel—and most people would agree—that a small manageable panel would be better, particularly as it will be given the remit to consult whomever it wishes and to set up sub-groups to ensure that all others are included. As I said, we have already received a large number of applications to join that panel and I think that everyone would agree that to take on everyone would be a mistake. We need a proper panel that is appropriately balanced and one that consults people properly. I also stress that the panel will be independent and will have an independent chairman, so I think that it is wrong when my noble friend Lord Greaves stresses that it must be for the Government to make sure that it consults people properly and that we get out information about what the panel is doing. It should be for the panel, which is independent, to get out what it is doing and to let people know how it is moving and in what direction it is moving. I am sure that the panel will do that with great expertise.
Lord Judd
After quite a number of years in both Houses, I am weary of Ministers putting words into your mouth that were not in your mouth at the time at which you spoke. I did not argue for a vast representative body. I said that the Minister had a real task to balance business efficiency against transparency and credibility. I am sure that he will understand that there has been deep misunderstanding and deep anxiety among the public about what has been afoot. If this panel is to carry conviction, it must somehow have people on it whom the wider public can identify with and feel are representative of their anxieties.
Lord Henley
I could not agree more with the noble Lord, other than that I believe that a smaller—I am not going to suggest a figure, as I think that it would be wrong to get into figures at this stage—manageable panel under an independent chairman is the best way forward. I apologise if the noble Lord felt that I had put words into his mouth. I appreciate that I have probably done that in the past and I will probably do it again in the future. However, I got the impression that he was pushing for bringing everyone in. The danger when a great many people want to be on something is that, if you do not make it clear right from the start that you want a small and appropriately focused committee, you end up giving in to every possible demand and you end up with something that is unwieldy and unfocused and cannot do the job. This panel will have the right to set up sub-groups or sub-committees—whatever you call them—so that it can consult. We want to make sure that it talks to all those who have put in their views.
That is why it is also very important that we have an appropriately independent chair. I am grateful for questions that I have received on this from the noble Lord, Lord Rooker, and others about how that will be done. All I can say at this stage is that the independent chairman will be appointed by the Secretary of State after consultation. As we want this to report by the autumn, we want to move on relatively speedily. I am sure that whomever we appoint, the noble Lord, Lord Rooker, who is smiling at this stage, will accept that we have appointed the right person, because he always does in the end when we find the right person. I am sure that he is not putting himself forward for this job. He will accept that we will find the right person in due course. It will be an independent panel under an independent chair.
That brings me on to the other comments that the noble Lord, Lord Rooker, made. As a former Member for a Birmingham seat, he raised the question of motorsport and its use of the forests. He was right to do that because it is important that we remember that there are diverse users of all the forests. Forests are not just there for growing timber, even though that is very important. Forests are also there for people who want to walk, to ride or to drive and for those involved in motorsports. They are also very important for biodiversity. In my own part of the world, up in Kielder, the forest is important for the few surviving red squirrels that we have in this country. There are a whole host of different uses that conflict with one another, which means that any decision about access has to take into account biodiversity interests. I imagine that not all of those who are keen on walking in the forests are that keen on some of the motorsports going on. We have to balance those issues. I am sure that the noble Lord will accept that. It is one of the things that we will make sure is done in due course.
Both right reverend Prelates referred to the Forest of Dean and the fact that it is a special case. I accept that the Forest of Dean is a special case. It was made a special case in law as a result of the 1981 Act, if not before. Actually the Forest of Dean and the New Forest have been special cases—I cannot say for how long, so I had probably better use this legal term—“since time immemorial”. It goes back that far. The odd thing about the Forest of Dean and the New Forest is that, as I understand it, they were originally part of the Crown Estate and then for some reason—why they but not others I do not know—became part of the Forestry Commission. The simple fact is that they are now part of the Forestry Commission and not part of the Crown Estate. That is where we are. Another public forest, Epping Forest, has gone into the ownership and management of the City of London. The Forestry Commission is not necessarily the only public body that can look after public forests in the best way. Epping Forest is not the only exception to that, but I accept that it is a special case.
That brings me to the planning issues raised by my noble friend Lady Williams and the noble Lord, Lord Knight of Weymouth. Yes, we are aware that there will be changes as a result of the Localism Bill. We can give assurances, as my right honourable friend Greg Clark has done, that protection for ancient woodland in the existing planning guidance will be carried over into the national policy framework. All that will be done, but we also feel that, as a result of the Localism Bill, it is important, as my noble friend Lady Williams put it, that local communities should have a right to have some input into what is going on in the forests or small woodlands in their area.
I want to touch on one or two other points. The noble Lord, Lord Foulkes, talked about jobs. I must make it quite clear to the noble Lord and his party that the Forestry Commission, like a lot of other public bodies, including public bodies within Defra, will have to take its cuts and reductions as a result of the mess that we inherited. It is no different from any other body. The change of tack that we have indicated on forests does not necessarily mean any change of policy in what the Forestry Commission does in terms of its staff. That is a matter for the Forestry Commission to manage.
Lord Foulkes of Cumnock
I put it to the Minister that two factors are affecting the staff at Corstorphine. One is the general economic climate in which, as he says, they must take the hits along with other public bodies. The second is the Government’s policy on forestry. As I understand it, the U-turn involved the Forestry Commission continuing to manage forests in England, for which staff at Corstorphine have responsibility, so surely it is wrong to continue with the same level of redundancies as was envisaged when the policy was different. Will the Minister not have another look to see whether some of the jobs in Edinburgh need to be continued to deal with the new policy that has been announced, into which he has gone into detail?
Lord Henley
My Lords, I never like to accuse the noble Lord of not having done something, because he is assiduous in his parliamentary work, but it is obvious from what he says that he has made no effort to read the entire forestry consultation that we put forward and have now withdrawn. If he had read that, he would have known that there is no immediate plan to sell off everything willy-nilly, as he seems to be suggesting, and as a result lay off half the Forestry Commission. We were looking at very long-term plans possibly to change the ownership of this forest or that but, in many cases, it would have involved transferring money to whoever took over some of those bodies. We were not at that stage considering reducing the number of staff, but we are asking the Forestry Commission, like all other bodies attached to Defra and other government bodies, to take its fair share of the reductions that the Government are having to make as a result of what we inherited.
Lord Foulkes of Cumnock
I have had discussions with the representatives of the trade unions from Silvan House, who have briefed me in detail on that. My understanding is that at least some of the proposed redundancies relate to the previous policy, which has now been abandoned. Unless my logic is completely crazy, it would seem that if you change your policy and continue with the present arrangements to look after some of the English forests from the Forestry Commission headquarters, a review must be needed of whether the large number of redundancies originally envisaged is still now necessary. Is that not the case?
Lord Henley
My Lords, that is not the case. I am not sure that the advice which the noble Lord has received was necessarily—dare I put it this way—as accurate as it might have been. Anyway, the simple fact is that the Forestry Commission, along with others, will have to take its cut because of what we inherited.
I hope that I have dealt with all the points that have been put to me in the course of the debate. I appreciate the strength of feeling that had been held, and I appreciate that the noble Lord, Lord Clark, will now press his amendment. As I said, we will support it. I hope that the rest of the House will support it and that we can move on to other matters in the Bill.
Lord Clark of Windermere
I rise very briefly just to say that it is a very unusual experience to find that one of my co-signatories to an amendment is a government Minister and that I look forward to it happening more and more in the future. I say that in the spirit in which the amendment has been moved.
Both right reverend Prelates and all the other contributors to this debate have made the point that the general public’s feeling towards the forest has been quite uncanny. The general public really do not discriminate between 85 and 15 per cent and the Government will have to think very carefully about how the 15 per cent is handled. However, that is a matter for another day. We are talking now specifically about Amendment 47—so we are talking about the big society, localism and the regional and advisory committees.
Libya and the Middle East
(13 years, 2 months ago)
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The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, this might be a convenient moment for me to repeat a Statement that was made in another place by the Prime Minister earlier this afternoon. The Statement is as follows.
“Mr Speaker, I would like to update the House on the evacuation of British nationals from Libya, the actions that we are now pursuing against Colonel Gaddafi and his administration and developments in the wider region.
We have been working intensively to get our people out. As of now, we have successfully removed around 600 British nationals from Libya. The evacuation has centred on three locations: Tripoli airport, the port at Benghazi and the desert oil fields. At Tripoli airport, a series of six aircraft organised by the Foreign Office and an RAF C130 Hercules flight have brought out more than 380 British nationals and a similar number of foreign citizens. At Benghazi, HMS ‘Cumberland’ has carried out two evacuations from the port, taking out 119 British nationals and 303 foreign citizens. The first of these evacuations took place in very difficult sea conditions. The second arrived in Malta earlier today. These evacuations were assisted on the ground by five rapid deployment teams. In total nearly 30 extra staff from the Foreign Office helped marshal British citizens in the midst of chaotic scenes in and around the airports and ports.
The most challenging part of the evacuation has, of course, involved those British nationals scattered across over 20 different locations in the oil fields deep in the desert. On Friday evening, I authorized a military operation to bring as many as possible out of the desert. On Saturday, two RAF C130 aircraft flew into the eastern desert and picked up 74 British nationals and 102 foreign nationals at three different locations. A second mission took place yesterday, bringing out a further 21 British nationals and 168 foreign nationals. On the second mission, one of the aircraft involved suffered minor damage from small arms fire. This underlines the challenging environment in which the aircraft were operating.
Indeed, Britain has taken on a leading role in co-ordinating the international evacuation effort. Our AWACS aircraft are directing international aircraft involved. Brigadier Bashall, who is commanding the operation, has established a temporary joint headquarters in Malta. I have thanked the Maltese Prime Minister personally on behalf of the country. Not for the first time in our history we must pay tribute to Malta and her people. In terms of numbers of British citizens remaining in Libya, this is, of course, difficult to ascertain precisely given the situation on the ground. Many of them will be dual nationals and not all of them will want to leave. I asked for urgent work to be done on accurate numbers in both categories: those who wish to leave and those who currently do not. Our current indications are that, as of today, there are fewer than 150 British citizens remaining in Libya, of which only a very small proportion wish to leave. Clearly this can change at any time. We will keep the House regularly updated.
We will continue to do all we can to ensure that those who wish to leave can do so. HMS ‘Cumberland’ will remain in the area, together with HMS ‘York’, which also stands ready off Tripoli to assist. We have military aircraft, including C130s and a 146, in Malta ready to fly in at very short notice. The Government will continue to focus on making sure our citizens are safe. COBRA has met regularly to co-ordinate the effort and I personally chaired three meetings over the weekend. The National Security Council is looking at the overall strategic picture, meeting last Friday and again today, not least to look at other risks to British citizens in the wider region. As I said last week, there will be lessons we will wish to learn from this evacuation, including in respect of the hiring of charter aircraft, use of defence assets and the need for greater redundancy.
Clearly an important decision was when to extract the embassy. This was taken at the COBRA meeting on Friday and carried out on Saturday after the remaining civilians had been extracted from Tripoli airport in parallel with the start of desert operations, which were of course planned from Malta. Our judgment throughout has been that the risk to British citizens has been growing. The Americans, French and Germans have similarly suspended the operations of their embassies. Britain also retains a consul in Tripoli and a consular warden in Benghazi. We have arranged that Turkey, which still has several thousand of its own citizens in Libya, will look after British interests while our embassy’s operations remain suspended.
I am sure that the whole House will want to put on record its thanks to all those who have made the rescue effort possible, to the skill of the RAF pilots, to all those involved from all three armed services, to our diplomatic service and to all those who put themselves in harm’s way to help our people leave safely.
Let me turn to the pressure we are now putting on the Gaddafi regime. We should be clear. For the future of Libya and its people, Colonel Gaddafi’s regime must end and he must leave. To that end we are taking every step possible to isolate the Gaddafi regime, deprive it of money, shrink its power and ensure that anyone responsible for abuses in Libya will be held to account.
With respect to all these actions, Britain is taking a lead. Over the weekend, we secured agreement for a UN Security Council resolution, which we had drafted and which is unusually strong, unanimous and includes all of our proposals. It condemns Gaddafi’s actions, and imposes a travel ban and assets freeze on those at the top of his murderous regime. It demands an immediate end to the violence and the killing of protesters, access for international human rights monitors, the lifting of restrictions on the internet and media, an end to the intimidation and detention of journalists and refers Libya’s current leaders to the International Criminal Court to face the justice they deserve.
We were also the driving force behind a special session of the UN Human Rights Council on Friday, which started work to eject Libya from the council; and the Foreign Secretary is in Geneva today along with US Secretary of State Hillary Clinton to see this work through. With our European partners, we have today secured agreement on freezing the assets of a wider group of individuals, banning them from entering the European Union and also imposing a wider arms embargo on the Libyan regime. Britain is also leading in implementing these direct measures against the regime.
I can tell the House today that here in the UK a special Privy Council session was held yesterday as a result of which we have now frozen the assets of Gaddafi, five of his family members, people acting for them or on their behalf and entities that are owned or controlled by them. The Treasury has stepped in to block a shipment of some £900 million in banknotes destined for Libya. The Government have revoked Colonel Gaddafi's immunity as a head of state and neither he nor his family may freely enter the UK any more. We have also revoked the visas of a number of Libyans linked to the regime who are now on immigration watch lists.
We will look at each and every way of stepping up pressure on this regime, including further isolation of the regime by expelling it from international organisations and further use of asset freezes and travel bans to give the clearest possible message to those on the fringes of the regime that now is the time to desert it. We do not in any way rule out the use of military assets. We must not tolerate this regime using military force against its own people. In that context, I have asked the Ministry of Defence and the Chief of the Defence Staff to work with our allies on plans for a military no-fly zone. It is clear that this is an illegitimate regime that has lost the consent of its people. My message to Colonel Gaddafi is simple: go now.
Everyone hopes this situation will be resolved quickly but there is a real danger now of a humanitarian crisis inside Libya. We are acutely conscious of the risks of shortages and are monitoring the situation closely. We have dispatched technical teams to be in place at both the Tunisian and Egyptian borders. Currently the most pressing need is assisting the large numbers of migrant workers into Egypt and Tunisia to get home. Tomorrow, in response to a request from the UN, Britain will fly in tents and blankets from our stocks in Dubai for use at the Tunisian border. The International Development Secretary will be visiting the region later this week to assess the situation on the ground for himself.
North Africa and the wider Middle East are now at the epicentre of momentous events. History is sweeping through this region. Yes, we must deal with the immediate consequences, especially for British citizens caught up in these developments, but we must also be clear about what these developments mean and how Britain and the West in general should respond. In many parts of the Arab world, hopes and aspirations which have been smothered for decades are stirring. People, especially young people, are seeking their rights, and in the vast majority of cases they are doing so peacefully and bravely. The parallels with what happened in Europe in 1989 are not, of course, precise, but there is no doubt that many of those who are demanding change in the wider Middle East can take inspiration from other peaceful movements for change, including the velvet revolutions in central and eastern Europe or the peaceful transition to democracy in Muslim countries like Indonesia. Of course there have been many disappointments in the past, but those of us who believe in democracy and open societies should be clear: this is a precious moment of opportunity.
While it is not for us to dictate how each country should meet the aspirations of its people, we must not remain silent in our belief that freedom and the rule of law are what best guarantee human progress and economic success. Freedom of expression, a free press, freedom of assembly, the right to demonstrate peacefully—these are basic rights, and they are as much the rights of people in Tahrir Square as Trafalgar Square. They are not British or western values but the values of human beings everywhere; so we need to take this opportunity to look again at our entire relationship with this region, at the billions of euros of EU funds, at our trade relationship and at our cultural ties. We need to be much clearer and tougher in linking our development assistance to real progress in promoting more open and plural societies, and we need to dispense once and for all with the outdated notion that democracy has no place in the Arab world.
Too often in the past, we have made a false choice between so-called stability on the one hand and reform and openness on the other. As recent events have confirmed, denying people their basic rights does not preserve stability, rather the reverse. We should be clear too that now is not the time to park the Middle East peace process, quite the opposite. This is a problem that is long overdue for resolution, and we should use developments in the region to drive forward progress, not hold it up. In short, reform, not repression, is the way to lasting stability. No one pretends that democracy and open societies can be built overnight. Democracy is the work of patient craftsmanship, and it takes time, as we know from our own history, to put its building blocks in place. What is happening in the wider Middle East is one of those once in a generation opportunities, a moment when history turns a page. That next page is not yet written. It falls to all of us to seize this chance to fashion a better future for this region, to build a better relationship between our peoples and to make a new start. As the inspiring opposition leaders I met in Tahrir Square said to me last week, ‘we now have the opportunity of achieving freedoms that you in Britain take for granted’. I am determined that Britain will not let them down, and I commend this Statement to the House”.
Baroness Royall of Blaisdon
My Lords, I thank the Leader of the House for repeating the Statement on Libya and the Middle East made by the Prime Minister. I should like to ask him about four areas—the immediate safety of British nationals, the future of the Libyan regime, the wider Middle East, and the lessons learnt from this crisis. First, however, I should like to join the Leader in expressing the deep and abiding gratitude of this side of the House to the members of the British Armed Forces, who have succeeded, with such extraordinary courage and professionalism, in evacuating so many of our own citizens, and those of many other countries, from Libya over the past week. These brave men and women are a credit to our nation. I also add my thanks to the Foreign Office staff on the ground in Libya for their efforts.
Our first concern must always be the safety of our own people. For obvious operational and security reasons, I would not expect the Leader to discuss any future operations; but can he assure the House that all contingencies continue to be looked at in relation to any remaining UK citizens stranded against their will? Given the closure of the British embassy on Saturday, can he reassure us that everything is still being done to keep in close contact with those citizens who remain and tell us what means of communication are available to them?
On the question of Libya's political future, I think that the whole House will endorse the view, publicly expressed by the Prime Minister today, that the only acceptable future is one without Colonel Gaddafi and his regime. We welcome what the Leader of the House says about a possible no-fly zone. We also welcome the international isolation of Colonel Gaddafi expressed in UN Security Council Resolution 1970, including sanctions, an arms embargo and a decision to refer the killing of protestors to the International Criminal Court. The resolution imposes travel bans for 17 Gaddafi loyalists and asset freezes on six of those individuals. Do the Government think that the asset freezes go wide enough in covering all those beyond Colonel Gaddafi's immediate family who have made the decision to stand with him? Will the Government make full use of the provision in paragraph 23 of the resolution to nominate additional regime members who should be targeted by travel bans and asset freezes?
On the human rights situation, there is clearly a growing humanitarian crisis on the Tunisian and Egyptian borders. On these Benches, we welcome the Statement’s points on British action to help the humanitarian assistance to displaced migrant workers, and we look forward to the report later this week on the visit of the International Development Secretary. I understand that one of the most pressing needs identified by the Tunisian Government is transport for displaced workers from Libya who wish to return to their own country. May I ask the Leader of the House to draw this to the attention of the Secretary of State for International Development for his consideration during his visit to the region this week?
I turn to events beyond Libya, in the wider region. The events now unfolding across the Middle East are as significant as the revolutions that liberated eastern Europe in 1989, as the Statement says. Our response to them needs to be equally ambitious. There is a popular will in many of these countries for democratic reform. This movement is in line with the values that we share, and the stability promised by the undemocratic regimes in many cases has turned out to be hollow. Does the Leader of the House therefore agree that there must be no question but that our hopes—indeed, our interests—lie unequivocally with those demanding economic and political reform?
Does the Leader agree that we need to build a strategic response, including closer economic ties, support for civil society and institution building? However, does he agree that, in order to do so, we have to embrace closer contact with civil society, including academic institutions and non-governmental organisations committed to building a democratic future for their citizens? In respect of that aim, does he agree that full support should be given to the work of bodies such as the British Council and the Westminster Foundation for Democracy, both of which have carried out important work in this area over the past few years?
Does the Leader concede that while there is much that we can and should do bilaterally, real progress will require sustained will and effort at a multilateral level, including via the European Union? Can he tell the House whether the negotiations for an EU-Libya association agreement on both free trade and human rights have been suspended? Libya is a member of both the Arab League and the African Union. Can the Leader say what efforts the Government have made with the countries of both organisations to bring pressure to bear on the current Libyan Government against the violence that we have seen? Does he also agree with these Benches that it would be a tragedy if in this moment of change the opportunity was not grasped to make progress on the issue of Israel/Palestine? I therefore give the support of these Benches to the Government’s calls for the rapid resumption of talks between Israel and the Palestinians, and to the Government’s decision to support the recent UN Security Council resolution on these settlements. Can he say what steps the UK will now be taking to get negotiations moving again? On the question of arms sales, can the Leader confirm that the Government will work with EU partners to strengthen the guidelines and their operation?
Finally, I should like to ask about the lessons to be learnt from the immediate crisis response during the past week. Many Members of your Lordships’ House, on all Benches, have in recent days either been aware of or had close experience of people who have been deeply anxious about family members, friends, colleagues or others stranded in Libya. I add our thanks to those expressed by the Prime Minister to the Maltese Prime Minister for the evacuation of British nationals and everything else that he is doing to assist. However, does the Leader accept that the Foreign Office should have done more, as other countries did, to ensure that planes were on the ground in Libya on Tuesday, rather than late on Wednesday night, to evacuate our citizens? Can he explain why this happened? Given the scale of the emergency and the transparent need for co-ordination across government, do the Government now agree that the emergency committee, COBRA, should have been convened earlier than Thursday? Can he explain why this did not happen? Can he also share with the House the wider lessons that have been learnt on the Benches opposite about the running of the Government?
I think that the whole country has now, thankfully, seen the scale of response that can be mobilised to help our citizens, and we are grateful. However, can the Government promise that British nationals abroad in future will not be let down as they were by the chaos and incompetence of early last week?
The Statement mentions the crucial role played by HMS “Cumberland” in the evacuation of British and foreign nationals. I was in Plymouth myself on Saturday and the citizens in Plymouth were immensely proud of what that ship was doing. Can the Leader give the House a clear assurance that the defence cuts currently planned will not in future preclude such vital rescue tasks for our citizens caught up in violence overseas?
Is the Leader satisfied with the way in which the warden system has worked? There have been reports that some of those working in the oilfields have found it very difficult—for some, impossible—to make contact with our consuls or with the embassy. I would welcome the opportunity to raise one or two of these issues later with the Leader of the House on Privy Council terms, if he thought it were appropriate.
These are questions which need to be the subject of thorough investigation and consideration. Given the volatile nature of the position, not just in Libya, but throughout the region, this needs to be carried out rapidly. We all hope that the levels of violence that we have seen in Libya will not be repeated there or elsewhere in the region, but there are signs of unrest in other countries in the area. British nationals working and living in the region need to be confident that their Government and their country have both the capacity and the will to assist them, including bringing them home safely should the need to do so arise.
Finally, will the Leader give a commitment to this House that when these inquiries and considerations are completed, he will come back to your Lordships’ House to report on both the findings and the lessons learnt for the future?
Lord Strathclyde
My Lords, I thank the noble Baroness for her response, and I am largely in agreement with much of what she said. I will try to answer the questions that she raised, and I will write to her about those that I do not manage to deal with this afternoon. I thank her for the tribute that she gave to the Armed Forces and others who have worked immensely hard during these difficult few days, including those in the FCO.
The safety of UK citizens is paramount to the Government, as the noble Baroness would expect. She asked specifically, since the embassy has closed, about the steps that we are taking to keep in touch with those who are in the country. We are working hard to keep in touch with them, and we are reviewing various options to assist those who wish to leave. However, as the noble Baroness herself pointed out quite rightly, it would be inappropriate for me to speculate on what those options might be or to go into the detail of potential operations. Technology certainly exists in a number of ways for British nationals in Libya to contact the Government. There are phone lines that are manned 24 hours a day, 7 days a week. There is, of course, Skype, and there is an efficient tweeting system to send information out to people who would like to be kept informed.
The noble Baroness raised the issue of the Security Council resolution. I agree with her that this was an extremely important resolution, one which I believe will make a substantial difference. She asked whether the asset freeze goes far enough and whether we would seek to extend it. The answer to that is yes; if we felt that it was necessary to do so, then we would. It is very important that this asset freeze is seen to be as effective as possible so as to maximise the pressure on the leadership in Libya, who need to understand that the rest of the civilised world will not put up with the kind of internal violence that we have seen over the past few days.
I very much welcome the visit of my right honourable friend the Secretary of State for International Development, who hopes to visit the area later on this week. Of course we will report back to Parliament on his visit.
The displaced migrant workers leaving Libya and seeking to find their own way home are another important issue. I know that the department is well aware of it and that substantial groups of officials are at the border posts offering advice to try to get them home.
The noble Baroness asked about the significance of the wider issues. Nobody seeing this extraordinary, rapid development throughout north Africa over the past few weeks can fail to be amazed at the speed and the comprehensive nature of the changes taking place. Of course we need to have a strategic response, and we need a response at almost every level, as the noble Baroness pointed out, including with elements of civil society in these countries. I am glad to say that we have made wide-ranging contacts with civil society. We have always had them to some extent, and rightly so. The Foreign Secretary met some of these contacts on his recent visit to the region earlier this month, as well as meeting British Council colleagues who play such an important part in all of this.
We also look to other countries and other multinational bodies to exert influence and pressure on what remains of the Libyan Government. We should leave no stone unturned in making the Libyan Government understand that the best way forward for them is to leave office and to hand it over as peacefully as possible.
The noble Baroness finished with one or two comments about the role of the Foreign Office. Having looked at what has been done, I do not share the view that the Foreign Office should have done very much more very much more quickly. The Foreign and Commonwealth Office has long been a member of the Non-combatant Evacuations Operations—a planning group which is run by the MoD and the structure that led the joint planning for the mixed evacuation in Libya. Every crisis is different. Libya is different from Egypt and both are different from the 2006 evacuation from Lebanon. The NEO model is a flexible response to that reality.
We put a consular rapid deployment team into Tripoli on Tuesday, 22 February to assist with the evacuation. We also deployed five rapid deployment teams totalling nearly 30 extra staff from the FCO. Those are the people who have done such a magnificent job in getting British nationals on planes in the horrific and dangerous circumstances at the airport. The Australian team arrived on Friday and the Canadians on Tuesday from Egypt. In any action of this kind—in any mission that comes out of nowhere—there are always lessons to be learnt. There will be a review and we will have to learn whatever lessons there are. But I am confident that the FCO reacted quickly and was prepared for this. One of the signs of that was the relative success of the operation that took place.
Baroness Falkner of Margravine
My Lords, from these Benches, I share in the tributes that have been paid to our Diplomatic Service and armed services in helping to evacuate our citizens. Several noble Lords want to speak and I will be brief.
I congratulate the Prime Minister on securing Resolution 1970 through the Security Council. Do the Government see it in the context of the broader responsibility to protect? I speak specifically about the sentiments in the Statement about the no-fly zone. Will my noble friend reassure us that preparations are advancing? We know from the barbarous nature of this regime that we may well have to intervene on the responsibility to protect to take those minimal measures implied in a no-fly zone. I wonder whether we will be prepared to do that as part of a framework outside of the UN Security Council if we are not able to achieve agreement there.
On the broader sentiments on democracy, this is such a significant Statement from a UK Government: I do not believe that I have seen one in my 25 years of trying to think about democracy in the Middle East. Will my noble friend reassure us that with the Westminster Foundation for Democracy and through all the other work that the Government will do with civil society institutions they will bear in mind that women in the Middle East, as elsewhere, comprise the majority of the citizens of that region? They have for far too long not had a voice in the governance of the region. Will this Government be steadfast in ensuring that women's voices are heard in the reform process going forward?
Lord Strathclyde
My Lords, I thank my noble friend for her comments. On the no-fly zone, there are no details at present and there will not be until we have had discussions with various allies about the feasibility and speed with which it can be put up and about compliance with other international organisations to make sure that everything we do is entirely legal. But the preparations continue, and it is important that they should.
On the organisations that support democracy such as the Westminster Foundation for Democracy, I can confirm that in the current year the budget has been increased. There is nothing I can possibly add to what my noble friend said about the importance of women in politics, particularly in some of these countries. It is self-evidently true.
Lord Lloyd of Berwick
My Lords, the Leader of the House referred to the Government having revoked Colonel Gaddafi's immunity as head of state. Can he tell us a little more about how that has been done? Will the revocation operate retrospectively and have any other Governments taken the same step? It sounds like a sound step if it can be done and perhaps other Governments should be encouraged to do the same.
Lord Strathclyde
My Lords, it has been done. I gather that it is a matter of state action that any Government can choose to take and the Government have so chosen. I understand that other countries have done something similar, but I cannot name which ones. As for the action being retrospective, I am not sure that it is important that it should be retrospective, but the noble and learned Lord may have been making a clever legal point that at the moment I have missed.
Lord Strathclyde
I am glad to hear that the noble and learned Lord say no.
Again, it is part of putting pressure on the regime and senior supporters of the regime including looking at the role of the International Criminal Court. It should complete its investigations so that we can bring this truly appalling situation to an end as quickly as possible.
Baroness Liddell of Coatdyke
My Lords, I am grateful to the noble Lord for repeating the Statement from the Prime Minister and I am glad that the opportunity will be taken to learn lessons from the procedures, particularly around the evacuation. If one contrasts the evacuation from Libya with the evacuation just a couple of years ago from Lebanon, it was at a much slower pace. However, I have a much more mundane, long-term question. For the courageous young people that we have seen throughout the region to reach their aspirations, there will have to be a sound economy throughout that region. With the turbulence surrounding events of the past couple of weeks, we have seen oil prices rising to $120 a barrel. That has a direct impact on this economy and on the fragile economies of the developing world.
I am aware that the structures exist to bring together oil producers and consumers both within and outwith OPEC to discuss the operation of oil markets. Will the Leader of the House indicate whether there has been an opportunity to begin those discussions? If we do not secure stability in oil markets in the Middle East, many of these courageous young people will experience continuing poverty, and such poverty of aspiration is what brought them onto the streets in the first place.
Lord Strathclyde
My Lords, the noble Baroness did not ask a mundane question. It is a crucial one and goes to the heart of how the situation will develop possibly over the next few months but certainly over the course of the next few years. The key is about the economy in these countries. As the noble Baroness pointed out, a lot of that is dependent on the price of oil and how it is managed. The second part of her question was about the role of young people, the proportion of whom as a population appears to be far greater in some of these countries than in Europe.
To the specific question on whether discussions are ongoing with oil producers, particularly OPEC, the answer is yes, and they will continue. There are no easy answers to what the noble Baroness called her mundane question, but we are very much aware of them. The decisions, depending on how events pan out over the next few weeks, will have a great bearing on the success of the north African economy over the next few years.
Baroness Morris of Bolton
I thank my noble friend for repeating the Statement. I am delighted that the Prime Minister visited Tahrir Square and leaders of the opposition in Egypt last week. While it is absolutely right that the peoples of the Middle East should determine their own futures, we have a lot to offer in institution-building and in developing the concept of stable and effective opposition. I am delighted that my noble friend said that the Westminster Foundation for Democracy will receive funding and that the British Council and others will be encouraged to work with civil society. However, there are a number of opposition leaders in Arab countries who have not had the luxury of being able to travel here and who would like to come to visit different political parties and institutions. Will my noble friend do all that he can to facilitate that as quickly as possible? That has to be in all of our interests.
Lord Strathclyde
My Lords, I agree with my noble friend Lady Morris. She is right when she talks about institution-building and the role that we can play. That includes looking at the experience post-1989 and the building of democracy in central and eastern Europe. Bodies such as the Westminster Foundation for Democracy play a very important part. As I said in response to the noble Baroness, Lady Liddell, it is partly about building these institutions and partly about rebuilding their economies. The two very often go hand in hand, and we should be looking at the two in making sure that we can bring all of this to a successful conclusion.
Lord Maginnis of Drumglass
My Lords, I thank the noble Lord for bringing the Statement to the House. I congratulate the Government and our security services on how they have worked effectively together so that this operation has been completed without casualties. I suggest that perhaps the Government would do well to look at their relationship with the press, who appear to have been pre-emptive and working on a minimal amount of information when they evoked the initial criticism of the operation.
It is important that civilian firms employing British civilians overseas keep a proper record of who they employ and where they are employed. If they already do so, was that information available as quickly as it should have been to the Government? I should be grateful if the Minister could answer those two questions. Lastly, this House should and does acknowledge the gratitude due to our Turkish friends and allies, who have once again stepped into the breach to support us at this difficult time.
Lord Strathclyde
My Lords, perhaps I may say how grateful we are for Turkish help in this developing crisis. They have now taken over the role of representing the United Kingdom in Libya. I thank the noble Lord, Lord Maginnis, for what he said about the role of the Armed Forces, the Government, and the security services, in this instance. I will not entirely follow him down the route of overly criticising the press, but it is certainly true, in planning these operations, that they are delicate, they need to be kept secret, there are enormously important elements of security, and our very free and open society is open to everyone, including Libyan armed forces. I hope that, over time, people will look back and see this process as having been rather more successful than was perhaps perceived at the end of last week.
The noble Lord asked a totally reasonable question about the amount of information that was made available on the whereabouts of individual employees. We are dealing with an area in the desert which is something like four times the size of the United Kingdom and I understand that some of the information we received was not as good as we would have wanted. No doubt that is one of the lessons we shall all learn.
Lord Gilbert
My Lords, will the Government make sure that any no-fly zone encompasses both rotary-wing and fixed-wing aircraft? This is a very obvious thing which has been overlooked occasionally in the past. I have confidence that Her Majesty’s Government have been canvassing friendly countries as to who would wish to join in the enforcement of any no-fly zone. Can the noble Lord tell us how many positive answers he has had—I am not asking him to identify the individual countries—and have those answers come from states that are actually in a position to contribute to the enforcement of a no-fly zone, particularly with respect to possession of the right sort of air assets, attitudes, and all the other ingredients that are necessary to take part in that sort of activity?
Lord Strathclyde
My Lords, the noble Lord is entirely right, and he should not shrink from stating the obvious, that we should look carefully at whether a no-fly zone should ban both rotary-wing and fixed-wing aircraft. The rest of his questions are entirely fair, but I am not able to help him with them at the moment. Work is ongoing with allies and other multinational organisations to see how a no-fly zone could be best put into effect and policed. Only when the Government have that information available will we be able to make it public.
Baroness Hussein-Ece
My Lords, I thank the Leader of the House very much. This Statement will go a long way and will be welcomed by the many brave people we have seen on our television screens and read about, who are demonstrating and fighting for democracy and for their freedom. I think it is going to improve the reputation of this country tremendously in those places. I should like to ask two questions. First, specifically about the British nationals who are still scattered and missing, or who have not been located, in the oilfields in the desert, what contribution has been made by the oil companies that they work for to help to locate these people and to evacuate their own workers to safety? Presumably they have resources at their disposal to help that effort. Secondly, although I welcome my noble friend’s comments and those of the Prime Minister about the outdated notion that democracy has no place in the Arab world, which has clearly been demonstrated now to have been a myth, what lessons have been learnt specifically regarding previous policies and the previous Government’s policies in arming and cosying up to dictators who oppress their own people?
Lord Strathclyde
My Lords, I agree with my noble friend on the cause, which we have seen on our television screens, of people fighting for freedom and for democracy, but most of all for choice and for change and to remove these old regimes that have oppressed their people for so long. On the first question on UK nationals, I mentioned to the noble Lord, Lord Maginnis, some of the role undertaken by UK companies. Generally speaking, there has been a lot of support from UK companies in helping the Government to trace the employees, so that has on the whole been a reasonably good story.
As to the second question about cosying up to dictators, of course I agree with my noble friend. However, successive British Governments cannot always pick and choose the kind of Governments that countries have chosen for themselves or have had imposed on them. At different times, different Governments will work in different ways with all sorts of people, some of whom are deeply unsavoury.
Lord Craig of Radley
My Lords, I thank the Minister for repeating the Statement. He has rightly acknowledged the considerable contribution of the Armed Forces in this, and it is a great regret to me that they were not brought in earlier, as happened with the French and German air forces, which arrived in Tripoli at the beginning of last week.
Bearing in mind that some of the assets used on this occasion are about to be scrapped and that others have already gone that could be used on similar occasions, has not the time come for the Government to consider some quantitative easing of the defence budget?
Lord Strathclyde
My Lords, I understand exactly why the noble and gallant Lord has asked the question, and the way in which he did so. We believe that, even with the strains on the MoD budget, we still have the capability to carry out the evacuation process that has been carried out over the past few days.
Lord Davies of Coity
My Lords, I, too, express appreciation for the Statement made by the Leader of the House, repeating what the Prime Minister said. I am also pleased with the evacuation measures that have been taken. However, early on in this crisis, millions of British people saw the Foreign Secretary on the television saying that Colonel Gaddafi, the tyrant of this issue, was in Venezuela. Have the Government made any assessment of the impact that that incorrect statement has had on the British public?
Lord Strathclyde
No, my Lords, and I think that it would be impossible to do so.
Lord Marlesford
My Lords, does my noble friend agree that the defection of senior Libyan diplomats from around the world may prove to have been a significant component in the removal of Gaddafi? Furthermore, in the context of the withdrawal of the British diplomatic mission from Tripoli, is there any news on what is happening to the Libyan embassy in London?
Lord Strathclyde
No, my Lords, there is no news on the embassy in London. But my noble friend is right that the defection of senior Libyan diplomats, particularly at the United Nations, was a signal to many others that this regime had come to an end. That is part of the combined exerted pressure that we wish to see to encourage more defections and bring this regime to an end as quickly as possible.
Public Bodies Bill [HL]
Baroness Royall of Blaisdon
My Lords, it is clear from the amendment that these Benches seek to remove RDAs from Schedule 1, which legally enables their abolition. This debate on the chaotic and misguided abolition of RDAs announced by ministerial fiat comes at a time when there is clear evidence that economic growth has flat-lined and that the economic recovery has ground to a halt. Now, more than ever, we need the regions to be motors of economic growth in our country, instead of which the RDAs, which provide the architecture for regional economic development, are being dismantled.
As we have heard at Second Reading and throughout this Committee stage, the Conservative-led Government have failed to follow a satisfactory process or procedure for evaluating the efficiency and effectiveness of the bodies scheduled for abolition. The rushed decision-making and lack of consultation is nowhere more blatantly obvious than with the abolition of the RDAs. The White Paper outlining the Government’s plans came after the decision to abolish RDAs had been announced, and it was a real surprise to these Benches to see their inclusion in Schedule 1. The House of Commons Public Administration Committee concluded that the Government did not consult properly on their proposals. It welcomed the Government’s agreement to allow for further consultations and said that it expected,
“these consultations to have real effect on the outcome of the review; even if this means reversing decisions that have already been made”.
What consultations have taken place since the abolition of RDAs was announced, and how have the conclusions of those consultations been taken into account?
Even if the Government did not make a proper assessment of the value of RDAs, an independent evaluation by PwC found that since their inception RDAs helped to create thousands and thousands of jobs, well in excess of their target; assisted nearly 57,000 businesses—again, well in excess of their target; enabled £5.7 billion of funding to be levered in from the public and private sectors; and created over 8,500 new businesses. The evaluation also demonstrated that every pound spent by RDAs added approximately £4.50 to the regional economy. Other strengths of the RDA model include the ability to pursue a coherent vision for the region that could be turned into a strategy for economic development and investment.
So why are RDAs being dismantled with no credible alternatives? I am sure that the Minister will tell me that they are being replaced by local economic partnerships, which will see business and civic leaders work together to bring economic development, shifting power away from central government towards local communities, which really understand the barriers to growth. But it is not the case that all the RDAs are being localised. Some functions, such as inward investment, innovation, key sector development and response to economic shocks are going to be transferred to the national level. Inward investment is one of the real big successes of RDAs, offering one-stop shops in a region, with fantastic results—for example, Toyota in Derby or Nissan in the north-east. So how does centralising such a function square with the much-vaunted localism agenda? Are the Government really committed to devolving powers and functions when there is clear evidence that they are currently being well managed at regional level? I am more than a little confused about the role of regional government offices, and would be grateful if the Minister could help me. Is it true that Mr Cable is reversing elements of Mr Pickles’s Maoist revolution by rebuilding parts of the regional infrastructure that were scrapped last summer? I very much hope that six regional government offices are being reinstated and that that will foreshadow other changes in regional policy.
I think that it will be clear from debates later this afternoon that some RDAs are more effective than others and that there are weaknesses as well as great strengths, but just because reform or change is necessary in some areas, why take the radical step of abolition, especially when it is apparent that the LEPs will not be able to provide the same impetus for regional development as the RDAs? In many areas of the country, there are simply no local economic partnerships; I think especially of my own region of the south-west. Could the Minister update us on how many LEPs have been approved and where the gaps are? How are the gaps going to be filled? It would be, or should be, unthinkable at any time, but especially when economic growth must be the means to kick-start and sustain recovery, that any part of the country should be without proper regional development.
There are many grey areas relating to funding. Can the Minister confirm that it could cost as much as £1.4 billion to wind down RDAs and complete existing programmes? Could he also confirm that funding from the regional growth fund will amount to £1.4 billion over three years, and that that is nowhere near the sum given to RDAs? If that is true, the money available is not adequate, and it suggests that the Government do not take regional growth seriously enough. I also wonder why the Government are approving only projects based on short-term job creation for the first £250 million of funding from the regional growth fund. Job creation is critical, of course, but what about strategic, long-term projects, which are essential for the economic well-being of any region? I would suggest that, by focusing on short-term job creation, the Government are being short-sighted, neglecting the potential for long-term economic growth as well as jobs.
Lord Beecham
My Lords, in the coalition lexicon, there is a six-letter word missing: it is the word “region”. It has been banished by Mr Pickles, and the use of it has been banished from PCTs by the Department of Health. Of course it is true, as my noble friend Lady Royall has implied, that there is a variable geometry about regions. They are not all the same: some are regarded as too big—one thinks perhaps of the south-east, where a predecessor television programme to “Strictly Come Dancing” was called “Come Dancing”. Some of your Lordships may recall that then “Home Counties North” and “Home Counties South” were regarded as appropriate areas. Perhaps that might have been better than a single RDA for the south-east. Nevertheless, many of the RDAs have performed extremely well. If there were uncertainty about some of them, the question arises: why abolish all when there may be a very strong case for keeping some, if not all?
Nearly a year ago, Vincent Cable came to the north-east in his first few weeks as Secretary of State, and he declared his belief that the north-east was,
“one region where business support through a regional agency is both necessary and appreciated”.
He was right about that, but he subsequently went on to propose the abolition of that agency. In any case, he understates the case.
Consider the report on the RDAs from the Select Committee on Business, Innovation and Skills. It found evidence of effective intervention in the face of economic shocks and strongly endorsed the RDAs’ role because they,
“improved the understanding of local economies and their connections with businesses … They were also able to catalyse delivery of infrastructure … and took a strategic approach to planning decisions”.
It thought that some RDAs were, perhaps, too big to profit from local engagement, but it made it clear that,
“policies were far from being applied on a blanket basis within regions”.
Interestingly, the CBI recorded 66 per cent support for continuing regional co-ordination via the LEPs, if they were to be the new mechanism—and especially strong support in the Midlands and the north. Even in areas where the number of local enterprise partnerships was great, it saw the need for an overarching structure. The Select Committee recommended that regional groupings should be recognised where a clear wish was expressed. It also expressed a concern that inward investment and tackling economic shocks would be inadequate without local knowledge and support, as my noble friend has said, when functions were translated to Whitehall. This has been compounded by the proposed abolition of Government Offices for the Regions providing critical intelligence and contact from within the regions to government. Accordingly, the Select Committee recommended that government should devolve powers to regional structures where there was clear evidence of good management of resources.
A back-handed compliment was paid to the Government’s policy from one witness to the Select Committee, who said:
“One good thing that the Westminster Government has done is to abolish regional development agencies in England”,
removing significant competition from the market. That witness was Dr Brian Gibbons, who is Minister for Economic Development in the Welsh Assembly. He clearly took the view—indeed he expressed it—that the Government’s decision presented Wales with a significant opportunity at the expense of the English regions.
The Federation of Small Businesses said that the local enterprise partnerships should have the capacity to address all the issues impacting on development, including transport, planning and housing at a strategic level, tourism, the low carbon agenda and skills and training. But that long list begs the question of the scale of the organisation to carry out those functions and the resources it will need. The organisations that will take the place of the RDAs are the local enterprise partnerships and, as my noble friend has said, they will not have responsibility for significant areas of policy including the ERDF. They will be expected to work with government, whatever that is supposed to mean, on investment priorities, transport infrastructure, the regional growth funds and getting the jobless back to work. Again, there is the question of scale: you will have, as we have in the north-east, at least two organisations, perhaps with an overarching body as well. In other parts of the country there are none, in some there are numerous: how will these work together at the strategic level as opposed to the very local level?
Of course, as my noble friend has pointed out, the funding is very limited: £1.4 billion over three years is very little more than what the Secretary of State himself described as the “trifling” figure—I think that was the word—of £1 billion that was originally proposed. The committee was also concerned about the not-so-local knowledge, about the assets and about the potential for a massive success or failure if the debts were not adequately resourced. Of course, they are not being resourced: they will have no funding and no powers. As I have said previously in this Chamber, they are in danger of being penniless, powerless and pointless. That is a real risk.
There are serious questions to be asked about assets. The Government’s plan is for the assets to be used to pursue economic development benefits through transferring assets to appropriate hosts. They qualify that promise, which on the face of it looks reasonable, by reference to the need to deliver maximum value on public sector investment in the context of deficit reduction. There is therefore a clear implication that the assets will be realised to meet that agenda. There is also a clear implication that that might lead to early disposal.
I have not had the advantage of reading the entire text because Wikipedia has not yet published it. I have seen only a redacted copy of the submission made by One North East, the agency with which I am most familiar, on the proposal for assets disposal. Interestingly, it is proposed to sell some at market value to local authorities. How local authorities are supposed to fund the acquisition of those assets in the present circumstances is beyond me. Some will eventually be put on the market for open market disposal, with an interim period of management by local authorities. Again, at a time of local authority cuts, where will the capacity exist to manage this estate? Similar difficulties arise in relation to intellectual property. There are no fewer than seven pages on that in the submission, including an interestingly little-known scheme called JEREMIE, which is spelt somewhat differently from the convention. It is to do with finance for business and has been extremely successful in the north-east.
What we have here is really an irony. This Government, above all, look to the private sector to lead and to make good the deficiencies in the economy. The RDAs, which they are about to abolish, are heavily engaged with the private sector. They are private-sector-led bodies, and yet they apparently cannot be trusted with economic development in the regions.
The proposals in the Bill bear all the hallmarks of a rush to misjudgment, like so many of the measures that the Government have brought forward. We have seen examples this very day of second thoughts having occurred. I hope that the Government will listen to their natural supporters, if you will, in the private sector, in business and across parties in parts of the country; and will pause, reflect and reconsider proposals that threaten to damage the economic recovery that is essential but seriously at risk in many regions.
Lord Shipley
My Lords, for much of the period since the Second World War—and indeed before—Governments have pursued some form of English regional policy. There have been several initiatives: regional Ministers in some or all regions; development corporations; development companies; and a variety of government office structures, so that Whitehall could be represented properly across all parts of England. Policies have been chopped and changed, but they have been clarified in recent years—first by the creation of the development agencies in the English regions, and secondly by the strengthening of government offices so that all Whitehall departments were housed in a single government office. The system was far from perfect and led to some unnecessary bureaucracy. There was a lack of democratic accountability within the regions. However, the system had one overriding virtue; it was regionally based and gave a clear and firm focus for each region in England that had previously been lacking.
Some regions did not like the structure because they did not feel that their region really existed as an entity. The south-east is the most obvious example. Others, such as parts of the south-west, felt distant from their RDA and government office. Perhaps it was a mistake by the previous Government to create an RDA in each region. Indeed, it is hard to see, in terms of strategic regeneration, why the south-east needed a development agency at all. However, that is history. What is not history is the decision to abolish all English RDAs.
In the north, people have identified with their RDA to a much greater extent than in the south. Maybe this is a function of the northern regions being further from London and the levers of power. It also reflects the greater needs of those regions, which require government intervention for the ultimate benefit of the UK as a whole. The decision to abolish the RDAs and government offices in the south-east may have been broadly popular but it is most certainly not a popular decision in my own region—the north-east. I declare my interest as a board member of One North East since 2005. There is a constitutional issue here, too. Why do Scotland, Wales, Northern Ireland and London have substantial devolved powers, some of which are set to increase, at the very same time that the English regions are being further centralised within London-based structures?
Baroness Armstrong of Hill Top
My Lords, I follow my noble friends Lord Beecham and Lord Shipley. Newcastle has spoken from both sides of the House today. I see that the noble Lord, Lord Bates, is waiting to represent the southern part of our region. I very much represent the middle of the region but also, I hope, the region as a whole. The north-east is a region and feels itself to be a region. It has a sense of identity and believes, partly because it is so near Scotland, that it has to fight both to maintain that identity—of which we are very proud—and to make the best of the enormous talent that is in the region.
Much government policy over the past 40 years has recognised that there is talent there and that the north-east laid the bedrock for much of the development of this country. If you think about the Industrial Revolution and the contribution that the north-east made then and in subsequent years to the growth of the economy across the nation, it was very important. As those prime industries began to decline, a regional voice, and action supported by central government, were seen as important to begin to rebuild. This case was being made very loudly before I became a Member of the other House. Indeed, when I did become a Member of the other House, my then neighbour and now my noble friend Lord Radice proposed a Private Member’s Bill, which several of us supported, to enable the north-east to have a regional body that would take strategic decisions with government support. Of course, that was in the era of the Government run by the noble Baroness, Lady Thatcher, so the Government of the day saw the point and the need, and they responded, eventually, to the efforts made by my noble friend and others across the board.
The north-east is parochial, but it is not sectarian. We do not want to get into a situation in which one group fights another within the region for whatever scraps are around. We have always accepted the importance of trying to build the private sector because it is true that at the moment we have too many public sector jobs. Even though we increased the number of private sector jobs in recent years, it was by no means sufficient. That is still a huge job to be done in the north-east, but now we are losing the strategic means of doing it. I just ask the Government to think again.
I accept that there have to be cutbacks in public spending, but it frightens me to see how much money the RDA is having to spend on redundancy and run-down costs when that money ought to be put into economic development. The rise in unemployment, particularly among young people, is frightening. My generation will regret that for many years to come, because we thought we had got through it. We thought that we had got to the stage where we could promise young people in the north-east prospects and opportunities, and that is beginning to fall off the edge again. They see redundancy payments and the struggle to get rid of assets when they know that doing so at this time will not bring in the return that we should be getting from those assets. This is the moment for the Government to think again about the north-east.
The reaction to the Government’s announcement on 23 June was bewilderment, particularly, as my noble friend Lord Beecham said, after the Secretary of State for Business, Vince Cable, said on 3 June that, having looked at things, he was convinced of the need for one body across the north-east. It was therefore with bewilderment that the private sector, the regional chamber of commerce and the regional CBI faced the prospect of months of, quite honestly, squabbling again about what the LEPs should look like, how they should be formed and all that, when the key issues of the day were actually slipping out of anyone’s responsibility.
It was irresponsible of the Government to appoint a new chair of the RDA on 3 June, and then, on 23 June, to say that the organisation was being abolished. One of the key businessmen of the region was being put in place to manage redundancies. It is nonsense. He should be managing inward investment; he should be managing what possibly can be done with the manner in which the assets have been developed in the north-east, with partners, to draw the best strategic opportunities for the region. Instead, he is managing decline, which is a tragedy. There is no one who does not accept that the Government will have to put in less money this year, although they did with regard to One North East, and I hope that they recognise that from what my noble friend Lord Shipley has said. I acknowledge, welcome and am thankful for his contribution both to the RDA and to the new body. However, the new body—the national body—will not have particular reserves for the north-east. It will accept whatever bid comes from wherever. Therefore we might do more to unbalance the economy in this country rather than address the need to rebalance the economy in this country.
One North East was, according to all the independent audits, very successful in the number of jobs that it created, the number of new businesses that it supported and the number of people it helped to get into employment. I will talk about that in more detail at a later stage. The north-east has had a successful RDA. No one says that it achieved everything that we had ambition for it to achieve, but it is one region in England in which we know that progress was being made, and we know that it makes sense to have a strategic body across the region. We are, after all, a very small region, the smallest in the country. Its success was therefore dependent on being able to be strategic across the region. It had a plan for green jobs; it had been developing green policies in recent years. I know very well, from companies that I have talked to, the work that One North East was able to do in pulling together that strategy and in making sure that one company worked with another in a way that developed each of their interests while working in a more coherent and strategic way across businesses.
As a result, Romag, the glass company, was able to support the development of more charge points for electric cars and to support the electric car makers in where they would be and how they would develop their business in a network of hubs around the country. All these ideas came out of the initiative of One North East. I hope that the Minister will take the opportunity to talk to Nissan about its support for One North East and how important it thinks it has been in its continued presence in the region and its ability to get the parent company to continue to invest in that factory in the north-east, which is, as we know, the most productive car factory across Europe, if not the world.
It is very difficult to talk without emotion about the north-east, a region that means so much to so many of us and to try to get the Government to think again. This does not mean, “You’ve got to put more money in”, but that the money that is going in has to be used in the most strategic way and must not be fragmented. It should not be used in a way that does not maintain the consensus with business, trade unions and local authorities that we have had across the region for many a long month and year. The Government are breaking that consensus, which is incredibly dangerous. I ask them to think again.
Lord Ramsbotham
I declare an interest: my son is the chairman of the North East Chamber of Commerce, which the noble Baroness mentioned. I endorse everything that has been said by the noble Lords, Lord Beecham and Lord Shipley, and by the noble Baroness, Lady Armstrong. Politically, people think of the north-east as being divided by rivers. Economically, the north-east is divided between the rivers. Now, instead of having one regional development agency, which has been looking over the whole of that area and easing that division, the Government are setting up local enterprise partnerships that are separating the region. It seems to be madness. All that I can say, from the points of view that I have heard from everyone, is that there was not just confusion but anger up there after Mr Cable made his announcement. Having observed the situation, the Government seemed to be prepared to listen to what people up there were saying and proving, but suddenly that was all dashed, apparently in alliance with a mantra that everything should be localised.
If there is one issue that should be borne in mind, it is communications. The communications system in the north-east is not all that good. There are not the motorways or the means of connecting the various areas. Why not? It is because, over the years, there has been all this local scrapping. Yes, bypasses have been built around areas and there have been local communications, but the region was never looked at as a whole until there was an RDA. Until and unless you get the region to be looked at properly, you will not get the communications that should be the hub of any future development. I join everyone who is begging that the north-east be, if necessary, taken as a separate area and looked at separately again, in order not to throw away what has happened.
Lord Bates
My Lords, in many ways, this debate reflects the sense of where we are with the whole Bill, because we have heard speech after speech about the north-east of England, which we all love dearly, pointing out what an exceptional region it is and how it needs special attention and help. People have been saying that it had a regional development agency that performed better than any other and was adhered to and held in affection by the business community of the region. It is a small region, with 2.6 million people. The Northwest Regional Development Agency, on the other hand, covers an area from the Scottish border to Cheshire. That is not a homogeneous region to which people can feel an affinity.
There are different views on this. We are having this debate, but let us remember that there is an option available to the local authorities and the business community of the north-east to have a single local enterprise partnership for the whole of the region. That offer was put forward and I supported it, so that there should be one voice for the north-east. However, the local authorities, in their wisdom, could not agree on that. We therefore have this breakaway on Teesside. In fairness to Teesside, and given my credentials in the north-east that I offer to this debate—I was born on Tyneside, represented a seat on Teesside and now live on Wearside—I understand what the noble Lord, Lord Ramsbotham, said about the region between the rivers. There are different perspectives. The people on Teesside felt strongly at the last general election that they had been let down by the regional development agency. The closure of Corus TCP was a real issue. The people felt that they wanted to reflect the fact that the economy and the process industry of the Tees valley made up a unique and discrete entity and that they might perform better on their own. I disagreed with them, but they took that decision, which was for them to take. It was on offer.
Perhaps I may offer this point of view. As well as the sort of romance that we have heard about One North East, let us remember—I am sure that my noble friend Lord Shipley from the board can confirm this—that its budget two years ago was £290 million. Under the previous Government, that was to be cut this year to £180 million. The idea that there was some sort of love-in and that somehow money was being poured into the good north-east was not true. A cutting back of the reach of that agency, and some may say its effectiveness, was already in train.
It is also worth putting this on record. Other noble Lords will also remember the time when I was Minister for the north-east under the previous Conservative Government. There were the Northern Development Company and the Teesside and Tyne and Wear development corporations, to which the noble Baroness, Lady Armstrong, referred. The development corporation for the north-east was fantastic and very well run under John Bridge, with George Russell as chairman—Ron Dearing was a previous chairman. These were terrific ambassadors for the region. They brought in significant amounts of foreign direct investment; 75,000 jobs were brought into the region during their time, although their organisation was very thin. They did phenomenal work. Our reward for having one regional development agency, going head-to-head with the Welsh Development Agency and Scottish Enterprise in trying to bid for projects, was that the incoming Labour Government created seven competitors for us in the other regional development agencies around the country. That was a mistake. There is a case for north-east exceptionalism in these matters. I should have preferred the continuation of a single entity, but that has not been possible.
In conclusion, we are entering a time when there is a change of approach. An interesting study into regionalism by the Smith Institute looked at a set of data covering a period between the peak before the recession hit and its trough. It showed that a recession born of the financial services industry, which should therefore have primarily impacted on the City of London, in fact hit the regions of the country, such as the north-east, Yorkshire and the north-west, hardest. That seemed to fly in the face of the argument that regionalism would balance the national economy. Regionalism was meant to give a little bit of emphasis and push to those regions that, because they were peripheral to the centre, struggled in economic terms. However, we were actually hit hardest.
The north-east will have a good and positive future, not because of organisations and institutions, but because of the quality of its entrepreneurs and businesses. The entire budget of One North East is only half as much as the amount by which Greggs increased its turnover last year, in terms of investment in the region. The company employs 18,000 people. The private sector is doing it. Companies such as Sage are doing fantastically well. I was at the opening of a new facility for OneX in Teesside, which is now exporting server capacity into Denmark through a new cable across the North Sea. There are some fantastic things happening.
It is worth remembering that the north-east is the only region in the country that exports more than it imports. That is a great place to start, and we have to have far greater confidence in our own ability. A good policy is the introduction for the first time of a difference in national insurance contributions, with a preference for allowing people outside the south-east and London to benefit from lower tax rates. Personally, I would go much further. There is a real case for reintroducing enterprise zones across places such as the north-east. In places such as Blyth, Easington and Middlesbrough, where there is no enterprise at all at present, you could create enterprise zones under which businesses could be set up.
The opportunity was there for us to have a single voice in the north-east, although it was not taken. However, the prospects are good, but only because our entrepreneurs and businessmen are good.
Baroness Whitaker
I rise to speak to Amendment 55, leaving the north-east. The grounds for my amendment, in contrast to the eloquent plea by my noble friend Lady Armstrong, are not that every part of the South East England Development Agency should remain exactly as it is now, but that, at present, without it, there is no adequate support for some of the poorest parts of the south-east. I am thinking in particular of Newhaven, next to where I live, where over a quarter of households earn 60 per cent less than the national median income. Newhaven would hugely repay investment. It is poised to become the key commercial port in Sussex and 30 per cent of local companies are in the manufacturing, construction and building sectors. But its high street is withering away and its residents have little spending power.
The Government have proposed local enterprise partnerships in place of the regional development agencies, as we discussed earlier. But at the moment Lewes district, where Newhaven sits, is covered by an LEP for East Sussex, Kent and Essex. This is hopeless. Newhaven has few links to the east. The travel-to-work area is west towards Brighton, north to Gatwick and Crawley, and, for commuters, north-west to London. Unless Newhaven can go into the Coast to Capital LEP, there is little hope for the prosperity of the hardworking and friendly people who live there.
There are acres of brownfield land designated for industrial and commercial use which will be of little interest to an LEP focused on Hastings, Kent, Essex and the Thames Gateway. But it is all ripe for investment. The town is well placed to provide work for the Brighton area and there are promising signs that land with planning permission for housing will soon be developed. The port owners are actively pursuing regeneration of the port, which again has few synergies with the east and north-east.
You could argue—indeed, it has been argued—that SEEDA is too big and there could be other solutions to the regional investment problem. But the worry is that places such as Newhaven will simply drop out of the loop unless the Government pay more attention to practical realities. I ask the Minister: what in the Government’s arrangements for LEPs demonstrates any improvement for Newhaven?
Lord Greaves
My Lords, we have heard a lot from the north-east during the discussion on these amendments and I want to broaden it a little to the rest of the north of England. I have Amendments 52 and 58 in this group, which refer to the three regions of northern England: the north-east, Yorkshire and the north-west. I speak as a Yorkshireman who lives in the north-west—just—and, in view of what I am going to say, I should remind the Committee that I am a member of Pendle Borough Council.
Here, we are dealing with a government policy based on the view that regions do not really exist in England. I think that that is a metropolitan/south-eastern view of life and does not apply in the north. I believe that regions exist. I certainly believe that the north-east exists but I have to say to the noble Lord, Lord Bates, that most people in the north-west are very clear that they live in the north-west. North-west England may be a boring name; nevertheless, most people in the north-west know perfectly well that they live in the north-west and they have an allegiance to it.
There are boundary problems, but there always are. I live in Pendle, which is on the border with Yorkshire. We have an area called West Craven, which includes the small towns of Barnoldswick and Earby, where everyone believes that they are still in Yorkshire for everything other than administrative purposes. There is always a problem with Cumbria, which in a sense is a mini-region on its own. If Cumbria had been twice the size it is, it would always have been a separate region. It has always had to choose whether to be tagged on to the north-east or the north-west. However, that is not to say that in Lancashire, Cheshire, Merseyside and Greater Manchester in particular, and in south Cumbria, people are not very clear that they are in the north-west, and they have an allegiance to it. I do not object to an attempt by the Government—if this is what they have done—to rationalise our regional structures and make them more efficient, more logical and more sensible.
Perhaps I may talk for a minute about regional structures in general in the north-west and about the government office for the north-west. A close member of my family had a job as a permanent temp in the regional office in Manchester for the best part of a year. This was a while back but not that far back. I do not want to breach lots of confidentialities concerning what she did there—she had to sign the Official Secrets Act to work there and she asked me whether it was all right to sign it. However, I think I can mention one thing without having her hauled off to the Tower of London. She said to me, “You know when MPs and people put questions down and ask questions of the Government?”. I replied, “Yes”, and she said, “Well, if they’re about transport, I have to deal with them, find out the answers and send them back to London”. I remind noble Lords that she was a temp. I thought about it and asked her what she meant by “and people”, but she said, “Please don’t, daddy”.
The regional offices and the North-West Development Agency were probably overstaffed. They were not wholly efficient, but that is a reason for slimming them down, making them efficient and getting them to do their job more effectively rather than abolishing them. The North-West Development Agency had the same task as the others. It had to deal with business support, which I think is very valuable. It also had the task of directly stimulating development and regeneration by directing funds—many of them government funds—into schemes in the region. One problem is that a large number of those funds have dried up for the moment and there is no money to hand out. However, the present Government seem to be of the view that regeneration in terms of investment in the public realm and the public infrastructure is not efficient development and, unless the money goes directly to commercial activity to create jobs, it should not be done. However, who else is going to renovate the public realm and regenerate rundown areas if not the public sector? The commercial sector will come in and help but the underlying funding has to come from the public sector. However, it seems to me that that is drying up and it will need to be reinstated as soon as possible.
Furthermore, following the latest planning legislation, the regional development agencies were in charge of producing the regional strategies along with the leaders’ boards, which had a temporary existence. I always thought, as I think my party did by and large, that it was not appropriate for an unelected regional development agency to act effectively as a regional planning authority. Whatever was going to happen to regional planning—it is currently being abolished, although it will probably have to come back—we would have had no problem at all if it had been taken away from regional development agencies, because it was not a suitable thing for them to do. I went back to the coalition agreement and it says:
“We will support the creation of local enterprise partnerships … to replace regional development agencies (RDAs). These may take the form of the existing RDAs in areas where they are popular”.
That was a fudge when the coalition agreement was hammered out, a compromise between the Liberal Democrat view that regional development agencies should continue to exist in areas such as the north of England and the Conservative view that they should be swept away. Within Government that turned into a turf war between BIS and the CLG and the CLG came out on top. Like the north-east, we in the north-west and people in Yorkshire thought that RDAs were going to continue in a slimmed-down form.
So what is happening? We are told that there’s a regional growth fund, but there is much less to spend and it is being doled out centrally. The idea that politicians and civil servants in London are the right people to decide which projects in the north-west or in the other parts of the north of England—places 200 or 300 miles away—should be funded is not really credible. Decisions made in that way are not going to be good decisions. There is European funding—the ERDF—and the Rural Development Programme for England, but again the decisions are being taken centrally. A Written Statement from my noble friend Lady Hanham says:
“I have concluded that, in order to maintain compliance with the regulations and spending momentum, we should transfer the existing ERDF staff and functions into my department by the beginning of July”.—[Official Report, 3/2/2011; col. WS 86.]
Except in London where it will be devolved to the Greater London Authority, presumably because the Greater London Authority exists. But in the rest of the country decisions about regional development funding are going to be made here in London. That just seems illogical.
Then we have the question of the transfer of assets. The regional development agencies have been asked to produce plans but they are not being allowed to make their own decisions. The decisions are going to be made by the CLG and BIS, depending on what those decisions are. Then, as one noble Lord pointed out, assets are going to be offered to local authorities at a commercial rate. In my experience in Pendle, some of the property which belongs to the regional development agency was bought by the RDA off local authorities in order to provide a source of regeneration funding by those local authorities. But the local authorities are not going to have that money—so what is now happening? People are realising that this is topsy-turvy and that it is not going to work. We are told that for future regional development agency funding, ERDF funding and rural funding, there are going to be teams based in the regions, perhaps collocated with the Homes and Communities Agency. We read in the papers that BIS is talking of setting up small regional offices in order to make sure that the decisions made are right for that region because people in London cannot do it. And we are told that for decisions on the regional growth fund the CLG is going to have teams of people in the regions because, again, people in London cannot do it. It is a scorched-earth policy. Everything is being abolished. I always thought that it would have to be rebuilt sometime. They are beginning to rebuild it at the very time they are abolishing what is there at the moment. There does not seem to be a great deal of logic about this.
The last thing I want to say is about LEPs—local enterprise partnerships—which are supposed to deliver the local growth policies, though they will have precious little government funding. The specific question I want to ask the Government—I do not expect my noble friend Lord Taylor to know but perhaps somebody can write to me and tell me afterwards—refers specifically to Pennine Lancashire, the part of Lancashire that wants to be a separate LEP from the rest of Lancashire based on Blackburn, Burnley, Hyndburn, Pendle, Rossendale and Ribble Valley, a very clear economic area which already has institutions in PLACE, which is a regeneration and development agency set up by the authorities in our part of Lancashire under a multi-area agreement. So we have a Government who tell us multi-area agreements are the way forward. We get on with it and produce an effective, genuine partnership between the local authorities, working very closely with the private sector, ready to go as a LEP. We know exactly what we want to do to convert it into a LEP and how to do it and still we are not being given the go-ahead. And yet the regional growth fund already exists. So who bids for our part of Lancashire? It is the body called PLACE which is the multi-area agreement body. That body exists and is bidding. Can the Government give an assurance that bids from areas like ours which are properly organised and properly submitted, even though we do not yet have an agreed LEP, will be treated on exactly the same basis as areas which already have a LEP? Otherwise we are being dreadfully discriminated against. I hope the answer will be yes but I would be grateful if somebody could write to me and tell me.
The regions in the north of England need to be recognised. Just because the existing RDAs have not managed to narrow the gap between areas like the north and London does not mean they have not done a good job. There is no evidence whatever that by maintaining the gap as it is, even if it has not been narrowed, they have not been doing a job. Without them the gap might now be a lot larger. Unless we see some research and proper evidence to the contrary, we will continue to believe that regional institutions are necessary.
Lord Knight of Weymouth
My Lords, I want to speak to Amendment 56, drawing on my experience as the Minister with responsibility for the south-west in the year running up to the last general election. I agree with much of what has been said in this debate so far, but I want to start by paying tribute to Sir Harry Studholme, the chair of SWRDA, and Jane Henderson, the chief executive, and all of their staff for the excellent work that I observed them doing during that year and the time preceding that when I was a Member of Parliament in the region. They were doing excellent work, largely on the supply side of the economy, developing sites such as Osprey Quay in my constituency, without which the Olympics would not be coming to the south-west, Gloucester Docks and the Science Park Network in the Bath and Bristol area. I endorse the questions that were asked by my noble friend Lord Beecham about assets and what happens to those assets owned by the regional development agency in reality.
SWRDA did excellent work in developing skills and 130,000 people have been provided with new work-related skills since 2002 in the south-west. Without SWRDA we would not have the combined university, the only university in Cornwall, which has been doing stunning work in developing the economy in that part of the region. Without it we would not have the marine skills centres across the south-west or the nuclear skills centre that is being developed in Somerset. SWRDA has been developing connectivity—the new generation broadband initiative in Cornwall, for example. It has been developing finance for business. The South West Angel and Investor Network comes to mind, as does the work that I was a part of in trying to get banks to focus on the needs of small businesses. Hooking banks up with a federation of small businesses in the region was very important as we were trying to respond to the recession.
So plenty of good work went on across the region, and although it is possible to argue that a region the size of Denmark will have some issues around its edges as to whether, for example, Bournemouth and Poole as a conurbation is best placed in the south-west or the south-east—and similarly with Swindon and Gloucestershire, given that Tewkesbury is closer to Scotland than it is to Land’s End; these arguments will run—I would argue that we were just starting to get a sense of identity in the region as the RDAs were becoming successful.
I would argue that the sort of centralisation that we are getting, and which others have argued against, is a backward step. LEPs have already been announced across the south-west but there is none so far in Dorset, Bournemouth, Poole, Devon, Somerset Wiltshire or Gloucestershire. Huge swathes of my region will not have an LEP. Indeed, as the BBC reported, there is one down in Cornwall where we have the interesting spectacle of Sir John Banham being generously engaged for just over 20 days at half his daily rate—it is usually £4,000 but is now £2,000—to produce a strategy which has now been rejected. He has now left at a cost of more than £40,000 to the taxpayer. I cannot see that as good value for money from this new system.
Lord Phillips of Sudbury
I am sorry to interrupt the noble Lord, but he has twice mentioned Sir John Banham, and his last reference was in terms of a scandal. Will he make it clear to the Committee that if scandal there be, it is not to be laid at the door of Sir John Banham, who is a friend of mine and a considerable public servant, but should be laid at the door of those who put him on the task?
Lord Knight of Weymouth
I do not know Sir John Banham but it seems extraordinary that more than £40,000 has been paid out from the Cornish LEP to commission him to do a job that was then rejected. Something in that process has gone wrong. I know that he has done other work and given service in public life. I have nothing against him personally, but something has gone badly wrong. We need to learn lessons from that. If we are to make savings out of this process, which one assumes is part of the motivation, we cannot afford for any of those individual LEPs to be making £40,000 errors. That money needs to be spent on creating jobs, particularly for young people—to reprise what my noble friend Lady Armstrong said.
In summary the Minister needs to say why we are going for an ideological centralisation and anti-industrial policy position. Where is the value for money out of this abolition of the regional development agency?
Israel
(13 years, 2 months ago)
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Lord Dykes
To ask Her Majesty’s Government how they will work with the Government of the United States to ensure that Israel complies with United Nations resolutions and international law.
Lord Dykes
My Lords, this is again a very important moment to have a debate on this matter. I am grateful to the House for giving me the opportunity this evening.
Over the weekend it was good to see for once—unusually, and I suppose sadly—the unanimous decisions of the UN Security Council calling on Colonel Gaddafi to account for the abominable behaviour that he is wreaking on his own people. In contrast, how depressing it was to see—once again, and probably for the 42nd time—the previous weekend’s United Nations Security Council session being ruined, even recklessly sabotaged, by another US veto concerning the Israel/Palestine issue. A seemingly unanimous decision in a moderately worded resolution asking Israel to obey its international law duties in occupied Palestine was deliberately—I am sad to use the verb—wrecked by the US. This time it caused universal resentment, even hatred, towards America among some of the other Security Council members. Some of them kept silent counsel, but they did so with great sadness.
Once again the US refused to condemn behaviour which even President Reagan repeatedly described as totally illegal: the continued colonisation of the West Bank and, of course, East Jerusalem. Once again the Arab street sees the double standards of the US. Saddam Hussein invaded Kuwait and was quite rightly expelled after a year. The UN, quite rightly, did not hesitate then. Israel invaded the West Bank 44 years ago, but it is still there.
I warmly congratulate the UK Government as well as the EU on their much more decisive stand in contrast to the still lingering, miserable and self-inflicted humiliation which is further eroding America’s already tattered so-called leadership of the western world. Indeed, Barack Obama made it even worse by allowing the long-suffering Department of State—and I have enormous sympathy for many of its senior officials dealing with this matter—to leak the sad news that he imposed the veto with a heavy heart. The US ambassador to the UN, Susan Rice, was even allowed to make some harsh comments on the illegal colonisation policy. Even the former Israeli consul-general in New York, Alon Pinkas, said that this should be the last-ever veto since Americans in general were sick and tired of the continuing charade carried out in their name. Even Israel military radio carried a reaction of disbelief.
The cynical use of the veto by America so blatantly and so often is a madness that must not continue. Furthermore, against the background of the momentous events now in surrounding Arab countries, where the essence of the people’s democracy is rising up against tyranny and the abuse of power, we see just how monumental have been the mistakes made by the US and by us, too, the West as a whole, in the frenzied, relentless search for oil at any price—any political price and any price of freedom. The whole history of the West’s presence in Arabia is indeed a saga of wretchedness and despair for ordinary citizens in most of these countries, much of that manifested now in the words used by the rioting crowds in the various squares in the various countries when they are interviewed by the media.
As in Latin America for so many years, we remember with pain that the US in particular has always preferred the brutal dictator regimes, as it does now in Arabia. Surely now is the time for the former imperial powers and the US to restore the balance of hope in this crucial area by following an ethical foreign policy, as well as by curbing arms sales and stopping support for unacceptable regimes, even Saudi Arabia with its corrupt royal dictatorship. Above all, now is the time for Israel, too, to show decency and wisdom at long last in its policy towards the cruelly treated Palestinians.
Make no mistake, Israel is a country that I greatly admire, and I have done so for many years. I admire many of the people there. It is a great country. It has a great contribution to make in the Middle East.
Meanwhile, however, across the fence, we see Fatah struggling for the legitimacy that it lacks in the Arab street. That is one reason why it will not join in negotiations until Israel acknowledges its offences under international law and the Geneva conventions on the treatment of civilians and shows a complete change of heart. That is a responsibility that is as solemn for an occupying power as it is for a country that actually owns the territory legally. Can the present Israeli Government—who so sadly include a number of rather extremist members, though I will not mention any names tonight, and who have been such a disappointment —accept this reality at long last? I hope so. In doing so, they would be meeting the fervent wishes of millions of decent, fair-minded Israeli citizens who want peace and security and good relations with their Arab and Palestinian neighbours.
With the Palestinians seemingly prepared to accept that a two-state outcome will accord them a mere 23 per cent of the original combined mandate territory, there is no longer any rational reason for Israel to prevaricate even if aided by a totally incompetent American support stance. That will mean that the settlers have to leave the illegally occupied lands. Let us repeat that loud and clear. The Israeli Government can easily provide financial assistance for resettlement back in Israel proper. There is, for example, plenty of spare space if the Negev, too, is properly developed with infrastructure and modernised in the future. This process has not yet even begun to take place on a massive scale. While they are about it, surely the Israelis can modernise their hopelessly outdated election system and reduce the blackmail of the tiny extremist parties in the Knesset.
Yes, it will mean that the international community has to accept the inclusion of Hamas in any fundamental, realistic negotiations for peace. It is outrageous that it has been excluded when it is the main Palestinian political grouping capable of securing a genuine democratic majority. What a contrast to the Fatah president’s desperate and lamentable efforts to secure street support, having already blatantly exceeded the mandate period. At long last elections are now in the offing, thanks to the pressure that he was facing, but it will be outrageous if the Palestinian Authority seeks to exclude Hamas from the West Bank election activity—or, indeed, per contra, if Hamas seeks to consolidate one-party rule in Gaza, which is surely just as unacceptable, preventing other parties there from having a say. Leading Palestinian political commentators of all groups were certainly too eager to express support for the dodgy dictators, some of whom have now been removed, in Tunisia, Egypt and Libya. We are also now observing the events in Yemen.
Any elections in the near term must restore the confidence of the street in the West Bank. They must help local voters feel that they are playing a full part in the wider Arab uprising which we are now excitedly witnessing. Huge problems are still being caused by the long-running American stupidity and carelessness in the Middle East, and they will take time to sort out. Israel must show it can rise to the occasion at last. As William Hague stated on 14 February:
“We are calling for both sides to show the visionary boldness to return to talks and make genuine compromises … the entire international community, including the United States, should now support 1967 borders as the basis for resumed negotiations. The result should be two states, with Jerusalem as the future capital of both”.—[Official Report, Commons, 14/2/11; col. 716.]
After all the tears and madness of history, cannot the world work for the two friendly states, side by side, erasing the tragedy of Israel’s failure to be magnanimous and generous after its spectacular 1967 victories? Then we could perhaps see a rewritten version of the Balfour declaration. Let me try this one to see if it is congenial: “As long as it is not to the detriment of the 62 year-old state of Israel, a renewed homeland will be created for the state of Palestine, a modern democratic and progressive republic, with financial assistance from the international community, the two neighbours respecting human rights and their reciprocal friendship, producing in due time the near east common market for the prosperity of all”.
Lord Bates
My Lords, I thank my noble friend Lord Dykes for securing this timely debate and also for the way in which he has presented it. I believe that the only hope for the development of civilisation is to advance towards a society of states under a rules-based international order. The argument is that there is a community or society beyond the nation state of which we are all part and being part of that club comes with international rights and responsibilities.
The alternative to a rules-based international order is anarchy in which the powerful do as they will while the weak suffer as they must. That is the completely opposite end of the spectrum from which I am sure we all entered politics. We wanted justice to trump power and protect freedom and if anything have a bias to the weak and the oppressed. This too was the desire which led to the creation of the United Nations out of the carnage of World War II. Article 1 of the UN Charter says:
“To bring about by peaceful means, and in conformity with the principles of justice and international law, adjustment or settlement of international disputes”.
Why is that relevant to this debate? Well it is relevant because we have voluntarily agreed along with 191 other nations to work for peace within a framework of law and non-violence. Why is that especially relevant to Israel? The state of Israel exists in international law only because the United Nations Special Committee of Palestine in 1947 proposed that it should be along with an Arab state of Palestine and because United Nations Resolution 181 said it existed in international law.
I would argue therefore that there is a special reason for the state of Israel to look benevolently upon the United Nations institution for it, more than any other nation or institution, has realised the aspirations of a Jewish national homeland and enshrined that in law. It therefore requires it to comply with its requests expressed through resolutions and work with the United Nations despite its manifold imperfections to bring about the creation of a viable Palestinian state as equal partners in an international society of nation states.
Lord Judd
My Lords, I too congratulate the noble Lord, Lord Dykes, on having so firmly introduced this debate today. I would just like to make two or three points. First, I think historically it is a major tragedy that we have seen the United States behave as it has at the United Nations in recent weeks. It is while the United States still has ascendency in the international community that it is so important for it to throw its weight behind the strengthening of international institutions and international law. That is in the interests of the future of the people of the United States because it will not always have that ascendency. It will then—too late, perhaps—realise the importance of having strong international institutions and the rule of international law.
Secondly, what is so sad about what the United States has done is that it is absolutely counterproductive to the security of Israel. It will not help the people of Israel. No one cares more than I do about the future of Israel; I have many friends in Israel. I am glad that the noble Lord, Lord Bates, and the noble Lord, Lord Dykes, in introducing the debate, referred to the people of Israel letting down themselves. Many people in Israel want the debate in Israel to open up. They have a completely different perspective on the future. They see that the future of Israel, the strength of Israel and the safety of Israel lie in negotiated settlements and making peace with the people in the surrounding area.
If there is to be peace in the region, it is essential that negotiations are as inclusive as possible. That is where the noble Lord, Lord Dykes, is so right again—he has done it before—to emphasise the importance of Hamas. At the moment, there is a self-fulfilling prophecy: we strengthen the extremist elements in Hamas. They are not all extremists in Hamas; we should be strengthening the more moderate elements and bringing them in to help move the negotiations forward.
Finally, let us just remember that when we talk about aggression and the threat of aggression, of course it is wrong to kill innocent Israelis. That cannot be condoned, but what about the bombardments of the so-called buffer zone within Gaza? What about the 52 innocent people killed within the buffer zone last year? What about the embargo and the damage that it has done to the health, well-being, industry and economic life of Gaza? Is that not aggression? From every standpoint, the American position has been disastrous.
I congratulate the British Government with one reservation. Having made such a courageous, firm and sensible stand at the UN, why on earth did the Prime Minister at this very juncture go with a group of arms salesmen to the Gulf, sending a completely contrary message to that which is inherent in everything that we are arguing about how peace and security need to be achieved? That was counterproductivity of the first order.
Baroness Falkner of Margravine
My Lords, I apologise to the House for my delay in attending the debate of my noble friend Lord Dykes. I was detained in my room momentarily.
It is nearly 18 years since the Oslo peace accords showed a ray of hope for a peace settlement; but 18 years later, we find ourselves at an impasse. The history of US involvement in recent times—we can go back to the Camp David accords, the Madrid conference, the Clinton parameters and Annapolis—should have yielded greater results than they have. Of course, it does not fall to the US alone to secure peace in our time in the Middle East, but recent US efforts have been particularly disappointing. We have had fine rhetoric since the inauguration of President Obama and the expression of lofty ideals, but we are no closer to a solution than at any time before Oslo.
If the US continues to be rebuffed in the manner that it is being rebuffed at the moment by the Israelis, the question is to be asked whether the will for peace exists between the Israelis and the Palestinians, because there will be a comprehensive peace only if both sides are prepared to sit down to sue for peace, irrespective of the position of other powers.
There is little to bring Israel to the table when it can create facts on the ground with impunity in its settlements, its separation wall and, above all, its electoral system, which allows for its most extreme elements to sit at the table. The Palestinians, too, have settled for a dual-track strategy: that of securing economic growth by Fatah in the West Bank, while Hamas seems to be torn between being, on the one hand, the Government in Gaza and, on the other, still playing the role of insurgent when it suits it. Fatah, we hear, will try to seek a unilateral declaration of independence, but that, while giving it legitimacy, will not give it back East Jerusalem or freedom for the Occupied Territories and will certainly not give the people who languish in the camps the right of return.
My noble friend Lord Dykes talked of the democratic trends in the Middle East. If there is one silver lining, it is that the Arab nations together, once they move to more democratic and legitimate frameworks, could secure Israel by normalising relations with Israel. That would be a significant step forward. The West should stand by to facilitate that through encouraging democracy and pluralism in those countries but, ultimately, the peace, such as will come, will have to be made between the two countries alone.
Lord Bew
My Lords, I, too, thank the noble Lord, Lord Dykes, for introducing the debate on this important subject. I start by declaring an interest as the incoming chairman of the Anglo-Israel Association and say that as someone who was a strong advocate in the early and mid-1990s of what became the Good Friday agreement solution in Northern Ireland, I am strongly committed to historic compromise as the means to overcome the tenacious problems of ethnic, religious and national political divides.
I want to concentrate on the issues surrounding the United States, the United Nations and our foreign policy in recent days. One point has to be made about the decision made by the American Administration in the lead-up to the recent United Nations vote: 110 congressmen wrote to the Administration to say, “Do not support this anti-Israel resolution”. In the end, the Administration compromised. Critical points were made about Israeli policy. I say wryly and not with overwhelming pleasure after 30 years experience of the Irish question that 110 congressmen is 109 more than you need to countermand any dialogue between our Foreign Office and the State Department. We must respect profound political realities for any United States Administration.
On the United Nations decision, one point made by the American ambassador to the UN, Susan Rice, seems to me of some substance. She argued that, had the United States not vetoed the resolution, it would merely have hardened opinion on both sides. More profoundly, it is clearly the view of the United States that the United Nations—its resolutions and its theatre—is not the context for the resolution of the Middle Eastern problem. That is the message that the United States is sending to us. We may not like it, but we have been sent that message very firmly.
The problem is seen more profoundly as one of land for peace and of convincing enough Israelis, in the aftermath of the disappointment that many Israelis feel about the consequences of withdrawal from Gaza, in both the political class and the population at large, that land for peace is a gamble that they can take on. That is the fundamental problem. It is not helped by one-sided denunciations of Israel and the failure thus far in the debate to acknowledge the consequences for many Israelis and the disappointment felt because of one risk that was taken: the withdrawal from Gaza. That is the reality with which we are now faced in this context. The United Nations and its resolutions are, in a sense, background music.
Lord Tugendhat
My Lords, I, too, thank the noble Lord, Lord Dykes, for launching this debate. The best reason for working closely with the United States in the past was that it always seemed to have the best chance of bringing about a just and peaceful resolution to the Israel-Palestine dispute. Sadly, we now seem to have reached the point where that is no longer the case. Israel remains obdurate. The United States is unwilling to act as a candid friend. The result is the recent vote in the United Nations Security Council, in which the United States found itself isolated, as did the Israeli position of settlements and occupation. I hope that the United States will learn from this embarrassing debacle, which has separated it from almost all its closest friends and allies. It is still the best hope for securing a just resolution to the Israel-Palestine dispute.
However, we, and other countries who believe that Israel’s current contra mundi defiance is against its own long-term interest as well as a danger to peace, should no longer wait on the United States. At this critical stage in the Middle East, when hope and fear are so finely balanced, we must be open and frank about our abhorrence of Israel’s current settlements policy and the concomitant occupation that it involves. We should bear in mind the wise words of David Shulman, the Renee Lang professor of humanistic studies at the Hebrew University of Jerusalem, when he talks about,
“its relentless, daily, dehumanizing grind”.
We must make clear the extent to which that policy diminishes our friendship for the Government—as distinct from the people—of Israel, with the practical consequences that must inevitably flow from this. It is very sad that we should be in this position. As the noble Lord, Lord Dykes, and others have said, there are many in Israel who do not share the views of its Government. I pay particular tribute to those Israeli soldiers who recently produced the book, Occupation of the Territories: Israeli Soldier Testimonies 2000-2010. It is to those voices in Israel that we should listen and not always to some of the advocates of the hard-line policies of the Government that we hear in this House.
Lord Janner of Braunstone
My Lords, does this House recognise that Israel is the only democracy in the Middle East? Democracies, like Israel or this country, do not always elect the Governments whom we would vote for. However, in my view, Israel continues to play an important role in the international community. It represents a bridge between Europe and the Middle East. It represents democracy, liberty and freedom in a region that has long been filled with tyrannies and dictatorships. We have all seen the people’s aspirations, which have long been suppressed, now released in recent revolutions in Tunisia, Egypt, Bahrain and now Libya, which we should welcome. We should recognise the fact that the only democracy in that area is the country that Members of this House have been attacking so readily this evening. The instability of the region has always been a major problem for Israel. However, the current revolutions in the Middle East present an opportunity for Israel and the world.
The primary role of a nation state is to defend its borders and citizens from attack. Israel faces a tough task. Its duty is to defend its citizens. Hamas is not a Government and Gaza is not a nation state. Hamas has been praised. However, Hamas is a terrorist group, which rains terrors on civilians in Israel. These terrorists ignore international law and they, not Israel, should be the key focus of this debate. Let me make it clear to this House: Israel does not target citizens, unlike Hamas and Hezbollah, which target citizens in many parts of Israel. Mistakes occur in warfare, just as mistakes have occurred in Afghanistan and Iraq. When these mistakes happen, investigations are launched and, where possible, justice is delivered. I would have been interested to hear how the noble Lord who triggered this debate would himself have responded if we in this nation suffered from attacks from terrorist entities, which is the position that Israel has to face. Many of these terrorists were funded and armed by an Iranian regime dedicated to the destruction of Israel and to attacks on Jewish people around the world. The true question for this House is who the real abusers of international law are: Israel, which defends its citizens, or the terrorists who target them.
Baroness Tonge
My Lords, I congratulate my noble friend on introducing this debate tonight. I have somewhat had my breath blown away by the speech of the noble Lord, Lord Janner.
The international community is outraged by the behavior of Colonel Gaddafi towards his people in Libya and has rightly condemned his actions, which have violated human rights and international law. The reaction from our leaders has been swift and decisive. Sanctions are being imposed and bank accounts frozen—quite right too. Any Government who behave in this way should receive the same response. Why, then, has the Government of Israel, who defy all international law, never been called to account by the international community and, why, just last week—as we have heard from other noble Peers—did the USA veto the UN resolution on settlements after calling for a freeze on those settlements just a few months ago? Why has this happened when the behaviour of Israel towards the Palestinians lies at the very root of the problems in the Arab-Muslim world?
Tonight, I want to raise briefly the subject of prisoners and their treatment by Israel. At the end of January, there were 5,642 Palestinian prisoners in Israeli jails, 621 of whom are still awaiting trial and 219 of whom are being held in administrative detention for no good reason, without any charge or prospect of trial. Since 2000, over 7,000 children have been held in Israeli prisons. There are currently 221 children in prison. A horrifying report has been submitted to the UN by the Defence for Children International. I beg your Lordships to read the report. Most children had been accused of throwing stones and were subjected to various forms of torture and forced to sign statements written in Hebrew. There is no time to give the detail. However, this is a sure way of providing embittered terrorists who will hate Israel for the rest of their lives.
After four years in prison, three members of the PLC are now threatened with deportation from their homes and constituencies in East Jerusalem and have taken refuge in the Red Cross. Is imprisonment for winning an election permitted under international law? I think not. Israel is immune to international law. We have to face this. The USA and Europe collude in it and I hope that the Minister will tell me why.
Baroness Deech
My Lords, we have had a stream of similar questions over the past few months evincing a disproportionate focus by this House on Israel, now evident in the turmoil in the Middle East. These questions are based on some implicit but unsustainable assumptions—for example, that Britain has any influence over Israel and Palestine or that it should be following and supporting American policy, which has been criticised here tonight. The UK risks becoming a spent force in this area because it is no longer seen as even-handed by Israel. The Foreign Secretary’s recent comments have made this situation even more partial. The judgment of the UK Government and their advisers over the Middle East is suspect. We have got it wrong for years.
As we speak, international humanitarian law is being ignored to the damage of millions in the region. Israel has not been the focus of the rising-up by the peoples of Tunisia, Bahrain, Egypt and Libya. Indeed, I once heard an ambassador from the region say to an audience that the Arab states did not really care about Israel at all, but it was a useful deflection from the problems internal to their states.
As far as the UN goes, one would have thought that to point out that Libya and Bahrain have seats on the United Nations Human Rights Council would suffice to make one sceptical, but the law and the resolutions are not clear. The fundamental issue is that Israel itself owes its existence to the League of Nations and the UN and has a right of self-determination and self-defence, which has been rejected wholesale ever since 1947 by its neighbours. For example, today is the last day of Gilad Shalit fortnight. This young Israeli solider has been held for four years by Hamas and denied all visits, even from the Red Cross, in breach of international humanitarian law. This is one matter that the UK Government can take up if they wish to promote the rule of law in the region.
The UK can also be constructive in building normal relations. The noble Lord, Lord Stone of Blackheath, made a moving and impressive speech on 11 February describing the work in which he is involved in bringing Israelis and Palestinians together in education, health and the environment and in fostering economic prosperity in the West Bank.
The UN is not the place to bring pressure on Israel to end the occupation and to freeze settlements. That has to be done by negotiation. This Government must support a two-state solution and reject the delegitimisation of Israel. They could encourage and help Arab leaders to invest in infrastructure, housing and general state-building for a future Palestine. They could promote the education of Palestinian youth towards a future of peace and co-operation, not rockets and hatred. They could rehabilitate housing so that refugee camps become decent habitats. There are obvious opportunities and responsibilities for the UK Government if they heed the voices of reason.
Lord Palmer of Childs Hill
My Lords, I compliment my noble friend Lord Dykes on securing this short debate. I know that he, like me, seeks a lasting peace in the region based on a two-state solution with a secure state of Israel alongside a very viable Palestinian state. Of course, it is helpful if United Nations resolutions are complied with but, as my noble friend Lord Dykes pointed out, they are resolutions of the General Assembly, not of the Security Council. Israel has complied with every resolution of the Security Council, with all its faults. In fact, it complied with only one, on Lebanon. There have been no others.
However, my view is that, contrary to the name of this debate, trying to solve the long-standing conflict by United Nations resolutions is not the way forward. As my noble friend Lord Dykes suggests, Her Majesty's Government and the United States could have a role, but I am certain that the first step must be, as the noble Baroness, Lady Deech, said, to get the Israelis and the Palestinians to the negotiating table. I would add to that “without preconditions”. That is the problem. The Palestinians say they will not go to the negotiating table unless something happens—for example, no settlements. The Israelis say they will not go unless they are recognised by everyone. My view is that the United States, the United Kingdom and others should ensure that they sit down at that negotiating table without any preconditions whatever. Once they are there at that table, I believe that things can be solved. For those who study the region—I am a former chairman of the Liberal Democrat Friends of Israel and I have studied it deeply—there is a desire for a solution. Most people know what that solution will be—where roughly the border will be. Once there is a border, the settlements that are on the non-Israeli side of the border will no longer be there as settlements. You solve it at a stroke. At the same time, we have to ensure that there is no psychological and practical warfare on Israel, where the towns of Sderot and Ashkelon in Israel are bombarded by rockets, producing a psychological and practical fear in Israel; it is this that produces some of the attitudes of the Israeli Government, of which many in this House might disapprove.
I ask noble Lords to think about the fact that our duty as a country is to get these people to the negotiating table and to bear in mind that this is not only about Palestinian refugees; 800,000 Jews fled Arab lands, of which 600,000 found a home in Israel. Refugees, sadly, are part of life. Many of us have been refugees or have parents who were so.
Lord Beecham
My Lords, I come to this debate as a committed supporter of Israel and a committed critic of its Government: as a committed supporter of a two-state solution and an opponent of the settlements. The question of the legality of the settlements in international law is perhaps more arguable than is normally thought to be the case, but that is an irrelevance here; I certainly oppose the settlements. Whether, in the reported words of a distinguished Member of this House, this makes me an intelligent but prejudiced Jew, I do not know—I leave it to others to determine.
I agree with the noble Lord, Lord Dykes, in his criticism of the political system in Israel. Interestingly, of course, it is a very pure form of proportional representation, which presumably he would like to see in this country. He also referred to the 1947 resolution that created the state of Israel: a resolution that, if it had been complied with, would have led to the creation of an independent Palestine. It was not complied with because Egypt and Jordan decided not to implement it. Jordan occupied the West Bank and Egypt occupied Gaza. The reality is that, 60-odd years later, many of the states in the region still do not recognise the existence of the state of Israel—and more particularly, and crucially, neither does Hamas. If Hamas had followed Fatah and the Palestinian Authority in recognising the state of Israel, it would certainly be a legitimate partner in a dialogue. That is clearly a consolation that all of us here in your Lordships’ House would like to see.
I will refer not so much to the general issues but to small yet positive steps that might be taken—and indeed have already been initiated—in developing the democratic structures within Israel and potentially within Palestine. So far as Israel is concerned, they relate to the Israeli Arab community. In my former days in the Local Government Association, I managed to initiate a scheme for capacity building within the Arab municipal sector in Israel, supported by the previous Government, with a modest amount of funding that is still available during the current year. I hope that the present Government will continue with that programme, and seek to extend it to the Palestinian Authority itself. It is clearly in everyone’s interest—other speakers have referred to this—to promote democracy and state building within the Arab world. Here is an example of where it can happen.
The event two years ago in Israel, which saw people from local government in this country going over to work with newly elected Arab mayors, can be repeated—I hope it will be repeated. This is a principle that might well be extended to the territories. The Local Government Association signed agreements with both the local government associations of Palestine and Israel, and here local government can play a small positive role in developing the kind of structures—and ultimately the kind of contacts—that can only help lead to a peaceful resolution. If we were to concentrate more on the practical issues and a little less on the rhetoric about the serious problems of the region, we might see more progress.
Lord Alderdice
My Lords, I think we are all grateful to my noble friend Lord Dykes for giving us an opportunity to address this serious question again, albeit in a very short time. Most of us have only three minutes. I will raise just three points; the first is an observation, the second is a fear, the third is an appeal.
My observation is that in these conflicts in general, and in this conflict in particular, it is not only those who are in the conflict who are exceptionally passionate about it; those outside who have any interest and concern—indeed, almost anyone who gets involved—are passionate on one side of the argument. It seems extremely difficult to contain the problem and feel strongly about it, but not feel strongly for one side and against another. The noble Lord, Lord Bew, will recognise that very much from our own experience, and we have seen that demonstrated here tonight. When people become very passionate, it becomes difficult to think clearly and reflectively about a problem.
My second point expresses a fear. I have been going backwards and forwards to the region for a number of years. When I first started to go, I was a little optimistic about the possibilities. In Israel, I met people in the Government, in the Opposition and in civic society. I met people on the Palestinian side in Fatah and Hamas, and in Lebanon, Syria, Jordan and Egypt, and I had a sense that people wanted to move forward, but in the past couple of years I have felt that opportunity for progress slipping away. A two-state solution would be an ideal thing to achieve, but increasingly it is beginning to slip off the agenda. Israel is the country that needs a two-state solution because I cannot for the life of me see how you can have a Jewish democratic state unless you have a homeland for the Palestinians, yet it is becoming harder seriously to believe that a two-state solution remains possible.
I hope that I can be persuaded otherwise by the facts and I want to see it, but those who believe in an historic existential right for Israel to extend the whole way from the sea to Jordan are mixed together with those who would like a two-state solution but feel that there is no possibility of a partner for peace in the Palestinians and those who want a two-state solution but now see no prospect of one. They are all mixed together and there is almost no other side of the argument in Israel. That is extremely worrying.
My final point is an appeal for international law. I tried to address the question of Gilad Shalit, which was mentioned by noble Baroness. I met his family and senior officials in Hamas and they said, “We found that this is the only way we can get our prisoners out. We cannot get them out by legal means so we get them out this way. We have found that we can do a deal with the Israeli Government”. I hope for his sake and for his family that Gilad Shalit gets home soon. I hope that the Palestinian prisoners also get home soon, but that is what happens when international and domestic law are set aside because of passions. I appeal for a return to the rule of law, for without it there is only chaos in the Middle East.
Baroness Jones of Whitchurch
My Lords, I thank the noble Lord, Lord Dykes, for giving us the opportunity to debate this crucial issue this evening. As several noble Lords have said, the movement for democracy across the Middle East, while causing short-term anxiety about the loss of life and the intransigence of some regimes, must ultimately offer a precious moment when new politics and real change can be delivered. That is why the Foreign Secretary was right to say that the turmoil in the Middle East should be used as a springboard to reignite the peace process.
At the same time, it goes without saying that we have to be sensitive about our comments and/or interventions when the region is in such flux, particularly in the context of our own history. That is why the United Nations, imperfect though it is, continues to provide a respected forum for determining the common good and the rule of international law. That is why it continues to have an important role to play in the Middle East peace process.
We remain concerned that the peace talks initiated by the Obama Government appear to have stalled. No one underestimates the difficulty of the task involved in bringing the two sides together for meaningful dialogue, but with any new Government there is hope for a fresh approach and a renewed determination that they might make progress. In addition, President Obama himself signalled from an early stage that this would be a priority for his Administration and we desperately want him to succeed, but since the 10-month moratorium expired last September Israel has resumed construction in the West Bank and East Jerusalem—an act that it knows to be provocative not only to the Palestinians but to much of the rest of the world.
We also know that the Obama Administration has called on Israel to cease construction and return to the peace talks. However, that appeal appears to have been ignored and it may well be time to face the fact that diplomatic initiatives of the past need to be backed by other forms of pressure. Perhaps the Minister can update the House as to any discussions that are taking place between the Foreign Secretary and his US counterpart in this regard.
This brings us to the recent UN resolution that condemned the Israeli settlement construction in Palestinian territory. It was a resolution in accord with the stated policy of the US, but nevertheless the Administration chose to stand alone and veto it at the Security Council. As we have heard, their justification for this decision was that it would complicate efforts to resume the peace talks. With some sadness, I have to say that this position might have had some legitimacy if there had been any evidence of a pending breakthrough in kick-starting the peace talks, but as things stand, the US position has weakened both its own role and the UN’s voice in bringing the parties together, and has regrettably encouraged further illegal construction of Israeli settlements.
I welcome our own Government’s intervention on this, and the fact that we supported the UN resolution, and I hope that the Minister can update us on some further discussions that have taken place behind the scenes on this. Whatever route it takes, and whoever ultimately succeeds in bringing the two sides together, it remains the case that any settlement should include a two-state solution, with a permanent end to hostilities, an agreement on the boundaries of a new country of Palestine, an end to the West Bank settlement expansion, and a resettlement of illegal occupiers.
Finally, I hope that both our own Government and the United States can seize this chance and play their role in bringing about a lasting Middle East peace settlement based on these principles.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, I give warm thanks to the noble Lord, Lord Dykes, for opening this brief debate in such a robust fashion. I will come to some of his points in a moment. It has inevitably been a somewhat staccato debate, given the very short time in which noble Lords have been able to speak, but quite often in these very short debates we get the distillation of remarkable wisdom in very few words. Some very profound things have been said very clearly by a number of your Lordships who obviously have a huge hinterland of knowledge, but three minutes places a severe limit on what can be said. Whether in my few minutes I will be able to comment on every one of the contributions is in the hands of the gods. If I cannot do that, I apologise in advance, and will certainly discuss with or write to noble Lords who feel I have not addressed their points sufficiently.
Before I come to the detailed points in the debate, let me say that the United Kingdom Government are committed to upholding international law, as enshrined in the United Nations resolutions and the Geneva Conventions, and the Israel-Palestine conflict which we have been debating this evening is no exception. Our commitment was most recently demonstrated when, on Friday 18 February at the UN Security Council, the United Kingdom and others, including France and Germany, voted to reinforce our long-standing view that the Israeli settlements, including those in East Jerusalem, are illegal under international law, are an obstacle to peace, and constitute a threat to the two-state solution. It was a matter of regret that it remained a draft resolution, and that the UN Security Council could not speak with one voice on this issue. A number of your Lordships have concentrated on that very point.
The reasons for the US veto were given at some length by the spokesperson. They are, in a sense, the US’s own reasons. They argue, as the noble Lord, Lord Bew, reminded us, that the UN Security Council was the wrong place, and that pursuing the issue there might make negotiations harder. The US delegate also reminded us that they rejected the legitimacy of settlement activity, which may be some sliver of comfort for those who have found this such a pity, but that they saw this as the wrong forum in which to push forward the proposals of the Palestinians and the Palestinian-initiated draft, and therefore opposed it. We were in regular contact with the US on the run-up to the vote. I have been asked what contact there has been between the Foreign Secretary and Secretary of State Hillary Clinton. The answer is that there has been contact; there was in the run-up and there has been since on this matter. The Foreign Secretary made it clear that Israel’s obligations under international law are central to making progress toward a two-state solution. That remains our view.
I have heard some argue that current events in the region mean that this whole matter may be pushed aside by the turmoil that we have seen in north Africa and elsewhere. I think that that is completely wrong. Indeed, my right honourable friend the Prime Minister said as much this afternoon in his Statement in another place. We believe that Israel’s security and the realisation of the Palestinians’ right to statehood are not opposing goals at all. On the contrary, they are intimately intertwined objectives, and we should push ahead and make them with the MEPP, which becomes even more vital in the present circumstances.
Our main goal is to work with the United States and other international partners to return the parties as soon as possible to direct negotiations towards a two-state solution, on the basis of clear parameters. I know that the noble Lord, Lord Alderdice, with his great experience cast doubt on whether the two-state solution is still possible. We believe that it is, and that it remains a goal, and that we should go for an agreement on the borders of the two states, based on 4 June 1967 lines with equivalent land swaps, as may be agreed between the parties. That is the first basis of our approach. The second is to have security arrangements which, for Palestinians, respect their sovereignty and show that the occupation is over and, for Israelis, protect their security, prevent the resurgence of terrorism and deal effectively with new and emerging threats. That was a point of view that the noble Lord, Lord Janner, and others put in this debate, where we have witnessed the same divisions of view as exist in the wider world about this whole difficult matter, even in our brief contributions.
Thirdly, we believe that a just, fair and agreed solution to the refugee question should be the basis of progress. Fourthly, we believe in the fulfilment of the aspirations of both parties for Jerusalem. A way must be found through negotiations to resolve the status of Jerusalem as the future capital of both states.
In a few more of these precious minutes, I turn to a number of specific points raised. The noble Lord, Lord Dykes, spoke out very forcefully of his regrets about the position of the USA. Without necessarily approving of it—on the contrary, we voted the other way—I have tried to describe the view that the United States took. He also urged, as have other of your Lordships, both in this debate and many others, that we should talk to Hamas. The United Kingdom’s view is that we should not talk to them until it renounces the ideology of violence, and that it should begin to emerge as part of the solution rather than part of the problem. That is the view of the Government at this time, although I know that some of your Lordships disagree with it.
My noble friend Lord Bates made an impassioned plea to comply with UN resolutions and reminded us of the vital point that the UN gave birth to Israel. Therefore, it is the duty of Israel to do all that it can to comply with UN resolutions. The noble Lord, Lord Janner, said that in many respects it has—but clearly in others it has not.
The noble Lord, Lord Judd, also said that negotiations ought to include Hamas, and made some sharp remarks on arms sales. He criticised my right honourable friend and his colleagues for travelling through the Middle East and arguing both that there should be more democracy and that there should be an arms trade. He has to face the fact, as my right honourable friend said, that democracies have to arm. The question is whether they should be armed by Chinese or Russian weapons, which are in ample supply—they can produce all kinds of unregulated, dangerous and lethal weapons—or whether the legitimate and properly controlled arms exports of this country should continue to play a part. That question has to be answered before one denounces completely the arms trade of this country.
My noble friend Lady Falkner spoke, as always, with great feeling. She asked whether we could normalise relations between the Arabs and Israel in the right context. I believe that we can. The noble Lord, Lord Bew, put the point of view of the United States quite fairly, as I, too, have done. We do not agree with it, but now at least we understand where they are coming from. My noble friend Lord Tugendhat gave an eloquent plea to listen to the moderate voices of Israel—those who really want to secure the longer range security of Israel, rather than some of the more extreme voices that many of us feel are anti-Israeli, though they come from Israeli personnel.
I have mentioned the noble Lord, Lord Janner, who believes that Hamas are terrorists. I have stated the UK Government’s view towards them. My noble friend Lady Tonge, who is immensely experienced in these issues and in the details, asked about Palestinian prisoners. We raise the issue continuously, particularly the very worrying concerns about underage and juvenile prisoners and how they are held. We raise them all the time with the Israelis and will continue to do so. The noble Baroness, Lady Deech, mentioned the virtue of the kind of approach outlined by the noble Lord, Lord Stern, the other day: to make enterprise and business the way we can see Arabs and Israelis sew themselves and work together again, rather than be in endless conflict. The noble Lord, Lord Palmer of Childs Hill, took the side of those who said, like the Americans, that the UN was not the best forum for the way forward.
I think I have covered everything, including the question from the noble Baroness, Lady Jones, about the Foreign Secretary speaking with the Americans. He does so all the time. I have now run out of further time, so will say only that we believe in a peaceful and safe future for Israel that is best secured through a peace with the Palestinians which can, in turn, lead to a peace with the entire region that will strengthen the stability of the region. That is our hope and intention; we have demonstrated it by our position in the recent vote, and we have demonstrated it by our continuous actions. We will continue to do so in order that we can move forward through the agonising difficulties and divisions which this great issue has produced again and again.
Public Bodies Bill [HL]
(13 years, 2 months ago)
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Lord Campbell-Savours
My Lords, I intervene briefly because I shall concentrate my remarks during proceedings on the Report stage of the Bill. I want to say a few words about how we need to consider what has happened historically when considering the future of the development agencies. I believe that the closure of the RDAs, particularly in the north of England—and when I talk about the north of England, I mean the north-west, Yorkshire and Humberside and the north-east—is ill-advised and misconceived, and will ultimately be damaging to the regions.
We really need to learn the lessons of history. My mind goes back to the early 1980s, around 30 years ago, when I was a young MP. The debates in the Commons at that time were totally dominated by the decline in the regional economy in the north of England—particularly in shipbuilding, steel, heavy engineering, mining and textiles. Week after week, Question Time after Question Time, Labour MPs—sometimes with Conservatives joining in as well—got up to object to what was happening in the region and to ask how the problems of the region were to be resolved. I was a member of the northern group of Labour MPs. We were constantly being lobbied by industry, employer groups, the trade unions and the local authorities. The CBI in the northern region was prominent in lobbying Labour Members of Parliament to ensure a change in the Government’s regional strategy at that time. I remember a man called James Cran, whom some of us might recall. He subsequently became the Member of Parliament for Beverley in Yorkshire but was then the leading figure in the northern CBI. I remember him appearing on Border Television and north-east television repeatedly, week after week, demanding a reversal of the strategy and some alteration in regional policy. The cry was universal: “We need a regional strategy”. The constant refrain was, “The centre cannot deliver”, because the centre was not delivering. Laissez-faire regional strategy, despite European money, meant that the concentration of footloose investment and capital accumulation more widely was in the south. That was our problem.
Time and again, the differential in house prices and unemployment rates between the north and the south was cited as evidence of a north-south divide in economic development. As the late John Smith put it 26 years ago, in a debate on regional policy and the need for a regional strategy with agencies delivering, which I remember well from 17 January 1985:
“What is frightening is that the Government appear to be impervious to the damage that they are causing. As the economic storm clouds gather over Britain and become more serious every day, the Government plunge blindly on destroying as they go. When they are finally called to account, the missed opportunities and wanton destruction of regional development policy will, I hope, be high on the indictment”.—[Official Report, Commons, 17/1/85; cols. 543-44.]
I say that history will repeat itself. What John said then will be relevant in these coming years unless there is a change in strategy by the Government.
Then I remember the Labour Party conferences in the north of England being dominated by the debate on the need for a regional strategy. Often at the forefront of those debates was the then north-east Member of Parliament Ian Wrigglesworth—now Sir Ian—who I understand the Government have brought in to help with their new regional strategy. Maybe that is no longer true and my noble friends can correct me if I am wrong, but I read somewhere that he has now been brought in. I remember it all as though it were yesterday. It was the debate that dominated all of my 21 years in the House of Commons.
I remember the huge debate that was launched in the north in the early 1980s following the publication of a paper entitled—I know my noble friends will remember this—Let’s Pull Together for a Better North. If I recall correctly, it was a paper jointly sponsored by the late Joe Mills of the Transport and General Workers’ Union and the late Lord Burlison, who was in this House. I go on about this because history will repeat itself if we go down this route. Even at this late stage, the Government should revise their strategy.
Lord Judd
My Lords, I just wanted to follow my noble friend Lord Campbell-Savours because he has put so powerfully the case for the north, particularly with his origins in the north-west. He is, in every sense, a son of the north-west. He speaks with authority.
I simply say that there is a cultural dimension to all this. It has to be faced. There are many good people living in the south-east, the south and more prosperous parts of the Midlands who just have not seen for themselves the social reality of what happened in the north in the past. The noble Lord, Lord Greaves, and the noble Lord opposite have referred to Cumbria. Just come to Cumbria. I often speak about the inheritance and the beauties of the national park, but come to the west coast of Cumbria and see the physical and living evidence of what happened before. The communities are broken, disheartened and demoralised still.
The challenges are huge and, given the economic stringency that faces the nation, this is the very time that one needs strategic and powerful authorities to look after the interests of those who will find themselves in the toughest position, as economic policy takes effect. If we have any pretence of commitment to social justice, this is the very time that there should be strong voices speaking, not just tactically but strategically, for the people of a region. Those voices should look at the issues of communications and transport, and at the work that can be done with the universities in the north, to find ways of regenerating and building a new future.
Some will argue that in Cumbria we will have the one bright prospect of becoming the energy coast of Britain. If that is a prospect—and I fervently hope that we can make a contribution in that context—this is the time that we need a strategic authority speaking for us and making sure that the plan is developed to the full, not just thrown to the vagaries of the market.
What is sad about the Government having rushed into this ill considered Bill, with all its ill considered propositions that have not been properly researched, investigated and analysed, is that we might have had a case for coming up with a review of regional policy. I agree with the argument that there was a great deal of room for adjustments to the regional structure. I am not sure that my noble and very good friend Lord Campbell-Savours will agree with me on this, but I am a sceptic about whether Cumbria—particularly north Cumbria, where I live—is in the right region. It seems to me that the natural links of north Cumbria are with the north-east—up around the coast, through Carlisle and into Newcastle and the rest. We do not think of Manchester and Liverpool. We think of the north-east. Our health service is oriented in that direction. When I needed neurosurgery, I ended up, through the National Health Service, in Newcastle. When I turn on my television in the evening, I see Newcastle-based television.
There was therefore a case for a review to make sure that the regions, in their administration and structure, were best geared to meet the real social challenges that were out there. However, instead of going down that exciting route, this new Government, who pride themselves on being so radical and imaginative, just dodged all that and went for an ideological destruction of the regional development authorities at the very time that they were most needed. I know that the Minister listens. He is a sensitive man and has not only a social conscience but a feel for social issues and people. I urge him, even at this 11th hour plus, to plead with his colleagues and say, “This is a step too far. Think again”.
Lord Empey
My Lords, I have been listening to the debate, but the truth is that there is no single solution to economic development policy. There is no perfect model. There is a variety of models throughout the United Kingdom, some of which work better than others. However, the amendment is a fairly blunt instrument. The decision on the number of regional development agencies in England has to be taken in conjunction with the devolved regions. Until a few months ago, I had responsibility in Northern Ireland for certain aspects of economic development policy. Prior to that, I had responsibility for establishing Invest Northern Ireland, which at that time consisted of some 700 staff and had a budget of about £160 million.
However, the whole scene has changed. I listened carefully to the noble Lord, Lord Campbell-Savours, but what applies today is totally different from what applied in the 1980s. Europe has a big influence in this, because one of the big weapons that organisations in Scotland, Northern Ireland and elsewhere had was selective financial assistance. Since 1 January, that assistance has been largely reducing and by 2013 it will be virtually gone. Therefore, the model that we used for distributing it and the mechanism that we used for trying to bid for foreign direct investment are going to be denied us. All that will be left is soft assistance, with management plans and various other things, but the hardcore employment grants and capital grants that regions depended on to buy in business and investors will be denied us because of European regulations.
I can tell the Committee that a protocol exists within the United Kingdom to prevent all the different RDAs, the regional administrations and the national Government from bidding against each other. Foreign direct investors are not stupid. They knew that people in the regions were hungry and they went about their business going from one to the other. We had to establish protocols.
Lord Foulkes of Cumnock
Is it not the case that the noble Lord in Northern Ireland, we in Scotland and colleagues in Wales will continue to have development agencies, so why is he denying them to the regions of England?
Lord Empey
First, I have not denied anybody anything. I am just beginning to develop my argument. The fundamental point is that these organisations in the devolved regions are becoming systematically weaker. They have less ability to direct financial aid because the selective financial assistance, which was their principal weapon, is diminishing very rapidly and in a couple of years’ time will be gone altogether. The whole emphasis is shifting on to the development of skills. We had a fantastic conference in the United States last September and October hosted by the State Department at which we were given the opportunity to put Northern Ireland’s case. What was really interesting to potential investors was no longer grant aid; it was whether a region had a sufficient centre of gravity and critical mass of skilled people with the right skills in the right place to attract people. You can no longer buy in companies.
Sitting in the Chamber tonight is the noble Lord, Lord Ballyedmond, one of our premier entrepreneurs. I dealt with him and his colleagues on a number of occasions, and they were frustrated because the agencies and organisations could sometimes get in the way of business. Therefore, the question is: what is the right balance? Is it going to be possible to develop a national policy that will allow for the creation of the correct skill base? That will be far more important to foreign direct investment—and indeed, I believe, to indigenous investment—than financial aid in the future because the latter is going to be reduced and will be so small. I remember examples of £20,000 being offered per job created and perhaps even more. On average, it was £7,000, £8,000 or £10,000 per job created, but those days are gone and are not coming back. I certainly feel that this list of agencies is no longer sustainable but, at the same time, it is perfectly clear that you cannot create a complete vacuum.
Lord Campbell-Savours
If the responsibility that the noble Lord is referring to in the case of Northern Ireland were transferred to London, does he believe that the centre in London could deliver?
Lord Empey
I have always been a devolutionist and felt that there had to be a local dimension to most things. The noble Lord, Lord Judd, was asking whether people fully understood the social and other implications of what has been happening in this country over recent years. The answer for me is yes. I still have a constituency. It is largely an inner-city constituency in east Belfast. The people at my advice centres are queueing up, looking for help with DLA, housing benefit and how we can get them training, so I am very familiar with all of that. But having elaborate structures today, whether they be in Northern Ireland, in Scotland or anywhere else, is not the whole answer. There is another dimension.
The noble Lord, Lord Foulkes of Cumnock, will be well aware that we have another dimension in Northern Ireland, where we are up against the Republic, which has a very attractive corporation tax rate. At the end of the day, that was attracting more inward investment to that region than anything that any of our industrial development organisations could do.
Local government also has a role to play. There is no model that is absolutely applicable in every part of the UK. I would be very afraid to take a position on the north-east of England, about which a vast array of people seem to be extremely passionate. The noble Baroness, Lady Armstrong of Hill Top, made a powerful speech in respect of what she saw in her region and many other noble Lords, including the noble Lords, Lord Bates and Lord Greaves, spoke on it as well.
Lord Greaves
I actually spoke about the north-west and not the north-east, but I will back the north-east as well.
Lord Empey
The noble Lord was saying at one stage, if I recall, that part of his region felt that it belonged to the north-east. The point is that there is a large pool of people who feel passionately that the north-east in particular has a critical mass and should have representation. I know that the noble Lord, Lord Prescott, attempted to offer regional government to that region and it did not want it at that stage. Otherwise, I dare say, it would have, just as Scotland and London and other places have, its own economic development unit, probably with a Minister working full-time on that area.
The question for us is whether this is going to be solved simply by structures or by a combination of structures and a policy involving close linkages with higher and further education and training. I am not convinced, having established one of these bodies in the past, that the model that we need to go forward for the next 10 or 20 years is necessarily the model that we have adopted in the past. I am not saying that everything that is being proposed by the Secretary of State is the right solution. Local people in those areas would have a better grasp of that than I would have from a distance. But I no longer put my faith in the structures. When you talk to businesspeople, they are very dismissive of bureaucracy. Their real interest is not in any grants that you can offer them; it is whether you have the people on the ground who can do the job. That is the thing that matters most.
There seems to be a new dimension opening up. I do not have all the answers and it is not entirely clear that the Secretary of State for Business has them either. But things have changed dramatically in the past few years, not least because of Europe and what it is now deciding. We have signed up to that. The ability of local organisations to take strategic decisions and effectively to buy in the businesses that come to invest has diminished. We have to be aware of what is happening in the rest of Europe. We feel that people in other parts of Europe do not apply the rules as strictly and rigorously as we do. I am sure that noble Lords from Scotland and elsewhere have had that repeated to them time and again. We play by the rules while others ignore them. That is one source of considerable concern to people in the regions, who feel that we are not necessarily playing on a level pitch.
When one is next door to a region where there is 12.5 per cent corporation tax versus what we have, that is what I call real competition. It is something to which no individual organisation, whether regionally based or otherwise, has a solution on its own. I am for regional solutions but I am no longer putting my faith simply in the structures that we develop. Those structures themselves sometimes get in the way of business; they frustrate businesspeople and, of course, they are very expensive. Whether we have the balance right remains to be seen and I have no doubt that there will be further debate to establish that.
Lord Whitty
My aim is to speak to Amendment 56 which deals with the south-west region. It is not simply to convince the Committee that there are concerns on these Benches somewhat south of Watford, but as my noble friend Lord Knight spelt out before the break, the South-West Regional Development Agency has done a fantastic job in many respects, from projects such as the Eden project through to the Osprey Quay in his previous constituency where I was only a couple of weeks ago, through to the deals with the universities, science parks, and so forth. The majority of its interventions have been relatively small and, to respond to the noble Lord, Lord Empey, most of what the regional development agency has done has involved not large sums of money but soft policies, such as putting together patches of land, developing skills, getting people talking to each other who do not normally talk to each other, in the universities, professional associations, local government and small businesses.
The South-West Regional Development Agency may not have had the right geographical boundaries and it was probably not as universally loved as those in the north-east appear to be, but the prospect of its absence is causing deep and grave concern among small businesses and others within the region. Its replacement by the so-called LEPs is a shambles. It is a crazy situation. The Government who profess to want localism and to have industry-led alternatives to the agency have ended up with a situation where Whitehall is telling groups of business people and others who put their heads above the parapet what the basis to organise should be. On what basis is the man in Whitehall telling the putative LEPs in the M4 belt in Gloucester, Swindon and Wiltshire that that is not the appropriate sub-region? It seems a very appropriate sub-region to me and, more importantly, to them. Yet, they are being told that it is not the right region. People in Dorset—in Bournemouth and Poole—are being told to talk to Southampton and the Solent areas. Why? How is that allowing local businesses to decide on their own remits?
It is clear that the Government have set out on a process not on the basis of what is best for the regions or best individually for each of the English regions, but on the straightforward basis that they do not like RDAs and want to abolish them. What has happened in the south-west, which I suspect has happened in all regions, is that business men and women who some months ago were not particularly supportive of the RDA are now saying that with the abolition of the RDA in prospect, the government office for the region going and regional planning disappearing, they do not know who to talk to if they want to put together a deal, if they want to try to bring in public and private partnerships, if they want to make arrangements to develop the skills within the region that will achieve delivery of the ideas that they, as entrepreneurs, have. They are asking, “Who do we talk to?”.
At the same time, the big potential investors are asking precisely the same question. The areas that miss out are going to be the more peripheral ones in the north and the west of the country and maybe in parts of East Anglia and the Midlands as well. In London, there is always somebody to talk to. In Wales and Scotland you have government-backed organisations but in these other regions you have not. It is not just a question of the industrial heartlands; we are talking about rural counties in the south-west. Indeed, it is not a question of the Labour heartlands, in case Members opposite feel that we are parti pris to this—these are the heartlands of the Liberal Democrats and many Tories as well. As the consequences of the disappearance of the RDA and the regional offices of government become clear, I imagine that many of the MPs in their parties are going to have deputations from businesses and from local government asking how to deal with this.
What has happened in the south-west and what people now fear in the south-west is that there is no point at which small businesses can talk to Government about their problems and there is no point at which outside investors can talk on a regional or sub-regional basis with some authority behind those discussions. What will they do? They will go elsewhere. It is true, of course, as the noble Lord, Lord Empey, says, that the interventions will not be so much financial in the future, although there will be some money there and there will be money in things such as the European Regional Development Fund and money from the agricultural side of this dimension. However, they will say it is easier to do this in France or Germany or Spain. It may be slightly easier to do it in London or Scotland or Wales but with nobody to talk to in dispersed regions such as the south-west the absence of the RDA will come to be a dreadful brake on developments which were beginning to see fruition.
I do not think that is what the political representatives of the south-west would wish to see. I do not therefore think it is what the coalition Government would wish to see. But by their own universal decree that RDAs are bad, that is likely to be the consequence.
Baroness Harris of Richmond
My Lords, before we remove RDAs entirely from our lexicon, I would like to put on record the really excellent work done by Yorkshire Forward. I make no apology for being parochial. It has helped nearly 30,000 businesses a year to improve performance, which is one in 12 of the region’s business, with a typical turnover gain for each of those businesses of around £15,000 a year. About one in 30 people in the region’s workforce are in a job because of Yorkshire Forward’s work in the past five years. It has been one of the two most successful regional development agencies at turning investment into jobs.
Yorkshire Forward was created in 1999, and by 2000 it was already investing in business parks in small rural areas in my particular part of north Yorkshire, making a huge difference to those communities. Through its investment, it was to lever several millions of Objective 2 European funding into my local district, and transformational projects were initiated through the pilot Renaissance Market Towns programme. In my town of Richmond, money was granted to the award-winning Georgian Theatre Royal. One project that is dear to my heart and which we would have had great difficulty getting off the ground—I played a small fundraising role with our local MP—was the award-winning station development and the award-winning heritage partnership scheme. None of these would have taken place without the foresight and the funding of Yorkshire Forward.
Over the years, its investment helped to transform Richmond from an underperforming market town to Great Town of the Year in 2009. It is interesting to note that the Academy of Urbanism has awarded that national accolade to three Yorkshire towns—Richmond, Scarborough and Hebden Bridge—by a vote of its members over the five years for which it has been run. All those towns had strategic investment through Yorkshire Forward’s Renaissance Market Towns programme. Because of the speed at which Yorkshire Forward has been disbanded, funding contracted to complete the Richmond heritage partnership scheme had to be withdrawn. It would have brought redundant property back into economic use and, at the same time, restored the character of that beautiful Georgian market town. That is indeed a most terrible shame.
Lord Hoyle
This has been a very interesting debate on RDAs so far. I refer to some of the remarks of the noble Lord, Lord Empey, before I develop my theme. The noble Lord mentioned the difficulties faced by the Republic of Ireland because of its economic policies. As I understand it, it has been in a little difficulty recently, has it not? The noble Lord talks about Stormont, where power is devolved. I think he will understand that we want the best for our regions as well. I agree with him completely on one thing; this is about training. If that is left completely to industry, it might well, as it has in the past, go to the south-east rather than to the other regions. As has been said tonight, whether noble Lords have been speaking about the north-east, the north-west—as has the noble Lord, Lord Greaves—or other regions, such as the south-west, which my noble friend Lord Whitty spoke about, it is about ensuring that provision is spread more widely than the south-east, which, if it was left to the market, is where it would go. Because of that, I am totally against the Government's proposal and hope that, in the light of the debate and certain disquiet, as I sense it, from part of the coalition, they might just think again about their policy.
The noble Lord, Lord Greaves, raised this issue, but I want to speak a little more about what the Northwest Regional Development Agency has done and what successes it has had. In doing so, I pay tribute to the chairman, Robert Hough, and his colleagues, and the dedicated staff for their vision when they were led by Steve Broomhead, who until recently was the chief executive. I want to spell out more concretely for the Minister what the agency has done for the community. It has created or safeguarded just over 220,000 jobs; it has created 23,000 new businesses; it has reclaimed 4,000 hectares of brownfield land; and it has levered in £3.2 billion of private sector investment. This is quite a record in itself.
Data from the independent evaluation by PwC of the north-west’s development activity over the period 2002-07 reported—and this is very important—that, for every £1 invested, the Northwest Regional Development Agency had achieved a £5.20 increase in GVA. Independent X-ray inspections by the NAO in 2007 showed that the NWDA was performing strongly. At the time, this was the top mark possible. A subsequent report in 2010—let us bring things more up to date—showed that the NWDA was strong on reprioritising to deal with the economic challenges of the recession. That will be lost to us. Recently, the NWDA moved into the IiP gold standard. The big thing about this in relation to development agencies generally and the north-west in particular is that they built on the region’s heritage and strengths to provide the investment where it was needed—that is the important thing—and the leadership and support to ensure that the places, assets and industries of the north-west were best able to seize the opportunities for a sustainable future.
The Northwest Regional Development Agency supported the north-west in dealing with the tremors and shocks—particularly economic shocks—that can appear. They dealt with foot and mouth, which was very important in Cumbria in particular, and with the more recent flooding in Cumbria, getting practical support to businesses within four days of the floods. All that was very important indeed, especially in Cumbria. Could that be done by any other agency? I do not think so. The agency has also worked with partners to attract, host and develop a legacy from a wide range of events in the north-west, including the extremely successful Commonwealth Games—which everyone remembers—and Liverpool as the European capital of culture. This was largely based on the funds that came. The agency led the development of economic strategy in the region and produced the strategies needed. The important thing was that it brought together the regional agencies to develop the whole of the north-west economy, from Cheshire in the south to Cumbria in the north-west.
Let me go even further and develop in more detail how the agency played a part in the regeneration of Ancoats in east Manchester. In 2002, it undertook England’s largest compulsory purchase order to regenerate Ancoats, revitalising historic cotton mills and ensuring the north-west’s history as the birthplace of the industrial revolution, while bringing back derelict buildings for new economic use.
Let us talk a little about what they did in Liverpool. As Members here understand, the agency invested heavily in the regeneration of Liverpool’s waterfront, particularly the world famous “Three Graces” and the Albert Dock. How will we do that in the future? It helped to secure the arena, the convention centre and the new museum. It reopened the Leeds-Liverpool Canal, as we know, and the Mann Island development. These investments have paved the way for a fully private sector-funded redevelopment of Liverpool’s city centre. How will we do that without an agency that looks at the whole region?
I am sorry if I am going on a bit but, because we have been talking about development agencies, I want to put into context what has happened in the north-west. On businesses, the agency secured support for the nuclear industry, the supply chains, and the Nuclear Decommissioning Authority in west Cumbria. It also secured the national skills academy, the nuclear headquarters and the flagship energy facility in west Cumbria. We have talked a lot about west Cumbria because it is an area that could be forgotten. It has been said that it should perhaps have been with the north-east, but let us say what has actually been done. I notice my noble friend, who made a very powerful speech, nodding his head in agreement with what I am saying in relation to this.
Let us take Business Link Northwest. In 2007, the development agency launched a one-stop regional business link service to provide a primary access point for business support in 2008 and 2009. Over 92,000 businesses accepted the service, which was a 30 per cent increase on the previous subregional arrangements, with an 89 per cent customer satisfaction rate. What it has done is worth recalling. We talked earlier about skills. The noble Lord talked about the need for them. In Manchester, in 2004, the Victoria University of Manchester and UMIST combined to form a single university. The investment by the development agency helped to pave the way for integrating the two institutions and enabled the construction of new state of the art facilities. As a result of the help that it received, the University of Manchester is now Europe’s largest single-campus university, with over 27,000 undergraduate students. It is steadily climbing in the rankings to one of the top universities in the world, not just in this country.
A bit nearer home to me in Warrington is the Daresbury Science and Innovation Campus. Investment and leadership from the agency to create a critical mass of research knowledge, expertise and capacity has resulted in extensive spillover with over 100 high-tech enterprises now located in the Daresbury Innovation Centre. They benefited from all the help they were given by the agency. Are we going to throw all that away?
The noble Lord talked about RDAs competing. Does he imagine that the local enterprise partnerships will not compete with each other? I do not know where he is coming from. The RDA was split into Cumbria, Greater Manchester, Liverpool city region, Cheshire and Warrington, plus—the noble Lord, Lord Greaves, mentioned one of them—possibly three overlapping supporting approaches for local enterprise partnerships in Lancashire. Indeed, as he said, a lot of work has been done in a territory that both of us know well: the Pendle area and Burnley. There is the Blackburn with Darwen Borough Council, and an approach is being made by Blackpool, Fylde and Wyre. All these can go together in relation to it. The question is whether that will be the powerful voice that the RDA has been in the past. I do not think so. The needs of the whole region will be neglected. I am afraid that the competition between the two cities of Manchester and Liverpool will be to the detriment of the rest of the region. That is what we are hoping to get away from. We hope to look at the north-west region as a whole. That is the way in which we should go, but I am sorry that the Government have taken this approach. They have taken the idea—
Lord Greaves
I wonder whether the noble Lord—as he says, both of us know the Pennines well—will agree that when a region such as the north-west finally gets a complete set of local enterprise partnerships, or LEPs, whatever pattern it is, what will happen—and it is already being discussed—is that at regional level all the LEPs will come together to form some sort of association or confederation of LEPs to recreate a structure at a regional level. However you look at it, this will be necessary.
Lord Hoyle
I could not agree more with the noble Lord. Of course that is what is going to happen. Something is being tossed away needlessly by the Government in a very hasty decision, without due thought being given to either region. I certainly agree with him that these things will need to come together if the various regions throughout the country are to benefit. Unless we do that—unless we get them together—we have failed. I am so sorry that they are being split up in this way, only for them all to come together under another name, as the noble Lord, Lord Greaves, says. In view of the pleas that have been made from these Benches and from other Benches, particularly from the Benches within the coalition—they seem to sit a little bit apart at times—will the Government please think again before destroying the RDAs?
Lord McKenzie of Luton
My Lords, I speak to Amendment 51, which opposes the abolition of the East of England Development Agency. I am perhaps a lonely voice for the east, although it is a region that I know the Minister knows well, so I look for some particular favour in his response tonight. I do not think that the east as a region has the innate identity that we have heard about tonight, particularly with the north-east and the passion that goes with that. We are probably a bit more like the south-west; we have grown to be a region. Before I develop my theme, I just say in response to the noble Baroness, Lady Harris, who I think was arguing for the benefits of some regional selective tax breaks, that selective tax breaks can be good for job creation, but mostly for accountants and lawyers. For me, it is a slippery slope and we need to think about it very hard.
I take this opportunity to reflect on the opportunities for the east, which EEDA has encapsulated in its Blueprint for Growth, and on why the fragmentation of the regional effort will diminish those opportunities. I caution that the replacement local enterprise partnerships are no substitute for the RDA. In any event, in the east some 27 per cent of the population and 26 per cent of the businesses will not be covered by a LEP.
My first encounter with the RDA was about a decade ago, as leader of the council, when we heard the news that the Vauxhall car plant was to close; in fact it was—would you believe?—heard over the radio while people were still working on the production line. I did my job as leader of the council in my office in Luton town hall; I sent off a fax to the chief executive of General Motors in Detroit demanding that it rescind this closure notice. I still await a reply. It was the RDA that sprung into action and convened a strong local partnership, which took action around skills training, supply chain diversification, job placement, investment and infrastructure. It was the RDA’s efforts that made a significant difference to the local economy and to literally thousands of local people in Luton and the surrounding area.
EEDA has a clear mission to improve the economy of the east of England. It works across the six counties of Bedfordshire, Cambridgeshire, Essex, Hertfordshire, Norfolk and Suffolk. The east of England is one of the fastest-growing regions in the UK in terms of population. It is a beautiful and diverse region, rich with cultural heritage and international trade links. It can be proud of its many achievements, but it faces many challenges, especially from intensifying global competition.
Despite the lack of homogeneity across the region, EEDA’s efforts have been spread right across the area—in its impact in Bedfordshire borough, central Bedfordshire and Luton, for example. In the past 10 years, EEDA has invested more than £100 million in this sub-region. Some 6,000 jobs have been created or safeguarded, 13,000 people have improved skills, 1,000 businesses have been helped to start or grow, 2,300 people have been supported into employment and 43 hectares of brownfield land have been reclaimed. Funding of the UK Centre for Carnival Arts in Luton has created a national centre for carnival excellence, boosting the local economy and the cultural heritage.
In Norfolk over that period, EEDA similarly has created or safeguarded some 6,000 jobs, improved the skills of 22,000 people, helped 1,100 start-ups and reclaimed 72 hectares of land. It has also supported projects such as the Hethel technology park in its bid to be a globally recognised centre of excellence for low-carbon engineering and manufacturing. The Cambridge rural enterprise and mentoring initiative is encouraging start-ups in economically disadvantaged parts of the region.
The East of England Manufacturing Advisory Service has supported Vacuumatic, the world leader in paper counting technology, to implement lean manufacturing principles. Over the past 10 years, EEDA has invested £81 million directly in the Hertfordshire economy, helping some 22,600 businesses to start up. Highly skilled jobs for research companies are to be created as part of a £120 million expansion of the GlaxoSmithKline bioscience campus at Stevenage. Some £8 million has helped to support small life science companies and to protect jobs in the biopark in Welwyn Garden City. EEDA investment has regenerated Ipswich waterfront. EEDA has also invested in the Haven Gateway Partnership, the single most important cluster of ports in the UK. Everywhere you look in the region, it is possible to see the impact of the RDA.
Looking back is one thing, but what of the future? One in every nine UK businesses is based in the east of England—more than 430,000. Business investment in R&D is three times higher than the UK average. It has the most successful life sciences cluster outside the US. The world-renowned Cambridge technology cluster is in the region representing 1,400 companies and employing 43,000 people. The east of England has significant capability in both mature and developing high-value knowledge-based markets. It is already a major generator and supplier of energy, including leading the way in renewable energy generation, which makes it the centre of one of the world’s largest markets for offshore wind energy and the UK’s most dense area of offshore development between the Humber, the Greater Wash and the Thames estuary.
Despite these successes, the region requires a skills base that better suits its needs. There are disparities in economic performance within the region and areas such as Luton have high deprivation. The region suffers from an infrastructure deficit, with congestion on the transport network costing the UK more than £1 billion per annum. There is only one commercial broadband network in the east of England, which provides coverage to only around 60 per cent of the region.
It is at this time of huge opportunities but significant challenges that the Government choose to pull the plug on the agency that has been at the heart of the success of the east of England and best placed to address its challenges. In parallel, they are killing off regional spatial strategies. There is a continuing need for joined-up interventions in support of skills, infrastructure, business support and supply chain managers.
The focus that the RDA brought to the region is being scattered, as we heard from others, in all sorts of directions—the EU programme to DCLG and Defra, inward investment to UKTI, manufacturing support to BIS, and Business Link, eventually, to some national scheme. Other noble Lords have mentioned issues of asset disposal. One of the issues that needs to be addressed, especially when regeneration funding is involved, is the potential for clawbacks, particularly for local authorities.
So much for localism. The local enterprise partnership does not cover the whole region; it covers parts of three old RDAs. By all accounts the process locally fits the Cable description of being,
“a little Maoist and chaotic”.
As we have heard, LEPs have inadequate funding, there are no significant resources for their development and local authorities are going to be very hard pressed to fund even the secretarial support. It is not too late to draw back from the hasty and ill thought-through decision to abolish RDAs. The east of England will certainly be less well placed to realise its potential without the RDA. This is a loss not only for the region but for UK plc.
Lord Taylor of Holbeach
My Lords, I begin by thanking noble Lords for their contributions to this debate. It has been an excellent opportunity to consider the expertise that this House can provide on a subject covering all points of the United Kingdom. I understand the passion; I speak as a provincial myself. We are all in politics, to a lesser or greater extent, simply because we believe in where we come from and in the communities from which we originate and because we care about the people with whom we live and work. However, there may be other ways of dealing with the imbalances in the economy in the United Kingdom and I ask noble Lords to listen to the argument as to why the Government are proposing a changed approach. Given the breadth and detail of this debate, I regret that I am not likely to be able to respond to every point that has been raised, but I assure noble Lords that I will go through the record and seek to answer the points in a letter, which I will circulate to all noble Lords who have spoken this evening.
The Government’s economic ambition is to create a fairer and better balanced economy. We wish to see business opportunities in a broad range of sectors balanced across the country and between businesses. The noble Lord, Lord Empey, spoke with experience and authority and indicated that the real challenge of building investment and providing job opportunities was probably outside the traditional structures represented by the RDAs. Our Local Growth White Paper sets out how we will put businesses and local communities in charge of their own futures, rather than having to rely on centrally imposed regional development agencies. If I may say so, I felt that some of the speeches confused the effectiveness of critical mass with the greater strength of coherence and real local empowerment and focus.
The amendments that we are debating as a group would preserve the regional development agencies as a whole, or those in specified individual regions. We believe that preserving all or any of them would be a retrograde step. In December, we placed in the Library of the House a short briefing paper, which sets out the reasons for abolishing the RDAs and gives a snapshot of the situation in each region. This has now been updated. Indeed, the number of LEPs has increased dramatically since that time. That update has been placed in the Library and I will build on this information in the course of my remarks.
We set out the rationale for our proposals in the Local Growth White Paper, which was published in October 2010. One key theme in the document is the need to shift power to local communities and businesses. We believe that localities should lead their own development and have the flexibility to tailor their approach to this and to their individual circumstances. If this is to work, they must own their own economic strategy; one imposed from regional or national level would not have this local ownership. For all the good work that they did, the RDAs did not really belong to the communities within the regions. Many of the policies and initiatives that they delivered were on behalf of national government and did not always recognise the varied needs and opportunities that individual places have.
The RDAs were also designed around administrative regions rather than real economic geography. While it would be possible to discuss this matter in the context of every one of the individual RDAs, I would like to discuss two specific examples now. My first example is the south-west region, stretching from Swindon in the east to Penzance in the west and covering an enormous geographical and economic range, from the prosperous and relatively well connected places in the upper Thames valley to relatively isolated and deprived areas in Cornwall. Bristol has many problems in common with our largest cities—those of economic success and of economic inclusion. The issues faced in rural parts of the region are quite different. Linkages, too, differ, with parts of the region having close ties to London, the south-east, the West Midlands and Wales, and others having no such link at all. The relevant policies in each case are quite different. RDAs sought to address that problem and to recognise the differences within their regions, but it makes no real sense to establish a single body to cover the entire region and to expect it somehow to understand and cope with that huge variety. It is far better for the local partners in Bristol to develop policies dealing with the specific issues that they face and for those in Cornwall to do likewise.
Lord Knight of Weymouth
I do not want to delay the House, because I know that there is other business that we want to get done. The Minister is talking about the south-west, where the rivalries between Plymouth and Cornwall are well known; left to their own devices, the Tamar will remain the border between them and it will be difficult to persuade a LEP to form across that river. But I also think that it is very difficult to see in economic geography terms how you can develop parts of Cornwall and Devon without taking into account Plymouth and the city region approach. That relationship between a deprived rural county, Cornwall, and the only major city and centre of population needs to be thought through in terms of economic strategy, but the LEP approach will not do that.
Lord Taylor of Holbeach
I am grateful to the noble Lord for that intervention because it gives me the opportunity to respond by saying that there is almost a mathematical relationship between size and the importance of the boundary that exists between different regions. One difficulty with regional boundaries is that they are frequently quite dramatic, although there may be a geographical coherence. I am a Fenman. The Fens are in the eastern region, about which the noble Lord, Lord McKenzie, spoke, but they are also in the east Midlands. Yet it makes sense for them to work together as a geographical whole. One great advantage of the LEP approach is that, when the models are smaller, the boundaries are slightly less severe and there is an opportunity for LEPs to work together. That is the whole point of the policy—to create greater flexibility in how the units of economic development can work together where they wish to. That supports the argument of One North East and the degree to which common policies across the north-east can work. I accept that it is possible to have a different point of view, but I am telling noble Lords how we see this. If we really want to address the regional imbalance in this country, we have not succeeded with RDAs.
Baroness Armstrong of Hill Top
Does the Minister accept that the Government are out of step with virtually everyone in the north-east?
Lord Taylor of Holbeach
I take a great deal of comfort from my noble friend Lord Bates, who shares my view of the ability of the north-east to develop common policies where it wishes to do so. There are individual differences between Teeside, Tyneside and Wearside. You would not want to say you were in Newcastle when you were in Washington—I remember somebody getting into terrible trouble for doing so. Locality is very specific and the north-east has different characteristics. It is not homogenous and there are methods of getting economic development in the north-east which do not depend on having a single body to deliver it. A coalition of different bodies with a common policy may well be a much more effective method for doing so.
I gave way to my noble friend when I was talking about the West Country. If I might take Bristol as an example, it is far better for the local partners to develop policies for the specific issues it faces, and for Cornwall to do likewise. I strongly believe that any economies of scale that a regional approach may have are more than outweighed by an absence of local knowledge and commitment and the consequent loss of responsiveness to local circumstances. In response to the noble Lord, Lord Whitty, who asked why the Gloucester, Swindon and Wiltshire LEP was rejected, I would say that, although there was some business support for the proposal, other businesses in the area felt that a different geographical approach was right. Ministers have gone back and asked the partners to discuss their proposals again in order to develop an approach which takes the full range of local views into account. So the matter is not concluded; it is still under debate, and the Government await evidence on which to make their decision.
Lord Greaves
I will give my noble friend a slight rest. Does he not accept that not only are the Government apparently out of step with what most people in the north-east think but their thinking on regionalism is completely out of step with pretty well every other country in Europe of a similar size? It really risks England becoming the most centralised country in the whole of western Europe. While what he says about LEPS and putting the emphasis at a more local level might well be a perfectly acceptable way forward, the real problem is that the LEPs are being deprived of pretty well all the resources which the RDAs and regional bodies have at the moment. Therefore, unless they are lucky enough to get some of this relatively small amount of regional development fund money, they are going to be toothless.
Lord Taylor of Holbeach
I should remind the noble Lord that I do not consider £1.4 billion in the regional growth fund to be insignificant. Noble Lords may well feel—and they clearly do—that it is better that the taxpayer should fund large redistributions through RDAs, but there may be other ways in which economic policy can be directed, as my noble friend Lady Harris of Richmond mentioned. She talked about tax incentives. Far be it for me, as a very lowly member of the Government, to challenge the Treasury on tax incentives, but there are different ways of doing these things other than handing out taxpayers’ largesse. I emphasise that that is the way in which this Government are thinking.
Perhaps if I talk about the north-east, I might be steering into danger. I am not too frightened of doing so because we should recognise that the north-east does not have a single monolithic economy. The region has a varied economic geography, with significant economic poles, across the Rivers Tyne and Wear and the River Tees. Each place has a different industrial heritage and different strengths, opportunities and threats. The local authorities in Tees Valley have a strong track record in working together and were quick to put forward an application to form a local enterprise partnership. This argues that they recognise the benefits of these new arrangements. A partnership has now been established, covering the authorities in the rest of the region. As Vince Cable has made clear, this is not to say that some form of co-operative arrangement across the north-east is not justified if local partners want it. I said that at Second Reading and I have just said it again. However, I strongly question whether a regional development agency, with all its attendant complexity and bureaucracy, is necessary to achieve this.
The previous Government gave RDAs the task of narrowing the gap in growth rates between the prosperous region of the greater south-east and the rest of England, and provided them with significant resources over a sustained period to help them achieve this. However, it was a target that they failed to meet. Between 1990 and 1999, the real gross value added per head in the greater south-east grew by around 1.8 per cent in each year, compared with around 1.4 per cent in the other six regions—a gap of 0.4 of a percentage point. Between 1999 and 2009, annual growth in the greater south-east fell to 1.4 per cent, compared to 0.8 per cent in the other regions—a gap of 0.6 of a percentage point. Therefore, the gap in growth rates has widened by around 0.2 of a percentage point. It is time to try a new policy, even in the north-east.
As the White Paper makes clear, we are encouraging businesses, local authorities and their partners to develop local enterprise partnerships based on real economic areas, rather than artificial administrative regions. The new partnerships are based on where people live and work. Businesses and civic leaders will work together to drive sustainable economic growth and create the conditions for private sector job growth in their communities. Partners have responded to this invitation in an enthusiastic and innovative way. So far, 31 partnerships have been asked to form boards, covering 87 per cent of England’s population and a similar proportion of businesses. We are actively engaged with partners in the remaining areas, helping them to develop proposals that will meet our broad criteria.
I reassure the noble Lord, Lord McKenzie of Luton, that five LEPs have been asked to establish their bases in areas that cover the east of England. I assure the noble Lord that there will be partnerships covering the entire region. There will be no businesses or parts of the population that are not covered by an LEP.
Baroness Whitaker
What the noble Lord has to say about LEPs does not exactly fit the situation of Newhaven, where the LEP is just wrong for it.
Lord Taylor of Holbeach
I was coming to the whole business of Newhaven. I am grateful to the noble Baroness for mentioning earlier that she wanted to talk about Newhaven. As she will know, Newhaven is currently covered by the LEP for East Sussex, Kent and Essex. It is perfectly possible for Newhaven and the Lewes district to work with the Coast to Capital LEP as well. The whole point is that boundaries are not as important with LEPs as they are with RDAs. I hope that Newhaven’s position will indeed be recognised by Lewes District Council in the way that it operates within the LEP framework. It is perfectly at liberty to do just that.
I come to a few other parts of the country; we have mentioned everywhere, I suspect. There is perhaps an example of cross-regional development that I should also draw your Lordships’ attention to. The partnership in the south-east Midlands attempted to deal with an economic area in which the former regional boundaries were particularly irrational and obstructive—the area around Milton Keynes, which the noble Lord, Lord McKenzie of Luton, will know. To an extent, the RDAs recognised this but they were largely ineffective in responding because their structures hampered them in doing so. The local partners do recognise it fully. They are basing their proposals around a practical response, and I regard this as progress.
The White Paper also described the regional growth fund, which, as I said, is worth £1.4 billion over three years. This is money to be spent outside the south-east of England. This complements the other measures that the Government are taking to support growth through investment and to provide support for education and skills. The noble Lord, Lord Empey, emphasised the role of skills, improvements in competition and support for research and innovation. These are the focus of the measures and will lead to real jobs and skills. Without a skills base, we have no opportunity of building the jobs and the industries that will provide employment in the future.
Lord Hoyle
Will the Minister say why he thinks he will develop skills better than the RDAs have done?
Lord Taylor of Holbeach
The skills will be developed as part of the skills policy of the Government. My honourable friend in another place, the Minister, Mr John Hayes, has recently announced a skills strategy for the country. If we have not debated it in this House, it is because we have been very busy debating other things. However, it is a very important strategy, and it is part and parcel of the strategy for economic growth in this country.
Perhaps I may continue to describe the regional growth fund. It is intended to encourage private sector enterprise and create sustainable jobs. In particular, it is designed to help places currently reliant on the public sector to make the transition to private sector-led growth. I suspect that there is a feeling across the House that this is important. Once again we are encouraging proposals to come from the bottom up, responding to local circumstances. When the first round of bidding closed at the end of January, we had received nearly 450 proposals, showing that there is a significant appetite for an approach of this kind. My noble friend Lord Heseltine is chairing the panel which will be selecting the best of these proposals; and noble Lords have referred to my noble friend in contributions to this debate. Noble Lords will need no reminding that encouraging growth throughout the country is a cause dear to his heart.
Lord Greaves
I apologise for intervening again. The resources may be significant, as the Minister said, but they are considerably less than the resources available at the moment, either through RDA or through the regional housing pots and all the other resources, which are being either dramatically cut back or scrapped altogether. Is not the problem that many of these places that have put forward good, exciting schemes and want to get ahead will be denied a penny because they will not win the competition that the noble Lord, Lord Heseltine, is presiding over?
Lord Taylor of Holbeach
I cannot guarantee that all the 450 proposals will find funding. However, I can be sure that the ones for which funding is found will be successful and provide opportunities for the people in those areas.
Lord Beecham
Can the Minister indicate in monetary terms the extent of the bids that have been made?
Lord Taylor of Holbeach
No, I do not have that information available, but we know the amount of money that is available for the fund, which I have stated.
Finally, noble Lords raised the question of what will happen to RDA assets and activities. There has been some concern that there might be a fire sale. That is not the case. These bodies will be run down, the relevant clauses of the Bill will become law, and the RDAs will finally be abolished. RDAs have been liaising with the relevant local authorities, local enterprise partnerships and other local partners. On 31 January, all RDAs submitted detailed plans for the disposal of their assets. They recognised that there will be a variety of destinations for these assets, depending on their nature and associated liabilities. These plans are currently being scrutinised by the Government. After scrutiny, each RDA management board will sign off its plan and begin implementation. RDA asset-disposal plans have been developed while taking into account the principles that we set out in the White Paper. These include maximising value for money from these assets, ensuring that liabilities follow assets and passing control down to local level where possible. Where this is not appropriate—where, for example, an asset is of national importance, such as that set up in the south-west and mentioned in the debate, and considerable resources are needed to run it—other options will be considered.
Similarly, co-ordination of some activities formerly undertaken by RDAs will be taken back to national level, and some activities, such as those of the England Rural Development Programme, will retain local accessible support. In some cases, such as managing the European Regional Development Fund and the England Rural Development Programme, we need to ensure compliance with our obligations to the European Union. In other cases, such as co-ordination of inward investment activity, we need to ensure that we can put over a coherent and effective message to potential investors. However, even in those cases, we are setting up mechanisms under which local partnerships have the opportunity to influence policy and help drive the decisions we make. For all these reasons, we do not believe that retaining all or any of the nine RDAs will help to achieve local growth. I therefore ask the noble Baroness to withdraw her amendment, and for noble Lords not to move theirs.
Baroness Royall of Blaisdon
My Lords, I am grateful to the Minister for his response, which I will carefully consider, and I look forward to the letters that he has undertaken to write. All around the Chamber we would agree that regional development is key to the economic recovery of this country. RDAs have been, and for the moment are, excellent strategic catalysts for growth. I have to say that I am not confident that their replacement by LEPs will suffice. However, I will take into consideration what the noble Lord has said. At this juncture I beg leave to withdraw the amendment, but I reserve the right to bring something back at Report.
Baroness Royall of Blaisdon
My Lords, this amendment is on the abolition of the Security Industry Authority. I pay tribute to my noble friend Lady Henig, who has been its chair. My Government established the SIA in 2004 to reduce criminality in the security profession and to raise standards in the industry. This is exactly what the SIA has done and what I would like it to continue to do. The body has two main duties: the compulsory licensing of individuals undertaking designated activities within the private security industry, such as security guarding, door supervision, close protection, public space surveillance by CCTV, and protecting cash and valuables in transit; and to manage the voluntary approved-contractor scheme.
It is easy to understand why the police campaigned for the industry to be regulated, why they are content with the way in which the authority is working and why they do not want it to be abolished. Neither do I. It is not difficult to see why such an industry should have been regulated. You just have to think about how the actions of nightclub bouncers have, according to my children and their friends, improved exponentially over the past few years. You just have to think about the potential for people who wish to harm our society with acts of terrorism and how much easier it would be for them to find employment in an unregulated industry. You just have to think about the potential for employing people—perhaps illegal immigrants—at below the minimum wage. I realise that employers in the industry have a responsibility but I am sure that they are greatly assisted by the SIA.
Can the Minister confirm that the Home Secretary has decided that there will be no significant changes to the SIA until after the Olympics in 2012? If that is the case, it is certainly very telling. I suggest that our citizens should be able to enjoy a properly regulated security industry at any time, not just in the period leading up to and during the Olympics. I ask the Minister whether there are plans for a smooth transition to a self-regulated industry and whether the police are content with the transition. Finally, what reviews do the Government intend to carry out following the proposed changes to ensure that the public can continue to have confidence in the system? I simply do not understand why the Government wish to abolish this body and I look forward to hearing from the Minister.
Lord Whitty
My Lords, I rise briefly to support this amendment. I do so partly because I was in on the beginning of the campaign to regulate the security industry when I still worked for my trade union, which organised the more respectable end of the security industry. However, 20 years ago, and indeed more recently, it was an industry with some very dodgy people in it. There was an element of criminality; there were occasional outbursts of violence; there was fraud; and there was a straightforward dereliction of duty to the businesses and individuals that employed so-called security companies. There was much in the industry that, to put it at its mildest, was short of customer service.
It was not a pleasant industry but in many respects it was one on which, because of the nature of our society and the value of the goods in which we trade, more and more businesses came to rely. They needed to be assured that the people they brought in to protect their premises, their transit arrangements, their valuables and, in many respects, their staff and customers knew what they were doing and did not have any record of transgression. That is what, after a long campaign, led to the setting up of the Security Industry Authority.
The Home Office has ummed and ahed about this for many years and has done absolutely nothing about it. The first time the authority’s abolition was proposed, it was suggested that its responsibilities went back to the Home Office, but that would have been absolutely disastrous. Now, a degree of self-regulation for the industry is proposed. However, the problem with that is that the more respectable end of the industry will undoubtedly attempt very effectively to ensure a degree of quality of service and vetting of staff and individuals but the less respectable end will re-emerge and so-called security firms will spring up all over the place employing people who have not been through the vetting procedure. Therefore, any self-regulation is dependent on the majority of the industry participating in it and being able to exclude others.
There may have been criticisms of the SIA but most of those have probably been invalid. I feel that there should have been a mandatory system of approving companies, as well as individuals, but the authority, together with the police, undoubtedly helped to clean up the industry. Taking away this protection from businesses and individuals is a big risk for the Government to take. I hope that the Home Office will think again, because it cannot do this job itself. Those at the respectable end of the industry do not really want to be reduced to self-regulation. They will operate such a system if the Government insist on it but it will not be as effective as the development of the SIA. For that reason, and in the interests of protecting a lot of small and large businesses and public premises, I ask the Government to think again.
Baroness Henig
My Lords, I declare an interest as the current chair of the Security Industry Authority and president of the Association of Police Authorities. In the speech I made at Second Reading I told the House about the enormous concern with which the Government’s proposal to abolish the organisation and return to self-regulation of the industry was greeted, particularly by people in the industry and also by Scotland and Northern Ireland. Last week the chairman of Security Alliance said how the inclusion of the SIA on the list for abolition came as a great surprise to the industry. He said that since regulation was introduced, there had been a general acceptance in the industry that licensing had been a force for good. So that is clearly understood and agreed across the industry.
We know there has been a lot of criticism recently in the other place by the Public Administration Committee about the handling of the bonfire of the quangos. The committee said it was a rushed, botched job with no clear evidence of savings or concern for value for money or efficiency. More important for the SIA was the lack of consistency in applying the three questions and the issue of whether they were even the right questions to ask. I asked at Second Reading why the SIA was being abolished when the Gangmasters Licensing Authority was being spared—a question which has not yet been satisfactorily answered. The Public Administration Committee’s report asked exactly the same question. The silence in response is deafening.
I asked another question to which there has been no response: why is it that the Government believe the industry is mature enough at this moment in time to regulate itself when the Scottish Government, the Northern Ireland Administration and even large parts of the industry disagree very strongly. Yet the Minister told us at Second Reading that there had been no major disagreements on the legislation between the Government and the Scottish Government. I do not think that is entirely an accurate description but obviously I defer to others on that.
The most serious issue I had with the Government on this matter was their lack of consultation with the industry. After all it was the BSIA and other bodies and individuals within the private security industry which consistently pressed for regulation of the industry in the 1980s and 1990s and they have supported it and for the most part paid for it. Surely, therefore, the views of the industry should have been sought before the policies were drawn up, not to mention the uncertainty caused to 350,000 individuals working in the industry, many of whom funded their own licence fee and invested in their training. Surely there should have been consultation with all these people. Certainly the view of the Public Administration Committee was that there should be consultation with all the bodies listed in this Bill, even at this late hour, and who can say that it is wrong?
In the case of the security industry, its leaders sensibly were not prepared to wait that long. Indeed, they made their opposition to the ending of regulation and the abolition of the SIA very clear. They wrote to the Home Secretary, the Prime Minister and the Deputy Prime Minister. They organised and they highlighted the tremendous risks inherent in the Government’s proposals, forcing the Government to change their mind. Instead of abolition the Government agreed that there should be a phased transition to a new regulatory regime and that the SIA should no longer be an NDPB.
So there has been a change and therefore this Bill is already out of date in terms of regulation of the private security industry. In the exchange of views that took place between the Government and the industry, industry leaders made it clear that they were already discussing with the Security Industry Authority a blueprint for the evolution of regulation whereby the regulator and the industry would work together to produce smarter, more cost-effective regulation and would press the Government to introduce business registration alongside individual licensing so that we could move to a more efficient, effective and lighter-touch regulatory regime—“better for less”, to use the Government’s own phrase. That was certainly what the industry was working towards with the SIA. As the Public Administration Committee so rightly observed, the major issue at stake in relation to quangos should not be about their status or structure but about effectiveness and delivering value for money. Since last summer the SIA has been in discussion with the industry about precisely these matters.
The issue before us in this discussion on the Security Industry Authority is not a simple should it or should it not be abolished, but how best to facilitate a phased transition from the current regulatory regime to lighter touch, smarter regulation in which industry bodies and leaders play an increasingly active and important role alongside the SIA. There is no disagreement about that. The issue is that it is a process which will take time. It cannot be rushed. It has to include all sections of the industry that are currently regulated. While the recent emergence of the Security Alliance as a unified voice for the industry is to be welcomed as a very positive development, it is by no means fully established across the industry. So there is a lot of work to be done, and along the way the decisions made by the Home Office and the Government in relation to the extent of regulation—for example, that it should not include in-house security, or for the time being private investigators or security consultants—will undoubtedly be queried and challenged by many in the industry. If we are discussing the industry’s future, people working in it want to raise many things.
Then there are the views of Scotland and Northern Ireland. I cannot speak with enormous knowledge about these areas but the licensing of private security has been a huge success both in Scotland and Northern Ireland. It has been in Scotland since 2007 but licensing in Northern Ireland is just a year old. The Northern Ireland Administration are in no rush to change it and we can understand why. They think that it has made a big difference. Both those areas have elections in the spring and we will have to wait to find out the views of the new Administrations and Governments that result. A lot is standing in the way of progress at the moment. As part of the phased transition process, the industry is strongly of the view that the Government should play their part by showing a willingness to bring in business registration in the industry, alongside the licensing of individuals. I hope that the Minister will be able to commit the Government to action in relation to business registration when she replies, as the industry is keen to see that.
We are working to move forward. We in the SIA are consulting a whole range of bodies, including the strategic consultation group, a Security Alliance industry panel, and so on, because it is important to have agreement with the industry and major stakeholders on key principles and milestones for the future, while being conscious, as was said, of the need to proceed cautiously before the Olympics in 2012. There are also the Commonwealth Games in Scotland in 2014 and we must not forget that. It is important to put on the record that many senior figures in the industry are urging caution. They do not believe that the industry is yet ready for self-regulation. I strongly support giving the industry more responsibility in terms of licensing and training, but I share its view that there is no evidence at present that it is sufficiently mature at this point for self-regulation. We have to move very gradually towards that goal. Substantial progress will have been made towards establishing a new regulatory regime by 2014 but there is the big issue of effective intelligence and enforcement operations. It is important that they continue and that the state continues to maintain a strong regulatory regime in respect of criminality; in respect of criminals and their associates; and in respect of those who continue to seek to undermine and weaken the regime. Everyone who works in the industry wants the regime to be effective in driving out and keeping out criminality and in upholding robust standards. That is extremely important because the credibility of the industry requires strong intelligence and enforcement activity, which has to continue in any new regime.
There is a considerable way to travel. Listing the SIA in Schedule 1 to the Bill was a misguided and inappropriate step for the Government to take. We are talking about Schedule 3 and changing the nature of the organisation and moving it to something different. The important thing is that we all want to build on and improve the regulation that has been introduced. It has been a great success and we want to continue it both with the industry and the devolved Administrations. We have to work with them at their pace, which I hope the Government will be supporting so that we can move forward together.
Baroness Meacher
My Lords, I will speak very briefly in support of the comments of the noble Baroness, Lady Henig, the current chairman of the SIA. I should mention that I was the first chairman of the Security Industry Authority some years ago and in that capacity I came to respect very highly the considerable number of companies that control the vast majority of companies within the security industry. However, I was introduced to the industry prior to regulation and can certainly endorse the comments already made that the industry does attract a large number of highly unscrupulous individuals who, without very tight controls, are more than willing to take advantage of the unsuspecting, either employers or members of the public.
The two big achievements of the SIA, and a credit to its current chairman, have been the raising of the educational level of the 350,000 or so security officers and also, as others have mentioned, the protection of the public and employers from these unscrupulous security guards. I am sure the Minister would like to recognise the value of its work.
There is of course merit in the proposal to focus in future on the system of business registration, leaving the individual licensing largely in the hands of the industry. However, I too do not accept the Government’s argument that none of the SIA functions needs to be carried out by a public body. In view of the extent of criminality within the industry, and the potential for far greater amounts of criminality, this just does not seem realistic. It is difficult to imagine that all aspects of the SIA can effectively be carried out by the industry itself.
The Government refer to employers in other industries taking responsibility for making appropriate recruitment decisions and suggest that this approach would be appropriate for the private security industry. My understanding is that the industry just is not ready. I do not think the Government have at all taken into account the degree of criminality in the industry. It must be quite alone—in fact I cannot think of any other industry that has comparable problems.
It is certainly most encouraging that Ministers have now agreed to the SIA’s plan for evolution towards a new system based upon business registration. However, Ministers do not seem to be taking account at all of the degree of opposition to these changes both in Scotland and Northern Ireland. It seems the Government will need to move much more slowly if they are to have any hope at all of bringing the devolved Administrations with them. I hope the Minister will take very seriously the points already made by the noble Baroness, Lady Henig.
I want to mention one small but particularly threatening sector of the security industry—the security officers who control parking on private land. The Government are committed to ending the right to clamp vehicles on private land. I applaud this move wholeheartedly. However, there is no move to prevent, as I understand it, these operators charging unsuspecting members of the public extortionate fees for parking on private land. It is in this area that threats are made and extortionate quantities of money are demanded, increasing over time if people do not pay up quickly, that lead to people submitting to the fees charged. I hope the Government will be able to deal with that relatively small but really alarming sector of the security industry in the course of their deliberations about reform.
I was very pleased to note in the Government’s briefing that any proposed changes will be subject to parliamentary approval. Perhaps I may take this opportunity to applaud the Minister, who told us in a meeting recently that he will be eliminating Clause 11 and Schedule 7 from the Bill. This does seem to me an enormous step forward and I imagine I am speaking on behalf of others too in saying that this is extremely welcome. That is at least an excellent piece of good news.
Finally, as others have said, the SIA regulatory system is self funding. There are no public spending implications in this reform. Perhaps the noble Baroness will explain to the House the motivation for a reform which seems to be opposed not only by the devolved Administrations but also by the industry which currently pays the bill for the Security Industry Authority. I look forward to the Minister’s response.
Lord Foulkes of Cumnock
I add my congratulations and thanks to my noble friend Lady Henig for the work she does as the chair of the authority. I have had a number of discussions with her over the past year or so about the situation in Scotland, and she has been most helpful. She carries out her work in a modest but very effective way. I also echo what my noble friend Lord Whitty said earlier: before the SIA was established, the industry was characterised by cowboys and gangsters. I remember it well—not that I was part of it in any way, but I remember how it operated. I remember its links with organised crime. It was also characterised by low pay, which created particular problems with bribery in the running of operations.
That did not all change through self-regulation. It changed because we legislated and because the Government took clear and decisive action to ensure that the industry was properly regulated.
My main point relates to Scotland. I see the noble and learned Lord, Lord Wallace, here. I think that he will confirm that there is no doubt what is the view of the Scottish Executive in relation to the future of the SIA. On 8 September, the Home Secretary wrote to the Scottish Government seeking their views on the UK Government’s intention for the future of the Security Industry Authority. Kenny MacAskill, the Justice Minister in Scotland, in a reply to my colleague in the Scottish Parliament—he is not my noble friend yet—Richard Baker, stated on 11 November:
“I responded on behalf of the Scottish Government on 13 September 2010, setting out my concerns about the UK Government's proposals and strongly emphasising the need for continued regulation of the private security industry in Scotland. These views were also set out in a letter that I wrote to the Deputy Prime Minister on 24 September 2010 and in a further letter to the Home Secretary following my meeting with the Scottish security industry representatives on 13 October 2010”.
There is no doubt about their view, which was made very clear to the Home Office and the Deputy Prime Minister. In another reply, also on 11 November, Kenny MacAskill stated:
“The Scottish Government does not support the decision of the UK Government. The Security Industry Authority has been working very well in Scotland, and the Scottish Government made a very strong case to the UK Government for its continuation as the independent body responsible for regulating the private security industry”.
There is no doubt about the view of the Scottish Government. As my noble friend Lady Henig has heard directly, I can confirm that the shadow Justice Secretary, Richard Baker, who asked the Question, agrees. It is not often that he agrees with Kenny MacAskill, but on this occasion, he agrees 100 per cent with him.
So we have the two largest parties in the Scottish Parliament at one in wanting to keep the Security Industry Authority in operation. One might say, “It can continue to operate in Scotland”, but it would be ridiculous for a United Kingdom industry—which it is, because Securicor and G4 security operate north and south of the border—to have completely different regulation, a completely different kind of supervision.
The issues for the industry are the same in Scotland as they are in England. There are other areas where things are different in Scotland, where we are proud of the differences, but in this area, there are no differences in the operation of the industry and there should not be any difference in the regulation of the industry.
As my noble friend Lord Whitty said in a robust way and as my noble friend Lady Henig said in her usual gentle way, I say to the Minister: think again about this. Have further discussions with the Scottish Executive to find out more about their concerns, have discussions with the Welsh Assembly Government and with Northern Ireland about their concerns to try to find something which is acceptable to all parts of the United Kingdom, and come back to this House and the other place with alternatives. The very co-operative way in which the Minister, the noble Lord, Lord Taylor of Holbeach, started off the discussion on the Bill at about 3 o’clock—all those hours ago—was very refreshing. I hope that, on this particular issue, the Minister will act similarly to the noble Lord, Lord Taylor, look at it positively, take account of the views that have been expressed and take the matter away, think again and come back with revised proposals.
Lord Ramsbotham
My Lords, I add just one concern to what has already been said. That is in relation to the criminal justice system and the use of private security companies in it, coupled with my increasing concern about their involvement in the activities of the UK Border Agency. The Green Paper published by the Ministry of Justice, Breaking the Cycle, envisages increased use of private sector companies, for example in providing probation services. At present they are conducting a number of private sector prisons. Those are under supervision of the Inspectorate of Prisons but the training and the selection of staff has always caused concern.
As far as the UK Border Agency is concerned, the activities of the private sector in such activities as the deportation of people was drawn into high relief the other day with the death of someone who was put under restraint while being deported in an airplane from Heathrow. As a result, the activities of private sector guards have come under greater scrutiny rather than less. Therefore, with this increased activity, I have to admit that I am nervous at the thought of the SIA being removed from a role that it could have if raised to the stature of that work, in favour of self-regulation, which I do not believe is right in this particular area.
Lord Kennedy of Southwark
My Lords, I rise to support my noble friend Lady Royall of Blaisdon. I am most surprised that the Government proposed the abolition of the Security Industry Authority in the first place and that they have not moved on this matter. The Security Industry Authority is a great success story. It has professionalised the private security industry, driven out criminality and ensured that people are safe when attending a variety of events in pubs, clubs and elsewhere. I am aware that they have their own licensing body. I was at a football match on Saturday and it was reassuring, walking around the ground, to see security professionals with accreditation on their arms. How different that was only a few years ago.
I read the Government’s brief. It provides no reassurance on the position going forward. In the document, the Government say that Ministers decided that there is no evidence that the Security Industry Authority carried out a function that needed to be undertaken by a public body. Will the Minister expand on that in her response? Also, whatever is decided in the future, it must surely be inferior to what we have at present, if for no other reason than the fact, as my noble friend Lord Foulkes said, that different systems operate different authorities round the country. It is ridiculous.
I also ask, as my noble friend Lady Royall did, how the Government will ensure that criminality is kept out of the industry. I am pleased that the Government say in the briefing note that there will be little change this side of the Olympics in 2012—though, for me, that highlights the weakness of the proposals in the first place. I would like the Minister to comment on that in her response as well.
I agree with the comments of my noble friend Lord Whitty about the respectable and less respectable arms of the industry. I pay tribute to my noble friend Lady Henig for all the work that she has done. In conclusion, I hope that the Minister has something to say and is at least prepared to take away this proposal and come back with something on Report.
The Minister of State, Home Office (Baroness Neville-Jones)
My Lords, I thank the noble Lords who have spoken in this debate and made some important points. Many of them I accept. In putting forward the Government’s proposed measure, I hope to convince the Committee that many of the anxieties they have expressed will prove unfounded.
The Government intend to resist this amendment, which would remove the Security Industry Authority from the list of public bodies that Ministers will be able to abolish via secondary legislation. We will do so because we consider it unnecessary. I want to explain what the Government intend to do because I believe that many of the things that have been said on the Floor this evening perhaps represent a situation that no longer pertains.
Before I do that, I join other noble Lords in expressing my appreciation for the work done by the noble Baroness, Lady Henig, as chairman of the SIA. There is no doubt that under her guidance the authority has raised the standards of the industry, which is one of the things that give us confidence that we can move on to a different regime. I will come back to that in a moment. Many of the things that she said are points on which there is a very large measure of agreement between her, the Government and, I hope, other Members of your Lordships' House.
In looking at the SIA, the Government have applied a number of tests to retention in the public bodies review. We concluded that there was not compelling evidence that, given the standards that are now being reached, the SIA’s functions need to continue to be performed by a public body. The SIA was established by the Private Security Industry Act 2001, as has been said, and it has succeeded, as was the intention, in reducing criminality in the security industry. It also set out to improve standards. The approval system has undoubtedly resulted in improvements in those standards and uses the compulsory licensing of individuals to achieve the reduction in criminality. It carries out criminality and identity checks in addition to confirming the training that has to be completed before issuing a licence.
The Government do not intend that any alternative regime should result in a lowering of these standards. Licensing began in 2004, and there are currently more than 350,000 licensed individuals. The SIA has done something else important, which is to raise standards through the voluntary approved contractor scheme that allows companies to demonstrate that they meet a wide range of standards and are therefore worthy of being accredited as approved providers of security industry services. That is also something that will continue. More than 650 companies employing about two-thirds of the industry now have the ACS standard. That is a record of achievement and I pay tribute to it.
On that basis, however, we believe that it is now right to move over time to a new regulatory regime. I stress that it will be a regulatory regime. The private security industry has matured under the aegis of the SIA since SIA regulation began, and there is evidence of increased standards in the industry. We believe that employers should now be given more responsibility for making safe and legal recruitment decisions in the same way as employers in other professions. In other words, they should not have normal responsibilities removed from them.
As was mentioned in the debate, the security industry has formed a so-called security alliance of trade bodies which by their own reckoning represent more than 80 per cent of the regulated security industry. This group recently wrote to the Parliamentary Under-Secretary responsible for equalities and criminal information, Miss Lynne Featherstone, and outlined its willingness to work with the Government. It has already been working with the SIA to shape the future regulation of its industry, as the noble Baroness, Lady Henig, mentioned. Indeed, we intend to build on the work that has already been done. There is no doubt that challenges still lie ahead for the industry, but I have a slightly different picture of the attitude of the industry and some of those who are affected by the changes that lie ahead. It is more positive than has been noted in discussions so far. There is no doubt that they are willing. They have shown considerable alacrity in stepping up to take responsibility. That should encourage noble Lords.
Baroness Meacher
The Minister has repeatedly referred to the industry as though it was some uniform set of organisations. Does she accept that there is a tremendous divide between the reputable end of the industry and these highly dubious individuals and pairs of people who go about taking work in the security industry? You cannot refer to them in the same breath—and certainly not in the same phrase. Does she accept that?
Baroness Neville-Jones
I accept that this industry—I do not know what other term I can use: perhaps “this occupation”—has a wide spectrum of activities and individuals in it. I will come to that in a moment. I want to encourage your Lordships to have more confidence that those in this industry can be relied on and are willing to take further responsibility and be more accountable for their own actions in future. I understand that there is some concern that if the SIA is abolished there will be no effective regulation of the private security industry. I want to offer reassurance on that point. We are not going to do anything immediate. We have been convinced by those who have argued that that would be unwise and that it would not be sensible to do that. The regulation of the private security industry will continue in its present form. The SIA will not be abolished until the new regulatory regime has been fully established and is properly functioning.
Since the outcome of the public bodies review was announced by the Cabinet Office on 14 October, Home Office Ministers and officials have been in close contact with the SIA to discuss how to take this forward. The Parliamentary Under-Secretary of State for Equalities and Criminal Information, who is the lead Home Office Minister for the SIA, has met the SIA representatives. The Home Secretary herself has been in correspondence with the noble Baroness, Lady Henig, about the future.
Ministers have asked the SIA to work with the private security industry and key stakeholders to put together a detailed plan to achieve a phased transition to a new regulatory regime. We do not intend to do this in anything but careful detail. To inform the plan, the SIA started targeted consultations with stakeholders, including industry and law enforcement partners. The police were mentioned, and they are involved in the consultation process. A detail of the phased introduction of the new regulatory regime that will replace regulation by the SIA will be the product. The SIA started this work by hosting an initial meeting with a number of industry stakeholders on 28 October. I understand that this work is progressing well.
In the Second Reading debate on this Bill on 9 November, the noble Baroness, Lady Henig, stated that the SIA had already agreed with the industry,
“a blueprint for the next few years to move to greater industry involvement in the regulatory regime”.—[Official Report, 9/11/10; col. 133]
She also quoted from a letter that she had had from the Home Secretary in which she very kindly said that she was happy to accede to the Home Secretary’s wish to ensure that,
“any transition to a new regulatory regime is phased in smoothly and takes into account the needs of the industry as well as the priorities of the Government including the devolved Administrations”.
To confirm the point made by the noble Baroness, Lady Royall, the Home Secretary has agreed that there should be no significant change prior to the Olympic Games in 2012. That is in line with a number of measures in other areas in which we are staying any kind of change until after the Olympic Games.
My point in all this is that the SIA itself is involved in the work to move towards something that is described as self-regulation by the private security industry but which is a pretty tough form of self-regulation. I will come back to some of the details in a moment. The SIA plan was presented to Home Office Ministers earlier this month for consideration, and on 16 February there was another meeting with Lynne Featherstone to discuss the plan further. We have now considered and agreed that this will form the basis for moving forward on phased transition. I hope I am reassuring the Committee that this process is being done in careful consultation with the SIA and the industry on the basis of trying to ensure, therefore, that we come out with a regime that offers the same degree of assurance of high standards that has already been established.
As a result of the consultation, we are now in a position to give a few more details of the shape of the new regulatory regime, although the Committee will understand that as we are still in discussion—the whole point of the discussions is to get an agreed format between the parties—not all the details have been decided. So far, the agreed proposals will ensure that responsibility for the private security industry is transferred to a new body for self-regulation as soon as that is sensible after 2012—not before it is sensible and not before the Olympics in 2012. No significant change will happen before that.
Primary legislation will then be needed to set up the new regulatory body that will succeed the SIA. We will ensure that provision is included in a future Home Office Bill. Full transition to the new regime should, we hope, be completed by the end of 2013. Again, this is not a rushed process.
Lord Foulkes of Cumnock
Would that be a new regulatory body for England or for the United Kingdom? If only for England, what will the situation be in other parts of United Kingdom?
Baroness Neville-Jones
I will come to the noble Lord’s point about the relationship with the devolved Administrations. I have it in mind.
The new regime will also see a significant shift of responsibility from individual workers to businesses. That is one of the changes in structure. We believe that that will be efficient and that it will also reduce regulatory costs and burdens. Instead of every single employee having to be registered separately at a cost of something like £250 each, it will be a business paying for the registration. In getting that registration, businesses will be required to show that they meet a comprehensive set of conditions set by the new body.
The industry itself has a strong interest in ensuring that the standards it sets are maintained and that they are high. Clearly, that has to be one of the really important parts of the new regime. Businesses that fail to meet these comprehensive conditions will have their rights to trade in private security removed. There is no reason to suppose that somehow a transition to another regime will by definition, and automatically, result in a lowering of standards. On the contrary, the industry will have a strong self-interest in ensuring that the cowboys are not allowed in and are not permitted to sully the reputation of an industry that is responsible for its regulation. There is a strong incentive actually to take this regime and make it work well.
It is obviously too early to give full details on costs, but we know that instead of more than 350,000 individuals paying £245 each for licences, much of which is currently paid for by the companies that employ them, the new regime will involve fewer than 5,000 companies having to register, giving considerable saving to the industry.
One of the other things that we are doing, however, is to ensure that the impact on smaller businesses is minimised by reflecting business size in the registration fees in the new regime, so that we do not get a situation in which small companies are paying a flat fee which is the same size as very large ones. They will be gradated. There will also be a sensibly phased transition to the new regime, the details of which are still to be worked out. We do not expect all businesses to move to the regime at the same time. Some of the big boys are clearly going to be ready to move at an early stage. Some of the smaller companies will not necessarily be so ready, and they will be given time to achieve the necessary transition. The big ones that have already met the high standards of the approved contractor scheme will be able and willing to move immediately, but we will maintain mechanisms to ensure that smaller companies, which may not be in the position immediately to transition to the new regime, can continue to trade.
Lord Kennedy of Southwark
Does the Minister envisage, in the new regime, that the individuals themselves will undergo CRB checks?
Baroness Neville-Jones
Clearly, CRB checks will be relevant. I cannot immediately answer whether they have to be done by the individuals themselves or by their businesses to ensure that they are employing fit and proper people. I would have to write to the noble Lord. The registering of these individuals is another point that worried some noble Lords, who thought that this new method of regulation would somehow allow the bottom end of the industry to have free rein, if I can put it that way. This will not be permitted, because a registry of individuals will also be maintained by the new body to support the needs of the customer and the industry. That will do two things. First, it will ensure that named individuals are known to the regulatory body. Secondly, it will enable those individuals who are of fit and proper standing to move from one company to another with greater ease than would otherwise be the case. Any proposed changes will be subject to parliamentary approval. I thank the SIA for the help that they are giving in moving the industry along to the new regime. We have also asked the SIA if they will take forward the work necessary to ensure the full delivery. This Bill confers an ability to abolish the SIA, but this will be done only at an appropriate time in the transition to the regulatory regime.
Some noble Lords, particularly the noble Lord, Lord Foulkes, raised the issue of the response of the devolved Administrations. Since the correspondence to which he referred, and which I have seen, there have been further contacts with the devolved Administrations, and we are now in consultation with both the Scottish Government and the Northern Ireland Executive. Although it is the case that, on a voluntary basis, both the Scottish Government and the Northern Ireland Executive decided that they would accept the regulation of the SIA, the regulation of the private security industry is a policy decision for the devolved Administrations. It is a devolved matter, which we fully respect, and they will have the opportunity, if they choose to exercise it, to have a different regime. However, I agree with the noble Lord, that, given the nature of the industry, which operates across the country, it would be highly desirable if we could get agreement on a single regime.
Lord Empey
I thank the Minister for giving way. The noble Lord, Lord Foulkes of Cumnock, raised this earlier. I declare an interest as a member of the justice committee of the Northern Ireland Executive. The reason why we have a particular issue must be fairly obvious to most Members. We have a lot of people who, sadly, have come from a background where they were, shall I put it, organised, and were able to bring intimidation and pressure and other things to bear. Consequently, we are not talking about precisely the same situation that would exist here, albeit that there are always criminal elements there. The noble Baroness, Lady Henig, asked whether the results of the election in May would make any difference. I think that they will not, because the circumstances that we have had to deal with have a long history and will take some further time yet to work their way out of the system. I do not anticipate any immediate change in the regime following the elections in May.
Baroness Neville-Jones
I understand entirely the point that the noble Lord makes. I would say two things about that. Clearly, it is desirable if the regulatory regime that operates throughout the United Kingdom makes it easy for companies to operate across all three Administrations. It does not follow from that that these regimes have to be identical. Certainly, the Home Office takes the view that if, for regional and local needs, variation is needed, we would want to accommodate that. The object is to get an effective regulatory regime that does not put obstacles in the way of companies operating across the country but permits local variation, if it is necessary.
Lord Foulkes of Cumnock
I know that there are other topics that we need to discuss and I apologise for intervening, but it looks as if we are moving inevitably towards a separate regime, with a Scottish and a Northern Ireland Security Industry Authority operating as the Security Industry Authority in the UK does at present and a move to a completely different regulatory regime in England. Is that not absolutely daft? It will create huge problems for the security industry. Why are we doing it? Would it not be better to accept what the noble Baroness, Lady Henig, the Security Industry Authority, all the people in the security industry and the Scottish and Northern Irish Parliaments have said, and stick to the present arrangement? Why are the Government so determined to change, when no money is going to be saved and no advantage will be given? Also, I hope that at some point the Minister will answer the question asked by my noble friend Lord Kennedy. If it is so important to keep the authority going for the Olympics, does not that undermine the whole argument for changing at all?
Baroness Neville-Jones
To take the noble Lord’s last point, I do not think that it follows that, because one decides not to make a change before a big event, there is no case for change at all. It does not follow at all. It is a sensible thing not to institute change immediately before a big event. However, it does not follow that no change is possible or desirable.
On the noble Lord’s other point, I think that he is jumping to conclusions. It is not our impression that the attitude of the Scottish Government is as negative as he fears it may be. We are in consultation and I do not think that what I said indicated that we were suddenly leaping to entirely different regimes. We are going to have consultation; we believe that it will be possible to have a national regime. We may need, and it may be fitting, to have a certain amount of local variation. However, as I say, that is an area that is still being consulted about. We will work for a sensible outcome and we want one that fits the needs of all UK Administrations.
Some noble Lords raised the issue of wheel clamping. I should mention it briefly. As was rightly mentioned, the Government are taking measures to regulate this area, which include the abolition of the right to clamp and tow away on private land. This legislation will be put into effect through the Protection of Freedoms Bill. The ban will end the abuse by devious firms and their employees who prey on motorists with signage, excessive fees and unscrupulous towing. That regime is going to come to an end, which obviously means that the power does not need to be included in the new regulatory regime.
The noble Baroness asked whether we were also going to cover parking tickets. That is not an SIA issue. It is regulated by the Department for Transport and the DVLA, so it lies outside the scope of this piece of legislation.
The SIA had already proposed the move to a more self-regulatory model before the Government took this issue on. It is in the spirit of building on that that we want to proceed. If the amendment were accepted, it would create an administrative anomaly that would deliver, in our view, no benefits to the public, even after the SIA had successfully implemented its plans to transition to the new regulatory regime. We are endeavouring to work in close co-operation with the existing authority on a transition to a regime that we hope the authority itself will feel fulfils the job, so I hope that, on that basis, the noble Baroness will feel able to withdraw her amendment.
Lord Whitty
My Lords, before my noble friend decides what to do with this amendment, I should like to ask a question. I understood the noble Baroness to say that, at the final stage of this, we will need further primary legislation. If that is the case, I do not understand her last point. Why do we need to include the SIA in this Bill if we are going to deal with it later in primary legislation?
Baroness Neville-Jones
Having removed the basis for the present regime, we obviously need to have a basis for the new regime.
Baroness Royall of Blaisdon
My Lords, I am utterly perplexed at the end of this very good debate. We have a regime which was introduced seven years ago at the behest of the police and the industry itself—the good elements of the industry—as well as Parliamentarians. The Minister herself has said that standards have been raised as a consequence of this good regime; it is working well throughout the United Kingdom. Usually, when there are demands for a regulatory body to be disbanded, it is because the industry itself wants it to be disbanded or because of an exorbitant cost. It seems to me that there is no cost in this; the industry is very happy to meet the bills and is content with the present situation. It looks very much as though the Government are tinkering around the edges—forgive me if it sounds rude—and they are tinkering with a system which is working well and that everybody is content with. I simply do not understand why we are dealing with this issue now.
I recognise, as the noble Baroness has said, that the industry is content to have a phased transition, but it seems to be a complex way of going about things. I do not feel at all reassured by what she has said this evening. The point made by the noble Lord, Lord Ramsbotham, about the interaction between the security industry and the prison service—which, if I had thought about it, I would have been dismayed and concerned about—makes me even more concerned about the proposal before us today. The noble Baroness has talked about the need for transition and has said that consultation is already taking place. She has also said that primary legislation will be needed for a new body, so I am slightly perplexed as to what we are doing now. Notwithstanding that, I am content to withdraw my amendment now, but I will certainly bring back an amendment on Report.
Baroness Royall of Blaisdon
We were not planning on proceeding further tonight.