House of Commons
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Oral Answers to Questions
(13 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
1. What assessment he has made of the social and economic value to schools and pupils of learning outside the classroom.
The Parliamentary Under-Secretary of State for Education (Tim Loughton)
The Government fully support learning outside the classroom, and whilst we have made no formal assessment, we recognise the important contribution it can make to engaging and supporting pupils in their education. We believe that schools should have the freedom, however, to use their professional judgment to determine how learning outside the classroom best meets the needs of their pupils.
Simon Hart
Will the Minister give an indication of whether his Department will look at allocating a percentage of the pupil premium for this particular area?
Tim Loughton
The whole point of the pupil premium is to give extra resources for schools that can be used exactly as they see fit for their own pupils. If a school wants to use a large or a small part of the pupil premium for that activity, that is entirely a matter for the head and the school.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
Learning outside the classroom includes encouraging healthy eating through breakfast clubs, but new research suggests that one in eight breakfast clubs closed this year and that half of those remaining are under threat. What would the Minister say to the chief executive of Greggs, which funds breakfast clubs for 7,000 disadvantaged children across the country, who recently questioned the coalition’s priorities and the fact that it is able to find £250 million to fund weekly bin collections but is unable to pledge support for the rising number of children coming into school hungry?
Tim Loughton
I was in Leeds recently, where I awarded on behalf of the Prime Minister a big society award to the founder of Magic Breakfast, which is a voluntary organisation providing breakfasts and doing some fantastic work—in that case, with a local bagel maker renowned in the city. It is providing fantastic breakfasts for the kids, and I was lucky to see this great job being done rather well. In other places like Liverpool, however, which is run by the Labour party, the decision has been taken to reduce some of the breakfast clubs. That is a matter for local authorities; other places are doing it well, and the hon. Lady should look at some of these innovative schemes rather than look to the Government to provide everything.
Robert Halfon (Harlow) (Con)
2. How much he plans to allocate in funding for the pupil premium to (a) Harlow constituency and (b) England in 2011-12.
The Minister of State, Department for Education (Sarah Teather)
We are planning to allocate £625 million to schools and local authorities in England in 2011-12. The allocation for the Harlow constituency is £1,012,112.
Robert Halfon
I thank my hon. Friend for that excellent news about how the pupil premium is helping the most vulnerable children in my constituency. Will she look at incentivising schools like Burnt Mill in Harlow that are using the pupil premium to focus on improving maths and English?
Sarah Teather
I am delighted to hear about that school using the pupil premium in that way. It is good to hear from head teachers examples of how they are spending the money and the impact it is making on the ground. I wonder whether the hon. Gentleman would invite the head teacher to write to me to tell me more about the detail of the work that that school is doing and its impact on pupils, as we are looking to try to publicise examples of good practice and it would be helpful to hear what is happening in the hon. Gentleman’s constituency?
Chris Ruane (Vale of Clwyd) (Lab)
Although the pupil premium has some merits in theory, what we shall see in reality over the next few years is the biggest cut in education funding since the 1950s. Is this not simply a case of robbing Peter to pay Paul?
Sarah Teather
I am glad to hear some grudging acceptance from the Opposition of the benefits of the pupil premium, which focuses money on the most disadvantaged students and gives schools freedom to spend it as they choose. I have just heard an example from my hon. Friend the Member for Harlow (Robert Halfon) of where that is making a substantial difference. I remind the hon. Gentleman that there is a flat cash settlement per pupil, and that an additional £2.5 billion has been made available for the pupil premium.
Amber Rudd (Hastings and Rye) (Con)
Schools in my constituency are to receive a welcome £1.5 million from the pupil premium. At a meeting with representatives of the local primary school last Friday, I learnt that some primary schools will be working together to spend that money in the best possible way for their pupils. Does the Minister agree that that is a smart way of trying to get the best out of the pupil premium?
Sarah Teather
Trying to encourage smaller schools in particular to work together on best practice, especially if they have similar catchment areas, is an excellent initiative. It is helpful to hear about what is happening on the ground.
Simon Danczuk (Rochdale) (Lab)
3. What assessment he has made of the findings of the report by the Institute for Fiscal Studies on Trends in Education and Schools Spending.
John Woodcock (Barrow and Furness) (Lab/Co-op)
13. What assessment he has made of the findings of the report by the Institute for Fiscal Studies on Trends in Education and Schools Spending.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
17. What assessment he has made of the findings of the report by the Institute for Fiscal Studies on Trends in Education and School Spending.
The Secretary of State for Education (Michael Gove)
I read the IFS report with interest, and found its arguments thought-provoking.
Simon Danczuk
The report shows that education spending is being reduced dramatically. Head teachers in Rochdale and throughout the country deserve our praise for their hard work in dealing with the cuts that are being made by the Government of whom the Secretary of State is a member. Will he take this opportunity to apologise for describing head teachers as whingers?
Michael Gove
I am grateful to the hon. Gentleman for praising head teachers in Rochdale. Head teachers everywhere are doing a fantastic job with limited resources. The one thing that I hope I shall be able to work with the hon. Gentleman to ensure is that head teachers can make those resources go even further by allowing their schools to convert to academy status.
John Woodcock
The report shows that capital spending on schools was the fastest-growing component under Labour, but that we shall see the biggest cut under the Secretary of State’s plans. In Barrow, a vital development is currently being upheld at the planning stage by Conservative councillors. Will the Secretary of State guarantee full funding for the project if those planning objections are dismissed?
Michael Gove
I think that the hon. Gentleman probably means “held up” rather than “upheld”. However, we shall do everything possible to ensure that not just the planning system but building regulations are reformed so that necessary investment in schools is accelerated, and we shall do everything possible to ensure that resources are there for those in the most need.
Mr Thomas
In the light of the IFS report and the understandable concerns that it will have raised among my constituents who have children at school, can the Secretary of State assure Harrow schools that have just become academies that there will have been no real-terms cut in direct Government spending by the time of the next election?
Michael Gove
All schools that have become academies have the chance to spend their money directly on the priorities that are close to them. Obviously every school will have different funding results over the next four years, but, overall, cash spending on schools is protected, and schools should also benefit from the pupil premium.
Mr Philip Hollobone (Kettering) (Con)
The IFS report sets education spending in the context of the national economy as a whole. Will the Secretary of State remind the House of the comparator between the size of the education budget each year and the size of the net annual debt interest bill left to this country by the Labour party?
Michael Gove
My hon. Friend has made another welcome point. The truth is that any reductions in spending across government are a direct result of the mismanagement of the last Government and the economic mess that they bequeathed to us.
Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)
The IFS report shows that the Secretary of State is undertaking the largest cut in education spending since the 1950s, and that education capital will be cut by an eye-watering 57%. Can he tell us how that 57% cut compares to the average capital spending cut across all other Departments?
Michael Gove
I am reminded by my hon. Friend the Minister of State with responsibility for children and families that it should be “compares with”, not “compares to.” The truth is that under the last Government capital spending was poorly allocated and wastefully squandered, and we are now ensuring that money goes in particular to those primary schools in desperate need that were neglected when the hon. Gentleman, unfortunately, was not in government but so many of his colleagues were.
Stephen Twigg
The right hon. Gentleman’s English may be better than mine, but his maths certainly is not, because, as he knows, the cut is double the average cut—a truly terrible spending settlement for education capital. With youth unemployment now over 1 million, will he join me in pressing the Treasury to bring forward capital investment in schools, as set out in Labour’s plan for jobs? Does he agree that that would not only be good for education, but it would be good for jobs and economic growth?
Michael Gove
The hon. Gentleman is, indeed, very good at arithmetic; if only he had been in the Treasury over the last five years when so much money was wasted by a spendthrift and profligate team of Ministers who had not a care for prudence, economy or the next generation. If he believes in a plan for jobs and growth, he should support the deregulation measures that will be in the autumn statement; he should support the Chancellor in making sure our economy is competitive again, and he should support the education reforms we are introducing, which will ensure that our children go on to become the best educated and the most enterprising in the world.
Rushanara Ali (Bethnal Green and Bow) (Lab)
4. What estimate he has made of the change in average expenditure on schools in real terms per student following the introduction of the pupil premium.
The Minister of State, Department for Education (Sarah Teather)
Average funding per pupil for 2011-12 has been kept cash-flat at £5,082 per pupil, plus the pupil premium. The pupil premium totals £625 million this year, rising to £2.5 billion in 2014-15. It provides £488 for each free-school-meal child and looked-after child. In addition, the children of families in the armed services will attract £200.
Rushanara Ali
I thank the Minister for her answer. According to recent research, a London child living in one of the country’s most deprived neighbourhoods in 2010 had a 75% chance of finishing above the bottom quarter of the national results at age 16. Without the London weighting attached to the pupil premium, how will the Government ensure these high standards are maintained in constituencies such as mine?
Sarah Teather
I absolutely agree that the figures for attainment for children on free school meals and looked-after children are woefully inadequate at present. That is why we have introduced the pupil premium. I should also say that in the hon. Lady’s constituency per-pupil funding is higher than almost anywhere else in the country. A substantial amount of money is already going into her constituency, therefore, as well as a significant amount of money through the pupil premium, which will rise to £2.5 billion nationally by the end of the spending review period. I would therefore encourage her to ask her schools how they are spending that money, and I would be very pleased to hear the detail of some of the best practice being followed by them.
Dan Rogerson (North Cornwall) (LD)
My hon. Friend rightly sets out the benefits of the pupil premium. Does she agree that one of them is that it targets disadvantaged pupils wherever they are in the country, unlike general funding formulas, which the Government are looking at and which under previous Administrations have, perhaps, neglected some children in some parts of the country?
Sarah Teather
Absolutely. I represent an inner-London constituency so I see very high levels of deprivation there, but there are also high levels of deprivation in rural areas, which is often unseen either because it is in pockets or because people might perceive that because an area is leafier it must also be wealthier. Many rural schools, including in my hon. Friend’s constituency, will benefit from the pupil premium and will be able to focus their efforts on raising the attainment of all their pupils.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
I have written to the Minister’s colleague the Secretary of State about a specific issue relating to transient populations clustered in particular areas, such as north-east Sheffield, where as many as 25% of primary school pupils and about 15% in one secondary school do not claim the usual benefits that entitle their school to receive the pupil premium. I therefore take the unusual step of asking the Minister to come to Sheffield and to my constituency, so as to examine this issue and then reformulate the pupil premium so that such schools can be supported and helped?
Sarah Teather
Obviously, I have not seen the right hon. Gentleman’s letter to the Secretary of State, but I would be happy for either me or a colleague to come to see the specific issues in his constituency. I recognise the challenges of having a transient population and ensuring that all those families are claiming their benefits and are registered for free school meals. The Department is beginning a series of work to encourage schools to make sure that all families are signed up to free school meals.
Andrew Bridgen (North West Leicestershire) (Con)
I very much welcome the introduction of the pupil premium, but is the whole system not completely reliant on the schools correctly identifying and registering pupils who are eligible for free school meals? How successful does the Minister believe schools are in identifying these vulnerable pupils?
Sarah Teather
It varies according to area. We know that there is some tail-off at secondary school level, which is one of the reasons why our funding consultation touched on whether or not to introduce measures, including “ever” free school meals. That was about picking up children for the pupil premium who had previously been on free school meals, because there is some drop-off as they move from one area to the next. As I said, we are beginning some work to encourage parents to sign up. Not all parents want to sign up for the lunch, but they may well be keen to sign up if they know that their school will get extra money.
Kevin Brennan (Cardiff West) (Lab)
The facts are that the Institute for Fiscal Studies report says that in this financial year nearly three quarters of primary schools and more than 90% of secondary schools will see a real-terms cut in their budgets, even after including this so-called “additional pupil premium”. Is the Minister embarrassed about the way she has been conned by her coalition partners or was she only too willing to sell our schools short?
Sarah Teather
Perhaps I can quote the IFS report back at the hon. Gentleman, because it says that the most deprived schools are likely to see real-terms increases in funding per pupil in 2011-2012. It is perhaps sometimes worth reading the detail of a report and not merely quoting back headlines.
Helen Goodman (Bishop Auckland) (Lab)
5. What assessment he has made of the effect on schoolchildren of a lack of high-speed broadband access in schools.
The Minister of State, Department for Education (Mr Nick Gibb)
Broadband is important in supporting teaching in schools. The Department for Education does not collect data on broadband speeds in schools, but evidence suggests that almost all schools in England have access to broadband—speeds will vary, depending on location. Most schools choose broadband provided by local authorities or regional broadband consortiums, which are able to aggregate demand across a region, take account of rural schools and offer services suited to the needs of education.
Helen Goodman
I am grateful for that answer. In Byers Green and Binchester in my constituency there are broadband not-spots—they are surrounded by areas that are well served—and so children are told to do homework, using broadband, that they simply cannot do. Will the Minister either lobby his colleagues to ensure that broadband is accessible throughout the country or take steps to make sure that secondary schools stop requiring children to do homework that they simply cannot do?
Mr Gibb
I am grateful for the hon. Lady’s comments. A BECTA survey in 2009 showed that only 2% of primary schools and 1% of secondary schools regarded their broadband speeds as very slow. There is record spending on broadband at the moment and the Government have allocated £530 million over the Parliament for broadband, which is available to local authorities to help improve broadband in their areas.
Gordon Henderson (Sittingbourne and Sheppey) (Con)
6. If he will bring forward proposals to place schools under a statutory duty to provide high-quality and impartial careers guidance.
The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)
The Education Act 2011 places a duty on schools to secure access to independent and impartial careers guidance for pupils in years 9 to 11. This provision will commence from September 2012 and will be underpinned by statutory guidance.
Gordon Henderson
I am grateful to my hon. Friend for his answer and I very much welcome the Government’s progress on launching the national careers service. Does he agree that it is vital that we use the service effectively to promote vocational training?
Mr Hayes
My hon. Friend will know that I visited his constituency to look at the excellent work that has been done on vocational training. The purpose of the independent advice and guidance is to ensure that people get advice appropriate to their needs. For too long, we have assumed that the only route to prowess came through academic accomplishment. The Government believe that the work of people’s hands matters too, and that those with practical tastes and talents deserve their place in the sun.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Minister knows that face-to-face contact and advice on careers is essential. Is it not the case that up and down this country schools are giving up on having a highly trained careers person in them and there is no access to an external schools careers service? Is that not sad for the kids in this country who do not have good, well-connected parents to give them the advice that they crave?
Mr Hayes
What preceded the position the Government have adopted was the Connexions service. I am not saying that Connexions did no good, but it certainly was not up to scratch. The skills commission inquiry said that it did not ensure that young people had good advice, Ofsted identified inconsistencies in provision and, as you know, Mr Speaker, Alan Milburn specifically called in his report for a national careers service. Of course face-to-face guidance matters, but it is not all that matters.
Mr Marcus Jones (Nuneaton) (Con)
New apprenticeships have grown by 56% in my constituency over the past year and are vital to our future. Will my hon. Friend confirm that he will ensure that under any future arrangements for careers guidance in schools opportunities for apprenticeships are fully promoted?
Mr Hayes
Absolutely. My hon. Friend knows that the work the Government have done on apprenticeships has been outstanding and it is due to the support, encouragement and advice of hon. Members like him that that work is cutting through in the constituencies in the way that he describes. It is not just our constituencies: the shadow Secretary of State’s constituency has seen a 69% increase in the number of apprenticeships and I know that he will want to take the first opportunity to rise to the Dispatch Box and congratulate the Government on that.
Ms Karen Buck (Westminster North) (Lab)
During the passage of the Education Bill, the Minister spoke movingly of the scope for the careers guidance service to be a driver of social mobility and quoted a survey that found that 27% of state school pupils have received bad careers guidance, set against 6% of private pupils. The model he has developed for careers guidance leaves 16 to 19-year-old school leavers with only a web or helpline service and does not transfer any of the money from careers guidance to schools for face-to-face services: how many private schools is he aware of in which teenagers receive only a web-based or telephone advice service?
Mr Hayes
I welcome the hon. Lady’s question on this subject, because she, too, will want to know that in her constituency, apprenticeship numbers are also up by 69%. To answer her question directly, it is absolutely right that schools make a judgment about the mix of provision that suits their pupils. She is right, too, that private schools typically buy independent, impartial advice and that is the kind of advice that all children deserve, which is why we are changing the situation.
Stephen Phillips (Sleaford and North Hykeham) (Con)
7. What steps he is taking to ensure adequate funding for rural primary schools.
The Parliamentary Under-Secretary of State for Education (Tim Loughton)
The Government recognise the vital contribution made by rural primary schools to their communities. We believe that in many parts of the country, the current funding has not supported rural areas properly. Our recent consultation on reforming the funding system looked carefully at how small schools should be supported and we aim to consult further on more detailed proposals in the spring.
Stephen Phillips
It is a fact that small rural primary schools cost, on average, 50% more to fund. With vastly reduced resources, that is a huge challenge for local authorities. What precisely is my hon. Friend doing and going to do to support funding for such schools given their importance in constituencies such as mine?
Tim Loughton
My hon. and learned Friend makes a good point. The current methodology was inherited from the previous Government and the funding system is based on historical and out-of-date assessments of need. The system is illogical, unfair and opaque and that is why we have had the first phase of the consultation and will be taking its findings to face further, more detailed consultation and proposals will be made in the spring. I hope that he will contribute to that process on behalf of his schools.
Mr Matthew Offord (Hendon) (Con)
9. What steps he is taking to tackle the shortage of primary school places in (a) Hendon constituency and (b) England.
The Secretary of State for Education (Michael Gove)
This year, we have made available £1.3 billion to fund school places in England. The London borough of Barnet’s share in 2011-12 is £12.8 million.
Mr Offord
I congratulate the Secretary of State on tackling a problem that was neglected by the previous Government and I thank him for and congratulate him on the free schools initiative, which has provided Etz Chaim with an opportunity in Mill Hill. Does he agree that London has always had a problem with school places? Recently, I had correspondence with a constituent who has found that although her son was given a place at a nursery school, he was not given the opportunity to have a place in a reception class. That means that he will have to walk more than two miles even though there are seven other primary schools in the immediate area of Hendon.
Michael Gove
My hon. Friend makes a very good point. One of the dreadful problems we inherited from the previous Government was a failure adequately to prioritise capital to ensure that there were new school places in areas of population growth. As we know, population growth is exceeding all expectations, which is why we need to do everything possible to reform planning rules and building regulations to ensure there are more new schools.
Fiona Mactaggart (Slough) (Lab)
I should like to thank the Secretary of State for following up on the grant we got from the previous Government to create extra primary school places in Slough with another grant to create more of the primary school places we need. Shortly, my constituency will face a serious shortage of secondary school places, but many children who live nowhere near Slough are educated in our secondary and grammar schools. Will he consider looking, in the school admissions code, at places that educate children from a long way away but that do not provide places for local children?
Michael Gove
I am grateful to the hon. Lady for essentially advocating that we subsidise the expansion of grammar schools. I look forward to that becoming the policy of Labour Front Benchers.
Karl MᶜCartney (Lincoln) (Con)
10. What assessment he has made of the effectiveness of the introduction of the English baccalaureate.
The Minister of State, Department for Education (Mr Nick Gibb)
A survey of nearly 700 schools has shown that the English baccalaureate is having an immediate impact by increasing the number of pupils electing to take up a key set of academic subjects and by reversing declines in entry to subjects such as French, German and history, which we know are valued by universities and the wider public. The survey showed that 47% of pupils studying for their GCSEs in 2013 are taking academic subjects leading to the English baccalaureate, compared with just 23% entering that combination of subjects in 2011. That figure of 47% takes us back almost to the 49% who took those subjects when Labour came to office in 1997.
Karl MᶜCartney
I thank my hon. Friend for that answer. Is he concerned that the impact of the English baccalaureate will undermine the value of excluded subjects such as divinity or religious education, which play an important part in providing students with a well-rounded English education?
Mr Gibb
Religious Education is an important part of the school curriculum, which is why it is compulsory up to age 16 and why it will remain so under this Government. The E-bac is small enough, with six or seven GCSEs, to allow time for the study of subjects such as RE, music, art or a vocational subject while also studying the E-bac combination of GCSEs that are regarded as the facilitating subjects. That will keep options open for longer and will widen opportunities.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
Does the Minister recognise that the E-bac will be inappropriate for some of the pupils represented in the figures he has just read out, but that schools will have to push their pupils towards taking that approach because of the retrospective and quite sloppy way in which all this has been introduced? What message does he have for teachers who want to motivate pupils using a wider curriculum if the E-bac is not appropriate for them?
Mr Gibb
No student should be entered for a subject that is not in their best interests. The E-bac is small enough to allow schools to offer a range of options, including a vocational or other subject that is motivational for that student while still taking the E-bac subjects if they are suitable for that pupil.
Jason McCartney (Colne Valley) (Con)
11. What his objectives are for the principal revisions to the school admissions code.
The Minister of State, Department for Education (Mr Nick Gibb)
The White Paper, “The Importance of Teaching”, announced that we would consult on a simplified and easier-to-understand schools admissions code to overhaul a system that is too often complex, confusing and unfair for parents. The revised schools admissions code is another contribution to our continued drive to reduce the bureaucracy facing our schools and local authorities while retaining the key safeguards that will ensure a simpler, fairer and more accessible admissions system for all parents.
Jason McCartney
Much of the local opposition to the Lindley Moor development in my constituency was based on the pressure on already oversubscribed local schools. Will my hon. Friend join me in insisting that section 106 money allocations to local schools as part of those plans really do go towards easing the pressure on local school places?
Mr Gibb
Local authorities have a duty to ensure that there are sufficient school places for all children of school age in their area and the Government are supporting local authorities in the fulfilment of that duty. Kirklees council received £17.2 million of capital for 2011-12 and a further £0.5 million as a result of the additional £0.5 billion basic need funding that was announced recently. On section 106 funding, the Government are consulting on changes to the community infrastructure levy to make it more responsive to local needs, including the need to ensure that there are enough school places.
Nick de Bois (Enfield North) (Con)
12. What steps he is taking to tackle the shortage of primary school places in (a) Enfield North constituency and (b) England.
The Secretary of State for Education (Michael Gove)
Of the £1.3 billion available to fund additional school places in England, the London borough of Enfield’s share is just under £16 million.
Nick de Bois
Enfield council recently announced a strategy to cope with the increasing demand, but it gives no specific consideration or role to free schools. What advice can the Secretary of State give to those interested in setting up free schools who face this purely ideological barrier?
Michael Gove
It is a great pity that Enfield Labour council is not as supportive of free schools as it should be. Both the hon. Member for Liverpool, West Derby (Stephen Twigg), the shadow spokesman for education, and I have visited superb free schools in Enfield, and I hope the Labour local authority there moves with the times and supports those free schools in doing a fantastic job for children in disadvantaged circumstances in a borough that deserves better.
Stella Creasy (Walthamstow) (Lab/Co-op)
Inevitably, the provision of school places in neighbouring boroughs such as Enfield will have a knock-on effect in places such as Waltham Forest. The Secretary of State is aware that a quarter of all responses to his consultation on the national schools funding formula came from Walthamstow, from parents and governors in my constituency who are desperately concerned that we are facing a shortage of 1,200 places as a result of the cancellation of the Building Schools for the Future project. Will Ministers agree to meet parents and governors from my constituency to talk about the desperate shortage of places in Waltham Forest and what can be done?
Michael Gove
I am not surprised that we had so many representations from Waltham Forest, and Walthamstow in particular, given that the constituency representative for Walthamstow is The Spectator parliamentarian of the year award-winner as campaigner of the year.
Bob Russell (Colchester) (LD)
As the Secretary of State knows, there is a shortage of primary school places right across the country. Does he agree that the situation is made considerably worse when the local education authority shows an inability to undertake forward planning? Thirty primary schools in Colchester have waiting lists. Will his officials please chase Essex education authority to get on with providing schools in my constituency?
Meg Munn (Sheffield, Heeley) (Lab/Co-op)
14. What progress has been made by the Munro review implementation working group.
The Parliamentary Under-Secretary of State for Education (Tim Loughton)
The Government’s response to the Munro review was informed by an implementation working group convened for that purpose. We continue to work with a range of partners to take forward these important reforms. We will consult early next year on the revision of statutory guidance. More flexible assessment processes are being trialled in eight local authorities. Ofsted has consulted on new inspection arrangements and we have published a work programme on safeguarding children in the NHS.
Meg Munn
The Minister started off well, publishing the minutes of the implementation working group on the website. Unless the working group has not met since, the last minutes are for May 2011. Will he give me an update on the report that he asked for on the funding implications of the Munro review?
Tim Loughton
I set up the implementation working group specifically to translate the Munro review recommendations into practical things that we could implement before we published the Government’s response, so they informed the Government’s response which we published before the summer. We have used members of that implementation group to inform the work that we are doing on all those aspects that I mentioned and others. My intention is to reconvene the implementation working group early in the new year to monitor the progress that we have made and see what more we need to do.
Joan Walley (Stoke-on-Trent North) (Lab)
15. What his policy is on converting primary schools into academies.
Joan Walley
I am pleased that we have got the Secretary of State to answer the question. I am in favour of head teachers, governors and local education authorities having a real debate about how to get primary schools to improve. How will the Secretary of State take account of special educational needs and outstanding Ofsted reports? Would he or one of his Ministers meet me, the local education authority and the heads about the schools which, it seems, will be forced to become primary school academies?
Michael Gove
I am grateful to the hon. Lady for her point. As she knows, education standards in Stoke-on-Trent have not been good enough for too long, and we particularly need to tackle underperformance at primary level. We need to find the right sponsors to help those primary schools turn round, but we can do so far better if we collaborate with the local authority and co-operate with local Members like herself and the hon. Member for Stoke-on-Trent Central (Tristram Hunt), who are passionate about change. I will make sure that a Minister makes time to talk to her and her parliamentary colleagues.
Mr Dominic Raab (Esher and Walton) (Con)
18. What steps he is taking to improve the teaching of numeracy and literacy in primary schools.
The Minister of State, Department for Education (Mr Nick Gibb)
Good-quality teaching is fundamental to improving numeracy and literacy. We are reviewing the national curriculum to ensure an enhanced focus on literacy and numeracy. We will recruit more high-quality graduates and ensure that all newly qualified teachers have the skills to teach well, particular in teaching reading through systematic synthetic phonics. We are supporting existing teachers, for example by making match funding available for phonics materials and training and by increasing the number of specialist maths teachers.
Mr Gibb
I agree completely with my hon. Friend’s comments. That is why we have announced that, from September 2012, a person must pass a literacy and numeracy skills test before starting teacher training and will be allowed only two resits, rather than being able to take the test an unlimited number of times. From September 2012 we will also raise the pass mark and carry out a complete review of the test’s contents to ensure that we are properly testing the literacy and numeracy of those teaching in our classrooms.
Elizabeth Truss (South West Norfolk) (Con)
The top-performing countries in maths, such as Singapore, hardly use calculators at all in primary schools. Britain uses calculators more than any other country and is ranked 28th in the world in maths. Does the Minister think that there is a correlation?
Mr Gibb
I read my hon. Friend’s article in The Sunday Times this weekend with great interest. She made some very important points. She has championed the importance of high-quality maths teaching in our schools and knows the importance of maths not just for an individual’s ultimate opportunities, but for the economy as a whole. I hope that she will continue to contribute to the national curriculum review of maths.
Karl Turner (Kingston upon Hull East) (Lab)
21. What estimate he has made of the likely size of the Sure Start children’s centre network by the end of the 2012-13 financial year.
The Minister of State, Department for Education (Sarah Teather)
Local authorities have a duty under section 5A(1) of the Childcare Act 2006 to ensure that there are sufficient children’s centres to meet local need. Many local authorities are reviewing their provision, and they must consult before making any significant changes. The situation changes constantly and it is not possible to predict accurately the position at the end of the 2012-13 financial year. The early intervention grant provides enough funding to retain a network of Sure Start children’s centres.
Karl Turner
The Minister recently visited Little Stars children’s centre in my constituency and was impressed by the quality and commitment of staff to the service. Will she commend the Labour council leader for prioritising Sure Start, despite the savage cuts handed to it by the Government, and urgently reconsider the Government’s decision to remove ring-fencing?
Sarah Teather
I very much enjoyed my visit to Hull and was extremely impressed by much of the work being done on the ground, particularly the innovative and fascinating work that a number of centres have been doing to link children’s services with health. As I have said already, I commend local authorities that are prioritising children’s services on the ground. That is certainly the message that we have given out clearly to local authorities.
Annette Brooke (Mid Dorset and North Poole) (LD)
A recent newspaper article suggested that the Minister’s Department did not know what impact there has been on the services provided within children’s centres. I hope she will agree that services are more important than the centres themselves. What research will she carry out on that, and will she ensure that good practice is publicised?
Sarah Teather
The Department has commissioned an ongoing evaluation of children’s centres in England, so any changes that are made as a result of Government policy, particularly the move to payment by results and changes in other services offered by children’s centres, will certainly be picked up by the evaluation.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
Last week the Department finally admitted that the Government’s damaging cuts to early years are resulting in services being withdrawn and children’s centres being decommissioned and having to close their doors to parents, but we all know that those figures are just the beginning. Councils are now looking ahead to the next financial year, with the reserves drained and the easy cuts having already been made. How many centres will have to close before this out-of-touch Government and out-of-touch Secretary of State admit their mistakes and save our Sure Starts?
Sarah Teather
Our survey suggests that there have been six closures and 124 mergers since last year, out of a total that started at 3,631, so there has been a 3% change in the number of Sure Start children’s centres, demonstrating that most local authorities are not only doing the best in what are, I recognise, very difficult circumstances, just as they are for the Government. Those authorities are prioritising services on the ground and that is certainly what we are encouraging them to do, as we ask them to publish the information on what they spend, under the new transparency requirements that the Government have introduced. Similarly, payments by results will focus them much more on outcomes.
Mr David Hanson (Delyn) (Lab)
22. What assessment he has made of the findings of the report by the Institute for Fiscal Studies on trends in education and schools spending.
The Secretary of State for Education (Michael Gove)
I refer the right hon. Gentleman to the answer I gave a wee while ago.
Mr Hanson
The report says that spending on 16 to 19-year-olds’ education has fallen by more than 4%. At the same time, an Association of Colleges report shows that half of all colleges have seen a significant drop in enrolment by 16 to 19-year-olds, including in some cases a drop of up to 15%. Does the Secretary of State think that the two are by any chance related?
Michael Gove
I absolutely do not, given that the changes in 16 to 19-year-old funding do not affect colleges. They primarily affect schools, as schools are brought into correlation with colleges. The good news is that the very best colleges—those that are outstanding—are recording an increase in the number of students, and overall that is part of a very happy picture of rising participation.
Lisa Nandy (Wigan) (Lab)
23. What plans his Department has to allocate funding to the national citizen service beyond 2012.
The Parliamentary Under-Secretary of State for Education (Tim Loughton)
The pilots that have been run this year and will be run next year are funded through the Cabinet Office, and we will discuss with it and the Treasury how the scheme is then rolled out to the 60,000 and 90,000 places that we have forecast for subsequent years.
Lisa Nandy
A recent Education Committee report highlighted the alarming disappearance of youth services throughout the country. Does the Minister accept that replacing long-term youth services, which were particularly good for most disadvantaged children, with an eight-week programme does not constitute a strategic vision for young people? What will he say to those young people who feel absolutely betrayed by the decision that his Government have taken?
Tim Loughton
Of course the hon. Lady is completely wrong in her premise. The national citizen service, as I have just described, has been funded from a completely separate source from that of youth services—coming through local government and the Department for Education. She knows my concerns about how certain local authorities are treating youth services as a soft target for some of their cuts, and this Government will publish shortly our “Positive for Youth” policy, which will send out some very strong messages about the value of well-targeted, quality youth services run in partnership and under new models, because for too many years they were just not reformed under her Government.
Gavin Barwell (Croydon Central) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Education (Michael Gove)
The Minister of State, Department for Education, my hon. Friend the Member for Brent Central (Sarah Teather), recently announced that we will spend more money to ensure that all disadvantaged two-year-olds have access to 15 hours of pre-school learning. Consultation is now taking place to ensure that the most deserving children get the best possible start in life, and I encourage all Members to contribute.
Gavin Barwell
Over the past year there has been a 10% increase in the number of children in reception classes in the London borough of Croydon, with further increases predicted in September 2012 and September 2013. I warmly welcome the almost £8 million that my right hon. Friend announced last week, but at the risk of sounding like Oliver Twist I also hope that there will be further such tranches of money in future.
Michael Gove
My hon. Friend not only sounds like Oliver Twist, but displays a sense of “Great Expectations” about what I can get out of the Chancellor—[Hon. Members: “‘Hard Times’!”] Well, really it is a “Tale of Two Cities”: the City of London under Labour, under-regulated and, sadly, not paying the taxes that it should have; and the City of London under the Conservatives—at last getting the resources into the Exchequer which, I hope, on a serious point we can give to the children in Croydon, who do need more school places.
Alun Michael (Cardiff South and Penarth) (Lab/Co-op)
T4. Has the Secretary of State yet woken up to the depth of anger among teachers, illustrated by a head teacher in my constituency, just coming up to retirement, who tells me that she feels cheated by a Government who want her to work longer for less, when she has already delivered her half of the bargain?
Michael Gove
First, I say to the right hon. Gentleman that if the head teacher in his constituency is coming up for retirement, she will be pleased to know that, under the coalition Government’s proposals, she will be not be affected by any change to her pension whatsoever.
Nicky Morgan (Loughborough) (Con)
T2. Leicestershire county council is currently reviewing the availability of school walking routes, including the one to Humphrey Perkins high school from Sileby to Barrow in my constituency. The county council considers that route to be reasonably safe, but the head teacher, the parents, the pupils and I do not. Will the Minister tell me the Government’s view on when safety becomes more important than the simple availability of a route?
The Parliamentary Under-Secretary of State for Education (Tim Loughton)
I am aware of my hon. Friend’s interest in this issue. I recently met the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), with another hon. Member and one of his councillors who were raising the same point. I simply point out to my hon. Friend—I am very sympathetic to this point—that local authorities are under a duty to make travel arrangements where the nature of the route to school is such that the child cannot be reasonably expected to walk in reasonable safety. Councils should not be re-designating roads without having done a safety check, and we should be asking some questions.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
T5. Research suggests that continuous teacher training offers the surest route for school improvements. What steps is the Secretary of State’s Department taking in conjunction with the Department for Business, Innovation and Skills to ensure that university departments are opening up to local schools, so that teachers are up to speed with the latest scholarship and can inspire their pupils?
Michael Gove
That is a typically acute point from the hon. Gentleman. One of the things we are doing is to invite the new group of 100 teaching schools that we have designated to play a closer role in collaboration with universities. Just last week, I was talking to the Royal Society about how important it is that universities and learned societies ensure that the best teachers can become accredited as masters in their field so that they remain up to speed with developments in their subject.
Laura Sandys (South Thanet) (Con)
T3. The Minister has made great headway in ensuring that looked-after children are not sent beyond their local authority boundary. However, 30 children from Greenwich have been placed in South Thanet in addition to the number it has placed before, and the number from Lewisham has increased by 15 in the past six months. I wonder what more we can do.
Tim Loughton
I am well aware of my hon. Friend’s genuine interest in that matter and she has been to see me with other colleagues. When we brought in the new guidance earlier this year, I wrote to every director of children’s services to remind them of their obligations to house looked-after children as close to home as possible. I have taken the matter up again with the office of the Mayor of London and will be making further representations to those London boroughs that particularly impact on south-eastern seaside resorts such as her own. They should not have to take such large pressure.
Emma Reynolds (Wolverhampton North East) (Lab)
T8. According to the Institute for Fiscal Studies, Wolverhampton will be one of the biggest losers from the Government’s new national funding formula. Schools in my constituency stand to lose 10% of their funding, whereas schools in Buckinghamshire will gain 10%. Why is the Secretary of State so determined to take from the poor to give to the rich?
Michael Gove
The Institute for Fiscal Studies projections were based on its guesses. However, something it has said about reality rather than the future is that, at the moment, this Government are ensuring that schools educating the poorest receive the most, because our pupil premium will be worth £2.5 billion by the end of this Parliament. That is something the Government the hon. Lady supported last time round never did.
Mrs Eleanor Laing (Epping Forest) (Con)
T7. Is the Secretary of State aware that many, many parents of children with special needs who were struggling to find a suitable school will be very pleased that he has decided to extend the free schools programme to special schools? How many special schools does he estimate will be free schools within the next few years and how many children does he estimate that will help?
Michael Gove
I am very grateful to my hon. Friend for her point. We need to ensure that all children who have special needs are better educated and we particularly need to ensure that the energy and enthusiasm of people in the third sector are galvanised. At this stage, I cannot give her a firm figure on how many students and schools are involved; all I know is that a small bridgehead will expand over the course of this Parliament.
Ian Austin (Dudley North) (Lab)
The Secretary of State will no doubt be delighted to hear that, on Friday, I visited the university technical college in Walsall and, credit where it is due, it was fantastic. He will also be pleased to hear that tomorrow I am meeting Lord Baker to discuss my campaign to bring a UTC to Dudley. Sadly, only one of the 70-odd UTCs that will open nationally is currently in the black country. Will the Secretary of State meet me too, so we can discuss how we can open a UTC in Dudley and deal with the urgent need to drive up vocational standards and bring new jobs and industries to the area?
Mr Edward Leigh (Gainsborough) (Con)
So many members of the Cabinet, including the Prime Minister and Deputy Prime Minister, owe their start in life to private education. Many other European countries have many more bridges between private and state education, with, for instance, the state paying the salaries of teachers in private schools. Will the Secretary of State confirm that he has not ruled out new, imaginative ways of helping ordinary people to access private education?
Michael Gove
I try never to rule anything out; life is too short. To return to the Oliver Twist metaphor that we had earlier, I want to ensure that we do not just save Oliver and leave the Artful Dodger and the rest of Fagin’s gang to the wolves, but ensure that every child in poverty is helped. It is therefore important that we all put pressure on independent schools to live up to their charitable foundation by sponsoring academies and doing more for all children in need.
Mr Kevin Barron (Rother Valley) (Lab)
The findings of the Institute for Fiscal Studies on Rotherham metropolitan borough indicate that secondary school education will take a spending cut of between 11.8% and 13.4%. Given that Rotherham is still in the highest 20% of deprived areas in this country, what has happened to the concept of “We’re all in it together”?
Michael Gove
As a deprived area, Rotherham will, over the lifetime of this Parliament, benefit increasingly from the pupil premium. The report to which the right hon. Gentleman refers is a projection—a guess. The IFS is a fantastic think-tank, but it is speculating, not stating.
Let me point out that every single question from Opposition Front Benchers during the course of this Question Time was a plea for more money; not a single question was about the case for reform. In a nutshell, there we have the problem with today’s Labour party: an outstretched hand demanding more cash but not a single thing to say about raising standards.
Richard Fuller (Bedford) (Con)
Here is a question about reform, not extra cash. With early adopter schools that are well equipped to convert to academies already on the pace in becoming free-standing academies, what extra support, advice and guidance can my right hon. Friend give to the middle area of schools that are considering moving to being an academy but have not yet got up the nerve to make that change?
Michael Gove
All I would say is this, “Come on in. The water’s lovely.” In Bedford and Bedfordshire, schools that have converted to academy status have already seen their standards increase, and their head teachers have been able to ensure that money is spent on the pupils’ priorities, not the bureaucracies’ priorities. I am looking forward to working with my hon. Friend and all Bedfordshire MPs to ensure that more schools convert to academy status and, in so doing, raise standards for all children.
Mr Geoffrey Robinson (Coventry North West) (Lab)
On academies and capital expenditure, the Secretary of State will recall that I was recently in touch with him, yet again, about Woodlands school in Coventry, which, having narrowly missed out on Building Schools for the Future, has turned into an academy in its desperation for some support from the Government and now finds that it is still not eligible for any further capital expenditure. Will he look at that and do something about it?
Michael Gove
The Priority School building programme exists specifically to help schools like Woodlands. At the moment, we are inviting bids from schools across the country and assessing those bids against each other. In due course, there will be an announcement about additional capital support for the schools in the worst condition.
Duncan Hames (Chippenham) (LD)
Now that the Education Act 2011 has Royal Assent, the Minister will be looking at criteria for determining whether a school causing concern should be taken over by the governing body of another school. Can he assure me that these decisions will be made on the basis of the most up-to-date assessment of a school’s progress?
Michael Gove
That is a very fair point. We want to make sure that we target our attention on schools in the greatest need. If a school has had a historically poor record but, for example, a new head teacher or a new chair of governors has turned it round in the past 12 months, of course we will interpret the criteria flexibly.
John Healey (Wentworth and Dearne) (Lab)
The Secretary of State did not answer the question from my right hon. Friend the Member for Rother Valley (Mr Barron), which was about the distribution of funding under the Secretary of State’s direct funding plans. Rotherham secondary schools are set to lose out by £12 million in an area where we already have high and rising deprivation. This is simply wrong. Will he give a guarantee to local parents, students and teachers that they will not lose out like this?
Michael Gove
I am grateful to the right hon. Gentleman, but I should say that this matter is under consultation at the moment. I should also say that the Association of School and College Leaders, the National Association of Head Teachers and every representative of head teacher opinion says that the current funding system needs to be reformed. Once again I say to him—now that he is, sadly, no longer in the shadow Cabinet—that it is not enough for Labour Members simply to ask for more; they have to push for reform as well as demanding more cash.
Sajid Javid (Bromsgrove) (Con)
On that note, school children in my constituency of Bromsgrove will receive £1,000 less per head this year than those in neighbouring Birmingham. Does my right hon. Friend agree that that is because under the previous Government school funding was allocated on the basis of party politics and not need?
Michael Gove
As we say in Scotland, “Facts are chiels that winna ding.” The truth is that the current system of school funding is inequitable. The Institute for Fiscal Studies has made that case most powerfully recently.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
In an earlier answer, the Under-Secretary of State for Education, the hon. Member for East Worthing and Shoreham (Tim Loughton) again deferred to Magic Breakfast, an excellent charity, to plug the massive funding gap that has been left by the Government taking away extended schools money. Magic Breakfast provides 200 schools with free breakfast, yet 3,000 breakfast clubs have been closed across the country and thousands more are under threat. What are the Government going to do about that?
Tim Loughton
Let me have another go. Just a few weeks ago, I met the former chairman of Greggs who set up the breakfast club. That company did so not on the basis of how much money the Government were or were not putting into it or because of Government policy, but because it thought that it was the right thing to do, it was in a position to do it and it was good corporate social responsibility. The company did it and it did not take Government money to ensure that companies could step up to the mark and do their bit.
Matthew Hancock (West Suffolk) (Con)
As the Secretary of State knows, support in the community of Brandon for the Breckland free school is extremely strong. Will he assure me that all expressions of interest from parents, both on official forms and on the forms from the free school, will be taken into account when he makes a decision on whether that free school should go ahead?
Michael Gove
I had the great pleasure of meeting the parents behind that free school application. They were a fantastic model of citizen action. The Department will do everything possible to ensure that their bravery, courage and energy in ensuring that their children get the best possible education are supported to the full.
Mr Dennis Skinner (Bolsover) (Lab)
A few minutes ago, the Minister for Further Education, Skills and Lifelong Learning talked about the increase in the number of apprentices in various parts of Britain. In Bolsover, that started three years ago when the working neighbourhoods fund was used to increase the number of apprentices in our area. Now, with the 28% cut for the local authority and the working neighbourhoods fund due to finish next spring, there will be a loss of apprenticeships in that part of Britain. Will he have a word with his colleagues to sort that out?
The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)
As the hon. Gentleman knows, this Government have produced the largest number of apprenticeships in modern history. I am very happy to look at his constituency, but I have to tell him that according the latest statistics—not my statistics, but the official figures—apprenticeship numbers in Bolsover are up by 65%.
Mr Philip Hollobone (Kettering) (Con)
Will the Secretary of State take this opportunity to praise those teachers and head teachers who are going to put their pupils first and refuse to go on strike a week on Wednesday?
Michael Gove
Once again, I am grateful to my hon. Friend. I stress that it is an important civil right to be able to withdraw one’s labour. I also stress that this Government understand the widespread anxiety and anguish of hard-working public sector professionals, who deserve a decent pension. However, let me also make it clear that it is wrong for teachers and head teachers to withdraw their labour, to deprive children of a day’s education and to make life more difficult for working parents—wrong, wrong, wrong.
Julie Hilling (Bolton West) (Lab)
It is reported that youth services are taking a 25% cut on average and we know that some youth services are disappearing altogether. Will the Minister tell us how many youth projects have closed, how many youth workers have been made redundant and what he will do to ensure that local authorities fulfil their statutory responsibilities?
Tim Loughton
I cannot tell the hon. Lady how many but I will tell her that this Government are funding 63 myplace centres, the latest of which I opened in Bognor Regis just last Friday. In the next few weeks, the Government will produce their “Positive for Youth” policy, which will point to the future of new partnerships, new forms of funding and new ways of working together to ensure that our young people get decent youth services and a decent offer up and down the country. Reform needs to come to youth services in this country because the model under the previous Government was not sustainable.
Mr Speaker
To make a statement, I call the Exchequer Secretary to the Treasury, Mr Mark Hoban.
Northern Rock
(13 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Financial Secretary to the Treasury (Mr Mark Hoban)
With permission, Mr Speaker, I would like to make a statement about Northern Rock. As the House will be aware, on 15 June this year the Chancellor of the Exchequer announced that Northern Rock had been put up for sale. Last week, he announced that he had agreed the sale of Northern Rock plc to Virgin Money. I am grateful for the chance to update Parliament on those events.
As hon. Members will be aware, the collapse of Northern Rock four years ago foreshadowed a crisis that was to engulf the global financial system. The queues of people outside branches of Northern Rock—the first run on a British bank in more than a century—remain to this day a lasting image of the crisis. It was a sorry result of the inadequate regulation and irresponsible banking that the previous Government presided over, and it was a crisis that led to a range of Government interventions in the financial sector. The sale of Northern Rock to Virgin Money is an important step towards normalising the Government’s role in the financial sector and getting the Government out of the business of running the banks.
The deal with Virgin Money is expected to be completed on 1 January 2012, pending European Commission merger clearance and Financial Services Authority approval. Let me reassure the House that the sale route represents the best value for money for the taxpayer. United Kingdom Financial Investments and its independent advisers looked exhaustively at all potential exits, including stand-alone remutualisation, combination with an existing mutual and initial public offering, but ultimately advised that a sale would generate the best value for money for the taxpayer.
Furthermore, under the terms of the state aid agreement entered into by the previous Government, we have to transfer control of Northern Rock to a new owner by the end of 2013. That limits the window for getting Northern Rock plc back into the private sector. Combined with the fact that the bank is likely to be loss-making well into 2012, a sale to Virgin Money now is the best option measured against taxpayer value for money. We have also carefully assessed the impact of the sale on competition and financial stability.
Let me set out the details of the deal. The cash elements are as follows. Virgin will make a cash payment of £747 million to the Treasury on completion, which is expected to be on 1 January, conditional on regulatory approvals. We also expect about a further £50 million once we know the actual final net asset value of Northern Rock plc at the end of 2011. In addition to the cash payment, the Government will hold a capital instrument in Virgin Money, with a par value of £150 million and paying interest at 10.5%. Furthermore, we have ensured that the taxpayer will get a share of any upside. In the event of a profitable sale or initial public offering by Virgin Money, an additional cash consideration of between £50 million and £80 million will be paid to the Government.
By way of comparison, our shareholding in Northern Rock is valued at £1.2 billion on the Treasury’s balance sheet, because the previous Government injected £1.4 billion of capital into the loss-making bank at the start of 2010. By the end of this year, that value will have decreased further due to the losses that Northern Rock currently makes. Despite all that, we have sold Northern Rock plc at a price-to-book multiple of about 0.8. Given that other UK banking stocks are trading at multiples of around 0.5, that is a good outcome for the taxpayer. Of course, when we consider the final position we will need to look at both Northern Rock Asset Management and Northern Rock plc to see the final outcome for the taxpayer.
This is also a good deal for the economy of the north-east, with the potential to create new growth and new jobs in the area. Virgin Money has committed to there being no further compulsory redundancies beyond those already announced for at least three years. It will also make Newcastle the operational headquarters of the new, combined business. It will retain the total number of existing branches, with the highest concentration in the north-east, and with plans to expand as the business grows.
We are pleased that Virgin Money has also committed to extending the current financial agreement with the Northern Rock Foundation to the end of 2013. We all know that the Northern Rock Foundation plays a vital role in tackling disadvantage in the north-east and Cumbria. Virgin has also committed to exploring how Virgin Money Giving and the foundation could work together in the future.
This deal will create almost immediately a new, credible competitor in our retail banking sector, thus increasing choice for consumers. The Government are clear that more competition is needed in the banking sector. A competitive banking sector ensures that the economy benefits from banking products and services at efficient prices. Competition is also a spur to innovation and economic growth, but choice has diminished in recent years as a number of high street banks and building societies have disappeared or merged. As set out in this Government’s coalition agreement, we are committed to promoting competition in the banking sector and to the return to the private sector of the Government-held stakes in banks, of which this measure is a key part.
The Virgin brand has a strong reputation for growth and innovation and I am confident that its entry into retail banking will provide a real challenge and improve diversity in the banking sector. I want to be clear that for current Northern Rock customers, it is business as usual. They will not need to take any action as a result of the announcement. Virgin Money also plans to offer personal current accounts and small business banking products in due course.
I know some would have liked to see Northern Rock re-mutualised, but no final bids were made by mutuals and no workable plans for stand-alone mutualisation were put forward. None the less, the Government remain committed to promoting mutuals, which is why we are working with the mutuals sector to support its ambitions and ensure that it is not disadvantaged compared to bigger established banks—all to foster diversity and create a more competitive banking industry.
Of course, the sale of Northern Rock is only one step to a new banking sector—it is not simply a return to business as usual. The last crisis cost the taxpayer billions of pounds, and we cannot afford to repeat that. That is why this Government are pursuing ambitious reform of the financial sector at home and abroad, ensuring that we embed a competitive, successful but secure financial sector, and one that supports growth across the entire economy without jeopardising its stability; why we are fundamentally reforming the failed tripartite system, entrenching a much greater and much-needed focus on macro and system-level risks; why we are leading the international agenda for full implementation of the Basel III standards, to ensure that our banks are resilient to ongoing market turbulence; why we support in principle the recommendations of the Independent Commission on Banking to ring-fence better-capitalised high street banks, reduce taxpayer exposure through powers of bail-in, and increase competition in banking; and why we have secured commitments from the UK’s biggest banks to provide £190 billion of new credit to businesses across the country this year, lending £76 billion to small and medium-sized enterprises this year alone, which is £10 billion more than banks lent to them last year.
The sale of Northern Rock to Virgin Money is an important milestone in this Government’s efforts to return state-owned banks to the private sector. It represents good value for the taxpayer and provides an economic boost to the north-east region. For consumers across the board, it means greater diversity and choice in financial services.
I firmly believe that Virgin Money will have a hugely beneficial impact on the banking landscape in the years to come, providing better outcomes for customers and businesses. Of course, this is only one step towards a reformed banking landscape. The Government will continue to work hard to remedy the regulatory failures of the last decade, to promote a more competitive sector, and to ensure that we embed a stable and successful financial system that serves and not jeopardises the economy. I commend this statement to the House.
Mr Speaker
I apologise to the hon. Gentleman for inadvertently demoting him. I had been advised that this statement was to be made by the Exchequer Secretary to the Treasury, but I realise that the hon. Gentleman is a still more senior man, serving the Government as Financial Secretary.
Chris Leslie (Nottingham East) (Lab/Co-op)
The Chancellor might have chosen to make this announcement when Parliament was in recess, but he really ought to have been here today—[Interruption.]
Mr Speaker
Order. I just say this, once and for all, to the hon. Member for Reading West (Alok Sharma): sit there silently, please, doing your duty. If you feel unable to do so, you have a very simple alternative, which is to leave the Chamber.
Chris Leslie
Thank you very much, Mr Speaker. I was simply making the point that the Chancellor ought to have been here today because there are so many questions to answer about this deal. Obviously it is right that Northern Rock should be leaving public ownership, just as it was right to take it into public ownership in 2008 to avoid a catastrophe, but the decision to sell at this time and in this manner raises some very serious questions. Will the Minister confirm the net loss to the taxpayer from the sale, and that the proceeds will be used in their entirety to pay down the national debt?
On the sale’s timing, I read in the papers, and the Minister said again today, how the Government are blaming Europe and Labour—I am surprised that they have not blamed the civil service yet. These are weak excuses that just will not wash. He should start taking responsibility for some of his own decisions, and he should be doing what is right for the British taxpayer, not hiding behind EU rules. If he felt constrained by the EU requirement to sell by the end of 2013—let us remember that it is still only 2011—why did the Government not try to change that? If he is now suggesting that it was a bad deal for the taxpayer and that he would rather have waited, why did he not ask the European Commission for an extension? With the economy flat-lining, bank shares in decline and a deepening crisis in the eurozone, he could easily have made the case that circumstances had changed. Or does this fire sale suggest that they think that conditions will get even worse?
The Government have a duty to ensure that the deal is good for taxpayers, the economy, the new company and its customers and staff, so why is he scared to issue an initial public offering for Northern Rock? With about £700 million of excess equity on its balance sheets, why on earth is he selling it privately for 66p in the pound? Contrary to the headlines, this deal is funded not principally by Richard Branson, but rather with £250 million from US financier Wilbur Ross, a stake from an Abu Dhabi sovereign fund and—wait for it— £250 million of Northern Rock’s own money, using its existing capital assets in a complex financial swap deal. Is the Minister not a little troubled that the company’s assets are being stripped even before it changes ownership?
What is Northern Rock’s current core tier 1 capital position, and what does the Treasury anticipate it will be in three years? We know that the Financial Services Authority has voiced its anxieties about such a substantial removal of capital. What safeguards will it be given if these capital buffers are to be thinned out so dramatically? The Financial Times reports that Wilbur Ross has paid about 80% of the book value for Northern Rock, yet he is quoted as saying that he would have
“to sell out a few years down the road for 1.5 times book value.”
That is 150%. Is the Minister comfortable with the news that the Government have sold to an individual actively planning to dispose of the bank quickly and nearly double his money? Does that not indicate that the Treasury might be selling prematurely and at the wrong price?
I am amazed that the Minister has agreed to underwrite a further £150 million of the buyers’ payments? I have heard of vendor financing, but agreeing to accept £150 million of debt so deeply subordinated as to be basically unsellable takes the biscuit. Is it not possible that the subsidy will be regarded as further state aid, and is he presumably seeking EU Commission approval for that? Will he at least guarantee that the Treasury will receive a payment every year on that £150 million, and that we will get it all back by the end of this Parliament?
The coalition agreement promised to promote mutuals and financial services, yet no apparent consideration was given to the mutualisation of Northern Rock. Why did Ministers not try harder to develop that option? Will the Minister publish the analysis on the basis of which they dismissed a member buy-out? The concerns about the decision to run down £250 million of Northern Rock’s capital reserves are not just an issue for the taxpayer; they also reduce Northern Rock and Virgin Money’s ability to provide significant credit in a market crying out for mortgage finance. Despite the new owners’ reported assurances, there are no contractual guarantees that branches or jobs will be retained. Savers in Northern Rock will also need reassurance that their new bank’s depleted capital reserves will not bring repeated anxieties if another banking crisis occurs.
The Chancellor opposed the original decision to rescue Northern Rock, saying:
“I am not in favour of nationalisation, full stop.”—[Official Report, 19 February 2008; Vol. 472, c. 186.]
Is this not a golden opportunity for him to hold up his hands and admit that he made a mistake, and do not the growing question marks lingering over this giveaway deal also suggest that his judgment is as wrong now as it was then?
Mr Hoban
That was a lame response to my statement. The previous Government presided over the failure of financial regulation and an irresponsible banking culture that led to the collapse of Northern Rock. Now we have to deal with their legacy, and that includes the agreement that they struck with the European Commission requiring Northern Rock to be sold by 2013. Given the hand we were dealt by the previous Government, we had to do three things: get the best deal for the taxpayer, for the consumer and for Northern Rock and the north-east. The deal that we announced last week did just that.
The hon. Gentleman asked about proceeds. As we have said, this is a one-off transaction, and the proceeds will go towards paying down the debt. He asked whether it would have been better to hold on to Northern Rock longer. The reality is that Northern Rock is currently loss-making, and it is expected to make losses in the first part of next year. The best outcome for Northern Rock is to be acquired by somebody who wants to use the base in Gosforth to expand the business and offer a better deal to consumers and the staff of Northern Rock. David Fleming, the Unite trade union official, said:
“The treasury’s decision to sell Northern Rock to Virgin Money marks a significant moment in the history of this north-east based financial institution. After three years of turmoil and upheaval for the workforce at Northern Rock, Unite hopes that today will be the start of a secure future.”
Let me deal with Virgin Money’s capital position, which the hon. Gentleman raised. Virgin Money has clearly set out to be a strong and dependable partner. Its core tier 1 capital ratio is 15%, which is much higher than that of many existing high street banks, which averages about 10%. Of course the FSA will approve the capital structure and will have to give its approval of the transfer of ownership, and hon. Members should welcome that support.
On mutualisation, I made it clear, as did the Chancellor, that we were open to offers from existing mutuals to buy Northern Rock for a stand-alone remutualisation, but no firm bids were made in the final round. No one came forward with a well worked-out plan on how Northern Rock could be remutualised on a stand-alone basis, and that is why we took the decision we did. It was in the best interests of the taxpayer, the consumer, the north-east and Northern Rock to sell the business to Virgin Money.
Mr Andrew Tyrie (Chichester) (Con)
In the Treasury Committee’s recent report on competition in retail banking, we argued strongly that competition, and not just short-term revenue maximisation, should play a major part in the sales of the nationalised banks. Have consumer interests influenced the Treasury’s decision to sell Northern Rock now, and does the Minister agree that increasing competition should be central to future divestments?
Mr Hoban
My hon. Friend makes an important point. We have studied the Treasury Committee’s reports on competition carefully. We agree with him that competition is vital to improve outcomes for consumers, whether they be business or personal; and, to the extent that divestments of banks help to deliver improved competition, that is something to be welcomed and borne in mind. There are other areas where we can look to improve competition in the banking sector. The Independent Commission on Banking has made its proposals, and we will respond to them in due course.
Mr Speaker
Order. There is extensive interest in this statement, which I am keen to accommodate, but I remind the House that there is another statement to follow. Therefore, brevity is of the essence.
Mr Geoffrey Robinson (Coventry North West) (Lab)
Is the Financial Secretary not aware that this is an appalling deal, and at quite the wrong time for the British taxpayer? Is he not aware that the European Commission cannot sanction the imposition of that date? The worst time to sell a company is when it is loss-making and when—as in this case—it has prospects of profits to come. He should have waited. It is the timing that is being opposed, and which has nothing to do with the European Union, but everything to do with the collapse of this Government’s economic policy.
Mr Hoban
The hon. Gentleman is well known for his business experience, but what we need is to get the best deal for the taxpayer and Northern Rock. The advice that we received from our independent advisers indicated that this was the best time. As I mentioned in my statement, we got a price-to-book ratio of about 0.8, which compares with other banks, which are currently trading on a price-to-book multiple of 0.5. That sounds to me like a good deal for the taxpayer.
Stephen Williams (Bristol West) (LD)
I welcome my hon. Friend’s confirmation that this is the best value for the taxpayer and injects a new competitive force into the high street. He said that this was a milestone in the Government’s journey of returning the other state-owned banks to the private sector. Will he agree to continue to work with me and others who have imaginative ideas in this area to ensure that all citizens benefit from that rather larger transaction?
Mr Hoban
My hon. Friend has championed particular ideas about the distribution of shares in RBS, and we listen to those views carefully. It is absolutely right to see this as a milestone towards the normalisation of the banking system. It requires a significant reform to regulation and to the structure of banking, which is a course that we are embarked upon.
Mr Michael Meacher (Oldham West and Royton) (Lab)
But is it not a scandal to sell off Northern Rock unnecessarily at this time at a cost to the taxpayer of up to a £500 million loss, especially when, in addition, the bad debts of Northern Rock Asset Management, which, significantly, the Minister did not mention, will be dumped on the taxpayer when the £50 billion of mortgages it still holds begin to default as interest rates rise?
Mr Hoban
Clearly, there are two parts to the Northern Rock business that the previous Government nationalised: the business that we are selling—Northern Rock plc—and Northern Rock Asset Management, which holds a lot of the old mortgage book. The previous Prime Minister assured the House that both would make a profit for the taxpayer.
Mr John Redwood (Wokingham) (Con)
I hope that Sir Richard Branson can turn this business into a profit-making, growing business, generating more jobs and paying some tax. Will the Minister remind us how much this bank has lost in state hands, which accounts for the fact that it is no longer worth what the Labour party paid for it?
Mr Hoban
The previous Government injected £1.4 billion-worth of capital into Northern Rock plc. That has gone down to £1.2 billion because of the losses incurred, and we expect further losses in this financial year and in the next. The challenge for Virgin is to use the platform it will have in Gosforth to grow the business, attract new customers and use its reputation for challenging incumbents.
Mr Alan Campbell (Tynemouth) (Lab)
Will the Minister give a cast-iron guarantee that the foundation will still exist beyond 2013?
Mr Hoban
It is a matter for Virgin Money and Northern Rock Foundation to discuss. Virgin Money has said as part of its agreement to acquire the business that it will extend existing arrangements to the end of 2013. It is keen to work closely with Northern Rock Foundation so that it can continue its excellent work in the north-east and Cumbria.
Michael Fallon (Sevenoaks) (Con)
The big plus here is that from January we will have a strong challenger retail bank. Will my hon. Friend assure me that in taking forward the Vickers proposals, he will get on with creating other challenger banks, not least as alternative sources of support for small businesses?
Mr Hoban
My hon. Friend is right. From 1 January we will see a strong challenger on the high street from a business that has a reputation for taking on incumbents and offering a better deal for consumers. That is one of the great attractions of Virgin Money in this transaction. We want to take more action to improve competition on the high street. We are working closely with challenger banks to find ways of removing barriers of entry to the market so that they can grow their market share. One of the Government’s key commitments is to improve competition on the high street for both business and retail customers.
Roberta Blackman-Woods (City of Durham) (Lab)
I note that the Minister said that this agreement would lead to additional job creation in the north-east. Will he say how many jobs he expects to be created, of what type and by when?
Mr Hoban
What this deal does is preserve jobs in the north-east. Virgin is committed to not going beyond the existing management’s plans for compulsory redundancies. The growth of Northern Rock will come off the back of how well Virgin Money does in exploiting new markets and new opportunities. I think this is a good deal for the employees of Northern Rock. That is why staff cheered when the deal was announced on Thursday at Northern Rock’s offices in Gosforth. They wanted an end to the uncertainty that has hung over the business for the past four years. We have delivered that for them.
Mark Field (Cities of London and Westminster) (Con)
I accept that any Government should, in the Minister’s words, be looking to “get out” of the business of banking. Presumably, the fact that we have done this deal now rather than wait until the end of 2013 is due to the expectation of a considerable deterioration in the value of all the banks, including RBS and Lloyds banking group, where we have far more significant holdings. Will the Minister give an indication of the time period during which we might be getting out of the business of those two banks?
Mr Hoban
The decision to dispose of Northern Rock was taken in isolation from consideration of other banks. A particular set of circumstances appeared, which enabled us to sell while providing a good deal for the taxpayer, a good deal for the future of Northern Rock and a new competitor on the high street. That is why we sold Northern Rock to Virgin Money. I think it is a good deal for everyone concerned.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I welcome the end of some of the uncertainty that has been blighting many of my constituents’ lives, and Virgin Money’s commitment to keeping Northern Rock’s headquarters in Newcastle, but the people of Newcastle and the country want a return to a longer-term, more responsible form of banking to ensure that this never happens again. Given that the Government ignored the possibility of mutualisation, choosing a complex financial arrangement instead, what confidence can the people of Newcastle have that they will achieve that aim?
Mr Hoban
No one put forward a workable plan for a stand-alone remutualisation of Northern Rock. No mutual came forward in the final round with a bid to acquire Northern Rock. There is no point in hoping for a white knight to appear to remutualise Northern Rock when the reality is that none was forthcoming. I hope that the hon. Lady shares the view of Councillor Nick Forbes, leader of Newcastle city council, who said that he was
“delighted that the future of Northern Rock has now been decided with its sale to Virgin Money”.
Guy Opperman (Hexham) (Con)
I too was in Newcastle last week, when the foundation, local people, the Labour party and the cheering staff members in Northern Rock’s building in Gosforth were confirming—as were the unions—that this was a great deal. Is the Minister surprised that no mutual came forward, and will he explain once more why none would be willing to do so in the circumstances?
Mr Hoban
We went out of our way to encourage that. We spoke to various organisations that are keen to promote the idea of mutuality, but none of them could produce a workable model that would enable us to give money back to the taxpayer, and, as I have said, no mutual came forward with a bid in the final round. That was not for want of trying on our part. Clearly there was not the interest in the mutual sector in acquiring Northern Rock that people assumed to exist.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
Of course my constituents in Newcastle welcome news that appears to offer some job security to many local people in the short to medium term, but will the Financial Secretary tell us what financial guarantees have been given to ensure that Virgin Money delivers on its promises?
Mr Hoban
Indeed. Councillor Nick Forbes, whom I quoted earlier, also said:
“The decision by Virgin Money to make Newcastle their home sends a message of confidence in our city and the wider North East.”
Virgin Money backed that up by saying that it would not make any compulsory redundancies beyond those already announced by management for the next three years, and I think that that provides a good level of assurance for Northern Rock’s staff.
When I visited Northern Rock on Thursday and talked to some of its staff, they were clearly pleased that the uncertainty that had hung over the business for the last four years and acted as a brake on its development had been removed. They look forward to its continued growth under Virgin Money.
Alec Shelbrooke (Elmet and Rothwell) (Con)
The deal that the Minister has announced represents the best value that can be obtained for the taxpayer at this time, and for as long as financial crises continue to abound. We have secured the jobs of people in the north-east, hence the good cheer that is felt there. Does my right hon. Friend agree that the good news is here, and that the reason people may look po-faced is that, once again, we are clearing up a hell of a mess?
Mr Hoban
My hon. Friend is absolutely right. Since we came to office, we have reformed the failed tripartite arrangements that were introduced by the Labour party. We are changing the nature of banking in this country by establishing the Independent Commission on Banking, whose proposals on ring-fencing will mean higher levels of capital and better levels of liquidity for businesses. We are tackling the mess that Labour left behind, and the disposal of Northern Rock is part of that story.
Mr Ronnie Campbell (Blyth Valley) (Lab)
This is a three-year deal by Mr Goody Two Shoes, Mr Branson. [Interruption.] That is what he is: Goody Two Shoes. What will happen to the people in Newcastle? Will he come to London, or will he go offshore after three years? Where is the guarantee for those workers?
Mr Hoban
I think that there is a better guarantee of jobs under the current proposal than there would have been if Northern Rock had continued as it was. The problem with Northern Rock was that its cost base exceeded the business that it was writing, and that posed a long-term—[Interruption.]
Mr Speaker
Order. As I said to the hon. Member for Reading West (Alok Sharma), I understand that there are very strong feelings and effects on constituencies on these occasions, but the hon. Member for Blyth Valley (Mr Campbell) must not chant a chorus from a sedentary position—or even, for that matter, from a standing position. We are grateful to him for his views when he is called to speak.
Matthew Hancock (West Suffolk) (Con)
Is not the argument that we should hold on to Northern Rock for a few more years in the hope that the price will go up just a punt on the stock market, and is that not exactly the sort of attitude that got us into this mess in the first place?
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
I want to be reassured that this is the right time to sell Northern Rock. I presume that the Treasury took into account the situation in the eurozone. If the Prime Minister currently believes the European Central Bank should be the bank of last resort and should therefore buy Italian bonds, why does the Financial Secretary think that back in 1976 a Labour Government did not instruct the Bank of England to buy British bonds but instead called in the International Monetary Fund?
Mr Speaker
Order. The relationship between that question and the matter under consideration is, at best, tangential, but I am sure it is not beyond the intellectual compass of the Financial Secretary to address it.
Mr Hoban
I was, indeed, intrigued about the role Northern Rock might play in bailing out the eurozone economies. It is essential that action is taken in the eurozone to tackle the fundamental problems it faces. The banking system must be recapitalised, the fiscal crisis in Greece and a number of other member states must be resolved, and a firewall must be put in place to ensure that the turbulence in the eurozone comes to an end. We are all working towards achieving that, and it is in our long-term interests to do so. The fact that we were able to dispose of Northern Rock against that backdrop is a good sign of what is happening here in the UK.
Richard Harrington (Watford) (Con)
I, for one, would like to thank the Financial Secretary and his colleagues for this deal, as I believe it is a good deal for the taxpayer and it offers a good future for the employees of Northern Rock. Does the Financial Secretary agree with the shadow Chancellor, who unfortunately is not in his place but who said in 2006 that the tripartite committee provided robust supervision of risks to financial stability?
Mr Hoban
My hon. Friend makes an important point. The reality is that Northern Rock’s problems and ultimate failure as an institution were a consequence of the architectural flaws in the system of tripartite regulation, under which no one body was monitoring, and could respond to, the build-up of an asset price bubble, and no body was able, or prepared, to challenge Northern Rock’s business model which led to its being over-dependent on money borrowed in the wholesale markets. That was the cause of Northern Rock’s problems, and we are putting in place measures that will tackle some of them.
Ian Mearns (Gateshead) (Lab)
The Financial Secretary will remember the discussions we had in the summer and spring about this potential sale and the guarantees we were seeking about the Northern Rock Foundation. He said at the time that he could not give any guarantees about the foundation as he had to get the best deal for the taxpayer. Having failed to achieve that, will he go back and see whether he can get a further deal on the foundation beyond the one year that has been guaranteed?
Mr Hoban
There is a good deal for the foundation. There was no obligation on Virgin Money to continue the deal beyond 2012, but it has agreed to extend it to 2013, and it wants to ensure that Virgin Money Giving works with the foundation to enable it to continue its work. One of the challenges for the hon. Gentleman and his colleagues from the north-east is to work with Virgin Money and to persuade it of the merits of continuing to fund the foundation.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
My constituents who have worked for Northern Rock, and people throughout the north-east who care about the new institution having its headquarters there, will be astonished at Labour’s opposition to the deal, as it is designed to give a future to a bank that failed on Labour’s watch, when guarantees were not worth the paper they were written on.
Mr Hoban
My right hon. Friend makes an important point. As someone who was born and brought up in the north-east, I understand how important Northern Rock is to the fabric of the region, and how important it is as an employer and as a sign of prosperity. That is why I was keen to ensure that we got a good deal, not only for the taxpayer but for Northern Rock and the north-east. I am disappointed that so few voices from the Labour Benches have spoken up in support of what is a good deal for Northern Rock and its employees.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
It is amazing that the Government find the ability to mutualise public services but not to remutualise a former mutual. Will the Minister put evidence in the House Library over the next 25 months proving that this was, indeed, a good deal for the taxpayer now?
Mr Hoban
I have made it very clear that we acted on the advice that we had received from our independent advisers. They put forward the case that it was better for Northern Rock to be sold to Virgin Money than for us to sit on it or have it remutualised in one form or another, and I think that that is the best outcome for Northern Rock and its employees. I also think that Labour Members should recognise their role in the circumstances that led up to the failure of Northern Rock and show some contrition about the regulatory system that they left behind.
Mr Peter Bone (Wellingborough) (Con)
For Northern Rock’s employees, borrowers and depositors, who does the Minister think would be better to run it: the Government or Virgin? It appears that Labour Front Benchers think it is the Government.
Mr Hoban
I have always taken the view—I think my hon. Friend will agree with me on this occasion—that these things are better run in the private sector than in the state sector. I think we will see good management and good leadership from Virgin Money, which will provide a long-term foundation for a credible competitor in the retail financial services sector.
Grahame M. Morris (Easington) (Lab)
My question is about the timing and sustainability of this deal. I wonder whether the Minister will answer a question that my hon. Friend the Member for Nottingham East (Chris Leslie) asked earlier about the reported recapitalisation—what we would refer to as “an asset strip”—whereby almost a third of the purchase price is reportedly coming from the bank’s current capital base. Does the Minister not feel that this would put the bank at greater risk in the future if the capital base is not quickly rebuilt?
Mr Hoban
This transaction is subject to regulatory approval by the Financial Services Authority, which will carefully examine a range of issues, including the capital position of Virgin Money. I have made the following point before, but it is worth repeating. Virgin Money’s core tier 1 capital ratio is about 15%, whereas most of the UK high street banks are operating at about 10%, so is strongly capitalised. This deal is subject to regulatory approval, and that should give all of us confidence in the future of Northern Rock.
Robert Halfon (Harlow) (Con)
As well as reassuring anxious employees that there will be no compulsory redundancies, will my hon. Friend confirm that there will be few branch closures under the new Virgin Money scheme?
Mr Hoban
I can indeed. One of the commitments given by Virgin Money was to maintain Northern Rock’s existing branch structure, particularly the branches based in the north-east, and as it grows and expands the services I suspect that it will want to open more branches, so that more people can access the deals that it is offering.
Mr David Anderson (Blaydon) (Lab)
If this is the best time to sell Northern Rock—a time when it has made a loss, with the implication of what the Minister has said being that it has already made a loss for part way through next year—does that not show what the real story here is? It is not about the bank, but about the fact that the Government are tacitly agreeing today that the economy will be no better, or worse, in the next two years than it has been in the past year and a half, under their stewardship?
Mr Hoban
I do not agree with that at all. If the hon. Gentleman had spoken to Northern Rock employees over the past few months, as I have, he would have found that they clearly have the capacity to expand their services beyond what is currently on offer; they can cope with a bigger flow of savings and mortgages. That is good news, because it will enable Northern Rock to cope with the volumes that should flow from the acquisition by Virgin Money. If we did not sell Northern Rock now, the risk is that there would be further job losses to try to cut the cost base in line with the current business book. That would not be a good outcome for Northern Rock or its employees. The prospect of moving to Virgin Money has lifted the uncertainty from over the heads of Northern Rock employees. As one of them said to me on Thursday, “This is like an early Christmas present.”
Mrs Eleanor Laing (Epping Forest) (Con)
In contrast to the Opposition’s blind prejudice against the private sector, does the Minister agree that Sir Richard Branson’s undertaking that there will be no compulsory redundancies and no branch closures in the next three years shows that Virgin Money is a decent company that will bring benefits to Northern Rock’s savers and employees, and to the north-east generally?
Mr Hoban
My hon. Friend is absolutely right. What is impressive about Virgin Money has been the way it has sought to engage with stakeholders in the north-east and to understand the importance of Northern Rock not just to the employees but to the wider community in the north-east. It has put forward a business plan that seeks to focus its operations in Gosforth in a way that will help to protect and grow the operation there. That is why the news of Northern Rock’s sale to Virgin Money has been greeted positively by most people, but, sadly, not by those on the Opposition Benches.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
Earlier this year, UKFI ruled out remutualising Northern Rock on the grounds that that would represent the gifting of shares to members of a new mutual. Aside from the fact that mutuals are not premised on gifting, can the Minister explain how using £250 million of existing equity within Northern Rock to finance this deal is anything other than gifting?
Mr Hoban
The deal we have agreed with Virgin Money involves the receipt of £747 million in cash now and further receipts in the future. I think that offers much better value for money than the remutualisation route, which would have involved the free transfer of shares to members and would have had no certainty of return to the taxpayer. It is in the long-term interests of the Northern Rock business for this deal to go ahead as it is.
Alun Cairns (Vale of Glamorgan) (Con)
Does the Minister agree that this could be seen as the first step in returning normality to the banking high street after regulatory failure over the past 10 years? Does he accept that by doing that he is bringing a new, welcome innovator to the marketplace that will have a positive impact on competition?
Mr Hoban
My hon. Friend is absolutely right. We want to see new competitors in the market—people who can challenge the incumbents and offer a better service, better rates and better products—and that is to the advantage of consumers. That is a trend we are seeing across the banking sector as a whole, with new entrants coming into the market, and we should be encouraging it so that we have a more competitive financial services marketplace with better outcomes for consumers, whether they are business or personal.
Phil Wilson (Sedgefield) (Lab)
Will the Government do an impact assessment of the effect on jobs in the voluntary sector if the Northern Rock Foundation closes after 2013?
Mr Hoban
I recognise the importance of the Northern Rock Foundation and I think we all appreciate the excellent work it does in the north-east, but following the denationalisation of Northern Rock it needs to think about how it will continue its work and how it will work with Virgin Money and Virgin Money Giving to continue its activities across the north-east in the future.
Mr Philip Hollobone (Kettering) (Con)
What commitment has Virgin Money made to Her Majesty’s Treasury that it will increase lending to small businesses with its new asset in place?
Mr Hoban
At the moment, Virgin Money operates primarily in the retail financial services field. It offers a range of products to personal customers. However, it has said that it will look to provide a range of products to small businesses in the future and we would welcome that increased competition in that key area.
Chris Evans (Islwyn) (Lab/Co-op)
Will the Minister please explain how using £240 million of Northern Rock’s own capital somehow represents a good deal for the bank and for consumers?
Mr Hoban
As I have already made very clear, Virgin Money is paying £747 million to the taxpayer, and other proceeds of sale will come our way. Our view is that this is far and away the best deal on the table. It is the best deal when it comes to value for money for the taxpayer, it is the best deal for consumers and the best deal for the north-east. I am sorry that the hon. Gentleman has not sought to welcome this opportunity to give the people of the north-east and those who work at Northern Rock some new hope for their future.
Stephen Hammond (Wimbledon) (Con)
I thank my hon. Friend for his statement. If I understand it, the deal done by the Labour party that forced Northern Rock to be sold before 2013 put a deadline in place, and if losses were being made, the book value was more likely to fall. May I urge my hon. Friend to stick to his guns, as this is a good deal for taxpayers? I remind him that the Labour party’s timing meant that gold was sold at the bottom of the market.
Mr William Bain (Glasgow North East) (Lab)
Northern Rock demutualised in 1997 yet collapsed 10 years later. Does the Financial Secretary recognise that if it did so again, the cost to the taxpayer could rise to £10 billion? Why, then, did he not more rigorously pursue a mutualisation option that would have restored a safer building society mode of finance to the British high street?
Mr Hoban
We should think about those dates very carefully. It was demutualised in 1997 and failed in 2007. The hon. Gentleman needs to remember that the regulatory architecture put in place by the previous Government meant that Northern Rock could act as an outlier and become over-dependent on wholesale funding. Nobody did anything about that at a time when there was an asset price bubble in the UK economy. Those factors in the regulatory architecture led to some of the financial problems in the economy in 2007, 2008 and 2009. We are acting to strengthen the regulatory architecture, to tackle those problems and to ensure that the Bank of England has the powers it needs to supervise the banks properly and look at systemic threats to financial stability. We have also set up the Independent Commission on Banking, which is looking at ways of making the banking system in the UK safer while remaining competitive at an international level.
Jonathan Evans (Cardiff North) (Con)
My hon. Friend will recall that when he appeared before the all-party group for building societies and financial mutuals he was asked to arrange for the publication of the advice received in relation to UKFI and the start of this sale. Bearing in mind the reliance he has placed on advice today, when does he anticipate that advice being published?
Mr Hoban
My hon. Friend will understand from his own business experience that received advice can be subject to commercial confidentiality. I assure him that we looked carefully at the remutualisation of Northern Rock—that is why I went before his all-party group. We reached out to people in the mutuals sector who wanted to see the remutualisation of Northern Rock but, sadly, no one came up with a viable and workable plan to enable that to happen.
Mr Andrew Love (Edmonton) (Lab/Co-op)
I remind the Minister that UKFI made it absolutely clear at the start of the process that it was looking for short-term maximisation of the cash value of Northern Rock. That precluded any sensible mutual from entering the process. This deal is a disaster—we are losing money hand over fist on it. Would it not have been sensible in the circumstances, recognising market conditions, to have gone for a much longer-term deal with a mutual, which would have provided financial benefits as well as delivering benefits to the consumer?
Andrew Bridgen (North West Leicestershire) (Con)
Has the Minister noted that the deal agreed with Virgin Money represents 80% of the book value of Northern Rock, whereas RBS and Lloyds are currently trading at only 40% of book value? Does not the deal represent good value for the taxpayer?
Mr Hoban
My hon. Friend is absolutely right. If we measure this deal against the values at which other banks are trading at the moment, it is very clear that it is good value for money for the taxpayer. Rather than carping and criticising, Labour Members should welcome the fact that at a difficult time for the global economy we have been able to sell Northern Rock and get such good value for money.
Nic Dakin (Scunthorpe) (Lab)
Has the Financial Services Authority expressed a view on the use of £240 million of Northern Rock’s own money by the buyers for the purchase of this scheme?
Richard Fuller (Bedford) (Con)
Given the failed corporate strategy that led directly to the first run on a bank for more than 100 years, the nationalisation and now the capitalised loss for the taxpayer, is my hon. Friend satisfied that the original directors and chief executive officer of Northern Rock have been held sufficiently to account for their fiduciary responsibilities and will he welcome funding for the Serious Fraud Office to ensure that they are?
Mr Hoban
The directors of Northern Rock have been subject to enforcement action by the FSA, but I shall not go into detail about that. I recognise that the directors have their responsibility for the failure of Northern Rock, but the Labour party should also share some responsibility for the architecture of the financial regulation it put in place, which meant that no one was in a position to prevent Northern Rock from being an outlier when it came to its dependence on wholesale funding. It was a consequence of that dependence that led to Northern Rock’s being nationalised and we should welcome the fact that it is returning to the private sector.
Jonathan Ashworth (Leicester South) (Lab)
Will the Financial Secretary confirm, so that we are clear, that the Treasury did not apply to the European Commission for an extension of the 2013 deadline? Will he also confirm, further to his answer to the hon. Member for North West Leicestershire (Andrew Bridgen), that given the price of shares in Lloyds and RBS, the Government and UKFI have no immediate plans to sell off their shareholdings in those banks as well?
Mr Hoban
We were dealt a hand by the previous Government. We inherited their ownership of Northern Rock. We inherited their holdings in Lloyds and RBS. Our judgment was that this was the right time to sell the business. The deadline imposed upon us by the European Commission acted as a spur to this. Looking at the prospects for Northern Rock under state control and comparing them to the prospects for Northern Rock under Virgin Money’s control, most sensible people would say that it was better that Northern Rock was owned by Virgin Money than by the state.
Stephen Mosley (City of Chester) (Con)
The employees of Northern Rock were cheering last week, but is this not also a vote of confidence by Virgin Money in the economy of the north-east and in the Government’s handling of the British economy as a whole?
Mr Hoban
That is right. We have a significant new entrant in the financial services market that is prepared to buy Northern Rock, to invest in the future of the operations in Gosforth and to provide job security there. It is a vote of confidence. It demonstrates that there are people out there who want to be part of our financial services market and who want to offer a good deal to consumers.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
Can the Minister guarantee that the Government will get back the £150 million that they are lending to Virgin and, if so, when?
Mr Hoban
What we put in place with Virgin Money is a capital instrument which is an important part of its financing structure, and the terms of that instrument will be set in place shortly. It is important to recognise that we want to see a well capitalised bank there. The FSA will look very carefully at the structure of Northern Rock and its ownership. As I said, Virgin operated a business model whereby it has capital levels which are much greater than those of some of its peers. That is a welcome sign that Virgin takes financial stability very seriously indeed.
Paul Blomfield (Sheffield Central) (Lab)
Is it any wonder that Members on the Labour Benches and people more widely question the value of the deal, when the principal purchaser says that he intends to sell out within a few years at double the money?
Mr Hoban
That is why we have agreed as part of the deal that if Northern Rock is sold within five years, we will get a benefit from that. It is not just those on the Government Benches who agree with the deal. It is the staff at Northern Rock, the Labour leader of Newcastle city council, the national officer of Unite and others who welcome the fact that this is a vote of confidence in the ability of Northern Rock to add value to the Virgin Money brand.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
Like my fellow Co-operative party MPs, I strongly wanted to see a mutual solution for Northern Rock. The Government’s reasons for not going down that route seem to change every time the issue comes before the House. The Government were happy to sell at a discount and use vendor financing, but are not those the very reasons why the Government used to say they could not proceed with remutualisation? Further to that, the Minister’s statement that “no mutual came forward with a bid” suggests that he does not really understand the issue at all. Surely the point of a mutual is that the members themselves would buy it out and become the owners.
Mr Hoban
I question whether the hon. Gentleman himself understands mutuals. There are situations where mutuals come forward and make bids. We have seen the consolidation of the mutual sector in recent years as a consequence of the financial crisis, so there are different ways in which a mutual option could arise. Let me reassure the hon. Gentleman and his hon. Friends. We looked closely at the mutualisation option, and we were open in reaching out to Mutuo, Adrian Coles, the Building Societies Association and Jonathan Michie to encourage them to come forward with a workable solution for how Northern Rock could be remutualised. No one came forward with such a solution. That is why this deal is the best one for the taxpayer.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
The Minister was asked at the all-party financial mutuals inquiry to publish in full the Deutsche Bank report to UKFI on the future of Northern Rock. Why will he not publish any of that report or any of the details of the other conversations that he says he has had with Mutuo and others? Does he not recognise that his failure to do so calls into question the seriousness of his commitment to financial mutuals?
Mr Hoban
I say this to the hon. Gentleman and other Members on the Opposition Benches who represent the Co-operative party: we have worked hard since we came into office to find ways to strengthen the mutual sector. That is why we have finally pushed through the legislative reform order which will make it easier for credit unions to expand, why we set up a fund in the Department for Work and Pensions to encourage credit unions to expand, and why we have pushed through, after years of inactivity by Labour when in government, a new capital instrument for building societies. This party is committed to diversity in financial services. We have done more to help the mutual sector in the past 18 months than the previous Government did before they left office. I believe we have a strong message on mutuals, and what we have here is the best outcome for the taxpayer and Northern Rock.
Housing Reform
The Minister for Housing and Local Government (Grant Shapps)
Today, the Government have published “Laying the Foundations: A Housing Strategy for England”. The Government inherited a situation in which house building had fallen to its lowest peacetime level since the 1920s, house prices virtually doubled in the 10 years to 2010 and nearly 3 million households who wanted to own their own home and to have that sense of independence and pride were struggling to get a foot on the ladder. Indeed, under the previous Administration, the number of first-time buyers collapsed to its lowest level since the 1970s. Lenders are not lending, builders are not building and buyers are not able to buy.
Of course, the credit crunch is responsible for some of the slow-down, but I have no doubt that the problem was compounded by a centralist and bureaucratic approach to housing that made it harder and more expensive to build those much needed homes. This Government will get Britain building again by working with communities and industry, not against them. Instead of forcing homes on communities, we are giving them reasons to say yes with the new homes bonus. Instead of dictating to industry, we are addressing the barriers it faces. We have already seen some promising signs—house building starts are up by a quarter during our first 18 months in office—but we are in no doubt about the scale of the challenges ahead and we are ready to take decisive action to get our country building again.
To get builders building, we need to get buyers buying, which is why we are helping those who aspire to own. Today, I am announcing support for an industry-led indemnity scheme to provide help for first-time buyers in particular. It will help up to 100,000 people to buy new-build homes with a 5% deposit. That means that, instead of an impossibly high deposit of, say, £40,000, a typical first-time buyer would need only around £10,000 in deposit, putting ownership within the reach of the many. It is also a low-risk scheme for the taxpayer, with the deposit from the homeowner and the liability for the builder coming first.
We are reinvigorating the right to buy. Nothing did more than the right to buy to promote social mobility, home ownership and mixed communities, but I am afraid that the previous Government made vindictive cuts to that successful scheme. We are on the side of every family who wants to get on and do well, so we will raise the discounts available to social tenants who wish to buy. For the first time, we will take the receipts from additional right-to-buy sales and use them to support new affordable homes on a one-for-one basis—for every home sold, a new one will be built.
In the current tough conditions, direct support from the Government can get things moving again. Across the country there is a large number of what I describe as shovel-ready sites complete with planning permissions, but a lack of immediate support has stopped development in its tracks. Therefore, we are launching a new £400 million get Britain building fund. It is the injection needed to get building going and has the potential to support up to 32,000 jobs. [Interruption.] I hear chuntering from the Opposition Front Bench, but I can confirm that that money has not been raided from another budget. We all remember the previous Government’s habit of returning to the Dispatch Box to reshuffle money around. This is new money for the housing sector.
Alongside that support, a new £500 million growing places fund will support the large-scale infrastructure needed for housing and economic growth. Today we are also providing £150 million, which I think the whole House will welcome, to bring many empty houses back into use.
Of course, quality matters, not just quantity. That is why the new homes we are going to build will be well designed and meet high environmental standards, and why we have asked the Design Council to help advise on building better homes.
The Government can also help by making more public land available, so we are freeing up public sector land with the capacity to deliver 100,000 new homes, many of those on brownfield sites. It is also time to recognise that many of the local deals struck during the height of the boom—the so-called section 106 agreements —placed unreasonable demands that simply do not make sense in today’s economic climate. It is quite right to ask developers to work with communities to make sure that development is viable, and no one has any objection to that, but it is self-defeating if the demands are so stringent that as a result there is no development, no regeneration, no community benefit and, ultimately, no houses are built.
In addition, we will provide support for local areas that want to deliver large-scale new development to meet the needs of their growing communities, so we are putting the incentives in place. Alongside the new homes bonus, we are reforming the community infrastructure levy, so local communities will have a proper say over how their neighbourhoods are developed and improved.
We are also supporting self-build, a revolution in the making, with a custom-build homes programme. We will put in place up to £30 million to fund this country’s ability to match what happens overseas and build many more homes through self-building by people who want to develop for themselves. Last year, the largest group of builders in this country was self-builders, with some 13,000 homes, and we want to see that figure double over the years to come.
Rented housing continues to have a vital part to play in meeting our national housing need and supporting mobility, so we will work with local authorities to tackle the worst private rented properties and the worst private landlords who drag the reputation of the sector down. Satisfaction in the sector is 85%, and we want to see it grow.
Members will know that we are reforming social housing, too. Under the previous Government, housing waiting lists almost doubled, so building more affordable homes is absolutely vital, and we are introducing the new affordable rent model, making sure that vulnerable people get the support that they need, while those who can pay, pay a little more and make a fairer contribution.
It has to be easier for social tenants to move for work or to be closer to family, so we have just introduced the national HomeSwap Direct scheme, which will support them in their moves and create excellent mobility—in strong contrast to the failed scheme that no Opposition Member wants to talk about any more. One or two Members will recall it: it was called MoveUK, a scheme that the previous Government disastrously mishandled and, eventually, shut down. That was their idea of social mobility.
We have introduced new flexibility to the tenancies that can be offered to new social tenants. When councils want to continue to offer lifetime tenancies, that is fine—if it is in the best interest of their tenants. When councils want to do something more flexible, they will have that flexibility in order to manage their stock much more effectively and to give hope to the millions of people languishing on the record waiting lists that have developed over the past 13 years.
Today, I have also issued directions to the social housing regulator as a vital step towards putting all these various social housing reforms into effect. Alongside that, I am completely committed to protecting the most vulnerable and helping to prevent homelessness, and Members should be aware that I have established the first ever cross-ministerial working group, which brings together eight Departments and will help to solve the problems of homelessness.
We have already published our first plan, which is in place and will help prevent street homelessness, with the “no second night out” nationwide pledge meaning that, for the first time in this country, nobody should ever sleep on the streets for a second night—[Interruption.] I hear the right hon. Member for Greenwich and Woolwich (Mr Raynsford) say that homelessness is going up, and he is right, but the reason why is that we no longer fiddle the rough sleeping count, which his Government resolutely failed to do anything about, even though people pointed out that it was preposterous to claim that there were only—get this—424 rough sleepers, as his Government wanted us to believe, in the entire country. It was untrue, and we are tackling the issue. I have reconvened the ministerial working group, and we are producing a second report—on ending homelessness—which can be expected in spring 2012.
The measures in the housing strategy published today come from a Government who are committed to thinking in the long term about a stable housing market that works to the benefit of everyone. Taken together, these various different measures will provide a much needed boost for the housing industry, give 100,000 buyers the chance to own new properties and get their foot on the housing ladder for the first time, and lay firm foundations for housing growth in this country by creating the right legacy for future generations. I commend this statement to the House.
Jack Dromey (Birmingham, Erdington) (Lab)
Housing matters. Good housing can make a world of difference to people’s lives, but bad housing harms health and holds back kids at school.
Britain is gripped by a growing housing crisis. Does the Minister accept that he makes his statement on a day when the figures show that house building is down, homelessness is up, we have a mortgage market in which people cannot get mortgages, and rents are soaring in the private rented sector? Does he also accept that the extra £400 million to build only 16,000 more homes is but a 10th of last year’s cut to housing investment of £4 billion?
Some of today’s announcements are not without merit. The mortgage indemnity scheme is something that we have called for and was pioneered by Labour in Scotland. However, the Government must get this right. So I ask the Minister: how many lenders have signed up to the scheme? On the sale of council houses, can he guarantee today that, for every house sold, one will be built? Will local authorities be able to keep 100% of the receipts from right-to-buy sales, and will the new council homes be let at the so-called higher, affordable rent linked to market prices? Does he not accept that we cannot have a combination of falling stock and rising rents when the need for good council housing has never been greater? The announcement on the use of public land is welcome. However, does the Minister agree that it is nothing new? Press releases from his Department about where such schemes are happening demonstrate that such things were taking place back in 2006 under a Labour Government. Does he accept that this is the fifth time that the same initiative has been announced?
That goes to the heart of the problem. Today, much has been promised—much has been repeatedly promised—but, in 18 months under this Government, there has been a sorry saga of false dawns, failure and broken promises. The Minister boasted that he would beat Labour hands down when it came to house building, yet new homes are down 6% and housing starts are down 7%. Does the Minister accept his Department’s figures? The Prime Minister once said that homelessness was a disgrace and, together with the Minister, he committed to tackling the issue. Since the general election, homelessness has risen by 10%, yet under Labour, it fell by 70%. Does the Minister agree with Crisis that his policies will make that situation worse?
The Secretary of State for Communities and Local Government has said that he wants to see more young families able to buy their first home, as he did. Yet research by Scottish Widows demonstrates that the average age of the unassisted first-time buyer will increase by seven years, from 37 to 44. However, one promise will be kept. When the Minister for Housing was the shadow Minister for Housing, he said:
“it’s easy for a housing minister to catch your eye with a headline, but much harder to deliver more homes.”
He has been true to his words. After 137 housing announcements, the facts are clear: on every measure, this Government are failing to deliver on housing. The contrast with Labour in government could not be more dramatic. There were 2 million new homes, including 500,000 affordable homes; 1 million families buying their own homes; 1.5 million social homes brought up to standard through the decent homes programme; and tenants’ rights were protected.
Urgent action is needed now. Will the Minister accept that we should repeat the bankers’ bonus tax, so that we can build 25,000 new affordable homes and create 100,000 jobs for our young unemployed to kick-start the economy? Will he support our proposal for a 5% cut to VAT on home improvements, as that would mean that more homes were in a better condition?
There is a human cost to this growing housing crisis: the damp flat where the baby is always ill; proud parents desperate because the kids they love cannot get a mortgage; small construction companies struggling to stay afloat; unemployed building workers desperate to get a job. Those people have had enough of false dawns, grand plans and press launches followed by broken promises and a failure to deliver. Sadly for them, a decent home at a price they can afford has never been further away than it is today.
Grant Shapps
I am very grateful to the hon. Gentleman for welcoming at least some sections of this policy—and, indeed, for laying claim to inventing some sections of it, I note from him and his colleagues in Scotland. When he says that these measures add up to £400 million in the get Britain building fund, he forgets that we have also announced £500 million for infrastructure projects; a multi-billion pound fund in the new homes bonus, and I do not notice any of his colleagues sending funds back to the Department as we distribute this year, we think, more than £400 million through that alone; and numerous other spending commitments, including the empty homes programme for £150 million—oh, and £4.5 billion to build more social and affordable homes. I am grateful to him for counting up the 137 measures, but it is a little disingenuous to take one of them and claim that that is the summary of the document. It is, as he rightly says, one of many measures.
The hon. Gentleman asked some specific questions, so let me try to answer them. He asked how many lenders have signed up to the mortgage indemnity programme, and I can tell him and the House that 80% of lenders have done so. That is a good deal better than the scheme that many of us will remember from our time in opposition. The then Prime Minister came to this Dispatch Box and launched a scheme, and that was the first time many of the lenders who were supposed to be participating in it had heard of it. So yes, the scheme is being widely welcomed, and I am pleased that he is welcoming it himself.
The hon. Gentleman asked whether the right to buy will be a one for one, and the answer is that it will. That is possible because of affordable rent and our having put that scheme together. [Interruption.] Opposition Members ask how. The simple answer is that affordable rent relies on money coming in from the private sector and from the housing associations to help to fund those homes. It is not simply the case, as with old-fashioned social house building, that the state is putting the money in. We have seen this work with affordable rent. That is why our programme to build 150,000 social and affordable homes was over-subscribed, and we are now producing 170,000 homes from it. We know that there is still latent demand in that programme, and we will use the receipts from the right to buy to make sure that we can build more.
The hon. Gentleman mentioned homelessness, for which he says that the figures are higher. I want to challenge his figures. For one thing, the Council of Mortgage Lenders confirmed only last week that repossessions are lower this year than was projected—and, indeed, lower than the previous year as well. That is made possible by the record low interest rates that are possible only because we have managed to set out a credible plan to control the deficit. I should also point out to the hon. Gentleman, who has not been in the job for all that long—by the way, he is the eighth Labour shadow Minister I have faced—and will not have the track record to recall this, that there are fewer people in temporary accommodation this year than when Labour was in power.
The hon. Gentleman rightly asks about the number of new homes and points out, rightly, I believe—there is no reason to doubt this figure—that 1 million new homes were built during Labour’s 13 years. He forgets to mention, though, that 2 million new people were coming into the country, so we ended up with a huge housing shortage. In any case, the net result in terms of social housing was a net reduction, with 200,000 fewer social homes.
The hon. Gentleman mentioned Labour’s plan—it is, as far as I know, its only housing policy; we have spotted or detected no others so far—which is that old chestnut, the bankers tax. Forgetting that we have already raised the bank levy to £2.5 billion a year for 10 years, the Opposition want to raise this money again and to spend it, I have calculated, for the 10th time over. With it, they will produce just 25,000 homes. I suggest that he spends this evening and perhaps this week reading the document. These 137 measures go well in excess of 25,000 homes. VAT was the other big ask. To add to the debt when we have a debt crisis by lowering VAT would be economically inept.
Finally, the one thing that has kept people in their homes more than anything else that any Government could do, as has been demonstrated in Italy, Ireland, Spain, Portugal and Greece, has been keeping interest rates low. This country’s plans to reduce the deficit have been received as credible, meaning that we enjoy all-time record borrowing levels. It is that which will help more people to own a home in the future.
Mr Speaker
Order. A large number of right hon. and hon. Members are seeking to catch my eye, which means that there is a premium on brevity, an object lesson in which is invariably provided by Mr John Redwood.
Mr John Redwood (Wokingham) (Con)
Will the Minister tell us what receipts he plans to get from all the sales that he has identified?
Grant Shapps
This is a large document and the receipts will come in many forms. The money that we are announcing for things such as the get Britain building fund will be recycled into building more homes, as will the money from the right-to-buy sales. I will write to my right hon. Friend with a more detailed note on precisely what we expect the receipts to be.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
May I draw attention to my interest as declared in the register? The Minister claimed that housing starts are up by a quarter under this Government. The opposite is true. In the past 12 months, the number of new homes started in England is below 100,000 and is 7% lower than the level over the previous 12 months. As the Minister has such a tenuous grip on what is actually happening in the market, why should we believe a word that he has said today?
Grant Shapps
I am sorry to have to challenge the right hon. Gentleman on this issue, but housing starts are up by 24% under the coalition compared with the comparative period under Labour. I have the figures here for each quarter. I will not stretch your patience, Mr Speaker, but I will happily drop the right hon. Gentleman a note on those figures. If one compares the period that we have been in office—roughly 18 months—with the same period before, housing starts are up by 24%.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I welcome the statement warmly. Will the Minister assure me that his Department is continuing to talk to the Treasury about further incentives to ensure that land that is held sterile because developers will not develop it is brought back into use for housing, particularly in urban areas where it is needed?
Grant Shapps
I can definitely reassure my right hon. Friend that that is exactly the intention of our housing strategy. A number of our recommendations and policies will lead to that conclusion. It is important to get work moving on land that is available, particularly where planning permission has been granted. That is exactly what we intend to do.
Jeremy Corbyn (Islington North) (Lab)
Some 30% of constituents in my inner-London constituency live in private rented accommodation without security of tenure and with very high rents. Many of them are threatened with eviction because of the Minister’s changes to housing benefit. Does he not think that it is important to bring about real changes in the private rented sector by giving longer-term tenancies at fixed rents, and at the same time to deal with the problem of homelessness in London by building more council housing as quickly as possible?
Grant Shapps
I agree with the hon. Gentleman that the answer to many of these problems is to build more homes. That is why “Laying the Foundations” puts such a big emphasis on that. He might also be surprised to hear that I agree with him that we need to ensure, as the private rented sector has expanded from 8% to 16%, that the quality is of a sufficiently high standard. I will be doing more work on that in the coming months and will report back. I should also say to him that satisfaction levels in the private rented sector are about 85%, which compares favourably with the social sector, where the satisfaction level is 81%. I take his points and will certainly reflect on them.
Mr Stewart Jackson (Peterborough) (Con)
I warmly welcome my right hon. Friend’s strategy and statement. In particular, I welcome the mortgage indemnity scheme and the undertaking to produce guidance and regulations on housing allocations for armed service personnel from December 2012. May I impress upon the Minister that there must also be assistance for local housing authorities that want to prioritise in their housing allocation those with a local link, poorly paid workers and those who make demonstrable efforts to improve their community?
Grant Shapps
I can tell my hon. Friend that I have today issued new directions to the social regulator that cover each of the points that he has raised. In particular, I know all Members will join me in the belief that it is essential that this country properly and correctly honours the sacrifice of those who have been out and fought for this country. That is explicit in the new directions, as is much more flexibility to take into account, for example, whether somebody is working, and whether that should be considered a positive attribute in gaining access to social housing.
Diana Johnson (Kingston upon Hull North) (Lab)
A year ago today, the Government axed a £160 million scheme to build new houses in my constituency to rent and buy. Will my constituents see the benefit of any of the money that has been announced today?
Grant Shapps
I think that is a reference to the housing market renewal areas. [Interruption.] Perhaps the hon. Lady would like to drop me a note, because I may have misunderstood which funding she was referring to, and then I will be very happy to respond in detail.
Alok Sharma (Reading West) (Con)
The new homes bonus has been welcomed by councils up and down the country that are delivering new house building. Does my right hon. Friend agree that incentivising local communities and councils in the right way is absolutely the right approach to deliver new house building?
Grant Shapps
That is right. More than 40% of local authorities report that the new homes bonus is making it easier to propose and introduce new housing in their local areas, which is very important. Last year, nearly £200 million of new homes bonus was paid out, and this year we expect to pay out more than £400 million. Incidentally, there will be a boost of another £19 million for the affordable social housing that has been included in the scheme. That approach is very important indeed.
Sheila Gilmore (Edinburgh East) (Lab)
The Minister has made it clear that the one-for-one promise on council house sales appears to depend on higher rents. How does that square with the Government’s intention to keep housing benefit down?
Grant Shapps
As with the general affordable rent programme, what will typically happen is that people will be brought out of the private rented sector and into the affordable rent sector. Rather than paying 100% rent, people will be paying affordable rent, which in London, for example, is just 65%. That does indeed keep the pressure on housing benefit down.
Nigel Adams (Selby and Ainsty) (Con)
Will the Minister explain at exactly what stage the taxpayer will become liable under the mortgage indemnity scheme should there be a default on a mortgage?
Grant Shapps
Yes, I certainly can tell the House a little more about the mortgage indemnity scheme. It has principally been worked up by the Council of Mortgage Lenders and the Home Builders Federation. They had hoped to produce it on their own, without Government backing, but that was not possible.
First, the home buyer will put down a deposit of at least 5%. That is the first chunk. Secondly, the home builder will put money into an indemnity fund. It will stay there for seven years, and they will not be able to touch it. They will get it back after that period. Only after those two mechanisms have failed will the Government step in to back the mortgage. Lenders will pay a fee to be part of the scheme as well, so overall we believe it will be excellent value for money for the taxpayer.
Austin Mitchell (Great Grimsby) (Lab)
Is this not going to lead to two-class housing development? For those who can afford to buy, which is to say the first class, there will be subsidies and support. For those who cannot, who are a large proportion at current prices, the choice will be either council and social housing, which will be treated like a transit camp and will shrink as it is flogged off at knock-down prices, or a private rented sector that is unregulated and in which there is no security of tenure, rents will be rising and housing benefit will be cut. Is not the only answer to build more public housing for rent?
Grant Shapps
I am sorry, but I think the hon. Gentleman has misunderstood some of the principles behind the scheme. Unlike when the previous Administration were in office, we are not going to have declining social housing stock. We are going to build one-for-one replacements for every home that is sold through the right to buy. Of course, he is right that there are different types of housing for people who purchase and those who rent through intermediate rent, affordable rent and social housing. That is why we are proud to have put £4.5 billion to date, before this housing strategy, into building more affordable and social homes in this country.
Sarah Newton (Truro and Falmouth) (Con)
The 20,000 people living in Cornwall and waiting for a home to rent will welcome today’s news. Does my right hon. Friend agree that villages and towns in my constituency and across the country should get a plan in place now, so that local people decide the number and type of houses that their communities need?
Grant Shapps
I absolutely agree with my hon. Friend, who is right that all our plans, including the national planning policy framework, the Localism Act 2011 and the housing strategy document, lead towards local communities having far more say. Of course, the first thing that they should do is set out their own plans with their local population.
Joan Ruddock (Lewisham, Deptford) (Lab)
Will the Minister accept that, in an area such as Lewisham, where there are below-average incomes, a lot of unemployment and very high house prices, finding a deposit of £10,000 is absolutely impossible? What time frame would he put on housing the 17,000-plus families in my borough of Lewisham into affordable and decent homes?
Grant Shapps
The only answer for the right hon. Lady’s constituents is for us to build more homes and to get a more flexible, dynamic and mobile housing market in this country. She is absolutely right, and I have every sympathy with her constituents. Throughout London, the average deposit is something like £60,000—it is completely unattainable. However, I hope she will join me and—I think—her Front-Bench colleagues in welcoming the indemnity scheme, which means that from now on, deposits will come down to £15,000 from £60,000.
Bob Russell (Colchester) (LD)
Bob the builder welcomes this statement. It is a statement of fact that the previous Labour Government in 13 years built fewer council houses than the Thatcher Government achieved in 10 years. The Minister has said that the Government can help by making more public land available, but will he specifically consider sites such as Severalls hospital in Colchester, which the previous Labour Government left to rot for a duration greater than that of the combined total of two world wars?
Grant Shapps
My hon. Friend is absolutely right about our burning ambition to ensure that we out-build—in social houses as well as in houses generally—anything that happened in the previous decade or two. He is also right that building on public sector land is an ambitious programme. I can update the House by saying that we have identified sufficient land for about 82,000 homes so far. That is without going through all Government Departments and arm’s length bodies. Indeed, we have not gone through the smaller sites—those for less than 40 homes—that could be used fruitfully to build houses. I am not familiar with the site that my hon. Friend has mentioned, but I would be very happy to discuss it with him.
Mr Michael Meacher (Oldham West and Royton) (Lab)
How can the Minister justify encouraging home buyers to raid their pension pots to pay down their deposit, which would be a reckless running down of limited pension savings for retirement? Will not mortgage indemnification lead to losses of millions for taxpayers when home buyers are forced in their thousands to default as a result of prolonged and deepening recession and rising unemployment?
Grant Shapps
I do not see it that way at all. For a start, it is not clear that people who are saving for a deposit are at the same time using the same money to save for the pension funds, as the right hon. Gentleman has described. Secondly, it is obviously a lot easier to save £8,000 or £10,000 than to save £35,000 or £40,000, which is the average deposit today, so I do not think that what he says is true. We do not think that the Government will be widely exposed through this scheme for the reasons that I have already described—I will not labour the House by describing them again.
Jeremy Lefroy (Stafford) (Con)
In Stafford, we have more than 500 long-term empty houses, which has been the number for many years. I welcome the announcement of the £150 million, but will the Minister kindly advise us when that will be forthcoming and how it can be applied for?
Grant Shapps
I am pleased to let my hon. Friend know that in addition to the £150 million in the housing strategy, which will be delivered quickly—the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hazel Grove (Andrew Stunell) has been working on that scheme and will announce more shortly—we have delivered, through the new homes bonus, which Opposition Members often deride, 16,000 empty homes in just one year back into proper use.
Stephen Pound (Ealing North) (Lab)
The Minister will be aware that today the right to buy involves not the Parker Morris street freeholds—they are long-gone—but high-rise, tower-block leaseholds. What steps is he taking to warn potential purchasers of such leaseholds that they will incur considerable and significant future costs for management, maintenance and structural work?
Grant Shapps
The hon. Gentleman makes a reasonable point. There have been issues for leaseholders, and I spend much time considering that and working with them. Each of us tends to characterise what we think is left of the social housing stock—by the way, there are 4 million social homes, nearly 1.8 million of which are in the council and ALMO sector—and to think that the homes that we know are representative of them all. In my constituency, by and large we have street houses rather than tower blocks. Around the country there remains great diversity in the sorts of homes available, and I am sure that the renewed right to buy will be really popular.
Mrs Anne Main (St Albans) (Con)
I welcome much in my right hon. Friend’s statement, but I have concerns about how the indemnity scheme will work. In an area such as St Albans, which is ringed by green belt, which does not have shovel-ready sites but which does have high house prices, what hope can he give to constituents of mine who would like to access the starter homes that are old period houses? We will not build loads of brand-new starter homes in an area such as St Albans.
Grant Shapps
My hon. Friend and I share a boundary between St Albans and Hatfield. That area used to be an aerospace site and is now available for quite a lot of house building, but that aside—I make no apology for this—we consider it important that we focus our efforts on building new homes. Every home built supports two jobs, which is important for employment and gross domestic product growth. We are therefore focusing on new homes, not just for first-time buyers but for anybody who wants to buy a new home.
Hazel Blears (Salford and Eccles) (Lab)
The Minister and the Secretary of State will be well aware that the people of Pendleton have been waiting many months for the conclusion of their £150 million private finance initiative project, which will result in 800 new homes, 1,200 refurbished homes and hundreds of construction jobs. When will the Minister sort this out? The people of Pendleton need hope for the future, and if he could do it in time for Christmas, it would be extremely good.
Grant Shapps
The right hon. Lady has been a doughty champion for her residents, and it will not be too long before I can deliver further news.
Richard Graham (Gloucester) (Con)
I welcome the Minister’s announcement, particularly on his indemnity scheme, which will stimulate the housing market in general and, more specifically, accelerate sales for the development of Kingsway in Gloucester, triggering badly needed infrastructure, such as a new surgery. Does he agree that the growing places programme is well suited to resolve section 106-related hold-ups to brownfield site developments, such as the one at the former Van Moppes chemical site on the Bristol road, which he visited with me some time ago?
Grant Shapps
My hon. Friend is absolutely right. Between the growing places fund and the get Britain building cash announced today in the housing strategy, there is ample room to get some of these stalled and stuck sites, such as the one I visited in his constituency, building again.
Mr Andrew Love (Edmonton) (Lab/Co-op)
I want to press the Minister on the one-for-one policy: the Government are increasing the discounts to 50%, and in return the affordable rent policy is meant to make up the difference. Will he guarantee the one-for-one policy? If it does not happen, what action will he take?
Grant Shapps
I would not have the confidence in this policy had we not already launched the affordable rent programme and discovered that it was over-subscribed. So we already have the contacts with councils and housing associations saying, “We want to do this, and we have a site to do it”. However, the Government did not have enough money to allow it to happen. We know from the size of the receipts that we will have sufficient money left over, after paying down the housing debt, to replace on a one-for-one basis.
Mr David Nuttall (Bury North) (Con)
I remind the House of my interest in the Register of Members’ Financial Interests. Does my right hon. Friend agree that a central plank of any housing strategy must be a thriving and vibrant private rented sector, which should not be restricted by even more regulation, as suggested by the Labour party?
Grant Shapps
The private rented sector is absolutely vital, as my hon. Friend suggests. One of my predecessors, whom I shadowed, suggested putting rent controls back in place. However, it is instructive to consider that when rent controls were in place, the private rented sector shrank from more than 50% to just 8%. Once they were removed, it doubled back up to 16%. It is important not to burden the private rented sector with too much red tape. Having said that, however, it is also important to ensure that the quality is sufficiently high, as I said a few moments ago, and we will be doing more work in that regard.
Alison Seabeck (Plymouth, Moor View) (Lab)
I make my usual declaration of an indirect interest. I received an e-mail this morning from the Minister for the Armed Forces that listed the Ministry of Defence sites in my constituency that were going into the public land pot. I made some inquiries, and the Minister should hear the answer to them. The MOD is slowing down the submission and is in no hurry to bring forward development on the site. Indeed, it is acting completely against the e-mail from the Minister for the Armed Forces, to the extent that we are now considering removing the housing element of that site. Does the Minister have any certainty that his Government’s left hand knows what their right hand is doing on this?
Grant Shapps
I am grateful to the hon. Lady—my seventh shadow Housing Minister—for making that point, which I would be happy to look into in more detail. The instruction to ensure that government land is properly used and distributed for housing has come straight from No. 10, and I will ensure that I follow up on that request.
Andrew Selous (South West Bedfordshire) (Con)
I draw attention to my declaration in the Register of Members’ Financial Interests. May I encourage my right hon. Friend to keep putting families at the front and centre of his policy? More than 15% of UK families face over-burdensome housing costs, and many couples are putting off having children because of the high cost of housing.
Grant Shapps
My hon. Friend is right, and today’s housing strategy is very much about putting the family front and centre. We have already done a number of things, such as scrapping the density targets, which led to too many flats and not enough family homes. Today’s announcement, and in particular the mortgage indemnity, will be widely welcomed by families across the country.
Mr David Hanson (Delyn) (Lab)
Hansard will show that the Minister was clear that this is new money, rather than recycled money. If that is the case, will he say what the consequential is for Wales, Scotland and Northern Ireland, otherwise we might believe that the money is perhaps not new but recycled? Secondly, are builders in the indemnity scheme building simply in England rather than nationally?
Grant Shapps
On the first point, the Barnett consequential formula will apply, which means £400 million for England. On the second point, there will now be discussions with the devolved Administrations to see whether they are interested in the indemnity scheme.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I welcome my right hon. Friend’s announcement this afternoon of measures to reduce the 738,000 empty houses, which are a shocking waste of our built environment. Can he say what effect he thinks that those measures will have? He might also be interested to know that there were as many empty houses at the beginning of the 13 years of Labour Government as there were at the end.
Grant Shapps
I am grateful to my hon. Friend for that second statistic, of which I was not aware. Those empty houses are indeed a scandal, no matter who they have remained empty under. The Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hazel Grove will lay out more details of the new, enlarged fund to tackle the empty homes. It is important that we tackle them not only through some of the traditional methods, but by taking people who may be unemployed and reskilling them, using apprenticeships and much else, to ensure that we bring as many homes as possible back into use.
Graham Jones (Hyndburn) (Lab)
Satisfaction among people in the private rented sector is certainly way below 85% in my constituency. The Minister talks a good game about the private rented sector and tackling some of the worst rented properties. However, may I remind him that he is the Minister who rolled back regulation on houses in multiple occupation, did away with Labour’s register of private landlords and is about to introduce a universal credit direct payment to landlords, none of which will help my constituents in poor housing? Can he give me some examples of what he will do to deal with the private rented sector in the next year?
Grant Shapps
Yes. I have had a good look at the range of powers available to the hon. Gentleman’s local authority, and I hope that he will join me in ensuring that it is properly using them to ensure that tenants in the private rented sector are getting a better deal. I know that his work, joined with mine, will help to make their lives a lot better.
Mark Field (Cities of London and Westminster) (Con)
I fully support what the Minister has said about aspiration and today’s first-time buyers taking advantage of something that he and I—as almost-baby boomers—took for granted. However, does he understand some of the unease about the idea of using potentially billions of pounds for a Government guarantee in this area? At what point does the inflated housing market have to fall for that to come into play?
Grant Shapps
I am grateful to my hon. Friend for describing me as part of the baby boomer generation. As I have described, this is not a multi-million pound exposure for the taxpayer. In actual fact, a number of things have to happen before the taxpayer experiences any loss—not least because the lenders are paying for the scheme, because the people building the homes are paying into a pot and, of course, because there is a deposit that has to be paid first. We are carrying out a wide range of modelling, which we will release shortly as part of the consultation for the scheme. I know that my hon. Friend will take a great deal of interest in those numbers.
Ian Mearns (Gateshead) (Lab)
The Minister may be aware that my borough of Gateshead already has significant unmet need, and we anticipate that something like 6,000 households will be forced to seek alternative accommodation when the housing benefit changes kick in. Will the Minister guarantee that to tackle this impending crisis, Gateshead will get more than the £68,000 new homes bonus that we got last year?
Grant Shapps
In many ways, it is entirely in the hands of the hon. Gentleman and his local authority. The more homes that are built, the more money that will flow. We have made the system disproportionately advantageous to local authorities with lower-than-average council tax banding, because we have used the national average, which favours authorities with below-average rates.
Iain Stewart (Milton Keynes South) (Con)
Is my right hon. Friend aware that the National House-Building Council, which has its headquarters in my constituency and celebrated its 75th birthday last week, has widely welcomed this package of measures? In particular, it thinks that the indemnity scheme will go a long way to unlocking the supply of mortgages.
Grant Shapps
I am grateful to my hon. Friend for pointing that out. The NHBC is important, as it guarantees the quality of new homes with its own insurance scheme. Clearly, if the indemnity scheme is to work, it will require all the different partners in the sector to work with the NHBC. I am grateful for its comments and for my hon. Friend’s.
Stephen Gilbert (St Austell and Newquay) (LD)
As possibly the only Member to have been elected last year while still living at the hotel of mum and dad—[Hon. Members: “Aah”]—I welcome much that is in this ambitious document. I want to press the Minister on land disposal. How much public land has been identified by the Government and what impact will below-cost disposal have on the assumptions in the comprehensive spending review?
Grant Shapps
I am sure that my hon. Friend will be delighted with the indemnity scheme—or perhaps he has missed the boat already. The public sector land disposal programme has, I think, identified 83,500 potential plots, and I should add that that comes from only five different Departments. We still have arm’s length bodies, there are still the other Departments and plots with fewer than about 40 homes have not been taken into account at all, so we are confident of being able to go a lot further. My hon. Friend asks about the receipts. The simple answer is that if these pieces of land are not being used and are unlikely to get used under the current programme, things such as the build now, pay later scheme can unlock the land and improve the profile of receipts to the Treasury and taxpayer rather than worsen them.
Martin Vickers (Cleethorpes) (Con)
The Minister will be aware that as a result of changing shopping patterns, many of our towns have boarded-up empty shop properties, many of which are substantial buildings that could easily be brought back into housing use. Will he explain what plans he has to do that? In the case of my constituency, this would provide a better and more attractive environment for the town and attract more visitors, which would boost the tourist trade.
Grant Shapps
I appreciate that there might be times when the mix is wrong. Having said that, we want to ensure that we do not destroy vibrant potential business areas. I confirm that we are looking at use class orders, for example, and we will have more to say about that shortly.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
I declare my entry in the Register of Members’ Financial Interests. Will my right hon. Friend spell out what he proposes to do about the misuse of tenancies?
Grant Shapps
My hon. Friend is right to mention the misuse of tenancies. There is considerable detail in the proposals about some of the plans that we intend to take forward. Housing fraud and abuse cost this country something like £5 billion to £10 billion a year. That covers everything from high-income, six-figure-salaried tenants taking up council housing that is meant for vulnerable people to people sub-letting homes when they already have their own home and people getting homes even though they have a home here or somewhere else. There is a wide range of abuse, and my hon. Friend will be pleased to see some of the detail in our housing strategy.
Andrew Percy (Brigg and Goole) (Con)
I feel that I should declare that I do not have an interest.
During my 10 years as a city councillor I observed that the top-down approach helped to slow down house building in many areas, and I therefore welcome the proposed changes. I particularly welcome the commitment to build more social housing, which is much needed in my part of the world. However, may I press my right hon. Friend on the section 106 reforms? During my time as a councillor, I observed that section 106 could deliver some very good community benefits, but that it could also hold up developments. Will my right hon. Friend assure us that when there is development in a local community, that community will benefit from it in some way?
Grant Shapps
I think it enormously important for communities to benefit, and I know that Members in all parts of the House share my view. The community infrastructure levy, the new homes bonus and, indeed, section 106 all play their part in that. What concerns us, however, is that some of the deals negotiated during the boom times are now preventing developments from going ahead. It is better to have housing than to have no housing, so we are inviting people to take part in “pre-April 2010” negotiations in order to unlock some of those sites.
Mr Peter Bone (Wellingborough) (Con)
The Minister has been very good at the Dispatch Box today, just as he was very good in the radio studios this morning when he was grilled by journalists. Is it not a shame that he did not make his announcement to the House first?
Grant Shapps
As you will know, Mr Speaker, I issued a written statement at 9.30 am in addition to my oral statement. However, my hon. Friend is right to point out that we deplore those who deliberately leak Government policy. Such leaks often happen because, in the case of documents such as this, it is necessary to work with third parties—there is no way round that. We always encourage them not to send out details of what is inside the documents, but unfortunately we are not always successful.
Alec Shelbrooke (Elmet and Rothwell) (Con)
My constituents will be overjoyed about the document tonight, not least because it will take the pressure off greenfield sites all over my constituency. Thousands of permissions have been granted on brownfield sites in Leeds. Does my right hon. Friend agree that the document gives developers nowhere to hide, and that those brownfield sites need to be developed?
Grant Shapps
I look forward to visiting my hon. Friend’s constituency, where people will no doubt be dancing in the streets this evening. Local authorities and local people must make delicate decisions about where it is right to build and where they do not want building to take place. The Government are proud to have returned those powers to local communities. That is absolutely the right place for them, as the housing strategy confirms.
Amber Rudd (Hastings and Rye) (Con)
I particularly welcome the release of public sector land to boost housing construction, but will the Minister assure me that the build now, pay later scheme will mean that taxpayers have an IOU ensuring that, when the houses are eventually sold, they will get the money back?
Grant Shapps
Yes, I can give my hon. Friend that assurance: obviously the taxpayer must get the money back in the end. Indeed, I can go one step further in saying that we will impose conditions on how quickly developments are created and houses are built. We can get things moving faster by using that mechanism.
Jason McCartney (Colne Valley) (Con)
Given that there are 11,000 long-term and short-term empty properties in my Kirklees council area and 350,000 empty properties in the country as a whole, does my right hon. Friend agree that, while today’s announcements are welcome, we need to give councils and communities greater incentives to bring those empty properties back into use?
Grant Shapps
That is absolutely true. Without putting too fine a point on it, it is a scandal that 700,000 or 750,000 properties are empty when so many people are in desperate housing need. As the hon. Member for Birmingham, Erdington (Jack Dromey) has rightly pointed out, the housing strategy takes account of all the decisions that have been made to date and then presents new proposals. We concluded that we wanted to add another £50 million to the £100 million fund for empty homes that already existed. We shall certainly want to work with my hon. Friend’s local authority and indeed with everyone else, including social enterprises, to ensure that those empty homes are returned to use.
Robert Halfon (Harlow) (Con)
I refer Members to my entry in the Register of Members’ Financial Interests.
Will my right hon. Friend confirm that, under the reforms, housing money raised in Harlow will be spent in Harlow, and that we really will have Harlow housing money for Harlow people?
Grant Shapps
Our intention is to ensure that where there is demand, we can create the housing. The money will cease to be transferred via the centre and then be paid out again. That is what has happened for many years through the housing revenue account, but we are reforming that system. We have confirmed that today in the housing strategy, and as a result about £30 billion of debt will be reallocated around the system and in future be spent locally.
Annette Brooke (Mid Dorset and North Poole) (LD)
How will the Government monitor whether their welcome promise to build a new social home for every one sold under the right to buy is fulfilled, and how will they ensure that if there is a clear and overwhelming need for family homes, the new properties will not be two-bedroom flats?
Grant Shapps
My hon. Friend is right that we must know what is going on with these sales, and I will set that out in more detail in a further document shortly, so she will be able to study the details and provide feedback. Broadly, we know where a house has been sold, so it is not too difficult to track that money and make sure that another property is built, and we will ensure that that happens.
Andrew Bridgen (North West Leicestershire) (Con)
My constituency has a huge interest in there being a healthy house building industry, as we are home to not only many large and small construction companies, but many companies that supply materials to the house building sector, including the largest brick factories in the country. Does my right hon. Friend agree that our newly unveiled housing strategy will start to transform opportunities for hard-working people in North West Leicestershire and across the country?
Grant Shapps
I am grateful to my hon. Friend for his question, because he is absolutely right. Lenders are not lending; builders are not building; people cannot buy; and the whole construction industry supply chain has effectively ground to a halt. This strategy is designed to deliver precisely what he has called for. We want to make sure that jobs are created again in those sectors to support more house building in this country.
Stephen Mosley (City of Chester) (Con)
May I press my right hon. Friend a little further on a question that he answered a few moments ago? He said new houses will be built on a one-for-one basis. Will they also be built on a like-for-like basis, so that, for instance, if a three-bedroom family home is sold, it will be replaced by another three-bedroom family home, not a one-bedroom flat?
Grant Shapps
My hon. Friend will recognise that some of the homes in question will, of course, have been built a long time ago, and current housing needs might be different from what they were in the past. That can work in both directions, as it were, and I will consult on the best way to implement this measure, as there is no point in building homes where they are not required. For instance, people might want to buy homes in an area that is currently experiencing depopulation, so there is nobody on the waiting list who wants a new home there. We will examine such issues very carefully, and I will welcome my hon. Friend’s comments in the consultation.
Mr Marcus Jones (Nuneaton) (Con)
I am encouraged by the success of the Firstbuy scheme, which is helping many first-time buyers get on to the housing ladder, and I am sure that the new build indemnity scheme that my right hon. Friend has announced today will be equally successful. Can he tell the first-time buyers in my constituency when that scheme will be up and running?
Points of Order
Hilary Benn (Leeds Central) (Lab)
On a point of order, Mr Speaker. Once again, a major policy announcement from the Department for Communities and Local Government has appeared in the newspapers before a statement has been made to the House. I refer in particular to the report on the Financial Times website on Saturday 18 November on the details of the mortgage indemnity scheme, and the front-page report in The Times of the same date about both the mortgage indemnity scheme and right-to-buy discounts. Mr Speaker, you have been consistently clear that statements about policy should be made to the House before they are made anywhere else. What can now be done, given that this is the third occasion when that has not happened in respect of a policy statement from this Department?
Mr Speaker
Order. Before I respond to the point of order, the Secretary of State is seeking to catch my eye, and I shall listen to him.
Mr Pickles
Further to that point of order, Mr Speaker. I want to give an assurance to you, Mr Speaker, that what appeared in the Financial Times and The Times on Saturday was not authorised by my Department or by any other Department. As my right hon. Friend the Minister for Housing and Local Government has explained, putting together policy statements necessarily involves talking to third parties, and it is a matter of some considerable regret that this information was released before we intended. It was our intention to release everything today.
Mr Peter Bone (Wellingborough) (Con)
Further to that point of order, Mr Speaker. We regularly saw leaking under the previous Government, which was wrong, and I thought that things were going to be put right. Leaks may occur, but that does not explain why Ministers appear in the media and are grilled by journalists before they come to this House. I wonder whether that can be looked at.
Mr Speaker
I am grateful to the hon. Gentleman, the Secretary of State and the shadow Secretary of State for the point of order. Let me respond as follows. I was interested but concerned to hear the Minister for Housing and Local Government explain the position by saying that, though regrettable, it was not his doing and that those entrusted with the information had let it slip. It is not, I am afraid, a satisfactory excuse for a Minister of the Crown to say, “It wasn’t us but those to whom we gave the information.” Ministers are going to have to think rather carefully about the people to whom they entrust information in future. If they cannot be confident that the confidence will be respected, perhaps they ought not to divulge the information. I know that in these circumstances there is a tendency, particularly among old hands, for there to be a certain amount of smirking on the Front Bench but, frankly, it is not good enough—it is a rank discourtesy to the House of Commons and an abuse of Parliament. That is the reality. I deprecated this under the previous Government, but what happened in previous decades or under earlier Governments does not concern me. What I am concerned about is trying to bring about an improvement now.
Secondly, I say in respect of the point made by the hon. Member for Wellingborough (Mr Bone) that Ministers of course must make judgments about when they appear in the media, but they certainly should not allow themselves to be drawn into the pertinent matters that are to be addressed in the statement. If they now and again felt able to restrain themselves from appearing in the media until after they have addressed the House, I doubt whether either they or the nation would suffer.
Intelligence and Security Committee
(13 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Sir Malcolm Rifkind (Kensington) (Con)
I am privileged, as Chairman of the Intelligence and Security Committee, to introduce this debate on not only the Committee’s annual report but the work of our intelligence agencies over the past year. It has been a particularly interesting year, in which we have seen a sea change in our intelligence agencies and the role that they play in the public debate of the nation: not only has the Justice and Security Green Paper been published by the Government, but only last week the Foreign Secretary, for the first time in our history, gave a lecture on the record—a public lecture—on the role of intelligence in foreign policy; over the past few months, the heads of the various intelligence agencies—the Secret Intelligence Service, the Security Service and GCHQ—have either given lectures or been interviewed on television or in the press about the work of their agencies and the role of intelligence; and the Intelligence and Security Committee has said in its annual report that we look forward to having, at least on one or two occasions, public sittings, for the first time in the history of the Committee, and we know that the Government see that to be appropriate. The fundamental reforms that we will be discussing today on the nature of the Intelligence and Security Committee and on the wider question of intelligence oversight mark a fundamental departure from the practices of the past.
Some might be entitled to ask, “Does this mean that secrecy is not as important as it used to be?” They might suggest that our secret services do not have to be as secret and that the secrets themselves do not require the same protection. Anyone who had that view would need correcting quickly and comprehensively. Of course there are secrets, and the basic role of these agencies is to carry out secret activities on behalf the nation as a whole.
Keith Vaz (Leicester East) (Lab)
I welcome what the right hon. and learned Gentleman has said about this important matter. When the Select Committee on Home Affairs has sought evidence from the head of MI5 in the past, we have had to travel to its headquarters for a private briefing, sometimes with darkened windows. I welcome what he said about the fact that the heads of those agencies will be giving evidence to his Committee in public so that they can be cross-examined. Does he know when the first such sitting might be?
Sir Malcolm Rifkind
The heads of the agencies have been travelling to the Intelligence and Security Committee to give evidence—albeit in secret, not in public—for a good number of years, so precedent is not being broken. Some thought is being given to holding public sessions, and I certainly hope that will prove possible over the next few months. I cannot give an absolute commitment to that effect, but it is certainly what I would expect.
The nature of secret operations remains as crucial as ever. A much more mature approach is being taken to what Britain needs to remain secret and what is a legitimate question of public debate, even if the intelligence agencies are involved. When I first entered this House, and right up until the 1990s, the very existence of the intelligence agencies was never officially declared or admitted and those who led the agencies were very private figures whose identities were never revealed. Much has changed since enactment of the Intelligence Services Act 1994, but to this day some aspects of that approach remain very much in our eye. The question that must be asked is whether that is acceptable in a modern society. We have three intelligence agencies that collectively receive some £2 billion of taxpayers’ money each year. That is serious money that inevitably needs not only private scrutiny but a degree of public scrutiny, too.
Secondly, the very fact that they are secret agencies in an open society means that there is a need for Parliament and the public to take a serious interest not only in the private but, where possible, in the public way in which the agencies operate. Of course, there is a third consideration, which is that as the very activities of the agencies involve the power to intercept communications or carry out operations that, without the authority of a Secretary of State, would be unlawful, they have a privilege that is not available to the rest of the community. If one thinks that this debate is taking place in the middle of a hacking inquiry when exactly that kind of interception was carried out by those who did not have lawful authority, one can see a clear illustration of why the needs of the agencies should be subject to a degree of transparency.
Mr David Winnick (Walsall North) (Lab)
The Chair of the Committee mentioned that before 1994, there was no debate—or at least no acceptance and acknowledgment by the Government of the day—of the security services. Does he accept that during the 1980s some of us pressed for parliamentary scrutiny and used every opportunity in debates to say that there should be such scrutiny by Members of Parliament?
Sir Malcolm Rifkind
I not only acknowledge that but can say that both the activity of the hon. Gentleman and many representations from other hon. Members and those outside this House led in the 1990s to the Government changing the situation. I was Defence Secretary at the time and was involved in the discussions within Government that led to the 1994 Act, which set up for the first time the independent oversight machinery. We are now trying to discuss and consider the radical modernisation of that machinery, which has existed since 1994.
It is worth also making the general point that at the end of the cold war there was a debate about whether we still needed intelligence agencies and whether they needed the funding, powers and resources they had been allocated during the cold war. The famous phrase about its being the end of history was quoted at that time. I have always been sceptical of that phrase; I prefer an alternative view, which is that as one door closes another slams in your face.
Mark Field (Cities of London and Westminster) (Con)
Although we accept that some radical change is clearly overdue, which will, we hope, be put in place, and accept that the change will be fluid because of the fluid international world in which we live, will my right hon. and learned Friend reiterate the importance of remembering that there will always be a need for certain information to remain secret? We do not want to throw everything out with the bathwater. There will always be a need for certain things to remain secret, even within this transparent 24/7 media world.
Sir Malcolm Rifkind
Yes, there are crucial requirements and anyone will understand why that is the case. The identity of intelligence officers can never be revealed. If it were, not only would they not be able to carry out their proper responsibilities but their very physical safety would be in danger. Intelligence operations and the ways in which intelligence is obtained, processed and dealt with should not become public knowledge. If they were, they would be available to our enemies and would cease to be available in that way in future. There would be no benefit in having intelligence agencies unless that fundamental secrecy applied—that covers all the areas that are relevant to the operational work they do and the benefits they provide for our society.
In the years since the end of the cold war, we have had the 7/7 bombings in London, which were very traumatic. Those terrible actions led to some deep soul-searching within the security and intelligence agencies. The perpetrators were British citizens who had been born in this country, but the agencies had not anticipated that event. In addition, there are problems with nuclear proliferation and cyber attacks, which might be aimed at Governments but cover a wide range of economic intelligence that is sought by foreign Governments and industrial interests. That is a matter of great significance.
Those new demands led the intelligence agencies to operate rather differently, which is a welcome development. The most significant point is that the intelligence agencies now work together far more than ever before. If one went to GCHQ on any day of the week one would probably find officials from the Secret Intelligence Service who had been seconded there for a significant period. The same would apply to the SIS and to each of the agencies in reverse. That is happening not because of some doctrinal view but because of the practical requirements of getting the best use of intelligence in this modern world and ensuring maximum public benefit. It is not too dissimilar to the way in which the Navy, Army and Air Force have increasingly realised that operations will involve all those services, or two of the three services, with joint activity becoming the norm rather than the exception.
The other big change, which I very much welcome, as does the Committee, has been the creation of the National Security Council. Not only does it provide an opportunity in general terms for strategic thinking, strategic planning and proper consideration under the Prime Minister, but for the first time the heads of the intelligence agencies attend meetings as of right and are able to ensure not only that they hear what is being said but that the intelligence they are providing is much more easily fitted into the requirements of Government so that the practical benefits of the intelligence is of much greater value.
Mr Tobias Ellwood (Bournemouth East) (Con)
My right hon. and learned Friend talks about the change in attitude and style in the work of our security services. Does he agree that after 9/11, in a bid to counter the asymmetric threats, the clandestine services lost their way for a period? I think of such things as Guantanamo Bay, water-boarding, rendition, dodgy dossiers and so forth. Does he agree that with the freedoms that were given to those services in a bid to try to find Osama bin Laden and hunt down the enemy we lost the moral high ground for some time and that it has taken a while for us to redeem ourselves?
Sir Malcolm Rifkind
I certainly agree that serious issues came to prominence during those years, some of which were the responsibility of the agencies and some of which were more the responsibility of government. However, I think we should get this into perspective. So far as I am aware, not a single British intelligence officer has ever been accused of personally being involved in water-boarding, torture or maltreatment of an individual. The issue—and it is a very serious issue—is whether they were aware of those matters and whether they might indirectly have colluded in such activity. I do not wish to diminish the seriousness of these matters but it is very important to make that point and get things into perspective because the same is not true of many other countries around the world. That is an important point that has to be made.
I want to speak briefly about four points in the report and then say something about the issues in the Green Paper, particularly about what is called the control principle, with regard to the handling of intelligence. Finally, I shall address the reform of the Intelligence and Security Committee. I shall try not to detain the House too long. The first of the four points in the report I want to address concerns the single intelligence account—the £2 billion that goes to the intelligence agencies. They have had a very large increase over the past few years but a cut is now being imposed—and understandably so—of 11% if one takes account of inflation over the next four years. The Committee has said:
“It is essential—given the fundamental importance to our national security of the Agencies’ work—that the settlement is kept under review and that there is scope to adjust it if there is a significant change in the threat.”
I know that every single recipient of Government funding would like to be able to say that, but I hope there is no dispute that when we are dealing with the fundamental issues of national security, if the threat were to change in a material way, it would not be acceptable to say that those resources could not be reviewed by a Government because that might in some way contradict public expenditure decisions. I have no reason to believe that the Government would take that view, but it is important to make that point, and that is what the Committee would like to stress.
The second point is the security that will be needed for the Olympics. The director general of the Security Service—again, I quote from our report—
“told us that he considers the Service to be well placed to manage the risks that the Olympics will bring.”
However, he added that
“the effort required to cover the Olympics will inevitably divert resources from the Service’s other work.”
The Committee would like to emphasise that the National Security Council must take such steps as are necessary to minimise that risk. Although we understand that the Security Service is not at present making representations and feels that the task can be handled effectively, it is too early to be certain that that will remain the case and it must be kept under consideration.
The third point relates to cyber security. In its reports of 2008 and 2009, the Committee drew attention to the increasing risks this country faces from cyber attacks. The Committee welcomes the fact that the Government have said that cyber is now a tier 1 interest in our national security strategy and have provided more than £600 million in new resources for that purpose.
The Committee’s concern is not those sums but the potential over-interest within Government in cyber matters. We note in our report that there are 18 units with responsibilities in this field across the three agencies— two law enforcement bodies and five Government Departments—and express our concern, which the Government share, about the risk of duplication. It is extremely important that these matters are looked at to ensure that, with such large sums and so many elements of Government involved, we do not do mischief to our own objectives.
Mark Field
I entirely endorse what my right hon. and learned Friend says. We feel strongly that there is a risk of duplication, with 18 bodies having some say in cyber security. We are grateful for the Government’s commitment and provision of certainty of financing over a four-year period—the £600 million to which he referred. However, if in 2007 we had asked about the importance of cyber, it would have been largely off the radar. Does my right hon. and learned Friend agree that we must be aware that if this becomes a much bigger problem not just in governmental and military terms, but in commercial terms, by the end of that four-year period considerably larger sums might be required, along the lines of the provision for the Olympics?
Sir Malcolm Rifkind
I thank my hon. Friend for his contribution to the work of the Committee. He and I visited GCHQ and saw at first hand the increasing threat from cyber that this country faces from a number of sources. I therefore very much endorse his comments.
Mr Philip Hollobone (Kettering) (Con)
I am enjoying my right hon. and learned Friend’s speech immensely. In his Committee’s report, in recommendations K and E, the Committee identifies a wider technological problem facing our security services. In recommendation E the Committee says:
“We are concerned about GCHQ’s inability to retain a suitable cadre of internet specialists to respond to the threat”,
and in recommendation K it states:
“The Committee recognises that the Security Service needs IT specialists in order to deliver its major technology projects. However, spending on consultants and contractors continues to increase at a significant rate.”
Does my right hon. and learned Friend share my concern that although his Committee has identified this as a problem, the Government are not yet up to speed in providing the answer that his Committee seeks?
Sir Malcolm Rifkind
I very much welcome what my hon. Friend says. It is timely, because the Intelligence and Security Committee some months ago commissioned its own investigator to carry out a study of the use of contractors and consultants in the intelligence agencies. We found that they were used to a very high order and we have a number of recommendations, which we are analysing and will subsequently put to Government. I hope that many of them will be made public. Contractors and consultants can be very expensive and are not always the best way of using the resources available, but sometimes they have skills that the agencies could provide only at disproportionate cost to their wider interests. I very much welcome my hon. Friend’s comments.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
Does my right hon. and learned Friend agree that the situation with cyber attacks is likely to get worse, rather than better? There are clear examples around the world of such attacks significantly disabling military installations and operations, so the Government must continue to regard that as a high-level threat. In contrast to what he has just said, it is the consultants working on this on the front line around the world who are likely to know the latest technologies, rather than those who have been employed by the intelligence agencies for some time.
Sir Malcolm Rifkind
There may be some truth in what my hon. Friend says, and obviously these matters must be taken on board. Given his comments, I will make the general point that we should realise that cyber technology can be a threat and an opportunity for this country and others. One need only think of the use of what has become known as the Stuxnet malware, which temporarily prevented the Iranians continuing with uranium enrichment, which might lead to nuclear capability. If that happened—obviously, the information available is limited—it is a positive example of how such technology might prevent military conflict or a war ever taking place. Technology is not peculiar to one side of the debate or the other, but we must protect our secrets and our information. I strongly endorse my hon. Friend’s comments.
Richard Graham (Gloucester) (Con)
Will my right hon. and learned Friend confirm that ministerial responsibility for cyber-security will be with the Cabinet Office and that that will in no way detract from the Foreign Secretary’s overall responsibility for GCHQ?
Sir Malcolm Rifkind
That is one of the great dilemmas that Governments have faced and, I suspect, continue to face. It is not for me to comment on what the conclusion will be, but there has been some confusion on that. My hon. Friend will be aware that Baroness Neville-Jones at one stage had some responsibility for that within the Home Office, but she is no longer in government. It probably makes sense that the Cabinet Office has some sort of lead responsibility, but many loose ends still need to be addressed. If the Home Secretary or the Minister has any thoughts on those matters, I am sure that the whole House will be delighted to hear them when they reply to the debate, as it would deal with a problem that has been present for a considerable time and to which our report refers.
Dr Julian Lewis (New Forest East) (Con)
For the sake of clarity, before some reporter’s pen runs away with him, will my right hon. and learned Friend confirm that there was no suggestion in his remarks that UK intelligence services were responsible for the Stuxnet virus?
Sir Malcolm Rifkind
Even our worst enemies have not suggested that, as far as I am aware. I of course entirely confirm that.
My final detailed point on the report relates to a part of our intelligence community that is hardly even mentioned in this House or anywhere else: Defence Intelligence. It is part of the Ministry of Defence, but its contribution and role is greatly underestimated, if not entirely unknown, in the wider world, a point we draw attention to on page 51 of the report:
“Defence Intelligence provides the largest single all-source assessment capability within the UK intelligence community.”
As it is part of the MOD, it has perhaps been more subject to resource reductions than the other intelligence agencies. The report states:
“The prospect of further cuts—combined with the impact of cuts to BBC Monitoring, on which DI relies heavily—therefore has potentially very serious long-term consequences for DI’s ability to support military operations”,
which everyone tends to know about,
“and for the UK intelligence community as a whole.”
I hope that the Government can give some careful thought to how Defence Intelligence’s unique contribution to the UK’s overall assessment capability can be properly protected. I suggest that it perhaps needs a higher profile and status in the intelligence community than it has traditionally had so that there can be wider awareness of the benefits it brings to the national interest.
I deal now with the intelligence aspects of the Government’s Green Paper, particularly the control principle and the ISC itself. As far as the control principle is concerned, many Members attending the debate will be aware that what I am referring to, and what the Green Paper refers to, is how we deal with intelligence received from other friendly intelligence services. Anyone who has any awareness of the intelligence situation will know that that is crucial to the UK, particularly our relationship with the United States. If the special relationship means anything, it means a dramatic amount of intelligence, which has continued for around 60 years and benefited the UK enormously. However, it concerns not only the United States; to a lesser degree, we share and receive intelligence from other friendly agencies as well. Fundamental to the system is the deep principle that intelligence shared with another intelligence agency will not be made available to any third party without the consent of the agency that gave it in the first place. That principle has overwhelmingly been respected, but there have been individual exceptions that caused great concern. Following the Binyam Mohamed case, the Court of Appeal decided that such information should be released in a limited set of circumstances, and that caused great concern in the United States and elsewhere. I and the Committee greatly welcome the Government’s determination to deal with the matter in a way that strikes a proper balance between the national security requirement and the interests of justice, because that is the crucial debate in these matters.
Some might imagine that the Binyam Mohamed case was a one-off and that the Green Paper is an overreaction to the problem. With all respect, the Committee’s view is that it is not an overreaction. Although the Court of Appeal’s verdict might have been different in that case, we are today dealing with a situation that is very different from that which existed in the past. Information on this is given in the Green Paper, so I will share briefly with the House what the Government say. The Green Paper refers to judicial review, and not simply with regard to intelligence, but more broadly how it has increased over the years:
“Recourse to judicial review has increased significantly in recent decades, from 160 applications in 1974 to 4,539 in 1998. By 2010 the number of applications had reached 10,548.”
Judicial review and the overruling of the Government’s view—perhaps rightly in many cases—have become a major part of our judicial process, rather than an exception.
The raising of intelligence matters in court has also been transformed dramatically in recent years. The same page of the Green Paper states that
“in the first 90 years of the Security Service’s existence”—
meaning MI5—
“no case impacting directly on that Service’s work reached the House of Lords. In the last 10 years there have been 14 such case in the House of Lords or the Supreme Court.”
That is no longer an exception, but increasingly something we must be aware of and decide whether the previous balance is the appropriate one in the wider national interest.
Another point of interest, and one I was unaware of until recently, is that one of the circumstances in which these matters are being raised is not the release of sensitive documents to help in UK legal cases, as sometimes happens, but often the request for the release of this information to assist legal proceedings in other countries. The Green Paper states on page 7:
“The Government has strained key international relationships and risked compromise of vital sources and techniques in no fewer than seven court cases in which the applicants sought sensitive UK Government-held but very often foreign government-originated information for disclosure into foreign legal proceedings.”
Of course, Binyam Mohamed was such an example, because his appearance before a United States military commission led to the application in the first place.
Against that background and as the report states, I and the Committee very much welcome the Government’s proposals to modernise the procedure and their recommendation that the United Kingdom use the closed material procedure and involve special advocates, as already occurs in several areas, to deal with such cases. The only alternative, traditionally, has been the public interest immunity approach, but that is a blockbuster approach, and if one secures such immunity one finds that none of the information can be seen by anyone.
At least under the special advocate procedure, the special advocate—someone who has been vetted to be able to inspect such sensitive material—will have the opportunity to see it on behalf of his or her client, and, although they will not be able to reveal detailed information, they will be able at least to take it into account when advising their client on judicial proceedings.
That is greatly welcome and a step forward, but the Committee wants to make this point. If these proposals are implemented, the situation will improve considerably, but they do not provide an absolute guarantee that no information can ever be released at the insistence of the court, a fact that the Government acknowledge. Page 21 of the Green Paper states that closed material proceedings, involving a special advocate,
“reduce the risk of damaging disclosure of sensitive material.”
Such proceedings do not remove the risk; they reduce it. Likewise, on the following page, the Green Paper states that a decision to allow a special advocate to be available can
“be reviewable by the trial judge on judicial review principles if the other side decides to challenge the Secretary of State’s decision.”
We are therefore dealing with a very curious situation. If the Government’s proposals are accepted, the balance will change, and that is good and healthy, but the significant possibility will remain that in very special circumstances a judge might take a different view on such matters and the information could be released, with all the consequences that might flow from that.
Those who take the interests of national security very seriously indeed, as I certainly do and I am sure everyone here does, accept that, at the end of the day in a country that believes in the rule of law, the courts—in most circumstances, if not all—have to have the final word. I wonder, however, whether the Government ought to consider the argument that the provisions in the Green Paper need to be further strengthened: a belt and braces approach, which would not be inconsistent with the rule of law but would certainly provide added reassurance.
The Government have been good enough to refer in their Green Paper to the way that approach might be taken, and paragraph 2.78 on page 33 states:
“It would be possible for Parliament to provide the courts with clearer guidance in statute”.
The proposal refers to public interest immunity cases, but it could apply to special advocate cases, and the Government go on to state in the next paragraph:
“One such presumption”—
written into statute as a “rebuttable presumption”—
“would be against disclosure of sensitive”—
national security—
“material owned by foreign governments, obtained via intelligence relationships working on the basis of the Control Principle.”
That is exactly what we need seriously to consider. It would not be inconsistent with the rule of law, because at the end of the day it would be a rebuttable presumption, and the court would determine whether the presumption were rebutted.
As we have always known, the courts, when they interpret the legislation of this House, not only look at the words of an Act but try to identify, if they can, Parliament’s intention in passing it. If the statute stated that there were such a presumption against the disclosure of intelligence received from a foreign, friendly Government, the court would be able at least to take that into account before it reached a final decision, so I and the Committee hope that the Government give that proposal serious consideration.
One of the main parts of not only our report but the Government’s Green Paper concerns the future of the Intelligence and Security Committee, and although I note that it is a major issue I will not detain the House for long, as I hope to conclude my remarks in at most another 10 or 15 minutes in order to allow everyone else who wishes to speak the chance to do so. It is, however, a crucial matter.
Over a period of some 17 or 18 years, the Intelligence Services Act 1994 has become outdated: it no longer accurately describes how the Committee operates. That is part of the problem; another part of the problem is that the Committee, if it is to conduct its oversight effectively, needs additional responsibility and power.
It is worth remembering that when the 1994 Act was passed, the intention was not only that oversight would be provided for the first time, but that the public would be reassured that it was independent oversight—and to some degree that reassurance has not yet been achieved. The public, when they look at the Act, see a Committee that is not a Committee of Parliament, although it is a Committee of parliamentarians, because we are all appointed by the Prime Minister, we report to the Prime Minister, and only through the Prime Minister do our reports eventually reach the House. That obviously calls our independence into question.
Mr George Howarth (Knowsley) (Lab)
We are all nominated by the Prime Minister, but it is important to note that this House has to endorse the names of the Committee’s members before the Committee is formed.
Sir Malcolm Rifkind
The House has to give its view, but I say to the right hon. Gentleman, who also serves on the Committee and has done so even longer than I have, that the Prime Minister has the last word. Although Prime Ministers have in practice never overruled the view of the House, they have the statutory power to do so. The House gives its advice, thus illustrating the difficulty in terms of the public’s view. That is the first problem.
The Committee, in its report, recommends—we are delighted that the Government have accepted it in principle—that the Committee become a Committee of Parliament. It is a joint Committee of the House of Commons and House of Lords, with two distinguished Members of the House of Lords, Lord Butler and Lord Lothian, but we recommend that its appointment procedure be very similar to that used by the Standards and Privileges Committee or by all Joint Committees of Parliament. Names would be presented to Parliament, but Parliament would be able to veto them if it disapproved. If it disapproved, the names would have to disappear, and only when Parliament was satisfied with the recommendations would appointments be made. Parliament would have—in a way that it does not, and has never had—the last word on both the Chairman of the Committee and its members, and it would properly be a Committee of Parliament, albeit obviously required to operate under slightly different procedures because of the secret information that we deal with. That is the first reform of a fundamental kind.
On the second reform, the 1994 Act states that the Committee has responsibility for policy, resources and administration, but it does not mention operations, a subject in which there is overwhelming public interest and in which, on a simple literal reading of the Act, we appear to have no involvement. People who ought to know better have recently asked, “How can the Committee operate effectively if it cannot even look at operations?” In reality, it has been looking at operations over the past few years, whether on the treatment of detainees, the Binyam Mohamed case or the use of intelligence during the Iraq war.
The Committee has been able to look at the raw material and to question agencies about operations, but that role does not appear in the Act. That needs to be revised. We suggest that, instead of listing the issues that the Committee can look at, the Act should be reformed and simply state that “the Committee should have oversight responsibility for all the activities of the intelligence agencies”, thereby including operations.
Dr Julian Lewis
On operations, does my right hon. and learned Friend agree that practice in the past has been—and is likely to be in the future—for the examination of particular operations to be retrospective and that there are very good reasons for that?
Sir Malcolm Rifkind
My hon. Friend raises a very important point. In making our recommendations to the Government—the matter is important to them as well—we acknowledge that we do not seek the level of responsibility that exists in the United States, where certain senior members of Congress have to be consulted in advance of an operation regarding what the intelligence agencies will be doing. They do not have the power to stop an operation, but they are informed about it, as they were, for example—so we understand—of that involving Osama bin Laden.
The ISC can see no public interest in such an approach. Having power without responsibility is bad enough, but to have responsibility without power is even worse. Our responsibility is to provide retrospective oversight, and the Government appear in principle to have accepted that, as long as we are dealing—as we agree we should be—with matters of significant national interest. That is right and proper. Many discussions will be needed about how that will be handled in practice, but the principle is of profound importance.
Geoffrey Clifton-Brown
I have been thinking carefully about what my right hon. and learned Friend said regarding a change in the procedure for electing his Committee. Would a constitutional issue arise if Parliament summoned either him, as Chairman of the Committee, or a member of his Committee to give information that they knew but felt they were not entitled to reveal? What would happen in such a case?
Sir Malcolm Rifkind
I can give my hon. Friend a very straightforward answer: all members of the Committee are subject to the Official Secrets Act. We see the most secret information and we have therefore all been considered suitable for that purpose. Like any other United Kingdom citizen, we cannot reveal information that is in breach of the Official Secrets Act, which is an Act of this place and must be respected. In the unlikely event of the circumstances to which my hon. Friend refers, that would be the response.
The third major reform relates to the fact that the 1994 Act states that the Committee may “request” information from the intelligence agencies. If the Committee has the power to request, the agencies have the power to decline. I have to be fair and say that the agencies have never used that power, but they are able to decline and that is no longer acceptable. Our view, which we have recommended to the Government, is that the Committee should have the power to require information to be shared by the intelligence agencies, and only the Government, not the agencies, should have the power to override that if, for example, a Secretary of State or Prime Minister believe there is some overwhelming national interest in doing so. That would have to be reported to Parliament.
The power to require information is not just a change of words. At the moment, if the Committee wants information we request it and the agencies, which sometimes have massive files, produce a summary of the information. I am sure that they do it in good faith, but we are allowed to see only that summarised version. The power to require information will mean that we will have our own staff who can have informal discussions in a constructive and positive way with the agencies and see all the available information. Ultimately, they will decide what summary we might wish to see, which will enable us to put questions to the agencies if we decide to take evidence from them. That is a much more sensible procedure, which I am sure will work. However, it is obviously a very important change compared with previous practice.
Hazel Blears (Salford and Eccles) (Lab)
The right hon. and learned Gentleman has talked about balance in relation to the Green Paper. If there are to be more closed proceedings, is it not absolutely essential that there should be more rigorous parliamentary oversight? The Committee should therefore have more resources, not to aggrandise itself but to do properly the job that the Government are asking us to do
Sir Malcolm Rifkind
Yes. The right hon. Lady is a very senior member of the Intelligence and Security Committee. In the Green Paper, the Government have combined enhanced oversight with proposals for reform of the control principle precisely for the reason she mentions. In addition, even if there had not been a Green Paper and there were no Government proposals, I am sure the Committee would have taken the view that the time had come for a fundamental root-and-branch reform of oversight, and would have been making the recommendations we are discussing today to the Government. I do not know—and we will never know—what the Government’s reaction might have been. That would have been a different situation.
The final major change we are recommending relates, again, to the 1994 Act. The Act states that we have oversight of the Secret Intelligence Service, which is MI6; the Security Service, which is MI5; and GCHQ. That is all that is mentioned but, as the House will be well aware, the intelligence community is considerably wider than that. I mentioned defence intelligence a few minutes ago, and there is the Joint Intelligence Committee and the new National Security Council, which has a role partly concerned with intelligence. The reality is that, over the years, these additional agencies and parts of government have voluntarily subjected themselves to scrutiny by the ISC. That is right and proper, but it is time that the legislation caught up with the formal position. That has also been accepted by the Government.
In conclusion, the House might think, “Well, that’s all very well. We know what the Government’s view is and we know what the Intelligence and Security Committee’s view is, but what about the agencies themselves? How comfortable are they with these proposals?” I cannot speak on their behalf, but I can say that our relationship with the agencies is very positive and that they have sometimes publicly said that it is time for reform.
The agencies have taken an entirely constructive approach to the kind of issues we have been discussing today. Of course, there is a very good reason for that. Not only are the agencies great national servants operating in the national interest, but one of the big developments in intelligence oversight over the past 16 years has been that a Committee such as ours, whose primary role may seem to be to criticise agencies or the Government if something goes wrong, has also occasionally been the agencies’ champion if we conclude they are being unfairly attacked either in the media or elsewhere and are unable to defend themselves.
The obvious example of that is the 7/7 bombings, when serious representations were made that because the names of the people responsible for the bombings were on the Security Service’s files, what happened could surely have been stopped and it was all a disastrous mistake. I was not involved in that investigation, but our predecessors looked into the matter in enormous detail. It is significant that the conclusion they came to was in all material respects the same as that the coroner came to a few months ago: although various criticisms could be made, the Security Service was being unfairly accused on the central question of failing to stop that terrible event in the circumstances. The agencies have trust in the Committee partly because it has operated in a mature and sensible way. Although on many occasions the Committee may have criticised things the agencies have done, we are also prepared to speak on their behalf in public and private if we think the facts justify it.
Intelligence has been a hugely important issue for the United Kingdom for many years. The single most important intelligence achievement was Bletchley Park during the second world war, which had a material impact on our winning the war. More recently, how intelligence operates has changed fundamentally. However, the crucial aspects of intelligence remain the same: our national interest requires that intelligence agencies remain secret in their most crucial activities. That is how I started and that is how I conclude my comments. On behalf of the Committee as a whole, I commend our report to the House.
The Secretary of State for the Home Department (Mrs Theresa May)
I am grateful to my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind) for introducing his Committee’s report with his usual eloquence. I thank him and all the ISC’s members, a good number of whom are in the Chamber today, for the work they do throughout the year in overseeing our security and intelligence agencies. They play a very important role. Obviously, I will come on to the proposals to enhance the Committee’s role but, first, I would like to say that it plays an important and largely unseen role in overseeing the agencies. We are grateful to it for that. The quality of the Committee’s annual report underlines the unique and valuable role that it plays in the parliamentary oversight of the security and intelligence agencies.
We continue to face a number of serious threats to our national security. As the Committee’s report rightly sets out, those threats come from a range of sources. Foremost among them are international terrorism, particularly from al-Qaeda and its affiliates. We also face an ongoing threat from residual terrorist groups linked to Northern Ireland, from serious organised crime, and from traditional espionage against British interests. Added to those long-standing threats, we must now address the growing threat to our cyber-security from cybercrime and cyber-espionage.
On international terrorism, it is worth stressing that, despite the death of Osama bin Laden, al-Qaeda remains a threat. It is true that the organisation is now weaker than it has been at any point since 9/11. US military and intelligence operations, work by the Pakistani military and, of course, the enormous contribution that UK forces have made to the international effort in Afghanistan have all been key factors. I am sure that the whole House will want to join me in praising the contribution of our armed forces, who are fighting so bravely many thousands of miles away in order to secure our streets back home from terrorism. However, threats from al-Qaeda, and from other groups that subscribe to its global jihad ideology, remain. We continue to arrest very significant numbers of people for terrorist offences—over 650 in the past two years alone.
Hazel Blears
The right hon. Lady is detailing the nature of the threat that we still face in this country. On that basis, she will recognise that the Olympic games is an area where there is clearly a heightened threat. Will she, even at this late stage, consider delaying the implementation of terrorism prevention and investigation measures, so that people who have been relocated out of London, who are some of the most dangerous people in this country, do not have the possibility of returning to London before the Olympic games?
Mrs May
The right hon. Lady is right to say that the security of the Olympic games is obviously a key concern and a key issue that we will be addressing over the coming months; indeed, it has been addressed by significant work that has been taking place over the past few years, since the bid was won. We all want to ensure that we provide a safe and secure Olympic games where people are able to endure—I am sorry, I mean enjoy; “endure” is probably more like the athletes enduring some pain during the games—the sporting achievements. We have been clear about our reasons for introducing TPIMs. We have been clear, as well, that the introduction of TPIMs, as the right hon. Lady knows, is accompanied by increased funding for the Security Service, and for the police in their counter-terrorism capacity, in order to provide for extra surveillance alongside TPIMs, which ensures that we are able to be reassured about the level of security that we can provide in relation to individuals who will be under those measures.
The leadership of al-Qaeda continues to plan operations in the UK. It attracts people for training, it has sections dedicated to overseas operations, and it radicalises and recruits. Even as its command and control infrastructure has weakened, al-Qaeda now seeks to inspire lone acts of terrorism organised and conducted without its guidance or instruction. We must now also pay more attention to the groups in Yemen and the horn of Africa, in particular, which are affiliated to al-Qaeda or support its ideology. These groups have independent capability. They can radicalise people in this country. Britons, Americans and Europeans are travelling to fight in Somalia with al-Shabaab and to train in Yemen with al-Qaeda.
Keith Vaz
Is that not why the National Security Council is so important? It brings together Cabinet Ministers and others—those who have domestic responsibility and Ministers such as the Foreign Secretary—in dealing with a country such as Yemen. What happens on the streets of Sana’a today may well affect what happens on the streets of London and other cities tomorrow.
Mrs May
I am grateful to the right hon. Gentleman for making that point. It is indeed the case that the National Security Council is able to bring together all the Government Ministers with an interest in matters relating to our national security—not only me and my right hon. Friend the Foreign Secretary but the Secretary of State for Defence and others. The right hon. Gentleman is absolutely right to point out that in looking at our national security we must also look at issues that arise abroad. As I have been saying, we must pay attention to the countries where people from the UK have the opportunity to travel to be trained and then to come back, perhaps to plot attacks here in the UK. What happens elsewhere matters for us on our streets, and he is absolutely right to say so. Indeed, when he intervened I was about to say that, of the people who are abroad in these areas, we know that some aspire to conduct terrorist attacks back at home.
The emergence of such groups is a stark reminder that the threat picture can change rapidly and that the factors that drive the terrorist threat to this country have not gone away. Recent attacks in Nigeria demonstrate the range of places around the globe in which western interests, including British interests, are now under threat. We also face a significant and ongoing threat from terrorism in Northern Ireland. There were 40 such attacks last year. That threat has obviously required increased effort and resources from the security and intelligence agencies.
The tragic events in Oslo this summer have also made us reconsider the threat from the extreme right. That is much less widespread and systematic than terrorism associated with al-Qaeda. However, contrary to some reports, our counter-terrorism strategy—CONTEST—already addresses that threat; that was a major change that we made to the strategy produced by the last Government. After Oslo, we will be allocating further resources to that work.
Traditional espionage continues to pose a threat—to the commercial sector, as well as to our diplomatic and defence interests. The foreign intelligence services operating in this country seek to obtain a wide range of classified and privileged information in the fields of defence, politics, government, energy, and science and technology.
The final threat that I want to mention is cyber-security. The national security strategy assessed cyber-security to be one of the highest-priority risks we now face. It is important to stress that this is not simply a risk for the future. Cybercrime is hitting British people, and cyber-espionage is hitting the British Government and British business, on a daily basis, right now.
All these threats must now be faced at the same time as we prepare for the London 2012 Olympic and Paralympic games and the challenge of providing security for 10,500 Olympic athletes, 21,000 media and broadcasting personnel—double the number of athletes, I note—and the holders of some 10.8 million Olympic and Paralympic tickets. A question was asked earlier about the responsibility for cyber-security. That rests with the Cabinet Office, although that in no way detracts from the role of the Foreign Secretary in relation to GCHQ. The Cabinet Office is looking at a wide range of issues across Government in relation to cyber-security.
Mr Ellwood
My right hon. Friend is right to say that the Cabinet Office leads on that, and that co-ordination is welcome news. However, do we not all have a responsibility to understand cyber-security? A generation is now growing up that is using Facebook, is yet to own a credit card, and has very different liberal values when it comes to using the internet. Some small and medium-sized businesses are perhaps reluctant to pay for the addition of cyber-security because it is a little costly and times are difficult. We all have a responsibility for this, not just the Cabinet Office and Government.
Mrs May
My hon. Friend makes an extremely important point. There is an onus on all of us who are using the internet to ensure that we are aware of the responsibility that we have for our own security. One problem is that many people are unaware of what is available to help them to increase their own personal security in relation to these matters. That is a challenge that we all need to face and to rise up to.
All these threats require active and highly competent security and intelligence agencies to tackle them—and fortunately, in this country, that is exactly what we have. We should be proud of the agencies and of the work they do alongside their police colleagues. They work tirelessly, day in and day out, often at great personal risk to themselves, to keep the British public safe. They do this work without public thanks or public recognition, and we owe them an enormous debt of gratitude. As the Committee’s report notes, those working in this field continue to excel at a very challenging task. I am sure that the whole House will join me in sending them our thanks and our praise.
As the Foreign Secretary set out last week, those agencies not only defend us from threats to our national security and to the lives of British citizens but provide vital support to British military operations and diplomatic intelligence, which gives us a key national advantage in foreign and security policy. But it is precisely because of the importance of the agencies’ role, and because much of it must be kept away from the public gaze, that their work should be properly scrutinised. It is also important that, where there are any allegations of misconduct by the agencies, public confidence can be assured and retained by rigorous independent parliamentary oversight. That is why the oversight provided by the ISC is so crucial.
We sought in our Green Paper on justice and security to strengthen, clarify and modernise those oversight arrangements. For many years, successive Chairmen of the ISC have called for reform. We will answer that call. We therefore propose to formalise the role of the ISC, making it a statutory Committee of Parliament and allowing it to report to Parliament as well as to the Prime Minister. It will also be given a formal remit for oversight of the wider intelligence community. Crucially, our proposals will for the first time give the ISC the power to require information from the agencies.
I want to stress that, although the Green Paper proposes that we should consider the extent to which the ISC should oversee the operational activity of the agencies, no decisions in that area have yet been made. We need to consider carefully the consequences of creating such a broad power, including the impact on the operational effectiveness of the agencies and the additional resource burden that would be placed on them.
We are also looking at wider changes. We propose to consult on giving the intelligence services commissioner an expanded remit to monitor compliance with agency operational policies. We will also consult on more far-reaching proposals such as the introduction of an inspector- general to provide oversight of all agency business.
Separately, we have strengthened decision making on national security issues by creating a proper National Security Council, as was referred to by the Chairman of the Home Affairs Committee, and appointing a National Security Adviser. Those are important and profound changes to the national security and intelligence machinery at the heart of Government and I am grateful that the Committee has welcomed them.
Robust oversight and accountability are not the sole requirements of effective intelligence agencies. They also need to be able to keep the public safe, without the risk of vital intelligence or essential international intelligence-sharing relationships being compromised. For that, they need a proper legal framework that allows them to present their case in the courts and to defend themselves properly. It cannot be right that at the moment sensitive material is excluded altogether, meaning judgment is not reached on the basis of the full facts. That is why the Green Paper proposes reforms to allow the right balance to be struck between protecting sensitive material and giving the courts the access to the material that they need to allow justice to be done.
The Green Paper makes proposals, to which my right hon. and learned Friend the Member for Kensington referred, to allow closed material procedures to be more widely available to the courts, to enhance the special advocate system, and to ensure that sensitive material, sources and techniques are protected. The overall aim is to allow cases involving national security to be heard fairly, fully and safely in our courts. I am pleased that the Committee welcomed those proposals and that there was cross-party support for them. I note that the right hon. Member for Blackburn (Mr Straw)—not always one to praise this Government’s decisions—called them “elegant solutions”.
I stress that those are just proposals at this stage. I note the encouragement of my right hon. and learned Friend to strengthen that aspect of the Green Paper. We will consider other ideas if they come forward. However, our aim is and must be to strike the right balance between protecting sensitive material and protecting the fundamentals of British justice.
As well as robust oversight and the right legal framework, the other thing that the security and intelligence agencies need to do their job is, of course, resources. I am pleased with the Committee’s conclusion that the agencies have been given a fair funding settlement in the spending review. Like the rest of the public sector, the agencies will seek to make savings in their support functions and corporate services. Collaborative working across the three agencies is the key to that. What is clear is that the agencies have the funding that they need to maintain their current range of operational capabilities and to invest for the future. For example, much of the £650 million of funding for our transformative national cyber-security programme will fund activity by the agencies. There is no question of allowing our national security to be diminished to make savings. Although the agencies face pressures, as they always do, like the ISC, the Government remain confident in their ability to meet those challenges.
It is important to note, with the Olympics approaching, that the agencies’ plans for meeting the significant additional challenge of securing the games remain on track and that the Olympics security budget is protected.
The first duty and the overriding priority of any Government is the protection of the British public. Although great progress has been made in counter-terrorism and other areas in recent years, serious threats to our national security remain. That is why it is so vital that we have security and intelligence agencies that can continue to reduce those threats and help keep us all safe. Their work is among the most important carried out by anyone. It is right that there should be robust oversight, which is why we are modernising and strengthening the oversight arrangements. I warmly welcome the Committee’s latest annual report. Its recommendations are informing change as we speak. I look forward to future annual reports being even more useful in helping our world-class intelligence and security agencies to get even better at the valuable work that they do to protect the public.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
I, too, welcome the Intelligence and Security Committee’s annual report and the work that the Committee has done this year, which was comprehensively set out by the right hon. and learned Member for Kensington (Sir Malcolm Rifkind).
It is 13 years since I last spoke in a debate on a report by the Intelligence and Security Committee. That was before the attacks of 9/11, before the London bombings of 7/7 and the damage done by al-Qaeda, before the most recent military engagements in Afghanistan and Iraq and at a very different stage in the Northern Ireland peace process. There have been dramatic changes since then in the nature of the threats that Britain faces and in the nature of the work of the intelligence and security agencies to keep us safe. However, many of the principles that we debated then, such as the importance of accountability and managing the tensions between liberty and security and between democracy and secrecy, remain as valid and as pertinent now.
I join the Committee and the Home Secretary in paying tribute to those who work in the intelligence and security agencies, and I place on the record the gratitude of the Opposition and those we represent. Our intelligence officers and agents are not known. By its very nature, their work must go unsung. Some have even died in the course of their work and have been laid to rest quietly with no public tribute. They work tirelessly, sometimes in dangerous conditions, to find a piece of a jigsaw that will never be fully complete, but which could yet save lives.
In this debate, we must pay tribute from the Front Benches to the work of the ISC, as the Home Secretary has done. Its members take extremely seriously their responsibility to provide accountability, even though they cannot discuss or debate in public many of the issues that they pursue privately. There is a long tradition of cross-party working and consensus in the Committee, as indeed there should be, on many issues to do with intelligence and our national interest. I congratulate the Committee on its latest report. I also thank those who represent the Opposition on the Committee, my right hon. Friends the Members for Salford and Eccles (Hazel Blears), for Wythenshawe and Sale East (Paul Goggins) and for Knowsley (Mr Howarth), for their hard work on behalf of this side of the House and Parliament as a whole.
As the Committee and Ministers have made clear, the security risks that we face have become more diverse and technologically advanced than at any time in our history. Hostile attacks in cyberspace by other states and terrorist groups have the potential to cause serious damage to the security and prosperity of the UK. The Home Secretary has set out the continued threat from al-Qaeda and rightly paid tribute to the work of our armed forces. The work on international terrorism and counter-proliferation are becoming more closely connected. We are also dealing with new challenges, such as helping new states to emerge from the Arab spring. The older and more established threat from groups in Northern Ireland is now a growing concern.
Our security and intelligence agencies have expanded their work substantially over the past decade, supported by increased resources that were rightly provided over many years to keep Britain safe. The right hon. and learned Member for Kensington was right to point to the increasingly mature debate on security and accountability. As a result, there are large areas of agreement across the Committee and across the House on security and our national interest.
The Committee has rightly welcomed the work done by the Government through the National Security Council and the growing focus on cyber-terrorism. It is right that the Government and the agencies are increasing investment and action in that area. I also welcome the ISC’s continued scrutiny of the Prevent and Contest strategies, which we have discussed on the Floor of the House.
Like the Committee Chair, I welcome the Government’s attempts in the justice and security Green Paper to address the difficult issues of the control principle and the use of sensitive material in civil cases. Those are not easy problems to solve, but they are extremely important given the chilling effect on international intelligence arrangements if sensitive material is at risk of being disclosed. I noted the important points that the right hon. Gentleman made about the detail, practicality and workability of measures, and we stand ready to work with the Government to get that right, because it is hugely important.
We welcome, too, the Gibson inquiry, which is important for maintaining confidence in the work of the intelligence agencies. The Committee may wish to look further at that matter in advance of the Gibson inquiry beginning its work, while there remain legal delays, to ensure that the inquiry can achieve its aims.
A number of concerns are raised as a result of the Committee’s report. In particular, in the face of the ever-changing threats, the Committee’s scrutiny of resources is extremely important. The report rightly identifies areas in which the agencies could make greater savings by, for example, exploring a consolidated approach to vetting. The Home Secretary should also take seriously the Committee’s concerns about the scale of the real-terms cuts that the agencies are facing, particularly in Olympic year. The increases in inflation since the spending review have increased those real-terms cuts. Ministers will be aware that the chief of the Secret Intelligence Service told the Committee:
“It’s quite hard to…maintain the capability of the Service when we face a 10% reduction in staff”.
Clearly all Departments and agencies need to make their share of efficiencies, but in the current circumstances it is vital that the Government accept the Committee’s recommendation that
“Given the importance of national security work, it is essential that the Spending Review settlement can be adjusted if there is a significant change in the threat.”
We are also concerned about the particular pressures surrounding the Olympics. According to figures from the Library, the real reduction in the single intelligence account next year alone will be £60 million. Next year is the year in which the eyes of the world will be on us for the Olympics, and the Home Secretary rightly discussed the Olympics in her speech. The evidence quoted in the Committee’s report shows the pressure that the agencies will face. The Security Service chief has said that
“there will be a large diversion of resource from other things into the Olympics. But I don’t think we’ve got any option about that.”
The Secret Intelligence Service chief has said that the Olympics
“will certainly have an impact on our intelligence operations and intelligence coverage of other targets during that period.”
The Home Secretary and the Foreign Secretary must take seriously the Committee’s warning that it is
“nevertheless concerned that this will inevitably divert resources from the Service’s other work during this period, and thus expose the UK to greater risk.”
At a time when thousands of police officers are being lost, the Home Secretary and the Treasury should take the opportunity to review the level of resources available for security and policing next year to ensure that they are sufficient for the threats that we will face.
As a result of the Olympics, there is also an additional reason for the Home Secretary to re-examine counter-terror powers, which my right hon. Friend the Member for Salford and Eccles has raised. The Home Secretary is aware of our deep concern that she is removing the ability to keep terror suspects out of London in Olympic year through control orders. The director-general of the Security Service told the Committee that under the Terrorism Prevention and Investigation Measures Bill and with additional resources,
“there should be no substantial increase in overall risk.”
Frankly, however, it is very hard for the House to understand why the Home Secretary should want any increase in overall risk, let alone one that is entirely a result of her own policies. The Committee is right to warn the Government about that and to raise the concern that the new regime does not offer the same level of assurance as control orders.
We know that the Government have themselves admitted that there are issues to consider in that regard. Indeed, the Home Office has recently written to the House of Lords to say that the transitional period between control orders and TPIMs will be extended from 28 days to 42 days in an amendment to be tabled in the Lords in response, I understand, to resourcing concerns raised by the Metropolitan police. However, would it not be wise to delay the implementation of TPIMs altogether, at least until after the Olympics have taken place? Frankly, it is simply not responsible for the Government to reduce counter-terror powers, as well as resources, at a time when we know the pressures are growing. I urge the Home Secretary to examine the Committee’s report carefully and think again.
Turning to the ISC’s proposals for its own reform, the current Chair called for those reforms even before he was appointed, and I welcome his continued commitment to them. The Committee has certainly evolved since the 1994 Act, as he rightly pointed out. It started with no investigatory resource, which changed after the debates in the late ’90s. Over the years, increasing levels of detail have been provided to the Committee, and also by the Committee to the public, including more information about overall budgets and information from other Departments and organisations. Although many people in the agencies viewed the Committee with a certain suspicion and anxiety in its early years, I believe most now agree about its importance and the benefits that the agencies are provided with by having accountability and independent scrutiny. The Committee can bust myths and counteract attacks on the agencies as well as challenge and explore problems without putting security at risk in any way.
However, it is time to go further, and both the ISC and the Government are right to want reform now. The Government are right to consider strengthened executive accountability and greater scrutiny of the agencies through the executive and judicial routes, and they are right to consider options such as an inspector-general, although I understand that considerably more work will need to be done on that approach. For many years, the tradition of the agencies was one of very little executive oversight. Ministers would decide the overall framework, but they did not have clear accountability for how operations took place. That executive accountability has increased over the years, with the roles of the different commissioners being strengthened, but I do not believe it is yet on a sensible long-term footing, and the Government are right to explore that further.
It is also right that we look further at parliamentary oversight. I believe that we should have gone further on that under the previous Government. It is right to consider creating a statutory Committee of Parliament with much stronger access to information. Of course, the Committee will always have to operate in a different way from other parliamentary Committees. The principle of its operating inside the so-called ring of secrecy is integral to much of its work, so it requires additional safeguards, including on how Committee members are selected. However, I believe that the Government could still go further.
The Home Secretary said that the Government were still cautiously considering the proposal that the Committee’s work should cover operations. Of course, it is not for the Committee to second-guess operations in advance, which is not what the ISC is proposing, but there needs to be parliamentary scrutiny of not only the policies and good intentions of the agencies, but operations. Ministers and the agencies actively resisted that when the Committee was first established in 1994, but in fact the Committee has already gone further in practice than was originally intended in legislation. It is important to support it now and give it the proper underpinnings that it needs to be able to examine operations properly and thoroughly where it is appropriate to do so, and where the Committee believes that a significant issue needs to be investigated. I urge the Home Secretary to make progress in that area and accept the principle of the Committee’s recommendations.
I also believe that there is a strong case for the Committee, or at least its Chair, to see more detail on individual cases. I have seen no convincing reason to deny the Committee, or its Chair, access to the full oversight reports on the agencies by the various commissioners, including the annexes, which are currently often withheld.
It would help the House, too, for the ISC—or, again, at least for its Chair—to have access to the detailed papers on individual control order cases as, for example, the commissioner currently does. Again, that would not be to second-guess current cases, but so that the House could reflect on the implications of those cases for legislation. For example, we may be asked to introduce emergency legislation on TPIMs or on extending pre-charge detention, yet it is a genuine problem for Parliament that the only person who has seen all the cases that justify changing legislation is the Home Secretary who proposes the new legislation. There are too few checks and balances in that system, which is bad for democracy but ultimately also bad for the Home Secretary and for confidence in national security. It would be far better for Parliament and for the Home Secretary to have another independent voice that can come to judgment on the basis of the evidence and advise Parliament. Stronger counter-terror powers can be justified, but I would like stronger checks and balances alongside them. The Opposition would prefer to retain control orders, especially in Olympics year, but we would also prefer greater scrutiny of the control order regime by Parliament, including the ISC.
Finally, I am astonished to find myself in agreement with the hon. Member for Stone (Mr Cash), who in last year’s debate argued that the ISC Chair should be an Opposition Member. There are significant advantages to the ISC following the example of the Public Accounts Committee, the Chair of which is a senior Member of the Opposition. That is not to cast aspersions on the current ISC Chair, who would make an admirable Chair any time in opposition, nor is it—perhaps more importantly —to cast aspersions on my right hon. Friends who did admirable jobs as ISC Chairs when Labour was in government. They would make excellent ISC Chairs now, but perceived independence and credibility is even more important for the ISC than for other Committees.
Sir Malcolm Rifkind
I am extremely grateful to the right hon. Lady for the additional comments that she has volunteered. The House might like to be reminded that there is nothing to stop an Opposition Member from being ISC Chair. In fact, there is a precedent. Tom King, now Lord King of Bridgwater, was the first ISC Chair and remained for a period after the Labour Government came into power in 1997. It is entirely available to Opposition Members, depending on who they are.
Yvette Cooper
The right hon. and learned Gentleman is absolutely right that there are precedents. In fact, Lord King was Chair when I was a member of the ISC between 1997 and 1999, and he continued through to 2001. The principle of the Public Accounts Committee is that as a matter of course the Chair is a Member of the Opposition. The value of that is this: exactly because the ISC must operate behind closed doors, it needs to be seen to be independent and authoritative in its conclusions; and exactly because it cannot tell us the evidence on which its judgments are based, it needs to be perceived by the wider public to be independent of Ministers. That is important for the agencies as well as for the public.
In the 1998 debate, the then ISC Chair, Tom King, spoke of the importance of the Committee having a unanimous all-party voice and authority:
“When a situation arises that gives serious cause for public concern…We shall not be able to help matters unless we can say that we have investigated the allegations, with…access to all the relevant information”.—[Official Report, 2 November 1998; Vol. 318, c. 594.]
Those words stand today. When I spoke in that debate, I said that accountability through the ISC lay at the heart of the tension not just between liberty and security, but between democracy and secrecy:
“We have certainly come a long way since the mere existence of MI5 and MI6 was denied. I believe that, sooner or later, we will travel much further. We will have to improve our system of accountability, for the sake not only of democracy but of the very secret agencies that the United Kingdom needs to function and to protect our modern democracy. If we do not improve our system of accountability, those agencies’ capacity to operate in the national interest will be threatened.”—[Official Report, 2 November 1998; Vol. 318, c. 613.]
Those words, too, still stand.
The role of the ISC has become stronger since 1998 and it does vital work. Accountability has increased, but it has not yet gone far enough. The Government’s reforms are welcome, but they should be brave and go further, so that we continue to have effective agencies that have the confidence of the public in a modern democracy. Sooner or later, we will have that.
Dr Julian Lewis (New Forest East) (Con)
I begin by reassuring the shadow Home Secretary that, in my limited experience—I have been a member of the ISC for just over a year—such is the sense of cross-party common purpose on the Committee, I would have no difficulty in accepting as Chairman any of the Committee’s three excellent Labour members. However, such a thing is completely unnecessary given the outstanding chairmanship of my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind)—[Hon. Members: “Hear hear!”] I am glad to hear Opposition Members’ endorsements.
In his opening remarks, my right hon. and learned Friend mentioned the totally discredited concept that history ended with the end of the cold war. Topics mentioned in the debate include the Olympics, cyber-security, general terrorism and the more traditional threat from more traditional enemies. In my somewhat disparate remarks, I shall try to touch on a few of them.
When dealing with any form of enemy of the democratic system, it is helpful to think in the ways and along the lines that they think—if we have such twisted minds, to which some of us must own up. Our initial reaction in respect of the Olympic games is to think, “There must be a huge extra effort to protect the games,” but what would terrorists planning a series of deadly attacks in the UK think? Would they think, “I must go straight away to the heart of the games, where the maximum security effort is bound to be concentrated,” or would they think, “There will be a huge concentration of effort on the security of the Olympic games in that fortnight, so there will be great opportunities to create mayhem in all sorts of other, less protected parts of the UK”?
Therefore, the problem facing the Security Service is that it cannot say, “With the extra effort we will put into protecting the Olympics, we will ease security measures elsewhere in the country.” The reality is that the holding of the Olympics in the UK is a considerable opportunity—I will not say that it is a heaven-sent opportunity, because it comes from a somewhat different direction—for terrorists to cause mayhem and to maximise the deadly effect of their perverted ideas carried into action. I often wonder whether it was sheer coincidence—it probably was—that the choice of London for the Olympics was announced just 24 hours before the 7/7 atrocities in 2005.
We need extra concentration because of what could be visited upon us during the Olympics, but there are also new technological threats, to which hon. Members have referred. Everybody has welcomed the increase in resources—£600 million net—to ensure greater cyber-security in future. There was concern in the past about a lack of ministerial responsibility for cyber-protection, so it comes as a great relief to the ISC and its members to know that the role will now be undertaken by the Cabinet Office, whose Ministers have a legendary reputation for the protection of sensitive information. Think about it. However, when we are considering—[Laughter.] They got there in the end. As Frankie Howerd used to say, don’t take a vote on it.
The Cabinet Office will be responsible for cyber-security, but that does not mean that it is the most suited Department to be responsible—nor has it been earmarked for the role—for the countering of the propaganda message that is used to generate recruits to the terrorist cause, which is closely related to cyber-warfare. We have heard a considerable amount about the attempts that have been made to decapitate al-Qaeda, which have enjoyed considerable success. However, we also know that attacks are increasingly lone-wolf attacks, when people self-start and trawl the internet, picking up messages and techniques that they turn into action, with deadly effect.
It is of the utmost importance that the Government seek to counter the message put out to mobilise, radicalise and turn into terrorists impressionable and sometimes unbalanced minds already in our society. It is incredibly difficult for a security service to track such people: it is much harder to track a lone-wolf potential attacker than somebody who is engaged with people abroad and part of an al-Qaeda-like organisation planning a much more sophisticated attack. We need to hear more—the Committee will make an effort to ensure that we do—of the efforts that the Government are making to neutralise the radicalising messages on the internet and put forward a counter-narrative so that people can understand the values of the society in which they live.
Hazel Blears
The hon. Gentleman is extremely knowledgeable in this field because of his experience before entering Parliament, but does he share my concerns about the work of the Home Office’s research, information and communications unit, which the Committee has decided to consider much more closely? It is essential work but at the moment we have little information about what it is doing and its effectiveness.
Dr Lewis
I am delighted that the right hon. Lady makes that point. It is too early to have concerns about the work of the unit because we have not been able to examine it yet. The work that such a unit is designed to do is, as she said, of the utmost importance, and if it carries it out successfully the public at large might not know how successful it has been in supporting themes and counter-narrative ideologies in the media and internet to the benefit of people in our society who might otherwise become disaffected. However, unless one can examine the organisation’s work—within what is commonly called the ring of secrecy—one cannot be sure whether sufficient work is being done or about its quality.
On page 44, paragraph 156 of our report, the Committee stated:
“The difficulty of measuring the success of PREVENT work is most notable in the work of the Research, Information and Communications Unit…which was established in 2007 with the primary aim of ensuring consistency, across government, on Counter-Terrorism and counter-extremism messages and developing a coherent narrative to challenge extremist ideology. RICU is jointly funded by the Home Office and the Foreign Office. It currently has 22 full-time staff and its budget in 2010/11 was £4.25m (of which £0.3m was spent on research and £2.7m was spent on communication campaigns).”
That does not sound like an effort on the scale needed if we are seriously to counter the radicalising message of the enemies of our way of life.
Democratic societies are inherently resistant to Governments propagandising against organisations involving their own citizens, in an attempt to get a message across to their own people; but sometimes we have to understand that there are forms of warfare besides open warfare—for example, the propaganda and counter-propaganda warfare that went on during the long confrontation with Soviet communism. During that period, in 1948, a Labour Government set up the Foreign Office’s information research department, which remained in existence until 1977 under Governments of both complexions, until unfortunately another Labour Government decided to do away with it. That organisation operated on a considerable scale, and its particular strength was that it made available to opinion-formers the detailed facts that enabled strong cases for what was good about British society to be made on a non-partisan, non-party political basis. I believe—I think that the right hon. Member for Salford and Eccles (Hazel Blears) shares my belief—that an effort on a similar scale might be necessary in the future.
On the Committee’s operations, I can reassure the Home Secretary: she said that we need to consider the resource implications of the Committee expanding its work to consider operational matters; but I am not sure that there are many resource implications, because as my right hon. and learned Friend the Member for Kensington said, we are asking not to change what we do but simply to formalise what we already do. We are not asking to look over the shoulder of the intelligence and security services at what they are doing while they are doing it—in an operational sense—although they sometimes choose to give us glimpses of that, which obviously we treat with appropriate discretion. Instead, we wish to be assured that when something becomes contentious, the ISC can review the matter and decide whether proper procedures were followed, whether mistakes were made or whether we can help the security and intelligence services by giving them a clean bill of health.
I shall take an example at random. It is known that over the years the approach of Governments towards Libya changed completely. Under the Labour Government, there was a policy—I am sure that its proponents would argue that it was a legitimate line to pursue—of trying to bring Libya back into the fold. For example, when Libya declared its intention to abandon its chemical weapons stocks—we now know that it still had some, although we do not know whether that was because it had not finished getting rid of them or because it was concealing them and cheating on its promises—it was regarded as quite a coup, quite a triumph for the security and intelligence services
It now appears, however, that along the way the degree of co-operation between some of our agencies and some Libyan agencies might have crossed the line. If it did, for example in the rendition of two people, as has been reported, we will need a means of finding out why that line was crossed, which agencies crossed it, who, if anybody, was responsible—was it the Government, was it the agencies?—and whether there are lessons to be learned that we can help to articulate. If the Committee is not given the power to review such operations, many people will rightly ask, “What’s the use of having a Committee of parliamentarians, whose job is supposedly to supervise the security and intelligence services, if when something highly controversial appears to have happened, it cannot, does not or will not look into it?”
I want to refer to one or two of the slightly more traditional threats. It was interesting to hear that the agencies still think that we should not, in our rightful concern about international terrorism, forget that the country remains an intelligence target for countries such as Russia and China. One of the things that worry me the more I focus on it is the possibility that some countries could steal our technology, use it to undercut our competitiveness and then buy their way into our infrastructure in this country. This would be of great strategic value to them in future. I will say no more about that for the moment, but I hope that others might feel it appropriate to do so later in the debate.
Finally, I warmly welcome the proposal in the justice Green Paper to prevent the control order principle being breached. Irrespective of what piece of intelligence was disclosed in court, we must never forget that if we undermine the trust between ourselves and our principal intelligence allies on that issue, we undermine it on every issue. However, it also behoves us to remind our intelligence partners that when they engage in methods and techniques such as Guantanamo Bay and water-boarding, they open up not only themselves but their allies to challenges in court that make such problems much more salient, in respect of the evidence that a judge might feel had to be disclosed. It is a question of exercising two-way restraint: we do not wish to breach the confidence of our allies, but our allies must not breach the standards to which our intelligence services rightly apply themselves.
Paul Murphy (Torfaen) (Lab)
I am very grateful to be able to make a brief contribution to this important debate. Let me start by congratulating the Chairman, and the members, of the Intelligence and Security Committee. When I held that position some years ago, I was unable to open the debate, as the right hon. and learned Member for Kensington (Sir Malcolm Rifkind) has done so ably today. Indeed, I barely missed being constrained to 10 minutes because I was speaking from the Back Benches, so I am glad that addressing that issue was one of the first reforms to be implemented.
The right hon. and learned Gentleman made an excellent speech outlining the work of the Committee, touching on the important point that, inevitably, people outside—or, for that matter, inside—do not know exactly what members of the Committee do. By its nature, the Committee deals with secret business and secret matters, so it is inevitable that people will be simply unaware of the huge amount of work that goes into what it does. During my time on the Committee, the amount of work that the Chair and the members put in meant that they were virtually doing a full-time job. My right hon. Friend the Member for Knowsley (Mr Howarth) and the Marquess of Lothian are the only two current Labour and Conservative members with whom I served on the Committee, but I know that the current members, from all parts of the House, do an excellent job. I pay tribute to them, as I do to the intelligence agencies and the great work that they do in keeping our country safe from terrorism and other important threats.
However, there is one thing in the report that disturbs me. The report refers to the terrorist attacks of July 2005. The House will know that the Intelligence and Security Committee issued two reports on that terrible event—one when I chaired it and the other when it was chaired by Dr Kim Howells, my successor but one. It is important for the House to understand the point that the right hon. and learned Member for Kensington made about those reports, for which Dr Kim Howells and I were responsible, both of which came to the same conclusions about that event as the coroner: that the intelligence agencies could not have prevented what happened in 2005, because of resources and prioritisation. However, it disturbs me to read in the annual report—although I am pleased that the excellent director of the Security Service has indicated that he was sorry about this—that the information that the Committee received was not up to it, and that the work had not been done and the intelligence not looked at sufficiently well for the Committee to be properly informed about what had occurred.
I want to confine my remarks, however, to the important business of the reform of the Intelligence and Security Committee, a matter that has been before the Committee for at least four years, and rightly so. The Government are to be congratulated on the Green Paper, which was referred to earlier. My right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) was right to emphasise that reform must come, as the Chair of the Committee said. However, we have to do that in such a way that we balance the significance of the Committee—by ensuring that secrecy is maintained—with the importance of ensuring that people in our country are aware that it is doing a proper job, and that is not easy. Every other Select Committee in this House can do all sorts of things—here in the Chamber, in the Committee Rooms and outside, even on visits—that the Intelligence and Security Committee cannot do. How do we square that circle? How do we ensure that people are sufficiently assured that the members of the Intelligence and Security Committee are, in fact, doing the job that the House of Commons and the House of Lords have asked them to do?
There is a problem with trying to make the Committee exactly the same as any other Select Committee or Joint Committee of both Houses. We have gone down the right road by ensuring that this House and the House of Lords have the right to propose names. It is important that this should continue and that there should be a requirement that the Government respect the names put to them for membership. At the same time, however, the vital issue of trust—a word used throughout this debate —is critical, whether it be trust between our international allies or trust between the Committee and the intelligence agencies. If that trust breaks down, it will be a purposeless Committee that simply will not work.
It has been said—the Chairman of the Committee himself said it—that when the Committee was set up back in the mid-1990s, it was an extremely different creature from what it is today. It did not deal with operational matters, but simply with finance, resources, structures and so on; but now, of course, operational matters have been dealt with. It is important that the Green Paper recognises that this should be put into statute, with a legal requirement for the Committee to deal with operational matters. I agree with the hon. Member for New Forest East (Dr Lewis) that the Committee is obviously not going to walk across to the MI5 or MI6 buildings every day, knock on the door and say, “Let’s have a look at what’s happening now,” as may happen in other countries. That is not going to happen, nor should it. However, I am sure that it is the experience of the current members of the Committee, as it was when I was the Chairman, that when important issues arise, such as Libya or others that I can recall, the agencies will take it upon themselves to inform the Committee, and certainly the Chairman, of the significance of those issues. However, that has to be formalised, because at the moment we cannot insist that the Intelligence and Security Committee can deal with operational issues, which is a problem.
Ultimately, it all comes back to trust. Whatever the legalities, if the agencies do not trust the Committee, for fear of leaks or whatever, they will simply—and quite rightly—not discuss sensitive intelligence matters with it that could present a danger to our country. Incidentally, I do not think for one second that any current or previous member of the ISC would do that, but that is obviously an issue that the intelligence agencies have to consider. I am therefore very much in favour of extending the Committee’s remit.
As to whether the Chairman of the Committee should be an Opposition Member, it is quite interesting that the noble Lord King, who was referred to earlier, was a Government Member when he was appointed. It has rightly been said that when Labour won the election in 1997, he continued as the Chair of the Intelligence and Security Committee. It is quite interesting that when I was appointed in 2005, he rather grizzled and grumbled about it and said in the House of Lords that I should not have been appointed because I was not an Opposition Member, but still a Government Member. My view is that, ultimately, we need the right person for the job. Although there is an analogy between the ISC and the Public Accounts Committee—and my right hon. Friend the Member for Normanton, Pontefract and Castleford who served on that Committee has made it—I think we need to be careful how far we go down that line. It is important that the person chosen has the respect and confidence of both sides of the House of Commons and also, of course, of the agencies themselves.
The other important issue that has been mentioned—I talk about it elliptically—is that of having consensus in the Committee. I cannot recall a single instance when a vote was taken in the ISC. It is not that there were no disagreements—there were many profound and deep disagreements about the members—but as a Committee we took the view that whatever our profound and difficult disagreements, we would have to find a way out of them. To my knowledge, only one single vote has ever been taken on the ISC—on whether a visit to particular place should be by plane or by train. That was the only real vote. Every other issue has been decided by consensus. It was obvious—no, perhaps it was not that obvious—that this place was in the United Kingdom. This shows that members of the Committee, usually senior Members who are there to serve their country in a special way, put aside party political allegiances and are on the Committee to do a particular job.
I think that a difficulty might arise if the ISC were exactly the same as a Select Committee. That needs to be considered when we think about how the ISC should develop over the years. There is unquestionably a need for greater accountability, and the ISC, the House, the Government and my Front-Bench colleagues must work out how to achieve it.
The other very important issue raised by my friend Dr Kim Howells when he chaired the ISC was the Committee’s independence from Government. I believe that this is critical. How do we achieve it? First, I do not think it was a good idea for the Committee to meet in the Cabinet Office. It should be removed from Government premises altogether and put somewhere on the parliamentary estate. The excellent people who work in the secretariat—they are indeed excellent—would work to Parliament rather than to the Government.
I do not undervalue for a second the significance of the Prime Minister’s role in this because he has ultimate responsibility for the security of our nation and has to ensure that these hugely sensitive issues and materials are dealt with properly. However, I still think that there is a lot of work to be done to ensure the Committee’s independence—removing it physically from the Cabinet Office, and perhaps also taking the food and rations, so to speak, away from the Cabinet Office to ensure a genuine independence in the ISC.
Work has been done and I am delighted to note the Government’s efforts in the Green Paper to ensure that we make progress. I was pleased with the remarks made by my right hon. Friend the shadow Home Secretary and, as I said earlier, pleased with the excellent remarks of the current Chairman of the ISC. We all owe the Committee a great debt, just as we do to the intelligence services. There is a balance to be struck between accountability on the one hand and the security of our nation on the other. It is one that we have struggled with for a long time, but I think that we are getting there at last.
Tom Brake (Carshalton and Wallington) (LD)
I echo the thanks of various Members to the members of the intelligence and security services for the work they do on our behalf to keep us safe. I also thank the right hon. and learned Member for Kensington (Sir Malcolm Rifkind) for setting out in a lucid and measured way what his Committee has found, which has led in turn to a measured and lucid debate so far, consistent with what the right hon. Member for Torfaen (Paul Murphy) said about members of the Intelligence and Security Committee putting aside party political allegiances. I welcome that, as we do not want party political differences to get in the way of the important security considerations that the ISC has highlighted.
Both the ISC in its response and annual report and the Government in their detailed response have provided a useful framework for formulating a small number of questions for the Minister who will respond later. I hope he does not take offence at that. Let me deal with the recommendations in the report.
Recommendation A deals with the savings to be derived from the single intelligence account. It talks about making the supporting functions more efficient and delivering new operational capability as a means of reducing the need for savings. I wonder whether a breakdown has been done to determine how the savings will be split between those two areas. The most certain way of achieving the savings safely is having a clear plan that identifies how those savings will be derived over future years.
Recommendation B deals with the spending review settlements and poses the question whether they can be adjusted if there is a significant change in the threat. A number of Members have referred to this issue, including the hon. Member for Cities of London and Westminster (Mark Field). He is no longer in his place but spoke about the cyber-threat. The Government response states that
“the SIA will first look to reprioritise from within its existing work.”
The use of the word “first” suggests that the SIA might look to do something different secondly, but no second alternative is outlined, which makes me wonder what it is that the Government do not want to put on the record. What is clearly understood is that if a very large and significant new threat emerges, the Government would want to respond in a way that would involve resources. We would all expect that to be the case.
Recommendation D deals with information assurance and making sure that it has the required backing. The Government’s response states that
“the Deputy National Security Adviser will continue to work with the Communications-Electronics Security Group…to develop a suitable funding model that will ensure the long-term sustainability of their IA work.”
Is it clear at what point that work is going to be completed?
In a similar vein, in response to recommendation E the Government have rightly identified the need to take proactive steps to address the issue of retaining a suitable cadre of internet specialists. I hope the Minister will tell us what proactive steps have already been taken. I should state now—perhaps I should have done so at the outset—that the Minister, for clear operational reasons, might not be able to give answers to every question. Clearly, he will not respond if it is not appropriate for him to do so.
Recommendation G identifies the need for GCHQ to be able to account for lost equipment. The ISC made it clear that GCHQ should ensure that the problem does not happen again and the response noted that good work had been undertaken with the National Audit Office since 2008-09. I wonder whether GCHQ has been able to provide the Minister with the assurance that those incidents of lost equipment, and the potential risks associated with them, will not happen again.
Recommendation K deals with the Security Service’s need for IT specialists. A useful initiative has been set up with
“the three Agencies…engaged in setting up a single unified mechanism for hiring interim specialists and contractors.”
I suspect that this will make a substantial contribution to savings. I was hoping that a time frame might be identified for delivery.
Recommendation P refers to the overlap between the Office for Security and Counter-Terrorism and the National Security Secretariat. Although that overlap is limited, I hope that the Minister will be able to explain how problems caused by the duplication of work are addressed.
Recommendation V refers to BBC Monitoring. I know that work is proceeding on that front, but the Minister may be able to tell us something about the intended time scale for the review.
Recommendation X refers to Shaker Aamer. Other Members may welcome an update from the Minister on any discussions that are taking place with the United States authorities.
Recommendation Y refers to the Consolidated Guidance to Intelligence Officers. I thank the Minister for a recent briefing that clearly identified the difficulties and complexity that surround those issues, especially when Government agencies or the intelligence services are having to deal with a range of agencies abroad.
Recommendation AA refers to the Government’s announcement of the publication of a Green Paper. That is very welcome, and I hope that the Green Paper will receive a wide response. Some parts of it may be deemed controversial, particularly those dealing with the use of special advocates and other aspects of the reform of the Intelligence and Security Committee. There is clearly a huge amount of expertise in the Chamber in that regard, and I am sure that Members who are present have already made an important contribution simply by giving their informed views, which can be read in Hansard tomorrow.
Recommendation GG refers to the vulnerability of some of GCHQ’s sites. It is not clear to me whether the necessary resilience already exists, or whether it is being developed and is expected to be rolled out at some point in the future. Perhaps some clarification will be possible either now or at a later date.
Recommendation HH proposes the establishment of a single SIA vetting service. That is, on the face of it, a sensible proposal. It has been under discussion since early 2010, and now, in late 2011, I should like to think that an end date is in sight.
I hope that the Minister will consider the limited number of questions that I have asked to be pertinent. Let me restate my support for the work that is being done by the intelligence and security community and for the work that the ISC has done in ensuring not just that we are safe, but that due scrutiny is given to the services that are responsible for our safety.
Keith Vaz (Leicester East) (Lab)
It is always a pleasure to follow the right hon. Member for Carshalton and Wallington (Tom Brake), who, with his usual ingenuity, managed to give a number of written parliamentary questions an oral flavour. Some might well have served as essay titles. I noted that the Minister was writing furiously in preparation for his winding-up speech, and I hope that we shall all be able to obtain copies of his answers.
I shall speak briefly. First, let me join Front Benchers and others in congratulating the right hon. and learned Member for Kensington (Sir Malcolm Rifkind) on the excellent work that he and his fellow Committee members have done in respect of the annual report. It was a change to be able to hear such a long and thoughtful speech from the Chairman of the ISC, rather than the limited contribution that my right hon. Friend the Member for Torfaen (Paul Murphy) used to have to make when he chaired the Committee. Things are certainly changing.
I also welcome the commitment that the right hon. and learned Gentleman made in saying that the Committee intended to take oral evidence from the heads of the security services at some time in the future. I always think it odd that, although we hear about magnificent speeches made by the heads of MI5 and MI6 containing important statistics about the security threat, no one in Parliament is able to question them. We used to be told that their jobs were so secret that no one knew what they looked like, but nowadays it is quite easy to find out what Jonathan Evans and John Sawyers look like by means of the internet. There is no secrecy about their identities any more.
In an intervention on the right hon. and learned Member for Kensington, I described the annual pilgrimage of the Home Affairs Committee, in a people-carrier with blacked-out windows, to a building somewhere on Millbank whose address we were not allowed to know. On arrival, we would be taken up through the back of the building into a room that was not the office of the head of the agency, but a meeting room where we were able to ask questions. We were not allowed to make notes or include what was said in our reports, although inevitably some of it had leaked out into a Sunday newspaper by the time the Committee was able to consider matters a week later. The fact is that it is much better for the heads of those agencies—both of whom I have met, and both of whom are highly intelligent individuals—to appear before the ISC, and for members of the ISC to put questions to them and receive answers. That is the basis of parliamentary scrutiny, and it is a very important step forward.
I welcome the way in which the National Security Council has developed over the past 18 months. Its establishment was recommended by the Home Affairs Committee in the last Parliament. I tried hard to persuade the last Prime Minister to accept the recommendation. I told him that the NSC would be good for the country, because for the first time we should be able to co-ordinate all the various Government Departments. There would be a national security adviser who, hopefully, would give evidence to Parliament, and it would be a good way of dealing with issues relating to countries such as Yemen—foreign policy issues that also had a domestic resonance. I was pleased that, when the Prime Minister appeared before the Liaison Committee, he talked about the operation of the National Security Council. I welcome that co-ordination, and I think it important for us to hear more about what the council is doing.
Obviously, in terms of its composition, the NSC differs from its counterpart in the United States, which is the model that we used when we considered the report two years ago. I do not think that Peter Ricketts or his successor, Kim Darroch, will ever quite become Condoleezza Rice—a great figure who can be brought before Parliament and make important statements about national security. That will never happen, because we will always have a career civil servant in the job. It is a pity, because I think that Prime Ministers ought to be able to choose more widely when selecting their national security advisers, but we never know: in the future, a Prime Minister may decide to do that.
I want to refer to the excellent contribution of the hon. Member for New Forest East (Dr Lewis). He is entirely right to consider the threat that is facing our country. We must deal with those who are behind that threat, which is why I am so pleased that the Security Minister—the Under-Secretary of State for the Home Department, the hon. Member for Old Bexley and Sidcup (James Brokenshire)—has agreed to speak at the Select Committee’s conference in Leicester in December, when we will consider the roots of radicalism. As the hon. Member for New Forest East pointed out, unless we confront the threat with a budget larger than that which currently exists in the units in the Home Office, we will never deal with it. The only way in which to deal with home-grown terrorism is to engage the communities involved. The previous strategy was about preventing: “Let’s try to stop them doing what they’re doing.” That cannot be successful, however. Instead, we have to engage; we have to get right down into the communities and work with them—with different mosques and organisations. We heard from a fair few of them in the Home Affairs Committee evidence sessions, and I think that, by engaging, we can deal with this threat.
This annual report is excellent, and we look forward to the next one, but we also look forward to its being even more transparent in respect of the issues it addresses, as the Committee and Parliament expect.
Richard Graham (Gloucester) (Con)
It is with great pleasure that I rise to make my first contribution to this important annual debate as a Back Bencher representing constituents who work at GCHQ. May I add my congratulations to those already made to my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind) on the crispness of the ISC annual report and the swiftness with which many of its recommendations have been incorporated into the Ministry of Justice Green Paper on justice and security?
As a member of Her Majesty’s diplomatic service at the time, I well remember the concerns that were felt among the agencies in the run-up to the Intelligence Services Act 1994. They were very concerned about the impact of coming in from the cold and into the limelight of parliamentary oversight. Those concerns were, of course, largely overcome by keeping that exposure away from operations. I think it is true to say that the agencies’ worries in terms of parliamentary limelight have not been realised, but two issues have emerged: the handling of reputational issues, and the increased number of challenges of Government actions in our courts. I shall deal with each of them in turn.
The Foreign Secretary rightly said only a few days ago, on 16 November:
“Secret Intelligence saves both military and civilian lives, protects our economy, stops criminals and makes a critical contribution to our diplomatic and military success.”
However, it is also true that the agencies depend hugely on their reputation—as, indeed, do all of us in this House. Reputation is everything, and I believe that, had the accusation of complicity in extraordinary rendition leading to torture been dealt with by an ISC with operational oversight, that reputational question mark would not still be hanging over the agencies. Nor would the ISC have faced the issues of poor record keeping that are identified in pages 70 to 73 of the annual report. That is a practical example of why the ISC remit should be “strengthened” to provide “more credible oversight” and
“greater assurance to the public and to Parliament”
by adding operations to its current remit of policy administration and finance. I therefore welcome that proposal and the Home Secretary’s positive response this evening, while also recognising that there will be much detail to resolve.
On the increased number of challenges to Government actions in the courts, I absolutely agree with the Justice Secretary’s comments in the Green Paper that we need to use closed material procedures in mainstream civil courts, as that is the only way to reconcile the two difficult challenges of both providing fairness to all and ensuring our secrets are kept secret.
I join the right hon. Member for Leicester East (Keith Vaz) in paying tribute to the Government for their innovative move of creating the National Security Council. I am sure that it contributed considerably to the successful pursuit of the United Nations Security Council resolutions on Libya, and I was delighted to see in the ISC annual report recommendation M on the NSC, which pays tribute to the successful establishment of the organisation.
The right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) referred to there being too few checks and balances, but where was she and her concern for checks and balances when her country needed her in the run-up to the Iraq war of 2001, when it appeared to many of us outside this Chamber that decisions were being made and dossiers prepared exclusively in No. 10? I believe that, had the NSC existed at that time, with its checks and balances, it would have changed the course of our involvement in Iraq. No doubt historians will, in time, ruminate on that.
Tonight, we have heard more detail on the ISC proposals, and we have heard the endorsement given to them by the Home Secretary. I have highlighted my strong support for two key measures: the more credible oversight provided by the ISC with a stronger mandate to include operational oversight, and the handling of secret intelligence in the courts so that the right balance between fairness and secrecy can be struck.
The right hon. Member for Blackburn (Mr Straw) said not long ago that the Government have found “elegant solutions” to dilemmas that have faced successive Home and Foreign Secretaries in balancing the pursuit of openness with the requirements of secret intelligence. I agree, and I hope they prove to be practical solutions that will enhance the oversight of the work of our agencies, which are so important to all of us in this country.
Paul Goggins (Wythenshawe and Sale East) (Lab)
It is a pleasure to follow the hon. Member for Gloucester (Richard Graham). He spoke about his pride in his constituents who do such tremendous work at GCHQ, and I join him in praising those dedicated and important staff.
It is common ground among the main political parties that the Government’s top priority must be to protect the people of this country. Although we all want a law enforcement and criminal justice system that is as open as possible, in order to maintain public safety we must have some level of secrecy, and scrutinising the workings of that secret world is the core task of the ISC.
As ever, my right hon. Friend the Member for Torfaen (Paul Murphy) put his finger on the key issue when he talked about the importance of trust. I am sure that I speak for all members of the Committee in saying that it is a privilege that trust has been placed in us in respect of the access that we have to the agencies and confidential information. It is also a privilege to visit the agencies and meet the staff who do such important work. Some of them are long-serving and very experienced, and I pay tribute to them of course, but I have noticed during my first year serving in Committee that there are also many energetic and ingenious young people in these agencies, and they do tremendous work. What they do is a very important form of public service, and I pay tribute to them.
There is much to welcome in the ISC report on what has been done in the past year. Many Members have mentioned the NSC’s work and the coherence that it brings to national security. We all agree that that has been a very important step forward, not least because of the regular contact that it brings between senior Ministers and the heads of the agencies, as the ISC Chair, the right hon. and learned Member for Kensington (Sir Malcolm Rifkind), has pointed out. I am sure that that is helping to foster a greater degree of collaboration between the agencies, which is welcome.
I want to say a couple of things about resources. First, I welcome the additional £600 million that is being made available to deal with cyber-security and the cyber-threat. That is an important investment and, as has been suggested, it will almost certainly not be a one-off sum and will need to be followed up in subsequent spending periods.
On the funding of the agencies, the report says that the 11% real-terms cut is “a fair settlement”, which is a fair comment by the Committee. Given the rapid growth over the past decade in the funding available to the intelligence and security agencies and given the level of cuts right across government and the public services, it probably is a fair settlement. However, as page 15 of the report states, it is essential that the funding
“can be adjusted if there is a significant change in the threat.”
I have no reason to doubt the good intentions and good faith of the Government, but their response to the Committee’s report could be a bit more robust in the strength and clarity of the answer. We all accept that where things change we need to look first at reprioritising our resources. For example, the events in the middle east required a reprioritisation of the resources of the various agencies. Those agencies cannot expect simply to have new money made available if there is a new threat or a new need, but with the Olympics coming up, with the increasing threat from Northern Ireland-related terrorism and with the continuing threat from international terrorism, Parliament and the public need to know clearly from the Government that additional resources will be made available, if they are needed.
On the Olympics, it is clearly recognised by government and by the Security Service that additional officers will be required by the Security Service. Some of those officers will be drawn from existing staff, but some will be new recruits. Last November, the Committee was told that the Security Service was
“seeking to recruit 100 new intelligence officers by November 2011”.
Subsequently, in May, the Committee was told that 90% of these officers are expected to take up their posts by November 2011. We are now in that month, and the House will be pleased to hear in the Minister’s winding-up speech that those staff have been recruited and trained and that they will be available well in advance of the Olympics.
Finally, on resources, I want briefly to comment on the Communications-Electronics Security Group. That little-known group operates out of GCHQ and performs an important service in providing information assurance right across government and all its agencies. The problem is that the importance of that service is not reflected in the enthusiasm of Departments and agencies in taking it up, and as a result GCHQ is out of pocket to the tune of £7 million over the past two years. We have been given repeated reassurances that a grip will be got of that situation. It is very important that that happens and that in the next financial year we have a funding model for the service that actually means that it can be provided without having to be subsidised from the GCHQ budget.
May I raise, as one or two of my right hon. Friends have done, the new counter-terrorism measures? The TPIMs are, as we know, intended to replace the control order system that went before. The Minister may or may not be pleased to learn that I do not seek to debate the principle of TPIMs as against control orders this evening, as we have done that often enough over the past few months. However, I remain of the view that the system that he is introducing is weaker, and I draw his attention to the remarks of the director general of the Security Service on page 46 of the report:
“Covert investigation does not deliver disruption”.
I do not wish to go over the principles again, but we are now six weeks away from the planned implementation of the new TPIMs system. As that system relies on additional resources being made available to the police and to the Security Service, we need to find out, in this timely debate, whether the additional officers that were to be recruited to provide the additional resource to the Security Service have been recruited and trained, and whether they will be available to work on the new system as soon as it is introduced, which will presumably be early in the new year.
I also wish to draw attention, as my right hon. Friend the shadow Home Secretary did, to the director general’s comment in the report that
“there should be no substantial increase in overall risk.”
That of course implies that there may be some increase in the additional risk, and the Committee records that as being of concern to us. We will be taking an active interest in that in the weeks and months ahead. I am very grateful to the director general for his candid assessment of that situation, but Ministers will also need to pay close attention to whether or not the level of risk increases, and they must be prepared to act if there is any sign of an additional risk, be it substantial or otherwise.
Such action must mean either additional resources or a willingness to return to this House to implement emergency legislation, which the Government have spoken about, which they intend to subject to pre-legislative scrutiny and which would impose greater restrictions on those suspected of deep involvement in terrorist activity. My view remains the same as that of my right hon. Friend the Member for Salford and Eccles (Hazel Blears), who intervened earlier in the debate. We feel that delay would be far better than uncertainty and risk. I say again to the Minister, as plainly as I can, that this matter has gone way beyond party political squabbling, although it never was about that for me. I put it to him that if there is any doubt whatsoever, delay should be the first thing that he considers and that he would have the full support of Members on both sides of this House if he did the sensible thing.
Although I have been a member of the Committee for only the past year, it is fair to say that Northern Ireland has probably had a slightly higher profile in the Committee’s work this year than in the preceding two or three years. The Committee has been told that in 2008-09 the Security Service’s effort in countering Northern Ireland-related terrorism fell to some 13% of its overall effort total, which is not surprising given the progress in Northern Ireland. Not only was stage 1 of devolution delivered in 2007, but in July that year we saw the end of Operation Banner, which meant the end of Army involvement in Northern Ireland after 38 years. At that point, just a handful of dissidents remained. They were few in number, fragmented in their organisation, more interested in the proceeds of crime than in the politics of a united Ireland and technically inept in their capability. That has changed and their number has increased. Their expertise has clearly increased and now the threat level is “severe” in Northern Ireland and “substantial” in Great Britain. The director general reported to the Committee that although he has no reason to believe that an attack in Great Britain is imminent,
“I certainly believe it’s in their minds”.
We know that just in recent months the murder of police officer Ronan Kerr has occurred, a 500 lb bomb was placed near Newry and there have been other attacks, including on Derry’s UK city of culture office. These risks are real, and I again pay tribute to those who serve in the Security Service and to the Police Service of Northern Ireland in countering that threat.
Dr Julian Lewis
Before the right hon. Gentleman moves on, he might wish to draw the House’s attention to paragraph 33 of the report, which states:
“The Security Service has told the Committee that the numbers of individuals involved with the current republican terrorist groups is around half the number that were active in the Provisional IRA”.
That is a very considerable number, is it not?
Paul Goggins
It is, although it is also fair to say that there are degrees of involvement. Although there may be some latent support at a fairly local level for certain individuals, the number of active people who are determined on violence in pursuit of their aims is probably still fairly limited. None the less, they are increasingly dangerous in what they do, and they need to be dealt with. That is why, as I am sure the hon. Gentleman will agree, the 34% increase in investment in the past couple of years in the Security Service’s work on Northern Ireland terrorism is welcome.
There have been some positive developments, and it is important to record them in this debate. The devolution of policing and justice, of course, was a very important step in April last year. The PSNI and the Security Service have worked very well together in a new relationship over the past few years, which has borne great fruit. Only recently—this is outside the period covered by the report, but it is none the less important—Michael Campbell was convicted in Lithuania and sentenced to 12 years’ imprisonment there. That was the product of some very good work, and those involved should be commended and congratulated.
I warmly welcome the Green Paper, which others have already analysed. Frankly, it takes political courage to come forward with such a Green Paper. The territory is complex and the document is hardly a vote-winner, but it is essential that we grapple with such issues and seek to try to resolve them on a cross-party basis, because they are important. The Binyam Mohamed case was clearly a major breach of the control principle and, as we have reported in our report this year, when we went to the United States and met our colleagues and counterparts there it was clear that they were shaken by this development. Although they reiterated time and again the value that they attach to the relationship between the United States and the United Kingdom on intelligence and security, they made it absolutely clear that they must know that their intelligence is safe in our hands. If they cannot trust us, it would be a very negative development.
We all agree that we want a system of open justice. Article 6, on the right to a fair trial, is a vital part of our system. As far as possible, of course, defendants and suspects should have the gist of the case against them outlined and given to them, but the problem is that the “gist” is starting to become virtually the whole case, which makes things very difficult. When evidence includes highly sensitive information, there must be a way of protecting it. Ministers have an obligation to ensure that they uphold article 6, but they also have article 2 obligations to the people who are the source of the intelligence that enables Ministers to act. Those people must be protected, too, because if Ministers were to reveal such information and thereby the identity of the sources, who might then be imperilled, it would be a terrible development. It is vital that both sources and the wider public are protected.
I welcome the proposals in the Green Paper on the closed material procedures, but, as others have said, they must be made as tight as possible. In the end, the court will always have the last word and make the ultimate decision, but it is for Parliament now to make its views absolutely clear, through statutory guidance and through the consideration, as others have said, of the statutory presumption against disclosure of foreign intelligence material. All those safeguards should be considered, but, having had the courage to introduce this Green Paper and grapple with these issues, it is vital that we get it right. We will not get an early or easy second chance to do so, so it is essential that we make the best effort that we can now.
Let me make a final point on closed material procedures. We are familiar with the arguments about the control principle and more familiar with its application to immigration cases in the Special Immigration Appeals Commission and to control orders—and TPIMs, when they are introduced. I caution the Minister, as we will increasingly need clarity on the recall of convicted terrorists who are out of prison on licence. I want to emphasise the importance of that. It is already an issue in Northern Ireland, and it will become increasingly important across the rest of the UK. When intelligence raises concerns about the continued involvement in terrorism of someone who has served their sentence and is now out in the community on licence, although that intelligence might not be able to be used further to convict that individual, it must be possible to use it to ensure that they go back into prison and continue their sentence so that the public are protected. That is another important test that the Minister will need to set himself when he comes up with the ultimate solution to the issues raised in the Green Paper.
Finally, I warmly welcome what the Green Paper has to say about the future role and remit of the Committee. I am not personally persuaded by the argument put forward by my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) that the Chair of the Committee should always be from the Opposition party, and there was a good exchange involving my right hon. Friend the Member for Torfaen in which the arguments were advanced. It is important that the individual who is in the Chair of the Committee should be respected by not only its members but more widely across Parliament and the agencies. The Chair should have the expertise and leadership to create consensus, which is at the core of all this work. We have that in our current Chair, and whether or not a future Chair is from the Opposition or Government party, those are the key credentials that that individual must have.
I welcome the proposal that the Committee should be a Committee of Parliament, with all the safeguards that have been discussed. There should be a limited number of public sessions, which would help to explain more about the importance of the work of the intelligence and security agencies as well as that of the Committee. The remit of the Committee should run across not only policy, resources and administration, but all the work of the agencies. That already happens, and we need to ensure that it is formalised for the future.
It is also important that the Committee can not only request information but require it. As we make that move, it will place greater obligations on the Committee to ensure that it gets the information and that it knows that it has it, as well as that there is nothing missing. That means that we will need a deeper investigative capacity in the Committee. The agencies should ensure in every case that we get all the information that has been requested the first time rather than the second or third time.
Speaking personally, my first year as a member of the Committee has been fascinating and very enjoyable. I certainly look forward to the year ahead and the many challenges that lie in it. There will certainly be no let-up in those challenges, particularly with TPIMs coming into operation and the Olympic games coming to our capital city.
Richard Ottaway (Croydon South) (Con)
I apologise to the House for my late arrival and for missing the opening speeches, but the Foreign Affairs Committee has been sitting tonight. The President of Turkey is in town on a state visit and the Turkish Foreign Minister and Baroness Cathy Ashton, the High Representative of the EU, have given evidence to us.
It is a pleasure to follow the right hon. Member for Wythenshawe and Sale East (Paul Goggins), who is one of the new members of the Committee. I had the privilege of serving on the Committee from 2005 to 2010 and I found it to be one of the most rewarding experiences of my parliamentary life. He is quite right that Northern Ireland has moved up the agenda in recent years and I agree with virtually every point he made in his speech.
As this is the first debate on such matters in this Parliament, may I take the opportunity to pay tribute to the staff of the ISC, who are of the highest possible calibre? There are not enough of them, but that is not their fault. I also pay tribute to the agencies for their hard work and the way in which they protect the freedoms that we all value. The Foreign Secretary rightly praised them in his speech last Wednesday and we can all join him in his praise.
I also want to thank the three Chairmen I served under during those five years. Although it is regrettable that there were three, they all discharged their responsibilities with diligence and enthusiasm and were all of a very high calibre. I hope that my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind) is the only Chairman we have in this Parliament, as a degree of continuity is essential.
This is the first time we have looked at the report from the outside, so to speak, and one change I have noted—I do not know whether it is my imagination—is that there seem to be fewer redactions than in the past, which we recommended in the previous Parliament. We wanted reports to flow better, and I think that has been achieved.
I share the concern about the drop in funding—a 10% cut would concern anybody. The agencies do not seem to be alarmed, but a 10% cut in staff at the Secret Intelligence Service would certainly alarm me.
We host the Olympic games next year and I see that the agencies feel they are well placed to manage risks. However, that sits a bit awkwardly with the revelations in the past couple of weeks, after the report was published, that a review of security is under way.
I agree with the Committee’s conclusions about cyber-security. The national security strategy puts cyber-security as a tier 1 risk, but under the present strategy an uprising in north Africa is a tier 3 risk, so I do not know how much weight one can put on these things. At the moment, we just take the world as we find it and try to address things.
The Committee has noted that the Foreign Affairs Committee managed to get some of the World Service cuts reversed and would like to see the same happen with BBC Monitoring. I completely agree with that but I point out to members of the Intelligence and Security Committee who are present that the Foreign Affairs Committee’s recommendation was initially rejected and that it took a debate under the Backbench Business Committee procedure to raise it again before the Government took that on board. We have seen the growing influence of the Backbench Business Committee, and I do not know whether the ISC wants to get down to that level—get deep down and dirty, as it were—but it may be something it has to do.
I also welcome the conclusions of the coroner who said, in relation to the report arising out of 7/7, that the ISC’s conclusions were “detailed and thorough”. The coroner also made some interesting recommendations about the use of photographs. I note that the Committee found that any discrepancies would not have changed its conclusions. That shows the calibre of the work being carried out by the ISC—if the coroner can describe the work as “detailed and thorough” and it can be said that conclusions would not have been affected. That is an important point to make in relation to those who were so critical of the reports when they came out.
Dr Julian Lewis
I am listening to my hon. Friend’s speech with great attention and I think that another word of praise could be said for the services themselves in that context. In the past, when they have found that they have inadvertently overlooked some piece of information, in providing that information to the ISC, they have not hesitated to own up to that fact even if it opened them up to criticism. It is incumbent on us to encourage them to do that and not to be deterred from doing it because it is a slight blot on their record when they do not get things right first time.
Richard Ottaway
I completely agree, and I have always been hugely impressed by the vast quantity of information. When there was just one needle in the haystack, they might not have found it the first time around but they did find it the second time around and quite rightly, as my hon. Friend says, produced it for the Committee.
On the Green Paper, may I support the point that was made about the handling of sensitive material, which I gather was mentioned by the Chairman of the ISC in his opening speech? The recommendations in the Green Paper are sensible and offer the best way of dealing with sensitive material, but I do not think it has to be instead of using a special advocate. It could well be in addition to using a special advocate and using the presumptions set out in the Green Paper.
Let me address the role of the Committee and the way it operates. Parliamentary oversight of a secret service is always going to have limitations. I do not think there is a silver bullet, regardless of whether the Committee is a Committee of the House. Let me give an illustration. The major foreign policy objective of our engagement in Afghanistan is to deny al-Qaeda and international terrorists a base from which to carry out their operations. During the Foreign Affairs Committee’s report on Afghanistan, a number of witnesses told us that that is no longer a problem in Afghanistan, so at the Liaison Committee I asked the Prime Minister whether he was still receiving intelligence to that effect and he said he was. So, we are stuck with the same old problem that a major overseas deployment of the British Army and other armed services is based on intelligence that has not been subject to the scrutiny of the House. Those of us who were here at the time of the Iraq war know the problems that that can generate. This is an echo of the past. I have come up with a least-bad option and have written to the Chairman of the ISC to ask him to put it to the appropriate quarters when a suitable opportunity arrives and then to report to the House on the veracity of that information. I hope that, in the short term, that can be a way of dealing with the matter.
Sir Malcolm Rifkind
May I say that we have been in touch with the SIS and have asked it to respond on exactly the points that my hon. Friend is concerned about?
Richard Ottaway
I am delighted to hear that because that presents a channel—certainly in the current circumstances, until there is a change in the law—through which the House can make inquiries. However, it irritates the hell out of a lot of Members that we have to do that. The fact that the ISC is not a Committee of the House has long been a bugbear. I remember debates in which Andrew MacKinlay used to go on and on about this and challenge the legitimacy of the ISC. We all love him deeply, but I think it is time to move on. It is wrong that the ISC has oversight of the Cabinet Office, which is the Department that administers the ISC. Those who are critical see the Committee as being somehow made up of Government lackeys, but that is an insult to the members of the Committee. Those who have served on the Committee know that we behave as though we were on a Select Committee; indeed, there is far less partisan behaviour on the ISC than on any other Committee I have served on. This issue can now be addressed.
We have to accept that classified information can be handled only by those who are subject to the Official Secrets Act. If one accepts that principle, it does not make much difference whether the Committee is a Committee of the House or not, but there is a good case for it becoming a Committee of the House if only to remove the suspicion that has prevailed over the years. In making the move, the devil will be in the detail. There are a number of issues to address, although I will not go into the detail now, such as the question of appointments and the fact that the Official Secrets Act does not fit easily with freedom of speech.
I think it would be sensible for the Committee to have powers to call for information that could be withheld only by the Secretary of State, rather than what happens currently. When I was on the Committee, the question “Have we seen everything?” was always at the back of my mind. It took two reports on the 7/7 bombings for us to satisfy ourselves that we had done everything. The fact that there was a second report illustrated that we had not seen everything the first time around. Another problem to address is how redactions will be dealt with by a Committee of the House, as the Government will not be able to threaten a veto on publication. Obviously, the report will be to the House, but what will it report? It is no secret that some evidence submissions to the Government never saw the light of day in the previous Parliament. How would that be treated if the Committee were to become a Committee of the House?
This issue is a minefield, but the Government have found a way through it in their Green Paper and I support them. It is very hard to have democratic oversight of a secret service, but I think we are on the right track.
Mr David Winnick (Walsall North) (Lab)
I shall follow previous speakers to some extent, particularly the latter remarks of the Chair of the Foreign Affairs Committee, the hon. Member for Croydon South (Richard Ottaway). I see this as a continuation of the debate about the parliamentary accountability of the security services. Over a number of years I argued, with other Members—Labour Members—for adequate parliamentary scrutiny of the services involved in security. When I was looking up previous debates on the subject, I noted that 23 years ago, almost to the day, I argued that such scrutiny was important, and that it was therefore necessary to provide the mechanism for Members of Parliament to look into what the security services were doing.
Before the Intelligence Services Act 1994, which, as we know, established the Intelligence and Security Committee, a leading historian, Sir Michael Howard, observed in 1986:
“So far as official government policy is concerned . . . enemy agents are found under gooseberry bushes and intelligence is brought by the storks.”
In other words, children, Parliament and the public should not meddle in what were considered to be very adult matters.
At least we have a consensus that we need to move on from the limited parliamentary machinery that was established at the time. I welcome the fact that the Committee is in favour, as the Chair said and as the report makes clear, of expanding the role of the ISC. The Green Paper makes the same point.
I note that in its recommendations the Committee does not suggest public evidence, but the Green Paper does. I see no reason why such evidence should not, in certain circumstances, be given in public. If some members of the Committee immediately say, “Much of what we do can’t be revealed in public; it is confidential—classified”, I agree. When I spoke in 2008 and tabled an amendment, which I later withdrew, about holding public sessions, the then Foreign Secretary accepted that there was scope for holding some sessions in public and wanted to make progress on that. It was not made then, but I hope it will be now.
The then Foreign Secretary emphasised, as one would expect, the need to protect national security. Let me be clear: public sessions, yes, but most of the evidence and most of the Committee’s work would be in private. There would be limited scope, as I see it and as the Green Paper recognises, for public sessions.
In the past the heads of the two main security services, MI5 and MI6, were not mentioned, as though they and the organisations did not exist. The difference is that now we have become used to the head of MI5—the current head and his predecessors—making public speeches. There is nothing novel about that. It does not necessarily get great news coverage because, as I said, it has become quite common. Last October for the first time the head of MI6 gave a public speech. Parliamentary democracy survived. The intelligence services survived. Presumably, as in the case of MI5, the head of MI6 and his successors will continue to make public speeches, where appropriate. It is true, of course, that in giving such a speech, the head of MI6 was not giving evidence and being asked questions by Members of Parliament. That, I hope, will be brought about.
The Chair of the Home Affairs Committee made the point that when, from time to time, we have sessions with MI5—he mentioned MI5, so I will mention it as well—we are told that if we want to have such briefings, which obviously are private and remain so, we should go over to Millbank. I do not see any reason why we should do that any longer. If it continues, I for one, as a member of the Home Affairs Committee, would be most reluctant to do so. It seems to me that if MI5 is going to give briefings on a confidential basis, the director general should come to the House of Commons, not the other way round. It is not a major point, but it asserts the supremacy of Parliament.
My right hon. Friend the Member for Torfaen (Paul Murphy), a former Chair of the ISC, and a very good Chair, as is the present one, spoke about Members. I hope all Members of the House are reliable and can be given information on a confidential basis. I am not putting myself forward as a candidate for membership as I do not particularly want to join the Committee. If it was said in the past—not, I hope, in the present Parliament—that there are some rogue elements among Members, the same applies to the Security Service. Peter Wright and other elements, a small minority of the Security Service, apparently believed that Harold Wilson was an agent of Moscow and acted on the instructions of the Kremlin. Let us be clear that in the past there have been rogue elements—a very small minority—among Members of Parliament, as in the security services.
Mr George Howarth
Although what my hon. Friend says about some of the personalities involved is undoubtedly true, does he think it would give great cause for concern if there were rogue elements within the security services being overseen by rogue elements in the House of Commons?
Mr Winnick
Yes. I do not think it would help our national security. I hope that satisfies my right hon. Friend. I do not know what other answer I could give to that question.
In previous debates I have criticised the ISC. I do not believe, and I am hardly alone in this, that it has been robust enough about the allegations of complicity in torture. The present Chair of the Committee said that there is no allegation whatsoever that British security officials have in any way taken part in torture. I accept that entirely. I said in the previous debate that there is not the slightest evidence that such torture has been used by British security services, but clearly the allegation, which is a very serious allegation, is complicity in torture. In respect of what has been happening abroad—the water-boarding, 160 times in one instance, carried out by the United States on an individual, Guantanamo remaining opening, the practices that went on there, the Pakistan security service and so on—the allegation is that British security officials knew what was happening and took no action. That is an extremely serious allegation. Peter Gibson’s inquiry is therefore to be welcomed. I am not sure whether the inquiry is already under way or when it is likely to conclude and publish its report, but perhaps the Minister will clarify that when responding to the debate.
The question is whether the ISC was sufficiently robust when looking at the matter. In my view it was not. The Joint Committee on Human Rights, in a report produced last year, was critical of the ISC in such matters and expressed concern about the adequacy of the parliamentary mechanism for oversight of the intelligence and security services. I hope that there will be a different approach in future. It is very important that the ISC does not give the impression that it is simply the voice of the security services or that it is reluctant to criticise, because if that was its attitude it would not be doing its proper job. Unlike some Members, I have reservations about relevant sensitive material not being disclosed in court, and I will be very surprised if that is not the subject of further debate in the House.
In conclusion, I in no way underestimate the acute and continuing terrorist danger to our country. Sometimes critics such as me are accused of underestimating, not recognising or playing down, the terrorist danger, but I certainly do not underestimate the danger, and I take the point as well about republican dissidents in Northern Ireland. Even if 7/7 and what was attempted a fortnight later had not happened, I would recognise first and foremost that this country faces an acute danger from Islamists who clearly believe that murdering as many people as possible is the way to paradise. Hon. Members have today put various views and arguments on how we should deal with the terrorist danger, and that debate will continue for some time. However, the greater the danger and the greater the role of the security services in trying to protect our country from further atrocities and mass murder, the greater the need for effective parliamentary scrutiny of those involved. It is absolutely essential that the changes proposed by the Committee and set out in the Green Paper are implemented in the near future.
Sir Menzies Campbell (North East Fife) (LD)
I should begin with an apology because it has been my misfortune to miss a large part of the debate owing to a prior commitment, which was on behalf of Parliament but outside the House. However, I have had the opportunity to listen to the debate and hear some very fine and perceptive speeches. I hope that I may be excused for singling out the right hon. Member for Torfaen (Paul Murphy), who made a very wise contribution. I was also pleased to hear the right hon. Member for Wythenshawe and Sale East (Paul Goggins), with whom I serve on the Committee, because his four years in the Northern Ireland Office undoubtedly qualify him to speak with common sense and great knowledge of the problems Northern Ireland presents, not least in recent times. The right hon. Gentleman referred to the Chair. I think that the Chair should be the best person for the job because any kind of preference, however well intentioned, could stand in the way of the Committee’s efficient working.
As for what the hon. Member for Walsall North (Mr Winnick) said, or at least implied, anyone who doubts the independence of the Committee over the years should come to the office and look at the photographs on the wall of the people who have constituted the Committee over 20 odd years. He will not find one of them, man or woman, who could be described in any way as less than fully independent. My experience as a relatively new member led me to believe from the very beginning that the quality I had to demonstrate most of all was independence.
Despite the independence of those who have served on the Committee, it is interesting to note the extent to which its role has been misunderstood, and often in circles where one would have hoped that its role would be much better appreciated. That is one of the most compelling arguments for the changes in the Committee that the Committee itself has recommended and that now form part of the Green Paper.
Mr Winnick
When I made my criticism of the Committee, I cited what the Joint Committee on Human Rights reported last year—that the Committee had not been sufficiently robust in dealing with the allegations of complicity in torture.
Sir Menzies Campbell
That is a matter of judgment. Members of the Committee sign the Official Secrets Act and are subject to constraints when it comes to any criticism directed at them either collectively or individually. Based on my experience, however, I have never seen any action—or lack of action—on the part of the Committee which suggested a lack of independence of thought.
Sir Menzies Campbell
I see members of the Committee, both past and present, nodding in agreement.
I talked about independence a moment or two ago, but two other elements are important to the Committee’s membership: experience and judgment. The assessment of these is of enormous significance and importance, and, given that the ultimate responsibility for security in this country rests with the Prime Minister, the Prime Minister ought to play a significant part in the formation of the Committee. We can argue about whether he should play a part after or in advance of an election, but that is a detail for another day. I am in no doubt about the principle, however, that as the Prime Minister answers to the nation—to the country—for the security of the country, in this matter at least he ought to have a determining role.
One other thing that has been brought rather remarkably to my attention is that the success of the three agencies depends on their co-operation. Those with longer—or perhaps not that much longer—memories than I will remember that there have been occasions in the not-so-distant past when the agencies have to some extent seemed at odds, when there has been a certain amount of competition and when they have found it difficult to share common objectives and, indeed, common information.
The greater effectiveness of the services collectively has come about because of increasing co-operation. In the four years or so that I have been a member of the Committee, I have seen that co-operation grow and blossom. Co-operation is necessary because no one agency can hope to be the fount of all intelligence wisdom any more than one country can. That is why our relations with our allies are of very considerable significance, and why the debate and, indeed, controversy about the control principle have become so salient.
I echo what others have said. When we last went to the United States, there was strong anecdotal evidence from people in positions of authority and responsibility that their anxiety about the control principle, or the lack of its application, might—if it had not already—inhibit the volume and quality of intelligence that they were willing to share.
If someone has that anxiety and concern, they have a simple way of dealing with it: they just stop giving significant information. The problem is that if ours is the country expecting to receive information of that quality, we have no way of knowing that they have stopped. The supplier can simply turn off the tap, and we have no way of knowing whether what we still receive is of quality or, indeed, the sort of worth that the arrangements between our closest allies have often provided.
It has been said—it is an entirely logical position to take—that if there is to be protection of information provided to us under the control principle, that enhances the argument for scrutiny at the instance of the Committee of the services. I certainly agree with that principle. That is why I hope that I am in the vanguard of those who support the proposal that the Committee become a Committee of Parliament, perhaps selected using the same method as that used by the Standards and Privileges Committee. However, as I have said, an important role and responsibility should rest with the Prime Minister.
Like some more long-standing Members, I remember the debates that surrounded the creation of the Intelligence and Security Committee and the atmosphere in which it was launched, which was very different from that now surrounding the Committee’s activities. Although I was not a member of the Committee at the time of its inception, I imagine that the atmosphere was also very different then between the Committee and the services. I do not doubt for a moment that the services were perhaps suspicious but certainly apprehensive about the extent to which the Committee might inhibit or create some kind of obstacle to their activities.
For that reason, we are entitled not only to change the form of the Committee but certainly to increase its powers. That is why the recommendation that we be able to “require” information rather than request it seems an essential part of the change that the Green Paper envisages. However, as others have said, the Committee staff is very modest in number. If the Committee is to fulfil this wider remit, it must have many more resources; otherwise it will have greater responsibility but less capability. That would be bound to reduce not only the quantity but the quality of scrutiny.
I am amused by the suggestion that rogue elements of Parliament might be keeping tabs on rogue members of the security services. It occurred to me that perhaps the best way to keep tabs on rogue elements of Parliament would be to employ the services of rogue elements of the security services. The latter proposition may prove more powerful than the first.
This is an annual debate of great importance. It is true that the quality of the Committee’s work depends to a large extent on the quality of the work done by its staff. That in turn depends on the quality of the activities carried out by those who work for the agencies. My experience of these people is that they are professional, unassuming and that they essentially live in the shade. There is no glory attached to what they do and there is hardly ever any public recognition. It is not the most generously remunerated occupation and it necessarily imposes considerable restrictions on personal life, on the ability to live in a normal way and even sometimes on someone being able to say what their occupation is. These are people of enormous quality. If one were looking for a fictional comparison, which is always dangerous, it is rather less like Ian Fleming and rather more like John le Carré.
The right hon. Member for Wythenshawe and Sale East very properly paid tribute to the quality of the members of the agencies, and I would most certainly like to do so too. I also pay tribute to the leadership in the agencies, because that has not been expressly referred to. Daily challenges have to be faced. One substantial challenge coming down the track is the Olympic games. I am not an entirely impartial observer of that because I attend the Olympic Board under the chairmanship of the Secretary of State for Culture, Olympics, Media and Sport and, indeed, the Mayor. The Olympics will be a very formidable challenge.
Let me say, in parenthesis, that everyone with any interest in sport remembers the horrific outrage of Munich. If anything of that kind were to happen in any other games, it would inevitably be definitive. Therefore, in the next 12 months or so these unassuming professional people will, perhaps from a domestic point of view, face a more severe challenge than they have ever faced before. I am confident that they will meet that challenge.
Mr George Howarth (Knowsley) (Lab)
It is a great pleasure to follow the right hon. and learned Member for North East Fife (Sir Menzies Campbell), who has demonstrated the qualities that we have all come to respect in him: first, he has good judgment; and secondly, he is unerringly fair in the judgments that he exercises. It is a pleasure to serve with him. I think we are now the two old lags of the Committee.
Mr Howarth
In my case, yes. [Interruption.] We are both certainly young in our outlook.
I should like to echo the praise that the right hon. and learned Gentleman gave to the agencies and to the staff of the ISC, who are very open with us, very helpful, and enable us to do the job that we have been appointed to do. When we go to visit the agencies—sometimes we do have to make visits, like other Committees—or when they come to give evidence, those events are invariably well organised and well informed. Our most recent visit, which was to GCHQ, was no exception, and I learned a lot from it. It was well structured and well organised, and it is important to acknowledge that.
Before I move on to the three key issues that I want to cover, it is important to recognise that the impartiality, or independence, of the Committee is paramount and, in my experience, can be relied on. Michael Mates, a former member of the Committee who, until he retired at the last election, served on it from the outset, used to say that when the Committee meets, our political affiliations are left at the door. In my experience, that is the exactly the case. We are seeking not to score party political points, but to get at the truth and carry out the job of scrutinising the work of the agencies concerned.
That leads me on to my first point, which is about the reform of the Committee. A great deal has been said about that already, and I will not repeat it all, but I want to make two observations. First, I agree with the right hon. and learned Member for North East Fife and my right hon. Friend the Member for Torfaen (Paul Murphy) in that I am unconcerned about whether the Chairman of the Committee is a member of the governing party or of the Opposition party. I have served under four Chairmen—their downfall, in three cases, had nothing whatsoever to do with me—and I have found them all to be extremely capable and experienced. Whatever their political affiliation was, it never influenced how the Committee was conducted. The most important thing is that we get the right man or woman in the job. I hope, like the hon. Member for Croydon South (Richard Ottaway), that we might have some continuity with the current Chairman during the course of this Parliament, because that is helpful.
Secondly, I support the reforms of the Committee set out in the Green Paper and covered in our report. Let us be brutally frank: there are now two Prime Ministers who have wanted reforms in this direction, and it would be a very foolish Committee that did not notice that they were both from different parties and that perhaps the time for change had arrived. I therefore have no problem with the reforms.
However, we need to be careful about one thing. We should not set up the expectation that these reforms will make the whole operation of the services and everything that they do a matter of public knowledge. As the Chairman of the Committee said at the outset, there is information that we are party to that we can never make public because we sign the Official Secrets Act and, by and large, retain the trust of the agencies. That is why we sometimes, reluctantly, have to put redactions in our annual reports. Principled critics of the Committee criticise it because we have access to privileged and secret information. States will always have secrets, and necessarily so. We should not lead anybody to believe that everything that we know will be made public as a result of the reforms of the Committee. I know that nobody is claiming that and I do not mean this as a criticism of the Government or other Committee members. However, it is important, as the right hon. and learned Member for Kensington (Sir Malcolm Rifkind) made clear at the outset, that there will not be a free-for-all in relation to the information that the state has and what can be made public. The brutal truth is that a state secret that becomes public is no longer a state secret and is therefore useless.
My second point is about cyber-security. That issue has been covered extensively, but I want to cover it in a slightly different way. It is not a new issue. In June 2009, the Cabinet Office produced the “Cyber Security Strategy of the United Kingdom”, which rightly stated that it was an urgent, high-level issue that could not be ignored. More recently, in October 2010, the national security strategy cited
“Hostile attacks upon UK cyber space by other states and large scale cyber crime”
as a tier-one risk, as the right hon. and learned Member for Kensington has said. For several years, the importance of this issue has been acknowledged. However, for national security and diplomatic reasons, the UK has been coy about naming those responsible, at least until recently. I will say a little more about the recent developments where those responsible have been named in a moment.
First, I want to use this opportunity to emphasise how important this issue is for our country. Our annual report makes it clear that we generally approve of the cross-cutting approach that the Government are taking on cyber-security. It states rightly that the Government’s decision to move ministerial responsibility for the issue to the Cabinet Office, which is better placed to deal with such issues across Departments, is appropriate. That was a good move on the part of the Government.
It is also important that we seek better international cyber-security controls against cyber-attacks. I do not underestimate the difficulties that that presents. I am well aware that the Foreign Secretary is on the case and is raising this issue in international forums, no doubt discretely. I believe that we need to develop international protocols and controls over the coming years to make it easier to get control over what is going on across the world. I do not make that point in a spirit of criticism, I merely say that the matter has to be given some prominence. I hope that the Under-Secretary of State for the Home Department, the hon. Member for Old Bexley and Sidcup (James Brokenshire), might be able to support that point of view when he winds up the debate. It is in the interests of our national security, and of businesses in the UK, that we take such an approach.
I wish to make one further point on cyber-security that is perhaps less driven by consensus than those that I have already made. It concerns the role and status of the Prime Minister’s official representative to business on cyber-security, Baroness Neville-Jones, who was of course Security Minister until May. Over recent years, our Committee has struggled with both the current and previous Government on whether those primarily responsible for attacks could be named in our reports. I am sure the right hon. and learned Member for North East Fife would bear me out on that. Up until this year, we were losing that struggle. However, there has been movement. In his recent signed article in The Times, the head of GCHQ, Mr Iain Lobban, flagged up the importance of the issue, but sensibly declined to say which countries were responsible.
In our report, published in July, we went further, stating:
“The greatest threat of electronic attack continues to be posed by State actors and, of those, Russia and China are”
suspected of carrying out “the majority of attacks.” That form of words, carefully nuanced and the product of thorough negotiations between the services, the Government and our Committee, was the best way of putting it. Certainly the Government and the agencies concerned seemed to believe that that was the right way to describe the situation. However, when Baroness Neville-Jones was pressed in an interview on Radio 4’s “The World at One” about whether China and Russia were involved in such attacks, she responded, “They certainly are”. That is rather further than anybody else has gone.
The reason for highlighting that is straightforward. Either it is right to be circumspect about naming the states concerned, or it is not. It is not clear to me whether Baroness Neville-Jones speaks for the Government or whether she is, as it were, a free spirit in these matters. We need to know with what authority she speaks, and to what extent anything she says can be attributed to the Government or to the agencies concerned. Perhaps the Minister might be able to say a little about the noble Lady’s position, and what her status and authority is.
I turn to the use of intelligence material as evidence. The issue has arisen principally from the Binyam Mohamed case, and the Government have brought forward a way of dealing with it that may or may not work. I agree with the points made in our annual report about the matter, but what concerns me is that, no matter how Parliament may express itself on the issue, what guidance is given to the judiciary or what clauses are put in Bills, at the end of the day judges who will handle such cases will have to make a choice between, on the one hand, what is in the national interest and important for national security, and on the other hand the conduct of the court and the particular trial that is taking place. My fear is that the conduct of the trial and the proceedings of the court will, in some cases, as in the Binyam Mohamed case, take precedence over what Parliament intended, anything in any particular Act of Parliament, and the national interest. This is not an attack on judges. I have tried to think of this by asking myself, “What if I were sitting in that chair and had to make that choice,” but they might ask, “What am I responsible for?” The answer is that they are responsible for the good conduct of that trial.
Why is that important? Several hon. Members, including the right hon. and learned Member for Kensington, who chairs the Committee, have made the point that it is hugely important that the co-operation we have with foreign Governments on intelligence remains something on which we can rely. In turn, it is vital that those Governments feel that intelligence that is passed to the UK will not be made public in court proceedings. I would go slightly further than the right hon. and learned Member for North East Fife. I believe that the amount and quality of intelligence that we have received from the US since the Binyam Mohamed case has declined. As the right hon. and learned Gentleman said, that is a difficult case to prove, and I cannot within the confines of this debate give chapter and verse on it—certain issues of which I am aware cannot be discussed in public—but most well informed people who have made a judgment on the matter believe that co-operation between the US and the UK has declined.
That is important not from the point of view of the volume of information that we receive, but because incidents have been prevented on the basis of intelligence co-operation not only with the US, but with other close allies. The reputation of the UK could become such that foreign agencies and Governments feel they cannot share information with us because it will end up being broadcast all over the place in a court case. As has already been said, there is evidence that fishing trips are being made in the British courts to support cases elsewhere.
I am not necessarily saying that the Government have got it wrong. My point is that we need to think long and hard about how we will handle this, not because of any political matter that might attach itself to the problem, and not even because of day-to-day political relationships with other Governments, but because getting as much information as we can is in our national interest and the interests of the security of our people. I hope that will be addressed fully and sustainably as things develop and in legislation. It should be addressed in a way that does not leave the courts feeling that they can do what they like regardless.
As other hon. Members have said, it is an enormous privilege to be a member of the Intelligence and Security Committee—it is now six years since I was fortunate to be appointed to it. The Committee is sometimes criticised not for what we do, but for what we cannot say. We should be careful in how we deal with that. Hopefully, we are all big enough and experienced enough to know that we sometimes have to take a hit as a Committee and as individuals because some sections of the press and the media want to know what we know and we cannot tell them, but at the end of the day, being able properly to oversee the activities of the agencies and knowing why the public need to be protected overrides our concerns about any criticism we might get in the media.
Hazel Blears (Salford and Eccles) (Lab)
It is a great pleasure to follow my right hon. Friend the Member for Knowsley (Mr Howarth), who has immense experience in intelligence and security matters.
I have only been a Committee member since the beginning of this Parliament, and this is the first annual report with which I have been involved. I want to put on the record my thanks to former members, including my right hon. Friend the Member for Torfaen (Paul Murphy), who have pursued challenging issues with great diligence, tenacity and, as my right hon. Friend the Member for Knowsley has said, often while subject to criticism simply because the Committee was unable to share with the world at large the information on which it had based its judgments. In some ways, being on the Committee is a great honour, but in others it is a thankless task. Nevertheless, every member, irrespective of their political party, has done their job with tremendous pride and great results.
I also praise the leadership of our Chair, the right hon. and learned Member for Kensington (Sir Malcolm Rifkind). Since becoming a Committee member, I have noticed not only his ability to get the best out of everybody, which is the most important characteristic of any Committee Chair, but his personal focus, energy and determination to make progress. We would not have the proposals in the Green Paper on strengthening parliamentary oversight, or at least they would not be so good, had it not been for his personal commitment, so he can rest assured and sleep easy in his bed tonight—I am not after his job and I am more than content for him to carry on.
The Committee operates in a spirit of constructive consensus. There is a general sense of personal commitment from all its members—for example, we meet every week, which many members of the public do not realise. I have benefited from the experience of members who have served previously. We have members with extremely diverse experience—I have thoroughly enjoyed the contribution by the hon. Member for New Forest East (Dr Lewis), who, as I said in an intervention, had tremendous experience in these matters even before he came to the House. Such experience informs the Committee’s work. Furthermore, we have the undoubted wisdom of our two distinguished Members of the House of Lords, who, in their own ways, make a fantastic contribution.
I want to place on the record—this sounds a bit like an obituary—the work of our fantastic secretariat, which no one has mentioned yet. Its staff are few in number, which is a point I shall come to later, but their breadth of knowledge, their institutional memory and their tenacity in following the threads of an inquiry are extremely impressive and have proved invaluable to the Committee in pursuing our inquiries this year.
We are charged by statute with looking at the administration, expenditure and policy of the services, and much of our work is devoted to that, because we have to ensure that the services are operating properly, acting within the legal framework and seeking value for money. Several hon. Members tonight have talked about the tight budget settlement. It is a fair settlement, given the general economic situation, but nevertheless we must keep an eye on such pressures on the services.
I have been very impressed by the agencies’ openness and frankness with the Committee—as my right hon. Friend the Member for Torfaen has said, that is about trust. While we have that trust relationship, they are amazingly open with the Committee, not only on policy and administration matters, but, as has been mentioned, on operational matters. That is an important part of what the Committee does, because we cannot properly consider policy in isolation from the operations governed by that policy. If, therefore, the Committee is to do the job that it is charged with doing, it needs to look at those operations, albeit retrospectively, as hon. Members have said.
Recently, the agencies have given access to our investigator in a way that has been really positive. Owing to time restraints, the Committee inevitably cannot delve into certain issues in order to get to the detail, and our investigator has done some excellent reports on vetting and on the use of consultants and contractors. That is one reason why the proposal to give the Committee more investigative resources is so important. If we are to pursue a wider range of inquiries, we need the ability to do that to a high level of competence.
We have also visited the agencies, using the opportunity to talk not only with the heads of the services and senior officials, but with those operating at the front line on some of the most challenging issues, be they counter-terrorism here in Britain, support for military operations overseas or the development of technology to combat the cyber-threat. Like other members of the Committee, I have been hugely encouraged by the professionalism and commitment of those people in working to keep our country safe, often at great personal risk. Many are young people, and they are enthusiastic and amazingly intelligent. However, I am also heartened by the fact that they have such a well developed awareness that they have to operate within a legal and human rights framework that supports our democratic values both here and abroad. Some people think that there might be an almost cavalier attitude towards human rights in the agencies. However, from my discussions with the people involved in operational matters—the people charged with doing this work—I can tell the House that it is hugely refreshing to see that they are almost self-policing when it comes to the legal framework within which they operate. That should give us all some security and assurance.
I pay tribute to those in the services who have made the ultimate sacrifice. There are people in our services, whether on military operations abroad or in hostile circumstances, who have died while on duty serving the country. They cannot be acknowledged publicly—the services do their best, in what they can do, to acknowledge them privately—but it is important that we should pay tribute to those who have given their lives in the service of our country. We owe them a great debt.
In the world of secret intelligence, when people are operating in the most dangerous and hostile areas of the world, difficult decisions will always need to be taken, which is why the work of the ISC in scrutinising how the agencies operate is vital if we are to retain public trust in the agencies’ work. The most controversial issues arise when difficult decisions have to be made. It is essential that, while protecting our secrets, our agents and our techniques, we can assure the public that our intelligence agencies operate within the rule of law. The ISC has an important responsibility not only to provide scrutiny, but to perform the essential role of reassuring the public.
That is why we have begun to discuss having an occasional public evidence session. Clearly that cannot apply to the majority of our business, which has to be in secret because we must have that confidential relationship, but there is more to be done. In an age when information is everywhere and when the public are more sceptical about the work of authority in general, there is more to be done to reassure the public that the services are operating within the framework of the rule of law and within a robust human rights framework, too. That is why it is important that effective, independent and properly resourced oversight is available to us.
We have had lots of speeches this evening and, between us, members of the Committee have managed to cover most of the ground, as ever. However, I want to raise a couple of things in the annual report with the Minister and ask him some questions that he might be able to answer in his winding-up speech. He will know that I have long been concerned about the security threat at the Olympics. That is not a partisan issue, because we are all worried about it. We need to ensure that we do everything that we can to protect the public at a time of heightened risk. We have been told that we need 100 extra agents and that it takes a year to recruit and train them. I would welcome an assurance that by the time we get to the Olympic games we will have in place the resources that were promised and that we need to provide that reassurance.
I have to say to the Minister that the Government response to the issues that we raised about the Olympics in our annual report is a little obtuse. It says that the service will be able to
“build further capacity and strengthen the resilience of its processes,”
and that its response is
“designed to be scalable…to maximise agility in meeting surge requirements, while continuing to respond to business-as-usual demands”.
That sounds to me like something out of a corporate annual business report, so I would welcome a little more clarity—perhaps in plain English—about what the pressures are, what resources are in place and why the Government are reassured that the Security Service is able to manage at what will undoubtedly be a time of increased threat.
I have raised TPIMs many times with the Minister, as has my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins). I thought we had a very good Committee stage on the Terrorism Prevention and Investigation Measures Bill, with many more Members contributing than is usually the case, and the Minister was generous in dealing with the issues that we raised. I am afraid, however, that although he was generous, he has not managed entirely to reassure me. I still honestly believe that it is common sense simply to delay the implementation of the transition from control orders to TPIMs until the Olympic games have concluded. It is not a matter of the Government losing faith; it is not about backtracking; and it is not about moving away from the original policy, with which, incidentally, as the Minister knows, I do not agree. He seems intent on this policy, but to cope with the extra threat without adding extreme layers of risk into what is already a highly charged situation, he could simply say that the Bill will not come into force until October next year. That would at least get us past the Olympics. If he is not prepared to do that, will he tell us in his winding-up speech why he is not prepared to take that straightforward step?
Another issue was discussed by the hon. Member for New Forest East, but not by other hon. Members. This is the issue of the Prevent review and the role of the Research, Information and Communications Unit, which is dealt with on pages 44 and 45 of our report. The Prevent review was supposed to be published in January this year, but it was not actually published until July. That was too late for us to be able to examine its impact, so it is an issue to which the Committee will return. The Home Secretary promised time for a parliamentary debate on the Prevent review, but it has not yet happened. Will the Minister tell us when that debate will take place?
The key issue is to separate Prevent work, by putting it in the Home Office, from the integration work in the Department for Communities and Local Government. The integration strategy—again, long promised—has not yet materialised. It has been trailed in the press today, and if the press reports are correct, one proposal of the Secretary of State for Communities and Local Government is to start a British curry college. I am not quite sure how that fits with an integration strategy, but I am ready to be convinced about the benefits of pakoras, onion bhajis and goodness knows what else! Levity aside, that integration strategy is absolutely key if we are to do the vital work of ensuring that young people feel very much part of British society, so that they cannot be groomed, radicalised and drawn into that world, which, unfortunately, has happened all too often in the past.
I tabled a series of parliamentary questions about the Prevent review, of which the Minister is aware, asking which groups the Government were going to work with, which previously funded groups will no longer be funded because they do not share our democratic values, how we will ensure that groups sign up to democratic values if we are going to work with them in future and what practical work will be done on the ground. I have to say with some regret to the Minister that the answers to my parliamentary questions were entirely unsatisfactory. I would go as far as to say, although not in an insulting way, that the answers were stonewalling. If the ISC occasionally cannot answer questions because of secrecy, the Minister seems to be rather expert at not answering my questions. I did not feel that the questions related to secret matters, so I ask the Minister to revisit my parliamentary questions and provide me with some answers.
The hon. Member for New Forest East talked about the significant budget for the Research, Information and Communications Unit, but we have no way of knowing whether it is appropriate, whether it helps to achieve the objectives that it should or whether further evaluation is necessary. I entirely accept that evaluation of Prevent, RICU, counter-radicalisation and counter-narrative is really difficult. I struggled with these issues when I was the Secretary of State with responsibility for this area of policy, but it is essential that we work on evaluation and know how effective we are at steering young people away from extremism. We must minimise the number of people who, unfortunately, are going to find themselves in this territory. There is nothing more pressing for our country. Heaven forbid that we should have another attack. I was a Minister at the time of 7/7. I feel a great personal responsibility on this agenda. Heaven forbid that another event happens because we have not done enough work to be able to identify people early, to steer them away from extremism, to give them a real sense of British identity and to be part of our community. That is why I press the Minister so heavily on these issues.
I think that the problem of detainees is one of the most significant with which we must deal. The Prime Minister has taken a number of actions: he has set up the Gibson inquiry; he has helped to secure a settlement in the Guantanamo Bay cases; he has issued consolidated guidance on the treatment of detainees; and he has drawn up the measures in the Green Paper. However, I feel that both public reassurance and the reputation and morale in the services are at stake.
Last week, in what I considered to be a groundbreaking speech on secret intelligence, the Foreign Secretary said that
“we also saw allegations of UK complicity in extraordinary rendition leading to torture. The very making of these allegations undermined Britain's standing in the world as a country that upholds international law and abhors torture. Torture is unacceptable in any circumstances. It is abhorrent, it is wrong, and Britain will never condone it.”
I think that every single Member in the House today would support that sentiment. The Foreign Secretary also said:
“As a nation we need to be an inspiring example of the values we hold dear and that we want to encourage others to take up.”
In the past—not when I was a member of it—the Committee has taken evidence about the treatment of detainees and allegations of complicity by our services in the maltreatment of detainees by foreign intelligence agencies. I believe that such matters corrode public trust and internal morale if they are allowed to endure, which is why I think it important for Sir Peter Gibson’s inquiry to be as open and transparent as possible—commensurate, of course, with the protection of our national security.
I want to hear from the Minister when we can get on with the inquiry. I know that there are problems involving police issues and witnesses, but delaying the start of the inquiry’s work and its reassurance of the public can only be damaging. I also know that some people are worried about the inquiry, because they want all the evidence to be published and to be open and transparent, which is a difficult issue. It is the same issue that arises in the justice and security Green Paper about how we should protect information from our allies when national security is at stake.
We are faced with an unenviable choice between completely open inquiries in which key material that would expose our secrets cannot be used and decisions must therefore be based on an incomplete understanding of the facts, and partly closed proceedings in which only members of the inquiry team, or a judge in a court case, have seen the secret material. Closed proceedings are, of course, unsatisfactory, but at least they ensure that decisions are based on all the relevant information. That is the dilemma that must be faced, and the choice that must be made. Do we want open proceedings in which judgments are made in ignorance of the facts, or are we prepared to allow limited, tightly controlled closed proceedings in which it is at least possible to obtain all the information before the person who makes the final judgment?
I do not think that that dilemma can be resolved to the absolute satisfaction of all parties, so compromises will be necessary. That is the real world with which must we deal in relation to security agencies, secret intelligence and the national security of our country. It is always a matter of balancing the risks and making difficult decisions. However, at least in a democracy such as ours, it will be for our elected Parliament to consider some of those matters in future legislation, when there will be the opportunity for a wide-ranging public debate.
In the case of al-Rawi in the Supreme Court, Lord Clarke said that he was not prepared to grant closed proceedings, and that those were matters properly for Parliament to resolve. We, too, need to deal with these issues. I want to hear from the Minister when we will have legislation if he proceeds with the proposals in the justice and security Green Paper. Will there be a separate Bill? Will it be a broad justice Bill? There is an urgent need, and an impetus, for such matters to be resolved.
We have heard a great deal this evening about the Binyam Mohamed case and the control principle. That ground is well established, but it is difficult territory. I commend the Government on the Green Paper, because it takes a great deal of courage to tackle such issues head on. Inevitably, some “voices off” will accuse the Government of being authoritarian and illiberal, while others will claim that they are not protecting information sufficiently to reassure our allies. It is a no-win situation, but at least the Government have gripped it. I merely wish to add my weight and to say, “If we are going to tackle this, let us get on with making it happen.”
We have a range of options. The option that the Government wish to pursue is that of closed proceedings. I well remember, as the Minister who dealt with the control orders legislation, how controversial closed proceedings and special advocates were at that time. That is a departure from our traditional legal system of open, transparent justice, where evidence is presented to the court, tested and cross-examined in front of a judge and a decision is then made. I do not think that we have found a better way of dealing with matters involving secret intelligence however, and although all of us would be reluctant to go down this path as it is not something we would want to do, I cannot see an alternative.
I ask the Minister to consider not only closed material proceedings, but the possibility of the presumption of exclusion in certain classes of cases, as proposed in the public interest immunity option, or the assertion of state secrets—again, that would involve a rebuttable presumption that could be put before the courts. In framing the legislation, it is important that the courts understand what the mischief is that we are trying to deal with, which is exactly what they will look at in respect of statutory interpretation.
I support all the Committee recommendations. I agree that we should look at operations retrospectively, as well as considering policy. The Home Secretary said that she is pondering whether the commissioner might look at the effectiveness of operational policy. My understanding is that the inspectors’ role is to look at compliance with policy and the law. Again, I ask the Minister to think very carefully about this, because the last thing we want is confusion between the role of parliamentary oversight in looking at operational policy and the role of independent oversight.
When I have visited the services and met the men and women—there are both men and women—working on our behalf, I am acutely conscious of the need to develop all our staff so they can achieve their potential. I believe that there are currently too few women at senior levels in our services. I have raised that with the agencies. I do not say that every woman is empathetic or a good listener, but women have skills that are vital to our intelligence services. I am the only woman currently serving on the ISC, and the Chair knows that I am pursuing these issues. It is important that we draw on every bit of talent, knowledge, potential and skill in our services, which includes men and women working together. I ask the Minister to reinforce that message.
I commend the report to the House.
Mr Tobias Ellwood (Bournemouth East) (Con)
It is a pleasure to follow the right hon. Member for Salford and Eccles (Hazel Blears). She speaks with compassion and conviction, and she articulates her points very well. She is an asset to the Committee, and it has also been a pleasure to work with her on other Committees.
As the final Back-Bench speaker, I should consider what points are left to be made in what has been a very informative debate. It is important that the British public and Parliament have confidence in the agencies’ ability to keep us safe, and to do so within the framework of the law and our democratic values. I therefore add my congratulations to the Committee and its Chairman on the work they do in helping to realise those objectives.
The Committee has now been in existence for 16 years, since the Intelligence Services Act 1994, and it is clear that greater transparency has been introduced year after year. The security services have, of course, been in existence for much longer than that, but it is also clear that the public remain largely unaware of what they really do. It has been left to romanticised fictional characters, from James Bond to George Smiley, to portray the role of our clandestine services, apart from when information has occasionally spilled out into the public domain, such as the revelations about the Cambridge spies and the break-up of the Soviet spy ring in the 1970s. Indeed, so well are our secrets kept that it was not until the right hon. Member for Blackburn (Mr Straw) became Home Secretary that he discovered the existence of his own MI5 file dating back to his days as a student radical. That shows how well our clandestine services can keep secrets.
Our modern-day service dates back to 1909, when it was called the Secret Service Bureau, but intelligence monitoring, collection and interception dates back far further—all the way back to the 15th century. Thomas Cromwell ran secret agents in Europe on behalf of Henry VIII and the famous Sir Francis Walsingham, private secretary to Elizabeth I, developed expertise in secret interception and maintained a network of more than 50 agents abroad. For the sake of completion, we must not forget the masters of intelligence gathering: those in the Whips Office. The party enforcers have long developed that dark art of intelligence gathering and monitoring, not to mention a range of creative punishments lest Members drift astray.
On a serious note, we live in turbulent times and there has been a focus on our secret intelligence services since 9/11. More demands have been placed on them, as our nation expects them to prevent attacks by recognising where they are coming from and intervening before they get out of hand. As I mentioned in an intervention, I believe that after 9/11 too much unchecked power fell into those hands, and the very standards that successive generations fought hard to create, defend and preserve slipped. As the Chairman of the Committee rightly pointed out, there is no criticism of the British intelligence services or their methods of gathering intelligence. We should be more focused on how we use that intelligence, how it was portrayed by the politicians and the consequences of the actions taken after that. Given Guantanamo Bay, rendition, water-boarding, the justification for the Iraq war, dodgy dossiers and so on, hon. Members will recognise that in the so-called “war on terror” we lost our way. I am very pleased that the Chilcot inquiry has finally got off the ground and will report soon. It will provide testament to what went wrong during the justification for going to war.
As a nation, we need to be an inspiring example of the values that we hold dear and that we must encourage others to stand up for. Once damaged, our moral authority in the eyes of the world is very difficult to replenish, so I am very pleased that this Government are overhauling how the security services do business, are held accountable and marshal their resources in a way that serves this country’s overall objectives. Three themes have emerged today. The first is the importance of the strategic defence and security review in providing that strategic direction, which, sadly, was absent for so long under the previous Government. The second is that new guidance is in place so that the courts can be used more appropriately and the Justice and Security Green Paper aims to strengthen our legal arrangements involving cases that require Security Service comment. The third is, as my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind) outlined passionately, the new era of openness and scrutiny that we now expect. I am pleased to see that powers will very much be coming to the Committee to allow it to continue that work. It seems strange that we can now talk about Sir John Sawers, the head of MI6, Iain Lobban, the director of GCHQ, and Jonathan Evans, the head of MI5. In the past, those names would have been limited to a letter or would not have been known by us at all.
In the remaining minutes, I wish to discuss cyber-security, which I mentioned in an intervention. As the report suggests, this is a completely new dimension, which we have yet to master. It is constantly evolving and is introducing a complexity to security matters that we have not been able to appreciate before. It is also fuelling an explosion of new connections between Governments, economies and citizens. The use of cyber-world is overwhelmingly positive, allowing the transfusion of ideas, thoughts, economies and so on, but it is also a double-edged sword—there is a negative aspect to it. Aspects of the Arab spring have been attributed to the way in which Facebook has been used to communicate in a way that had not been allowed in the past. That of course is very positive, but the internet has been harnessed by terrorists, criminals and, in some cases, states to disrupt and attack. The question I pose to the Minister, which my right hon. and learned Friend mentioned in relation to cyber-security, concerns the number of agencies that have taken an interest in cyber-security. I believe that my right hon. and learned Friend talked about there being 18 units in all. That of course is very positive, because it simply means that every agency, organisation and Department recognises the need to understand and become an expert in this realm. Are we at a point at which there is the co-ordination we require, as illustrated on page 56 of the report, which lists the number of organisations with cyber-security interests?
I also mentioned in my intervention the changes in our society. The generation growing up today is living in a very different world from the one in which I grew up. The computer I first came to terms with was the ZX81, which would probably be found in an antiques store or even a museum now. I hear some chuckles from Opposition Members, and they probably recognise that name. Nowadays, everybody has a computer or has a mobile phone or iPad on their person. We are entering the digital world of the future—it is already the world of today. The liberal way in which youngsters today exchange information quite freely means that we need to ask whether, when they graduate to adulthood and become responsible for credit cards and information in small, medium and large businesses, they will have the same level of caution as we apply in using such technology. We are cautious because we are uncertain of it, because of the generation of which we are part.
There is also a concern about whether small and medium-sized businesses will have the intuition to recognise the importance of cyber-security. There is a worry that the financial crisis will mean that the last thing on any small business’s mind is the consideration of cyber-security and protecting their digital information. Of course, when we talk about cyber-security we have to remember that it is not just about terrorism but about criminality, too.
The impact on our society of the internet and of the digital age is, I would argue, bigger than the invention of the wheel or more significant than the printing press, such is the effect on the world and our lives. If knowledge is power, the internet means power now has no boundaries. The ability to simplify our lives through online banking and shopping is positive, of course, but the internet can be terrifying because of the risk of identity theft or, indeed, sabotage, which could lead to disasters such as a head-on rail collision.
If the Cabinet Office leads on cyber-security, we must then ask whether it—or another Department—should lead on educating businesses and the nation. If not, which Department should do that? It needs to be a priority for the reasons I have outlined. We have an opportunity now to harness such work to our economic benefit. We have an aerospace industry that is primed and ready to harness that capability. Can we now be the world leaders in providing protection in cyber-technology? Some of the recognised companies that we are dealing with, such as IBM and so on, are international operations—they are not British—but companies such as BAE Systems Detica and Logica are UK companies and when I spoke to them before the debate it was clear that they were concerned about university training. When we compare the university courses on cyber-technology, we see that only 15% of the content is consistent. That means that people are not sure and the universities are not in agreement about what needs to be taught in the future. There is an opportunity for leverage there.
Finally, it is important to work with our allies, as the right hon. Member for Salford and Eccles stressed. The Foreign Secretary said last week:
“Intelligence…is like a jigsaw…we…rarely have all the pieces”.
The analysis of information and working with our partners enables us to piece together each snippet of information to create the fullest possible picture of the threats to our national security and to act against them. We cannot work in isolation on that; we must work with our allies, too. That means training our allies so that they can recognise and work to the same standards as we do, not just in the technology but in the moral standards I spoke about earlier. That allows us to develop links with parts of Governments in other countries and to build capacity and infrastructure support while strengthening our diplomatic and military relationships.
In conclusion, our security services have the skills to assimilate information beyond the reach of everyday diplomacy, filling in the blanks in our understanding of our enemies. So much of their work is unseen and therefore receives little praise. They are our early warning system against those who plot to sabotage us, steal from us or kill us. It is difficult to find a country where the clandestine community performs so well under such scrutiny within the confines of democratic process. By and large, we sleep safe at night, oblivious to the many threats we face as they are dealt with by the service we never see.
Diana Johnson (Kingston upon Hull North) (Lab)
I pay tribute to all those who work in the security and intelligence agencies for the important work they do in keeping us all safe. I also extend that tribute to the very important work that the Intelligence and Security Committee does in scrutinising those agencies. It is clear from this evening’s debate that the past and current members of the Committee have been very high calibre and senior parliamentarians. The right hon. and learned Member for North East Fife (Sir Menzies Campbell) said that they were fully independent and had experience and judgment, and that view was echoed by my right hon. Friends the Members for Knowsley (Mr Howarth) and for Salford and Eccles (Hazel Blears).
The report is excellent and we have had a very good debate on its contents. The current Chair of the Committee, the right hon. and learned Member for Kensington (Sir Malcolm Rifkind), set out the key issues in a very accessible but detailed way at the outset. I should like to pay special tribute to my right hon. Friend the Member for Torfaen (Paul Murphy), who made such a contribution to the development of the Committee’s work as its Chair. He let us into a secret this evening about the one vote that took place when he was chairing the Committee about which mode of transport the Committee should use on a visit. I am sure that does not offend against the Official Secrets Act.
The report covers the period from October 2010 to May 2011, and we have seen further developments since, including the Green Paper on justice and security. My hon. Friend the Member for Walsall North (Mr Winnick) made it clear that there had been a long fight to get the Committee established in the first place. It operates under the Intelligence Services Act 1994, so it is now 16 years old. The world has moved on considerably in those 16 years, but so has the Committee. The hon. Member for New Forest East (Dr Lewis) said that recognition of the need to make changes to the Committee was about formalising what it does already.
The right hon. and learned Member for Kensington talked about the radical modernisation of the Committee and mentioned public hearings. My right hon. Friend the Member for Salford and Eccles also commented on the need to look at operational issues as part of the Committee’s remit. My right hon. Friend the Member for Torfaen drew on his experience to give some wise words about which of the proposed changes he supports. Recommendation JJ in the Committee’s report sets out in full the Committee’s concerns and the changes it would like to be implemented. The Home Secretary gave a positive response in her remarks to many of the proposed changes, including the recommendation about the Committee becoming a Committee of Parliament. We look forward to debates on all the recommendations and whether they will come to pass in the coming months.
I want to touch on the issue that my right hon. Friend the shadow Home Secretary raised about who should chair the Committee, which provoked quite a lot of debate. The key issue is not about the person chairing the Committee being independent—there is nothing in that—but is more about the perception that the general public might have about an Opposition MP chairing such a Committee. The right hon. and learned Member for North East Fife made some very interesting points about the Prime Minister’s role in choosing or having some say in the selection of members in future.
There are a few key issues that many Members have talked about this evening. The first such issue I should like to address is the spending review. It is clear from the settlement for this area that there is an 11.3% cut to the single intelligence account, and a number of concerned Members mentioned the effect of inflation. Because inflation is running at a much higher rate than was previously thought, that figure needs to be monitored. The Chair commented that the Committee recognised the need to be flexible in reacting to any significant changes in the threat when considering the budget allocation that has been made.
The Government’s response was that they would reprioritise and make sure the National Security Council’s top requirements were given priority, with a reduction in the spend on lower priorities. It is clear that there may be unknown factors lurking around the corner. That should be kept under review. We must make sure that there is sufficient funding to maintain the security of the country. My right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins) made a powerful point about that.
It is interesting that the report identifies areas where savings could be made to meet the 11.3% cut, including more joint working and the possibility of a shared vetting procedure across all agencies. Other issues that should be examined include the use of consultants and internet and language specialists, and whether some of those could be shared across the services. The Chair of the Committee said there were already good examples of joint working.
The right hon. Member for Carshalton and Wallington (Tom Brake) highlighted important issues relating to assets, the £1 million worth of assets that had gone missing, and the need to ensure that that does not happen in the future. It is interesting to note that the Committee is investigating the value for money of projects it has been concerned about.
The Olympics have been mentioned by many hon. Members this evening. It is clear that the public are concerned about security during the Olympics. Over the past week we have seen much press coverage of the topic, including a parliamentary question about the use of surface-to-air missiles. In the press at the weekend there was mention of the deployment of snipers in helicopters. There was a report last week about the possibility of 500 FBI agents being brought over because the Americans were so worried about security, and the use of the Army to help protect the Olympics.
The report recognises how important this issue is. The Home Secretary said that we were on track, but that is against the background of the policing cuts, which we know are front-loaded and can affect the policing capability at the Olympics, and the knock-on effect on other security services. The hon. Member for New Forest East suggested that we put ourselves in the shoes of someone who wants to do harm. It may be that some other area is threatened, rather than the Olympics. This all has to be considered. I hope the Minister will be able to offer further reassurance on the matter.
On terrorism prevention and investigation measures, my right hon. Friends the Members for Salford and Eccles and for Wythenshawe and Sale East made a powerful case for the Minister to consider delaying the introduction of TPIMs until after the Olympics in order to offer a further layer of protection. I hope the Minister will reply to the queries about whether all the officers are trained and resourced, ready for the introduction of TPIMs if that happens in the next few weeks.
Cyber-security was mentioned by many hon. Members. We welcome the fact that it has been recognised as a tier 1 national security risk, and the £600 million of extra resources are welcome. I listened to what the Chair said about the number of bodies, law enforcement agencies and Government Departments that are involved in this area. Although the hon. Member for Bournemouth East (Mr Ellwood) argued that it was an advantage that so many organisations were involved, there are questions about whether the response is as co-ordinated as it could be.
The control principle was talked about at length, and the Committee Chair gave a helpful explanation of why it is so important and the potential way forward, now set out in the Green Paper, for using the closed material procedures and the special advocate route. What my right hon. Friend the Member for Knowsley and the right hon. and learned Member for North East Fife said about turning off the tap of information and whether that has already happened was very telling, and I think that that will be debated further.
Finally, I want to mention BBC Monitoring. I hope that the Government will consider the recommendations set out in recommendation EE of the report, which asks them to look again at funding in the period leading up to the transfer to the licence fee funding for that important area. We heard at length about BBC Monitoring and how important getting that open-source information is. I look forward to the Minister’s responses to all those points.
The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
We have had an important and wide-ranging debate that has illustrated how important it is that the public should be confident that the Government’s national security work is being robustly scrutinised. Last week the Foreign Secretary said:
“I believe it is vital that the British public and Parliament have confidence in the Agencies’ ability to keep us safe and to do so within the framework of the law; and that they also have confidence in government using this capability wisely, and in accordance with our democratic values and principles of domestic and international law.”
That comment sums up well the Committee’s challenges and the themes that ran through this evening’s debate. I am grateful to hon. Members on both sides of the House for raising a number of pertinent points. We heard 16 speeches, and the debate has been considered and well informed. I fear that in the eight or so minutes available to me I will not be able to do justice to the contributions we have heard.
Before I address those points, let me first thank my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind), the Committee’s Chair, for the work he and his Committee have undertaken over the past year. The Committee and its staff continue to adopt a constructive and professional approach, for which the Government are grateful. It is vital that we have a strong framework for overseeing the work of the security and intelligence agencies. As my right hon. Friend the Home Secretary has said, the quality of the ISC’s annual report underlines the unique and valuable role it plays in this framework.
Several of the contributions we have heard this evening have focused on the justice and security Green Paper and the proposals it outlines to ensure that justice can be done in the full range of civil proceedings by allowing the courts to take full and fair account of all the relevant information, even when some of it is too sensitive to be disclosed publicly. The overall aim is to allow cases involving national security to be heard fairly, fully and safely in our courts, and I think that that sense of safety underpinned a number of the contributions we heard this evening. This will allow sensitive material to be considered in court proceedings without the risk of vital intelligence or essential international intelligence-sharing relationships being compromised.
Sensitive material is essential for UK national security. It is used to prevent terrorist attacks, disrupt serious crime networks and make the case for executive actions such as deportation and asset freezing. Closed material procedures are the central provision in the Green Paper. Extending their availability across all civil judicial proceedings will provide a framework that enables the courts to consider material that is too sensitive to be disclosed in open court but that protects the fundamental elements that make up a fair trial and UK national security. We welcome the Committee’s support for the proposals.
The other aspect of the Green Paper that has been the focus of much of today’s debate is the proposal to strengthen, clarify and modernise the arrangements for overseeing the work of the security and intelligence agencies and the wider intelligence community. The proposals are designed to ensure that oversight arrangements are as effective and credible as possible and to provide reassurance to Parliament and the public that the agencies operate in a proper and legal manner.
I am grateful to the ISC for the very active and constructive role that it has played in developing proposals for its reform. The Government and the Committee agree on the right approach to the vast majority of those proposals, including formalising the role of the ISC with regard to oversight of the wider intelligence community, making it a statutory Committee of Parliament and allowing it to report to Parliament as well as to the Prime Minister. The ISC would also be given the power to require information from the agencies.
As my right hon. Friend the Home Secretary has said, however, although the Green Paper proposes that we consider the extent to which the ISC might in future oversee the operational activity of the agencies, no decisions have yet been made in that regard. Before making any decisions, we would need to understand the consequences of creating such a broad power, including the impact on the operational effectiveness of the agencies and on the Foreign and Home Secretaries’ own responsibilities for them.
A number of points have been made about the agencies’ resources and the ability to respond to threats. In addition to the real and serious threat from international terrorism, particularly from al-Qaeda and its affiliates, we continue to face threats from residual terrorist groups linked to Northern Ireland, as well as from cyber-attack and from traditional espionage—a point very effectively made by my hon. Friend the Member for New Forest East (Dr Lewis).
I welcome the ISC’s conclusion that the agencies have been given a fair settlement in the most recent spending review, which will allow them to continue their essential work of keeping us all safe, but of course they are not immune from the pressures of the wider economic climate, and delivering more support or back-office functions together will ensure that the agencies can play their part in making savings while prioritising resources to support the front line.
James Brokenshire
I am afraid that I will not, because I have three minutes left in which to get through a range of other points. I do apologise to my hon. Friend.
Let me make it clear: there is no question of allowing our national security to be diminished in order to make savings. The agencies have always prioritised their resources to meet the highest threats to our national security, and they will continue to do so. There is no clearer example of that than the Olympics, which throw up a number of security challenges, but agility and flexibility are core and established strengths of the British intelligence community. The agencies continue to enhance their capacity in preparation for the games, and their plans for meeting the additional challenges of London 2012 are mature and remain on track, including in relation to the recruitment of additional personnel.
A number of points have been made about cyber-security, and the Government welcome the ISC’s acknowledgement of the real and increasing risk to the UK’s national security from cyber-attack. It is one of the highest priority risks that we face, and the Government have allocated—I know that many Members recognise this—an additional £650 million of funding over four years to enhance the response to threats from cyberspace through a transformative national cyber-security programme. Much of that money will fund activity by the agencies, but we have sought to provide clear accountability on cyber-security through the Office of Cyber Security and Information Assurance and the role that my right hon. Friend the Minister for the Cabinet Office and Paymaster General plays in providing such oversight, while recognising the role that other Ministers and Departments have to play in that important agenda.
As well as providing resources, we are committed to providing the agencies with the powers that they need. That is why the Government have introduced the Terrorism Prevention and Investigation Measures Bill, combined with new resources for the police and security services to replace the current control orders regime, which is neither perfect nor entirely effective. TPIMs will provide robust and effective powers for dealing with the risks posed by suspected terrorists whom we can neither prosecute nor deport, and they are part of a wider package of work to ensure that we have the most appropriate and effective powers to address the terrorist threats. Arrangements will be in place to manage the transition from control orders to TPIMs effectively.
In conclusion, I pay tribute to the security and intelligence agencies for the enormous contribution that they make in ensuring that the British public are kept safe and properly protected. We all owe them a debt of gratitude for the fundamental and indispensable role that they play in keeping our nation safe.
Question put and agreed to.
Resolved,
That this House has considered the matter of the 2010-11 Annual Report from the Intelligence and Security Committee (Cm 8114).
Mental Health Care
(13 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Charles Walker (Broxbourne) (Con)
Thank you for calling me to initiate tonight’s Adjournment debate, Mr Speaker. May I alert the Minister who is responding this evening to an excellent report published today by Mind entitled, “Listening to Experience—An Independent Inquiry into Acute and Crisis Mental Healthcare”? That paper comprises more than 350 interviews with people who have experience of acute and crisis mental health care. I say to the Minister—although he probably knows this—that the report makes for very difficult reading. However, there is also room for huge optimism.
I am delighted to be joined tonight by the hon. Member for Ashfield (Gloria De Piero) and my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones), who will be making brief contributions. I have also given permission for a few of my chosen and near colleagues to make brief interventions because I know how much the issue matters to them.
We need a new approach to the provision of mental health care in this country. Provision should be based on compassion, understanding and respect. That is what comes out of the Mind report and the 350 voices it contains. It should not be a punishment to be mentally ill, but too often it is. People who suffer from mental illness feel hugely excluded from mainstream society, and we need to approach them in a compassionate way. We need to reach out to them and draw them near, not push them away.
James Morris (Halesowen and Rowley Regis) (Con)
My hon. Friend is making a powerful case. The report is shocking in many ways. Does he agree that, if we are to develop a compassionate model of mental health care, we should focus on providing talking therapies more extensively to those people who come into the acute and crisis environment, so that they can be seriously helped with the conditions they present?
Mr Walker
My hon. Friend makes a fantastic point and is a fantastic attendee of the all-party group on mental health. He has a great interest in this area and I will come on to answer his point directly in a few moments.
Over the past 30 years, we have made fabulous progress in moving away from the use of asylums, although we have had problems in doing that. We have talked about care in the community but, too often, the community has not been there to provide that care. We must continue to address that. In closing the asylums, we must remember that there is still a need for accommodation when people are in severe crisis. I do not like to talk about beds or hospital wards, but we do need accommodation. Sometimes, people are so ill that they need to be hospitalised and looked after, but in a caring environment.
I am concerned that, with the closure of small acute wards, we are moving towards having much larger hospital environments. Some of those are, without doubt, excellent. However, as the report identifies, some of them have too many of the characteristics of past asylums. As I said, being ill should not be a punishment. It concerns me greatly to read of people going to institutions where they fear for themselves and are frightened daily. How can someone start to recover from a mental health crisis when they are terrified every day in their environment? Many of the report’s respondents said that institutions were so terrifying that staff seemed to spend most of their time trying to stop nasty things from happening. We must get away from that. We have made progress, but we are not doing so at a fast enough pace.
Let me move away from discussing hospitals. Sometimes people need to leave their home. Therefore, we need settings that can take people out of their home, but that are not traditional mental health hospitals. In the report, I came across two fantastic initiatives. I knew about one because it is being pioneered in Hertfordshire, but another one I did not know about: crisis housing. That means that, when someone is at home and having a crisis, they do not have to go to hospital. They recognise that they are having a crisis, as do the people who work with them, and they can be sent to a home where they can go for just a few hours—four, five or six—to talk through their concerns with people who can understand what they are going through because, often, they have experienced mental illness problems themselves, so they are talking to their peers. Alternatively, they can spend up to three or four days there to get through the period of acute crisis, so that their equilibrium is coming back and they may be able to go back home and face the world again. Crisis housing sounds like a fantastic innovation, because we have to get away from the idea that when someone is terribly ill the only place for them to be is in a traditional mental health hospital. They may need a bed, but it does not have to be in a hospital.
The other thing that has caught my attention, and is being pioneered in Hertfordshire, is the idea of host families. This is a fantastic initiative that people have been developing in France and that Hertfordshire is leading the way on in this country. If someone is not really up to being at home with their family or looking after themselves, they need some extra support. There are families out there who will take them into their home and allow them to become part of their everyday life. Those people may well, and probably do, have experience of dealing with mental health illness themselves. They may be in recovery, they may have recovered, or they may have a child, a brother or sister who has been in these very dark places, so they understand and know what their house guest is going through. This is a fabulous way of providing support. It can last from three weeks to 12 weeks, and it is there to make these people feel part of a working, functioning family community. They have responsibilities and chores, but they are given the support and love that they need to make progress.
However, those solutions may not be right for everyone, and many people will, on occasion, need to be hospitalised. The report identifies that many tens of thousands of people each year go into a hospital setting. I hope that we can reduce that overall number. Nevertheless, we need accommodation to look after them. As I said, too much of the small traditional accommodation has been shut down. That has been positioned as an unalloyed good thing: “Hooray, we’ve got rid of mental health beds; hooray, we don’t need them any more; hooray, the community can pick up all these people.” In fact, the community is not always in a position to pick them up. Crisis helplines that are meant to be running for 24 hours a day often run for only part of the day, and that is simply not good enough. A mental health crisis does not happen between 9 am and 5 pm; it is just as likely to happen between 9 pm and 5 am. We have to accept that the community is not always there for those people. Now that we have closed these beds, which were often in very small wards very close to people’s families, too often people who are committed into an acute environment can be sent up to 200 miles away from their home and from the people who care for them and can nurture them and provide them with support. To me, that is not progress.
We are now moving towards having larger mental health units. As I have said, some of those are very good but, as the report identifies, many are not. The threshold for being admitted to acute care is now so very high, because there are so few beds to accommodate people, that only the most ill people get into hospital. I have to say that, too often, their experience is pretty frightening and pretty unpleasant. I am not calling for less accommodation, but I am calling for us to do things differently, so that when we, as a society and as communities, are put in charge of people with a severe mental health problem, we go out and embrace them. We do not put them in a frightening environment where the doors are locked, where they are restrained, often face down, where they are terrified, and where they feel under pressure and in danger of being assaulted; we create environments where they can go and get well. With the mentally ill, we are not mending bones. I do not want to stick people in bed for 20 hours a day and put their leg in a brace. We are not doing that; we are not in that business. What we are in the business of doing is putting people in an environment where they can get well; where, as my hon. Friend the Member for Halesowen and Rowley Regis (James Morris) said, they can talk through their problems; where they can come to terms with their problems; where they can speak to people who have been where they have been, then recovered and gone on. That is the kind of environment that we need to create in the acute setting.
That calls for a radical approach. Perhaps we have to stop talking about hospitals and beds, and instead start talking about accommodation and wellness centres, where people can go to get well and where they feel relaxed, comfortable and safe so that they can focus on themselves and their own mental health. When people have a mental health crisis, all too often they are simply terrified and feel that the world is against them. If somebody who is feeling like that is put in one of these institutions, I am sure that it does their mental health no good at all.
Nigel Adams (Selby and Ainsty) (Con)
What is my hon. Friend’s experience of youngsters who have to go to such hospitals and who find themselves in mixed-age wards?
Mr Walker
That is a very important area. Great strides are being made to end mixed-sex and mixed-age wards. How terrifying it must be for a young person to be in such an environment for the first time with people of all ages, with all types of experiences, illnesses and conditions. That is not acceptable, particularly if that young person is 200 miles or more from their family. That is not a way to treat people.
As I have said, being mentally ill is not a crime. We need to reach out and embrace these people, and we need to hold them close. We need to create environments where they can get better and focus on themselves. Talking therapies have a huge part to play in that. This is a fabulous report because it focuses on the areas of weakness in the current system. That provides the Government and Back Benchers with an opportunity to work together to get it right. I will now sit down and allow the hon. Member for Ashfield to join in.
Gloria De Piero (Ashfield) (Lab)
I thank the hon. Member for Broxbourne (Mr Walker) for allowing me to contribute to this debate. I also congratulate Mind on the work that it has done. Its report today reveals some harsh realities about how we deal with mental health in this country.
I have learned a lot about mental health care, or the lack of it, in the short time that I have been the MP for Ashfield. I have also learned about mental health through my own experiences because a family member has struggled with his battles. I will talk a little about that later.
It was not long after I became the MP for Ashfield that the Rokerfield day care centre was threatened with closure. I spoke to its users. One man told me that the day care centre was his family, that the other users were his siblings and that the staff were his parents. A woman told me that she would not be here if Rokerfield had not been there for her. I hope to goodness that she is still with us. Sadly, Rokerfield and many day care centres like it are no more.
Something else that I have learned about recently through this job is the serious shortage of beds in psychiatric wards and the struggle to get emergency treatment. I sat open-mouthed in a meeting the other week as I was told that a shortage of beds meant that patients who were seriously ill and needed to be admitted immediately sometimes had to be taken miles away. The process was explained to me. If there is no bed locally, they start making calls. With each call, the bed gets further away. Before they know it, they are talking about a bed 100 miles away. When I heard that, I felt sick.
I will briefly explain why that made me feel sick. A close relative of mine had many spells in a psychiatric ward. I made many visits to the ward. Each time was a trauma for my relative and for the family. I never once considered that he could have been taken miles away. The two bus rides and the long walk up the hill, sometimes in the winter months, were distressing enough for me. People do it for peace of mind and to show that their relative is loved. I have heard harrowing tales from Mind about patients who have been transferred from their local area by ambulance or police car because there were not enough local beds.
I will end by echoing the call by the inquiry for
“a culture of service and hospitality”.
I thank Mind for its work. The Minister has responded to the report by saying that he will work with Mind to improve services. We will keep him to his word.
Andrew Jones (Harrogate and Knaresborough) (Con)
I thank my hon. Friend the Member for Broxbourne (Mr Walker) for so generously allowing me time in the Adjournment debate that he has secured. He and I have spoken about mental health provision several times before, although not, I believe, in the Chamber. We have spoken particularly about our concern that mental health provision is a Cinderella service in the NHS.
I wish to highlight an issue of access in my constituency, which is the closure of the Hawthorn day unit in Harrogate. When that happened, I had a meeting with the users of the unit and their carers. It was emotional and powerful meeting—one of the most powerful that I have attended since starting as an MP. The users, who had no obligation to attend, spoke openly and powerfully of their experiences and the struggles they were facing, and they were brave to do so.
The unit that closed provided a safe haven for those who really needed somewhere secure, because those facing mental health issues still face some stigma and discrimination in this country. It also helped by providing users with support to ensure that they took their medication, and it offered them the compassion and respect that my hon. Friend talked about. I have been in regular contact with the users since the unit closed, and I am very pleased that this week, we have secured a meeting between the users and the chief executive of the NHS foundation trust, which will take place in my office in about three weeks. I am hopeful that we will see the unit reopened.
I close by congratulating my hon. Friend on all he does in highlighting mental health issues around the country, and on speaking so passionately and with such determination and eloquence this evening. I also say to the Minister that I read the publication “No health without mental health”, which was published in February, and was very encouraged by it. I thought it represented great progress.
The Minister of State, Department of Health (Paul Burstow)
I start by congratulating my hon. Friend the Member for Broxbourne (Mr Walker) on securing the debate and on pursuing this issue through the all-party group on mental health and other channels for a considerable time. His good fortune in securing the debate tonight is particularly timely given the publication of Mind’s report this morning. I congratulate him doubly on that successful coalition of events that have led to the debate.
I, too, have had the opportunity to study the report, “Listening to Experience”, published by Mind, and I certainly share many of the sentiments that have been expressed in this brief debate. The report undoubtedly shines a spotlight on what is good about our acute and crisis mental health services, what is unacceptable, what is bad and what we can do to make them much better. It brings together the results of an independent inquiry, as we have heard, and it is fundamentally about ensuring that we listen to voices that are all too often overlooked and ignored.
I welcome the report. It is challenging, and some of the unacceptable practice that it describes is frankly harrowing. Many of its important conclusions reflect the aims and ambitions of our cross-Government mental health strategy, “No health without mental health”. More than that, it reinforces why it is right that our broader health and social care reform agenda focuses on patients being treated in a way that respects their dignity, protects their human rights and promotes flexible and creative commissioning solutions that are tailored to meet individual and local needs. The key is ensuring that services are genuinely personalised.
The provision of safe, modern, effective mental health services that offer patients real choice is, and remains, a Government priority. We expect the treatment and care of patients to be provided in the most appropriate therapeutic environment for them. My hon. Friend rightly referred to the concern expressed in the report that acute beds are not always available when needed. The hon. Member for Ashfield (Gloria De Piero) spoke about her own experience and her concerns about the journeys that some people have to make to find facilities, which is clearly unacceptable.
I want to make it absolutely clear that commissioners and providers have a responsibility to ensure that acute beds are available for those who need them. They should also ensure that the needs and wishes of patients, families and carers are not only sought but taken into account when decisions are made about community or hospital-based treatment. Distance and journey times are very serious issues that need to be properly taken into account in those commissioning decisions.
The quality, innovation, productivity and prevention programme, which is sometimes known as the Nicholson challenge, has targeted both reductions in bed days and—I stress—out-of-area admissions. Through a more effective acute care pathway, we can expect to achieve better patient experience of care, which means care that better reflects patient preferences, including being cared for at home if possible. That contributes to a more productive use of NHS resources to ensure that we drive up quality.
Specialised mental health community teams—crisis resolution home treatment, assertive outreach and early intervention in psychosis—provide care to service users and families in community settings. The crisis resolution home team performs a key role in supporting people at home, which often averts the need for an in-patient stay, acts as a gatekeeper for all those requiring access to in-patient services or other emergency care and supports early discharge, when appropriate.
The team is part of an integrated acute care system. It is affected by, and has an effect on, that system and beyond, especially the in-patient service and day hospital and community mental health teams. For example, patients with early onset psychosis benefit from early intervention services, and assertive outreach engages with severe and persistent mental disorder such as schizophrenia. That shared approach in system delivery is already beginning to show results, because 10,300 new patients with early diagnosis of psychosis were engaged with early intervention in psychosis services this year, which is the highest ever recorded figure. Overall investment in key mental health teams has also increased. In the last year, crisis resolution home treatment teams carried out 131,450 home treatment episodes for 106,790 patients who would otherwise have been admitted to hospital, an increase of 3.2% over the previous year.
I do not want my remarks in response to the important debate that my hon. Friend the Member for Broxbourne has secured to suggest that the Government are complacent. Mental health is a priority for us. The strategy that I mentioned earlier, and not least the spending review decisions that we made last year, make clear our commitment, especially as regards improving access to talking therapists for people with severe mental illness. However, there is always room to improve, and there is a need to listen to, understand and act on the experience of patients.
Mind’s report helpfully highlights four key areas: humanity, commissioning for people’s needs, choice and control, and reducing the medical emphasis in acute care, which is very much like the well-being concept that my hon. Friend has discussed. In mental health services, it is vital to balance patient autonomy with patient safety, which is often a source of debate in the Chamber. We need to ensure that that is done in an appropriate way, but it can be a challenging balance to strike. However, the solution to the problem does not lie with heavy-handed or coercive approaches. A wealth of research, guidance and good practice, much of which is cited in Mind’s report, offers practical strategies that can contribute much to ensuring that patient care is conducted in the humane, caring and respectful fashion described by my hon. Friend, envisaged in Mind’s report and espoused in the Government’s vision for mental health services.
The Mental Health Act 2007 code of practice is clear on the need to seek all alternative measures before adopting control and restraint or seclusion procedures. Restraint should be the last resort, never the practice of first choice. The code also emphasises the importance of providing support to patients after using control and restraint, seclusion or long-term segregation, and of reviewing such incidents to enable staff to learn from them.
The Mind report rightly draws attention to the importance of ensuring services meet the needs of black and minority ethnic communities. The Government’s mental health strategy acknowledges the lower well-being and higher rates of mental health problems that some BME groups suffer. The strategy is explicit on ensuring that health promotion and ill-health prevention approaches are targeted at high-risk groups, which means that programmes must be delivered in such a way that they are accessible to families from BME groups. Such approaches will lead to a narrowing of the health inequality gap.
There is no doubt that good data play a critical part in driving improvement—the report highlights that—which is why the mental health minimum dataset already has a good level of information on the ethnicity of patients, and why the annual mental health bulletin includes rates of access to services by ethnic groups and describes the ethnic profile of people spending time in hospital and being detained.
We will build on those measures. The mental health minimum dataset will go further, because for the first time it will be possible to analyse the full patient pathway, showing what happens to different groups of people before and after hospitalisation. This dataset has been identified as the single source for national statistics about the use of the Mental Health Act in the future, and the NHS information centre will launch a consultation next spring to determine exactly what information will be useful—I hope that hon. Members and others following the debate will take the opportunity to feed into that. The ability to compare and demonstrate differences between localities is an important way of driving improvement in services.
Dr Lewis
I am most grateful to the Minister. I want to put it on the record that since our last exchange on this subject on 10 November more data have come from the Hampshire trust, which intends to close more than one third of its acute in-patient beds, confirming that although only a minority of patients admitted to acute beds were detained patients, they stayed for longer, and that at any one time about half the beds, if not more, were occupied by detained patients. Does the Minister agree that if excessive numbers of beds are closed, the opportunity for a non-detained patient to find a bed will be disproportionately reduced?
Paul Burstow
I certainly agree that we need to look carefully at the data. My hon. Friend was right in his Adjournment debate on 10 November to highlight these issues and potential discrepancies, and I shall certainly take a close look at the data to which he has referred.
I am anxious to ensure that Mind and other key stakeholders play a part in identifying how the information that I have referred to can best be analysed and presented. As I have said, those data will be particularly useful in supporting commissioners in developing the kind of flexible and creative commissioning solutions that Mind and my hon. Friend the Member for Broxbourne have described so well.
The drive to improve the quality of services and reduce inequalities lies at the heart of our commissioning reforms. For the first time, the Secretary of State for Health, the NHS Commissioning Board and clinical commissioning groups will be under a legal duty to have regard to health inequalities in both access to and outcomes from health care. This legal duty will hardwire reducing health inequalities into the system. It not only obliges the Secretary of State to act, but obliges them to demonstrate that they did so and with what result. That is a powerful incentive for change.
Mind rightly emphasised the importance of choice, which I strongly endorse. That is already being demonstrated through several initiatives, including the improving access to psychological therapies programme for children and adolescents and for adults, the extension of the personal health budgets programme for people with mental health problems to increase choice and control and the development of adult and children mental health tariffs. We believe that choice of consultant or other professional-led teams should extend to mental health to achieve the parity of esteem expected by the mental health strategy, and we will work with key stakeholders to develop the proposals and look at ways of implementing our plans.
We recognise the benefits that mental health patients can receive from support and mentoring from peers, which was touched on in this debate, as well as the contribution from things such as crisis housing. To that end, I am working with colleagues on the ministerial working group on mental health to make these more widespread.
In conclusion, I thank my hon. Friend and others who have intervened and spoken briefly in this debate. I shall write to my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) to pick up on his particular point. I very much welcome Mind’s report for its clarity and for the useful contribution that it makes to our shared aim of improving acute and crisis services, and I shall meet it to discuss its report and how we can take its recommendations forward in delivering the Government’s mental health strategy. The Government remain committed to achieving their overarching goal of better mental health outcomes for everyone. Our strategy sets out what everyone needs to do to realise that goal, and by working together we can make a long-lasting difference to the quality of life of people with mental health needs.
Question put and agreed to.
Ministerial Correction
Communities and Local Government
Matthew Hancock (West Suffolk) (Con)
9. What steps he is taking to help local authorities reduce the cost of their property.
The Minister for Housing and Local Government (Grant Shapps)
First, let me pay tribute to my hon. Friend for his great work in the Westminster Sustainable Business Forum. Public sector assets are worth about £385 billion, almost two thirds of which are owned by councils.
Matthew Hancock
I am grateful for the Minister’s reply. Is he looking forward to sending his boss along to next week’s launch of the second leg of the review of how much can be saved by reforming the way property is used by local public sector agencies and local authorities, which will highlight that this is about not just bricks and mortar but increasing productivity and spending money more wisely?
Grant Shapps
I have no doubt that my right hon. Friend the Secretary of State will enjoy that visit enormously, especially if good food is on offer. My hon. Friend is on to something here: public sector assets are worth £385 billion, and two thirds of them are council-owned. If a saving of just 20% in running costs were made, that could save about £35 billion a year in receipts over 10 years. There is an enormous amount of money to be saved, therefore, and I commend the work that has been done.
[Official Report, 31 October 2011, Vol. 534, c. 590-91.]
Letter of correction from Grant Shapps:
An error has been identified in the oral answer given to a supplementary question on 31 October 2011. The error related to the figures on savings. The correct answer should have been:
Grant Shapps
I have no doubt that my right hon. Friend the Secretary of State will enjoy that visit enormously, especially if good food is on offer. My hon. Friend is on to something here: public sector assets are worth £385 billion, and two thirds of them are council-owned. Better management of public sector assets could potentially save 20% in running costs and £35 billion in capital receipts over 10 years. There is an enormous amount of money to be saved, therefore, and I commend the work that has been done.
Written Ministerial Statements
Consumer Credit Review
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)
I have, together with the Financial Secretary to the Treasury, published the Government’s response to the consumer credit aspects of the consumer credit and personal insolvency review, “Managing Borrowing and Dealing with Debt”, launched jointly by BIS and HM Treasury. My statement of 19 July, Official Report, columns 89-90WS, provided the Government’s response on the insolvency aspects of the review.
The response builds on a number of coalition commitments to help consumers make better financial decisions when borrowing money and deals specifically with:
unfair bank charges;
introductory discounts when taking out a store card;
interest rate caps on credit and store cards; and other consumer credit issues, including high-cost credit.
Our vision is twofold. First, we want all consumers to be empowered to make better choices for themselves. Consumers should be free to borrow if that is what they decide is in their best interest. It is not for the Government to pass judgment on whether a particular product is good or bad but, in line with the coalition principles of freedom, fairness and responsibility, we want to provide consumers with the tools they need to make informed decisions. Secondly, we want to ensure there is a safe and fair regulatory framework for both credit and personal insolvency. These frameworks must protect vulnerable consumers, particularly those at risk of falling into or those already in financial difficulty and drive rogue companies out of the market. Responding to consumer concerns about the lack of control and transparency over bank charges, the Government have driven forward a voluntary agreement which will apply to all full-facility current accounts offered by the major personal current account providers. Under the new agreement, over 85% of personal current account customers will benefit from measures to make charges for unarranged overdrafts clearer, fairer and more manageable.
This will include an option for consumers to receive alerts when their balance is low so that they can take action to avoid a charge; consumers will know by what time they need to make a payment into their account to avoid charges; and they will no longer be charged for going over their limit by a small amount. Balance alerts will be available from March 2012, with full implementation of the other measures by March 2013 at the latest.
These measures come in addition to commitments already made by the industry to increase transparency, including annual statements detailing charges incurred so that consumers can see how much their account costs them over the year, and from September 2013 a new guaranteed switching service which will give customers the confidence to switch accounts quickly, safely and without hassle. This will mean that consumers can make sure that they are getting a good deal from their bank. Together, all these measures will provide a powerful way for consumers to hold their banks to account.
On store cards, respondents to the review were most concerned about customers being tempted into expensive credit by retailers offering discounts on their purchases at the time they take out a store card. Following negotiations with the Government, industry has agreed to end this practice as well as introducing other measures to improve the way store cards are offered, including a good practice training scheme and a ban on direct commission for sales staff.
The Government will not be introducing a cap on interest rates on credit and store cards. Following the review, the evidence showed that a cap would not be in the best interest of consumers as pricing some consumers out of the market could force individuals to seek unregulated or high-cost credit.
What was clear from the review were the real concerns around the high-cost credit market and the impact that using this type of credit can have on vulnerable consumers. To address these concerns, the Government are pleased to have appointed Bristol university’s Personal Finance Research Centre (PFRC) to carry out research into the impact of introducing a variable cap on the total cost of high-cost credit that can be charged in the short to medium-term high-cost credit market. The Government have also started negotiations with industry to introduce improved consumer protections in codes of practice for payday lenders and other instant credit providers. In addition, the Government are working to improve access to credit unions which can provide a real alternative to high-cost credit.
Positive action from industry to address real consumer concerns has wider-reaching benefits. By working with industry we can make changes that improve things for consumers far more quickly than legislating. As we stated in the call for evidence, we will regulate where necessary but our strong preference is to promote more responsible corporate and consumer behaviour through greater transparency, competition and by harnessing the insights of behavioural economics.
Finally this response completes the announcement we made in July when we set out additional measures to assist consumers in difficulty, including a consultation on improving access for bankrupts to basic bank accounts (published on 17 November) and working with industry to improve standards in debt management plans. In addition, on 7 November we published a consultation seeking views on reforms to the route into bankruptcy (and compulsory winding up) to streamline the process and to ensure that the court focuses on dispute resolution.
The package of measures announced in this response will deliver real benefits for consumers that can be achieved while minimising the regulatory burdens on business. We are placing copies of the document in the Libraries of both Houses.
Tax Avoidance
(13 years ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
The Government are fully committed to tackling tax avoidance and will take necessary steps to protect the Exchequer and maintain fairness in the tax system.
The Government published “Tackling Tax Avoidance” at Budget 2011 which outlines a more strategic approach to addressing avoidance by placing the emphasis on preventing avoidance before it occurs. By building in sustainable defences to avoidance we will reduce the need for immediate changes to legislation once an avoidance risk has arisen, or for HMRC to challenge avoidance once it has happened.
In December 2010, I asked Graham Aaronson QC to lead a study that would consider whether a general anti-avoidance rule (GAAR) could deter and counter tax avoidance, while providing certainty, retaining a tax regime that is attractive to businesses, and minimising costs for businesses and HMRC.
I have now received Mr Aaronson’s report and have arranged for it to be published today on HM Treasury’s website at:
http://www.hm-treasury.gov.uk/d/gaar_final_report_111111.PDF.
Mr Aaronson has recommended a narrowly focused GAAR which should initially apply to the main direct taxes—income tax, capital gains tax, corporation tax, and petroleum revenue tax, as well as national insurance contributions. The report sets out in detail how a GAAR could be introduced, and includes an illustrative draft rule. It also includes a summary of the views of representative bodies in the tax sector.
The Government will consider the report in detail and the extent to which the proposals could add to HMRC’s existing legislative and administrative approaches and further reduce levels of tax avoidance. The Government will discuss the implications of the proposed rule with business and tax groups and respond fully at Budget 2012, setting out their plans for further, formal public consultation, if appropriate.
I will place a copy of the report in the Library of the House.
Counter-Terrorism Act (Financial Order)
(13 years ago)
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The Financial Secretary to the Treasury (Mr Mark Hoban)
The Government have today laid before the House an order under the Counter-Terrorism Act 2008 containing a direction requiring UK credit and financial institutions to cease all business with banks incorporated in Iran and their branches and subsidiaries. This means that UK credit and financial institutions are prohibited from entering into transactions or business relationships with these entities and continuing existing transactions and business relationships with them, unless licensed to do so by HM Treasury.
The Treasury is satisfied, as required by the Act, that activity in Iran that facilitates the development or production of nuclear weapons poses a significant risk to the national interests of the United Kingdom. The November board report of the International Atomic Energy Agency (the UN body charged with monitoring Iran’s activities and ensuring that no nuclear material is being diverted to non-civilian applications) highlights the reasons for the Government’s serious and ongoing concerns about Iran’s nuclear activities. The IAEA report sets out the agency’s concerns about
“possible military dimensions to Iran’s nuclear programme”.
In particular, the information available to the agency indicates that Iran has carried out the activities that are relevant to the development of a nuclear explosive device. The report notes that
“while some of the activities identified have civilian as well as military applications, others are specific to nuclear weapons”.
The Government view these developments with the utmost concern.
The case for action is underlined by the recent calls from the Financial Action Task Force for countries to apply effective countermeasures to protect their financial sectors from money laundering and financing of terrorism risks emanating from Iran. The FATF (the global standard setting body for anti-money laundering and combating the financing of terrorism) renewed these calls with urgency on 28 October 2011 and noted its particular and exceptional concern about Iran’s failure to address the risk of terrorist financing and the serious threat this poses to the integrity of the international financial system.
In light of these risks to the UK’s national interests, I consider it a proportionate response to require the UK financial sector to cease all business relationships and transactions with Iranian banks and their branches and subsidiaries, including the Central Bank of Iran. Iranian banks play a crucial role in providing financial services to individuals and entities within Iran’s nuclear and ballistic missile programmes as companies carrying out proliferation activities will typically require banking services. Any Iranian bank is exposed to the risk of being used by proliferators in Iran’s nuclear and ballistic missile programmes. Experience under existing UN and EU financial sanctions against Iran demonstrates that targeting individual Iranian banks is not sufficient. Once one bank is targeted, a new one can step into its place.
As they relate to an important global financial centre, UK restrictions will have an impact on the options available to Iranian banks. This will make it more difficult for Iranian banks to utilise the international financial system in support of proliferation-sensitive activities. It will protect the UK financial sector from the risk of unwittingly being used to facilitate activities which support Iran’s nuclear and ballistic missile programmes. UK action of this nature signals to Iran and the international community that we consider this risk to be significant.
These actions are being taken in co-ordination with other partner countries, who will make their own announcements separately.
Northern Rock plc
(13 years ago)
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The Chancellor of the Exchequer (Mr George Osborne)
On 15 June 2011 I announced that I had put Northern Rock plc up for sale.
The bidding process has now finished and on 17 November 2011 I announced the sale of Northern Rock plc to Virgin Money. The Financial Secretary is also updating the House on the sale of Northern Rock plc today.
The deal was reached following an open, transparent and competitive bidding process. It is expected to complete on 1 January 2012, pending European Commission merger clearance and Financial Services Authority approval.
This statement provides full details of the consideration HM Treasury will receive for the sale:
Cash: HM Treasury will receive cash of £747 million on completion and around an expected further £50 million cash in the second quarter of 2012 relating to the net asset value of Northern Rock plc upon completion.
Tier 1 Capital Notes: Virgin Money will issue to HM Treasury on completion Tier 1 Capital Notes with a par value of £150 million and an annual coupon of 10.5%. The terms of these notes have been designed to be compliant with current GENPRU requirements and the expected requirements of forthcoming CRD4 regulations which will implement Basel III guidelines into European law. Accordingly they include features such as principal loss absorption and discretionary interest coupons. Virgin Money has indicated that it intends that these notes would be exchanged, or purchased by the acquirer, upon an Initial Public Offering or sale, without reducing the amount and quality of the firm’s capital resources, which would allow HM Treasury to exit its investment.
Additional cash consideration: HM Treasury will receive additional cash consideration payable upon Virgin Money delivering a future profitable Initial Public Offering or sale in the next five years. The maximum payment would be £80 million if this occurred in 2012; £70 million in 2013; and £50 million in 2014 to 2016 inclusive.
Housing Reform
The Minister for Housing and Local Government (Grant Shapps)
I am today announcing the publication of “Laying the Foundations: A Housing Strategy for England”. This strategy sets out the Government’s plans to support social mobility and get the housing market—and in particular new house building—moving again.
This is vital for our economic growth—but more importantly, it is essential to the hopes and plans of young people, families and older households across the country. We know we will not achieve this by attempting to control the market from Whitehall. The system of setting top down targets for housing, vast amounts of planning guidance and excessive regulation contributed to the lowest level of house building since the 1920s. House building in 2010-11 was 29% higher compared to 2008-09, and compared to 2009-10, it was 17% higher (103,750 starts in 2010-11; 88,690 in 2009-10, and 80,550 in 2008-09).
The strategy sets out the immediate action we are taking to get the housing market moving again.
We are launching a new build indemnity scheme to provide support to potential home buyers;
We are reinvigorating the right to buy—to support social tenants who aspire to own their own home, by raising the discounts to make it attractive to tenants across England.
We are matching this with a commitment that for every additional home bought under right to buy, a new affordable home will be built;
We are getting building moving again with a new £400 million “Get Britain Building” investment fund;
We have established a new £500 million growing places fund which will support infrastructure for housing and economic growth;
We are freeing up formerly used public sector land with capacity to deliver up to 100,000 new homes—with build now, pay later deals on the table to support builders who are struggling to get finance up front; and,
We are consulting on a proposal to allow reconsideration of those planning obligations agreed prior to April 2010 where development is stalled. Some planning obligations negotiated at the height of the economy boom now make the site economically unfeasible—resulting in no development, no regeneration and no community benefits at all.
We are also taking action to lay the foundations for a more responsive, effective and stable housing market in the future.
We will be providing more support for local areas that want to deliver larger scale new development to meet the needs of their growing communities—with a programme of support for locally planned large scale development;
We are putting in place strong, new incentives for housing growth through the new homes bonus, community infrastructure levy and the proposals for local business rates retention;
We have consulted on simplifying planning policy through the draft national planning policy framework;
We are supporting a self-build revolution through a custom build homes programme to support and encourage more individuals and communities to build their own homes—including making available up to £30 million of new funding to support provision of short-term project finance on a repayable basis; and
We are giving communities new powers to deliver the development they want through Community right to build.
We are also supporting choice and quality for tenants by
supporting growth and investment in private rented housing, as the key to increasing choice, access and standards in the sector, while also working with local authorities to tackle the worst properties;
creating more opportunities for council tenants to have their say—with tenants with an arm’s length management organisation landlord given new opportunities to influence how their homes are managed;
introducing a radical programme of reform of social housing through the Localism Act, changing the way people access social housing, the types of tenancies which are provided and the way the homelessness duty is discharged, though not the duty itself which continues to provide among the best homelessness support in the world;
doing more to tackle fraud and tenancy abuse—we will give local authorities the tools to identify and recover properties that are being used unlawfully; to charge more reasonable market orientated rents from people earning very high salaries; and to prevent people who own a suitable home from seeking social housing too; and
considering how we can encourage more affordable housing—supporting greater innovation and competition between social landlords—including encouraging new private entrants into the social housing market and considering innovative new approaches to funding affordable housing in the medium-term.
We are also making better use of existing stock—bringing more empty homes and buildings back into use. The housing strategy sets out our strategy for tackling empty homes, including £100 million funding to bring empty homes back into use as affordable housing and changes to council tax to help tackle empty homes and bring them back into productive use and an additional £50 million of funding to tackle some of the worst concentrations of empty homes.
We remain committed to providing appropriate support, protections and opportunities to struggling households and to making the best use of social housing to provide stable homes for those who need them most. We have prioritised protection for the vulnerable in last year’s spending review and have established a ministerial working group to tackle the complex causes of homelessness. We are also setting out a new deal for older people’s housing, with a better offer to support older people to live independently for longer.
This strategy is not just about building more homes. We know that the quality, sustainability and design of housing, along with sufficient funding to support growing communities is just as important as how many new homes are built and that getting this right is crucial if communities are going to support new homes.
I am also issuing today a consultation on the powers which will deliver a devolved system for financing council housing from next April. Self-financing will deliver a long term, securely funded, future for council housing and give councils the freedom they need to be innovative in meeting local needs.
Copies of the strategy and consultation on legal determinations to implement self-financing will be placed in the Library of the House and published online at www.communities.gov.uk
Afghanistan Monthly Progress Report
(13 years ago)
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The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
I wish to inform the House that the Foreign and Commonwealth Office, together with the Ministry of Defence and the Department for International Development, is today publishing the 11th progress report on developments in Afghanistan.
The Bonn conference on 5 December provides President Karzai with an opportunity to set out his vision for an inclusive settlement. It is also an opportunity for the international community to reiterate its long-term commitment to Afghanistan.
The summer fighting season is ending and it has been a hard year for the insurgency. The numbers of both attempted and executed attacks were lower than during the corresponding period last year, continuing the trend observed over the summer. Despite considerable efforts, insurgents failed to re-establish themselves in areas in the south from which they had previously been displaced. High profile attacks in Kandahar early in October and in Kabul at the end of the month affected Afghan and international perceptions of security. However, Afghan national security forces (ANSF) disrupted many attempts and responded effectively and professionally to those that got through. Overall, the performance and operational capability of the ANSF continued to develop: they are on track to achieve their October 2012 growth objective of 352,000 and work continued to ensure that the quality of the forces steadily improves.
The United Nations Office on Drugs and Crime’s (UNODC) 2011 Afghan opium survey reported a year on year increase in cultivation of 7% nationally (from 123,000 hectares to 131,000 hectares). However, the increase should be interpreted in the context of a difficult economic backdrop of opium prices (which have doubled in the last year to the highest level since 2004) and that the figures are 32% lower than in 2007 (which saw 193,000 hectares cultivated).
With UK support, the Government of Afghanistan continued to make important progress on revenue collection and budgeting. The Government confirmed their best ever first quarter performance for revenue collection to date, bringing it in line with neighbouring countries including Bangladesh and Pakistan. Meanwhile, provincial Governments have been working with the Ministry of Finance to ensure that for the first time, local priorities are reflected in plans for next year’s national and provincial budgets. This will improve the Government’s ability to deliver vital basic services to the Afghan people.
During his recent visit to Afghanistan, the Secretary of State for International Development launched an important new fund for Afghan civil society organisations. This will help them to engage better with the Afghan Government and hold it to account, for example on human rights and corruption.
I am placing the report in the Library of the House. It will also be published on the Foreign and Commonwealth Office website (www.fco.gov.uk).
Post-Foreign Affairs Council and General Affairs Council
(13 years ago)
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The Minister for Europe (Mr David Lidington)
The Foreign Affairs Council (FAC) and General Affairs Council (GAC) were held on 14-15 November in Brussels. My right hon. Friend the Foreign Secretary attended the FAC (foreign affairs). My hon. Friend the Under-Secretary of State for International Development attended the FAC (development). The UK Permanent Representative attended the GAC.
The agenda items covered were as follows:
Foreign Affairs Council (foreign affairs)
The FAC was chaired by the high representative of the European Union for Foreign Affairs and Security Policy, Baroness Ashton of Upholland. A provisional report of the meeting (both foreign affairs and development), and all conclusions adopted, can be found at:
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/126064.pdf
Afghanistan
Ministers agreed conclusions (see link) that approved a mandate for an EU co-operation agreement for partnership and development with Afghanistan. They also agreed to extend the EU police mission in Afghanistan (EUPOL) in principle until the end of 2014, and made a commitment to support Afghan efforts in strengthening policing and the rule of law beyond 2014.
The Foreign Secretary stressed the importance of a clear vision for a future political settlement being set out by Afghanistan at the Bonn conference on 5 December. He also underlined Pakistan’s key role and the need for the EU to maintain momentum on engagement with Pakistan, as agreed by Ministers in the Foreign Affairs Council in July.
Syria
Ministers adopted conclusions (see link) and restrictive measures against a further 18 members of the Syrian regime and stopping all European Investment Bank loans. Following the FAC, the Foreign Secretary said:
“I welcome the EU’s decision today to apply further pressure on President Assad’s regime, following the strong measures announced by the Arab League this weekend. The EU has listed a further 18 individuals involved in or supporting the regime’s activities, including military, security and intelligence officials leading military operations in Syria. In addition, the EU has moved to prevent any further disbursement of loans from the European Investment Bank to Syria.
President Assad has ignored countless calls by the international community to put an end to the horrific violence in Syria. Since the Syrian regime’s claim to have agreed to the plan put forward by the Arab League on 2 November, violence has only escalated with a death toll of over 3,500 people since March. As long as the violence continues, we will continue to press the Syrian regime to bring an end to this killing”.
Libya
Ministers agreed conclusions (see link) welcoming the declaration of the liberation of Libya on 23 October. They encouraged the National Transitional Council to respect human rights in line with its constitutional charter.
The Foreign Secretary emphasised the success of NATO’s military intervention. The three key actions for now were moving forward with EU support, engaging the tools of the neighbourhood policy and sending measured but clear signals on our expectations on human rights, including the rights of women.
Tunisia and Egypt
Conclusions welcomed the “historic” elections in Tunisia (see link). Baroness Ashton laid out support under way or ready to be negotiated with the new Government: agricultural liberalisation, “open skies”, a mobility partnership, a free trade agreement, and a doubling of funding in 2011 to €160 million. On Egypt, there was a brief exchange on elections due later this month. Ministers are likely to return to this at their meeting in December.
Horn of Africa and Somalia
Ministers adopted a strategic framework for the horn of Africa (see link). This will guide EU action in five areas: building robust and accountable political structures; contributing to conflict resolution and prevention; mitigating security threats emanating from the region; promoting economic growth, and supporting regional economic co-operation.
On Somalia, Ministers adopted conclusions (see link) which expressed concern about the situation in Somalia, reaffirmed the EU’s commitment to support AMISOM and to continue the EU training mission for Somalia’s security forces.
The Foreign Secretary set out the UK’s support for Kenyan action in Somalia, which he stressed should be done in co-ordination with the Transitional Federal Government and in compliance with international law. He also outlined proposals for an international conference on Somalia in 2012, announced by the Prime Minister on 14 November.
Iran
Ministers agreed conclusions (see link) expressing increasing concern about the possible military dimensions of the Iranian nuclear programme and the lack of progress with diplomatic efforts. They also raised the prospect of reinforced sanctions measures in December.
Common Security and Defence Policy (CSDP)
Over lunch. Ministers discussed current and possible future CSDP operations. The Foreign Secretary set out the UK’s substantial contribution to European defence, not least as the EU country with the largest defence budget. He also reiterated the UK’s long-standing opposition to the establishment of an EU Operational Headquarters. Baroness Ashton concluded that EU Defence and Foreign Ministers would discuss this further at their meetings on 30 November and 1 December respectively.
Foreign Affairs Council (development)
The EU Common Position for the Fourth High-Level Forum on Aid Effectiveness (HLF-4, Busan, 29 November to 1 December 2011)
The EU common position for Busan was adopted and received general endorsement from member states. Mr O’Brien stated the UK’s desire to see a clear focus on transparency, results and fragility and stressed the importance of ensuring Busan produces an ambitious outcome that engages broader development actors as well as traditional donors. This was endorsed by Commissioner Piebalgs and the High Representative Baroness Ashton.
Ministers also discussed the issue of EU “joint programming”. Commissioner Piebalgs proposed a Busan initiative which launched joint programming in pilot countries. Mr O’Brien set out the UK’s concerns and made it clear that consultation on any list of countries and any form of EU co-ordination must be country-led, pragmatic and open to all donors, rather than led by Brussels.
Horn of Africa
Development Ministers addressed the humanitarian and development aspects of the horn of Africa crisis, continuing the discussion held by Foreign Ministers during the Foreign Affairs Council earlier in the day. Commissioner Georgieva praised UK leadership in the horn of Africa and called for a concerted long-term effort which addressed resilience.
Mr O’Brien called for a sustained EU effort over 2012 with more member states providing support and highlighted the importance of engaging with Turkey, the Gulf states and other donors in an ambitious response based on need and resilience. Baroness Ashton concluded by endorsing Mr O’Brien’s message on the need for a holistic response and the importance of finding a political solution. This was supported by a number of member states. The Under-Secretary of State also confirmed that the UK would be hosting the Somalia conference next year. The announcement was met with wide approval from Ministers, Baroness Ashdown and the Commissioners attending.
Future of EU Development Policy
Ministers endorsed the recent European Commission’s (EC) communication on “Increasing the Impact of EU Development Policy: An Agenda for Change”. Mr O’Brien stressed the importance of establishing a results framework for EU aid and also reinforced the UK concerns on EU joint programming.
EU Budget Support
This item focused on the EC Communication on “The Future Approach to EU Budget Support to Third Countries”, which was broadly welcomed by Ministers. There was general agreement on the principle of differentiating aid—ensuring it is more focused on the poorest countries. Mr O’Brien stressed that decisions on budget support should be made in-country on a case-by-case basis, with non-EU donors and member states retaining full ministerial responsibility over funding decisions.
AOB: G20 and Energy for All
Limited time was afforded to these AOB points. Nevertheless, France highlighted the achievements of the French G20 Cannes declaration. Additionally, Commissioner Piebalgs stated that he would write to Ministers on his initiative on Sustainable Energy for All.
General Affairs Council (GAC)
The GAC was chaired by the Polish EU presidency (Mikolaj Dowgielewicz, State Secretary for European Affairs). A draft record of the meeting can be found at
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/genaff/126082.pdf
Multiannual Financial Framework
Ministers discussed the EU’s multiannual framework for 2014-2020. The presidency indicated that it would present a report to the European Council on 9 December. It stressed that this report would signal the end of the clarification stage, paving the way for negotiations to begin in earnest in January 2012 under the Danish presidency.
The UK Permanent Representative set out the UK’s views. The current proposals were too high. The Commission needed to explore ways of replacing some current expenditure rather than adding more. Proposals to increase structural and cohesion funds as well as the Connecting Europe Facility were also too high. The UK could not support macro-fiscal conditionality on EU Budget funding due to the special position of the UK by virtue of protocol 15 of the treaties. Structural funds should be directed towards the poorest regions which are mostly located in the poorest member states. And the Commission’s proposals on the common agricultural policy needed to be substantially reduced.
October and December European Councils
Ministers reviewed the proposed agenda for the December Council which includes economic issues, energy and EU enlargement. Signature of the treaty on the accession of Croatia to the EU is scheduled for the margins of the December Council.
During the discussion on draft European Council conclusions the UK Permanent Representative stressed the need to reflect earlier Council conclusions on ensuring the widest possible reduction of regulatory burden and the importance of trade as a driver for growth. The UK Permanent Representative welcomed the undertaking of President van Rompuy to update the European Council on the reflections of the euro area member states, but noted that October European Council conclusions had talked in more explicit terms about the integrity of the EU as a whole and the role of the 27 in any discussion on treaty change; and that the UK wanted to see that approach reflected here.
Strategy for the Baltic Sea Region
Ministers agreed conclusions (see link) which welcomed the European Commission’s report on the Baltic sea strategy which had been agreed by the General Affairs and External Relations Council in October 2009.
I will deposit copies of this note in the Libraries of both Houses. And I will also continue to update Parliament on future Foreign and General Affairs Councils.
Protocol and Shadow Strategic Policing Requirement
(13 years ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
A year from now the public within England and Wales will, for the first time, have been given a direct vote and say in how they and their communities are policed. The election of the first police and crime commissioners on 15 November 2012 will mark a step change in how policing is held to account. Communities will be able to voice their local priorities to a single, directly elected, individual; their police and crime commissioner.
Police and crime commissioners will be powerful local representatives, able to set the priorities for the police force within their force area, respond to the needs and demands of their communities more effectively, ensure that local and national priorities are suitably funded by setting a budget and the local precept, and hold to account the local chief constable for the delivery and performance of the force.
Strong and effective leadership will continue to be delivered by the chief constable and their command teams. Nothing within this step change of policing governance removes or calls into question the operational independence of the police service which remains the corner stone of all that is good about our way of policing by consent.
To provide future safeguard to this principle I have today laid for the approval of Parliament a protocol which sets out how the new policing governance arrangements will work. It clarifies the role and responsibilities of police and crime commissioners (PCCs), the mayor’s office for policing and crime (MOPC), chief constables, police and crime panels and the London assembly police and crime panel. It outlines what these bodies are expected to do and how they are expected to work together to fight crime and improve policing. The protocol will therefore fundamentally underpin the key working relationships within the new policing landscape.
Elections for police and crime commissioners for England and Wales will take place in November 2012. Within London, the mayor’s office for policing and crime will perform the equivalent role for the metropolitan police district. How these elected policing bodies work with, and interact with, chief constables and police and crime panels will be crucial to achieving success.
It is my intention to issue the protocol to all chief constables, police authority chairs, their chief executives, the chief executives of all local authorities within England and Wales and the Welsh Government in order to assist in transition planning. The protocol will also be made available to all potential candidates for the Mayor of London elections in May 2012. It will then be made available to potential candidates for the office of PCC within each force area in England and Wales ahead of the first elections in November 2012.
Within England and Wales, the changes in governance will take effect on 22 November 2012, with the exception of London. I am confident that with this protocol in place everyone will be able to work together effectively to drive down crime and to make our communities safer.
I am also today issuing a non statutory “shadow” strategic policing requirement which sets out my view, as Home Secretary, of the national threats that the police must address and the appropriate national policing capabilities I believe are required to counter those threats. It respects the operational independence of the police, advising what, in strategic terms, they need to achieve but not how they should achieve it. I have placed copies of the shadow strategic policing requirement in the House of Commons Library and an electronic copy can be found at:
http://www.homeoffice.gov.uk/publications/police/strategic-policing-requirement/
I am issuing this shadow strategic policing requirement now to inform police forces’ and police authorities’ plans for 2012-13. Although it will not, at this stage, have statutory effect, it is my intention that it should help to drive improvements during the transition period to police and crime commissioners. I will look to all forces and authorities to have regard to this shadow strategic policing requirement when exercising their responsibilities.
The shadow strategic policing requirement is a statement of the collective capabilities that police forces across England and Wales will be expected to have in place in order to protect the public from cross-boundary threats such as terrorism, civil emergencies, public disorder, cyber incidents and organised crime. It supports the development and maintenance of policing capabilities, often collaboratively between forces, and in support of the work of national agencies such as, in future, the National Crime Agency.
I have consulted with ACPO, the APA, and other policing bodies and relevant agencies to develop the shadow strategic policing requirement. I will consult further on the experience of forces and authorities in using this shadow strategic policing requirement, and will then issue the statutory strategic policing requirement next summer in time for the election of police and crime commissioners.
Both police and crime commissioners and chief constables will be required to have regard to the SPR from November 2012 in the conduct of their respective responsibilities.
I would like to thank all of those from the police and the other bodies and agencies that have contributed to the drafting of the protocol and the shadow strategic policing requirement—their work has been invaluable.
Judicial Appointments
(13 years ago)
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The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)
The judiciary play a critical role in the administration of justice. It is therefore vital that we select candidates for judicial office on merit, through fair and open competition, from the widest range of eligible candidates.
We consider that there is a need to address issues with the current systems. Those issues include: the length of time and amount of money it can cost to run a selection process; the degree of diversity in appointments; and the inflexibility of the Constitutional Reform Act 2005, which means even minor process changes require primary legislation.
All of this supports the case for revisiting judicial appointments and today we have launched a consultation on legislative changes to achieve the proper balance between executive, judicial and independent responsibilities, improve clarity, transparency and openness in processes; create a more diverse judiciary that is reflective of society; and deliver speed and quality of service to applicants, the courts and tribunals and value for money to the taxpayer.
A number of our proposals give effect to recommendations arising from the report of the advisory panel on judicial diversity. Others come from the judiciary and those with a close interest in the appointment process.
I have formally submitted the consultation to the chair of the House of Lords Constitution Committee as part of our contribution to their ongoing inquiry into judicial appointments and diversity. The Government intend to consider the Committee’s findings alongside responses to this consultation.
The closing date for comments will be 13 February 2012.
It is available online at: http://www.justice.gov.uk/consultations.
Airport Security Scanners
(13 years ago)
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The Secretary of State for Transport (Justine Greening)
On Christmas day 2009 an attempted attack on Northwest flight 253 from Amsterdam Schiphol to Detroit was made using an explosive device concealed in the underwear of a passenger. The device had been constructed with the aim of making detection by existing screening methods extremely difficult and had not been picked up by airport security at any point throughout the passenger’s journey.
The previous Government’s response to this threat included introducing security scanners at UK airports. Security scanners were deployed at Heathrow and Manchester airports in February 2010. They were deployed at Gatwick airport a few months later, meaning that today scanners are in operation at three of the largest UK airports.
A public consultation on an interim code of practice for the use of security scanners began just before the general election. After the election, my predecessor, the right hon. Member for Runnymede and Weybridge (Mr Hammond) extended the consultation to allow more time for people to respond. The consultation closed on 19 July 2010 and over 6,000 responses were received. These have been analysed and I can now announce how we intend to deploy security scanners in the future.
The overwhelming feedback from airports is that nearly all passengers accept the use of security scanners and find the process quick and convenient. Out of over a million scans the Government are aware of only 12 refusals. However, I recognise that some passengers have concerns about the use of security scanners and these concerns were reflected in the responses to the consultation.
The ways in which security scanners can be deployed have been restricted by European legislation. My predecessor asked the Transport Commissioner to bring forward proposals which relax these restrictions, and allow scanners to be used more flexibly. An outline package which would achieve this was presented to the European Aviation Security Committee in July and has now been agreed by the European Parliament.
Most responses to the consultation expressed discomfort with the idea of having an image of their body captured for analysis, and they indicated that—if selected for a security scan—they would prefer to opt for an alternative method of screening. I have considered this carefully. However, I have decided against it, on security, operational and privacy grounds.
First, I do not believe that a “pat down” search is equivalent in security terms to a security scan. The purpose of introducing security scanners in the first place was to protect the travelling public better against sophisticated terrorist threats: these threats still exist and the required level of security is not achieved by permitting passengers to choose a less effective alternative.
I have considered carefully whether there are alternative screening methods which might deliver equivalent levels of security to a security scan. A full private search—involving the loosening and/or removal of clothing in the presence of security staff in a private room—would deliver a reasonable level of assurance. However, I believe that this is likely to represent a greater intrusion of privacy than a security scan, and that nearly all passengers, if they fully understand the procedures, would be unlikely to opt for this alternative. It is also likely to be operationally disruptive to airports and other passengers. Appropriately trained security staff would need to be diverted from the main search area to undertake these searches, leading to increased costs and longer queues for everyone else. I do not, therefore, believe that this represents a viable way forward.
I am aware that the proposals recently agreed by the European Parliament include the right for passengers to request an opt-out from scanning. The UK did not support these proposals when they were presented to the Aviation Security Committee. Given the security arguments against permitting such an opt-out, and the threat level that exists in the UK, the Government intend to use their powers under the Aviation Security Act to maintain the current position. Those passengers selected for scanning will therefore not be able to fly if they are not willing to be scanned.
The consultation also asked people whether they had any health concerns relating to the small doses of ionising radiation produced by some security scanners. Only a limited number of responses were received on this issue, but I recognise that it has continued to be a contentious issue. Last year, experts from the Health Protection Agency (HPA) conducted an official assessment of the x-ray backscatter scanner in use at some UK airports. The HPA found that the dose of ionising radiation received from deployed backscatter scanners is the equivalent to that received naturally through just two minutes of flying at high altitude.
The European Commission has called for further expert consideration of the potential health risks from security scanners and has asked the European Scientific Committee on Emerging and Newly Identified Health Risks to review the evidence. I look forward to the Committee’s report and will consider it carefully before making decisions about which technologies should be deployed at UK airports in future.
However, it is right that the Government does what it can to address people’s concerns wherever that is possible without compromising security. Therefore I can announce today that the Government intend to make further improvements to the privacy and data safeguards already in place for security scanners.
Software which automatically analyses images is currently in development. Where this technology has developed to a stage at which it passes rigorous Government testing, airports will be expected to deploy it when they renew or replace their equipment. This will mean that in the future images will no longer be seen by human reviewers. In addition, airports will also be required to undertake routine testing of hardware and software to ensure that they remain unable to copy, save, or otherwise transmit images. This will be verified by the Department’s transport security inspectors.
I have also been considering whether security scanners should be rolled out more widely at UK airports. In principle, I believe that they should. My officials will work with the aviation industry to agree a risk-based approach to further deployments. However, I want to make sure that this is done in conjunction with the availability of enhanced screening technology with better privacy safeguards. The precise timing of further deployments will therefore be dependent on how quickly the new generation of security scanners is developed.
I have placed a copy of this statement, and the revised regulations on the use of security scanners at UK airports, in the Libraries of both Houses.
Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Baroness McIntosh of Hudnall)
My Lords, I remind the Committee that if there is a Division in the Chamber, the Committee will adjourn for 10 minutes from the sound of the Division Bell for Members of the Committee to vote.
Welfare Reform Bill
(13 years ago)
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Lord Touhig
“(3) Regulations shall prescribe the considerations to be taken into account in deciding whether a fixed-term award would be appropriate.”
Lord Touhig
My Lords, Amendments 86F and 86G in my name, that of my noble friend Lady Healy of Primrose Hill and those of my good colleagues, the noble Lord, Lord Wigley, and the noble Baroness, Lady Gardner of Parkes, are intended to make it clear that indefinite awards could and should be made for people with lifelong conditions or disabilities of a degenerative nature. Such awards should be based on evidence from healthcare professionals showing that the needs of the person receiving the award will remain the same or increase over time, and that they will therefore continue to meet the eligibility criteria for the benefit indefinitely.
The Government have stated an intention to make the personal independence payment awards for a fixed term, except in exceptional circumstances. In addition, the Government’s proposal is that there will be an in-built review process for all awards to ensure that they remain accurate. This proposal is based on the assumption that most individuals will show some improvement or will be able to adapt to their condition over time to the extent that their needs will lessen. However, this is simply not the case for those with long-term conditions. There are around 300,000 adults in England with autism, which is a lifelong condition. While some people with autism may develop the ability to manage aspects of their disability, such as improving verbal communication or overcoming an inability to travel by learning a specific route, such positive change happens only as a result of support, including the present disability living allowance. If that is taken away, progress risks being reversed.
I am not arguing that people should be granted indefinite awards solely on the basis of their diagnosis. However, if medical and social care assessment evidence for the individual claimant indicates that theirs is a lifelong condition that is unlikely to improve, this should be taken into account to indicate that an indefinite award may be appropriate. It is important that this is prescribed in regulation. Reassessing all claimants with long-term and degenerative conditions not only wastes taxpayers’ money but can cause significant stress for claimants, especially those with autism, who often have additional mental health problems. The increased anxiety can lead to deterioration in the claimant’s health, thereby undermining the Government’s purpose and the rationale of enhancing the independence of disabled people—to which we all subscribe.
Our amendments before your Lordships this afternoon would allow for lifelong awards where there is evidence to show that the individual’s condition is unlikely to change over time. In our debate last Monday I said that, so far as understanding autism is required, the condition can be summed up in four words: autism is for life. Where it is established that a person with autism should receive the personal independence payment, it, too, should be for life. I beg to move.
Lord Wigley
My Lords, I rise to speak very briefly in support of these amendments so ably moved by the noble Lord, Lord Touhig. Many of the arguments that underpin these amendments have already been rehearsed in the previous debate, so I will not take too much time.
It seems sensible to have an equal-handed approach to these circumstances. If someone has a condition that is palpably for life, the guidance should be that the benefit should run for life. Equally, in those circumstances where there may be doubt, there needs to be flexibility. What is needed, perhaps on the face of the Bill as these amendments propose, is that there are guidelines that take those two sets of circumstances properly into account. The system itself must be willing to respond to the individual circumstances rather than just follow a dogma about restricting benefits even where benefits are probably much needed.
Lord Skelmersdale
My Lords, I am not sure whether I ought to declare an interest, but I will do so nevertheless. My daughter is a research biochemist at the University of Sheffield where she works in a cancer laboratory. Her objective, as it currently stands, is to starve cancer cells of blood—something that other researchers around the country, and indeed around the world, are currently working on without yet having achieved a satisfactory result.
Although I readily understand why the noble Lord, Lord Touhig, has moved his amendment, I find the amendment, although this might be unfair, perhaps—to make up a word—a little closed mind-ish. There is no doubt that, over recent years, the medical fraternity has made leaps and bounds in research. There is even, as I understand it, a possibility that stem cells could be used to repair the nerve system up the back. Now, such developments may come up in five, 20 or 50 years— I do not know, and nobody knows—but an amendment like this is so restrictive that it rather ignores the possibilities of medical science.
I readily understand the interest of the noble Lord, Lord Touhig, in mental health, particularly autism. I confess that I do not know anything about autism, whereas clearly he does. It is not beyond the wit of man to believe that some better treatment, understanding or social environment in respect of any mental disease could well improve matters to allow people a certain amount of, for example, work. My son-in-law suffers from ME, and apparently there is tremendous argument as to whether ME is entirely a mental disease or a physical disease with mental attributes. I do not know whether he will recover enough to work; I suspect that neither he nor anyone else knows that. However, I find this particular amendment—especially the second one—somewhat restrictive.
The Countess of Mar
My Lords, I support the noble Lord, Lord Touhig, in his amendment. I respect the view of the noble Lord, Lord Skelmersdale, on ME, and I also thank the Minister for his recent letter to me that clarifies a lot about the department’s stance on ME. I am very grateful for what he has done.
However, there are serious cases of ME where people are just not going to get better. In the House the other day during our consideration of the Health and Social Care Bill, I described a young lady who has had ME since she was 15 and who is now 30 and is not going to get any better. There are a lot of people like that. She is suffering terrible stress with worrying about what is going to happen with her personal independence payments, and that is not helping her condition. In cases like that, where it is pretty obvious that the person is not going to get better—unless there is a miracle of medical science, when of course it should be reviewed whether the person’s health can be improved, which would be all well and good—such patients should not be subjected to the stresses of a medical examination.
Lord McAvoy
My Lords, I would like to follow the point made by the noble Lord, Lord Skelmersdale, that medical science might come up with a cure, but I am puzzled as to why that is problem. Surely when the facts change, the law would be changed; I do not see any great problem with changing the law.
Lord McKenzie of Luton
My Lords, we have a degree of sympathy with the amendment moved by my noble friend Lord Touhig and spoken to by the noble Countess, Lady Mar, and the noble Lord, Lord Wigley. As I understand it, it goes with the grain of what the Government are seeking to do. When we debated similar issues last week, I thought the term “exceptional circumstances” was somewhat broader than a strict reading of it might lead one to conclude. Therefore, I ask the Minister to expand on that when dealing with this amendment and to say whether he accepts the proposition that there will be those with long-term degenerative conditions that are unlikely to improve.
The noble Lord, Lord Skelmersdale, makes the reasonable point that we never know if there might be medical scientific breakthroughs, but, as my noble friend said, these matters could always be revisited. It seems to be important to try to give some comfort to people whose condition is sadly not going to improve. What is the purpose of bringing them in simply to pile stress on to their lives and use resources that could be deployed elsewhere?
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, we think it is right that an individual’s benefit entitlement is based on the degree to which he or she is participating in society. This level of participation can vary as health conditions or impairments improve or deteriorate, their impact changes or individuals adapt to their circumstances. We want the benefit accurately to reflect relevant changes in circumstances to ensure that people receive the right level of support. The 2004-05 national benefit review found that about £630 million a year of DLA is overpaid as a result of unreported changes in circumstances. This cannot be right. However, it is equally about ensuring that, when people’s circumstances deteriorate, the benefit keeps track with them.
The same study estimated that around £190 million of DLA is underpaid each year—vital money that is not reaching the people for whom it was intended. There is no one-size-fits-all answer; our approach will involve a combination of awards that, in some cases, will be fixed for a short time and in others will be longer term, depending on the individual, the impact of their disability and the extent to which they are able to live independently. In many circumstances, this can change for better or indeed for worse during someone’s lifetime, and this will be different for different people. We think that an active management regime that involves planned reviews is the most appropriate way of responding to this.
However, it is important—and on this I feel we agree—that we do not undertake inappropriate or unnecessary assessments and interventions where there is unlikely to be a change in award. Key to this is ensuring that decisions on award duration and interventions are evidence based. Here I refer back to comments I made during the debate on the noble Lord’s previous amendments. In PIP assessment, we want to get the best mix of evidence from a variety of sources. This will be partly about what the claimants tell us about themselves, partly what can be gathered at face-to-face consultations and partly what we can obtain from relevant people who support them. Moreover, as I said, we want individuals to tell us who is best placed to advise us on these matters.
Therefore, I think we are fundamentally in the same place as the noble Lords and the noble Baroness. The one key difference is that we do not think that an individual’s type of health condition or impairment matters—for example, whether or not it is a lifelong condition; what matters is the likely impact of the condition going forwards and whether it is likely to affect benefit entitlement. Conditions and impairments—even ones that are usually degenerative—can affect people in very different ways. That is why we want decisions on award durations to be based on individual circumstances following consideration of all the evidence of the case.
Lord Wigley
The Minister said a moment ago that he was looking for the maximum degree of flexibility and not to have reviews where they were patently not necessary. Am I right in recalling that in the earlier debates he indicated that the first tier of any review might be with the professionals without impinging on the beneficiary so as not to cause unnecessary worry and that, if the professional—the GP or whoever—advised that there was no change, there would be no need at all for the beneficiary to be aware of this?
Lord Freud
Yes, my Lords. That is what I said and it has not changed. Noble Lords might be reassured by the fact that, even where awards are fixed term and periodic reassessment is required, this does not have to be burdensome. As I have just said, in some cases the assessments will involve scrutiny of paper evidence only and will not require a face-to-face consultation. This will especially be the case where there is considerable supporting evidence on which to base decisions. Conditions or impairments which are life-long and/or degenerative are particularly likely to have such supporting evidence.
We will provide guidance on the duration of an award, including when an ongoing award would be appropriate and with what frequency that award would be reviewed. We are committed to developing the duration assessment in consultation with disabled people and their representatives to ensure that we get it right. We recognise how important this is to ensure that the process of deciding award durations remains both fair and transparent.
I should also like to tackle a misconception that seems to have built up in relation to this issue—that is, that there will be a requirement for everyone to be reviewed on a yearly basis. This is simply not true. While some people will receive one-year awards where their circumstances warrant it, the vast majority of awards are likely to be longer than this, with some being much longer and some indefinite.
I hope that I have reassured noble Lords that we are in the same place as them on this issue. We want award durations to be based on individuals’ circumstances and the likelihood of change; we do not want unnecessary reviews or assessments; and we want decisions on these issues to be based on the best evidence, including that from the professionals involved in supporting claimants. On that basis, I urge the noble Lord to withdraw his amendment.
Lord McKenzie of Luton
Can the Minister clarify one point? He said that some awards might be long- term and some short-term. Can he give us an inkling as to the department’s thinking about that spectrum and what long-term awards may mean?
Lord Freud
My Lords, it would be premature for me to go into much more detail here. Clearly, we are aiming to build up the award duration in consultation, and I would not want to pre-empt that consultative process.
Lord Touhig
My Lords, I thank all noble Lords for their contributions to this very short but useful and important debate. The noble Lord, Lord Wigley, pointed out that we have sought to be flexible in these amendments. I am sorry that the noble Lord, Lord Skelmersdale, thinks that we are being somewhat restrictive. However, that is not the intention; we are trying to be flexible, recognising that there will be circumstances where it will not be appropriate for a lifetime award to be made.
The noble Countess, Lady Mar, made an important point in speaking about someone with experience of an illness that will not improve. Putting someone through all the problems and distress of a review will not be helpful at all. We all hope to God that many of these problems can be solved as time goes on. My noble friend Lord McAvoy made the point that, if what we are asking for were in the Bill and there were some considerable improvement in one area or another, we would obviously need to change the law if that were appropriate. Therefore, I think that we need to be flexible on that.
The Minister made the important point that £630 million had been overpaid in DLA. However, from my experience of sitting on the Public Accounts Committee in the other place, I would say that one really has to look into how that happened. Very often, it was due to failure by the department and not because someone’s condition had changed. The National Audit Office reports point this out. Indeed, on one occasion I had a case where a constituent had to complete a form and there was a box to be ticked against the question, “Have you received income support in the past year?”. She ticked it and underneath wrote, “But it ceased on X date”. However, because the form was scanned in, the department’s system could not read the words underneath, so it continued to overpay her and then demanded the money back. I fear that the problem of overpayment is often caused not by the person making the claim but by the system, in any event.
I thank the noble Lord for his clarity on a number of points and for the encouragement that he gave. I feel that can we make progress, as the way that we are working in this Committee and in this House helps us to improve the quality of legislation because of the backgrounds, knowledge and expertise that so many noble Lords have on a whole range of matters. I believe that by collaborating, we will protect those who are perhaps the most vulnerable—certainly, those who concern those of us who tabled this amendment—so that they will not have to go through all the trauma and difficulties associated with constant review of their benefit once it is awarded, if their condition is such that it will not improve. Having said that, I thank the Minister for his comments and I am sure that we will enter into more dialogue about this in future. I beg leave to withdraw the amendment.
Lord Rix
My Lords, the purpose of this amendment and Amendment 88 would be to introduce a biennial independent review of the personal independence payment for the first six years after it comes into force. The amendments also aim to require the report within two years of PIP being implemented, not the three years as proposed in the Bill. As your Lordships will be aware, the Bill already provides for a single independent review of the PIP assessment, with a report that must be presented to Parliament. While this is welcome, given the impact of the new assessment on many disabled people—particularly those with a learning disability—I believe that more than one review would be necessary.
Indeed, the precedent for having more than one review has already been established. The work capability assessment is subject to an annual independent review for the first five years of its operation, as laid out in the Welfare Reform Act 2007. The experience of the work capability assessment has shown the benefits of an ongoing independent review, although I acknowledge that the yearly requirement has meant insufficient time for the introduction of one review’s proposals before the next commences. Hence, I am calling for the PIP review to take place on a biennial basis only. During discussion on this matter in the Commons, it was noted by the Government that the proposed one-off report is just one way of “close working and testing” the implementation of the new measure. However, I am concerned that this does not necessarily guarantee a fully fit-for-purpose assessment.
The independent review of the WCA has shown a process that is not working as it should be. If a similar scenario is revealed for the PIP assessment, the Government should act swiftly to ensure that disabled people are appropriately supported and not denied the assistance they need to live more independently. I believe a biennial review would help to make this happen. Indeed, on a more positive note, if PIP is to be as successful as the Government claim it is going to be, Ministers would then have a valuable opportunity to showcase this in Parliament and more widely across the country, which—in these rather hard-pressed times for the Government on this Bill—must surely be a welcome boost both to the Government and to Ministers. I beg to move.
Lord Freud
My Lords, perhaps I may be permitted to make an early intervention here in order to offer to take this matter away and return on Report. The Government fully agree with noble Lords on the need for robust independent evaluation of how the assessment works in practice and of the value that Professor Harrington has added through his reviews of the work capability assessment. While we had not intended legislating for multiple reviews of PIP, we are not averse to them. Given the strength of opinion that I know exists on this issue, I will take it away to see what I can do before Report. Although I cannot promise here and now that I can agree to exactly the formulation in these amendments, I will do all that I can to satisfy noble Lords on this matter.
I hope that this statement also deals with my noble friend Lord German’s concern, which I believe may lie behind his Amendments 98ZA and 98ZB. Given this assurance, I urge noble Lords to withdraw their amendments.
Lord Wigley
My Lords, as my fire has been taken away from me by the Minister, perhaps I may at least be allowed to say thank you. In consideration of this matter—and obviously consideration can come to a positive outcome, but not necessarily—the one initial fact that I would ask the Minister to take on board is that other circumstances can change in parallel with this—the general economy and other legislation—which may make it beneficial for reviews to take place more frequently. However, I will not press an open door.
Lord Freud
Lord Freud
My Lords, the amendments in this group serve two purposes: to remove a number of consequential amendments relating to tax provisions for claimants of personal independence payment, and to align the benefit with common provisions on appealing against payability decisions when someone is imprisoned or detained in legal custody. I do not wish to dwell on the latter provision, as it is merely intended to extend common rules to personal independence payment, but I should like to offer some reassurances around the amendments that we are proposing against tax provisions.
First, let me say that these amendments do not reflect any change in the Government’s plans for either welfare or taxation. The amendments are purely a procedural matter. They will remove the tax amendments from the Welfare Reform Bill so that suitable tax amendments can be made by a future Finance Bill or by Treasury order if appropriate. It may be helpful if I give an example of one of the tax-related provisions. Currently, Schedule 7A to the Finance Act 1994 makes provision for the letting of a vehicle to be exempt from insurance premium tax. This provision applies where the contract is made on qualifying terms, one of which is that the disabled person leasing the vehicle receives the DLA mobility component at either rate.
I should like to reassure noble Lords that, although we are removing these provisions from the Bill, the Government have committed to maintain the current passporting arrangements wherever possible. These amendments will not make anyone worse off. They do not reflect any change in the Government’s plans for either welfare or taxation; they are purely procedural. The provisions will remove the tax amendments from the Welfare Reform Bill, so that suitable tax amendments can be made in future finance legislation. This will enable the tax position, including potential knock-on consequences for other parts of tax legislation, to be considered in the round.
The Government have been very clear that personal independence payment, like DLA, will be a tax-free benefit. In recognition of that absolute commitment, we have therefore decided to retain provision within this Bill to provide absolute certainty that these payments will be free of tax. I beg to move.
Lord McKenzie of Luton
My Lords, I thank the Minister for his explanation of these amendments, which I think I understand and accept. I wondered at first when I saw them whether we had done something to upset Treasury Ministers, and they no longer wanted to come before us. To be clear, we have provisions in here relating to tax which we are simply moving out of the Bill because they are going to go back in a Finance Act. If they remained in the Bill in their current form, would that in any way invalidate them? There might be a procedural issue that has gone awry in this case, but I am still a little unclear as to why it is necessary in the event, given that those provisions are there, they could not remain.
More importantly, I am anxious that if these provisions come out of this Bill, there is certainty that they will end up in a Finance Bill. Can the Minister give us any assurance as to which Bill that is likely to be and what processes, given the oversight that we dealt with a couple of Committee sittings ago, there are in place to make sure that these are followed through and put into effect?
Lord Freud
When you look at these detailed measures, which is something that I do not encourage anyone to do who wants to retain their sang-froid, you can see that they are closely associated with taxation and trust funds. It is much more coherent for them to be dealt with in a Finance Bill or another finance Act rather than one dealing with welfare reform. That is simply the reason, because it means that if you restructure a piece of tax trust law, you can do the whole thing in one, rather than having to go to different Acts. That is the reason.
Lord Freud
(a) in paragraph (f), the final “or” is repealed;”
“(i) section 84 of that Act.”
Baroness Sherlock
Baroness Sherlock
My Lords, I move this amendment on behalf of the noble Lord, Lord Patel, who has been unavoidably detained, as he has an important meeting on other legislation. I shall speak also to Amendment 98A.
In doing so, I am grateful for briefing, particularly from CLIC Sargent, a charity that works with children with cancer. These are probing amendments that are designed to ensure that personal independence payment is able to meet the distinct needs of young people aged 16 to 24 who have a long-term health condition or disability. I understand that the Government have confirmed that the reform of DLA for under-16s will be taken forward separately, but there is still an issue about whether PIP is able to meet the unique needs of young people aged 16 to 24. There is a concern that they will end up being treated the same way as adults, despite being much less likely to have financial independence and having fewer benefits available to them. I understand that DLA is at present the only benefit available to young people with a health condition which is available in all circumstances. Therefore, it is particularly important that PIP is able to meet the unique needs of this group of young people with health conditions or disabilities.
As noble Lords will appreciate, those young people aged 16 to 24 face a range of transitions as they approach adulthood. They may leave education and move on to higher education or employment, perhaps leaving their family and moving into their own home. They may enter into long-term relationships and have children; increasingly, those key transitions happen in the 20s. In particular, I am conscious that elsewhere the Government are moving to raise the age participation rate for children in education. There are also reviews going on of SEN; the disability Green Paper is looking at a co-ordinated system of assessment and support from birth to age 25. But the plans to raise participation age will mean that, for example, most 16 to 18 year-olds will still be in education or training, but PIP will classify them as working-age adults. By way of example, I understand that the best practice NICE guidance treats 16 to 24 year-olds with cancer as being a distinct group with specific social, psychological and educational needs and goes on to explain the best way for services to be shaped for this group. Could the Minister be encouraged to look at that as an approach that might be helpful in transitioning across to examining PIP?
The effect of relying on different age ranges within the benefits system not only complicates transition for long-term health conditions or disabilities but can also see them facing a cliff edge. Can I put some specific questions to the Minister? I have no desire to press this amendment but perhaps he could help the Committee to understand how the Government intend to support this group of people. Has he looked at the possibility of introducing specialist teams or a tailored approach to young people aged 16 to 24 in the benefits system? Would he consider a distinct PIP system for those aged 16 to 24, which would include an age-appropriate system of assessment for that age group? In particular, would he consider whether those already in receipt of DLA could continue to receive it until they turn 18—or maybe even up to 24, if he is feeling particularly generous today? Would he comment on the qualifying period? Could he reassure the Committee that that will not apply for those under 18, and ideally not for those under 24? Could he help the Committee to understand what approach the Government are taking to harmonising the various age limits across the benefit system?
This is a potentially particularly vulnerable group of young people, and it is important that in looking at how PIP will operate we take careful account of the impact on this group. I hope that the Minister is able to reassure the Committee. I beg to move.
Lord McKenzie of Luton
My Lords, these are useful probing amendments to understand fully what is happening or proposed in respect of this group of young people. I imagine that the Minister will say that, as the Bill stands, there are already powers to make regulations as proposed for 16 to 24 year-olds, but it is an opportunity to get something on the record. We certainly support the thrust of this and the needs for regulations that are affirmative—not just the first set. I think that we will hear from the noble Lord, Lord German, on that in a moment.
The age 16 already has ramifications in the DLA system. Below that age, young people cannot qualify for the lower-rate care component via the cooking test, and there are additional tests for the lower-rate mobility test. So there is already a potentially stressful transition under DLA that could be compounded with the transition to PIP. The figures that have been mentioned are that over the next three years 173,000 disabled children will turn 16. If they have to seek or apply for PIP immediately, that is a big challenge. There was a hint in the other place when this was debated that that would not necessarily be the case and that, in the scheduling of young people in this age group, they would go directly on to PIP. Perhaps we can have the Minister’s reassurance or an update on that point.
The briefing note that we got from the DWP sets out the work undertaken to date, seeking to base the assessment on the education health and care plan that is being developed across government, which we would support. But I am not quite sure how it fits together on timing, particularly over the next couple of years, with PIP being relatively close by and due to be with us shortly. Can the Minister confirm to us the process of assessment for young adults and say what the likely migration process is? What happens to 16 year-olds who are on DLA at the point when PIP is introduced?
Lord Freud
My Lords, I am grateful to the noble Lord, Lord Patel, for tabling these amendments and to the noble Baroness, Lady Sherlock, for moving them in his absence. The amendments allow me to set out the Government’s position on how we will deliver PIP effectively for young disabled people in a way that is sensitive to their needs. Noble Lords may be aware that the Government published a briefing document that specifically considered the position of young people. The briefing document set out some of the main insights that we have learned from them and their representatives, which are informing our design work.
Let me be clear from the outset. I know that there are particular issues and sensitivities when dealing with disabled young adults at what can be a particularly challenging period of their life. That is why we have been working closely with people aged 16 to 24 and their representative organisations in order to understand how we can ensure that the benefit is administered in a way that best meets their needs. Two main considerations that young people have raised with us are: whether 16 is too young an age to begin the process of moving from DLA to PIP; and making sure that the transition arrangements for moving on to the new benefit are easy to understand and transparent—the role of advocates and information needs, for example, being particularly important.
Under current arrangements for DLA, the child-related rules fall away at the age of 16 and the entitlement conditions to the care component are extended. The age of 16 therefore forms a natural touch-point to re-examine entitlement and take young people through to entitlement and receipt of DLA in their own right, where that is appropriate. Paying young people directly gives them direct control over how the benefit can enable them to live independent lives. It is our firm belief that the principle of giving individuals control over how they can tackle the barriers to their independence should be brought forward into PIP.
In developing our proposals for PIP, we know that there are particular issues that we need to address concerning its delivery to young adults. For example, young disabled people can expect to go through a number of assessments as they move from childhood to adulthood, and many of them will require varying degrees of support to negotiate those assessments. That is why we will ensure that all young people who claim, or transition on to, PIP will have the appropriate support to allow them fully to express their needs. This could be, for example, by allowing a parent, advocate or friend to accompany them to their face-to-face consultation.
We are fully involving young disabled people and their representatives as we design and build the delivery mechanisms. For example, we are working with user-led organisations through the PIP implementation development group, which is made up of a wide range of organisations including those that represent young people. We have also begun work with focus groups and have conducted one-to-one interviews directly with young people, appointees and their representatives to inform both the way in which PIP will be delivered and the transition arrangements for those moving from DLA to PIP.
As I mentioned, the transition from childhood to adulthood brings with it numerous assessments at different ages. We are therefore also working across government, in particular with the Department of Education, to see what more we may be able to join up and share information with the proposed single assessment process for education, health and social care. This means, for example, that if an individual is still in education or training, exploring whether we may be able to use evidence from special educational needs assessments or information from the school or college to inform the determination of a PIP claim. But we need to look carefully at this so that we get the right balance between not overassessing someone and having an approach that is too general to identify a person’s specific needs. My officials are therefore working closely with officials in the Department of Education so that we get this right.
To ensure transparency, credibility and a smooth transition from DLA to PIP, we know that we will need to build in processes, with appropriate information and engagement, that let young people and their families know what to expect and understand what they have to do. Our intention is to ensure continuity of payment, with no gap between DLA ending and PIP starting when an individual makes a claim and subject to their meeting the eligibility conditions. We are continuing to consider how the detailed rules should work and, as with all the changes that we are making, we will continue to involve disabled people and their representatives in the design.
Lord McKenzie of Luton
Could the Minister clarify a point? I apologise if I have missed this. In the case of someone who at the moment is under 16 and on DLA, if they reach the age of 16 before PIP is introduced, will they undergo the normal reassessment to adult DLA? If they reach 16 after PIP has been introduced, will they automatically go through the PIP process, or could they potentially stay on the DLA adult process for a period, whatever that may be?
Lord Freud
My Lords, we have not done a detailed migration strategy. When people are effectively on adult DLA, even though they have transitioned from child DLA, we will have to work out the exact timings for when to take them. We do not have those precise details yet.
Lord McKenzie of Luton
I am grateful for that. The Minister will see that the issue that that highlights is the one that was probed: if people reaching 16 are going to go straight on to PIP, given what is going to happen with the number of young people achieving the age of 16 over the next couple of years, they are in large measure going to be first through the gate for PIP. That was the concern.
Lord Freud
Clearly, if they go through their birthday when PIP is in position, we will have the arrangements that I was describing. If they have already gone through the gateway because PIP was not yet in position, we will have to decide on the precise migration strategy regarding whether they get priority or at what stage we would take them. That is something we need to determine a little later.
Baroness Sherlock
My Lords, I thank the Minister for giving such a comprehensive account of the Government’s approach to this group of young people. I also thank him for his offer to write to the noble Lord, Lord Patel, and to me. I hope that, if he does, he will pick up the point made at the very end by my noble friend Lord McKenzie and try to address what happens to those young people who may be first through the gate and how the system can deal with them. In the light of that, I beg leave to withdraw the amendment.
Lord Freud
“( ) the first regulations under section 76(4) or 77(4);”
Lord German
Lord German
This group of amendments was designed to test the arrangements that we have in Parliament for reviewing and looking in detail at the operation of PIP. In view of the offer that we have just had from the Minister to take back all the reviewing and reporting arrangements for the whole of PIP, I think that it would be unwise of me to move the amendment.
The Lord Bishop of Ripon and Leeds
My Lords, as we come to the consideration of the cap on welfare benefits, the amendments in my name in the next two groupings concentrate on the needs of children. They are concerned not with the existence of the cap but with the way in which it operates for families with children.
Amendment 99ZA in my name and that of the noble Baroness, Lady Tyler, makes families with children a specific category within Clause 93. The clause currently has no reference at all to children. The distinction that it makes is between single people and couples, yet children are most deeply affected by any restriction of benefits. My amendments are an attempt to find ways in which families with children can be helped to care for them where there is unemployment or circumstances which make the parents dependent on benefits.
I am particularly indebted to the Children’s Society for its Good Childhood report on the condition of children and the pressures on them in this country. I am also indebted to it for its work to ensure that children in deprived families are protected from the effect of capping and that the capping arrangements do not damage the needs of children and the way in which they grow up in our society. As the Bill stands, children are disproportionately affected by the cap. The Children’s Society estimates that some 210,000 children will be affected by it compared with some 70,000 adults.
The amendment promotes fairness because it compares like with like. If we are to set a cap for families with children, that should be compared with working families with children—probably those with someone working more than 16 hours a week, as suggested in Amendment 99ABB. That fits with, for example, the Chancellor of the Exchequer’s remarks at the 2010 Conservative Party conference that the cap should be at the level of the earnings of the average working family. I believe that most of us would see an average working family as meaning a family with children, whereas household earnings include those of childless single people, for example. This simple alteration in Amendment 99ZA could remove something like 25,000 children from the cap.
Linked in this group of amendments are those seeking to produce a fair definition of income. Amendment 99ABB aims to relate the cap to the income of working families rather than simply to their earnings. The principle behind the cap is that households should not be better off living on benefits than they would be in work. Income, for a family that is in work, includes, for example, child benefit or council tax benefit. If we are looking for an equitable comparison, then it is the amount that comes in to the household which is relevant, and not simply that which is on the payslip. To replace earnings by income, as Amendment 99ABB suggests, could remove some 38,000 children from the effects of the cap. Again, the concern is with provision for the growth, development and support of children as they grow up within our culture, and those who need the support of a welfare system as they grow up.
The last of the amendments in my name in this group concerns the maths by which “average” is calculated. The word “average” contains a studied ambiguity and I hope the Minister will be able to enlighten us as we look at this. At present, Clause 93(8) gives freedom to the Secretary of State to choose what he means by an average. That seems to me to be a slightly Humpty Dumpty-ish way of looking at the whole issue. It is unsatisfactory because it causes uncertainty. The mean, which is what is proposed by this amendment, is what, in my experience, is normally meant by an average. The figures are added up and then divided by the number of people concerned. It is like a cricket batting average, where the number of runs is divided by the number of dismissals to get the average. The other common so-called average is the median—the middle number. If you have a cohort of 1,000, it is number 500 in that 1,000. That is a remarkably arbitrary figure because it takes no account of the way in which there may be clustering at one end or the other of the total number of 1,000 in that particular example. However, it might well tempt future Secretaries of State, since at least, as figures are at the moment, it would be lower than the mean under current calculations. It may be that exploration could pursue a trimmed mean, which omits the highest paid 5 per cent and the lowest paid 5 per cent of working households when calculating the mean. We need some definition of average if this clause is going to make sense.
These are simple amendments, which do not challenge the basis of the benefits cap. They acknowledge the cost of bringing up children, which is at the heart of the need for family income. They recognise the struggle of parents unable to find work as they seek to care for their families. They could be crucial in helping to avoid plunging children back into poverty. I hope that the Government and the Minister will be able to explore some of these possibilities. I beg to move.
Baroness Tyler of Enfield
My Lords, I should like to explain why I decided to add my name to the excellent amendments that have just been put forward by the right reverend Prelate the Bishop of Ripon and Leeds. I, too, was indebted to the work of the Children’s Society, which did an excellent analysis in this area. I understand the rationale for a benefit cap. I am not trying to say that I am against it; I understand the arguments about promoting fairness between those in work and those receiving benefits, and indeed the need to reduce the cost of the rapidly growing benefits bill as part of the overall deficit reduction strategy. My concern, though, as I looked at the numbers, at who would be affected and at the types of families that would be affected, was the implications for some of the most vulnerable families, particularly families with children. I shall say a few more words about that.
I was very taken by the analysis of the Children’s Society that showed that children would be disproportionately affected by how the benefit cap is currently constructed. While it is estimated that some 50,000 households will have their benefits reduced at the moment by this policy, it has also been estimated that over 200,000 children will be affected and up to 80,000 of those could be made homeless.
The composition of the households that are likely to be affected is interesting. The figures are one-third couples, two-thirds single women—generally single mothers—and about half will also be disabled. Indeed, 60 per cent of the households likely to be affected live in London, where housing is more expensive, particularly people living in private rented accommodation. Various ethnic groups will also be particularly affected, when they have larger families.
The first consequences of the benefit cap, unless it is possible to look at constructing it in a different way—perhaps using one of the approaches suggested in these excellent amendments—will be families having to move very abruptly to cheaper areas. This risks children moving school in the middle of a year, thereby disrupting their education and their social networks. It also risks families splitting up, and I shall come back to that point. It could have adverse consequences on kinship carers—family and friends—which is why in the next grouping I am moving an amendment on that point. I also feel that families who will be able to continue to pay the rent will have less money left for other essentials such as food and clothes, which will therefore contribute to child poverty. For families who are not able to pay the rent, are evicted and become homeless, this will be a parlous situation. Children are a priority group for council housing so this is likely to lead to additional pressure on temporary accommodation costs, adding to the cost pressures on local authority budgets. We have heard quite a bit about this in recent months.
There is then a very real danger, which has had virtually no attention, that children at risk will simply disappear from view. This raises real child protection and safeguarding concerns for me. We all know the very tragic stories of children who have disappeared from view and what happens to them in the very worst circumstances. We must ensure that the benefit cap does not, however inadvertently, have that consequence.
Then there is the reduction in what I call mixed communities, as poorer families are forced to move out of an expensive area. As I said earlier, this is particularly the case in London. Not only will it create very undesirable ghettoisation but there will be pressure on public services in ways that different bits of different boroughs will find difficult to deal with. For example, the concentration of workless households in some areas has significant potential implications for a wide range of local authority services. Boroughs that have an inward migration of households are likely to face severely increased service pressures such as demand for school places, the impact of unemployment, poverty and poor housing conditions, whereas in contrast other boroughs will experience reduced demand for such services but will themselves face challenges and costs in adapting very quickly to these different demands.
The point that I should like to finish on, which I feel particularly passionate about—perhaps because I am chief executive of the country’s largest relationships support organisation Relate, which is a declared interest—is the inherent couple penalty currently built into the benefit cap. This has had very little attention so far, but it will affect couples substantially more than lone parents. Indeed, it has been suggested by experts in the field that the cap will introduce one of the most substantial couple penalties ever seen in the benefits system, so it could have the perverse consequence of breaking up families as well as deterring people from entering new relationships and forming new households. Surely this couple penalty is completely at odds with the Government’s, and indeed the Prime Minister’s, very clear stance on wishing to support strong and stable family relationships. I am sure that this is an unintended consequence and has not been thought through, but we need to look at this.
Finally, the impact would be particularly keen where two lone parents decide to move in together, particularly if they both had children from the previous relationship. Such couples could then find that they would be far worse off by moving in and forming one household rather than living as two separate households. I will not detain the Committee’s time any longer, but I just wanted to explain why I feel that having some in-depth discussion of an alternative way of constructing the benefit cap is so vital.
Lord McKenzie of Luton
My Lords, I think that the noble Lord, Lord Best, wishes to speak.
Lord Best
My Lords, in speaking to Amendment 99AC in this group, I am very grateful to Shelter, Homeless Link and the National Housing Federation, which have formulated a series of amendments here and given invaluable advice to all of us.
It turns out that the new benefit cap is really about two factors: children and housing. As was so clearly demonstrated by the noble Baroness, Lady Tyler, and the right reverend Prelate, because the cap is not adjusted to take account of the number of children in a family, larger families will be hardest hit. The other factor for which no allowance is made in the crude calculation of the benefit cap is housing costs. No account is taken of the fact that families in otherwise identical circumstances have to pay very different amounts for their housing, not out of choice but because of where they live, what type of landlord they have and the size of home that their family requires.
Rents are far higher in some areas than in others. In London and the south-east, rents may be four times the levels in the cheaper areas of the north of England or, say, south Wales. If the accommodation is in the private rented sector, again rents can be several times higher than in the social, council or housing association sector. Of course, accommodation costs will be higher if you have a larger family. Heaven help you if you have, say, three children—let alone four, as in my own family—and you are in the private rented sector and you live in the southern half of England. If you cannot find a job, you are probably going to have to move, most likely to a cheaper area where, unfortunately, employment prospects are likely to be even worse, or you will face homelessness.
The cap is very much about housing, and the way that it is applied relates directly to housing costs. Where a family’s entitlement to benefits exceeds the cap, the cut to their state support is to be achieved, in the first instance, by cutting their housing benefit. The DWP calculates that some 50,000 households will be affected. On average, they will lose £93 per week from the amount that they can contribute towards their rent. This shortfall, which cannot possibly be covered by cutting back on food, clothing, heating and so on, rises to a colossal £150 per week for some 7,500 families. The cap also raises the prospect that some families who will have to move in 2012, because of caps on housing benefit and local housing allowance already announced, will be hit again and uprooted for a second time when this overall cap reaches them in 2013.
Amendment 99AC in my name seeks to address this fundamental flaw in the proposal for a benefit cap by excluding the housing benefit component from it. This would not save all those affected since the largest families will be left with virtually nothing with which to pay their rents if they are not to fall below the poverty line. However, it recognises the extreme consequences, even for those in smaller households, of having to pay today’s market rents in so many areas. Removing the housing benefit element from the cap would greatly moderate its effect upon already very poor households.
The DWP itself points out in its impact assessment that households are very likely to go into rent arrears, which means landlords and the courts incurring the expense and effort of evictions, and local authorities facing the increased cost of handling homelessness. Shelter research shows that out-of-work families with just two children will face a shortfall in what they receive for their rent in the private rented sector in all inner London boroughs and many outer London boroughs, from Hounslow to Haringey to Newham. Those with three children will face this problem in every London borough and in 82 per cent of all local authorities throughout the south-east of England.
I may be pre-empting the Minister’s response but the problem would be solved if private landlords and housing associations charging the highest rents were to cut dramatically the rents of their tenants receiving housing benefit or local housing allowance. However, we should remember that housing benefit and local housing allowance are being cut and capped in several other ways, including through the high rent caps and the restriction to the lowest 30 per cent of rents. Therefore, in total, some pretty hefty rent reductions will be necessary. I fear that there is simply no chance of private landlords, who now have lots of new customers because so few younger households can afford to buy, slashing rents to accommodate the extra cap. Rather, Amendment 99AC seeks to remove much of this problem by taking housing benefits out of the equation.
In the next set of amendments, I will look at some of the ways in which the problem might be mitigated. However, this overarching amendment seeks to remove from the problem of a simple, overarching benefit cap the housing costs that make such a big difference to who is and who is not affected by the new overall cap.
Baroness Hollis of Heigham
My Lords, I support the noble Lord, Lord Best, in his amendment. There are some very difficult inconsistencies in the Government’s policy on housing benefit, about which we should be concerned. The noble Lord talked about the fact that there is, apparently, almost a standard housing and rent element in the benefit assumptions, even though we know that rent varies from area to area and region to region.
I particularly want to pick up the point that he made about the discrepancies between the private rented sector and the social rented sector. Some of us—certainly the noble Lord, Lord Best, and I—argued very strongly against a benefit cap based on underoccupancy in an earlier round of amendments. It was clear from the impact analysis that one of the responses that the Government felt was appropriate for people who were in so-called overly large local authority accommodation—with no possibility of an internal move because the stock does not exist—was to tell them that they should move into the private rented sector. However, the impact analysis also recognised that that sector would also have increased rents, and therefore the assumption of savings that would follow from that move would not be available to the Government.
The Government are saying that if you manage to avoid your housing benefit cut by virtue of these very harsh rules on underoccupancy by going into the private rented sector, you will then come up against an alternative cut—the benefit cap. You are between a rock and a hard place: you can stay put and have your cut because of the underoccupancy rules, or you can move to accommodation in the private rented sector which apparently fits, but because of the number of children you have, you will be up against the benefit cap and again you face a cut. Which strategy does the Minister suggest people should follow in that situation? It would be helpful to know because a lot of our poorest families will be faced with just such dilemmas.
Lord McKenzie of Luton
My Lords, we are indebted to the right reverend Prelate the Bishop of Ripon and Leeds for leading the charge on this. Indeed, faith communities generally have been a voice for people who might otherwise not have been heard. The need for so many amendments around this proposal in the Bill highlights the extent to which it is a badly conceived policy. Whether or not you believe there should be an overall cap on benefit entitlement, what we know about the approach taken to applying such a cap in the Bill shows it to be unfair, inconsistent and to ignore the needs of many of the most vulnerable.
This first group of amendments relates to how the benefit cap is to be calculated and shows the extent to which there are major inconsistencies in the Government’s approach. The second group relates to the fact that the Government appear to have ignored the needs of many of the most vulnerable people when thinking about who is to be excluded from the benefit cap.
The Government have argued that applying the benefit cap is fair. The Secretary of State for Work and Pensions, Iain Duncan Smith, has stated:
“The benefit cap will restore fairness to the taxpayer and fairness to those who do the right thing on benefits”.
Of course, we are learning with this Government that fairness has many different meanings to different people, but it would be hard for anyone to justify the idea that the current policy will be fair to children, who, as we have heard, the Children’s Society has shown are nine times as likely to lose out from the cap as adults. Out of the 50,000 households that will be affected by the cap, the Children’s Society estimates that 210,000 will be hit, compared to 70,000 adults. Perhaps the Minister will tell us whether he thinks this policy is indeed fair to children.
The Bill impacts so heavily on children in part because of the way that the Government have stated that they will calculate the level of the cap. At present it is proposed to set the benefit cap at two different levels. The first, for single people without children, will be introduced at around £350. For couples, it will be introduced whether they have children or not, and for single parents with children the cap will be introduced based on net average earnings for a working household with or without children, which the Government estimate to be around £500 per week at the point of introduction.
We should note that that proposal creates a substantial couple penalty, which the noble Baroness, Lady Tyler, spoke about. Research by Family Action showed that for two lone-parent households that decided to move in together this penalty could be as much as £9,000 a year. Does the Minister believe that financial penalties of this type form a disincentive for families to move in together? If so, what assessments has his department made of the likely impacts of applying the cap in this way on the rates of lone parenthood and cohabitation?
We note that while the universal credit has a higher personal amount for couples than for single people with children, the benefit cap has not followed the same principle. Not only is the current calculation unfair towards couple families, it is also unfair in its comparison between those in and out of work. Both working and non-working families were able to receive child benefit and housing benefit. As the level of the cap is based on earning levels rather than income, however, these will, as the right reverend Prelate said, be excluded from consideration of the amount of money that working families have to live on but included in the calculation for those out of work. Amendments in the next group seek to exclude child benefit and those in this group to exclude housing benefit from being included in the calculation of total income for out-of-work families. Perhaps now the Minister could explain exactly the basis on which this method for calculating average family earnings was chosen.
In-work benefits, including working tax credit and, subsequently, universal credit, will also be excluded from the calculation of the level of the cap, but not from the calculation of the amount of income that out-of-work families are expected to live on. Here we come to another lack of clarity about the Government’s approach, as it is once again not clear what the definition of work is expected to be for the benefit cap when universal credit is established. Before universal credit is established, the cap will initially be applied to housing benefit, and the note with the draft regulations that we received states that a claimant in receipt of housing benefit will be considered to be in work if they are entitled to working tax credit. It has been announced that when working tax credit is abolished, there will be a corresponding exemption for people on universal credit who are considered to be in work. The precise criteria for this exception are still being considered.
Again, the thinking behind the benefit cap appears to be out of kilter with what is behind the universal credit. Indeed, the Government have just spent a large amount of money on ensuring that households working under 16 hours will still be able to claim support with childcare costs under universal credit. Yet in benefit-cap terms, it seems that working less than 16 hours is not really considered as work, and it is possible that this childcare support will be removed by the restriction on the total amount of benefit that a family can receive. Large families may be caught in a trap whereby any move into work brings with it additional childcare costs, which are then reduced by the cap to the extent that working is no longer worth while. Does the Minister believe that a family in which someone is working for less than 16 hours a week is a “working family”?
Amendments 99ABAA and 99ACA in our names seek to understand why housing benefit and council tax benefit have been included in the benefit cap. At present, the proposals seem both unfair and unworkable. The differences in rent around the country, as we heard from the noble Lord, Lord Best, mean that families in different areas will be affected very differently by the cap, with the most severe impact on families in London. As the Government’s own impact assessment states about the possible impacts of the cap, it is likely to affect where different family types will be able to live, housing benefit may no longer cover housing costs, and some households may go into rent arrears. This is a direct consequence, they acknowledge, of government policy. Some households will be pushed into rent arrears, which will require expense and effort by landlords and the courts to evict and seek to recoup rent arrears. Some households are likely to present as homeless and may, as a result, need to move into more expensive temporary accommodation at a cost to the local authority. These costs are likely to fall most heavily on local authorities in London. Shelter, Crisis, Homeless Link and the National Housing Federation state that although the cap has been characterised as a cap on large families, high rents in London mean that families with just two children will be subject to the cap in all inner London and many parts of outer London, including Newham, Haringey and Hounslow, because of higher housing costs in those areas. London Councils points out that rent levels vary widely across the country. London has the highest average private sector rents in the country, at £220 per week, which is more than 35 per cent higher when compared to £164 nationally. It is estimated that more than 50 per cent of couples with more than three children in London are unlikely to be able to afford their rent.
The benefit cap will come on top of the already imposed cap on the local housing allowance, as we have heard, while Shelter, Crisis, Homeless Link and the National Housing Federation state:
“Unless housing benefit is removed from the calculation of the cap there is a risk that low income households will be displaced from large areas of the south-east, on a scale far wider than that feared in response to”
the local housing allowance caps. For families already hit by those caps, the organisations state,
“there is a risk that they could be hit again and forced to move twice within less than a year”,
as the noble Lord, Lord Best, said. What estimates has the Minister made of the additional cost to local authorities in London and the increased costs that they are likely to face as a result of the household benefit cap?
In the post-Bill world, these same local authorities will also be delivering council tax benefit. For the Government to be able to take council tax benefit or its replacement into account for the purposes of the cap, they will therefore need local authorities to tell them who is in receipt of the benefit and how much they are receiving. What arrangements does the Minister expect to be in place to ensure that the benefit cap correctly takes into account the amount of support with council tax?
The variation in local authority support for council tax also means that how families are affected by the benefit cap will vary by local authority. Those local authorities faced with additional costs in temporary accommodation as a result of the cap may be tempted to recoup their costs by limiting the amount of support that they give with council tax—knowing that, in effect, the DWP will pick up the bill by paying out more universal credit before the benefit cap is imposed. Perhaps the Minister can tell us what estimates have been made of the potential for savings from the benefit cap to vary, depending on the level of council tax support put in place by differing local authorities.
The Minister may say in his response that according to the impact assessment the benefit cap is expected to hit just 50,000 households—roughly 1 per cent of the out-of-work benefit caseload. Yet the impact on these families will be extreme, with an expected average loss of £93 a week. He may also tell us that he has no money and no way of recouping the expected savings from this policy of £225 million in 2013-14, and £270 million in 2014-15. However, it is clear that the costs of this policy, not only in terms of family well-being but for local authorities, will be high. The amendments proposed today seek to rescue this policy and to ensure that it can retain some aspects of the fairness that the Government say that they are aiming for. I hope that the Minister feels able to accept the amendments.
Perhaps I may conclude with a few questions. The impact assessment, as has been discussed, sets out the consequences of the benefit cap—that it will force people into rent arrears and cause them to be evicted—but it has not been able to put a cost on that. Do central Government accept that this is an increased burden on local authorities which, under the Government’s policy, should be met on one basis or another, and has any further work being undertaken to quantify this? What about the costs falling on the devolved Administrations? As to those Administrations, which benefits, if any, are included under Clause 93(9) that could be capped in England but not in Wales or Scotland? Perhaps the Minister could let us have a detailed note, not today but by correspondence, on the local authority obligations to individuals and families made homeless by these provisions and the types of rules that local authorities have to take into account, particularly in relation to local connections.
Can the Minister also say something about the number of people who will be affected by this cap and who live in social housing? I think that a figure of something like 70 per cent was discussed in the other place, but that may not be up to date. The point is that social housing is, generally, of lower cost than pretty much any other housing around. If people in social housing are being forced into rent arrears and eviction, the only consequence will be that they will face being rehoused in higher-cost accommodation.
Baroness Hollis of Heigham
Does the noble Lord not agree that, with the new affordable rents—which are going to be 80 per cent of market rents—we could end up with social housing being higher than the benefit available to somebody on the 30th or 20th percentile in the private rented sector?
Lord McKenzie of Luton
Indeed, I very much agree with that. In fact, one of my other questions to the Minister is to ask what assessment has been made of the impact of the capping policy on RSL’s ability to charge rents of up to 80 per cent of market value, which is the key to the housing programme that the Government have promulgated. They have moved away capital spend to revenue spend. Perhaps the Minister could spell out more generally the whole evidence base for this policy that is presented to us.
I also ask the Minister—because part of the rationale is supposedly its impact on work incentive—whether, out of the 50,000 households expected to be affected by the cap, he could split that 50,000 between those who are within income support currently, those who are within the WRAG, those in the support group and those in the full conditionality regime of JSA. Does he agree that the cap will effectively create a cliff edge that undermines a key benefit of the universal credit? Whether it is hours or income, movement to either side of the cut-off point could be dramatic. What modelling has been done to assess the consequences of that?
Finally—for the time being—I ask the noble Lord for his comments on the report from the Centre for Social Justice, which I think is an organisation dear to the Minister’s heart. It says,
“we do share some of the criticisms about how such cuts are being introduced in the welfare system”.
That was a reference to child benefit. The Centre for Social Justice goes on to state:
“But our main contention is with current plans to introduce a full benefit cap on households in one fell swoop. Without the careful phasing in of such a cap … the CSJ is concerned it will bring hardship to as many as 50,000 large families who will have the plug pulled from under them overnight”.
As we discussed, average losses are projected to be £93 a week. The Centre for Social Justice states that, “it is likely to be devastating” and that the Government should think again urgently about their implementation plan. Does the Minister accept that assessment?
Lord Skelmersdale
Before my noble friend the Minister responds to the questions asked by noble Lords, it seems to me that the key to all these questions is in Clause 99(4)(c)—in other words, what exceptions to the application of the benefit cap are due to be made? As I understand the matter, the average annual salary for a full-time worker is currently £25,900 a year. In his very long speech, the noble Lord, Lord McKenzie, talked about the amount of money out-of-work families are expected to live on. Those were his exact words. I find it extremely difficult to anticipate that the amount of money out-of-work families are expected to live on should be more than the average annual salary for a full-time worker.
Lord Skelmersdale
Can I just finish? I accept that this will involve lifestyle changes. It is inevitable, is it not? Noble Lords have spoken about housing. There is no doubt that idleness—no, idleness is an unfair word—having more time than someone in full-time work costs money. How and with what—
Lord McKenzie of Luton
Would the noble Lord approve of a lifestyle change that forced someone out of a council house, whatever the level of rent, into much more expensive private sector accommodation because they had been made homeless? Is that a lifestyle change that the noble Lord would approve of?
Baroness Hollis of Heigham
Perhaps I may add to my noble friend’s comments. Would the noble Lord care to compare apples with apples rather than apples with oranges—in other words, not compare the situation of a single man earning the average of £25,000 with the situation of a family who would also be entitled, for example, to child tax credits? If the noble Lord is going to make comparisons, he must in all integrity compare like with like.
Lord Skelmersdale
If there is a family where the sole income comes from either the man or the woman, then the situation is as I have described it. If, however, someone is working full time and someone is working part time, then the situation is clearly different, which is what I suspect the noble Baroness means.
Baroness Hollis of Heigham
The noble Lord is incorrect. He is failing to recognise that a man in work with a family at that income level will be entitled to tax credits that go into his net income. He is failing to take into account the additional benefits that come from the state over and beyond wages for someone in full-time work. He must compare like with like in all integrity.
Lord Skelmersdale
In that case, it would be useful for my noble friend Lord Freud to tell us how many families with an income of £25,900 a year are on benefit of any sort. I cannot imagine that he will be able to do so off the cuff but—
Baroness Lister of Burtersett
Perhaps I may intervene. I can tell the Committee off the cuff that all of them with children will be receiving child benefit, which has a 99 per cent take-up rate. They will be receiving exactly the same amount in child benefit as people out of work, and one of the amendments in the next group will address this matter.
Lord Skelmersdale
My Lords, as I understand it, everyone with children gets child benefit, so you can cut that out quite regularly because you know that it is going to come under subsection (4)(c)—that is inevitable. As I said at the beginning, we will find out from my noble friend what exceptions the Government are currently planning in order to change what the noble Baroness, Lady Hollis, calls apples and pears into apples and apples or perhaps pears and pears.
Lord German
I hope that I have followed your Lordships’ normal pathway by allowing those who have put their names to amendments to speak first. I understand that that is what your Lordships’ House wants and therefore I have done the appropriate thing. If I had had an amendment in my name, I would have spoken earlier. However, I am quite happy to speak now if your Lordships will permit me. I pay tribute to the right reverend Prelate the Bishop of Ripon and Leeds for introducing this issue, and particularly for his amendment relating to children. That is probably the subject on which I shall focus primarily. It is also an issue where there are unintended consequences, on which some of this debate will focus.
I think it is worth starting with what is in the impact assessment for this proposal, which outlays the Government’s objectives in achieving some policy ambitions and states quite clearly that it is intended to deliver fiscal savings. The other two matters relate to dealing with the fundamental unfairness of working families seeing families on benefits living in homes which they cannot themselves afford, and the incentives to help people to work.
I believe that a cap is an appropriate device for accomplishing ambitions of this sort and later I shall give some of my reasons for saying that. However, it is important that whatever the cap or caps may be, they must fit the heads on which they are placed. I do not believe that the cap as currently constructed does the job or serves the purpose that the impact assessment lays out. That is because there are of course some unintended and perverse consequences as a result of the way that it is currently being calculated and laid out. As currently crafted, the cap produces a number of these unintended consequences but exploring them does not negate the importance of having a cap or caps. The evidence demonstrates that the current approach will need amendment in order to fulfil its intended purposes.
I should like to address the issue of fiscal savings. I am sure that all noble Lords will have seen the letter from the Secretary of State for Communities and Local Government to the Prime Minister, sent via their Private Secretaries, in which the Secretary of State says of this proposal that there are,
“serious practical issues for DCLG priorities”.
The letter continues by stating that an additional 20,000 people will be accepted as homeless, according to the DCLG modelling. That is presumably done by those who would know what the outcome would be in a set of circumstances described by government. The letter goes on to say that this would mean additional expenditure in dealing with homelessness and for temporary accommodation, and further that the £270 million savings that the DWP budgets expects to make would be negated by the additional expenditure elsewhere. That is not my interpretation—those are the words I have read. There would, indeed be a net cost to the taxpayer. If these figures stand up to scrutiny—and I certainly have not seen any rebuttal of those figures—the cap as crafted will be at an additional cost to the taxpayer. I should like my noble friend the Minister to tell me: has there been or is there a rebuttal of the figures from the Secretary of State for Communities and Local Government?
However, that does not deal with the second policy objective that we have to face: the unfairness of working families seeing benefit recipients living in homes that they could not themselves afford. The challenge is to satisfy this need and at the same time avoid the consequential homelessness that the Secretary of State for Communities and Local Government has indicated. This issue has been left to fester for far too long. The previous Government placed it in the “too hot to handle” or “too difficult” category, or put it in the long grass pile—whatever metaphor you wish to use. However, as is always the case with very difficult issues such as this, they will simply not go away without some form of policy intervention.
Lord Boswell of Aynho: I regret that I was unable to attend the earlier part of this discussion, although I am very interested in what is being said. On the matter that my noble friend just raised, has he been able to discern a clear position from Her Majesty’s Opposition as to the principle and, further, as to the levels or basis of execution of policies in this area of benefit cap? I am not sure where they stand.
Lord German: I have not been able to get a clear position. However, I was somewhat interested to hear yesterday the Shadow Chancellor declare that his party is in favour of having limits. Perhaps other noble Lords might explain what those limits are. However, as the Secretary of State for Work and Pensions said in the House of Commons—as I believe I am now allowed to call it—the benefit cap,
“is about those who we believe should be able to go to work but are not doing so”.—[Official Report, Commons, 15/6/11; col. 882.]
Therefore, the purpose of this set of clauses seems to be to try and achieve a balance of fairnesses. Very importantly, we cannot see a rise in costly homelessness that penalises mainly children who are in large families and in high-rental areas.
The cap, as proposed, would punish children for the decisions of their parents. Children have little or no control over the upbringing they receive. I wonder whether the current cap, as defined here, could encourage family breakdown as families split up in order to get their benefit entitlement under the cap level. In terms of maintaining family structures, this surely cannot be right.
The first issue to be tackled is the one mentioned by the right reverend Prelate the Bishop of Ripon of Leeds—mean and median. The Bill clearly refers to,
“the average weekly earnings of a working household in Great Britain net of tax and national insurance contributions”.
However, as many noble Lords have pointed out, there are of course working households with children and working households without children. Working households with children also receive child benefit and possibly tax credits, and other benefits as well. Therefore, if you do the mathematics, a cap measured across average earnings based on working families with and without children can only be tougher on those households with children and easier on those households without children.
Lord Freud
My Lords, these amendments seek to increase the amount of welfare benefits that households which are out of work will be able to receive to above the level that we have said we will be introducing for the new benefit cap. Before I speak to the specific points that they raise, I need to make it clear that the coalition Government believe that there has to be a limit on the overall levels of benefit that it is appropriate for the state to provide to those who are not working. Indeed, I understand from the comment of Liam Byrne MP in yesterday’s Observer that this is also the position of the Opposition. Perhaps the noble Lord, Lord McKenzie, will be happy to confirm that.
A welfare system that provides payment at unrestricted rates ultimately serves nobody—not those paying taxes to fund it and often not those it traps in welfare dependency by providing little or no incentive to move off benefit and into employment. It is important that the benefits system is fair and is seen to be fair. We do not believe that it is appropriate that households getting out-of-work benefits should receive a greater income from benefits than the average weekly net wage for working households.
We believe that the cap for lone-parent and couple households should be around £500 a week, which is the level of median household earnings. This is the equivalent of a net salary of £26,000 per year, or a gross figure of £35,000 per year. There will be a cap of around £350 per week for single-adult households. Therefore, even within the limits of the cap, households will still be able to receive significant amounts of financial assistance from state welfare payments—an amount equal to the median national wage without going out to work. To make that explicit, it is the equivalent of what more than half the households in the country are earning.
The right reverend Prelate’s Amendment 99ZA and several of his other amendments seek to differentiate and improve the position of families with children in the way that the cap is calculated and applied. I acknowledge that, because of in-work benefits, there will be some working households that earn at the level of the average weekly wage whose total income will exceed the level that we are setting for the cap. However, we believe that work should always pay more than out-of-work benefits. That is one of the driving principles of the Bill and at the heart of our welfare reform.
When we introduce the cap, we intend to use a method that looks at median earnings after tax and national insurance for all working families, which will strike the right balance between providing support for families, promoting fairness between those out of work on benefits and those in work and, crucially, ensuring that there are clear financial incentives to work because work is the best route out of poverty. The benefit cap provides a clear, simple message that there has to be a maximum level of financial support that claimants can expect the state to provide. The aim of this policy is to achieve positive effects through changed attitudes to welfare, responsible life choices and strong work incentives. People must be encouraged to take responsibility for their decisions in light of what they can afford. I accept that a case can be made for making the estimate in a variety of ways. However, I should make it clear that the clause would provide us with flexibility, should it be necessary in future to adapt how we estimate average earnings if it is felt that we are no longer achieving the correct balance.
I will address Amendments 99ABAA, 99AC and 99ACA together, as they are all concerned with housing-related benefits. Each of these amendments would undermine the fundamental principles underpinning the cap—that, ultimately, there must be a limit to the amount of benefit that a household can receive and that work should pay. It is not right that some families on benefits have been able to live in homes that most working families could not afford. With the introduction of the cap, people receiving benefit will have to make the same choices about their housing that people who do not get benefit make.
The noble Lord, Lord Best, raised a point about whether the cap will force families to move. It will not necessarily mean that people need to move but they will have to make the same choices about affordability as those in work. While some may well choose to move, there are a number of ways in which they might be able to meet any such shortfall, such as moving into employment, trying to negotiate a reduction in their rent—I accept the noble Lord’s point that in some cases that may not be possible—and meeting it from other income or capital. The Government are looking at ways of easing the transition for families and providing assistance in hard cases. We recognise that there are households for which it would be inappropriate to restrict the amount of benefit that they can receive. We have announced the groups that we intend to exempt and will discuss these groups further as we move on to the next debate.
The noble Lord, Lord McKenzie, asked about childcare—specifically whether those working a small number of hours will be eligible for support for childcare costs through the universal credit. I confirm that support for childcare through the universal credit will not be affected by the cap.
Lord McKenzie of Luton
Could the noble Lord clarify whether he is saying that it will not be included in the total of benefits that is judged against the cap, or whether it cannot be withdrawn from that component of the benefit?
Lord Freud
It is the former. It may be helpful if I explain now that we feel that the best way to support these households is to exempt them completely from the impacts of the cap, rather than attempt, as these amendments do, to alter its design to accommodate their particular circumstances. For the groups to whom the cap applies, this measure creates a very strong incentive to work. The most effective way of smoothing transition will be to engage closely with those families likely to be affected by the cap in the year before it is implemented. We are having initial discussions with local authorities and will provide them with guidance on the implications of the caps so that they can take account of this when working with affected households, especially those affected by the LHA cap.
On the council tax benefit question, I confirm that we are looking at the implications of localised support for council tax, including the implications of decisions taken by the devolved Administrations.
Baroness Hollis of Heigham
If the Minister is staying on this point then I will sit down, but before he goes on to another point, could he please clarify further? Say that there are two households in band D in two different local authorities for which the council tax charge in one borough is £20 a week and in the other is £30 a week. In the first borough, the localised benefits system effectively allows a rebate of £15 out of the £20, but in the other borough facing £30 a week there is a localised council tax benefit of only half that sum, which is also £15. When it comes to calculating the universal credit, what elements of that mess will the Minister take into account? Will he look at the putative council tax that should be paid and the benefit or the net sum paid? What counts as income? What counts as cost? How will this be done when everyone will have a different calculation to be made locally?
Lord Freud
The noble Baroness is, as always, way ahead of the curve. As I hope I explained, there are several things that have to happen before we come to deciding some of those issues, and we need to know the shape of any replacement for council tax or the impact of localising council tax, which as yet we do not. I am left with my previous observation that we will take that information into account when we have it, but we have all the powers to do that so there is no issue here regarding our not being able to do it.
Baroness Hollis of Heigham
I understand the dilemma that the Minister faces and that it is not a dilemma of his making, so I have great sympathy with him. Will he expect income to be the council tax benefit, or the council tax benefit minus whatever element the individual may be expected to pay? In other words, are we dealing with gross or net? It could vary by £15 or £20 a week between two different households with similar income in adjacent boroughs, and that will make a lot of difference to their actual outgoings.
Lord Freud
Regrettably, yes, it may or it may not. That will depend on how we reach our design by taking in the implications of localised support. I cannot design a system on the spot when we do not know several of the components, but we have the powers here to take that into account and we are planning to do so.
Lord McKenzie of Luton
Will discretionary housing payments be included as benefits for these purposes?
Lord Freud
They will not be included. Moving on, with regard to the couple penalty, we should not assume any automatic link between the benefit cap and family breakdown. One of the key drivers of family breakdown is long-term unemployment, which puts considerable pressure on vulnerable families. One of the most supportive things that we can do for these families is ensure that work always pays and that the transition to work is as smooth as possible.
The benefit cap is intended to support our new universal credit, which will improve the incentive to work and the level of support for many low-income families, especially couples with children in rented accommodation. At the same time, we will also look to offer additional support through Jobcentre Plus. This would include working with local providers to support claimants with budgeting and the management of their housing costs, and encouraging families affected to engage with more employment support, particularly the work programme. We have always made clear that we would look at ways of easing the transition for families and providing assistance in hard cases.
Picking up the remarks of my noble friend Lord German, where he read from a putative letter—
Lord Freud
Putative is a good word. The figures to which he was referring came from internal modelling from the Department for Communities and Local Government which had not been externally validated. That analysis was out of date, having been produced in January and before we announced that we were looking at transitional arrangements for dealing with particularly hard cases. It is not possible to predict robustly the effects of this policy on homelessness as we cannot anticipate the resulting behaviours of tenants or their landlords. We will think carefully about all these matters, but the clause is drafted so that we have all the powers we need to ensure, through regulations, that the cap achieves its purpose in the fairest way possible.
Picking up the question of the noble Lord, Lord McKenzie, on the devolved Administrations, under Clause 93(9) we will be able to reduce only payments that are the responsibility of the United Kingdom Parliament. No payments that are within the legislative competence of the Scottish Parliament, the National Assembly for Wales or the Welsh Ministers will be reduced by the cap.
Lord McKenzie of Luton
I understand that; I have read the clause. I was trying to understand what might be included in the items that cannot be capped in Wales and Scotland.
Lord Freud
Such payments could, however, be taken into account when determining whether the cap itself should apply and whether the non-devolved payment should be reduced. Presently, we expect the cap to apply to housing benefit and ultimately to universal credit, which are the responsibility of the UK Parliament.
The next, or rather the last, question put by the noble Lord, Lord McKenzie, was on whether the Government accept that there would be an increased burden on local authorities as a result of this measure. The impact assessment recognised that there could be a cost to local authorities in connection with temporary accommodation. That is why we intend to work closely with local authorities on the implementation of the cap.
Baroness Sherlock
Could I just press the Minister for a moment on that? Have the Government looked into what other costs there might be for local authorities? For example, what if families with children were forced to move only to boroughs such as Haringey or Redbridge? Has the Minister looked into the matter and, if so, could he tell the Committee what would happen about the availability of school places or of other forms of support or social services, in those boroughs? Could he share the information with us?
Lord Freud
My Lords, the principle, as noble Lords will know, is that the grants to particular local authorities reflect the number of people living in those authorities. Therefore, there is an automatic adjustment process. I accept there are some timing issues if there are sudden movements, but the DWP is talking very closely to DCLG about these practical implementation matters.
I come to an end with this question. As I understand it, certainly the parties in the Committee—I am not sure whether that covers all the Back-Benchers—are all signed up to the principle of the cap. We believe that the cap is the right approach. In the light of these comments, I hope that the right reverend Prelate and the other noble Lords will withdraw their amendments.
Lord McKenzie of Luton
My Lords, I thank the Minister as ever for his detailed response but there are still a few questions left unanswered. I can confirm that he correctly sets out the position of the Labour Party in respect of the cap, but we want to see something that is evidence-based, properly analysed and fair to people. This is our great concern with what is on the table at the moment. The Minister did not deal with the analysis of the 50,000 households to be affected by this and the extent to which they are in a group which is subject to full work conditionality. If a big thrust of this is to look at work incentives but it then applies only to a minority of those people, where does that leave the policy?
Lord Freud
I think that we have a scattering of figures in this area. It is a minority, which I think is around 10 per cent. If the noble Lord is after a detailed response, I ought to offer to write on that matter if it would be satisfactory to him.
Lord McKenzie of Luton
That would certainly be satisfactory but even if that 10 per cent estimate is roughly right, it means that 90 per cent of the people who will be affected by this cap are under no obligation, under the Government's policies, to have full work conditionality. How does that square with the big thrust of this being about work incentives? I should also like to follow up on another point which the Minister did not touch upon: the profile of those, again within that 50,000, who would be tenants and paying rent of one sort or another. Is it the case that a significant proportion of that 50,000 are tenants of social landlords, RSLs or councils?
Baroness Lister of Burtersett
While the noble Lord is conferring, can he perhaps explain to the Committee what behavioural effects the Government are trying to achieve in the case of those who are not required to seek work?
Lord Freud
On the figures, one reason why I am slightly betwixt and between is that we are looking at that impact assessment, which is now somewhat dated, with a view to updating it and providing fresher figures when we can. That work is in progress and we are getting some more detail. All that I can do is to offer to provide some of that extra detail as soon as we get it. I am not completely sure yet of its timetable but there is ongoing work there, which is why I am slightly hazy about exactly what some of these figures will end up being, for which I apologise.
Baroness Sherlock
Before we leave this point, my noble friend Lady Lister just asked what is for me the crucial question: what behavioural impact does the Minister want this to have? He told the Committee earlier that if people did not want to be forced to move house, they could do one of three things: they could negotiate their rent down, but he acknowledged to the noble Lord, Lord Best, that that might not be possible; they could move into work, but he has just told the noble Lord, Lord McKenzie, that 90 per cent of them are not required to work; or they could use savings. We know from discussions earlier in Committee that most people in this situation have almost no savings. What is he trying to achieve?
Lord Freud
My Lords, I am going to revert to principle here. The principle of our policy sets out that the equivalent of £35,000 of earned income is a reasonable maximum amount of benefits for the state to pay someone who is living on them. Clearly, we are aware of concerns about the impact of a cap in some specific circumstances, and the clause is drafted as it is in order to give us the power to set the cap so that it achieves the purpose in the fairest possible way.
Lord McKenzie of Luton
I am sorry to press the Minister but, for us, the percentage of people affected by the cap who might be tenants of social landlords is a hugely important issue. I accept that the information has been updated but perhaps he can at least confirm the original estimate. Does he not understand that it is impossible for those people to get lower-cost housing? Generally you cannot get housing that costs less than social housing, so what are those people meant to do?
Lord Freud
The best I can say is that according to the current published impact assessment roughly 70 per cent of those affected are in social housing. However, the direction of travel of those figures in the new assessment is downwards, although I do not know by how much.
Baroness Hollis of Heigham
I am not sure that I have an answer that I fully understand. The noble Lord, Lord Best, raised the question of affordable housing, which, as we know, is to be set at 80 per cent of market rents. The market rent for a three or four-bedroomed family house not in central London but in some of the outer suburbs might well be £1,200 a month or £300 a week. Social housing with an affordable rent would therefore have to be 80 per cent of that £300, which is £240 a week. Let us assume that a family consists of a husband and wife with two or three children. He is in work and is paying an affordable rent, then his job collapses and he goes on to UC. He then finds that £240 a week has to come out of his benefit and he is up against the cap. Precisely what is he going to do? Obviously he is going to search for work but what does he do in the meanwhile? This is an affordable rent, being 80 per cent of a market rent, yet this is social housing, so there is nowhere else for him to go. What does he do? As my noble friend said, the probability is that he has very modest savings, otherwise he would not be in that sector in the first place, and he has children in school. It may well be that he cannot reasonably expect to get a job within the next six months, however frantically he tries, and he is then up against a benefit cap while in social housing with children. What does he do?
Lord Freud
My Lords, I have made it clear how we ease the transition for families, and that is one of the things that we are looking at.
Baroness Hollis of Heigham
Can the Minister at least help the Committee by indicating the shape—I shall not try to hold him to the precise details—of that transitional arrangement? Will it be over three years, or alternatively will extra resources be available through the discretionary housing allowance via the DCLG in order to allow local authorities to smooth that transitional arrangement? Would there be exceptions for particular payments, such as higher housing rent, because we are talking about social housing and affordable rents? Alternatively, would the Minister suggest to the DCLG that that rent could go from being affordable to the average social rent, even though that would then inhibit the ability to carry on with new building? I can think of three or four ways of doing it but what does the noble Lord have in mind?
Lord Freud
Regrettably, I am not in a position to be drawn. All I can say is that we are looking at how we can ease the position for families and how we can provide assistance for hard cases. I know that the noble Baroness has already created four different scenarios and ways of doing it, for which we are grateful, but that is all I can say at this point.
Baroness Hollis of Heigham
But it is a problem of the Government’s own creation. This is the difficulty—there is no evidence that this will have any longer-term savings cost.
Lord Freud
I should like to engage in a detailed debate on this, but all I can tell noble Lords at this stage is that we are looking at how we ease the transition for families, and we are looking at providing assistance in hard cases.
The Lord Bishop of Ripon and Leeds
I have two points. First, do I understand that now, in contrast to the research done some months ago, a far lower proportion of those affected by the cap are in social housing? If so, where have they gone—the people who were in social housing a few months ago but who no longer are?
Going back to the original amendment that we are, in a way, discussing, my second, unconnected, question is that I have still not quite understood why it is inappropriate, when looking at the cap, to look at families with children separately from couples. We have the distinction between singles and couples. Surely, in any discussion of how a cap should operate, children are fundamental and families with children are fundamentally different from those who do not have children. Should that not somewhere come into the way in which the cap, and therefore this clause, are established?
Lord Freud
As to the first question asked by the right reverend Prelate on where all the people in social housing have gone, the situation is, to be honest, probably nothing more than a result of greater depth of analysis. I do not think that there is any real movement there but, as we have homed in and obtained more information, that is our understanding.
On his second question, the interesting reality is that childless couples have higher earnings than couples with kids. Perversely, therefore, having a differentiation based on what actually happens would have the opposite effect to the one that I imagine the right reverend Prelate wants. That is the point. It is not a useful approach because it would do exactly the opposite.
Lord McKenzie of Luton
My Lords, is that right? It might be right if you are looking at earnings, but if you are looking at income, which was part of the proposition, it might not be the case.
Lord Freud
I very elegantly have a wonderful piece of paper to hand. On the median, it works for total income—all gross and net household income—and it works for the mean. I can give noble Lords all the figures but it would bore them.
Baroness Hollis of Heigham
If the Minister could circulate those figures to all Members of the Committee, it would be very useful.
Lord Freud
I am sure that noble Lords probably have them at their fingertips anyway. They are meant to be accessible figures, but if noble Lords would like some help and for me to use up another Scandinavian forest, I will circulate them. I will put them in an e-mail instead. That would be cheaper.
Lord McKenzie of Luton
I am sorry to come back to this but there are still some unanswered questions. I do not think the noble Lord dealt with the definition of “in-work” and when the cap will apply. Is the threshold set at 16 hours, as it is for working tax credit at the moment? How will that change from April? I think for couples there is a joint requirement for 24 hours a week, rather than 16. How will that all work?
Lord Freud
That is a matter that we will look at very closely. We want to encourage work and one of the main aspects of universal credit is to encourage smaller amounts of work. We will look at that issue very precisely.
Lord McKenzie of Luton
In which case, I have one final question. In relation to homelessness, I asked whether we might have a detailed note setting out all the obligations of local authorities when people present as homeless or when they are evicted.
Baroness Hollis of Heigham
Will the Minister ensure that his colleagues in the DCLG do not give guidance to local authorities that anyone unable to pay their rent by virtue of these changes is therefore deemed intentionally homeless? That is absolutely key.
Lord Freud
As I said, we are working very closely with the DCLG on the implementation of the benefit cap. We will work through those issues in detail.
Baroness Hollis of Heigham
When may we know the answer to that point? Conventionally, under homelessness legislation, anyone who loses their home by virtue of a failure to pay their rent is regarded as intentionally homeless. If they have children, they may get some help on grounds of vulnerability and the local authority may temporarily rehouse them. However, in future the local authority has only to give them guidance into the private rented sector, where they will be stuck. It is not a casual question. Unless we redefine the homelessness legislation from 1972 onwards, these families will be crucified.
Lord Freud
It is for local authorities to make decisions on individual homelessness applications, as they do now. Under homelessness legislation, if the only reason for the person’s homelessness is a reduction in benefit that is outside their control, they should not be considered intentionally homeless by their local authority.
The Lord Bishop of Ripon and Leeds
Perhaps I may just thank everyone for all the contributions that have been made. I also thank the Minister for his engagement with the collection of questions that have been asked of him over the past half-hour or so. I retain considerable disappointment in terms of moving forward in this area. There is clearly considerable disquiet among your Lordships over how this is developing. We have not yet pursued far enough issues such as the couple penalty, which the noble Baroness, Lady Tyler, spoke about. We have been exploring homelessness but have not got all that far. It might grow as a result of the cap. The noble Lord, Lord German, and others made points about children. I do not detect any likelihood that the amendment will be accepted unanimously by this Committee but it is with considerable reluctance that I withdraw it. I know that a number of these debates will need to go on behind the scenes if we are not to have the debate all over again on Report. I beg leave to withdraw the amendment.
Lord De Mauley
My Lords, may I suggest that this would be an appropriate moment to take a 10-minute break?
The Lord Bishop of Ripon and Leeds
My Lords, the amendment seeks to remove child benefit from the calculation of benefit income when determining the cap. We had a bit of discussion about that in the previous grouping. The argument for this is really quite straightforward: child benefit is a non-means-tested benefit paid to all families, working or non-working. It is not at all an employment benefit and has no effect on whether a person would be better off in work than out of work. It is far better to regard it as a grant to children. It represents the most effective way in which we as a society invest in the next generation, or the next but one.
It is manifestly unfair if child benefit is to be counted as income for non-working families but not counted as income for working families, because there we have talked about earnings. I hope that we can simply remove it from the calculations. If we do, that will release perhaps another 20,000 children from poverty. That discussion has taken place already. We have heard that 99 per cent of families with children claim this benefit, but I do not see what that has to do with the present discussions or with any of the Government’s purposes in establishing the cap. If I am wrong about that, no doubt the Minister will tell me, as well as telling me what effect it can have.
The group also includes Amendment 99C, a compendium amendment to which the noble Baronesses, Lady Taylor and Lady Hayter, and the noble Lord, Lord McKenzie, have added their names. It seeks to put a number of exemptions in the Bill so that they are not subject to the whims of future Secretaries of State. As I understand it, there has been movement by the Government to exempt people in three groups: those in work, those with disability living allowance and widows. What I seek here is simply to get those exemptions into the Bill, and others will speak about them in particular.
Those who have recently left employment—one of the other groups mentioned—are vulnerable, particularly if their leaving employment is the result of developing a disability, and earlier we had a discussion about just how the transitional arrangements work. They are still going to have to wait for six months before qualifying for personal independence payments. To go back to something that the noble Lord, Lord German, was saying, giving people time to find another job is likely to help to keep them in touch with the labour market. Much the same goes for those who are unable to make work pay, which is particularly the case where childcare costs are very high. A small but very vulnerable group of families will be unable to escape poverty by moving into work but they will face poverty through the cuts if they remain unemployed.
The exemption of lone parents with children under five is particularly important. The current system and all our arguments and discussions recognise that those additional commitments make it hard for them to move into work and, indeed, recognise that they are not expected to seek work, which also goes back to the Government’s purpose in having the cap. If they are not expected to seek work—and I absolutely agree with the argument that lone parents with children aged under five should not be expected to seek work—it seems unreasonable to place a cap on the benefits that they should receive when we acknowledge that they should not be put under pressure to seek work.
Baroness Lister of Burtersett
My Lords, I rise to speak in support of Amendment 99AD and to oppose the questions that Clauses 93 and 94 stand part of the Bill. I want to make clear that I also support other amendments, both the more ambitious and the more limited ones. I see Amendment 99AD as something of a bottom line, particularly its exclusion of child benefit from the cap. However, first I shall say a few words about why Clause 93 should not stand part of the Bill.
Unlike some other noble Lords who have spoken, I do not support the principle of the benefit cap. Despite ministerial invocations of fairness, it is unfair. It deliberately reduces the amount of money that some families will receive to well below the amount that Parliament has determined is the minimum that is required to meet their needs—a minimum that is itself well below minimum income standards, as we discussed earlier in our proceedings. We have heard that the average loss will be £93. Nearly half the families affected will lose between £50 and £150, and 15 per cent will lose more than £150. Black and minority ethnic families will be disproportionately affected. It simply is not good enough for Ministers to say, as they have, that the state can no longer afford to pay this minimum. We are a rich society despite current economic difficulties. What the state can afford to pay is a matter of political choice.
In applying such a cap, the Government are arguably reducing income to below what constitute decency levels in a modern, industrialised society—below the level required to ensure human dignity. Therefore, it does not surprise me that legal advice received by the Equality and Human Rights Commission stated that,
“there must be a real concern … that the cap on benefits, which will disproportionately impact on larger families”,
will result in a violation of the Human Rights Act. Some of the likely consequences have already been spelt out by other noble Lords. My noble friend Lord McKenzie has already cited the Centre for Social Justice, which warned that the impact was “likely to be devastating” for some families, so how can this be justified?
The justification put forward by Ministers is another example of how the Bill is designed to try to influence behaviour and send out signals—so many signals that we should nickname this the “semaphore Bill”. Once again, the spectre of welfare dependency raises its head and people are to be incentivised to find work, although I thought that the main point of universal credit was to do just this, insofar as incentives are inadequate at present.
We have already heard how the incentives argument is not that convincing. As my noble friend Lord McKenzie has already observed, some groups affected by the cap are not expected to seek work—the right reverend Prelate the Bishop of Ripon and Leeds made this point—such as carers and lone parents of children aged under five. I was disappointed that the Minister could not explain to the Committee what behavioural effects the Government were trying to achieve in the case of those who are not expected to seek work. I hope that, having had more time to think about this, he might be able to do so when he speaks.
Could the Minister also address the issue that I raised at the last sitting, which the right reverend Prelate has also raised, about impact of the six-month qualifying period for PIP? How many are likely to be affected, and would it be possible to backdate the money that they lose as a result of the cap, when they then become eligible? It should also be noted that, to the extent that fewer people qualify for PIP than for DLA, so will fewer disabled people be exempt from the cap.
As has already been noted, the cap will also apply to some who are in paid work. Again, I was disappointed that the Minister could not explain at this stage how it is planned to determine at what point those in paid work will be free of the cap under universal credit. It is a very important question. As was pointed out in CPAG’s Welfare Rights Bulletin, the danger is that a threshold is created that people in low-paid work could frequently cross, resulting in wild fluctuations in their entitlement and complex better-off calculations. A small drop in earnings over which the claimant might have no control could leave to a massive drop in income if the cap is triggered.
Ferret Information Systems comments that the cap will create just the kind of cliff edge that universal credit was intended to remove. It gives an example of how a difference of 1p an hour for someone working 24 hours at the minimum wage level could generate a net income increase or loss of £98.23. This is surely nonsensical. The greater security of income promised with universal credit would be undermined if people on very low earnings are living in constant fear of the cap being triggered.
I am also unclear as to how work incentives are promoted if, as predicted, one effect of the cap is that families have to move house to find cheaper accommodation, which we have already talked about and could be difficult, given that a majority of those affected—although perhaps not quite as big a majority as originally thought—will be in social housing. Is there not a danger that in search of affordable accommodation they will end up moving to an area where job opportunities are even poorer?
At Second Reading and in response to previous amendments, the Minister argued that:
“The introduction of a benefit cap will mean that households on out-of-work benefits will have to make the same decisions as families in work with regard to the lives they lead and the areas they can live in”.—[Official Report, 13/9/11; col. 739.]
It is still unclear to me, having listened to everything that the Minister said earlier and the debate so far, what decisions people are supposed to take if they cannot find work or affordable housing. The answer is that they simply have to live below the level set by Parliament. In response to a Written Answer about the implications for homelessness, the Minister said that if they became at risk of homelessness then our old friend, the loaves and fishes of the discretionary housing payment, would come to the rescue.
For lone parents in particular, the loss of social networks that can help with childcare could serve to make it harder for them to enter into paid work if they have to move area. The loss of such networks surely goes against the aspirations of the big society. Moreover, as the noble Baroness, Lady Tyler of Enfield, and my noble friend Lord McKenzie have already said, the cap will create a significant new couple penalty. So it is difficult to square the cap with key elements of the Government’s own philosophy.
The Minister of State told the Public Bill Committee in the other place that the clause is not primarily a “cost-saving measure”. Instead, he claimed that,
“fundamentally it is about creating a more credible welfare system … We do not believe that it is reasonable or fair that households getting out-of-work benefits should receive a greater income from benefits than the average weekly net wage for working households. That is the core principle that we are seeking to put in place here”.—[Official Report, Commons, Welfare Reform Bill Committee, 17/5/11; col. 985.]
We have heard that again from the Minister this evening. Is it not the case that the Government themselves are undermining the credibility of the so-called welfare system by sending out a signal that people on average wages are receiving significantly less money than some people on benefits, when the proposition is based on the false assumption that people on average—or, more accurately, median—wages are not themselves receiving welfare in various forms? That this is the case is demonstrated by parliamentary Answers, which show that, if the benefits and tax credits received by working families on median earnings were taken into account, hardly any of them would be worse off than out-of-work families. The Government could do much more for the credibility of the system if it sent out more accurate signals.
This brings me to Amendment 99AD, which is about protecting children, who are the main victims of the cap, as other noble Lords have underlined. They are victims who cannot respond to the Bill’s signals. I am grateful to Barnardo’s for circulating a briefing in support of the amendment. It is designed in particular to stop the cap penalising larger families—thereby failing the Prime Minister’s family test—and to create the level playing field that the Minister of State claimed for the cap in the other place. We have already heard—and I apologise for repeating it, but it seems like the message needs repeating because it has not been heard loud and clear by some members of the Committee—that one important reason why the playing field is far from level is that child credit and child tax credit received by families of median earnings are not included in the income level at which the cap is set, but are included in the out-of-work income to be taken into account. I could not believe it at first when I discovered that child benefit is being treated in this way, because it is so patently unjust. As I said earlier, take-up of child benefit is virtually 100 per cent, so there is not an issue as to whether families with median earnings are or are not getting it. They are getting exactly the same amount as families out of work: it just depends on the size of the family.
According to a Written Answer, the median level of child benefit received by families with median earnings is estimated to be £33.70 a week. If the child benefit of out-of-work families were ignored when applying the cap—and this is also the purpose of the amendment moved by the right reverend prelate the Bishop of Ripon and Leeds—it would reduce the numbers affected by 40 to 50 per cent. This would reduce the savings from £270 million to £140 million in 2014-15. Therefore, nearly half the savings from the cap are being made on the basis of a blatant piece of unfairness which drives a coach and horses through the Government’s claim to be creating a level playing field between those in and out of work. Given that the Minister of State has said that it is not primarily a cost-saving measure, I hope that the Minister will not use the cost as an argument for rejecting the amendment.
The amendment would also exclude childcare costs. If I understood the Minister correctly, he has told the Committee that those costs will not be treated as income for someone out of work. That is correct, so we have that again clearly on the record. I very much welcome that, because previously it had been suggested that they would be. That is an important step; it would have been nonsensical had it been, so perhaps we have achieved something here today.
I oppose the cap in principle, and would support more ambitious amendments than the one in my name and the names of the noble Lords, Lord Kirkwood of Kirkhope and Lord Adebowale. As I said, I particularly see the exclusion of child benefit from the income taken into account in applying the cap as a bottom line below which the Government’s claim to fairness is so patently unfounded that they should be embarrassed even to try to justify its inclusion. In the Public Bill Committee in the other place, the Minister of State had no real answer to this and kept evading the question of child benefit received by working families. I would therefore be grateful in the Minister could explain to your Lordships how in fact the Government justify the inclusion of child benefit in the cap when it is not included in the comparator incomes of working families. Better still—given that, according to the Minister of State, the cap is not primarily a cost-saving measure but purports to be about fairness, and given the strength of the opposition which we have already heard—I hope the Government will think again.
Baroness Donaghy
My Lords, Amendment 99ZC is by way of an interval in the big picture, but I hope that noble Lords will not go out and get an ice-cream while I am speaking.
This is a probing amendment to ensure that industrial injuries disablement benefit is not counted towards the benefit cap. At present, industrial injuries will be among the benefits that count towards total benefit income for benefit cap purposes. The Government have indicated that the constant attendance allowance under the industrial injuries scheme will be exempted in the same way as disability living allowance, and I shall say a little more about constant attendance allowance later.
Benefits under the industrial injuries scheme are different in character from the rest of the benefits system. Whereas other benefits are designed to prevent or ameliorate poverty, to help people to cope with extra costs or to substitute for lost income, the industrial injuries scheme is a system of no-fault compensation. In November last year, the Industrial Injuries Advisory Council wrote to the Minister to argue that IIDB should not count towards the cap for just this reason.
Employers and unions both support the industrial injuries scheme, which eliminates the need for an adversarial approach to compensating for a large number of injuries and diseases that are agreed to be a risk to employment. Damages won through civil litigation are a closer parallel to the industrial injuries scheme than disability or other benefits. Including damages awarded by the courts in the total that is subject to the cap would plainly be unfair, but industrial injuries disablement benefit is also a form of compensation and including it is just as unfair. Payments under the vaccine damages payment scheme are not to count towards the cap but they, too, are a form of compensation.
On 10 November in this Committee, my noble friend Lady Hayter took the opportunity to raise a number of questions and she put the issue very well. She said,
“it seems that to include these payments, which are compensation for injuries at work, within a calculation of the total support that a family could receive from the state would be somewhat unfair. It would mean that for a young person living with their family, any such support would be taken away from the total family entitlement, which would effectively turn the benefit into a means-tested benefit”.
The Minister replied:
“We can discuss that entire area when we look at the whole range of benefits”. —[Official Report, 10/11/11; col.112.]
Well, my Lords, the time is now.
The Government have put forward three reasons for introducing the benefit cap. All these reasons are weak when one looks at the industrial injuries disablement benefit. The Government have said that they are introducing the benefit cap partly to reduce benefit expenditure but IIDB accounts for a very small amount of social security expenditure. It stood at 0.58 per cent of DWP annually managed expenditure in 2010-11. However, IIDB will account for an even smaller proportion of benefit cap savings, most of which will affect large, younger families, especially those in receipt of housing benefit. Claimants of benefits from the industrial injuries scheme tend to be older—50.9 per cent of expenditure is on people who are over pension age—and will therefore count for significantly less than the 0.58 per cent. It is unlikely that counting IIDB towards the benefit cap would save as much as £1 million a year, but I appreciate that I am really talking about an issue of principle here and not just expenditure.
The Government’s equality impact assessment also indicated that a further purpose is to improve working incentives for those on benefits. It must be emphasised that IIDB does not create a work disincentive. Half of all spending on it is accounted for by pensioners, and working-age claimants can continue to receive the benefit if they stay in work or find work.
Ministers have given great prominence to the argument that it is not fair for a workless family to receive more in benefits than an average family would receive in wages. In last year’s spending review, the Treasury listed the benefit cap under the heading of “Fairness … Reducing the deficit fairly while protecting the vulnerable”. However, a working family, one of whose members has suffered an industrial disease or injury, would not be in a worse position than a workless family. They would have the same right to IIDB.
The Government have not said a great deal about why it should count towards the cap. The Minister has made a distinction between recipients of disability living allowance and IIDB claimants. People do not get industrial injuries benefit to meet extra costs, which can be dealt with by an award of DLA if necessary, and the Minister has used this difference to justify excluding DLA but not IIDB. This argument is not a sufficient rebuttal because it fails to address the point that I made about the nature of the industrial injuries scheme. Furthermore, if having extra costs were to be the reason for excluding the benefit, how would we explain the decision to exclude retirement pension and pension credit?
Informally, officials sometimes argue that excluding IIDB would open the floodgates for a long list of special cases, which would complicate the benefit cap. I hope that tidiness is never the deciding factor in matters like this and that simplicity is not a sufficient reason for proceeding with an unfair change.
The Government’s decision to exclude constant attendance allowance is of course welcome. It is worth remembering, however, that this is one of the industrial injury scheme benefits abolished by the previous Conservative Government and there are now comparatively few claimants. In fact, the cost of the constant attendance allowance is just 1 per cent of the industrial injuries scheme. I hope that the Government will agree with me that the industrial injuries disablement benefit should not be counted towards the benefit cap.
Baroness Hollins
My Lords, Amendment 99A calls for a new exemption from the benefit cap for households in which a resident claims carers’ allowance and for carers in receipt of the additional amount in universal credit for those with caring responsibilities. I am grateful to my noble friend Lady Meacher, the noble Baroness, Lady Hayter, and the noble Lord, Lord McKenzie, who have added their names to the amendment.
Why is it wrong to cap carers’ benefits? Carers UK and the Disability Benefits Consortium, representing more than 50 disability charities, are concerned that, as it stands, a cap could be devastating for some carers. It would also send out an extremely negative message about how the Government value family care and risk the perverse outcomes of disincentivising family care and potentially making caring for older or disabled relatives financially untenable for some families.
Carers make a huge contribution to society, estimated this year by Carers UK and the University of Leeds to be £119 billion each year. From the Minister’s response to an earlier amendment, we know how much the Government value that contribution. However, that only emphasises the fundamental unfairness of including carers’ allowance within this cap. This is perhaps best illustrated by the justification given by the Secretary of State for Work and Pensions when he introduced the Bill in the Commons, stating that the benefit cap was,
“a matter of fairness, so that those who are working hard and paying their taxes do not feel that someone else will benefit more by not playing a full part in society”.—[Official Report, Commons, 9/3/11; col. 922.]
If this cap is designed to be fair to individuals who are working hard and playing a full part in society, then it cannot be right that it applies to carers.
In order to receive their benefit, carers must be caring for a minimum of 35 hours a week—the equivalent of a full working week. Many care around the clock, with NHS Information Centre figures showing that a fifth of carers are caring for more than 50 hours a week. It would not be possible to say that these individuals are not working hard. Nor could it be said that they are not contributing to society, as they represent so many of the social values that the Government are working to promote in this Bill and beyond—strong families and communities, and taking personal responsibility. Indeed, such carers are not required to seek work and conditionality does not apply to them.
However, there are some inconsistencies in the existing proposals. While the Government have stated that the exemption for DLA protects families affected by disability, this is not the case for all such families. A lot depends on the definition of the word “household”. The DLA exemption protects households that include a DLA claimant, but what is considered to be a household in universal credit includes children under 18 and partners but not adult children or other adult relatives. Therefore, while carers looking after disabled partners and disabled young children would be exempt from the cap, those caring for adult disabled children or elderly parents or disabled siblings would not be exempt. Families caring for disabled children under 18 would therefore be exempt from the cap, but those caring for adult disabled children would be subject to it because the DLA claimant, as an adult, would no longer be considered to live in the same benefits household, even if they were living together.
Let me give an example of a family who would be affected. Imagine a single father with three sons, the eldest of whom is 19, has learning disabilities and a variety of other health conditions. The father has two other children of school age. While his eldest son receives DLA and he himself gets carers’ allowance for supporting him full-time, the father’s benefits, including child benefit and housing benefit, would be capped because his adult son would not be considered to be in the same benefits household as his father, despite living with him. The financial impact of the cap could be significant. With local housing allowance and council tax benefit totalling £305.22, income support £42.95, child tax credit £108.75, child benefit £33.70 and carers’ allowance £55.55, he would be in receipt of £546.17 a week. A cap of the level announced by the Government would result in a loss of £46 a week or £184 a month.
Such a drop in income could force carers such as this father to stop caring and instead turn to social services to provide full-time care for his son because he feels that he has no choice but to look for paid work rather than be a full time carer—a distressing situation for the family and ultimately far more costly to the state. According to Carers UK, to which I am grateful to for providing me with an excellent briefing for today, carers giving up work in order to care lose an average of £11,000 a year.
This kind of situation is neither logical nor fair. The best way to ensure that the carer’s contribution is better recognised and rewarded, and that carers are not penalised for taking on caring responsibilities, would be to give carers exemption from this cap. I ask the Minister: why is carers’ allowance included in the benefit cap when the Government’s intention is to protect those affected by disability? Or is it simply a mistake?
Lord Best
My Lords, I am speaking to Amendments 99AA, 99AB and 99D. We now return to housing matters. I have already made the point that it is high housing costs that so often will push families over the cap. High housing costs do not of course equate to housing quality. A £350-a-week two-bedroom flat in outer London can be to far lower standards than an £85-a-week three-bedroom council house with a garden in the north-east, yet the outer London family in Newham has only £150 left within the £500 cap after paying their rent while the well housed family in the north-east has £415 left to meet other needs. I have argued for the housing cost element in the benefits received to be taken out of the equation to create greater fairness. That change would render several of my amendments in this group redundant, but I turn to them none the less.
Amendment 99A calls for a period of grace for those affected by the new cap during which the claimant would remain entitled to full benefits. Only after this period—my amendment suggests 26 weeks—would the total benefit cap be applied. Without this concession, many families in private rented accommodation in the south of England will see the benefits for their housing costs cut, forcing them to look immediately for alternative housing elsewhere. Current housing benefit regulations allow for a 13-week period of grace from restrictions on the rent that they have been paying independently up to that point, so the claimant who could afford to pay the rent until they lost their job will get that rent covered in full for 13 weeks even if it breaches the maximum levels of local housing allowance. A longer period is allowed for households that have suffered bereavement. For them there is a 52-week period of grace. It seems entirely right that a proper safety net should be available to a family that faces a sudden change in circumstance to give them a chance to get back on their feet.
It is generally agreed that an important function of the benefits system is to provide such a full safety net for those suddenly hit by redundancy or relationship breakdown. If, from the very day that such a drastic change of circumstances has struck, the family has a substantial shortfall to find between their benefit for housing costs and the rent that they must pay, then a major setback becomes a real crisis. How much better to give the household some weeks to secure a new job, or indeed to move home without having to present themselves as homeless. How much more cost-effective to give people the opportunity to get back into work rather than having to move the family to another area where rents are lower and jobs likely to be scarcer, all the while accumulating rent arrears and seeing the chances of a settled life with a proper job taken from them.
If they are going to have to move to a cheaper part of the country, at least they must have time to make all those arrangements and, hopefully, secure employment in the new place. We all know that the cap is intended to reinforce the message that work pays and a life on benefits is not sustainable, but it will affect newly unemployed households that have a strong desire to work but have lost their jobs because of factors outside their control. Rather than penalise people who are doing all they can to make a swift return to employment, the arrangements should see people through a difficult period so that they can re-establish themselves for the long term.
Where relationship breakdown and the loss or desertion of the main breadwinner is the trigger for the benefit entitlement that is now to be capped—the DWP’s impact assessment shows that more than half the households affected by the cap are likely to be headed by lone parents—a precipitous application of the new limit seems likely to lead simply to homelessness. This compounds the harm and distress experienced by the children. Surely it makes more sense to allow those lone parents to look for a suitable job following separation, make arrangements for childcare—so often relying on grandparents, who themselves will need to make new arrangements—and get back on their feet in a sensible way, and to ensure that for the children the loss of a parent is not followed by the loss of a home.
At the same time, a breathing space allows those responsible for paying benefits to untangle the complexities, calculate entitlements in relation to tax credits and other exemptions and handle the administration. With local authorities continuing to look after housing benefit during the interim period before the universal credit arrives—at least six months—there is already enough opportunity for delay in handling these claims. The period of grace would help those paying the benefits as well as those receiving them. I am confident that the Minister will be able to respond positively on this one, as it seems in no one’s interests to deny families the breathing space in receiving the benefits that sees them through a bad patch, rather than forcing themselves into a crisis—into homelessness and, in all likelihood, into long-term worklessness.
My second amendment in this group, Amendment 99AB, seeks to exempt homeless households in temporary accommodation from the overall benefit cap. Again, this would be redundant if my earlier amendment to exempt all housing benefit from the cap was accepted. It is therefore a fallback amendment. It seems anomalous for those placed by their local authority in temporary accommodation, quite often outside their own borough and already in the cheapest neighbourhoods, to be penalised for paying too much for their housing. Such households have no choice over the accommodation that they occupy and therefore cannot seek to reduce their housing costs or cut their cloth to suit their means. Local authorities are already restricted in their choice of where they can put those deemed to be homeless by restrictions on the housing benefit payable for temporary accommodation. The housing benefit subsidy will not cover more than the local housing allowance, less 10 per cent, using the previous marker of the 50th percentile. Councils then charge an administrative fee of £40 a week in London or £60 elsewhere, which is added to the household’s housing benefit claim. The total rent payable in relation to the homeless household will be higher for temporary accommodation of this kind and therefore, alongside the family’s ordinary benefits, is more likely to take them over the proposed total housing benefit cap.
An additional complication is that at present the Government’s Homelessness Code of Guidance for Local Authorities prevents councils from arguing that a homeless household should use other benefits to top up the payment for their rent. This is an understandable restriction, since the state believes that the income of families for their subsistence living should not be reduced below a minimum level. This means, perfectly reasonably, that councils securing accommodation in the private rented sector for workless homeless families cannot turn to the families themselves to meet any part of the rental shortfall caused by the extra cap.
Already inner London authorities such as Westminster City Council are exporting homeless households to outer London boroughs. They will have to work within tougher constraints in future, but it is hard to see the sense of placing an overall benefit cap that reduces the benefit for housing costs for these homeless families. They are already being moved away from support networks—friends, grandparents et cetera—and penalising the family by cutting their income to the point when they cannot afford the accommodation to which they have been sent would seem to place both them and the council that sent them in an impossible position.
Is the idea that the local authority, having accepted responsibility for the homeless household, will be expected to support the family financially to stay in the temporary accommodation to which they have been sent? While such an arrangement would enable the family to remain there, the extra costs falling on the local authority would seem a very unfair transfer from the DWP to local councils. Or is the intention that the local authority must make arrangements to ship homeless families still further away, with all the logistical problems that implies?
Wherever families are sent, the costs of temporary accommodation are going to be high in relation to mainstream private renting and considerably more than social housing rents. Those placed in bed and breakfast accommodation cost an average of £325 per week back in 2008-09 across the whole of England, so moving people long distances may not achieve very great savings in these particular cases. It will certainly make it more difficult for people to find work in areas where they do not have local knowledge and contacts. The move is bound to disrupt children’s education; Shelter has found that 43 per cent of parents in temporary accommodation said that their children had missed some school and one in 10 had children who had lost out in a school place entirely. Moreover, because the maximum level does not rise according to the number of children in the family, as we have heard so clearly today, it is not clear that there is anywhere in the country to which the local authority could send a homeless family if it comprised several children. I know that the Government are planning changes to temporary accommodation funding for 2013. I hope that this presents an opportunity to overcome the incompatibility between the high cost of procuring temporary accommodation and the new overall benefit cap. Perhaps the Minister could reassure us of the position on that.
Amendment 99D in my name seeks to exempt people living in supported or sheltered housing from the extra benefit cap. This seems a fairly obvious exclusion when one thinks about it. Specialist housing for individuals and couples with support needs, usually provided by housing associations or charities, is clearly much more expensive than plain housing with no extras. Service charges will push up the total that is eligible for housing benefit. However, this housing has been created specifically to help those with particular needs in a cost-effective way. If people had to leave, it is improbable that they could be accommodated more cheaply elsewhere. No purpose would be served by imposing a cap that forced out vulnerable people who would have to be rehoused immediately at higher cost somewhere else.
This change seems an essential measure. For example, it would cover couples in sheltered housing where one person is below pension age, even if the other is well above it. It would also cover those younger people who are not eligible for disability benefits of any kind but who have experienced a range of traumas and vulnerabilities and who are being helped to seek training or employment, but who are not yet work-ready and need the continuing help of specialist supported housing for a little while longer. Once again, this small amendment would become redundant if the overarching principle was accepted that housing costs, which vary considerably from one household to another, should be taken out of the calculation of the cap.
I conclude where I began: the benefit cap is very often about cutting support for housing costs. However, housing benefit and local housing allowance have already been the subjects of serious reductions, and the imposition of the additional total benefit cap seems likely to have grave consequences. Removal of the housing component would address a good number of the unforeseen circumstances and represent a triumph of good sense. I look forward to the Minister’s response to my amendments.
Baroness Tyler of Enfield
My Lords, I add my support to the two amendments in this group to which I have added my name. I shall speak to Amendment 99AAA, which stands in my name, on the issue of kinship carers.
Amendment 99ZB, already moved very cogently by the right reverend Prelate, would remove child benefit from the calculation of the cap. There is much that I should like to say on this but in her recent contribution the noble Baroness, Lady Lister of Burtersett, made a very powerful case about the unfairness of including child benefit in the calculation of the cap. Frankly, there is little that I can add other than to say that if the Government were to accede to this amendment, there would be not just huge applause but real consensus around this table that children should be protected, whatever happens to adults. Whatever is thought—and probably not shared—about the perceived shortcomings of adults, children should always be protected.
Amendment 99C deals with the exemptions of particular groups from the benefit cap. This is the subject of Amendment 99AAA in my name regarding kinship carers. I will be very brief but I want to say a few words about why kinship carers are so important. A kinship carer might, for example, be an uncle, aunt or grandparent who takes in children from other members of the family to avoid that child going into council care, with all the trauma and expense to the state that that creates. The purpose of this amendment, which is essentially a probing amendment, is to see whether the Government indeed intend to exempt family and friend carers from the cap. The architecture is already there; Clause 93(4) provides for the introduction of regulations to make exemptions to the cap, and the amendment would include family and friends carers among those exemptions.
Lord Kirkwood of Kirkhope
My Lords, I think that Clauses 93 and 94, and I speak only for myself, are incapable of satisfactory amendment. They constitute a direct and dangerous attack on entitlement and the concept of entitlement. They subvert the scrutiny of Parliament and they will cost more than they save. Apart from that, they are absolutely fine. I understand colleagues’ attempts to try to mitigate some of the damage. The speeches have been powerful; I have supported some of them and agree with all of them. If the Minister decided to take on all the suggestions that he has had today on exemption, it would be so complex that it would add some £270 million to add some agile computing to get the exemptions properly carried out—and I would like to think that simplicity is an overriding principle in developing new policy.
The thing that really causes me sleepless nights is looking at the clauses themselves. I have just three points. I spent some time—not quite in my bath, as I do not take social security Bills to my bath with me—looking at three aspects in particular. The Minister might help me with this. Clause 93(1) starts with the wording:
“Regulations may provide for a benefit cap to be applied”.
I think that that is a first. I do not think that there is any other social security legislation that aggregates entitlement and then depresses the total amount by regulation. If I am wrong, I would really like to hear about whether any other legislation does that—and I have been looking at this area of policy since 1986.
We need to be careful that the step we are taking is not taken lightly, because subsection (2) contains some language that is also worrying if you follow the thread all the way through the rest of the clause. It says inter alia that,
“where a single person’s or couple’s total entitlement to welfare benefits in respect of the reference period exceeds the relevant amount, their entitlement to welfare benefits ... is reduced by an amount up to or equalling the excess”
We find out about the relevant amount from subsection (5), which tells us that it is going to be contained in regulations. It also tells us at subsection (6) that the relevant amount will be,
“determined by reference to estimated average earnings”,
and we have had some important discussions about exactly what that does and does not mean. Then we have subsection (8), which is wonderful. It says:
“The Secretary of State may estimate such earnings in such manner as the Secretary of State thinks fit”.
That is quite novel as well. Is there another social security regulation where the Secretary of State can exercise that level of discretion on top of the attack on entitlement contained in subsection (1)?
Lord Kirkwood of Kirkhope
It may be putative, for all I know, but the conjunction of subsections (1) and (8) worries me greatly. There may well be other precedents, but perhaps people who know better than I do will leave me alone so that I can finish my speech quickly.
I move on to my third point. Clause 93(4) talks about regulations, and that subsection is also worrying. Paragraph (b) states that regulations may,
“make provision as to the welfare benefit or benefits from which a reduction is to be made”.
There is absolutely no qualification there. It refers not just to workless benefits but to welfare benefit or benefits. The Minister slightly gave the game away earlier by saying that we have all the power we need in Clause 93, and he is absolutely right about that. There is nothing that he cannot do by regulation. My point is: what is the House of Lords for if not to say that Clause 93 is a step too far?
I will vote not only against Clauses 93 and 94 but against the regulations that flow from those clauses, because that is the only way that we can protect entitlement. From where I am sitting, the concept of entitlement is sacrosanct in the benefits system. I am up for a discussion about reducing the social security budget total by £270 million. We can do that—we can have the debates; we know the process; we can choose the benefit and we can look at the effects. We do a lot of work in creating these entitlements and I should like to think that we do so carefully, line by line, particularly in the House of Lords. We all know that that certainly does not happen any more in the House of Commons, so this is the last place where on occasion we can protect people’s entitlement.
We should remember that we are talking about the lowest two deciles of the household income group in this country. They are the most vulnerable people in our communities throughout the length and breadth of the land. We need to be safe in the knowledge that we are doing what is right, benefit by benefit, but I think that Clauses 93 and 94 take away that security of knowledge. If we pass these clauses, everything can be capped by regulation. By convention, we do not vote against regulations in the House of Lords, and there are very good reasons and precedents for that. However, this is a game that any Government can play. My noble friend is a sensible and good man, as we established earlier in the Committee. We might make sensible decisions about some of these things but they will be enshrined in law. Another Government will use this power and it will subvert the role of Parliament. That is my objection. I understand and agree with a plea for exemptions left, right and centre, but I feel in my heart that if we pass this legislation we will be crossing a bridge that will lead to consequences which are not easily foreseen.
Speaking for myself, I will not vote for these clauses. I think that on Report the House should not just concentrate on some of the important, powerful speeches made in attempts to win exemptions but give some consideration to the parliamentary ramifications of Clauses 93 and 94. If that does not happen, we will be surrendering a power that we will never win back.
Baroness Sherlock
My Lords, I hesitate to follow that speech from the noble Lord, Lord Kirkwood of Kirkhope, because I want to address a particular category. In fact, part of the reason I want to do that is for the reason he has just outlined, which is that it is important that if the Government are to ask this House to pass the Bill they should understand the implications of doing so. One of my difficulties with the way that this clause is framed is that it makes it very hard for noble Lords to understand the consequences of the decisions that they are being invited to take.
I wish to speak specifically to Amendment 99B in my name and that of the noble Earl, Lord Listowel, although I also support other amendments in the group. My amendment would specifically exempt from the cap households where a child is a subject of a child protection plan, a children-in-need assessment or a common assessment framework team, or is waiting to be subject to any of those.
I tabled my amendment because I am concerned about the possible effect of forced moves on vulnerable children, and I want to give the Minister the opportunity of reassuring the Committee and, through us, the House that he does not expect any such impacts. We have already discussed whether or not forced moves will happen. Briefly, we have heard the Minister’s suggestion of three ways that someone could avoid being forced to move: negotiating a reduced rent, which the Minister acknowledged may not be possible; moving into work, although we have already established that the clear majority of people likely to be affected by the benefit cap are not required to work; or using savings or other income.
We all know that most of the people we are talking about will have little or no savings. Even if they do, there are already mechanisms in means-tested benefits—as there will be in universal credit—to decide how treatment of savings income should be taken into account. There is therefore no need to double-address that point. We must accept that there will be forced moves, and we may debate elsewhere how many there will be. I want to address what will happen to the most vulnerable children when forced moves happen.
We have all had many briefings, and noble Lords will be aware that charities working with vulnerable children are concerned that the cap could force families to move, perhaps repeatedly, as rents rise faster than the cap. Research clearly shows that housing problems are a frequent theme in serious case reviews. I cite just one example of a report from a London Safeguarding Children Board paper, which found that 47 per cent of people in a sample of serious case reviews completed in the capital between 2006 and 2009 had rent arrears, had been evicted or were on the verge of eviction.
It is interesting to drill down further into that. It became clear that the highly mobile population in London and associated issues came to the surface. That kind of mobility interferes with the ability of professionals who work in child protection to focus on the most vulnerable children. This report showed that 21 per cent of families were known to two London Safeguarding Children Board areas, and 13 per cent to four or more areas. Noble Lords may also remember from the Laming review of the case of Victoria Climbié the concern that was expressed about what happens when a child potentially falls between two boroughs. Anyone who has ever had cause to look at a serious case review will know, as I heard another member of the Committee explain eloquently, that where everyone gathers around the table for the first time and shares all the information they have from their different perspectives, they always say, “If only we had done this sooner. If only we had all known then what we all know now, this may not have happened”.
That is hard enough within a single authority. It is clear that when people move across boroughs, children fall between the cracks. I am therefore very concerned that this House should not be invited to do anything that might make that more likely to happen, because we understand that the consequences are very serious. I am not attempting to get into shroud-waving. I simply want to give the Minister the opportunity to explain to the Committee whether or not he believes that this will happen, given the evidence that I have set out. If not, why not? If it does happen, what are the Government going to do about it?
I offer the Minister some suggestions. He has already mentioned that help will be available for hard cases. Perhaps he could tell us how hard cases will be defined and whether the children that I have described will count. Secondly, the Minister mentioned transitional relief. Can he tell us more about that? Will households containing children at risk definitely be covered by transitional relief, and can he explain how that will happen? What assurance can he give the Committee that boroughs with an influx of safeguarded children will receive adequate resources to cope? In particular, can the Minister tell the Committee that he has confidence that the kind of boroughs that will receive an influx of children have the resources and systems to support them? If so, can he provide us with the basis of that confidence? If the Government are going to undertake a move that will specifically increase the chances of families of very vulnerable children moving, I simply invite the Minister to explain to the Committee how he can defend that.
Baroness Drake
My Lords, I shall speak to Amendment 99AAA, to which I have put my name, and to Amendment 99C, particularly proposed new paragraphs (c) and (g). The cap as constructed fails to recognise the value of the non-waged work undertaken by family and friend carers when they embrace the responsibility for a vulnerable child or children who would otherwise go into care. Not only is that good for the child but it avoids a responsibility that would otherwise fall to the state and the taxpayer at a cost of £40,000 per year.
We know that a significant number of family and friend carers are older family members. Evidence from Grandparents Plus revealed that six out of 10 are over 55. I should like to quote highlights from a powerful speech that I read this weekend. It says that,
“we all gain hugely from the time and commitment that many older people give. We ignore this at our peril … we should not forget that many of the jobs they undertake would otherwise fall on the state. This is family doing what family does best—quietly, with great commitment, carrying out its duties … I’ve long believed that the state has become ambivalent about the importance of family structure, not just decent parenting but also the role of the extended family. In an increasingly atomised society, and in a context of growing family breakdown, it is all the more important that we continue to support, celebrate and hold together these wider relationships. Without them society would simply collapse”.
There we have it. I am sure that the Minister will recognise those as the words of Secretary of State Iain Duncan Smith in his speech on 31 October this year at the event organised by the Young Foundation and Grandparents Plus to celebrate the life of Lord Michael Young. There was no need for me to write my own words because the Secretary of State so powerfully makes the point that I want to make that it is better to use his. He makes a powerful case for recognising the contribution of these family and friend carers.
So we can see that there is no policy difference between us. The only issue, given that speech, is how we deliver that common policy. That is why the noble Baroness, Lady Tyler of Enfield, and I are expressing these concerns. However, the Secretary of State’s actual response to family and friend carers as currently provided for in the Bill is to cap their benefits, inclusive of child payments. In effect, the Bill has increased the barriers that these carers face. The state has moved from being ambivalent to actually being negative.
The Secretary of State concluded his speech by saying,
“We need to think hard”—
by “we”, I presume that he meant the coalition Government—
“about the way we recognise and reward caring, so that we don’t lose the invaluable support from friends and family that currently exists”.
I invite the Minister to do exactly that—to think hard about the cap on this community of carers, particularly as the Secretary of State has said publicly:
“I’ve specifically asked my colleague Lord Freud to look at the kinship carer issue”.
May I push the Minister to advise the Secretary of State to remove the cap for family and friend carers as set out in this amendment? When I read that statement, I had increased confidence that that would now happen.
I turn to Amendment 99C. There are three strands to the Government’s architecture for the welfare system: increasing efficiency, controlling affordability and reinforcing work incentives and positive behaviours. On that last strand, integrating in-work and out-of-work benefits into a single universal credit system has to be applied to two different constituencies: those who are out of work for long or sustained periods and those who are regularly in work. The Government have to build a single system for customers with different attitudes and experience of work, and a customer journey fit for both.
This is both a significant policy change and a behavioural challenge. If the Government want to avoid the universal credit resulting in disincentives and negative experiences for those who are fully engaged in work and have a clear work ethic, this challenge has to be met successfully. Otherwise, the Government may improve their process efficiency and affordability but they will fail to support the positive behaviour of millions of hard-working responsible people.
That is why I want to address the position of those hard-working people who suddenly lose their job involuntarily and the question of why there should be a period of 12 months before the cap is applied. The Government say that a benefit cap to limit benefit payments to those out of work is a fair and necessary measure—a driving principle, to use the Minister’s own words. However, to address the question from the noble Lord, Lord German, in a previous debate, a cap that is of itself a measure of fairness between those in and out of work must in my view be fair in its construct and proportionate in its impact. The benefit cap as proposed has significant shortcomings on both those criteria.
Clause 93 as drafted, as was powerfully said by the noble Lord, Lord Kirkwood of Kirkhope, means that Parliament is forgoing influencing “fair and proportionate” in the issue of the measure of fairness, unless it changes that clause or starts to lay out specific exemptions. Comparing average earnings net of national insurance and tax with benefits is not comparing like with like, and other noble Lords have already articulated the problems with that approach.
Equally, most benefit payments will be included in the cap, including child payments. To me, the concept of fairness in constructing the cap cannot be blind to the existence of children, otherwise there is an implicit punishment on them for their parents being out of work, and that is not acceptable in the design of a benefit system. That point was powerfully put by the right reverend Prelate in speaking to the amendment. The cap will also have a negative and disproportionate effect on hard-working families and their children when the wage earner loses a job or work involuntarily—even more so where the loss of work happens quickly and when any redundancy payment is low or non-existent.
Unfortunately, over my working life I have been involved in one way or another with thousands of redundancies and it is never a pleasant experience. I remember a FTSE institution deciding to close one of its regional offices. Originally, it intended both to tell all the employees and remove them from the premises on the same day. I managed to persuade the CEO that the workforce were a hard-working, decent group of people who would not wreck the systems and that he could delay the closure for three months to give people a fighting chance to find alternative work.
I kept remembering a female employee’s buoyant comment to me some nine months previously, because this was a group of people with a clear work ethic who worked at that regional office. She said: “They will never close this regional office: we have the highest productivity and we win all the company awards”. The CEO did agree to delay on the condition that I stood next to him when he told the staff, who had no idea of what was coming. It was one of the most salutary experiences of my life. The tears from both men and women, the panic, the anxiety: how were they going to pay their mortgage or rent; how were they going to tell their kids? I remember that plaintive question so clearly, because it was repeated so many times.
When faced with job loss or redundancy, hard-working people do not clap their hands and say, “Oh goody—I’m off to a life of unemployment on benefits”. They are more likely to be stressed and anxious while rushing around trying to find another job, probably fighting feelings of depression. To hit them with a benefit cap straight away just adds further hardship to already difficult—maybe even traumatic—circumstances. Anybody who has been involved in the private sector and large-scale redundancies knows that some people even have to be put on suicide watch. That is the reality of dealing with redundancy situations, even when there is a compelling economic reason for doing so. That immediate impact of a benefit cap would make it even more difficult to deal with the essential bills; their efforts may be redirected into relocating into cheaper accommodation and relocating their children to different schools at the very time they should be putting all their efforts into finding a job. It could force a breakdown in childcare arrangements for lone parents when they so desperately need to leave them in place, because they need them so they can search for jobs and make the early transition to another job.
In couples and families, to defend the cap and the couple penalty by shifting tougher work conditionality requirements to the other parent, who is the primary carer, is not necessarily going to provide a sustainable solution for that family. The inclusion of child payments in their benefit cap will hit their children hard. In a difficult economic climate, such hard-working people and their children will need time on benefits before a cap takes effect, while they try to find work. They should be given 12 months. A modern welfare system has not only to incentivise people to work and address benefit dependency, but also to support hard-working families with a clear work ethic in managing a flexible labour market. The single universal credit has to address both communities.
The Government want to see an increase in the private sector relative to the public sector. They want to see an increase in the flexibility of the labour market. This has to be achieved in part by a reduction in employment rights. However, they appear not to want to design a welfare system that supports hard-working people to manage the realities of today’s labour market and other economic realities—realities which will become harsher as global competition intensifies. Such support is fundamental to fairness; taxation and national insurance should enable society to make efficient and fair collective provision to meet the citizens’ needs—often at the point of need—whether it be, for example, health, defence or welfare. The Government, in building a universal credit system for customers with different attitudes and experience of work, must not fail to support hard-working people managing today’s economic realities. There is a danger that that dimension is lost in the current debate in this Bill.
The universal credit system is supporting both those who are persistently out of work, or who cannot for valid reasons be in work, and those millions of people who have a very clear work ethic but from time to time need a national insurance-based welfare system that is intended to assist them through—with their clear work ethic—the challenges with which they are faced.
Lord De Mauley
My Lords, I apologise for intervening at this stage but it appears that this debate is going to take a few more minutes, so I beg to move that the debate on Amendment 99ZB be adjourned.
Lord De Mauley
On that basis, perhaps I may suggest that the Committee be adjourned until Wednesday at 3.45 pm.
House of Lords
Health: Early Diagnosis
(13 years ago)
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Lord Sharkey
To ask Her Majesty’s Government what provision there will be for national early diagnosis campaigns for serious diseases following the enactment of the Health and Social Care Bill.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, both Public Health England and the NHS Commissioning Board, subject to the passage of the Bill, will have a clear interest in ensuring that early diagnosis supports improved outcomes in line with the NHS outcomes framework, the public health outcomes framework and the Secretary of State’s mandate. The Government, as set out in Healthy Lives, Healthy People: Update and Way Forward, continue to reflect on where commissioning responsibility for early diagnosis campaigns should rest.
Lord Sharkey
The Minister will know that there have been recent and very welcome significant advances in the early diagnosis of bowel and oesophagal cancers, but not in lung cancer, which is the most common cause of cancer deaths in men and women. Cancer Research UK points out that early diagnosis would make a significant difference to the current 5 per cent 10-year survival rate. Given that, can the Minister tell the House how much money will be spent on lung cancer early diagnosis campaigns in this financial year and how much is planned for next year?
Earl Howe
My Lords, we have provided funding for a number of local lung cancer awareness campaigns. On 10 October, we launched a five-week regional lung cancer awareness campaign in the Midlands, using TV, radio, press and face-to-face events. All those campaigns are aimed at improving public awareness of the signs and symptoms of lung cancer and to encourage people to visit their GP when they have symptoms. An evaluation of the impact of those campaigns is now taking place. I do not have the figure in front of me of the cost of those specific campaigns, but I shall let my noble friend know.
Lord Walton of Detchant
Does the Minister accept that, with recent advances in molecular biology and genomic diagnosis, many previously untreatable rare diseases have been identified, and that early diagnosis is crucial in order to introduce the newly available treatments for those conditions? Is he satisfied that the national Commissioning Board, with its outreach into the subnational senates, will have the facilities available to manage these rare diseases appropriately?
Earl Howe
My Lords, the noble Lord makes an extremely good point. The answer to his question is, yes, I believe that it will have the capacity to do that. He rightly mentions advances in genomic science, which of course will have a major part to play in the field of diagnostics. As regards rarer diseases, as he will know, we are placing responsibility with the national Commissioning Board for the commissioning of specialised services for rarer conditions.
Lord Collins of Highbury
My Lords, as the Minister is aware, the reduction of 10 per cent in weight maintained over a period can reduce the risk of developing type 2 diabetes by 50 per cent. Small improvements in eating and drinking are needed. Will the Minister accept that the country needs a major awareness programme, led by the Government, on what to do to avoid developing type 2 diabetes; and, under the new legislation, will he continue to use his powers?
Earl Howe
My Lords, the Government have no current plans for a specific national campaign to raise awareness of diabetes. On the other hand, as part of Change4Life, which we are continuing with, we aim to raise awareness about diet and physical activity, and to create what we hope will be a mass movement to help to reduce obesity and related conditions, including diabetes. The campaign encourages everyone to,
“eat well, move more and live longer”.
There is also the very important ingredient of the NHS Health Check in this area, which the noble Lord is familiar with, for people in England aged 40 to 74. We think that this has the potential to prevent over 4,000 people a year from developing diabetes.
Baroness Gardner of Parkes
My Lords, I am sure that the noble Earl is well aware that not only lung cancer but all forms of cancer benefit hugely from early diagnosis. Will he ensure that one existing problem is dealt with, perhaps through further encouragement of medical education? In the very rare cases of osteosarcoma, and to a certain extent oral cancer, GPs are not really aware; cases are referred to them and are missed. Surely this must be a matter of further training in the specialities of these rare conditions.
Earl Howe
My noble friend is absolutely right. It is widely recognised that GPs have very important roles in prevention and early diagnosis of cancer of all kinds but that, until recently, there has been very little information available to enable GPs to benchmark their own activity and performance against that of other practices. We have launched what we are calling GP practice profiles, which will bring together a range of outcomes and process information relevant to cancer in primary care, so that GPs have comparative information available to benchmark their own performance. I think this will be a major plus in taking these variations forward.
Baroness Finlay of Llandaff
My Lords, the responsibility for paediatric care for children aged five to 19 is moving from health—where it is to remain for the under-fives—to local authorities, and public health will be responsible for many of these campaigns for early diagnosis. In view of this, how will the Government ensure that there is joined-up information and data collection between public health, the local authority, and the point at which diagnosis of complex conditions is made, which is usually in general practice and paediatric departments, and therefore in health?
Earl Howe
The noble Baroness draws attention to an issue which we have been debating in various forms under this Bill, which is how we join up services and make the whole system hang together in the way that we all wish to see. The short answer to her question is that, at local authority level, the health and well-being boards will be responsible for co-ordinating that kind of information. However, we will also want to make sure that this takes place at a national level too. The outcomes data that we get from secondary care providers will in time, I am confident, produce information that will feed into public health campaigns.
Lord Hughes of Woodside
My Lords, I welcome the emphasis on and campaigns for early diagnosis, but will the Minister recognise that equally important is early treatment, and therefore not abandon targets for ensuring that people get early intervention of the highest quality?
Earl Howe
Yes, my Lords, we recognise fully that waiting times are important, and in particular diagnostic waiting times. I am certain that the noble Lord will be reassured to know that waiting times in both respects remain low, and we intend that they should remain that way.
Children: Television
Baroness Benjamin
To ask Her Majesty’s Government, further to the Answer by the Secretary of State for Culture, Media and Sport on 8 September (HC Deb, col. 543), how they will ensure higher prominence for children’s public service channels on electronic programming guides.
Baroness Rawlings
My Lords, we are considering the whole picture of public service broadcasting, including electronic programme guides, as part of the communications review. We will publish our thoughts in the communications Green Paper around the turn of the year.
Baroness Benjamin
I thank my noble friend. I am sure that she agrees that the BBC's children's channels are the largest providers of UK-made public service programmes. The other children's channels provide mainly a relentless diet of cartoons and bought-in programmes. Yet on the Sky electronic programming guide, EPG, BBC children's channels are low on the list. Does she agree that this is not what Parliament meant by “appropriate prominence” in the Communications Act 2003, under which Ofcom is required to review the position of PSB channels at least every two years? There has not been such a review since 2005. Instead of waiting for new legislation, will the Government urge Ofcom to review the EPG code sooner rather than later, and place BBC's children's channels in their right and proper place? I declare an interest as an independent producer and a children's presenter.
Baroness Rawlings
My Lords, my noble friend Lady Benjamin is right. As we all know, she has formidable experience in this area and is a passionate supporter of children's television in the UK. We believe that with around 30 dedicated children's channels in the UK, our younger viewers have a wide choice of programmes. Two of these are public service broadcasting channels: the BBC services of CBeebies and CBBC. I hope that my noble friend agrees that the BBC is fulfilling its public duty by making certain that these channels play a very important role in the provision of high-quality children's programmes in this country.
Baroness McIntosh of Hudnall
My Lords, will the Minister answer the question that the noble Baroness, Lady Benjamin, has just asked? It was not about whether CBeebies and CBBC are good providers but where they stand on the electronic guide. As I know to my cost, having searched for them in the interests of giving my grandchildren something worth watching, you have to go right down to number 71 on the electronic programming guide to find CBeebies. I do not think that that is high enough. Will the Government put pressure on Ofcom to make it better?
Baroness Rawlings
The noble Baroness makes an important point. I am sorry if I did not stress that Ofcom is an independent body that decides these things, and the communications review will be looking at this. The prominence of a children's programme is decided by Digital Multiplex Operators Ltd, DMOL, and other operators.
Baroness Howe of Idlicote
My Lords, the BBC is renowned for its children's broadcasts—there is little doubt about that—but as far as concerns radio programmes for children, it has not been as effective as it could have been. Will the Minister do her best to persuade all the Ministers in the department to keep up the pressure on the BBC about this and also to encourage the BBC to do a much better job in that respect than it has done up to now?
Baroness Rawlings
The noble Baroness is very expert on these matters and has gone to the core of the matter regarding radio programmes. It is up to the BBC to follow up on its children's programmes. The assessment of whether radio and television broadcasters are meeting their obligations towards children is a matter for Ofcom.
Lord Brooke of Sutton Mandeville
Does the Minister feel that the present arrangements for handling these matters are entirely satisfactory?
Baroness Rawlings
My noble friend Lord Brooke brings up a very important point. That is why the communications review Green Paper is being discussed at the moment. In the new year we will publish the Green Paper, through which all these ideas will be fed in to the Secretary of State before the Bill comes to this House.
Lord Soley
Will the noble Baroness draw this exchange to the attention of Ofcom and, when she does so, will she express her own view that it should be higher up the list and not be down at the bottom? Will she do that?
Baroness Rawlings
Yes, my Lords; the EPG prominence is an extremely important tool for making certain that as many people as possible have easy access to the full range and diversity of the PSB channels. However, we intend to take the opportunity of the communications review to look into this properly, to make certain that we have a fit-for-purpose system for the long term.
Baroness Walmsley
Does my noble friend the Minister agree that children’s radio is a very valuable tool for helping children to develop their language, particularly those children for whom English is not their first language? Does she also agree that the BBC has entirely failed in this despite a great deal of urging from many Members of your Lordships’ House? Is there anything that the Government can do to encourage commercial broadcasters to fill this important gap?
Baroness Rawlings
I am sure that that is exactly one of the areas that we will be including in the communications Green Paper. While the whole world outside will be celebrating the Olympics and the Jubilee, your Lordships will have the pleasure of the exciting communications Green Paper and the Leveson review, which will be looking into all forms of broadcasting.
Baroness Jones of Whitchurch
My Lords, given that there is inevitably limited space on the front pages of EPGs, does the Minister agree that greater priority should be given to ensuring that public service broadcasters and, as part of that, quality children’s programmes should appear on the front pages, rather than the Secretary of State’s declared policy of giving priority to local TV?
Baroness Rawlings
Regarding local television, the Government want local services to achieve EPG prominence on Freeview through acquiring a sufficiently high channel number. The Government hope that this will be Channel 8, which is currently vacant in England and Northern Ireland, and another high number for services in Wales and Scotland where Channel 8 is already in use.
International Development
(13 years ago)
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Lord Sheikh
To ask Her Majesty’s Government what steps they are taking to ensure that funds allocated to international development are spent in accordance with their objectives.
Baroness Northover
My Lords, the Government are focusing on delivering specific results and better value for money through our programmes. DfID is measuring the results and making them transparent so that the Government can be held to account. The Secretary of State for International Development has also established the Independent Commission for Aid Impact to provide independent assurance that UK aid is being spent properly and is achieving the desired impacts. The commission reports directly to Parliament through the International Development Select Committee.
Lord Sheikh
My Lords, I thank the Minister for that response. The Public Accounts Committee in another place found recently that DfID had no systematic or comprehensive approach to quantifying the extent of foreign corruption and was unable to provide an estimate of the scale of leakage. Does the Minister agree that this is not acceptable, and what action are the Government taking to put this right to ensure that they secure value for money?
Baroness Northover
My Lords, it certainly would be unacceptable if this were the case. The report very much reflects the position of the past and takes little account, it seems to me, of the changes made by the coalition. For example, in 2009-10 about 43 per cent of known losses were recovered, whereas over the past year that has risen to 92 per cent. We have also transformed the way in which the department manages its finances so that spending is attached to tangible results, which are being rigorously scrutinised by the new independent aid watchdog that I referred to just now.
Lord McConnell of Glenscorrodale
My Lords, will the Minister comment on the current position on the budget aid to Malawi? Six months ago the Secretary of State suspended budget support to Malawi but gave us assurances that funds would be redirected by other means to be spent in that country for those in need. Is it possible to give an estimate at this stage of all the money that will be spent in this financial year, and are we now on target to achieve the objectives set out in our own Government’s development plan to support Malawi this year?
Baroness Northover
I realise that the noble Lord has a great interest in Malawi from his work in the Scottish Parliament. I will write to him so that he has the most up-to-date details on that. His question reflects the difficulty, which we all recognise, of working in some of the most complex countries around the world. It is extremely important that we balance the needs of the poorest people in these countries with the difficulty of working through some of their Governments.
Lord Hannay of Chiswick
My Lords, will the Minister confirm that, as the press reports, the Secretary of State for International Development has today, or recently, written warning the FAO and UNESCO for the last time that their aid from us may be at risk? Will she say whether the Secretary of State intends, in the light of the 20 per cent or more cut in UNESCO’s budget, for reasons that have nothing whatever to do with its efficiency, and for reasons that I imagine the Government do not sympathise with, to take that into account when considering that particular case?
Baroness Northover
I hear what the noble Lord says. In the initial part of his question, he is referring to the multilateral aid review that took four organisations out of those that DfID would support and put four into, as it were, special measures, to be reviewed. UNESCO’s current problems are very significant. He is referring to UNESCO deciding to recognise the Palestinian Authority and the withdrawal of United States support as a result. I will write to him with the latest information on that.
Lord Roberts of Llandudno
My Lords, especially at this time of heavy youth unemployment, could we ask the Government to encourage organisations such as Voluntary Service Overseas to expand their activities and to give jobs to as many as, say, 20,000 young people in developing these projects? It would give work to those who have no work, and it would give hope to those who have little hope.
Baroness Northover
My Lords, we are currently piloting the International Citizen Service, which is giving more than 1,000 young people from all backgrounds the opportunity to spend three months doing voluntary work overseas. This will make a real difference to some of the world’s poorest people, while developing skills that will be invaluable as they seek employment in the future. Our intention is to scale up this programme so that 7,000 young people will benefit over the next three years.
Lord Turnberg
My Lords, is the Minister aware that in the Palestinian West Bank territories many textbooks contain all sorts of anti-Semitic and anti-Christian remarks and incitements to violence? Is that not something that DfID should pay attention to in its funding arrangements?
Baroness Northover
The noble Lord is right that some of these textbooks include things that we would certainly not wish to see within them. There is no doubt about that. With his work in the area, he knows how difficult it is to bring together groups that come from opposing positions. Sometimes it is extremely important to try to take forward the bigger picture and ensure that the Israeli side has security and that the Palestinian side has some kind of hope. That has to be the focus of DfID in supporting those who are in poverty in whatever situation they may be living.
Baroness Kinnock of Holyhead
Does the Minister share my concern that the Development Assistance Committee of the OECD has reported that international donors have met only one of the 13 targets that they set themselves on aid effectiveness and that, in addition, aid is now fragmented, unpredictable and poorly co-ordinated and lacks transparency? Will she give an assurance that the Government will raise these issues as a major concern at the Busan high-level forum on aid effectiveness later this month?
Baroness Northover
The noble Baroness is right that as more organisations and countries have become involved in aid, which itself is welcome, there is a lot of fragmentation. Previous meetings such as those in Paris and Accra have tried to take this forward, and Busan is trying to do that too. She is absolutely right that this is something that DfID will be emphasising, to try to ensure that aid is effective and targeted, and that countries and organisations should work closely together. In this regard, it is extremely important to bring in some of the BRIC countries, which up to now have not played such a large part in this area and may play a major role in the future.
Syria
(13 years ago)
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Lord Risby
To ask Her Majesty’s Government what action they are taking regarding the current situation in Syria through the United Nations and neighbouring countries.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, the United Kingdom has been at the forefront of international activity on Syria. To raise the international pressure on the regime further, we have tabled a draft human rights resolution in the UN General Assembly Third Committee. We have also made clear the need for firmer action in the UN Security Council. The UK has been active in welcoming and supporting the Arab League, and is in regular discussion with key players in the region, including Turkey.
Lord Risby
My Lords, as we have watched with horror the murder and mayhem that has descended upon the people of Syria in the last eight months or so, we should nevertheless remind ourselves of a long-standing historic tradition in Syria, unique in the region, of quite exceptional tolerance between the different religious communities. Therefore, when my noble friend the Minister and his ministerial colleagues have discussions with our Turkish friends and the Arab League at the United Nations, and most particularly with the Syrian opposition, can the clearest possible reassurances be given publicly to the minorities, for whom this is an extremely fearful and difficult time, that in the event of a change of government in Syria, which now seems increasingly likely, their rights and way of life will be fully protected?
Lord Howell of Guildford
The short answer to my noble friend is yes. Those are very important points and have certainly been brought to the fore in all these discussions, including those that took place only a few hours ago between my right honourable friend the Foreign Secretary and several opposition leaders in Syria. Our view is that minorities would be best protected if the Syrian Government themselves would stop their violent and oppressive activities and the slaughter of many of their citizens, and at every point we have sought to encourage the opposition leaders to engage with minorities and maintain non-sectarian approaches as far as they conceivably can.
Lord Wright of Richmond
Perhaps I may remind the Minister of a question that I asked on 8 June this year, in which I warned of the danger of calling for the overthrow of a system of government that is, for all its faults, a secular system of government. On that point, I endorse very much what the noble Lord, Lord Risby, has said. The Minister may have heard on the BBC very recently the Syrian Orthodox Archbishop of Aleppo making precisely that warning. Does the Minister agree that while we are absolutely right to continue to put pressure on the Syrian Government to respect human rights, to which they are of course fully committed under the international convention on human rights, we should nevertheless watch with caution the motives of some other Governments who are calling for the removal of President Bashar al-Assad, not so much because of the slaughter of civilians on the Syrian streets but because the Syrian Government are an ally of both Iran and Hezbollah?
Lord Howell of Guildford
The noble Lord is absolutely right that there are many complexities, risks and concerns, both in keeping the present regime and, indeed, in the removal of it. Who knows whether the violence and horrors of the present situation will evaporate and be removed by a replacement? There may well be difficulties ahead. However, we are encouraged by the fact that the Arab League has taken the position it has, of criticising and challenging the Syrian Government—indeed, of expelling them from the Arab League—and taking a very firm stand for the future. We want to see the Arab League take a lead on the whole Syrian situation and indeed we are working at the United Nations to see that it has a stronger say so that we can mobilise the full force of the global community for change.
Lord Triesman
My Lords, the noble Lord, Lord Risby, asks the right question, and at a key moment. I greatly appreciate the work that the Government have done on the human rights resolution, and I hope that it might be possible, with the visit of the President of Turkey, to pursue some of those arguments as well in the near future. Does the Minister think that there is scope for an escalating pattern of sanctions, which could be agreed at the UN; for the encouragement of appropriate bodies which nominate people, to remove Syria from some of the multinational bodies on which it still sits; and for an extension in issuing warrants under the rubric “crimes against humanity”, in order to increase the pressure on what is an obnoxious regime?
Lord Howell of Guildford
There can certainly be an escalation of pressures. Indeed, that is what we are involved in with the new EU measures that we are proposing, which will come forward on 1 December—the week after next—and the UN Human Rights Commission report, which is appearing next week, as well as doing what we can to carry forward the possibility of a UN Security Council resolution. However, one has to be realistic. In the UN Security Council there remains very great reluctance and indeed obstruction to advancing any Security Council agreement on a full resolution for further action. We are constantly working to overcome that, but it is there. That of course applies to the International Criminal Court aspects as well because, as Syria is not a signatory to the ICC, it requires a UN Security Council resolution to authorise the ICC to take matters forward in respect of what the noble Lord suggested. That faces the same difficulty at the moment. We will try to overcome it, but there are obvious obstacles.
Arrangement of Business
(13 years ago)
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Lord Wallace of Saltaire
My Lords, as no amendments have been tabled to the London Olympic Games and Paralympic Games (Amendment) Bill, it may be helpful if I announce at this point the advisory speaking time for the Second Reading of the Legal Aid, Sentencing and Punishment of Offenders Bill. There are 54 speakers signed up. If Back-Bench contributions are kept to a maximum of seven minutes, the House should be able to rise at around the target rising time of 11 pm.
London Olympic Games and Paralympic Games (Amendment) Bill
Legal Aid, Sentencing and Punishment of Offenders Bill
(13 years ago)
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The Minister of State, Ministry of Justice (Lord McNally)
My Lords, this is a substantial and far-reaching Bill. Its breadth is a consequence of the scale of its ambition, which is nothing less than intelligent, radical reform of the justice system. It aims to reform our criminal justice system so that it protects and serves the needs of the law-abiding, especially victims. It recognises that, for many offenders, prison does work and clear, stiff punishments are the right response to serious crime. But it also seeks to meet the challenge of persistent offending by bringing on stream a rehabilitation revolution which, if successful, would be a win-win, saving future victims from the trauma of a crime and the taxpayer the cost of incarcerating the offender once again, at the same time introducing to society a productive citizen whose life is not wasted in the cycle of criminality.
The Bill’s second goal is the long-overdue renewal of our system of civil justice. A modern system should resolve conflict as early as possible in the most cost-effective way. Yet the reality is that many ordinary users find going to law a slow, expensive and daunting experience that fosters rather than minimises litigation, often at the taxpayer’s expense.
The Bill therefore seeks to remove certain areas from the scope of legal aid while encouraging a step-change in the use of mediation and other ways of resolving disputes. It also implements the recommendations of Lord Justice Jackson on reforming no-win no-fee funding arrangements, which have become dysfunctional and inflationary. We also propose to ban referral fees.
Underpinning these first two aims is our third intention; namely, to make a contribution to unavoidable and necessary reductions in public spending. We approach our task with a profound belief in the fundamental importance of access to justice but the system as it stands faces an unignorable problem of affordability. Therefore, Part 1 introduces major reforms to the scope of civil legal aid. Alongside this, the changes in Part 1 mean a fundamental shift in the way the legal aid and wider civil justice system works.
For those who say that those most in need must have legal help to support them when they have a serious legal problem, I agree. For those who say that people must have legal help for whatever they want, whenever they want, I cannot agree. Access to justice is not the same as state-funded access to legal representation at court. We must do more to encourage people to use alternative, less adversarial means of resolving their problems.
We have approached our reforms of legal aid from first principles and have taken into account the relative importance of the issues at stake, the litigant’s ability to present their own case, the availability of alternative sources of funding as well as alternative sources of help and advice. Our proposals seek to focus legal-aid funding on circumstances where a person’s life or liberty is at stake, where they are at risk of serious physical harm, or where they face immediate loss of their home. Importantly, we are also retaining civil legal aid in cases where children may be taken into care.
The net effect of all this is significant change. Yet, in all, we estimate that the taxpayer will still spend the best part of £1.7 billion on legal aid each year after these reforms have been carried through. Prioritising critical areas of spend necessarily means taking a more radical approach elsewhere. That is why, for example, we have decided to remove taxpayer funding for legal representation in private family law cases and, instead, increase spending on mediation. Similarly, in areas such as employment, routine immigration applications and welfare benefits issues, legal aid will no longer be available. As noble Lords well know, the original rationale of the tribunals system was precisely to enable people to make their case without the intervention of a lawyer.
Although narrowing the scope of legal aid, we intend to provide a safety net. The exceptional funding scheme established in the Bill will provide funding for an excluded case where failure to do so would amount to a breach of a person’s right to legal aid under the Human Rights Act or European Union law. We also intend to address worries about the future of the valuable work done by the not-for-profit sector. This is an important part of our alternative and we recognise the need for a strong sustainable body of advice providers.
The Government have already announced a £100 million transition fund for the not-for-profit sector. I can confirm that, as announced this morning, we are injecting an extra £20 million specifically for free advice services, as well as undertaking a cross-government review to ensure that people continue to have access to good quality free advice services in their communities.
Concerns have also been raised about the impact of Part 1 on children and women. Let us be clear from the outset: we have retained legal aid for child protection cases, civil cases concerning child abuse and those involving special educational needs. We have also made special provision to retain legal aid for child parties in family cases. The consequence is that the vast majority of support for children will be unaffected by our changes. In 2009-10, the Government provided £133 million in civil legal-aid funding to child parties in all categories of law. Under our proposals, 95 per cent of that will continue.
In relation to women’s access to legal aid, we are again prioritising those most at risk of harm, retaining legal aid for private law cases involving domestic violence, where we have broadened the range of evidence accepted. Applications for protective injunctions and associated advice will continue to be funded.
In addition, in private family cases, Part 2 extends the courts’ powers to require one party to pay towards the other’s costs. This will help significantly in cases in which there is an inequality of arms. In family law as a whole, the taxpayer will still be providing over £400 million, much of which will benefit women.
Of course, the dire economic situation that we inherited drives some of the tough choices that we have had to make. Indeed, noble Lords opposite were already trying to cut legal aid at a time when they were still telling us that they had cured boom and bust. We all agree that legal help for those facing serious legal difficulties is fundamental. On the other hand, substantial changes and reform are much needed. We believe that our proposals in Part 1 achieve this balance.
Part 2 implements reforms in civil litigation funding and costs, based on Lord Justice Jackson’s recommendations. No-win no-fee conditional fee agreements were first introduced in England and Wales by my noble and learned friend Lord Mackay of Clashfern. Most observers believe that they succeeded in their goal of improving access to justice for those who were neither poor enough to qualify for legal aid nor wealthy enough to afford the costs of privately funded litigation. However, later changes tilted the balance much too far in favour of claimants. The Master of the Rolls, the noble and learned Lord, Lord Neuberger, said to the Times only last week:
“When you see the level of costs in some cases … it is clear that the system is unsatisfactory, some would say worse than unsatisfactory, and something needs to be done about it”.
This Bill intends to do something about it by ending the recoverability from losing parties of success fees and insurance premiums that drive up legal costs. This will be balanced against a 10 per cent increase in general damages for claimants. By taking these steps, we will restore common sense to the system and stop the perverse situation in which fear of excessive costs often forces defendants to settle, even when they know that they are in the right. This marks a return to the kind of arrangement that prevailed when the system was first set up by my noble and learned friend Lord Mackay in the mid-1990s.
I am well aware that a number of noble Lords, many of whom are sympathetic to the broad thrust of the Jackson reforms, have concerns about how this will impact on certain areas of litigation. I will listen to what they have to say both during today’s debate and when we return to those matters in Committee.
I turn now to the third and final part of the Bill, which concerns our sentencing proposals. I want to start by making the point that these reforms are designed with the victims of crime very much in mind. As I have said already, for many, prison is necessary and it works. However, if it is truly to protect the public, it needs to do a much better job on tackling reoffending.
We have two key proposals to deliver this change. The first is to introduce reforms across the estate to make our prisons places of hard work, not idleness. Getting prisoners into the habit of work matters in its own right not only because unemployment is a major risk factor in reoffending, but because once you get offenders working, you can institute a much more effective system of reparation to victims and to communities. Accordingly, this Bill enables deductions to prisoners’ earnings to pay for victims’ services and puts a positive duty on the courts to consider handing down compensation orders, the proceeds of which can go direct to victims. These reforms will help to move prisoners from being a purely negative drain on the system to making a positive contribution and pay genuine reparation to the victims who their actions have affected so terribly.
Running parallel to the Bill, our second key proposal is paying by results those organisations which work to rehabilitate offenders. This is a truly radical reform with the potential to revolutionise the way a lot of rehabilitation services operate. Rehabilitation is the key theme that runs right through the Government’s sentencing proposals. One need only look at this summer’s riots, where around three-quarters of suspects had previous convictions, to see that existing punishments have so far failed to reform. I believe that we need punishment which is robust and proportionate but that is also accompanied by a determination to get offenders to face up to the causes of their crime. We are offering those who commit crimes a choice. For those who do wrong, you will be punished, but for those who choose to mend their ways, we are extending a helping hand. That helping hand includes freeing up courts to impose drug, alcohol or mental health treatment requirement programmes which are tailored to individual needs.
I can also announce today that the Government intend to introduce reforms to the Rehabilitation of Offenders Act 1974, the outdated operation of which inhibits rehabilitation. We intend to bring forward amendments to achieve the right balance between the need to protect the public while removing unnecessary barriers that prevent reformed offenders contributing to society. I pay tribute to my noble friend Lord Dholakia on his long campaign on this matter. We believe that punishment must be proportionate, flexible and productive, so let me turn to some of the key measures in the Bill which will ensure that.
The first of the measures is greater discretion. We are legislating to provide more flexibility for judges and magistrates to sentence appropriately. The Bill is a first step to unpicking the labyrinth of legislation governing sentencing and creating a single framework for the release and recall of offenders. We are also proposing a simpler, clearer duty on the court to explain the sentence it passes, enabling it to be understood better. The Bill also introduces greater flexibility and discretion by removing the so-called “escalator principle” of out-of-court disposals for under-18s, which forces young people arbitrarily into the criminal justice system, regardless of the nature of their offending. In this area of youth justice reform, we are also undertaking the important step of treating 17 year-olds as children for remand purposes, and giving “looked-after child” status to all young people aged under 18 who are securely remanded. This will enable, for the first time, care plans to be created for those young people who are remanded to youth detention accommodation.
In the wider system, we seek to take a tougher approach to waste and reduce unnecessary pressures. Our major reform here is our proposals on remand in Chapter 2 of Part 3. These focus the use of remand in custody on those who are likely to receive a custodial sentence if convicted, with an exception in domestic violence cases. While I recognise that this change will be unwelcome to some, continuing to remand into custody people who in reality have no prospect of being sent to prison if convicted is simply a wasteful use of expensive prison places. On the other hand, if you have committed a serious crime, you can expect a serious punishment, so Part 3 introduces a number of new criminal offences which ensure that the public have confidence in the system. These include: criminalising squatting in a residential building; minimum sentences for those aged 16 and over who use a knife or offensive weapon to threaten another person and cause an immediate risk of serious physical harm to that other person; and a maximum penalty of five years’ imprisonment for causing serious injury by dangerous driving.
Lord Reid of Cardowan
Before we leave sentencing I would like to ask the Minister a question about indeterminate sentences, which he has not mentioned. In doing so, I declare my interests, as registered. The Minister may know that some years ago when I was Home Secretary, I gently reminded the judiciary of the premise behind the sentencing guidelines that people should not be sent to prison for offences that did not merit it but should be given community services, whereas people who were a serious danger to society should be retained indefinitely for protection, not for punishment. Could he say something about that relationship, in particular indeterminate sentences, before he moves on?
Lord McNally
Patience, my Lords. I will be turning to IPPs.
On knife crime, in particular, I understand the arguments of those requests and the desirability of minimum sentences. We have not taken this decision lightly but only after careful consideration. The stark reality is that too many people are affected by this scourge and more often than not those targeted will be other children, whom we have a duty to protect. This offence will bite where this becomes most serious, where the knife is brandished and there is an immediate risk of serious physical harm to another person. I can say with some feeling that every parent of teenage children knows the worry that an innocent night out might end in an act of violence against their child, and I make no apology for acting to send the clearest possible message that this is unacceptable.
I now wish to turn to one of the Bill’s most important reforming measures, namely reform of the current system of indeterminate sentences for public protection. IPPs are poorly understood by the public. They lead to inconsistent sentences for similar crimes. They deny victims clarity about the length of time an offender will serve. The previous Government estimated that there would be around 900 such prisoners in jail. There are now 6,500 and more than half of those are beyond their tariff. As of the end of June 2011, only 320 had been released.
IPPs clearly need major reform. We will replace the IPP with the new extended determinate sentence. Instead of serious violent and sexual criminals being released automatically halfway through their sentence, those receiving the new extended determinate sentence will have to serve at least two-thirds before they can be considered for release, and the more serious offenders will not be released at that point unless the Parole Board considers it safe to do so. Under our plans we expect that more dangerous offenders who commit a second serious crime will receive a mandatory life sentence. We believe this is a balanced reform, one where victims will have a clearer understanding of how long offenders will spend in prison and will be kept informed of progress and release plans. It is an attempt to deal with the real problem without compromising the public safety or ignoring legitimate concerns about serious offenders.
I am well aware, given the range of expertise in this House, that the sentencing reforms that I have outlined will be subject to scrutiny and debate, both today and in Committee. So, too, will our proposals on legal aid, on the Jackson reforms and the rehabilitation revolution. This is as it should be for this is a revisory and an advisory House of great wisdom and expertise, and I will listen. But we remain clear about the need to make hard choices and fundamental reforms in our justice system. If we get this right, the prize is a justice system that contributes to a safer and fairer society by tackling reoffending and by putting the victim at the heart of everything we do. Moreover, it will be a system that protects access to justice where it counts while keeping costs under control and ensuring the system has less waste and less delay. Our aim has always been to propose a balanced package and I can tell the House that that remains exactly what this is. This is a radical and reforming Bill and I commend it to the House. I beg to move.
Lord Davidson of Glen Clova
My Lords, I thank the Minister for his measured introduction to the Bill. First, I should declare an interest as a practising member of the Bar.
As the Minister indicated, the Bill is plainly a substantial piece of legislation. It makes major changes to the civil law, with consequences for access to justice. Our principal concern focuses on extensive cuts to legal aid and a dramatic switch in civil litigation to place greater financial burdens on winning claimants, hitherto treated as entitled to restitution for their loss and damage. As the House’s Select Committee on the Constitution has observed—as if there were any doubt about the matter:
“There is no doubt that access to justice is a constitutional principle”.
The section of the Bill on criminal justice is perhaps less sweeping and less controversial, encompassing as it does both sentencing reform, much of which we support, and the creation of new criminal offences, the latter for the main part having been introduced on Report in another place.
It is the changes to both legal aid and civil litigation that have rightly attracted the most concern, the most representations from civil society and the most debate in another place. It should be clear from the outset that we oppose many of these changes. I know from speaking to certain of your Lordships that these concerns are shared by many here. My noble friend Lord Bach and I will advance arguments as to why those changes are both economically misguided and target the wrong people. They target, for example, the most vulnerable in the case of legal aid, including vulnerable families, and victims in the case of civil litigation reform.
Part 3 of the Bill contains a variety of fairly substantial changes to the criminal justice system, some of which we welcome. For example, the Government intend to divert away from custody people with mental health and addiction problems as well as young people. These proposals are both sensible and proportionate. The Government propose to end indefinite sentences for public protection, IPPs, which have attracted considerable criticism over the years. The plan to replace IPPs with extended determinate sentences and mandatory life sentences for the offender who commits certain specified offences twice will plainly require scrutiny in Committee, as the Minister anticipated.
The Bill also aims to change the way in which remand works in England and Wales by limiting its use where a judge rules that there is no probability of a custodial sentence. Our view on this issue is that there is of course merit in reducing the use of remand where it is unnecessary, but only if it does not put victims and the general public in harm’s way. Further, there are due process issues for a magistrate, who, without having seen prima facie evidence, is required to decide whether an offender is likely to be sentenced to custody. The Government have signalled their intent to bring forward in this House further changes to remand in response to campaigns such as that by the parents of Jane Clough, who was murdered by her ex-partner while he was on bail pending charges for her rape We expect that these will require considerable scrutiny so that we can balance keeping the use of remand while protecting the public.
The Bill also creates new, or possibly restated, criminal offences of threatening with a knife and squatting, alongside what the Government call a “clarification” of how much force can be used in defence of property. I expect that there will be constructive debate in this House on these issues.
I return to Parts 1 and 2 of the Bill, which correctly have attracted most concern. The cuts to legal aid set out in Part 1 and the reduction of damages that victims receive set out in Part 2 are contiguous assaults on access to justice for both the most impecunious in society and those of moderate means. The Government aim to make substantial cuts to social welfare legal aid and advice. Welfare benefits will be removed from the scope of legal aid. Education advice and representation, except for matters dealing with special educational needs or discrimination, will be removed from scope, as will be debt advice, except where the client’s home is at risk, employment advice and representation, except discrimination issues, and housing advice, except where the client’s home is at risk. The Government apparently hope to save some £64.5 million by removing these areas of law from scope while, we say, adversely affecting the most vulnerable people in society. We say “adversely affecting” as these citizens will now have to navigate the First-tier Tribunals on their own without advice or representation.
I appreciate the First-tier Tribunals are meant to be more user-friendly to the unrepresented applicant than the courts, but they still rule on matters of law, which user-friendliness in itself does not assist. The Minister has indicated that today apparently £20 million will be made available in respect of free advice. I have one or two questions about this. It would be interesting to know, for example, whether this is free legal advice, because legal questions tend to require legal advice. I ask this question because we on these Benches have received little information about this proposal. I also ask whether this is possibly the same £20 million to which reference was made on 2 June this year.
The risk is that someone who has a learning disability or poor language or communication skills will receive no help at all. Answers to Parliamentary Questions reveal that those who appear before the tribunals with specialist advice are twice as likely to win as those without specialist advice. If we look at the data for the last year, taking advice away from those who won raises the question whether those 51,000 people who received advice and won their case would have in fact won at all.
The real concern is that people, who have meritorious cases, where advice would permit their cases to be pled cogently and persuasively, will lose out. We know that where the vulnerable lose out, their lives can sometimes tip over into ill health, homelessness and family breakdown. Of course, it is then, only then, that the state will be obliged to intervene.
It costs £150 per case of debt advice, but many thousands are required to be spent to resolve a case of homelessness. It can be tens of thousands of pounds—many tens of thousands.
The Civil Justice Council, the non-departmental public body that advises the Ministry of Justice on civil justice, states in its recent report on access to justice for litigants in person:
“It is hard to overstate just how difficult it can be—for the person, for the court, and for other parties—when someone self-represents”.
It goes on to say:
“The design of the legal aid reductions and changes will take away routes to accessible early advice (including by the damage done to the advice sector, which in turn damages access to wider pro bono legal services) and leave intervention too late or denied altogether. As a result we will find more cases started by self-represented claimants that need not have been started, more cases where self-represented defendants are involved for longer than need be, and more cases not starting when they should be started so that they can be resolved. We will find problems clustering, with increasingly wide and serious consequences for the individual, for families, and the state”.
The Government’s own assessments do not read particularly hopefully. They say the cuts to social welfare legal aid threaten to lead to reduced social cohesion; increased criminality; reduced business and economic efficiency; increased costs for other departments; and increased transfer payments from other departments, in particular higher benefits payments for people who have spent their savings on legal action.
These proposals merit considerable scrutiny by this House. I urge those who have not done so to read the Hansard record of the Committee and Report stage of this Bill in another place. Members from all sides have argued that these changes will do little to enhance our society. This House’s Select Committee on the Constitution suggests an amendment to oblige the Lord Chancellor to,
“secure that legal aid is made available in order to ensure effective access to justice”.
We consider that this is a necessary buttress to justice.
The second major change to the legal aid system is that to private family legal aid. Private family legal aid, which helps impecunious applicants with matters including divorce, custody or ancillary relief—payments and maintenance following divorce—will no longer be funded by legal aid unless the applicant has suffered domestic abuse. The Government have set out six forms of evidence that they will accept for the purposes of accessing private family legal aid.
We believe, as do many others including the Women's Institute, Rights of Women, and End Violence Against Women, that this evidential prescription will adversely affect women. In particular, the Opposition are very concerned that the evidential criteria adopted by the Government are too narrow. In fact, they do not even reflect best practice across government. The UK Border Agency's list of accepted evidence on domestic violence is broader than the Bill’s treatment of someone seeking legal aid for divorce.
One is given to understand that the Government are worried that evidential criteria containing an element of self referral and their decision to make domestic abuse the gateway to legal aid will create a perverse incentive to claim abuse where they might be none. But this approach seems to create and foster institutionalised doubt as to the veracity of victims’ claims in the first instance. Put colloquially, women will lie. We fear that it will disadvantage women and indeed men who leave a partner after sustained abuse. They may not have revealed their experience of abuse to others but they will be denied legal aid because they do not fit the set criteria. That is hardly an advance, noble Lords may agree.
Part 2 of the Bill deals with reform of civil litigation funding and costs. The Government believe that contingency fee arrangements—that is, no-win no-fee claims—require substantial reform. No-win no-fee is a mechanism allowing people of little or moderate means to access the courts without having to mortgage their houses or get into severe debt funding an action on a standard fee basis. No-win no-fee has worked remarkably well as a means of funding litigation. It limits liabilities for claimants and deters lawyers from taking on vexatious or spurious cases while enabling reasonable cases to be taken on, all through the awarding of success fees.
The Government's plans, which we will examine in their technicalities in due course, propose major changes to the settled system that we have now. How will it affect those who find themselves needing recourse to litigation, often literally through no fault of their own? Winning claimants—that is, those who have been wronged—will lose out. They may have to pay up to 25 per cent of their damages to their lawyers excepting any award for future care. It is true that to make up for part of these losses the Government plan a 10 per cent increase in damages for pain, suffering and loss of amenity, but not all damages awards. The simplest arithmetic shows that the increase is unlikely to replace the percentage paid to the lawyer.
Oddly, losing claimants, however, will gain. They will no longer have to pay the costs of winning defendants. That is part of the qualified one-way cost shifting scheme that the Government intend to introduce once the Bill passes. Local authorities and insurers are privately counselling that that will lead to an explosion in fraudulent small claims, typically slips and falls, where the authorities’ costs of defending exceed the claim. Elsewhere, the Government say that they fear perverse incentives.
We also find that losing defendants—that is, the wrongdoers, those proven to have caused harm—will gain because they will not have to pay the cost of after-the-event insurance and the victim’s lawyer’s success fee thus limiting their and their insurers’ liabilities. Winning defendants who successfully defend their cases will no longer be able to reclaim the cost of their defence thanks to qualified one-way cost shifting. Not all defendants, of course, are large companies or insured persons.
The gainers from this Bill are losing claimants and losing wrongdoers and their insurers. The losers are claimants who prove their cases and defendants who are held not to be at fault. Such outcomes are at best curious to those who prefer justice and fairness.
The majority of civil cases involve road traffic accident personal injuries and it is true that the Association of British Insurers and the right honourable Jack Straw have highlighted how so-called whiplash fraud is a real problem in this area. However, this Bill has consequences well beyond that problem, which can be resolved by a more focused approach. The effect of the Government’s changes will be to render much of the law that protects the individual no longer practically accessible to many of our fellow citizens. If we take the acute area of clinical negligence, for example, the NHS Litigation Authority—hardly a claimants’ advocate because it defends clinical negligence cases— identifies in its response to consultation that severely brain-damaged children and adults will find it hard to instruct a lawyer who is willing and able to take on their cases. People who have lost out to incompetent or fraudulent financial advisers, lawyers or accountants, will find that they will end up recovering less than they lost, despite having done nothing wrong. To lose 25 per cent of damages today connotes significant contributory negligence by the claimant. Under this Bill, the damaged—the blame-free—will lose out; and for what overriding public good? It would no doubt be crude sloganeering to suggest that this is for the protection of insurance company profits, but one is left puzzled seeking to identify the clear policy objective justifying such consequences. The Minister will no doubt assist the House with an explanation beyond what we have heard thus far.
I turn to another area of the adverse effects of this Bill: business and human rights. Cases such as Trafigura, the toxic waste to Africa case, will be most unlikely ever to be brought again in future, and that for cost reasons. The UN Secretary-General’s special representative for business and human rights, Professor John Ruggie, of Harvard University, alongside campaigners such as, inter alia, CAFOD, Friends of the Earth, Amnesty and Oxfam, all urge a rethink. We join them.
Turning to employment law, it is already under assault in so many ways, whether from tribunal charges, legal aid cuts or so-called blue-sky thinking to remove the laws completely. If people are made redundant or sacked unlawfully and their entitlement to remedies is blocked, the result in many cases will be that the state has to provide the support for which otherwise the employer is liable. We note also that insolvency cases raise issues. HMRC and the Insolvency Service have stated that they are lobbying for an exemption, which is possibly not an example of a joined-up government. I should also mention concerns about defamation law. Your Lordships will be aware that the Joint Committee on the draft Defamation Bill has observed that this Bill’s proposals do not put libel proceedings,
“genuinely within the grasp of the ordinary citizen”.
It is hardly an endorsement. Your Lordships will also be aware that the family of Milly Dowler are powerful advocates for the argument that the no-win no-fee system works.
Finally, I turn to industrial illness and disease, one of the most difficult areas. Many charities, including those that support the victims of asbestosis, have expressed real concern that this Bill threatens their ability to get access to justice. I will read a few excerpts from a letter written by Yvette Oldham, whose partner Trevor was a victim of asbestosis. She wrote:
“My husband Trevor and I were devastated upon hearing his diagnosis of mesothelioma in March 2010. We were just a normal couple with a grown-up son, leading busy lives at work, socialising and sporting activities. Trevor is in no way to blame for his condition and was exposed to asbestos between 16 and 24 years of age when he was an apprentice lift engineer erecting lifts on building sites … This disease has affected our lives in every possible way and stress levels have been extremely high for both of us … Trevor has been in pain since the condition showed itself, he is very sensitive to strong pain-killing drugs, so is unable to take more effective pain relief. Compensation would be eroded by having to pay legal costs plus insurance to cover defendants’ legal costs, plus the worry of having to pay some fees upfront. This is an insult and will discourage people from making a claim to which they are entitled. This Bill should be designed to stop the ‘ambulance chaser’ brigade who contact prospective clients and advertise constantly, not workplace victims whose lives were put at risk by exposure to asbestos”.
This Bill overturns central aspects of our civil justice system that have proved positive and progressive. The most vulnerable people in society and victims are being disadvantaged. Some say that the purpose is to attack a so-called compensation culture. Of course, there are abuses, as can occur in all systems, but there is no evidence—evidence, not headlines—of continuing pervasive abuse requiring this Bill’s approach. We believe that the Government will struggle to justify the changes this debate will highlight. We can promise that the Bill will be subject to substantial scrutiny in Committee.
Lord Thomas of Gresford
My Lords, one of the three great universal lies is, “I am from the Government and I am here to help you”. I assure my noble friend Lord McNally that we are from the Liberal Democrat Benches and we are here to help him. I hope that by the time we have finished this process that will not turn out to be the fourth great lie.
Many aspects of this Bill are very welcome. The sentencing provisions demonstrate the enlightened views of the Lord Chancellor, who sees great merit in improving the system of retribution and reform by community sentences, not to mention the many millions of pounds that it will save in keeping offenders out of our great universities of crime. One client said to me not so long ago—he was a man of excellent character before he went to prison—“I don’t need to work again. After what I’ve learnt in here over the last six months, my future is made”, so that is one less on the jobless list. It is true that in this Bill the old devil is peeping out from the provisions for mandatory sentencing, but we shall deal with that in Committee. My noble friends Lord Dholakia and Lady Linklater will speak further on these matters shortly.
Once again, parts of this Bill have not been debated by our elected representatives and have passed through on the nod. I single out particularly the new crime of squatting. Are current civil powers of kicking out squatters and letting them go on their way not enough? Must we punish the homeless with fines and imprisonment as well? My noble friend Lady Miller of Chilthorne Domer, who wished to make this point today, is unhappily not with us but she will address this issue in Committee. This is certainly not hating the sin but loving the sinner; it is hating the sinner because of the chaotic person he usually is.
I declare an interest in that over the past 50 years I have made my living from legal aid, and I am proud to say so. The system has been due for revision and change for some years. It is a basic principle that:
“In the determination of his civil rights and obligations—
a person who can afford it—
“is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law”.
I am sorry, I made a mistake; Article 6 of the European Convention on Human Rights actually states that “everyone” is entitled to a fair trial.
The legal aid provisions of the Bill are not designed to increase access to justice; they are meant to save money. That is fair enough. Those lawyers who have grown sleek and fat on the rich pickings of advising the sick, the disabled, the unemployed, the homeless and the immigrant have no need to go to WeightWatchers; they can now slim effortlessly. The matrimonial courts and the welfare and immigration tribunals of this country will resound not with the arguments of dry-as-dust lawyers any more, but with the arguments of good, honest, grievance-holders who will present their concise cases with style and precision and smoothly win their way to justice. Those of us with practical experience of the court system have just the smallest hesitation in applauding.
In welfare, immigration and benefit law, one principle stands out, and it is a principle to which my noble friend Lord McNally referred in his opening remarks—that of equality of arms. There has to be equality of arms between the state and its offshoots and any person in dispute with the state. At the very least that requires legal advice, assistance and advocacy in the Upper Tribunal on appeals from the social entitlement and the immigration and asylum chambers of First-tier Tribunals to the Upper Tribunal and appeals from there to the Court of Appeal and the Supreme Court. It also means a focus on better decision-making at first instance in these areas and a far less adversarial and more co-operative climate where litigants appear in person in front of First-tier Tribunals.
For the moment, I shall say little about areas of law that are removed from the scope of legal aid, save that the argument to retain clinical negligence within scope is, in our opinion, overwhelming. The Lord Chancellor takes power to remove further areas of the law out of scope, but takes no power to return into scope those areas where, as we reluctantly predict, the courts and tribunals will quickly grind to a halt.
I must make this point too; we on these Benches are not committed to smaller government, and when the economy improves we will look to ensure that access to justice in all areas is guaranteed. However, if financial necessity demands savings, it is essential that advice services to the public are fully supported. My noble friend Lord Shipley will expand on that, but it seems to me that if the Government are stipulating that the only gateway to legal aid is initially through the Community Legal Advice helpline, they should think again. The legal advice centres, citizens advice bureaux and other voluntary advice organisations, whose very existence is threatened by the cuts in legal aid, are a national resource not to be lightly cast aside. Rather than expanding the CLA helpline, the Government should fund these organisations to use their considerable expertise and local knowledge in providing the independent telephone and e-mail advice, which will certainly be required.
In the course of the Bill, I intend to focus on the changes promoted to conditional-fee agreements and after-the-event insurance in Part 2 of the Bill. My noble friend Lord Phillips and I were hotly opposed to the alterations contained in the Access to Justice Act 1999 on the principle that a lawyer ought never to have a financial interest in the outcome of a case. I shall table amendments to continue that fight against the creeping advance of third-party litigation funding, which used to be called maintenance and champerty, to introduce regulation into a completely unregulated field.
However, we have to sort out in the present provisions of the Bill not only the principle of whether the success fee and after-the-event insurance premium should be deducted from the damages of a claimant who has been injured by the negligence of the defendant, but the uncertainty introduced by the proposals for qualified one-way costs shifting, to which the noble and learned Lord, Lord Davidson, referred. The unintended consequences of the present proposals include much more satellite litigation: the destruction of after-the-event insurance in claims other than personal injuries, such as in environmental law where we have international obligations under the Aarhus convention, and in other complex and different cases where the ordinary man faces an industrial or commercial giant or the intransigence of local authorities. The concept of abolishing referral fees is to be welcomed, but it is another area that must be fully explored and the real abuses rooted out.
We are here for the long haul, and in Committee and at later stages we shall wish to put many things to the noble Lord, Lord McNally. We look forward to those stimulating encounters.
Baroness Grey-Thompson
My Lords, I have a number of concerns about this Bill, specifically in the area of legal aid which has been outlined wonderfully by the noble Lord, Lord Thomas of Gresford. Like many, I have worried that we have been creeping towards a more litigious society. However, research suggests to me that instead of encouraging litigation, legal-aid advisers recommend that clients go to appeal only if they judge that there is a realistic chance of winning. They act as independent gatekeepers, keeping costs down.
The Bill proposes that legal aid should be provided for some alleged victims of abuse in private divorce and children proceedings, but not for the alleged perpetrator. This will almost certainly result in those alleging abuse, including disabled people and vulnerable adults, being cross-examined by the accused, creating significant risks to their welfare through the court process. The final report of the Family Justice Review points out that protections are available to prevent vulnerable witnesses going through this ordeal in the criminal courts, but not in the family courts.
It was announced this morning that in Middlesbrough, the nearest large town to where I live, there were 4,500 reports of domestic violence in the last year. I am seriously concerned that many women, and some men, will be put in the vulnerable position of not taking cases forward because of fear of the system they are entering.
Disabled people are facing the biggest changes to the welfare system that we have seen in a long time. I think many in your Lordships’ House would agree that reform is necessary, and I welcome a simplification of the system. Based on the Government’s projection, approximately 250,000 households with a disabled person living there will be lifted out of poverty due to the introduction of universal credit. However, this could be undermined in the absence of appropriate legal advice that might prevent a disabled person taking up their entitlement. The Government have said that they want to protect those with the greatest need, but many hundreds of thousands of disabled people could have their support removed, and for many, the proposals in this Bill could act as a double whammy.
No benefits system is easy to understand. However, to push technical advice to volunteers or to Jobcentre Plus is not appropriate. Specialist advice is required in compiling evidence and also to meet the tight timescales in the appeals process. I am very interested in this area as I have an amendment to the Welfare Reform Bill, now in Grand Committee, which seeks to remove an extra step to the appeals process. One reason that I believe in protecting legal aid for disabled people is that in 60 per cent of appeals in which disabled people were eventually found to qualify for ESA, zero points had been allocated at the initial assessment. That is a massive turnaround, highlighting some of the problems with the assessment process, which quite rightly has been discussed elsewhere. However, it is clear to me that it is right to support people through the appeals process and this must be protected.
The Government's impact assessment shows that disabled people make up a disproportionate number of those who receive legal aid for welfare benefits cases: some 58 per cent. This translates to over 78,000 disabled people who could be denied specialist legal help if these measures go through. I have spoken many times about my desire to get more disabled people into work, but it is about getting the right advice and putting the right steps in place to encourage this to happen.
The Government’s own research has found that the public will face poorer case outcomes, longer delays in the resolution of cases and a declining prospect of settlements, and vulnerable people with complex needs will be forced to present their own cases. The court system could be thrown into chaos by the increasing number of litigants in person. This process can be intimidating for the most articulate and informed of individuals.
There are several questions that I would like to ask the Minister. Citizens Advice has provided evidence to the Government that removing welfare benefits from legal aid will cost more in the long term. Can the Minister explain what account has been taken of that advice? The Government’s own impact assessment has suggested that there could be increased costs for other departments due to these proposals. What are these costs, and which departments are involved? I accept that we are in difficult times and that tough choices have to be made. To redress the balance, the Ministry of Justice will rely on a proposed exceptional funding test as stated in Clause 9. However, the threshold for the test means that very few—only 5 per cent of cases—will likely be brought back into scope.
I also have serious concerns about the telephone gateway being proposed for community care law, debt, discrimination and special educational needs. The cases of disabled people are complex. A phone call will not take into account the nuances of the situation. If a disabled person has struggled to put their case forward in an assessment process, a phone call will not make it easier. In these tough times, I am concerned that local authorities may risk breaking the law at the level of care provided, hoping or even knowing that many people will not know the course of action open to them.
Data from the Civil and Social Justice Survey show that disabled people are more likely to report that they do now know their rights compared to non-disabled people: 69.2 per cent compared with 63 per cent. The 63 per cent figure also causes me concern, but perhaps it is not something to address here.
The Disability Law Service believes that this Bill will deny legal representation and advice to 650,000 people on low income, many of them disabled people. Where will these people go for help, advice and support, and the opportunity to get into work if more barriers are put in their way?
My final question concerns the consultation process. I understand that there were 5,000 responses and that around 90 per cent did not support the proposed changes. What notice has been taken of the consultation process?
The Lord Bishop of St Edmundsbury and Ipswich
My Lords, Members on these Benches, like many noble Lords who spoke, have many serious questions about the legal aid provisions in Parts 1 and 2, but broadly welcome the sentencing provisions in Part 3, particularly the ending of IPP sentences. I recently spoke to a Crown Court judge who had not used to such a sentence for more than two years, and had found them very unsatisfactory before that. Questions remain about those who are in the system already under IPP sentences, and how some of the anomalies will be dealt with. However, that is something apart from the Bill.
It is not easy for those of us who are not lawyers to evaluate the claims and counterclaims made about the workings of legal aid. However, some principles from which we on these Benches work include the very clear concern for justice that runs right through the scriptures. In the Old Testament, the prophet Amos said:
“Hate evil, and love good, and establish justice in the gate”.
Members on these Benches are aware not only of the widespread opposition in the legal profession to these changes but of the apprehensiveness of many voluntary organisations that work with less well-off recipients of legal aid.
There is a consensus that costs are too high in both the civil and criminal courts, but there is a lot of disagreement about the causes. We understand the problems that the Government face. A well known study by the University of York concluded that the high expenditure is driven by the high income ceilings on eligibility, although I realise that the Select Committee on Justice in another place concluded that the ceilings here were not very different from those in comparable European Community countries. There is also a wide coverage of different areas of law and a necessity for high-quality representation in an adversarial system. The committee also found that the comparatively high proportion of legally aided criminal cases was due in part to the higher rates of recorded crime and to the higher proportion of cases brought to court. Given this, some remedies lie outside the legal aid system, which cannot help being a victim of its success.
It seems that the limitation on the types of cases eligible for legal aid, the changes to the criteria of eligibility and the extension of means testing will have drastic effects on many litigants and defendants. The Bar Council stated:
“If legal aid is withdrawn from substantial areas of law, many people will be unable in practice to enforce their legal rights”.
The question is one of access to justice. The repeal of the duty to ensure that individuals have access to legal services that effectively meet their needs is regressive, as the Constitution Committee of the House noted. Surely there is the potential to swamp the courts with ill-equipped litigants in person. This would not only put extra pressure on the individuals but would extend the length of proceedings, thereby partly cancelling out the savings made by cutting legal aid.
I have particular areas of concern. There remains an anxiety that the Bill will have a damaging effect in family law cases, particularly where domestic abuse is involved. A number of children's advocates remain anxious about what has been curtailed in the way of legal aid in this area. The Bill will limit the ability of people to seek compensation in areas such as clinical negligence. The proposal to amend defendants’ cost orders looks like a blow to innocent defendants who choose to fund themselves. The exclusion of most immigration cases will affect people who often have no alternative means of resolving disputes and enforcing their rights. The provision of exceptional case funding for people in special need seems puzzling. Almost all cases should pass the proposed test, so why have exceptional funding in the first place?
As we heard, notably from the noble Baroness, Lady Grey-Thompson, disabled people are likely to be disproportionately affected. They tend to rely on benefits and are less able to represent themselves. If firms specialising in legal aid are put under financial pressure or go out of business, there will be considerable knock-on effects. The Bill may save money in one area at the expense of considerable social disruption and consequent expenditure in others.
As I said, it is difficult when you are not a legal expert; however, when we stand and listen to the debate, as Members from these Benches will do with great care, we remain hopeful that Parts 1 and 2 will continue to be heavily scrutinised and substantially amended by your Lordships’ House. Our attention will be there.
Lord Hunt of Wirral
My Lords, I declare my interest as a partner in the international commercial law firm DAC Beachcroft LLP and the other interests that I declare in the register. However, I would like to return to the speech of my noble friend Lord Thomas of Gresford, with whom I have previously worked. How right he is to criticise the changes that were introduced to the no-win no-fee system which made it exceedingly complicated but also benefited a number of groups, to which I will refer in a moment.
I also worked closely with him on the Legal Services Bill, to emphasise the need for access to justice. In that context, I want to refer to the recommendations of Lord Justice Jackson and to declare an interest in my pride at having been one of his original assessors. Lord Justice Jackson was set an almost impossible task by the Master of the Rolls. I recall that he was asked to find the best way of tackling the present unacceptable level of litigation costs and promoting access to justice at proportionate cost. I doubt whether anyone else could have produced a report which would have been received by the Master of the Rolls with the comments that it was,
“clear and comprehensive in its coverage, thorough and fair in its discussions and imaginative and realistic in its proposals”.
I strongly support those recommendations, but remind your Lordships that Sir Rupert started with a blank sheet of paper. He then spent four months gathering evidence and a further three months in consultation, before examining that evidence, balancing all the special pleading that was introduced by various vested interests, and coming up with recommendations which were firmly in the public interest. It is that balance which we must insist we keep in view throughout the passage of the Bill in this House.
What Sir Rupert Jackson said—and I remind the noble and learned Lord, Lord Davidson, of this—was to advocate the return of the no-win no-fee system that was originally introduced in 1995. I take this opportunity to praise the work of my noble and learned friend Lord Mackay of Clashfern, who as Lord Chancellor steered those reforms into law.
This is now very much his view of how litigation should be funded, and I thought, until the noble and learned Lord spoke from the opposition Front Bench, that it was based firmly on his Scottish roots. The system which the noble and learned Lord, the then Lord Chancellor, introduced and which Sir Rupert now advocates, is still no-win no-fee. It worked perfectly well, both for the severely injured and for those with lesser injuries. It also worked in other areas of law, such as human rights litigation and insolvency. It was never intended to be like the US style of contingency fees. Although Sir Rupert advocates the introduction of contingency fees, that certainly does not mean that we are introducing a US-style litigation culture as a consequence.
I do not think that there is anything in the idea of the client contributing towards the costs incurred on their behalf that would be against the established principles of our English legal system. Historically, there has always tended to be a difference between the cost which any litigant could recover at law from the opposing party and the total cost that they were liable to pay their own solicitor. Of course, there is a great debate about whether we have a compensation culture in this country, but Sir Rupert clearly thought that our legal costs culture had gone too far and, for my part, I strongly agree with him.
I shall give one example, which has been given in another place by Mr Straw and was referred to by the Lord Chancellor. At present, over 570,000 people present claims for whiplash. That is up 32 per cent in the past three years. That is the equivalent of one person every minute of every hour of every day. The number of such claims notified increased by 72 per cent between 2002 and 2010 against a background of a reduction of 16 per cent in the number of car accidents notified to the police in the past three years. Criticisms have been voiced of Part 2 and Sir Rupert Jackson’s work. Referring for a moment to the Transport Committee in another place, when dealing with referral fees, it made it quite clear that the system had gone wrong because substantial fees were now being paid to,
“insurance firms, vehicle repairers, rescue truck drivers, credit hire firms, claims and accident management firms, law firms and medical experts”.
How on earth can anybody be complacent about a system that has brought that about?
All I would say to my noble friends is that we have to listen critically to any claims from any vested interests here, but let us concentrate on the hard facts as, indeed, Sir Rupert did in his excellent report.
Baroness Scotland of Asthal
My Lords, I declare my interest as chair of the All-Party Parliamentary Group on Domestic and Sexual Violence and founder and patron of the Corporate Alliance Against Domestic Violence and the Global Foundation for the Elimination of Domestic Violence.
Many elements of the Bill have already been alluded to in part and are meritorious of our anxious consideration and concern. For my part, I wish to concentrate on the provisions that affect domestic violence. The noble Lord said that they were to be preserved in relation to private law concerns, but I have to say to him that the preservation that has been retained does not adequately meet the needs of domestic violence victims. I also wish to say straightaway that throughout the years when I had the privilege of addressing the House from where the Minister now sits, I was always confident that I would have on domestic violence the total support of all those who now sit on the Benches opposite. Nothing ever divided us. Indeed, I do not see the Chief Whip in her place, but many in this House will remember her trenchant support. Indeed, she was very much my comrade in arms.
I understand that the provisions that are now coming before us are coming before us because it is felt that the fiscal position we now find ourselves in is such that drastic reform has to be made. I also understand what the noble Lord has said, on this occasion and in the past: that hard choices have to be made. However, may I say that hard choices have to be made but they should be the right choices? They should be made on principle and with a proper understanding of what is just and proper. It is right for us to remind ourselves, as the Constitution Select Committee has reminded us, that these issues are of constitutional importance. I draw the House’s attention to what the committee said in its report. At paragraph 7, it reiterates the comments made by the late Lord Bingham:
“In his book, The Rule of Law, the late Lord Bingham forcefully argued that one of the ingredients of the rule of law itself was that ‘means must be provided for resolving, without prohibitive cost or inordinate delay, bona fide disputes which the parties are unable themselves to resolve’. He went on to say that ‘denial of legal protection to the poor litigant who cannot afford to pay is one enemy of the rule of law’”.
When we say that we cannot afford legal aid, we should think very carefully about whether we are saying that we cannot afford justice. Justice should be available in times of good and ill. In times of ill, it is more necessary than ever.
I accept that there has to be some modification, and that cost is a matter of importance. However, I have acute anxiety about the provisions in this Bill. They do not display any proper understanding of the nature of domestic violence, which I find acutely disappointing and, I have to say, surprising. These provisions reduce in both scope and extent the nature of legal aid that will be available to those who suffer from domestic violence. As your Lordships will be only too well aware, one in four women and one in six men are subject to domestic violence in our country. Eighty-nine per cent of victims are women; the repeat victimisation is of women.
It is well known that many victims, through shame and other matters, do not come before the courts with any degree of speed. They are reluctant and resistant and quite often do anything other than go to law. Any suggestion that we have to restrain or restrict the applicants seems misplaced. A woman will normally be assaulted 39 times on average before she will come forward. As your Lordships will know, some women will come forward straightaway but the majority will not, and sometimes they will suffer hundreds of assaults before they do.
These provisions restrict the legal aid given to victims in a number of significant ways. First, the definition of domestic violence is far narrower than the definition that we have all come to accept, which is accepted across government and by practitioners in the field. Secondly, there is a time limit of one year on when the person can come forward; one has to have either obtained an injunction or indeed got a conviction against the perpetrator within a year. Your Lordships will know that quite often abuse goes on for more than a year; for example, if a perpetrator is sentenced to five years’ imprisonment and comes out after two and a half years, he may still present a threat to his wife but that conviction will be more than 12 months ago and therefore the proposed litigant will not get legal aid. Finally, the victim has to have been identified as high risk by the multiagency risk assessment criteria. Your Lordships will know that that means that the victim has to be at risk of either death or grievous bodily harm. Many victims who are in that condition never get to make an application for legal aid. The important thing is to assist individuals long before they get to that stage.
I know that Members opposite care deeply about these issues. I ask the Government to think very carefully indeed about the economic cost of these provisions. Your Lordships will know that as a result of the proper application of a joined-up approach, we have been able to reduce domestic violence in our country by 64 per cent and have saved £7.5 billion in economic costs. Each murder has a cost to the system in excess of £1.1 million. In London alone, from 2003 we reduced domestic homicide significantly. In 2003 there were 49 such homicides. In 2010, when we left government, that figure had been reduced in London to five. If £1.1 million is saved with each murder that is prevented, your Lordships can see very quickly that it will not be very long until we have enough savings to more than pay for the legal aid that is now being withdrawn.
There are many things that we should do, but I say to the House very strongly indeed that the provisions on domestic violence are not one of them. This is a cut that we cannot afford, both in human terms and economically. I will be asking the Government to think again. There are so many provisions to look at, but I ask the Government to give these provisions particular and anxious consideration.
I will add just one more word, if I may, on the welfare claims. We know that the Government are currently minded to remove the Administrative Justice and Tribunals Council. The noble Baroness, Lady Grey-Thompson, has already indicated that over 650,000 cases are dealt with by the tribunal system. If we are not to have legal aid, and if we are not to have the supervision and oversight of the AJTC, how do the Government think that justice can be preserved?
Lord Dholakia
My Lords, much has happened since the introduction of the consultation paper, Breaking the Cycle. I shall leave it to the lawyers to deal with Parts 1 and 2 of the Bill. I shall concentrate on Part 3.
I trust the Minister will not be surprised if the thrust of my contribution relates to the rehabilitation process. I welcome the Bill and the fact that many of its provisions will help to reduce this country’s entrenched overuse of prison custody. This country currently has 154 people in prison for every 100,000 in our general population, compared with 96 in France and 88 in Germany. Eighty of our 132 prisons are overcrowded and this overcrowding severely hampers prisons in their attempts to provide rehabilitative regimes. We send many offenders to prison to serve short sentences which are too brief for a sustained attempt at rehabilitation but are long enough for prisoners to lose their homes and jobs, which in turn makes them more likely to reoffend.
Several of the Bill’s provisions will give courts greater ability to use non-custodial and suspended sentences. For example, the Bill will allow courts to suspend sentences of up to two years, rather than sentences of up to one year as at present. It gives courts more options when dealing with offenders who have breached conditions of community sentences. For example, courts will now have the option of fining the offenders and allowing the order to continue. The Bill will allow referral orders for young offenders to be used more often and more flexibly. All these changes should help to reduce the unnecessary use of custodial sentences.
I have one reservation about the proposed changes to non-custodial sentences and this relates to curfew requirements. The Bill increases the maximum period of a curfew from 12 to 16 hours a day and extends the period for which a curfew can last from six to 12 months. Confining offenders to their homes for such an extreme length of time could result in extreme family tensions in homes which are often overcrowded and characterised by chaotic lifestyles. In some cases it could increase the risk of domestic violence. In other cases it could set offenders up to fail by requiring them to comply with restrictive conditions for such lengthy periods that the temptation to breach the curfew order could be overwhelming.
The Bill includes some welcome provisions to reduce the number of prisoners who are unnecessarily remanded in custody. Around 40 per cent of defendants remanded in custody are either acquitted or given non-custodial sentences. Of course, in some cases the offender receives a non-custodial sentence because the court takes into account the fact that he or she has already been held in custody on remand. Nevertheless, to deprive someone of their liberty when they have not yet been found guilty of a crime is an extremely serious matter. It is surely right to ensure that we are not using custodial remands where the severity of this measure is disproportionate to the seriousness of the alleged offence. I therefore strongly support the Bill’s provision that defendants should not be remanded in custody when there is no real prospect that they will receive a custodial sentence if they are convicted. Those who have studied the use of remand in custody at international level will concur with the Government’s approach.
The Bill also puts right a serious anomaly in relation to defendants aged 17. At present, 17 year-olds are treated as juveniles for sentencing purposes but as adults for the purpose of bail and remand arrangements. This is indefensible and illogical, and I am pleased that the Government are ending this anomaly and putting the matter right. In common with the overwhelming majority of people involved in the penal system, I am delighted to see the back of the sentence of imprisonment for public protection, referred to by many noble Lords. The sentence has been a disaster for criminal justice and a disaster for the prison system, which is now clogged with more than 6,000 IPP prisoners with no certain release date, as the Minister has mentioned. It is particularly unjust that many prisoners who have passed their tariff dates are on lengthy waiting lists to start offending behaviour courses which could reduce their risk and make them good prospects for release.
While I welcome the abolition of the IPP sentence, I have some reservations about the measures which the Bill proposes to replace it. The first is the automatic life sentence for a second serious offence. Mandatory sentences always tend to produce injustice by preventing courts from taking into account all the circumstances of the individual case and tailoring their sentences accordingly. However, I acknowledge that this measure is much more restricted in its scope than the IPP sentence. It is limited to cases in which both the previous offence and the current offence merit sentences of at least 10 years and courts will not have to impose the automatic sentence if they consider that the interests of justice require another sentence.
I also have reservations about the proposal that offenders receiving extended sentences should have to serve two-thirds of their custodial term in custody compared with one-half as at present. At present, the point of an extended sentence is not to increase the period which offenders spend in custody. Extended sentences are currently intended to make sure that when serious offenders are released they are subject to a long period of post-release supervision on licence. This means that they are subject to restrictive conditions and controls alongside constructive help for the offender. If they breach the conditions of their licence, they can be recalled to prison.
However, the Bill would increase the time which an offender given an extended sentence spends in prison. This means that the time which he or she spends under supervision will correspondingly be reduced, which makes little sense. Can the Minister explain why the Government have decided that a court wishing to impose an extended period of post-release supervision will be able to do so in future only if it passes a sentence which also increases the length of time spent in custody before release? If a court does not want to increase the time the offender spends in prison but wants to make sure that he or she has an extended period of supervision on release, why should they not be able to order this as they can under the current provisions for extended sentences?
Clause 63 replaces the current complicated requirements on courts to explain the implications of and reasons for their sentences with a simpler requirement that they should explain the sentence in ordinary language. This is a welcome simplification of the court’s duties at the sentencing stage. However, I have one concern about this change; namely, that it abolishes the requirement for courts passing prison sentences to explain why they consider that the offence requires a custodial sentence. Depriving offenders of their liberty by passing a custodial sentence is a uniquely serious decision that is in a different category from imposing even the most restrictive and intensive community sentences. The discipline of having to give reasons for passing a custodial sentence helps to concentrate the sentencer’s mind on the gravity of that decision. It is designed to help ensure that custodial sentences are imposed only when there is no reasonable alternative. I hope that the Government will think again and decide to retain this important requirement.
I have never believed in miracles, but I am delighted that the noble Lord has indicated his wish to bring amendments on the rehabilitation of offenders, and I certainly welcome this. Reform of the Rehabilitation of Offenders Act 1974 would enable many offenders who have left crime behind to apply for jobs without fearing that they will be rejected on the basis of old and irrelevant convictions.
Reform of the Act would reduce crime by removing some of the obstacles that face former offenders who are seeking to live productive, law-abiding lives. This reform is in line with the Government’s stated intention in this House and in last year's Green Paper, Breaking the Cycle. This is the right thing to do. It is right that those who wish to lead a law-abiding life are assisted to do so. I shall study the Government’s amendments with great interest. In the mean time, it is right that I record my thanks to my noble friend Lord McNally.
Lord Pannick
My Lords, the exceptional quality of all the contributions that your Lordships have heard so far in this debate confirms—as if there were any doubt—the importance to the rule of law of the issues raised by this Bill. I want to focus my comments on Part 1. To put these issues in context, your Lordships may find it of assistance to look back at the speech of Sir Hartley Shawcross, the Attorney-General, when he introduced the Legal Aid and Advice Bill in the other place in December 1948. His concern and the concern of the Labour Government in those days was that the doors of the courts were in theory open to ordinary people,
“just as the grill room at the Ritz Hotel is open to all”;
but obtaining and acting on legal advice were,
“luxuries which were beyond their reach”.—[Official Report, Commons, 15/12/48; cols.1221-23.]
The 1949 Act recognised that the rights conferred by Parliament and the duties imposed by Parliament are undermined to the extent that people cannot enforce their legal entitlements through the judicial process. The law and democracy are quite simply brought into disrepute. As with other pillars of a civil society—such as an efficient National Health Service, an effective defence system and effective border controls— there is no getting away from the fact that these cost money.
I want to mention four main objections to Part 1 of the Bill. First, it does not recognise that access to justice is, as we have already heard today, a vital constitutional principle. Mention has been made of the report of your Lordships’ Constitution Committee last week. I am a member of that Committee and I will be putting down an amendment to replace Clause 1(1) of the Bill. The amendment will state that the Lord Chancellor must secure, within the resources made available, that individuals have access to legal services that effectively meet their needs. I hope that the Minister will be able to accept such an amendment, because it echoes precisely the current statutory provision in Section 4(1) of the Access to Justice Act 1999.
The second objection to Part 1 that I want to mention—we have heard about this already—is that it removes from the scope of legal advice and assistance many complex areas of law where the law is a vital safeguard of basic needs for the most vulnerable sections of our community—areas such as clinical negligence. The fact of the matter is this. It is indisputable that the removal of legal aid in these contexts will inevitably result in many hopeless claims being pursued by litigants in person, because they will not have had objective legal advice, as well as many proper claims not being pursued or, almost as bad, being pursued ineffectively by litigants in person. Do-it-yourself litigation—because that is what it is—will be as effective as a do-it-yourself medical operation, and I do not think that the elementary truth of that proposition is undermined by my declaration of interest. I am a practising barrister who occasionally has the privilege to act in legal aid cases.
I recognise the problems of delay and expense in the legal system. They continue to impede access to justice despite the exceptional work done in this area by the noble and learned Lord, Lord Woolf of Barnes, who I am delighted to see will be speaking later in the debate. But it is wholly unrealistic to suggest, as the Minister did in his measured opening to this debate, that mediation or a telephone helpline are practical solutions to the exclusion of legal aid in welfare law, in clinical negligence or, indeed, in family law where the problem is that often the parties are inherently unreasonable and unwilling to reach agreement, at least in their mutual relations.
The third point I want to mention is that Clause 8(2) will confer power on the Lord Chancellor by subordinate legislation to take further categories of services out of the scope of legal aid. This is inherently objectionable in that inevitably there will not be full parliamentary scrutiny. It is all the more objectionable when the Bill confers no power on the Lord Chancellor to add services back into the scope of legal aid, a point already mentioned by the noble Lord, Lord Thomas of Gresford, if, for example, experience shows a lack of wisdom in the exclusion or if, as we all hope, the economy improves. Again, I will be tabling an amendment on this subject, which was addressed by your Lordships’ Constitution Committee.
Fourthly, and finally, the money that the Government hope to save through these measures really needs to be assessed by reference to the financial costs that will have to be met by the state. Judges will need to deal with many more hearings in which litigants in person are going to waste valuable and expensive court resources. The health and housing agencies of the state and other welfare agencies will have the burden of dealing with the consequences of vulnerable children and adults being denied the benefits to which the law entitles them. The Justice Committee in another place and the Law Society have rightly criticised the Government for conducting no study into the costs of the provisions contained in this Bill.
I hope that the Minister will forgive me for saying that I know that he personally did not come into politics to aid and abet the infliction of serious harm to the legal aid system which Sir Hartley Shawcross introduced, and I very much welcome his assurance today that he will be listening as this House carries out its vital work of scrutinising the Bill in Committee and on Report.
Viscount Simon
My Lords, as has already been mentioned by the noble Lord, Lord Hunt of Wirral, in February of this year three senior cost judges made a report about the proposals of the Ministry of Justice for reform of civil litigation and costs in England and Wales. I suspect that the Law Society is not alone in disagreeing with various parts of the report. It is thought that the problems which affect the conditional fee regime will not be resolved by the abolition of the recoverability of success fees by paying parties, as the Ministry of Justice proposes. On the contrary, shifting the burden of success fees away from tortfeasors and on to claimants will not only cause injustice, but cast aside the many commendable steps that have already been taken by interested parties over the past decade to iron out the malign aspects of the conditional fee arrangement regime, which is widely recognised as having been a blight on the English and Welsh legal system.
Under the conditional fee agreements it is often said that claimants have no interest in the costs of their claim. Quite apart from the fact that claimants will not want the stress of a long and more expensive case if they can possibly help it, they will in fact have a deep interest in matters affecting their well-being, especially if they have suffered an injury. The claimant solicitor will also have a strong interest in keeping costs down because if they lose they will have to absorb them. In some senses the clue is in the well known phrase “no-win no-fee”. However, while the recoverability regime can be described as anything but having teething problems, the reality is that where improvements need to be made, the majority of difficulties have been resolved and those remaining can be dealt with without dismantling the existing regime. I find it interesting that the Law Society thinks that the changes contained in Part 2 of the Bill will cause years of satellite litigation as people argue about the new rules.
I now turn to medical accidents and the impact on injured patients and their families who are not able to challenge the NHS with the help of legal representation. Practically every clinical negligence claim represents a failure in patient safety, even if the case successfully results in negligence liability and causation is proved and compensation paid. The vast majority of cases are robustly defended by the NHS simply because there is no understanding of serious errors made which have led to avoidable harm to patients. It is often only because the case has been investigated independently that it becomes clear that errors have been made, resulting in some learning taking place to help prevent the same errors being repeated. The reforms under this Bill, particularly taking clinical negligence out of the scope of legal aid, will prevent vast numbers of people ever having their case properly investigated, thereby denying the NHS vital lessons for improving patient safety. This is due to the very high costs encountered by medical experts. If there is no legal aid, solicitors will be able to cherry pick the more clear-cut cases. Because the vast majority of clinical negligence victims are harmed at the hands of a state body—the NHS—there is a strong moral argument that the state should ensure that these people have access to justice.
There are many more areas of concern which I am sure will be raised by other noble Lords but I would like to mention citizens advice bureaux where, under the Legal Help scheme, thousands of people are assisted with their varied problems. According to the Government, this kind of assistance should not be within the scope of legal aid and these people should be able to represent themselves. The proposed changes will prohibit eligibility for assistance and restrict people’s access to justice. It will also have a serious financial impact on CABs and other non-profit agencies. We are told frequently that the Government listen. However, Citizens Advice has told me that 93 per cent of those who responded to the consultation did not support the proposed changes and raised serious concerns about them. These responses have not received the scrutiny they deserve and should be looked at in much more detail. The Government may well listen but they do not seem to take into account the concerns of so many people.
There are many aspects of this Bill which will cause all kinds of difficulties and I suspect that there will be numerous amendments to address them.
Baroness Howe of Idlicote
My Lords, like other noble Lords, I shall be addressing my remarks only to certain parts of this somewhat hybrid Bill, starting with the provisions for legal aid cuts. Obviously all departments—indeed all of us but we are discussing departments—must share the burden of these cuts. The legal aid system may indeed have become bureaucratic and expensive. In 2009-10 it spent more than £120 million. But as one young lawyer’s e-mail pointed out, the average salary for a young legal aid lawyer is £25,000, which is comparable to that of a teacher or policeman. So quite clearly other parts of the system need attention as well as what we pay lawyers.
Upstairs in Committee on the Welfare Reform Bill, one of our major concerns is to see that the most vulnerable sections of our community—children, the disabled, those with special educational needs and their carers—are protected as far as possible from the otherwise laudable attempts by government to get those who could be in work back into employment, an aim which would be even more laudable were the jobs available. But with the many changes that the LASPO Bill brings, the need for expert legal advice for vulnerable groups will be of even greater importance if the resulting, long-term costs for this group are not to escalate, as other noble Lords have mentioned. A particular area of concern for SEC, the Special Educational Consortium, is that young people with SEND aged between 16 and 25 who are not in school, or not in provision formally designated as a school, will be outside legal aid. Nor apparently does it cover young people with a learning difficulty assessment, which sets out the support they need beyond school; that is, in a college. As SEC points out, help and advice in that particularly difficult transition to adulthood can be important for SEND families.
Equally worrying, the Equality and Human Rights Commission points out that the new criteria for receiving legal aid for private family law may well mean that fewer victims of domestic abuse will be eligible for support. The basis for these concerns is that almost 50 per cent of family court cases where a report is ordered may have involved domestic violence. Government reassurance that legal aid advice will be available beyond doubt in these circumstances is therefore important. The noble and learned Baroness, Lady Scotland, made that point clearly.
We all know that imprisonment of children is both expensive and ineffective, with 80 per cent of those imprisoned reconvicted within a year. It is therefore good to see, not least because one-third of children currently remanded to youth detention are subsequently given community sentences, that Clauses 91 to 94 of the Bill, dealing with youth detention, place two sets of conditions on the court before a child can be remanded. The Government are rightly commended for this by the Prison Reform Trust, and for giving the court in Clause 73 extra powers conditionally to discharge the young offender or indeed to give a second referral order.
I turn to what follows, or should follow, from sentencing and punishment: rehabilitation. As the Prison Reform Trust points out, young men aged 18 to 20 are disproportionately represented in the prison population and clearly have not been, and are still not being, diverted from falling into a repeat pattern of offending. A much more focused approach to rehabilitating young offenders is needed. The Prison Reform Trust gives as examples two successful intensive-alternative-to-custody schemes run by Greater Manchester Probation Trust and West Yorkshire Probation Trust, both of which have achieved good results.
However, it is surely even more important to focus, much earlier in a child’s life, on early intervention. We now have conclusive evidence from Frank Field, Graham Allen and others that this approach is the way forward. The Government are again to be congratulated on taking an important step by committing to early testing of all children at the start of their primary schooling. Funds for further research are still needed to identify those chaotic families with many generations of offending behind them as the real targets for extra help and supervision. If this is achieved it will not only help to ensure useful and satisfying lives for such children, but will be saving a considerable amount of the literally millions of pounds of taxpayers’ money spent unnecessarily on prisons.
Last, and certainly not least, I turn to women. As the CAB and Equality and Human Rights Commission point out, indirect discrimination is unlawful unless it can be objectively justified. Yet over the past 15 years numbers of women in prisons have doubled. Many of these have themselves been victims of serious crime, domestic violence and sustained sexual abuse. One-third lose their homes and, worse, around 18,000 children are separated from their mothers. In 2009, women accounted for 43 per cent of the 24,114 incidents of self-harm in prison, although women are only 5 per cent of the total prison population. One essential amendment, backed by PRT, NCW and others—and certainly backed by me—would be to require the Government to produce a strategy to promote the just and appropriate treatment of women in the criminal justice system. When he replies, I would be very grateful if the Minister could give us any hope that the Government will indeed consider producing such a strategy.
Lord Faulks
My Lords, the intention behind Parts 1 and 2 of the Bill is to restore some balance to our civil litigation system. The system should provide access to justice but should not be so distorted that it provides a source of excessive profits to lawyers and a small industry of parasitic organisations which have been spawned by the current arrangements. Whether there is indeed a compensation culture does not matter very much. In fact, successive government investigations have suggested that there is no such thing. What, however, is indisputable is that the litigation process has been disfigured by the whole machinery of referral fees, crude advertising and cases which too often become about legal fees rather than the underlying dispute. The case for reform is clear. But does the Bill go too far?
The noble Lord, Lord Pannick, is quite right: we should see the whole question in historical context. When legal aid was introduced in 1949, it came shortly after the establishment of the national health system and reflected the national mood. However, we should beware of golden-ageism. We should also be careful of drawing too close a parallel between patients and litigants. Welcome though the provision of legal aid was, there gradually developed a system in which only those who were very rich or had legal aid could afford to litigate at all.
It was to restore a sense of balance that the Court and Legal Services Act 1990 brought in some modest changes allowing conditional fees to provide access for what has now become known as the squeezed middle. There was a view that these changes did not go far enough, hence the Access to Justice Act 1999, which unleashed the changes now to be redressed by the Bill. The provisions of that Act allowed for the recoverability of success fees up to 100 per cent and large ATE premiums which were effectively unchallengeable. This has meant that defendants have suffered an unfair disadvantage in litigation. I remind the House, as did the noble and learned Lord, Lord Davidson, that not all defendants are multinationals or emanations of the state.
The Jackson report, about which the noble Lord, Lord Hunt of Wirral, spoke so clearly, was the remarkably detailed and comprehensive response to these problems. It forms the basis of Part 2 of the Bill. I am broadly if rather cautiously in favour of these changes. I am concerned that some meritorious claims by the victims of industrial disease and even of environmental disasters may not now be viable. I will leave other noble Lords to develop arguments in these areas. However, a fundamental point ought to be made about Sir Rupert Jackson's report. It assumed the continuation of legal aid.
I want to concentrate the remainder of my remarks on clinical negligence. I should declare an interest as a practising barrister who has been instructed for defendants and claimants in this area of litigation. Many noble Lords will consider that we should retain the status quo, which allows legal aid at least where children are concerned. I have considerable sympathy for this view. The retention of legal aid for clinical negligence is supported not only by the NHSLA, as has been referred to by the noble Lord, but by Sir Rupert Jackson himself. In a lecture to the Cambridge law faculty in September this year, he said,
“of all the proposed cutbacks in legal aid, the removal of legal aid from clinical negligence is the most unfortunate”.
Although I would prefer to keep legal aid for seriously injured children as it is, it should at least be retained for the costs of investigation. Let me give a specific example of where injustice will follow if the current Bill is not amended. In cases of brain-injured children there are often considerable difficulties in establishing whether there has been a breach of duty, and sometimes greater complications still in establishing causation. Even the most experienced solicitors in the field will need expert opinions from obstetricians, midwives, neuro-radiologists, paediatric neurologists and/or neonatologists. Under the existing system, the LSC, which carefully monitors expenditure, allows for considerable legal and medical costs involved in forming a view on whether a case can go forward.
Without legal aid I cannot see how a brain-damaged child and his or her family can begin to pursue these cases. The cost of an ATE premium will be beyond the means of almost all litigants. Even large firms of solicitors will not be able to carry the expenditure, particularly where the advice may often be not to proceed further. Someone who is possibly the victim of clinical negligence has the right to know whether the immense cost and heartbreak involved in bringing up a disabled child can be mitigated by an award of damages. The provision of legal aid at modest rates is essential to allow them to do so.
For reasons that will be developed in Committee, the so-called exceptional funding provisions, which seem to be directed at Human Rights Act cases, are no answer. In this connection perhaps I may refer the Minister to the case of Powell v United Kingdom in 1990, decided by the European Court of Human Rights, which makes it clear that medical negligence cases will very rarely, if at all, involve violations of the convention. I am afraid that I am also wholly unsatisfied by the Government's proposal in Clause 45 that there will be some modification of the rules to allow the recoverability of ATE premiums in respect of expert reports. Where is there any evidence that such a market can simply be created by the Government in this context?
The only other response is that CFAs should be enough. For the reasons that I have given, I cannot see how anyone in this situation will be able to obtain a CFA, particularly if the profitability is to be so reduced. It is interesting that the existing LSC funding code, which specifically identifies investigative help as being of,
“vital importance in clinical negligence cases”,
also provides that,
“the potential to obtain a Conditional Fee Agreement will not be a ground for refusal of Investigative Help for a clinical negligence case”.
So even if a CFA could be obtained, it is not a very impressive reason for declining legal aid in these cases, particularly when legal aid is granted only where the solicitors are franchised and thus experienced in the field. That is a point of fundamental importance to access to justice. I profoundly hope that the Government will make changes to put the matter right.
I hope that there can be a degree of consensus in the approach to the vitally important process of improving the Bill. That would be much easier to achieve if the party opposite were to acknowledge in the course of debate that it too would have made significant, if not wholly identical, changes to the civil litigation system. Would it really have ignored the Jackson recommendations? Was it really happy with some of the grotesque results of the legislation that it brought in?
This momentous legislation is a necessary corrective to the unsatisfactory system. It reflects the economic times in which we live. There are changes to the Bill which we need, not least in the definition of the Lord Chancellor's duties to which the noble Lord, Lord Pannick, referred—I support his proposed amendment in that regard—and the role of the director of legal aid casework. In scrutinising this legislation it will be vital to ensure that access to justice is not a meaningless mantra. It is a critically important part of what it means to be British.
Baroness Gould of Potternewton
My Lords, there is so much in the Bill to be concerned about. The Bill is discriminatory and will entrench inequality for women, people from minority ethnic groups, disabled people and other groups facing discrimination, all of whom will be disproportionately affected, as I am sure we will discover as we go through it. I wish to follow my noble and learned friend Lady Scotland and deal with domestic violence, and I will go through the consequences of the Bill in some more detail.
First, I congratulate the National Federation of Women’s Institutes on the work it has undertaken in talking to vulnerable women, who have made it clear that the Bill will leave them without support or access to protection under civil remedies. As my noble and learned friend says, the Bill demonstrates a complete lack of understanding of the nature and dynamics of domestic violence. It flies in the face of the violence against women and girls strategy produced by the Government only last year. The strategy stated that a,
“robust cross-government approach underpinned by a single agreed definition”,
is required. Perhaps the Minister can explain why the definition in the Bill is not the one used by other government bodies, the one in the national strategy or the one used by the CPS and ACPO, which defines domestic violence as,
“any incident of threatening behaviour, violence or abuse (psychological, physical, sexual, financial or emotional)”.
Domestic violence takes all these forms, but the definition, quite deliberately, does not take that into account and in no way reflects the Government’s stated aim of affording access to justice and legal protection to victims of domestic violence. How much is that commitment honoured when looking at the criteria required for evidence of domestic violence? No one challenges that there have to be criteria and evidence, but they must reflect the reality of life for domestic violence survivors.
The Minister in the Commons stated that the Government had to engage in a difficult balancing act in providing legal aid for genuine victims of domestic violence without encouraging false allegations. I want to look at what he means by balance. Under the Bill, to get legal aid a domestic violence sufferer must have obtained one of four kinds of civil injunctions or a criminal conviction against the perpetrator, a multi-agency risk assessment conference, which is used only for a few exceptionally serious cases, or a non-molestation order. These do not reflect the reality of how women react and respond to domestic violence; 70 per cent of women choose not to go to the police and very few get non-molestation orders.
How is it “balance” when an overwhelming allegation of domestic violence, supported by witness evidence, will not qualify for legal aid under the law? One would assume that a doctor would be a credible witness, or that staff in accident and emergency departments, where the battered victim is regularly seen, would be credible witnesses, but no.
The Minister in the Commons said:
“we are not convinced that they”—
the medical professions—
“would be best placed to assess whether domestic violence has occurred. They might witness injuries, but it might be difficult for them to determine how they had occurred”.—[Official Report, Commons, 31/10/11; col. 688.]
The important word is “might”. What if they are certain that the victim’s injuries come from domestic violence? She will still not get legal aid under the criteria. The word of a neighbour who may have heard blows and rescued the victim from the violence she was suffering, or even if the police attended and saw her being beaten, is insufficient to meet the criteria. Here is another unbelievable quote from the Minister:
“the investigation could be inconclusive, or the police might determine that domestic violence has not taken place”.—[Official Report, Commons, 31/10/11; col. 687.]
If the woman asks for an injunction, judges often tell a perpetrator that he can save the cost of a hearing by undertaking not to hurt her in future. The court registers that undertaking. It is a contempt of court if the man breaks it, but it will not help her to get legal aid. Should she get admission to a refuge, although the staff will be experienced in assessing complaints it will not get her legal aid. As the Minister said:
“to include admission to a refuge in the criteria would be to rely on self-reporting”.—[Official Report, Commons, 31/10/11; col. 688.]
For a woman suffering domestic violence, self-reporting might be absolutely essential. A victim may have eye-witnesses, police and medical evidence, records from refuges and perpetrator programmes, undertakings not to assault, and photographs of injuries, but she will not get legal aid.
A further barrier in the criteria for assessing legal aid is the restrictive 12-month timeframe. This is sheer nonsense. The woman may delay reporting for a number of reasons and the problems that require legal aid may continue to affect her more than 12 months after she has experienced violence. There is example after example of women who, post-separation, have spent many years being harassed and stalked by the perpetrator. The 12-month timeframe fails to reflect this. A time limit of any duration, particularly such a restrictive one, will take many individuals out of eligibility.
Then we come to mediation. Although information from the Ministry of Justice shows that currently more than 50,000 couples are referred to mediation services annually, just 13,500 of those couples participate in mediation. It appears that little research has been done to ascertain why that is the case. Mediation is not always less confrontational as the Minister seems to believe. It can place the victim at further risk of violence or abuse. It gives the perpetrator the opportunity to continue to have contact with the victim and can cause revictimisation. Evidence shows that mediation works best when entered into voluntarily, but sometimes that is not the case. One victim identified that she was bullied and manipulated in mediation and found it hard to stand up to her “ex”. The Bill also assumes that parties will be able to come to agreement in mediation. This, again, is not always the case. There may be partial resolution. In those circumstances, can the Minister say what happens next? What is the victim expected to do?
Two further proposals will make it hard for victims to take action. Reference has already been made to the telephone gateway—the first port of call—and talking to someone who may have no legal qualifications but is expected to make a legal assessment. Disclosure is difficult enough, so at least you would expect to speak to somebody who understands what you are talking about. This proposal is certainly not appropriate for people who have language difficulties or mental health problems or are in distress.
In addition to my concerns about the process I have a number of questions. Will there be a free phone number? Will the conversations be recorded, kept securely and quality-controlled in case of further litigation arising? How will the number be publicised? It has been suggested that the victim might represent herself in court. Domestic abuse involves abuse of power. Many victims, whether subjected to physical power or other forms of abuse, do not have the capacity, skills or expertise to face and question the perpetrator in court. Not only would it be a traumatic experience, it could also put a victim in further danger.
This Bill will mean that too many women will have no alternative but to stay in an abusive relationship, with serious consequences not only for themselves but for their children. I thought that those days were past and that we were moving away from women living in fear and children living in violent households. This Bill will bring that back.
It is said that the Prime Minister is to appoint someone to look at the effects of policy on women. I suggest that she examines this Bill and its consequences on women's lives; maybe then will women who are victims be listened to.
Lord Goodhart
My Lords, in the last year of his life, Lord Bingham—the greatest judge, I believe, of my adult life—wrote and published a short but remarkable book called The Rule of Law. In Chapter 8, he wrote:
“The pressure for reform culminated in the Legal Aid and Advice Act 1949 … For half a century the legal aid scheme enabled those without means to sue and defend themselves in the courts … But its cost was its undoing. In the years 1988 to 1996/7 expenditure on civil (and also criminal) legal aid rose at a rate substantially in excess of inflation, and was the fastest rising item of government expenditure overall”.
Lord Bingham was, I am afraid, undoubtedly correct, and some reduction of costs here is necessary. On that basis, I start by saying that I agree very strongly with the general principles of my noble friends Lord Hunt of Wirral and Lord Faulks. Of course, we need to keep a no-win no-fee system. The amount involved in this should not be as large as it has been. We cannot justify paying the cost of fees for clients who have no serious chance of winning an action.
Part 1 of the Bill contains changes to the existing law that need to be enacted, but there also are other changes that I do not think should be enacted, particularly those relating to clinical negligence and family violence—although those are not the only ones—where legal rights are plainly necessary and should continue. We should regard a number of provisions introduced in the Bill as, at best, temporary provisions which could be removed when public resources increase. I feel that that is the basis on which we must go ahead. Importantly, that would mean that some legal aid, which is not provided for in the Bill, will continue to be provided. We must also act in a way that will prevent some of these difficulties and some of these seriously unpleasant things, such as the exceptional level of some profits. We also need to deal with the amount of money spent, as far too much has been spent on legal aid in recent years.
Part 3 of the Bill deals with very different issues which I believe should have been dealt with in a separate Bill. However, it is too late for that now. I am most concerned with Chapter 5. I welcome the abolition in Clause 113 of indeterminate or IPP sentences. IPP was a failure from the beginning. It relied on the ability to train prisoners while in prison, and there has been no such ability. There have been many—often justified—complaints, of which I have received a number, about the difficulty of ensuring that prisoners have access to the probation services which are essential for release. It would have been impossible to release many of these prisoners because of the difficulties of administration. IPP should not be allowed to continue for those who are already subject to it and it should be replaced by a fixed time limit. It is absolutely wrong that those subjected to this wholly undesirable sentence of uncertainty should not have a proper degree of certainty about when their time will end.
I am also concerned with Clause 114, which imposes a life sentence for a second listed offence. That is a mandatory sentence and it must be imposed unless the court is satisfied that there are special circumstances. That is perhaps a little better than the Californian custom of two strikes and you’re out, but it is not that much better. The judge will have seen the prisoner under questioning in court and he will have heard the evidence of the witnesses, so I believe that the judge and no one else should decide whether the prisoner should receive a life sentence. That will happen under Clause 115, which empowers the judge to decide whether to impose an extended sentence. Why should that not also apply to the question of life sentences under Clause 114? After all, it is open to the Attorney-General to appeal to the Court of Appeal if the judge has acted wrongly.
Lord Woolf
My Lords, it has been a privilege to be able to hear this debate so far. If my arithmetic is correct, I have heard 14 speeches, and I am in the happy position of saying that there is nothing which has been said so far with which I disagree. I include in that the speech for the Government introducing this Bill, by the noble Lord, Lord McNally, in case it is thought that there was an implied exception.
I have two reasons for saying that this Bill has special relevance to me, with regard to the two inquiries which I carried out when I was a serving judge. The first inquiry related to access to justice, a subject about which we have heard quite a considerable amount so far. The second was the inquiry into riots in our prison system caused by overcrowding, a problem which, alas, is still with us today.
The inquiry into access to justice was over a decade ago, and it is not surprising that it should need looking at again after this period. I for one was very pleased when the Master of the Rolls invited Lord Justice Jackson to make his report. I do not think anyone can doubt that this difficult task was undertaken by Lord Justice Jackson, as the noble Lord, Lord Hunt, has indicated, in an exemplary manner. He had a huge amount of material to marshal, and he did so and made recommendations of which, I suggest, on the whole this House could make favourable use.
The inquiry was needed not only because more than a decade had elapsed since my attempts to improve the situation, but also because it was clear that reforms which were made, for which I bear no responsibility, were causing the system to become unbalanced. The conditional fee—for which the noble and learned Lord, Lord Mackay, is rightly to be congratulated—initially helped to obtain access to justice for those who were not able to use the court because they were neither poor enough to qualify for legal aid, nor wealthy enough to dine at the Ritz. That section of the community, which was a large section, at the time of my report was not receiving access as was necessary. However, while those changes initially worked well, the noble and learned Lord, Lord Irvine, thought, rightly or wrongly, that further changes were needed if the conditional fee arrangements were to work as hoped. The problem was that there were doubts as to whether they gave lawyers enough assistance to take on the really difficult cases because of the need for payment of an uplift fee, which it was hoped could be smaller than ultimately proved to be the case.
In addition, it was found that insurance was necessary. This is because the costs for a claimant if he was unsuccessful could be very substantial, and so we had the after-the-event insurance. This, from one point of view, was beneficial; but it had the effect that a claimant who had paid the after-the-event insurance premium was left substantially out of pocket. Therefore, it was ordered, first, that the uplift to which I referred should be paid by an unsuccessful defendant; and secondly, that the premium to which I referred should also be paid by an unsuccessful defendant. The practical consequence was that a defendant who was unsuccessful could end up paying four sets of costs: first, the costs he incurred himself; secondly, the costs of the claimant who won; thirdly, the uplift, which could be up to 100 per cent; and, fourthly, the insurance premium. I say to the House with absolute confidence that there were many defendants who regarded the total burden as wholly inappropriate, to the extent that they had no option other than not to contest cases that they otherwise would have.
Since I ceased to be Chief Justice, I have earned a living—here I declare an interest—by conducting mediations on occasion. I have found that some defendants reach settlements in the course of mediation that they would not otherwise have done because of the deterrent effects of the combination of four sets of costs. While one was very anxious that justice should be done for claimants, it must also be done for defendants in the same position. This is something that requires attention. In due course we will have to consider whether the proposals made in that regard will get us back to a situation where there is a fair balance between both parties in litigation.
I emphasise what was drawn to our attention by my noble friend Lord Faulks: namely, the fact that Lord Justice Jackson was not directly involved with the question of legal aid. He was not asked to report on it. I suggest that if the system is to be amended in the way proposed by the Bill, it is regrettable that he did not have an opportunity to look at the matter objectively and independently in the way that was needed. I fear that his report could be a victim, as I consider I was because I was only shown part of the picture of where change will take place.
In the Cambridge lecture of 5 September last to which my noble friend Lord Faulks referred, which I read with interest, Lord Justice Jackson gave an indication of his views on the matter. He said:
“Let me make it plain that the cutbacks in legal aid are contrary”—
and I emphasise “contrary”—
“to the recommendations made in my report”.
Again, I encourage the House to accept that view. Lord Justice Jackson went on to state that if the position were to remain as is now proposed, an additional exception should be made to the cuts in legal aid. He said:
“On the assumption that it is decided not to maintain civil legal aid at present levels, the question may possibly arise as to whether any particular area of civil legal aid is particularly important and should be salvaged from the present cuts. My answer to that question is that of all the proposed cutbacks in legal aid, the removal of legal aid from clinical negligence is the most unfortunate”.
I hope that the House will pay attention to that remark. I see the time that I have already taken and I apologise for speaking for two or three minutes more. I would like to say something else with regard to Part 3.
I am the chairman of the Prison Reform Trust and I am grateful to my noble friend Lady Howe for her comments, which are based on research done by that trust, and which deserve considerable attention. There are matters on which the Government are to be congratulated. They have been mentioned by other Members of the House and there is no need for me to go over the same ground.
However, I submit that when we now know the problem with IPPs, it is extraordinary that the House should be asked to accept a more modified form of IPP. The one thing we want to avoid is people being in custody longer than they should be. Although the Bill repeals IPPs, it is, understandably, not retrospective. We have a deplorable situation in our prisons today, where thousands of prisoners who might be able to be safely returned to the community cannot be, because unfortunately the Parole Board is not in a position to deal with their cases due to the resources available to it. That will continue for some time. Surely it would be possible to change the procedures for those prisoners to obtain release? There is nothing in the Bill about that.
With that indulgence from the House, I conclude my remarks. I hope that there will be many amendments with which I can be associated that will improve this Bill in the spirit identified by the noble Lord, Lord Faulks.
Lord Clinton-Davis
It is a great privilege for a mere solicitor to follow the noble and learned Lord, Lord Woolf. Contrary to the view of the noble Lord, Lord McNally, I think that this Bill is profoundly flawed. In my view, many of the clauses are not capable of amendment. Many people, in both civil and criminal fields, will be adversely affected by these proposals.
I had some 25 years’ experience of legal aid litigation. In its earlier days, the scheme was seen to be an essential part of the system of social justice introduced by the post-war Labour Government. The House will be grateful to the noble Lord, Lord Pannick, for his views about that.
The advantage enjoyed by the legislation introduced by the Labour Government of that day was that it brought legal protection and legal rights within the reach of ordinary working people and also middle-class people, who would pay a contribution towards the Legal Aid Fund. This was enjoyed for the very first time; previously they had been outside the scope of any remedy whatever. Much of what was introduced by the Labour Government was opposed by the Conservative Party then and, apparently, now. Of course, a small minority of lawyers milked the system, but few made hefty profits. Nowadays, with ever-declining numbers of solicitors operating legal aid, younger members of the profession are disinclined to be part of the whole system. Who can blame them? Is this not bound to have a deleterious effect on the question of obtaining legal aid?
In my day, even the most complicated criminal cases rarely lasted more than three months. Today that situation is very different. Of course, the law has become more complex. Perhaps I can make a tentative suggestion—namely, that the system of applying for more funds should be readjusted. But it should be recognised that in normal circumstances approval should not be given, save where the claimant can establish beyond a peradventure of doubt that it is in the interests of justice that the application should succeed. However, there should be a term limited by the award.
The real trouble with this Bill is that there will be no savings: indeed, the very reverse. Unrepresented persons will appear before courts and tribunals and many, through no fault of their own, will make false and incoherent points. Time will be wasted. Inevitably, judges and chairmen will provide greater slack than ever, and accordingly costs will burgeon. Many organisations—charities, the judiciary, the Bar, the Law Society, many victims’ groups, Justice, the Magistrates’ Association, CABs, the Sentencing Guidelines Council and now the bishops, by a large majority—have signposted their anxieties about the Government’s proposals. They have all been spurned.
My own umbrella organisation, the Law Society, has raised a number of vital points. So far, the claims which they have made have been unanswered. They say that the cuts to civil legal aid are a violation of the European Court of Human Rights and the Charter. Are they right about that?
They say that the Bill’s proposed exceptional funding model is likely to prove ineffective. Are they right about that?
They also claim that limitations on the scope of legal aid will carry with them unrealistic costs, risks and burdens.
Then they say that the proposals introduce a lack of institutional independence and impartiality. That is a very serious claim indeed, and deserves a response from the Government.
Finally, they say that there is a serious risk that the courts will declare that compatibility under Section 4 of the Human Rights Act 1998 will be seriously impaired. The £350 million postulated by the Government by way of savings has been challenged by others, including the noble and learned Baroness, Lady Hale, of the Supreme Court. She has argued that this will be exceeded, and there can be little doubt that the poor and the most vulnerable will be the principal victims.
The Government reply in a superior and uncomprehending way. For example, they recommend more telephone advice and excellent advice to ensure that the legal system is hardly ever used. Most people needing such advice are without telephones and, if they do manage to get through, are incapable of communicating their often-complicated problems. Are the Government wholly out of touch with reality as far as this is concerned?
In conclusion, it is noteworthy that one of the principal supporters of this legislation has been the Association of British Insurers. It perceives that it is in its interest to see the decline of legal aid and ordinary people’s access to justice. My hope is that these disgraceful endeavours will be frustrated. The House of Lords now has the chance to demonstrate that it prefers to protect the interests of ordinary people rather than the powerful, such as Enron and Lehman Brothers. This legislation is fatally flawed.
Baroness Whitaker
My Lords, we all believe in upholding the rule of law, but when it comes to making a reality of what the law provides, there are problems. Our law is not easy for everyone to understand. The vast accumulation of case law from Magna Carta on, let alone the wording of the statutes, whose occult succinctness is so cherished by parliamentary draftsmen, makes it almost impossible for the average person to grasp what they can and cannot do, or have done to them, without expert help, and there is no alternative.
The law is not always coterminous with justice, but it is our best shot, and if we want access to justice we have to have a means of getting the point of laws. Professional lawyers are that means, and when the aggrieved person is poor, legal aid is the path. I think it was a judge who said that a person who represents himself has a fool for a client. I do not know about that, but I have sat on tribunals where the people who brought the case did not understand the rules of evidence, did not know the difference between facts and opinions, could not present their case in the terms of the law at all, and yet had a genuine grievance. It was very time-consuming, as my noble friend Lord Clinton-Davis said.
Some ask whether this is an Anglo-Saxon problem, notably the much-lamented late Lord Bingham, and the noble and learned Baroness, Lady Hale, in her celebrated Henry Hodge memorial speech last June. Our adversarial system is heavily dependent on preparation by lawyers, with the judge coming in at the end to decide. If the judge were more proactive, the argument runs, there would not be such a need for an expensive and lengthy presentation of the case, so access might be easier. However, our courts are faster and cheaper than those in the inquisitorial system, so, as the noble and learned Baroness, Lady Hale, says, the total legal system is not extravagant and legal aid is necessary to ensure access.
The Jackson report, on which the Government base much of their rationale, did not recommend purging legal aid, as the noble and learned Lord, Lord Woolf, and the noble Lord, Lord Faulks, both said. I will quote just one more sentence from Sir Rupert Jackson:
“I do, however, stress the vital necessity of making no further cutbacks in legal aid availability or eligibility. The legal aid system plays a crucial role in promoting access to justice at proportionate costs in key areas”.
Will the Minister confirm the total cost of our judicial system relative to that of other common law countries? The Lord Chancellor said in the House of Commons that our system costs four times that of New Zealand, which is a rather smaller country. Does this make a true comparison for civil legal aid?
We should realise that the costs of severe reductions in legal aid will not fall on the Ministry of Justice budget. Its own cumulative impact assessment states that,
“if dispute outcomes were much less fair … these resource gains might be more than outweighed by the total economic cost … This would include wider social and economic costs, both tangible and intangible”.
Can the Minister give any idea of what costs might fall on other budgets if people are not helped early on in their battles over housing, debts, employment or family breakdown? What is being sacrificed for this dubious saving? A huge proportion of civil legal aid under threat in this Bill is spent on things that matter very much indeed to poor people: getting the benefits they have a right to, domestic violence, fair compensation for injuries that prevent normal living or earning a living, getting the appropriate education for their children or housing.
Take an appeal against the refusal of a planning application for a Traveller site. It looks as though High Court planning appeals and planning injunction actions would all be out of scope for legal aid, and it seems that if a local authority takes eviction action against an unauthorised encampment in the county court, and even if it does this in an unlawful way, say by ignoring government guidance, the defendants will not be allowed legal aid. Would the Minister confirm this? If that is so, a very high proportion of Travellers who have no legitimate home will lose the chance of acquiring one or will face unlawful eviction.
As long as local authorities shirk their task of providing enough sites, an inability to get legal aid for the interim stages of establishing legitimacy or for those on the roadside through no fault of their own, as well as for the characteristic problems of negligent landlords and illiterate tenants, will unfairly prejudice this group of claimants. Why is the cumulative impact assessment silent on this impact? Does the Ministry of Justice include Gypsies and Travellers in its category of black and minority ethnic citizens, and if not, why not?
To supplement the already scarce social good of legal aid, the no-win no-fee system was brought in. That enlightened decision by the noble and learned Lord, Lord Mackay of Clashfern, and the second even more enlightened decision by my noble and learned friend Lord Irvine of Lairg to extend the conditional fee agreement system were responsible for some important settlements of fair entitlement. How could the countless mesothelioma cases, the passive smoking landmark cases or the Trafigura case have been brought under the proposed new regime?
My noble and learned friend Lord Davidson of Glen Clova referred to the United Nations Secretary-General's special representative for business and human rights’ commendation of the UK system in cases of high public interest in his letter of 16 May to the Justice Minister, Jonathan Djanogly, and expressed concern over the proposed reforms. Could that letter be placed in the Library? I think noble Lords would find it helpful. This Bill would take away advice that often results in cases not going expensively to court, and it cuts away equal access to the rule of law in major areas of deep human importance.
Finally, I refer to Magna Carta again:
“To no one will we sell, to no one will we deny or delay, right or justice”.
There is a facsimile copy in the Voting Lobby that noble Lords can have a look at. I think it is time for the Barons to get on the case again.
Lord Ramsbotham
My Lords, I shall not touch on legal aid or sentencing, which have been so comprehensively covered by other noble Lords, but instead try to explain a long-held disappointment and how it leads to a current fear.
When I heard that there was to be a legal aid, sentencing and rehabilitation of offenders Bill, I hoped that this marked the end of the mistaken idea that the criminal justice system is solely about punishment. However, when the Bill appeared, my heart sank because there was the word “punishment” instead of “rehabilitation”. The change had been ordered, I was told, by No. 10 Downing Street, and it confirmed my fears that a truly coherent criminal justice policy remains an impossibility while there is a continued failure to understand or accept what its acute part—imprisonment—is all about.
The criminal justice system is made up of four distinct parts: courts, police, prison and probation. The success or failure of the system as a whole depends on these four understanding and working with each other. I put imprisonment in pole position because, like hospitals in the NHS, prisons are the acute part, where treatment takes place and to which no one should be sent unless they need the treatment that only hospitals or prisons can provide. That treatment will not be completed in either hospital or prison, but has to be continued in the community in the form of aftercare.
However, just as the healthcare system would break down if hospitals were choked with people who did not need that level of treatment, so the criminal justice system has broken down over the past 18 years because prisons have been choked with steadily increasing numbers who do not need expensive imprisonment. The Justice Secretary should know this because he was Home Secretary in the early 1990s, the last time that there was any clear thinking about imprisonment, as set out by his predecessor, the noble Lord, Lord Baker of Dorking, in his 1991 White Paper Custody, Care and Justice, following the prison riots in 1990, and the masterly report on their causes and possible repair by my noble and learned friend Lord Woolf.
That White Paper, agreed to by all political parties, laid down clear priorities for the Prison Service. These included: to develop community prisons, which will involve the gradual realignment of the prison estate into geographically coherent groups serving most prisoners within that area; to increase delegation of responsibility and accountability to all levels, with clear leadership and a published annual statement of objectives; to provide a code of standards for conditions and activities in prisons which will be used to set improvement targets in the annual contracts made between prison governors and their area managers; and to provide active and relevant programmes for all prisoners, including unconvicted prisoners. Had those priorities been enacted and had the thoroughly unpleasant competition between the main political parties to appear tougher—or not weaker—than the other not undermined rational thinking about the role of imprisonment, I believe that we would not be in today’s mess.
What is that role? Some say that it is to deter people from crime, but the figures prove that the fear of imprisonment does not do this; others that it is to satisfy victims, but they are only a small part of society; others that it is to reform and rehabilitate those who are sentenced to imprisonment; and others that it is to punish, but the deprivation of liberty is the only punishment involved. Courts determine the length of that punishment, related to the seriousness of the crime. Therefore, while imprisonment is punishment, prisons are not for punishment, at least not in a civilised country, which we purport to be. Finally, some think that it is a mix of all four.
However, roles are synonymous with aims. The overall aim given to the criminal justice system is to protect the public by preventing reoffending. Therefore the role of the Prison Service should be related to the prevention of reoffending, which means rehabilitation. Taken objectively, I am surprised that successive Governments, while voicing their concerns about the rising numbers of those in prison, appear not to have thought through why the current conduct of imprisonment is clearly failing—witness the appallingly high reoffending rate—and what this says about that conduct. I contend that the avalanche of confusing legislation and torrents of wishful thoughts and undeliverable ideas, not least the expensive introduction of the so-called National Offender Management Service—which, if it is anything at all, is a system and not a service—stem from the fact that successive Ministers and their officials have failed to carry out such an analysis and have allowed themselves to be led astray by the seductions of penal populism and the cult of managerialism, which is all about process and not about outcomes.
If you accept that imprisonment is the acute part of the criminal justice system, and should be structured and managed accordingly, you will understand why I am so afraid that the Secretary of State should be embarking on the rehabilitation revolution—the intent for which I strongly support—without the necessary structures or management in place to ensure that it can succeed. It would be an avoidable tragedy if it failed for all the wrong reasons. At present, prisons are not organised into geographically coherent groups, with regions responsible for the rehabilitation of their own prisoners. Today’s incoherent prison population management system, as when I first saw it in 1995, prevents continuity of treatment. Also, because no one is responsible or accountable for any type of prisoner, other than high security, there is no consistency of treatment in prisons of the same type, and individual prison governors are not required to carry on from where their predecessor left off. Imagine the outcry if acute hospitals in the NHS were run in the same way. Why are acute prisons?
Therefore, during the passage of the Bill, I will be tabling amendments designed to try to improve the ability of the acute part of the criminal justice system to carry out its role, not least in improving alternatives to custody. I shall challenge some of the omissions and the wishful thoughts, and shall focus on the working prison, substance abuse treatment, women in the criminal justice system, restorative justice and the treatment of young adults.
Finally, I would like to say a word about indeterminate sentences, to which I have been opposed ever since they were introduced. Of course there will always be some criminals who should never be released, most of whom receive natural life sentences. However, the obscenity of the IPP is that the overcrowded system cannot provide the programmes that prisoners need to qualify for release. While I applaud the Secretary of State’s decision to end IPP sentences, like my noble and learned friend Lord Woolf, I am concerned that he has not tackled the problem of those serving such sentences now.
There are two immediate steps that I believe the Secretary of State should take, for which he has given himself the necessary weapon in Clause 117 of the Bill. First, he should conduct a census of all IPP prisoners and establish precisely why any of them are over their tariff, what is required of each of them to qualify for release, and what plans, if any, have been made to ensure that they are enabled to do so. This task would be far easier to execute if, as should have been done years ago, someone was made responsible and accountable for the oversight and management of all IPP prisoners, because that information would be available now. I urge him to make such an appointment. I have had more than 500 letters from prisoners serving an IPP, and their families. I share their view that the IPP is a stain on our reputation for civilised behaviour and should be removed as quickly as possible. Secondly, he should conduct a similar census of all determinate-sentence prisoners who are over tariff, and establish exactly the same facts.
This is a very important Bill because it contains many features of the rehabilitation revolution. Sadly, it has lost some of the clarity of purpose contained in Breaking the Cycle, which this House now has an opportunity to restore. I know that the Justice Secretary and the Minister share my concern that the acute part of the criminal justice system should be made fit for purpose. We must not waste this opportunity of helping them to make it so. I hope that, unlike their predecessors, they will repair the flaws in the system that they have inherited.
Lord Newton of Braintree
My Lords, before I say anything else, I should make one prefatory remark of apology to the House and the Minister. It will not surprise those who have observed me in recent times to learn that my stamina is not quite what it was. I hope it will be understood that I shall not feel able to stay for the winding-up speeches later on. I am sorry for not complying fully with the conventions of the House in that respect. If the Minister chooses to ignore me entirely, I shall of course understand completely. In the mean time, I shall try to refrain from asking him too many questions.
In line with almost everybody else in this debate—I want to make this clear to my noble friends on the Front Bench—I am not opposed to this Bill in principle. It is important, and there is a lot of important stuff in it. I do not think that we should attempt to frustrate it. We have had as good a debate as I can recall on any such matter, and it has been a privilege, as a non-lawyer and layman in the field, to have the opportunity to take part in it. I should also tell my noble friends—this may be music to their ears—that wherever I can give the Government the benefit of the doubt they will have it. As for the sentencing and punishment—I must say that I prefer the word rehabilitation—of offenders chunk, if it is in line with the normal liberal instincts of my right honourable friend Kenneth Clarke, I shall be happy to go along with it.
I am also pleased that my noble friend Lord McNally said that he was listening. If I am allowed to note it and it is in line with the rules of the House, I was particularly pleased to note that my right honourable friend Kenneth Clarke actually came along to listen this afternoon, which was a further encouragement.
I want to concentrate on civil legal aid, or rather the proposed cuts in it. I am not now talking about the Jackson aspects, which I broadly support and which seem broadly sensible. Nevertheless, I hope that attention will be paid to the wise words of my noble friends Lord Hunt of Wirral and Lord Faulks and, indeed, to the words of the noble and learned Lord, Lord Woolf, which seem to me to be very important in this context.
The areas that concern me have already been highlighted, so I am not going to rehearse them. One is social welfare law, including the effects on disabled people, on people with special educational needs and learning disabilities, who are a subset of disabled people, and on the law centres that are associated with those effects on social welfare law. I am concerned about the effects on family law, and especially on battered people—battered wives, mainly—and children, which have been highlighted in a number of important speeches. I am concerned about the effect on clinical negligence, where I have some experience as a chair of a number of health trusts, and where I certainly share some of the concerns that were expressed by my noble friend Lord Faulks but not only by him. I also still remain a bit concerned about some of the effects in the area of immigration. We had a go at the Government about that a few weeks back in a dinner-hour debate, where I made it clear that I welcomed the concessions but thought that a few questions remained.
As I have already said, I am not going to rehearse the arguments. Noble Lords on all sides of the House will have representations running out of their ears, and I have them running out of mine. The conclusion I draw is that there is now so much smoke on some of the issues that I have touched on that there must be some fire somewhere, and we need if possible to put it out.
I shall mention three or four other points briefly. I have never seen such a strong feeling that a set of cuts will not produce the savings that they are said to produce. What we appear to have here, as I judge it—and I should warn the Minister that this is an area that we all need to explore very vigorously in Committee—is a set of cuts that will save the Ministry of Justice money at the cost of passing costs to a number of other departments, including the welfare departments, throughout Whitehall and beyond, including, perhaps, local authorities as well.
Even within the Ministry of Justice, I suspect that we have proposals that are going to pass costs from one part of the ministry to another. I was the previous chairman of the Administrative Justice and Tribunals Council. It was notorious that, in many jurisdictions, cases where people turned up unrepresented took longer and cost more than cases where they had legal advice or assistance. Has that been costed? I am not sure. I happened to speak at the beginning of last week with a barrister who had been involved in a case involving a litigant in person. He sounded a sensible fellow, although I cannot validate this in any other way. He reckoned that this case—a High Court case, not one involving civil legal aid—had taken, in his estimation, two and a half weeks instead of four days because of the appearance of a litigant in person. If that was replicated on any scale at all, the savings in possible civil legal aid cases would disappear in a flash. We need to explore that. It was brought out very clearly by my noble friend Lord Pannick—I am going to call him my noble friend for this purpose.
I accept the need to make savings, and I hope that that will not be thrown at me. However, the Government’s position, which I support, was to make these savings and fill the debt hole, or whatever we want to call it, with savings that would not be at the expense of the poorest and most vulnerable but might even help them. As I hear things at the moment, this Bill does not do what it said on that tin.
Let me conclude with one very brief example. If I was not here, I would be upstairs in Committee on the Welfare Reform Bill. While discussing that Bill, we have heard about disabled people’s fears that a lot of them are going to lose out as a result of it. I am not saying that they will or will not, but that is their fear. A figure has been bandied around of 650,000 people who could lose out on disability living allowance as it moves on to something else. That group of people will include many who will want to challenge the results of a new system of that kind. Here we are, then, at one and the same time putting this fear into people’s minds, potentially cutting their benefits and reducing the scope for them to challenge what has been done to them. It is a sort of pincer movement. It is not the kind of thing I like, and I will need to be persuaded before I vote for it.
Lord Phillips of Sudbury
My Lords, this Bill is another monster piece of legislation—234 pages long—amending no fewer than 34 other statutes and repealing parts of 20 statutes. I rather concur with the suggestion made by my noble friend Lord Goodhart that it might have been more manageable were we to have taken this in two bites. Certainly, the complexity of this measure will tax all of us to the limit and, I fear, the Minister beyond endurance. Having heard the noble Lord, Lord Pannick, mention the speech made by Sir Hartley Shawcross on 15 December 1948 in moving the Second Reading debate of the Legal Aid and Advice Bill, I cannot resist quoting the first two sentences, the first of which illustrates the gulf of style that separates then from now and the second of which is a rather pithy encapsulation of what the Labour Government were then trying to do. I wish that I could put on his accent, but he said:
“If I might translate a respected expression from the promissory and ephemeral field in which it has been misemployed of late into the sphere of intended enactment, I should be inclined to call this Bill a charter. It is the charter of the little man to the British courts of justice”.—[Official Report, Commons, 15/12/48; col. 1221.]
With that, we can all concur.
Like the noble Lord, Lord Clinton-Davis, I have been a solicitor for more years than I dare to remember. But I came into the profession in the 1950s fired—I have to be frank—with a certain idealism that the 1949 Act had brought justice within the reach of every man and woman. I fear that I still persist in that ideal, although one has to confess that over the intervening years the legal aid scheme has run down and down. There is one reason above all for that—it is not a popular scheme with the great British public. It is if you take advantage of it but it is not in general. I am afraid it is assumed that anything that is good for the legal aid scheme is most of all good for lawyers and we are the least popular branch of the entire establishment. In my view that makes it more essential that we defend the legal aid scheme.
I accept and want to make clear, especially to my noble friends on the Front Bench, that it must have been most difficult to put this measure together in a circumstance where all departments of state are having to take their share of unpopular and unwished for cuts, but which are, none the less, I believe, necessary. However, two broad matters, both of which have been referred to by other noble Lords in this excellent debate, have to be faced by the Government and have to be satisfied if this Bill is to go forward without doing far more damage than good.
The first matter is simple, yet complex, and it has been referred to many times; that is, the boast in this country of equality before the law. Is it not something which enables us to sleep soundly that the judges are not corrupt and that the law is designed with the best of intentions? Again, if we are honest, we have to accept that year-by-year—it does not matter which Government are in power—we legislate more and more benefits for the disadvantaged, the poor, the unable and so on. It is a large slice of every party manifesto. Religiously and properly we legislate and enact those good intentions. But we all know full well that those rights are not enjoyed by a large minority of those for whom they are intended. There is no access to those benefits. Why? Above all, it is because the law relating to access is a jungle. If you think that only tax law is a complicated jungle, just have a look at welfare law.
I believe that if we legislate rights and benefits for our less advantaged citizens, knowing that they will not be taken advantage of because we do not have the wherewithal to enable the people who need those benefits to access them, we are engaged in an organised hypocrisy. We undermine this place and democracy. We add to citizen disenchantment and to a social context which I believe is one we should all worry greatly about—a context which I suggest showed at least one aspect of itself in the riots a few months ago.
I am apologetic to my noble friends on the Front Bench because I appreciate that they are in a position that I am not, but I cannot resist saying, as an old lawyer who has spent his life standing up for legal aid—I formed the Legal Action Group with others in 1971—that I cannot go along with a situation where we pretend that we are doing good to our fellow citizens when we know we are not and we know why we are not. Yet in this Bill we are doing exactly that.
To take but one example, we are excluding welfare advice from legal aid henceforward. Can anyone imagine any aspect of our law which more needs help and advice than welfare law? I cannot. Citizens Advice has 400 main offices and 3,300 satellites. It deals with 2.1 million advices every year and welfare law problems are a major part of that. Yet that will be taken out of scope. Law relating to social security, debt, housing, immigration, community care and employment will be taken out of scope, although not totally. However, welfare will be. Citizens Advice calculates that at present the advice given in those areas by the CABs and the approximately 50 law centres that still exist, but which are declining, costs £25 million plus to the Exchequer. If this Bill is enacted as currently drafted, that sum will be down to £5.5 million. But as others have said, no serious attempt has been made to calculate the downstream impact in just financial terms, let alone in terms of pain, suffering, disenchantment and cynicism.
Recently, the Ministry of Justice stated:
“The lack of a robust evidence base means we are unable to draw conclusions as to whether wider economic and social costs are likely to result from the programme of reform or to estimate their size”.
What are we doing? We know the suffering, the disenchantment and the cynicism that will follow. We have made no attempt to calculate the financial costs in social or other terms. We know that these problems come in clusters and that if a man is not given advice on a housing problem because it is now out of scope, that may lead to an eviction order in a court, which in turn will lead to a plethora of social security and welfare engagements, such as children—you name it. Tens of thousands of pounds could be involved for the saving of a piece of advice by a CAB or a solicitor—God bless him if he is still doing this type of work. Let us not forget either that the cost of this work is by the standards of most solicitors puny. It is a £150 fixed fee for every case that they take on. A City solicitor charges £150 for 10 or 15 minutes of his precious time.
I could go on but time is against me. I hope that when we get into the details of this Bill, we will be able fairly and squarely to face up to the on-the-ground realities so that we emerge with a Bill that does justice to the Government’s needs and aims but also does justice to justice.
Baroness Kennedy of The Shaws
My Lords, like the noble Lord, Lord Phillips, I came in to the law full of idealism. I have remained idealistic about the law and what its purposes are and I have remained proud of the legal system in which I work. That has not meant that I have not been a critic of the legal system. Frequently and regularly, I have been involved in criticising the law’s failures and suggested ways in which we could improve the system. From the 1970s onwards, I have campaigned for women’s issues and for greater fairness for women in the courts, hoping and working for better sentencing and so on. I have been only too aware of ways in which we have had miscarriages of justice, and I have been involved in many of those cases.
However, when you travel abroad, nothing fills your heart with greater joy as a lawyer than to realise just how wonderful our legal system is. I happen to believe that it is the best legal system in the world and that it is a source of pride to us. Yet I ask myself regularly: why is it, when we have something so precious and wonderful that is the best in the world, that we should we seek in any way to undermine it and actually take steps to destroy it?
One of the ways in which we are measured as a democracy is that we are proponents of the notion that the rule of law and democracy travel hand in hand. Britain is looked to as a great place of law, with great judges who are not corrupt, as the noble Lord, Lord Phillips, said, and great lawyers, whatever public opinion might be. When I go to the United States and speak to judges even in the Supreme Court, they say that they have sat and watched proceedings in our courts, like the Old Bailey. They say, “We have some great lawyers who are as good as some of your greatest advocates; but we do not have great lawyers in the middle ranks to measure against the lawyers that you have in the general run of courts”. It does not come without a price. We train our junior lawyers well. We give them opportunities to hone their skills. They start small doing legal aid cases, as I did, and build it up. I have to say that most of my life has been spent doing legal aid cases, and I take a pride in that. I do not feel that it is the sad end of the work that we do. I think that it is about the most precious and important work that we do.
I want to remind noble Lords why all of this matters. Only a week ago I was discussing the rule of law with people in government in Iraq. They asked, “How do we make access to justice real?”. When I am describing how our system has operated, it is a solid reminder that the rule of law is about more than passing laws and what we do in this House. It is about making it real by giving people genuine access. The Master of the Rolls, the noble and learned Lord, Lord Neuberger, recently made a speech in which he, like the late Lord Bingham and the noble and learned Baroness, Lady Hale, talked about how we get incredible value for money compared to other places. We also have a strong sense of what the rule of law is about. The noble and learned Lord made it very clear in speaking about its three facets: making clear and effective laws, which we try to do by honing, refining and improving legislation; enforcing those laws effectively and clearly through a good legal system, which I consider the best in the world; and ensuring that the law and the legal system are accessible to all.
As the noble Lord, Lord McNally, told the press in a recent interview, like every other government department, the Ministry of Justice had to take its hit. Of course, that is done at the behest of the Treasury, which is not really looking at the principles of the rule of law. However, two-thirds of the savings being made are being paid for out of the legal aid pot. The Ministry of Justice could have been bolder about taking more money out of the prison system. Regrettably, over the past 20 years, we have seen the ratcheting up of the numbers of people going in to prison, all satisfying a sort of Dutch auction on sentencing when we really ought to be much more creative about the ways in which we deal with crime. We could have been bolder about the ways in which this requirement to reduce the bill in the Ministry of Justice was fulfilled. Instead of reducing across the board what legal aid would mean in civil law, we have seen whole areas of law being removed from its ambit. It cannot be right or good for law.
The cuts are going to dismantle two key elements of the existing system. Others have mentioned how the legal aid system came into being at the end of the Second World War. It was saying that law is not just for the rich or for those who have money, but for all of us. That is what having a mature democracy is about. What came into being at that time was essentially legal aid that started off in family law and provision for women who did not have equality of arms and for their children when it came to the increase in divorces and in family disputes. The second thing that happened in the stages of this building up of legal aid was the Legal Advice and Assistance Act of 1972, which was taken through this House by Lord Hailsham, who was not exactly a bleeding heart on matters to do with law but a very fine constitutional lawyer who understood why it was important. He introduced assistance, which was the green form scheme, to which I will turn in a minute. We are going to see that dismantled. Having ready access to a lawyer will be replaced by a telephone hotline, a sort of call centre. We all know the problems that we have with call centres in every other area of our lives; imagine it when you are in distress and in need of decent legal advice.
The 1972 Act introduced a scheme for legal advice on any matter of English law, known variously as the green form scheme or the £25 scheme. It meant that a solicitor was available to give you advice. Law centres and advice bureaux came into being around that time, too, to give advice—on welfare benefits, community care, mental health, education law and so on—on that first call, when people have anxieties about how something is affecting their lives. I know good, decent, committed, idealistic lawyers, who have not become rich but who can persistently stay in this area providing that kind of advice to people. For us to be destroying it seems to me to be crazy.
The suggestion that there is a compensation culture, I am afraid, has been swallowed by our Lord Chancellor—to my surprise, because I am a great admirer of his. With the tabloid notion that a compensation culture exists, in a society that has idealised materialism and put the greatest value on money, it is not surprising that when bad things happen to people, they will want to be compensated. If you deregulate the professions and make it possible for them to ambulance-chase, it is not surprising that you will have poor outcomes. Judges at the Old Bailey now tell me that, because of the legal aid cuts by the previous Government, they are seeing a decline in the quality of representation in the courts before them. Why is that? Increasingly, people will go in ill prepared. Cases of weight are being conducted by inexperienced people. That happens if you are paying people very little money for doing a professional job.
I really think that a mistake is being made in these proposals. I urge the Front Bench, which I know is concerned about these matters, to think again. This is a precious part of our legal system and the consequences of the cuts may be far greater than anyone imagines.
Lord Martin of Springburn
My Lords, I have an interest to declare. Before entering this House I took up a complaint with the Times newspaper on a no-win no-fee basis and I was successful. Whether you are a long-standing politician or a showbiz personality, when you point out to a newspaper that it got the story wrong and ask it, in a civil manner, to rectify the matter, you are soon regarded as its enemy. The newspaper will look upon a complainant as someone who is attacking its professional integrity as a newspaper and it can take weeks to negotiate in the hope that you will go away. If you are lucky, you will get a few lines of correction somewhere in the back pages. The private individual who is not in public life can expect to be treated just as badly when he or she is publicly traduced, scorned or sneered at. It will be a daunting task for an individual as the newspaper deliberately delays or drags its feet in the hope that the complainant will go away. At least with the no-win no-fee arrangement the private citizen does not need to worry about his or her modest savings or house, or both, being at risk.
The Government and the media tell us that 100 per cent success fees are too high. If that is the case, why not go to a 50 per cent success fee, with stages at 10 per cent and 25 per cent for pre-court settlements, and 50 per cent only after a full court hearing? That 50 per cent should be paid by the losing party; it should not come out of the winning claimant’s settlement. This would give private citizens access to libel lawyers without considerable financial worry.
There are many examples of decent people who have benefited from no-win no-fee arrangements: a Catholic priest who was wrongly accused of habitually stealing from his church collection, an Army officer who was falsely accused of being involved in the abuse of prisoners in his care, and a teacher who was wrongly accused of inappropriate contact with female pupils. The Dowler family has written to our Prime Minister to say that it could not have taken through its successful case had it not been for the no-win no-fee arrangements.
There is also the case of Mr Christopher Jefferies, the landlord of the late Joanna Yeates, who was brutally murdered. This man who lived quietly was arrested on suspicion of murder and was going about the business of convincing the police that they were wrong to suspect him. However, eight newspapers, most of them national, indulged in a hate campaign against this good man. They described him as a “Peeping Tom”, a “weird”, “posh”, “lewd” and “creepy” individual, a “blue-rinse loner”, a “creep” who “freaked out schoolgirls”. What kind of people do we have in the media who can behave in such a manner against innocent people? This was after Mr Jefferies’ lawyer warned the media to desist from publishing damaging stories. It should be pointed out that in law a journalist is even allowed to get things wrong provided that he can prove he acted responsibly. Eight newspapers failed in their duty to act responsibly with regard to Mr Jefferies.
I am speaking tonight not for the benefit of highly-paid lawyers but for men and women on low or modest incomes who might be caught up with the media that we have the misfortune to have. I thank noble Lords for listening to me.
Lord Prescott
My Lords, I cannot declare an interest or experience as a barrister, a lawyer, a solicitor or, indeed, a judge, but I can declare some experience from my seafaring days when the ship owners used to call me a barrack room lawyer. I did not have legal aid, but a bit of industrial muscle helped. Perhaps I can just declare one interest. I am presently, after the comments made by the noble Lord, Lord Martin, involved in a no-win no-fee situation with the Metropolitan Police. Indeed, I concur with what the noble Lord has said. If you try to get justice for an offence committed by the press, they just ignore you or say, “We’ll sue you”, and you have to think about whether you will take on a no-win no-fee case. I identify with those circumstances.
I want to concentrate my remarks on what people have criticised about the Bill, which is that it is about cutting costs and money. Indeed, everybody admits that. But the people who are carrying the burden are the most vulnerable in our society, and that too is agreed across all the Benches. However, I disagree with it. I shall address my comments to the biggest interest group in this country—namely, our press. They are the ones that have real influence. They are the ones that have committed most of the injustices against individuals. They are the ones that can claim to do whatever they like in the name of the public interest, usually at the cost of the private individual’s interests and rights. I shall therefore concentrate on Part 2, which deals with litigation.
It has been said that many more cases are taken on under conditional agreements. Naturally so, and many have been won that way. Why is that? It is because people could not afford to take on the press before, who in contempt would not make any kind of apology. By the way, if you did get an apology, it was usually printed on page 25, even if you had probably been given the front page, as they often did with me. But eventually, when you win the case for an apology—by the way, they do not use the word “apology”; they say “correction”—basically it is put on the back pages. They are in contempt of justice for the individual. We therefore now have an opportunity to take into account how this Bill affects this area.
What offends me most about the Bill is that it strengthens the most powerful group against the vulnerable individual. The press have the money, the lawyers and the influence, and they use all that effectively against the individual. What this Bill seeks to do is strengthen that strong group by helping to reduce its costs on the one hand and by increasing its influence in these situations on the other. Look at what the Bill is actually proposing on damages—and we are talking about an industry that does not look as if it is going to change. Listen to the inquiry being conducted by Lord Leveson, or to what was said there today by Milly Dowler’s family. The press are still carrying on with business as usual. This is a group that does not want any change or a statutory framework. It is making it clear that it wants to keep the voluntary system. That has to be questioned.
The importance of that, particularly for this Bill, is: how do you bring an action against a powerful interest group like this? It is accountable to the useless Press Complaints Commission. It is absolutely useless. We have had Members of this House chairing the commission—I think the noble Baroness, Lady Buscombe, was one. In fact she was the chair of this pretty useless group when it was fined or had to pay damages for libel against one of the lawyers in the hacking case. In that case, did the press pay her legal fees and did they pay the damages? I keep asking but I get no answers. But I can tell you for a cert that it would have been carried by the industry. The PPC is a total failure. It does not carry out its job. Why is that? It is because it is self-regulated. It is controlled by the Editors’ Code of Practice Committee and by its code. If anybody saw the apology made by the Daily Telegraph in regard to Vince Cable, the Business Secretary, about what it did to him, they will see that the newspaper admitted that it was in the wrong and in breach of the Editors’ Code of Practice, but thought that it could still go ahead with the story. Publish and be damned because it could not care a damn, quite frankly, as long as it sells newspapers. That is the only interest of the press in these matters, and they ride over the rights of the individual simply to secure those sales.
This Bill will actually help to reduce the costs of the press, which they are moaning about, and not only in individual cases. Last July, we had a debate in this House on the private Defamation Bill introduced by the noble Lord, Lord Lester. The press were worried about libel tourism and who would carry the costs of that when our judges were making judgments on damages in some of the other cases that they thought to be excessive. Are they excessive when they breach the law and breach people’s rights and even object to judges giving a decision? Look at the case of Mr Dacre, who attacked the judge for making a judgment on human rights issues in regard to the Mosley case. That was totally unacceptable. It is the judges’ right to make the decision about the balance between public interests and private rights. That is what we ask them to do. Mr Dacre was saying it is not the job of the judges to do that. Journalists want human rights legislation changed, so it is not only in regard to individual claims that we have to watch this powerful interest group. They want changes right through the system. They want changes to reduce costs and damages so they can continue to pay them, limited as they are, in order to publish and carry on. That is what concerns me most.
In my own regard, the police constantly opposed my application for a judicial review. Thank goodness the judges eventually made a judgment that I should have one. But the police were contesting it. Who pays the police’s costs if there are damages involved? Who pays for them to employ the best barristers? That is paid, presumably, by the Metropolitan Police, which means by the public. I could not have taken out a case against the press if I had not had the chance to use the conditional system and to pay insurance. We now hear that the Government in this Bill are going to transfer insurance and other costs on to those who win their case. That is totally unacceptable, frankly. We talk about individuals paying damages if they have lost a case, but here we are talking about a powerful, wealthy body called the press which is asking us to make these changes.
There have been recommendations by Alan Rusbridger, editor of the Guardian. He suggested having a proper press complaints procedure with intervention and mediation by the Press Complaints Commission. He is absolutely right. He said it should be an independent body. He is absolutely right. But he does not want it to be a statutory one. How are you going to enforce everybody to be part of the PCC unless there is a statutory framework? How are you going to enforce sanctions, if you believe in doing that? I would suggest to him that in no-win, no-fee cases, the PCC should consider acting in mediation, and if courts or individuals refuse to accept that, then let the Press Complaints Commission take the complaint. Let it offer a conditional agreement so that the individual can then take the case, and let that be a cost to the industry, because it might be an effective deterrent if it has to pay to put something on the front page that is wrong. The Government in this Bill are reducing those penalties and strengthening the press and that is not acceptable.
This House will be debating a number of pieces of legislation. One is the legal aid Bill which is now before us. The second will be a defamation Bill that will presumably come before this House. There will be a new Human Rights Bill, a Bill of Rights or whatever, which normally comes to this House. And there will be a new public complaints or mediation facility and perhaps even a cross-media ownership issue. All these involve the media. This is an opportunity for this House to get a very clear idea of how the press fits within the framework. I believe in a free press—I think it is necessary—but one that defines what the public interest is, not one that is out of control. The Guardian’s proposal is that the editors should determine the public interest. Editors determining the public interest? They are only concerned about their own private interest and the selling of newspapers. To suggest, against the background of what our press has been doing, that they should define the public interest is unacceptable. They have defined it and they have no time for it. It is all about press freedom. I hope when we come to debate this legislation, we will consider all these parts. This is about the role of the press in a free society but not one where it is business as usual, as they are now proposing.
Baroness King of Bow
My Lords, this House knows that when a Bill is put before it, the Government of the day usually get some of the legislation right and some wrong. But the wrongs contained in this Bill, whether by accident or design, are monumentally devastating. They cannot be made good by the benign aspects of the Bill or written off as collateral damage to be borne by British citizens in times of austerity. The Bill undermines the very compact between citizen and state. Were it to become law, British citizens who cannot afford a lawyer will effectively lose fundamental rights they have today.
I will confine most of my remarks to the legal aid section of the Bill. Those affected could be almost anyone but they include some of the most vulnerable groups in Britain: disabled children whose lives are ruined by medical negligence, battered women who are victims of domestic violence, terminally ill patients—for example, those suffering from asbestosis-related disease—the disabled, the abused and the sick. Under this Bill these are the scapegoats for austerity Britain. What is the Government’s argument? They say they must clamp down on frivolous and trivial cases and the claim culture. We all agree with that. But how can they claim that a person dying of asbestos-related disease is a trivial or frivolous case or is part of the claim culture? I am sure the Minister does not claim that; in which case, surely he must bring those claims back within the scope of legal aid.
The same is true of domestic violence. Those crimes can never be described as trivial or frivolous. I was struck by what was said by a domestic violence survivor, Jeanie, who came here to the House of Lords to address Peers a fortnight ago. She said:
“It’s not an ideological issue; it’s one of basic fairness and justice”.
Jeanie was thrown down the stairs by her husband late in her pregnancy. She gave birth at the bottom of her stairs to a still-born child. Eventually, on a subsequent occasion when her husband cracked her skull, she received legal aid and was able to escape with her children and prosecute her psychotic husband for GBH. Jeanie says that without legal aid she would not have been able to leave her husband and he would have killed her. He might have killed the kids as well. Under this Bill as it now stands, Jeanie would not be eligible for legal aid. It is clear that these provisions must be amended because the criteria for domestic violence are now so narrow that in many circumstances even if a perpetrator admits that he has raped a woman, his own admission no longer counts in getting his victim legal aid. This is madness. It is no good asking a woman who is beaten and raped by her partner to use what the Minister described earlier as “less adversarial means” to resolve disputes. Not only is it inappropriate to ask a woman to do this, it is adding insult to terrible injury. Again, I know the Minister would never intend that so I am sure that he will want to rectify the Bill as it stands. If he is not able to give women in Jeanie’s position access to justice, I am sure he will never sleep again at night. To prevent terminal insomnia on his part and to put all our minds at rest, I ask him to abandon the narrow definition of domestic violence which is not used in other parts of Government, to lift the 12-month time limit and to ensure that no victim of domestic violence is forced to either ruin their life or lose their life because the justice system is now closed to them.
I now turn my remarks to the Bill’s impact on children. The Government have said that where children are involved, legal aid will still be provided. In the Minister’s opening remarks he said that 95 per cent of children who are currently covered by legal aid will retain that protection. First, having spoken to all interested parties, I am not yet convinced of that fact. Secondly, the Minister cannot be including within that statistic all the children affected by their parents’ or carers’ loss of legal aid under these proposals. The Minister will know that almost 150,000 children will lose civil law and family law protection provided by legal aid. Children are the main party in 6,000 cases a year that will no longer qualify for legal aid. They are financially affected by more than 140,000 cases a year involving their parents. Another obvious example, about which we heard earlier, is welfare benefit advice. Currently in tribunal appeals where the applicant has legal advice—this is an incredible statistic; if your Lordships are drifting off, I advise you to come back for this one and remember it—55 per cent of all DWP decisions to cut benefits are declared wrong and are overturned. On decisions taken to appeal, the Government are proved wrong more often than they are proved right. This means without a shadow of a doubt that low-income households will unfairly and through no fault of their own suffer when they no longer have recourse to legal aid. That includes 36,000 children every year from the poorest families who will no longer be able to appeal poor benefits decisions of this nature. A previous speaker talked about equality of arms. This is a precise illustration of how we are losing that equality of arms and how power is slipping from the individual towards the state. I do not think that this is an ideological issue, but, if it is, surely noble Lords on the government Benches would want to stop this drift of power from the individual to the state.
On the subject of children, the NSPCC unsurprisingly says that it is “gravely concerned” by the Bill and that:
“The proposals fail to protect the interests of children's welfare and the interests of justice”.
That is a damning critique. The Children’s Society is equally concerned and says:
“Taking whole areas of legal matter out of scope will inevitably affect the poorest, most vulnerable and marginalised families”.
So let us add those vulnerable families to the other specific groups targeted by the Bill: the disabled, the abused and the sick. There must surely be a better way of reforming legal aid than making life unbearable for those on the margins.
I was so concerned about the proposals in the area of medical negligence that I wrote to all Peers on the subject before the summer. I was overwhelmed by the responses that I received from all sides of the House. Your Lordships clearly do not think that it is wise or just to remove legal aid in medical negligence cases. I am sure that the Government will want to listen intently to the will of the House by accepting an amendment on this subject at an early stage.
My last sentence on this matter returns us to the victim of domestic violence, Jeanie, whose husband’s violence killed her child. Jeanie named her daughter, who was stillborn at the bottom of her stairs, Hope. She found the courage to protect her children and save her own life using legal aid. Jeanie is relying on us, on the Minister and especially on Peers on the government Benches to ensure that other lives are not ruined by a legal system where justice is denied.
Lord Elystan-Morgan
My Lords, I wish to use the time available to me to speak to Parts 1 and 2 of the Bill, that robustly harrowed area in respect of which we have heard the most distinguished and powerful contributions already.
Unless a Government of the future pass a one-clause Bill to abolish legal aid completely, the contents of this Bill and the proposals surrounding them must constitute the most savage and most deadly attack upon the institution of legal aid in the 62 years of its existence. The Government have pleaded three justifications for those proposals. The first is that we live in a society that is overindulgent with eccentric litigants, that legal aid is wasted and, even worse, that in some way or another it encourages and stimulates utterly irresponsible litigation. The second is that, in the context of legal aid, there is every alternative possible that can ameliorate and mitigate any loss that would otherwise exist. Furthermore, they say that, in any event, it is a system that will be greatly improved by the proposals in the legislation.
A few questions should be asked about those propositions. First, is there a litigation culture that menaces the community in which we live? I doubt it very much. I draw all my experience from some 50 years in the law as a solicitor, a barrister and a judge. I have seen many cases of legal aid. There may well be some one would doubt it was utterly reasonable to have granted legal aid—what else would you expect in an imperfect world? But for each one of those, I can think of a dozen cases for which one would think it would have been proper for a litigant to have been granted legal aid.
The first point that I would wish to make in challenge to that proposition of overindulgence and creating a culture of litigation is to be found in the report by the noble Lord, Lord Young, some few months ago, entitled if I remember rightly, A Community and a Safe Society.
Lord Elystan-Morgan
I am most grateful and obliged to the noble Lord. In that report, the noble Lord, Lord Young, made it perfectly clear that the conclusion that he came to, from all the evidence that he had heard, was that there was no such thing as a litigation culture in society but there was in the minds of tabloid editors. Of course, there are eccentric litigants. Let us just think of how poor the reports of the law of tort and the law of contract in the 19th century would have been were it not for eccentric litigants. However, they were rich and they were certainly not on legal aid. That is what we have to consider. There is no evidence whatever that we live in a situation where legal aid has stimulated a culture of litigation.
Secondly, we ask whether the effects of what we see now are going to be destructive or benign. So much has been said here today that it needs me only to ask that particular question for it to be answered. It is perfectly clear that the whole foundation, the whole ethos, of legal aid is being challenged and attacked. In those situations, the scope of the cuts and the very nature of the deprivations are such that it is inevitable that there will be very considerable destruction. There will be no legal aid generally, but only in that cluster of sparse areas referred to in Schedule 1. Six hundred thousand people who are now eligible for legal aid will be taken out of that system. There will be no legal aid for private family cases apart from domestic violence—and it seems that the gateway to that has already been deliberately created as a massive obstacle course for likely applicants.
Thirdly, I look to the question of whether amelioration is possible. I doubt it. No doubt mediation has its part to play. Even if we had an army of persons trained, skilled and experienced in mediation—and I hope that some day we might very well come to that; a great deal might be done—some cases, especially family cases, as I well know, could take days but would otherwise be utterly impossible. Again, so much has been said about no-win no-fee to make it obvious that, although that may fill some of the gap, a huge and yawning chasm will still remain.
Lastly, I ask a question about the cost to the Exchequer. In its third report on legal aid, the House of Commons Select Committee on Justice expressed amazement that there was no comprehensive study of the knock-on effects. These knock-on effects will show themselves in one of two ways: either people will retreat from defending or asserting their rights altogether, or there will be a knock-on effect in massive expenditure in other departments.
It has been calculated by the CAB that for every £1 that is spent on legal aid, £2.34 will be spent on housing, £7.18 on employment, and £8.80 on benefits. Where is the gain? What is the gain commensurate with the anguish, the loss and the injustice? At Second Reading of the Bill in the other House, the Secretary of Justice said:
“I accept that access to justice for the protection of fundamental rights is vital for a democratic society—something on which I will not compromise”.—[Official Report, Commons, 29/6/11; col. 986.]
It is not by their words but by their deeds that they will be judged, as far as this matter is concerned.
Lord Morris of Aberavon
My Lords, in the limited time available, I shall try to avoid Committee points, but I am confident that this House has a formidable task as a revising Chamber. The Lord Chancellor was, reputedly, one of the first to agree to the Treasury’s demand to contribute to the cut in the deficit. With hindsight, that might turn out to be a mistake. All his proposals flow from his efforts to meet the required amount: sentencing, remission, prison numbers and now the legal aid budget. Our job is to assess their fairness. How fair are they? In which fields will the most vulnerable suffer disproportionately? The words of the late Lord Bingham ring in our ears—they have already been quoted by my noble and learned friend Lady Scotland. He said that,
“denial of legal protection to the poor litigant who cannot afford to pay is one enemy of the rule of law”.
The Law Society, in today’s Times, recites some of the most vulnerable who will suffer. This House will have to examine in detail proposals for family law, some victims of domestic abuse, and victims of clinical negligence. The view has already been expressed of the grave concern that clinical negligence will be outwith legal aid. In the absence of legal aid, no-win no-fee has been the only means of litigation for many. From what I understand, a great deal of the ground is to be cut from under the feet of many by the Bill’s proposals.
Let me pinpoint one issue—the environment. As a constituency MP for more than 40 years, I was constantly reminded of environmental problems created by industry and developers. Litigation is the last resort in these fields, only when other means have failed. It is a battle of David and Goliath. There are occasions when the means should be provided for David to have his day in court. The Bar Council, in response to the Government’s proposals for legal aid reform, has made proposals for £350 million savings in the administration of justice. It is the profession’s belief that its views have fallen on deaf ears.
Let me make one point of detail—a detail which, if continued to be ignored, distorts the legal aid budget substantially. I have defended over the years many defendants who have hitherto enjoyed significant wealth. The cases would involve drug dealing, particularly importation, VAT frauds, mortgage frauds and the like. The defendants would frequently, having enjoyed the trappings of wealth, be on legal aid—or, in the course of a trial would be granted legal aid. You may well ask why. It would be because their assets would have been frozen by court orders on the application of the CPS. At that point, they would be persons without resources, eligible for legal aid, and in many cases treated as men of straw.
Let me give the basis of all this. In 2005, more than 50 per cent of Crown Court legal aid expenditure was consumed by 1 per cent of cases. These are the kinds of cases I was involved in. The average cost per case would be £2.6 million. To give an idea of the sums under restraint, the value in 2009-10 was £560 million, rising to £744 million in 2010-11. If we used some of that money for legal aid that is not necessary, the legal aid budget would be more realistic, fairer and more easily understood. The Treasury says that it can recover some of the money through confiscation orders. But how successful is it? Does not that basis distort the whole picture of legal aid? In any event, I believe that it is an unfair and distorted way of portraying and allocating public expenditure.
I will touch briefly on sentencing. When I sat as a recorder from 1973 to 1997, we were bombarded each year by criminal justice Acts. Sentencing was a labyrinth that you navigated as best you could. The pressure on the judiciary to get a sentence right was unremitting. Let me give two examples of how some things fell into or out of favour. At one stage, suspended sentences were very much in favour—with or without conditions. Then they fell out of favour. And now we are, back again, to look at how they are to be implemented. Secondly, the four-year imprisonment tariff became important; release depended on whether the sentence was just under or just over four years. That had immense consequences for the sentencing judges.
Some of the proposals in the Bill may well have a great deal of merit. We will examine them exceedingly carefully and hold on to that which is good. But I hope and pray for some respite in the introduction of the equivalent of the criminal justice Bills which change whatever is the fashion from year to year. The judiciary should be allowed to get on with it. Sentencing would be easier; the professions would understand it better; and the defendant—an equally important person—would understand it better. Constant changing in sentencing does not make life any easier for anyone at the criminal Bar.
Baroness Prosser
My Lords, I am pleased to be able to contribute to this debate, but less than pleased with the proposals contained within the Bill itself. I will restrict my remarks to the social welfare law aspects of the Bill, plus a couple of comments regarding access and rights.
Prior to becoming a trade union organiser, I worked in a south London law centre for six and a half years. It was work that I thoroughly enjoyed and was an experience which has given me a good understanding of the range of issues dealt with and the types of people looking for help.
I also clearly understand how the law centre and advice centre network is interdependent, providing general and specialist advice and services and a system of cross-referrals, almost always with good connections to services, benefit offices and so forth. There seems to be confusion in the minds of supporters of the Bill as to what does and does not constitute legal advice. On Report in another place, it was said that social welfare problems are not legal matters and do not require legal expertise to resolve them.
However, common sense would teach us that these matters are as legally complex, with case law and precedents to be taken into account, as any other legal area. Where they differ, of course, is that the first port of call for a hearing or an appeal is usually a tribunal where an unqualified lay person can speak and represent the claimant or client. The law centre and advice centre movement is also acutely aware that to claim legal aid for non-legal advice is simply against the law.
Because of the interdependency of the services provided, restricting the availability of legal aid support in the ways proposed is likely to see the collapse of the whole advice network. It is very hard to see how in a civilised society justification can be made to withdraw access to legal remedies from the most vulnerable and needy among us. It seems that there is a view that such people will somehow be able to look up the law, draft out a legal case and speak to the court—all this, of course, after going through the mandatory telephone gateway where they will be required to refer to complex documents at the same time as interpreting the legalese and trying to articulate their case—all in the name of reducing the overall legal aid bill, where civil legal aid is not even the culprit.
Many other aspects of the Bill cause me to feel dismayed. There is to be no housing advice unless the person is likely to lose their home. What about redress against landlords who make their tenants’ lives a misery, turning off the electricity for example or refusing to do essential repairs? There is to be no help in cases of domestic violence until the point where the woman is likely to be afraid for her life and often the lives of her children. There is to be no help for employment cases. Combine that with the introduction of fees to access the employment tribunal and a wronged employee has no effective right of redress at all. The Minister refers to the fact that tribunals were intended as more informal venues where the ordinary person can go along and state their case. He implied that it would be good to get back to that happy state and I am sure that most of us would agree, except that we cannot go back. We are where we are. Informal venues have been turned into highly legalistic arenas where the inexperienced will be swallowed up by complex arguments and convoluted language. Eleven years of sitting on the employment appeal tribunal tells me that unrepresented cases will take up much more court time. Where is the saving?
I turn briefly now to matters of rights and access. I declare an interest as deputy chair of the EHRC. There are two areas of particular concern. The first is the likely impact of the mandatory telephone gateway on those with disabilities. The equality impact assessment carried out by the Government does not properly assess whether the impact can be justified as a means of achieving a particular aim. Indirect discrimination in services and public functions is of course unlawful unless it can be objectively justified.
The second is the overall question of legal rights being no rights at all if they cannot be accessed. As is known, we have international obligations and the right to a fair trial is guaranteed by Article 6.1 of the European Convention on Human Rights. It has also been found by our own courts to be a constitutional right. The proposals contained in the Bill do not reflect the values of a civilised society. In my opinion, they are pretty shameful.
Baroness O'Loan
My Lords, there can be no doubt that the current arrangements represent, as the Minister said, an “unignorable problem of affordability”. However, even in that situation the current arrangements do not enable access to justice by huge sectors of society who must make the decision not to bring legal proceedings, based not on the merits of their case, but simply on the basis that they do not have the resources to fund litigation. So the current situation is far from perfect. The Bill as drafted will in some respects exacerbate a very difficult situation. It will not be compliant with Lord Justice Jackson's insistence that there should be,
“no further cutbacks in legal aid availability or eligibility”.
Elements of the Bill are welcome. I refer to the proposed introduction of a new offence of squatting in a residential building—a problem which became quite widespread as it was realised that it is possible to occupy a building without any possibility of criminal sanction. The costs of such occupation in terms of property damage and the consequential civil legal proceedings to eject a party can be very significant and can cause massive distress. This provision is clearly a common-sense and necessary improvement to the law. The only question is why it has taken so long to get there.
I wish to address the issue of the extent to which the current proposals will restrict access to justice for the most vulnerable and marginalised members of our society in circumstances in which they find themselves the victims of crime—of clinical negligence, professional negligence or fraud. I think of those who are very poor; those who have to cope with the consequences of disability in all its forms; of the 20 per cent or so of our population who effectively cannot read and write; of prisoners, who are disproportionately represented among those with mental health and literacy difficulties; and of immigrants for whom access to justice was completely unknown in their home country and who have come to this country believing in the rule of law and the principles thereunder to enable access to justice. The current civil legal aid provisions are very restricted but they do allow people with very limited assets to bring the proceedings that are necessary to assert their rights. The evolving conditional fee arrangements provide some access to justice for those who are not entitled to legal aid but who can seek redress in the courts through alternative arrangements.
I am no fan of the ambulance chaser. Indeed, I would prohibit the type of advertisement to which I—like many other noble Lords, I am sure—have been subjected, suggesting that I have suffered an accident and the sender of the text will provide me with legal representation to enable me to secure compensation. However, the Access to Justice Action Group has stated that Part 2 of the Bill will affect the capacity of some 600,000 ordinary people to get access to justice. It states that there will be 25 per cent fewer claimants and that the remaining 75 per cent will lose up to 25 per cent of their compensation. This will almost inevitably, in medical cases, result in additional costs to the National Health Service. Have those costs been factored in to the overall savings said to be consequential on the proposed changes?
The reality for a parent who has given birth to a child who has suffered significant injuries as a consequence of medical negligence is very grim. Such parents face, even in the present situation, an almost insuperable problem. They must learn to come to terms with the consequences of the alleged negligence in terms of their baby's ability to function. They must enter a world which they hitherto never knew of clinical process and, in some cases, almost constant emergency situations. They must learn to do that which doctors and nurses normally do, to preserve the life and function that their children have. Often, they will be constantly exhausted and frightened. They may have to care for their other children while coming to terms over years with the ongoing, developing consequences of that medical negligence. In the midst of all this, and of all the consequential visits to doctors, occupational therapists and physiotherapists, as well as to those who provide wheelchairs and other aids and adaptations for those with disability, they must contemplate the need to commence legal proceedings to seek compensation, which will enable them to secure proper care for their children in the future.
Similar situations will arise for those whose adult friends and relatives have suffered catastrophic damage as a consequence of medical negligence. They too will have to come to terms with a whole new way of life if they decide to become the carer for the injured party. By so doing, they will save the state a lot of money, because the state will not have to provide residential care. What too of the situation of those with an industrially-acquired disease and the widows and children of those who die at work as a consequence of an employer’s negligence?
In the midst of all the grief, the confusion, the fear and the exhaustion, they will need to know how long they have to initiate legal proceedings. They will need to know when it is best to do so, because the consequences of medical negligence may take a little time to emerge. They will have to contemplate the costs of expert medical and other technical evidence to support and explain the situation to them. They will need the capacity to keep their claims going through years of litigation—and all this without legal support. Is this possible?
All the while, in many negligence cases the costs of the defendant are borne by the public purse. We fund the defendant, but we will refuse to fund the complainant. The effect of the current proposals will be that yet another two-tier system will emerge. There will be those with sufficient resources to bring actions with legal representation, for whom compensation may ultimately be decreed and consequentially a higher standard of care. Then there will be those whose parents or carers just cannot contemplate how to bring such proceedings and who will ultimately suffer the consequences in terms of reduced living standards.
As the noble Viscount, Lord Simon, said, where the injury has been suffered as a consequence of the failure of state-provided care, it is even more necessary to provide an accessible remedy in law. There will have to be revision to this section of the Bill. The provision for exceptional cases will not meet the needs of these claimants. I also echo the words of the noble Lords, Lord Pannick and Lord Newton, about the court costs resulting from the appearance of an unrepresented litigant. I echo too those who identified the serious problems which will emerge from the withdrawal of legal aid for welfare cases.
There is one other matter in the Bill to which I will refer briefly. It is the matter of how the law deals with those offenders who are dangerous and violent and who will be sentenced, but in respect of whom there is an enhanced need for public protection which must be dealt with in a proportionate manner. This matter was dealt with in Northern Ireland by means of the Criminal Justice (Northern Ireland) Order 2008, which created indeterminate custodial sentences. Under the legislation, a judge contemplating an ICS has first to consider whether an extended custodial sentence,
“would be adequate for the purpose of protecting the public from harm”.
The purpose of that law is to ensure that the ICS is imposed only where there is no other proportionate way to protect the public. Mr Justice Hart stated in the case of R v McGleenon this year:
“Common to each of these four sentencing options (determinate sentence, ECS, ICS, life sentence) is the need to consider whether the accused presents a danger to others by virtue of being a significant risk to members of the public of serious harm in the event that he were to commit offences of the same or a similar nature in the future”.
In that case, Hart imposed an indeterminate custodial sentence with a minimum term of five years’ imprisonment, meaning that the defendant would not automatically be released after the minimum term has elapsed, but rather that he would be released when the parole commissioners are satisfied that it will be appropriate to release him.
It appears to be the view in Northern Ireland that the combination of judicial discretion as to the question of dangerousness—similar to that applied in England and Wales—and the requirement to consider an ECS before imposing an ICS has meant that the number of public protection sentences has grown slowly, far lower than anticipated. Consideration of the operation of that system may assist in providing a public perception and reality of protection while ensuring that there is not a disproportionate use of the ICS.
Baroness Newlove
My Lords, I have listened with great interest to the debate, which so far seems mostly about legal aid. I cannot comment knowledgeably about that, but I want to speak about what I know. I stand with a great weight of expectation on my shoulders as I speak out for victims of violent crime. I cannot hope to represent all the different views held by this group, but I will try. Many good and honest people, through no fault of their own, have entered the criminal justice system as victims. I add my own and my daughters' personal and eye-witness experiences as victims of the violent teenage gang that left my husband Garry dying in a pool of his own blood.
I support these innocent, grievously wounded people, and I speak also for Garry and the many others, deeply loved and missed, who are silenced for ever. This Bill has the capacity to right many wrongs and bring real justice. The coalition Government's strong sentencing package will make a huge sea-change reform of our justice system. It will ensure that criminals are punished for their crimes and made to face up to the causes of that criminality, and it will restore public confidence in our criminal justice system. I ask you to listen with your heart as well as your ears and minds. There but for the Grace of God go you.
I am grateful and humbled by the Minister saying on record that the victim will be at the centre of these reforms. I thank my noble friend. Our criminal justice system needs overhauling. Our jails and young offender units are full and overflowing. The system is creaking at the seams and not working when we see the depressing and costly figures of reoffending. Many people locked away are not violent, but others who can cause hurt have their freedom. It is shocking that about half of all prisoners reoffend within a year of release; 74 per cent of young people sentenced to youth custody and 68 per cent of young people on community sentences re-offend within a year. Something is broken and needs urgent fixing.
The scales of justice are tipped too far to the rights and needs of the offender. They must be balanced towards the victim; or, if their lives have been cruelly taken from them, then towards the families left behind. They should have a say in the sentencing, parole and probation of offenders. Although the argument rages between rights of victim and offender, there is another interested party to this; the public. Victims were the public once. Anyone can join our terrible club in a heartbeat. Membership is lifelong and unwanted. Lives will always be affected by the violence they never asked for.
We need to restore public confidence in the judicial processes, to look at the proposals put forward in this Bill and why we must make these changes. Offenders are not victims. Please do not patronise and disrespect us by confusing the two. Mitigating factors of background, bad parenting and social circumstances can influence an individual to commit terrible crimes, but this can never be a cloak to excuse criminal behaviour. Ultimately it is down to individual choice and we must do all we can to inform, educate and, if that fails, enforce common laws of acceptable behaviour. That is how a just and strong society functions. The will and actions of every individual must support and nurture the community. It protects the weak and defenceless, the young, aged and those with disabilities and learning needs. For without the common goals of strong values, self-respect and self esteem, we turn feral. We become a society that looks to self-gratification, to thinking me, me, and mine, mine. That takes out and does not put back in; grabs and steals but does not earn; tramples everyone that stands in the way of getting what we want; and passes these wrong behaviours to the next generation. In this downward spiral we risk never releasing the compassionate good that is within every one of us.
I do not speak from a vengeful and bitter platform. What has happened to my family and so many like us will be with us for ever. We cannot turn back the clock. What victims want is that it does not happen to anyone else. The suffering we experience cuts to our very hearts. My daughters will never have their father walk them down the aisle on their wedding day. My grandchildren will have to be content with photos and stories about the grandfather they will never see. Birthdays, anniversaries, Christmas, the back of a head in a crowd which is so familiar, the words or tune of “our song”—I cannot describe the physical pain which strikes unexpectedly and ferociously; words do not exist.
I welcome the Bill’s promise to simplify, release and recall arrangements and clarify the statutory duty to explain a sentence. Again, it must be clear and easily understood and accessible by the public. It must not be lip service. Communication is vital for everyone to understand our criminal justice system and the Bill promises to strip out unnecessary clutter. The government support of approximately £50 million to the victims' voluntary sector this year was a real commitment to rebalancing the criminal justice system. Extra funding for the homicide services and a redirection of offender surcharge and earnings are all steps in the right direction.
The Bill looks to encourage the use of compensation orders. This should be mandatory and paid directly to the victim involved or, where refused, the money should still be deducted and retained for other victims. Focusing on punishment for the perpetrator will help them to recognise and accept the wrong they have committed against others. This could well have a positive effect on reoffending. It will certainly appease the general public who are unhappy to learn that offenders can get away with working just six hours a week. A consultation document on victims’ services will be published soon by the Ministry of Justice and I look forward to the public's chance to influence policy-makers. The victims’ code should focus on sharing information and offer complete transparency. I recommend that we should explore new technology to help us in the fight against criminal behaviour and offender management. The public will accept community orders as long as they feel that they are safe and are guaranteed that offenders are not left to roam free but are properly monitored and put to real work.
Tomorrow I will look at a new GPS-linked UK tagging device called Buddi Tracker. This has an impressive record of stopping repeat breaking of parole conditions. It could help in the fight against organised gangs as tracker devices can alert when two or more banned individuals try to get together. While I believe in localism and returning power to local communities and agencies, I am also very afraid that we risk losing consistency in supporting victims by handing over these services completely. There needs to be an umbrella organisation so that, no matter where you live, the same platinum service is delivered to support victims and encourage witnesses to testify.
The annual three-year grant funding of £38 million to Victim Support, with its roots embedded in communities and supported by local volunteers, is to my mind a good thing. I shall be speaking next month at the first meeting of a victims’ alliance of charities and the support networks for victims of homicide brought together by Victim Support. I hope that everyone in this sector puts aside their minor disagreements and joins to make this a powerful force for good, sharing best practice, avoiding duplication and acting as a central source of comment so that reform of the criminal justice system can be better joined-up.
The Bill promises to tackle reoffending by young people so that the young offenders of today do not become the hardened career criminals of tomorrow. I recently visited the West Midlands to see a police initiative which is driving down anti-social behaviour by bringing young offenders and victims together to thrash out their differences in a safe, controlled environment. It is very early days but the initiative holds great promise and similar avenues of restorative justice should be explored. Success builds community trust in the police and empowers victims while exposing offenders to the suffering that they cause. This can stop minor bad behaviour escalating to dangerously high levels, as I know only too well.
Outrageous stories of foreign nationals abusing our hospitality while using human rights to stay and cause terrible harm to our citizens are shocking. The Bill promises to do what we all clamour for—remove them from our shores at the earliest possible moment and keep them out. Possessing a bladed article in a public place is already an offence. The new custodial sentences are welcome, but the message must be clear that no one should carry a knife in a public place without good reason; for example, for use in their job. It is the wrong message to send that unless someone threatens or endangers another it is okay to carry a knife. We must speak out loudly and impose harsh deterrents to reinforce the message to prevent anyone of any age carrying a knife. By setting an age limit, those under it will be coerced or bribed into carrying for their elders.
May I ask noble Lords to join me in conveying a huge thank you and get well soon message to the four brave police officers who were stabbed in the line of duty yesterday in north London? Our officers get up each morning, kiss their loved ones goodbye and walk into the unknown—a violent and unpredictable world. There is no guarantee that they will return unharmed, as this latest knife attack reminds us all. That is why we have to get knives off our streets, to limit the risk to them and us.
Finally, I want to comment on the review of the IPP sentencing to make this easier for the public to understand. I welcome clarity in sentencing laws. Victims need to know exactly how long offenders will be imprisoned. I hope this means that we see the end of a review of tariff at half-term stage for those convicted of murder and that instead they are subject to the new extended determinate sentence and will have to serve at least two-thirds of it behind bars before release. Victims must know that offenders are made to serve time and that there will be no automatic release before end of sentence for the most serious cases.
Sentencing, punishment, rehabilitation of offenders and the cost to the public purse of legal aid will be overhauled by this new Bill. It might not be totally perfect but it goes a long way to rid us of the current wrongs in the system and reassures the public that this Government will guard their safety and at the same time introduce common sense into new laws. Instead of being back-seat passengers, victims are at last being invited into the front seat, and even occasionally given the wheel, to enable them to take their rightful place on the journey. It is time that we were not treated as a meddlesome problem in the criminal justice system to be ignored, but included in discussions as part of the long-term solution. We have paid a high price for our ticket.
Lord Monks
My Lords, I declare an interest as a non-executive director of Thompsons Solicitors, which is probably the most experienced legal firm acting for workers in the personal injury and employment fields, and certainly the largest legal firm working with trade unions. That is enough of the advertising.
I am grateful to the noble Lord, Lord McNally, for affording me the opportunity to discuss my concerns about the Bill with him. A central concern relates to Part 2 which, if enacted, will undoubtedly make it harder, more hazardous and more expensive for many damaged workers to have access to justice. As a result, it will act as a major deterrent to applicants to apply for justice. A good thing too, some might say, including some employers and insurance companies. However, the losers will be the many victims suffering from injury or illness who are afraid to risk the expense of seeking redress.
In recent years, access to justice has been much encouraged by conditional fee agreements—the so-called no-win no-fee arrangements. These have certainly not led to an explosion of cases in the employer liability personal injury field. Employer liability claims are on a downward trend and fell between 2007 and 2011. There has been no noticeable surge in the compensation culture in this area. As the noble Lord, Lord Hunt, highlighted earlier, recently there has been a surge in road traffic cases, which are up 43 per cent to the very high figure of 791,000, 10 times the number of employer liability cases. I understand the Government's concern in the road traffic area, but that is no justification for making no-win no-fee arrangements in relation to employer liability and making access much harder for vulnerable claimants.
Conditional fee agreements were introduced to ensure that people who did not qualify for legal aid had an opportunity to instruct solicitors on a no-win, no-fee basis. Changes to funding, brought in by the Access to Justice Act, meant that from 2000 solicitors were able to make judgments about whether to proceed with cases with a degree of confidence that they would get paid; and, importantly by using the success fees that they recovered in cases that they won, they could fund riskier, less straightforward cases with worse odds of success. As the Bill is now, there will, at best, be a limited fund from success fees because they will be capped and it is a fund into which clients would have to pay from the compensation, if any, that they receive. We calculate that as many as 25 per cent of injured people whose cases would currently be run, and won, will not be able to find a lawyer willing to take on their cases.
The Bill is not making minor adjustments to the present system; it is scrapping the present system. Sections of society, other than the wealthy, will be frightened off pursuing cases. As the Law Society has argued, the other winner will be the insurance industry. I ask the Minister: is that industry preparing to cut premiums as a result of these substantial changes in its favour? They have given no such promises in the road traffic area, so those small and medium-sized employers who were in Ministers’ minds when they introduced the Bill had better not count on getting a better deal from their insurers.
Even at this stage, I hope that the Government will rethink their position. As the noble Lord, Lord Newton, said earlier, public finances may well not benefit. There could be a loss to the social security department in recoupable benefits, extra burdens on the NHS for the costs of care, and more people being reliant on benefits. Victims who win cases will have to pay a hefty slice of their compensation to lawyers, while many others will be deterred from taking cases at all. There is many a human tragedy, as we have heard today, behind all this technical talk of fees and so on. In today’s debate we have heard very moving stories about the victims of asbestos, from the Spinal Injuries Association, and other support and self-help groups. I ask the Government to look again at Lord Justice Jackson's two alternative packages, which would control recoverable success fees, and at the problems in the road traffic area.
I have one final point on legal aid. I would like to support points made by, among others, the noble Lords, Lord Newton and Lord Phillips, and the Chairman of the All-Party Group on Citizens Advice in the other place, that at a time when major changes are taking place in the welfare system, it is unwise to withdraw support for people who are challenging bad decisions. We heard the statistics on that earlier. I hope that the Government will urgently meet concerns in this area. There is a way forward that is more equal and effective than the current provisions in this Bill and I hope that we can persuade the Government to take it.
Baroness Linklater of Butterstone
My Lords, this has been a fascinating and important debate and I am honoured to be part of it. This is an enormous Bill, not only in its size but also its scope and aspirations. Of particular interest to me are the relative roles of prison and community sentencing in the future and how this will be managed. I agree with everything that my noble friend Lord Dholakia has said on specific aspects of sentencing policy and so will not repeat those arguments. I shall concentrate on Part 3.
The Lord Chancellor came into office to find our criminal justice system in a mess. There are soaring costs. The NOMS resource budget alone for 2011-12 is £3.679 billion—I thought they might have got the “b”s and “m”s muddled up, but apparently not; prison numbers are soaring and are currently around 85,000; and reoffending rates are soaring. Of those serving short sentences of a year or less, nearly two thirds will reoffend. Where children are concerned, the figure for reoffending rises to more than 71 per cent. This is the headline indicator of the failure to deal effectively with offenders in ways which help them to stop committing crimes. The whole country's needs, particularly those of victims, are not being met. The challenge is to cut costs and to try to make the system work better.
The Lord Chancellor's initial response in the Green Paper, Breaking the Cycle, recognised that short custodial sentences do not work, and he proposed instead the development of effective, tougher, targeted community penalties, which are much more successful at reducing reoffending, thus making society a safer place. He proposed making prisons work better by reducing the impossible overcrowding created by those serving short terms and allowing them to do what they do best, which is to deal with the violent, dangerous, prolific offenders, who are serving long sentences, from whom we need to be protected. He talked about a rehabilitation revolution and presented a coherent programme of legislative reform, which was very welcome and made many of us cheer.
Since then, there has been a move back from the clear, constructive focus on prevention, rehabilitation and the reduction of reoffending to giving punishment a more central focus. Hence the change to the last part of the name of this Bill from “the Prevention of Reoffending” to “the Punishment of Offenders” after it was first published and the Bill had to be reissued. I regret this because it injected an unhelpful, retributive and negative tone. From my earliest days of working in prisons, I have been told that not only was imprisonment the sanction of very last resort and for as short a time as possible, but that those who were sent to prison went as a punishment, not for punishment.
Despite this, I believe that the Bill could usher in a shift of focus, or emphasis, so that much of what is being proposed is constructive and could succeed in the core aim of reducing the number of short-term prison sentences, and thus reoffending, save money and protect the public. However, that will depend crucially on the work that will have to be done with sentencers in both magistrates’ courts and Crown Courts to generate understanding and, more importantly, confidence in the proposed community sentences and the quality and availability of these new tough sentences in the community. The decision on whether to use these alternatives remains with the sentencers. However, there is nothing in the Bill about the nature, range or expectations of the community sentences, which are to be alternatives to short sentences and on which the reduction of reoffending is predicated.
At a meeting with the Minister, Crispin Blunt, he was emphatic that there is no government money for this provision, but rather an expectation that payment by results will provide the answer. My noble friend Lord McNally did indeed refer to that in his opening remarks, but I have yet to find any detail in the Bill. Perhaps this is because this is an approach which is still only being trialled at the moment and that the success or otherwise is as yet unknown and unproved. The result will take at least two years to demonstrate, so the country will have to wait several years. This means we are indeed putting on hold the kind of revolution we hope to see. There is one much-heralded project at Peterborough prison, run by the prison, the private sector and voluntary sector partners. However, it has yet to demonstrate any definite outcomes, and is also based in the prison and focuses on finding prisoners jobs. I understand that at least 14 other prisons have plans of some kind in place. Mostly, however, the work—if it is to work—must be done in the community, on release, where the capacity to keep a job and sustain it will be the critical result.
I have the honour to be the patron of an excellent medium-sized, voluntary sector organisation called SOVA, which is also attempting to make such a PBR scheme work. It is very well placed to do so in terms of its knowledge and experience of working with offenders in the community. The problem is that for the first two years at least there is no return on its investment, which, as an organisation, is extremely expensive, because the payment only comes after two years, based on the result of reduced reoffending; this is of course a major gamble. There are in fact only a few agencies in the voluntary sector able to afford such up-front commitment. The voluntary sector has been the bedrock of community-based work with offenders and consists mainly of SOVA-sized organisations which will struggle and have to take on huge risks to deliver results. The field is left mainly to the few large voluntary organisations or the private sector who can afford to become players if and when they choose. These are the ones who have come into the criminal justice world through providing STCs—our child prisons—YOIs, some adult prisons, and escort services such as Serco or G4S. Meanwhile, the Probation Service, which provides the basic, statutory work with offenders in the community, is itself facing cuts and is very limited in its ability to participate—although I understand that there is a project on which it is working with NOMs.
How is it that on this very important and key element of policy, on which the reduction of the prison population is predicated, and which we all want to succeed, there so little explanation of how it will work, be managed, structured, co-ordinated, staffed, or delivered? I have searched the Bill without success. Perhaps the Minister can help me.
I welcome the Bill's aspirations in Part 3 as a positive first step in the approach to reforming our sentencing system and making it more fit for purpose, particularly in relation to community penalties including PBR, and the reduction of short-term prison sentences. Much will hinge on the nature and effectiveness of how these penalties are devised, how they command confidence—regarding sentences in particular—and show themselves to be truly effective. I sincerely hope that these aspirations will be realised.
Lord Borrie
My Lords, several participants in the course of this debate have referred to and quoted from the book by our late colleague Lord Bingham. If noble Lords will forgive one more quotation, he described the Legal Aid and Advice Act as one of the great but less celebrated achievements of the post-war Attlee Government. The noble Lords, Lord Pannick, Lord Goodhart, and others, made the point, following on from what Lord Bingham said, that legal aid is a service that the modern state owes to its citizens as a matter of principle. Lord Bingham went on to say that the closer a country comes to achieving the goal of expeditious and affordable dispute resolution, the better the rule of law is served. As several noble Lords, including the noble and learned Baroness, Lady Scotland, from these Benches, have already said, access to justice for all is essential to the rule of law.
These are powerful and persuasive sentiments. Because of the cost of legal aid—many noble Lords have rightly concentrated on this this afternoon—increasing, of course, in the 60-plus years that have passed since 1949, successive Governments and senior judges alike have promoted alternative remedies. The noble and learned Lord, Lord Woolf, in particular has promoted alternative dispute resolution procedures such as arbitration, mediation, more informal tribunal hearings, and alternative methods of financing litigation in the courts through conditional fee arrangements. Some of these are not appropriate in all circumstances, and I do not think that anyone is suggesting that they are. However, as people have worked through those proposals and as some of them have been implemented, we have come to see their value but also their limitations.
This Government, like the previous Government—and I certainly have no objection to this at all—are trying to reduce the costs of civil litigation. Many participants in the debate this afternoon have indicated serious doubts about the detail of the Bill because it very specifically limits legal aid for the most vulnerable and impecunious in society, such as those in need of advice on social welfare. Many people in this House, this week, next week and so on, will be involved in the most tremendous upheaval in welfare rights, and many individuals who may or may not be on welfare at the moment will have somehow to see whether they are eligible under the new legislation that will be in force very soon.
Many provisions in this Bill are counterproductive, as has been indicated, sometimes with detailed figures such as those given by the former Attorney-General, the noble and learned Lord, Lord Morris of Aberavon, and as Citizens Advice has pointed out as well. Judges have said many times that if applicants are unrepresented in the courts—and in the tribunals, which deal with so many welfare matters—they will be overwhelmed trying to cope with litigants in person. Trials that might have taken such and such a time will take much more time if litigants are not represented. The noble Lord, Lord Newton of Braintree, made a special point about this.
A seemingly minor change is a promised requirement that applicants must use the telephone as the only method of communication. Several people have put it as a mandatory requirement. Yet it must be clear to many people that for those with mental health problems or linguistic problems, the telephone is a more difficult method of communication compared with others.
The only other matter that I wanted to mention briefly relates to criminal proceedings. I do not think that it has been mentioned today; it is the provision that bail should be granted to a defendant where,
“there is no real prospect”,
that the defendant will be sentenced to imprisonment at the conclusion of the proceedings. But of course, as many people realise, bail is normally determined at the beginning of proceedings, and at that stage it is guesswork rather than any rational, intelligent observation that determines whether the proceedings are likely to end with a term of imprisonment. I understand that the Sentencing Council has criticised the Government’s proposals, saying:
“it will not be clear until the conclusion of the trial … whether the offence … merits a custodial sentence”.
So what is the point of this in determining whether bail should be given?
Finally, again on the subject of bail, the Opposition in the other place made a powerful case for the prosecution to have the right of appeal against a court decision to grant bail to an accused person. Jonathan Vass was given bail in a rape case in 2009, despite the fact that he had a very violent past. While on bail he murdered a woman who had earlier filed a number of complaints of rape against him. I understand that the Director of Public Prosecutions endorsed the desirability of a change in the law through a statement made by Parliamentary Under-Secretary Mr Crispin Blunt, and that favourable comments were made by the Government a few weeks ago in favour of the prosecution having the right of appeal against the granting of bail. I will be interested both in what the noble Lord, Lord Macdonald, will say shortly and in what the Minister will say in due course.
The Earl of Listowel
My Lords, I am prompted to speak briefly about the debate tomorrow on the Public Bodies Bill—and the amendments that are coming back from the other place—by what was said by the noble Baronesses, Lady Newlove and Lady Linklater of Butterstone, about the reoffending rate for young offenders, which is put at 71 per cent. Clearly we want to see that figure reduced. I draw noble Lords' attention briefly to the programme of change that the Youth Justice Board has set in motion in this area. Key to the effective rehabilitation of young offenders is the ensuring of good resettlement back into their home areas. The Youth Justice Board has worked with consortia of local authorities to develop programmes of work, accommodation, training and education for young people. It is early days, but one striking fact is that in the recent riots only one child in the programme was involved in criminal activity. I cannot tell noble Lords how many children are involved, but so far four large local authorities in the north-west of England have been pulled into the programme, which is now moving down to Wales. I hope that noble Lords will make time to listen to the debate tomorrow on amendments to the Public Bodies Bill—I apologise, the debate is in fact on Wednesday—because it will be germane to this debate.
I was grateful to the Minister for introducing the Bill in the way he did, and in particular for paying attention to concerns about the welfare of women and children. I am speaking because of concerns that have been raised by many bodies about the impact of the legislation on their welfare. I was grateful to the Minister for making clear that the Bill will not directly affect looked-after children in local authority care. I was also very pleased to hear some things that he said about the Bill's impact on sentencing, and about 17 year-olds. In the past they were treated—quite unacceptably—as adults, but now that situation will be remedied and they will be recognised as children while they are on remand.
I will comment on the rehabilitation revolution. It is perhaps important to bear in mind the success of the previous and current Governments in reducing the numbers of children coming into custody. There has been a 30 per cent reduction in the past three years in the number of children coming into custody. That is a very striking result. There has also been a 51 per cent reduction in the number of under-14s coming into custody in the past four years. Given that we have an exceptionally low age of criminal responsibility, and that such concern has been expressed in this area, it is very good news and one must pay tribute to the previous and current Governments for achieving those results.
Given the success that we have seen in the Youth Justice Board arena with these children in terms of reducing the numbers coming into custody, will the Minister consider again the recommendation made by the noble Baroness, Lady Corston, in her report on women in the criminal justice system? She recommended that there should be a women's justice board that would give appropriate focus to the smaller number of women, with their complex needs, in the criminal justice system. I understand that the decline in that area has not been sustained, and indeed that the numbers may be climbing again.
I return to the Bill and say that I share the concerns expressed in particular by the noble and learned Baroness, Lady Scotland. I will address briefly the important point raised by the Minister in previous debates regarding the disproportionate size of our legal aid system when compared with that of our international peers. Many noble Lords tonight spoke of the rule of law, which is perhaps dearer to us than to many nations. The Minister prompted me to reflect on differing national priorities. In Finland, 40 applicants for a teaching post are rejected for every successful candidate, and it takes five years to qualify as a teacher. In Denmark, a social pedagogy degree—the qualification for working with vulnerable children—is almost as popular as one in law or medicine. In France, the literature suggests that social workers have a high status and are held in high respect by the courts. In this country we are beginning to address the low status of social workers, teachers and others who work with our most vulnerable children. However, we have always prized the law. It has always been a high-status profession.
I sat in with a lawyer doing pro bono work at the Waterloo Legal Advice Service. He was advising a young, pregnant woman about her rights of tenure in her home. I was compelled to admire the clarity of reasoning he applied to the young woman's situation. In our culture it is vital to ensure that the weak have access to the law, because so many of their other advocates are absent or weak. Therefore, I share the deep concerns expressed by the noble and learned Baroness, Lady Scotland of Asthal, and other noble Lords. While I recognise the complexities of the issues that face the Government, I am very worried about how the raising of the threshold of access to justice will hit the most vulnerable.
I share concerns that were raised that many more litigants in person may clog up the courts. I worry that this will add to delays for children both in private and public family law, as the same courts are used for both. For example, has the Minister considered how the Bill may impact on the time it takes for children to go through the adoption process? Is he concerned that it may add to delay? I share the concerns raised about the likely knock-on costs of poor decisions or no decisions being taken, in particular by the family courts.
As I said, I am grateful for the care with which the Minister in his opening remarks addressed anxieties about the impact on children and women. Is he prepared to undertake an impact assessment of the Bill’s consequences for children and its compliance with the United Nations Convention on the Rights of the Child? I look forward to his response.
Lord Howarth of Newport
My Lords, it is a bedrock principle of a liberal society that there should be equality before the law. Every citizen, regardless of means, should be able, where they have a reasonable case, to have access to legal advice, assistance and, should it be necessary, representation in court. This is a matter of both constitutional and humanitarian principle—a principle that the Government are abandoning in the Bill.
Legal aid costs £2.1 billion. Is that too much to pay to make such a fundamental principle a reality in practice? Is it really unaffordable? It is no more than 1 per cent of social security expenditure, yet legal aid, too, is an indispensable part of the welfare state. Of course, where there is waste in legal aid, or unintended injustice in its working—as the noble and learned Lord, Lord Woolf, explained—it should be stripped out. However, when that has been done, I do not mind—and I suspect that most of my fellow citizens do not mind—how much tax we pay to fund legal aid.
Justice for All warns that more than 700,000 cases a year will lack legally aided support following the reduction of legal aid funding for advice centres and the removal from the scope of legal aid of housing, welfare benefits, debt, employment, immigration, education, clinical negligence and family breakdown. The organisations that form Justice for All—including the Law Society, Justice, the Disability Alliance, AvMA, Mind, the National Autistic Society, Gingerbread, Citizens Advice and Shelter—are experts, and I trust their evidence and their motives.
The Government take the view that legal aid is not justified in welfare benefits cases. Paragraph 4.219 of the Green Paper states that,
“because the issues are not generally of sufficiently high importance to warrant funding”,
and the tribunal system is so “user-accessible”,
“appellants are able to represent themselves”.
Not of sufficiently high importance for whom? I think that they are of very high importance for people in poverty. And how are people beset by the multiple, interlinking problems that the poor have to battle with and facing all the complexities of debt, the benefits system and the law to represent themselves? It is estimated that 58 per cent of those whose benefits cases will fall out of scope will be sick and disabled people.
Those served by law centres and other advice centres funded through legal aid include people who are ill and unable to manage day to day, have physical or sensory impairments, are learning disabled, cannot speak English, cannot read, have addictions, are old people with support needs or young people with support needs, or are refugees. Legal aid is to be taken away from people who are in acute difficulty.
The Government are legislating to remove legal aid from employment cases at a time when youth unemployment has passed 1 million and employment prospects are bleaker than they have been for a generation. Shelter anticipates that more than 50,000 housing cases will be unaided when legal aid is removed.
The removal of legal aid for clinical negligence is very worrying. The noble Lord, Lord Faulks, spoke powerfully about that. I ask Ministers to imagine the grief and the stress for a family in such a situation. Parents seeking legal redress and compensation in the interests of their damaged child have to battle not only with the distress and the practical difficulties at home that such an event creates but with daunting legal complexities, substantial costs for expert reports and the implacable resistance of the NHS to admitting fault. Your Lordships will want to examine rigorously the Government’s contention that reformed conditional fee agreements and the insurance industry will make up the gap.
Special educational needs are also removed from scope. Parents again face constant struggle and stress as they try to establish the rights of a child, ground down by the determination of so many LEAs to provide the minimum. If the parents' marriage should break down, adding new dimensions and intensities of distress to their lives, again the Government intend that they should no longer have access to legal aid to help them through the crisis.
The policy in the Bill on legal aid is not only indecent; it will not only create fear and suffering to save net, perhaps, £20 million or £25 million on legal aid for welfare cases and just £11 million for clinical negligence cases; it is also stupid. It will end up costing more to other government departments and to local government. Early advice and intervention prevent problems escalating to become more serious, complex and costly. The Howard League warns that:
“The logical conclusion of reducing legal aid is that … youth crime will increase and greater economic costs will be incurred further down the line”.
Through legally aided advice centres, litigation is actually averted, tribunal procedures are smoothed, ill health is prevented and children are saved from harm.
There is an ignorance and unrealism in the ministry's approach. Real life is messy and fails to fit bureaucratic categories. Citizens Advice has testified that,
“advising only on debts where a home is at ‘immediate risk’ is not practical, as most clients have multiple debts which must be addressed for them to achieve a sustainable financial position”.
The National Federation of Women's Institutes has noted that:
“To exclude areas of law such as housing and debt from the legal aid scheme denies victims of violence the support they need”.
Then there is the new obligatory telephone gateway to legal aid. My noble friend Lord Borrie asked questions about this. How are people with poor language skills, speech impairments or mental health problems leading to stress and poor concentration to explain themselves over the telephone? Clients need face to face contact with advisers. Advisers need to read body language, and build clients' confidence and ability to explain and understand. Poor presentations and poor advice will lead to poor decisions and further costs.
The exclusion of poor people from advice and legal aid comes when the Government are cutting local authority funding by 30 per cent; forcing cuts to Sure Start, social care and other local authority services that are crucial in assisting disadvantaged people to cope; cutting and capping benefits; making social housing tenure more uncertain; driving up unemployment through reckless cuts to public spending; and making it easier for employers to sack people.
The Ministry of Justice has failed to seek economies in the right places. The Law Society says:
“There is significant scope to make efficiency savings within the legal aid and the civil and criminal justice systems that will enable at least £400 million to be saved”.
It is not civil legal aid whose costs have been rising. The ministry is hitting the wrong targets. It is cutting the fees paid to legal aid practitioners by 10 per cent, yet legal aid lawyers typically earn only around £25,000 a year. The ministry's policy will also result in a 77 per cent loss of legal aid income to charities, which is essential to fund staff. Volunteers need professional training and cases need the continuity that only professional staff will supply.
Sixty per cent of appeals against the refusal to award disability living allowance, when the claimant is accompanied by an adviser, are successful. Appeals against the refusal of employment and support allowance have quadrupled in the last two years. Why are the Government penalising claimants instead of the DWP for the appalling quality of its decision-making? It has to be anticipated that the introduction of universal credit from 2013, affecting huge numbers of people, will be accompanied by a high error rate. Legal aid will be essential for the success of welfare reform.
At a time when we are seeing mass protests, which the Government should take very seriously, they are introducing a policy in this Bill that will drive more people to hold the view that politics, law and public administration in this country are unjust.
I had hoped that we agreed across the parties that in hard times, and indeed at all times, we should protect the weakest and the most vulnerable. Of course I do not believe that Ministers personally want to hurt anyone, but this policy of withdrawing legal aid, of hitting people when they are down, will be cruel in effect, and it is wrong.
Lord Macdonald of River Glaven
My Lords, as my noble friend Lady Linklater said a few minutes ago, this has been a fascinating debate, and it is a great privilege to speak in it. I listened with particular interest to the speeches of my noble friend Lord Phillips of Sudbury and of the noble Baroness, Lady Kennedy of The Shaws. I found myself agreeing with every single word that they uttered.
It is clear that the legal aid bill is high, but it is equally clear that Part 1 of the Bill, if it passes into law, will narrow access to justice. That is a quite inevitable consequence and in that sense it is surely a retreat. It is all the more essential then that the areas where access will be narrowed are carefully chosen and the most vulnerable, we would hope, protected. It seems that many noble Lords on all sides of the House feel that these important aims may not yet have been entirely achieved by the Bill so that if Part 1 passes into law unrevised, the pain will, on the contrary, fall disproportionately on the weakest and the most vulnerable. That cannot be the Government’s intention.
I want to address the question of domestic violence, which has already been spoken to by a number of noble Lords. When I was chief prosecutor some years ago, I saw the extent of the scourge of domestic violence, its impact on those who suffered it, who were mainly women, and its impact on the children, who usually witnessed it, many of whom would enter their own chaotic cycles later in life. We did a great deal of work with the police and other agencies to try to improve the response of criminal justice to crimes of violence committed against women and children in the home. The first lesson we learnt doing this work was that it is impossible to predict the responses of people who are suffering that sort of crime. They do not respond in a way that you can always predict. Sometimes their responses appear to be entirely out of kilter with what is happening to them. One thinks of women returning again and again to abusive partners. This first lesson which we learnt appears to have been forgotten by the drafters of this Bill, who completely fail to understand that the responses of people who are being beaten and abused by their partners will not fit into the sort of narrow tramlines that serve as a gateway to legal aid under Part 1. An inevitable consequence of the Bill’s approach to domestic violence is that more people—again, mainly women and children—will be trapped in more abusive relationships with no succour at all from our law. I venture to suggest to noble Lords that that is a situation that would bring shame upon our entire legal system.
It surely at the very least must make sense for the definition of domestic violence in the Bill to be the same as the tried and tested ACPO definition that has been used by the police and the Crown Prosecution Service and well understood by the courts for many years. It is a matter of very great regret that the definition of domestic violence in the Bill is narrower and, I have to assume, deliberately narrower than the definition used by ACPO and the CPS. I ask the Government to think very carefully about whether it is appropriate to have a narrow definition of domestic violence in the Bill so that fewer women who are victims of it will have access to the law and to the protection of the law, as will their children.
I want to address one other issue in the Bill because it seems to be another illustration of the application of the law of unintended consequences as it applies to the Bill. Clause 12(1) concerns criminal legal aid in the context of advice and assistance for individuals in police custody. The right of a prisoner to consult a solicitor in a police station is a fundamental protection. It has been described by the Court of Appeal as,
“one of the most important and fundamental rights of a citizen”.
The United Kingdom Supreme Court has endorsed this view saying that,
“on arrival at a police station, the detainee must be advised about his right to free legal advice”.
However, the provision of legal advice in police stations is not simply a protection for detainees; it is also a protection for the police. This was very well understood by Parliament when it passed the Police and Criminal Evidence Act into law under a Conservative Government in 1984. This legislation followed notorious police abuses in the 1970s and early 1980s, when mistreatment in police stations was common and confessions were regularly fabricated. One notable and inevitable effect of this misconduct was the growing unwillingness of juries to convict defendants on the strength of police evidence alone and widespread cynicism among them about confession evidence generally. This cynicism certainly meant that some guilty people escaped justice, adding insult to the injury of their victims.
It was in response to this that the Police and Criminal Evidence Act enshrined the right to legal advice in police stations into our law. The effect of this long-overdue reform was immediate and entirely beneficial. Of course it helped fundamentally to regulate conduct in police stations—and that was a good thing—but it also protected the police because it gave honest officers, the overwhelming majority, protection from malicious allegations of abuse. The universal availability of free legal advice in custody suites throughout England and Wales has improved beyond measure the quality of criminal justice and, along with tape-recorded interviews, improved the standard of prosecution evidence to the general benefit of the public.
Of course, a critical aspect of this legal advice was that it was readily available and free. This meant that its provision was swift, it was certain, and it did not tend to disrupt the flow of an investigation with additional layers of scrutiny and paperwork. However, Clause 12(1) raises the spectre of this all changing in the future, and changing for the worse, because it indicates the possible future introduction of means-testing before police station advice may be available. Leaving aside the extent to which the cost of administering means-testing often seems to outweigh any financial benefit occasioned by its introduction, it is very difficult to conceive of any environment less suited to its always rather clumsy operation.
We are talking about busy police stations, in the early stages of an investigation, possibly when the need to interview a suspect is urgent. However, if he wants legal advice, he cannot be interviewed until he has received that advice—after all, if he remains silent, that could be held against him at a trial. Are we really to say that no interview is going to take place before a means test is considered, no charge may be preferred until the financial forms are filled out and passed—mortgage payments, rents, wage slips, debts, assets and all the rest of it? It is—I choose my words carefully—a foolish notion. Who is going to calculate the cost of this in wasted time and disruption to the forensic process? How will any hoped-for benefit possibly compensate us for yet more bureaucracy in police stations at a time when we are supposed to be doing all we can to reduce it?
The truth is that suspects in police stations need legal advice and it is equally in the interests of the police that they should have it. It is certainly in the wider public interest too because appropriate and legally compliant behaviour in our police stations is the starting point for a fair and decent justice system worthy of public confidence. We would tamper with this gateway at our peril.
Baroness Stern
My Lords, I am very glad indeed to follow the noble Lord, Lord Macdonald, and wholeheartedly endorse his comments about free legal advice in police stations. However, I shall concentrate my remarks on the sentencing part of this Bill, Part 3, which contains many proposals that are broadly welcome.
The Lord Chancellor has said on more than one occasion:
“A sensible review of sentencing policy is much overdue”.
This followed his statement soon after his appointment that he was “amazed” that the prison population had doubled since he was Home Secretary in the early 1990s and now stood at more than 85,000, which he described as “an astonishing number”, which he would have,
“dismissed as an impossible and ridiculous prediction”
if it had been put to him as a forecast in 1992. He said:
“We need an enlightened and effective penal system that the public can both trust and afford to pay for … Too often prison has proved a costly and ineffectual approach”.
These are very sensible words that have proved a little difficult to put into policy.
It is perhaps worth noting, in support of the Lord Chancellor’s view, that it is a feature of England and Wales that our use of prison is high compared to similar countries, and our use of prison rises year by year, unlike similar countries. England and Wales have 154 prisoners per 100,000 of population; Germany, a similar, large, western country, has about 87. So we are about 70 per cent higher. Germany’s prison population has not been on a steady upward trend for the past 20 years; it has fluctuated around 90 per 100,000, and has gone down by 6 per cent since 2007. In England and Wales, the prison population has gone up steadily for the past 20 years and has increased by 6 per cent since 2007.
The Lord Chancellor is right to think that there are models of an “enlightened and effective” penal policy, and prison numbers can be reduced, especially since there is no evidence to connect imprisonment rates and crime rates; for example, in New York, the number in the city’s jail system has been going down steadily. In 2010 it fell below 100,000 for the first time since 1987, and at the same time there has been a big and much publicised reduction in New York City’s crime rate. Whether the legislation we are debating here this evening will take us in that direction remains to be seen, but it might be worth noting that features of the European countries with lower and stable prison populations are, to generalise, first, broad discretion for judges; secondly, strenuous efforts to keep young people out of the system and to divert lesser offenders; thirdly, strong, well resourced probation and social services; and finally, a recognised role in the system for victims of crime.
There is therefore much to welcome in Part 3 of this Bill. For example, there are provisions for greater use of compensation orders, which take victims into account. There is flexibility for the court in dealing with breaches—that is, more discretion for judges; greater discretion and flexibility in supervising community orders—and probation staff are likely to be more effective if they are given the opportunity to use their discretion and tailor what they do to the individual before them; more flexibility in imposing referral orders, trusting the court to do what is best for the juvenile before it; and reducing remands in custody, and, in particular, juvenile remands.
Obviously many of us who have spoken so often in this House about the injustice inherent in the IPP system will welcome the abolition of the IPP sentence, and also the proposal to reform the release test for prisoners serving IPP sentences. The Convenor of the Cross Benches, the noble Lord, Lord Laming, has received and passed to me a huge packet of letters from the families of current IPP prisoners—I believe that they have also written to the noble Lord, Lord Ramsbotham—pointing out the injustice of their continued detention. Many of them are without access to the facilities that would enable them to progress towards release. Can the Minister also tell the House in his response what the Government plan to do to deal with those currently serving IPP sentences?
Not everything that has been put before us in Part 3 of the Bill is so welcome. Curfews of up to 16 hours, with the length of curfew periods up from six to 12 months, seem to me neither sensible nor enlightened, especially for children and young people. The provision for mandatory four-month detention and training orders—that is, prison sentences for 16 and 17 year-olds—for threatening with a knife could bring another 200 to 400 teenagers into prison every year. It is not clear to me that that is sensible either.
I must end with a word about the legal aid aspects of the Bill, although I can see that the Minister feels he might well have heard enough about them. It is my experience when dealing with improving observance of the rule of law in countries where it is grossly deficient that the one measure most likely to create a more lawful, fair and democratic society is to give poor people access to justice and access to means of redress of abuses by the powerful or by the state. In a democratic society, people—whatever their social position—should be able to get wrongs righted and injustices rectified. So I am in wholehearted agreement with the very powerful points that have been made all around the House, calling for the Government to think again about what it means when a rich person can go to court and fight for his or her rights and a poor person cannot do so.
Lord Judd
My Lords, in opening this debate, the noble Lord, Lord McNally, in his engaging, candid way, asked us to be reasonable and accept that it was not possible for everyone who sought legal aid to have it. The trouble is, if I may say so to the noble Lord, that those with wealth can always have access. That is the basic contradiction and injustice in the system. We must not lose sight of that in our deliberations. Quite apart from the burden on judges, courts and legal systems as a result of inadequate legal aid, which will be caused by the absence of proper professional legal representations, we have to remember the indirect costs, which have been spelt out for other spheres of government and for the economy as a whole; that is, the costs of stress, mental illness, homelessness and the impact on economic performance by people who are so stressed or, indeed, broken.
My noble friend Lord Howarth was right. We have to remain focused on the people about whom this legislation is concerned. We have to focus on the widow, the single mother, the disabled, the chronically sick, the bereaved, the recently unemployed and the redundant. These people often are devastated, broken and bewildered. It is not just a matter of leaving it to them; they need particular help and assistance in their struggle simply to keep going.
The distinguished Howard League has raised key issues in approaching most of us, I think, about these deliberations. It has raised magistrates’ sentencing powers and has asked whether, if we are really serious about reducing the number of people unnecessarily in prison and ensuring adequate rehabilitation, the issue of committing people to prison should be in the realm of the Crown Court and not the magistrates. It has also raised the issue of curfews and extending them, as proposed, to 16 hours. What impact will that have on rehabilitation? For people who are expected to stay at home even longer, what will the situation really be? Will this assist them in becoming more well adjusted, productive citizens or will it make matters worse? The Howard League has suggested that perhaps there is provocation, in effect, in extending the hours, which makes the system almost certain to fail.
On bail, in 2009, 40 per cent of people remanded in custody did not go on to a custodial sentence. Almost two-thirds of those on remand in prison are accused of non-violent offences. The average waiting time is 12.3 weeks. What are the social and economic consequences of this? What about family disruption? Are we thinking through the implications of some of these measures?
The Howard League rightly concentrates, as have other noble Lords, on the position of women. In dealing with women, we are also dealing with children and families. Do we remember that the average distance of prisons away from home is 55 miles? Very often, that distance is faced by families with virtually no spare means available. Only 5 per cent—a shocking statistic—of the children of women in prison remain in the family home. More than 17,000 children in any year are separated from their mothers as the result of imprisonment. While on average women spend four to six weeks in prison on remand, 60 per cent do not go on to receive a custodial sentence, which is clearly contradictory and counterproductive. But what kind of logic is being advanced in favour of a situation of this kind? As my noble friend Lady Corston put it in her good report, surely we should have a situation in which women who are unlikely to be give a custodial sentence are never remanded to prison.
As a former director of Oxfam, I very much share the concern of my old organisation and other organisations working in the same sphere about the way in which wealthy companies have invested heavily in cheap agricultural land in poor countries. In many cases, the land sold is being used by poor families to grow food. Families are often forcibly evicted with little or no warning or compensation. Research by my old organisation has revealed that residents regularly lose out to local elites and domestic or foreign investors and to local corruption, because they lack the power to claim their rights effectively and to defend and advance their interests. There is concern that the changes in this Bill to the cost regime for civil litigation would make it almost impossible for foreign victims of human rights abuses committed by UK multinational companies to access justice in the United Kingdom.
There is real anxiety lest the abolition of success fees being payable by defendants will mean that claimant firms will not be able to run the risk of taking on cases against multinational companies. The financial risk of losing the case will be great. Even if they are successful, they may not be able to recoup all their expenses. This, of course, will be particularly pertinent when the claimants are from developing countries.
The Bill also proposes that the claimant, rather than the defendant, should pay for the “after the event” insurance premium, again reducing compensation recovered. In recognition of the significant expense and expertise required, clinical negligence cases are to be exempt. Surely human rights cases, which require similar levels of expense and expertise, should therefore be exempt. This will need our careful consideration. I think the example that I have just given brings home that, at an international level as well as within the UK, justice is indeed often the key to full mobilisation of people’s potential rather than simply handouts or grants.
Access to justice is, of course, the hallmark of a decent society. Lack of convincing access is a spur to social fragmentation, alienation, instability, or worse. To talk about all being in it together is provocative when it is patently obvious that, in effect, we are not all equal in the processes of the legal system and when too many people simply cannot get access to justice at all. In our deliberations, we must be vigilant lest overall this Bill aggravates that sad reality.
Baroness Mallalieu
My Lords, I must first declare two interests. I am a practising member of the criminal Bar with an almost exclusively legal aid practice. In addition, I have a daughter who has followed me into the same area of practice, despite my best efforts to stop her boarding a sinking ship. I have had 40 years’ experience of looking at the legal aid system from inside and outside, and in my seven minutes I will concentrate on Part 1 of this Bill.
Most members of the public give credit to the 1945 Labour Government for laying down the foundations of the National Health Service. However, few people outside this Chamber remember that that same Government introduced legal aid and that, later on, reforming Labour Lord Chancellors, notably Lord Gardiner and Lord Elwyn-Jones, built on those beginnings to try to ensure that no one in our country should be denied access to justice through lack of funds. They saw that principle, as I do, as a fundamental aim of a just and civilised society and part of our very constitution.
Since then, like the health budget, the legal aid budget has grown and grown as areas of law have developed and expanded. In the present climate, every area of public spending, including legal aid, faces cuts in addition to those that have already been imposed on criminal legal aid with very damaging consequences under the previous Administration.
The legal profession has not been guilty of special pleading. It entered into the consultation with the Government fully on this Bill and identified alternative cost savings of more than £350 million in the administration of justice, which the Government have so far chosen to ignore. Those proposals would have saved money yet retained the structure of the legal aid system without abandoning some of the most vulnerable to do-it-yourself justice. But instead, in Part 1 of the Bill, the Government have preferred to throw out the baby as well. Indeed, Part 1 might just as well be titled the “slash and burn” Bill, because it is destructive and in no way constructive. What it says is, “We’ll get rid of legal aid and maybe we’ll give a little help to some further mediation here or a bit of encouragement to some pro bono work there”.
If access to our health service was to be reduced to as many people and to the extent to which this Bill proposes to reduce access to legal assistance for those in need, there would be a public outcry and very probably a major demonstration taking place outside in Parliament Square today. We can all readily envisage a time when we or those close to us may need a doctor or a hospital, but few of us envisage needing a lawyer or having to go to court until it actually happens to us. Much of the outcry against this Bill, and there is one which will grow as its reality becomes better known to the wider public, comes from people who have seen for themselves those in need of help and the protection of the law, or with good and valid claims sometimes against government departments or large companies with big purses, who lack the means and the ability to pursue them without proper help.
Like others who have spoken, I hold no brief for ambulance chasing, for referral fees which should rightly go, or for excessive legal costs. For the reasons given by the noble Lord, Lord Thomas of Gresford, I spoke out against conditional fee agreements when they were introduced in this House, but I have to say now, “Thank goodness for them”. I am very concerned about some of the steps that are proposed in a later part of the Bill which are likely to close that avenue off to many people.
To remove legal aid altogether, saying that there will be nothing but self-help in so many areas of the law for those who cannot afford to pay, ultimately does not punish the greedy lawyers, who if they exist in this field will simply move on to other work, but puts the most needy outside the protection of the law. Strong cases have been advanced in a number of areas during the course of this very interesting debate. People have argued for the victims of domestic violence, for those involved in welfare claims and also in cases of clinical negligence. All of these are likely to fall outside the scope, as far as I can see, of any remedy. I would just say this. Clinical negligence is not alone. There are many other cases where medical reports and expensive preparations have to be made before a case can be begun, and I doubt very much that many solicitors will take up those costs unless the case is 100 per cent sure, which they seldom are.
As the noble Baroness, Lady Kennedy, said, we have in this country the best legal system in the world. Our judges are drawn from the top of the practising profession and they are of the highest quality. Our courts are not corrupt, they are relatively speedy and they have a worldwide reputation for fairness. But our justice system will be tarnished if it lies beyond the means of whole sections of our poorest citizens. On the figures I have heard mentioned, over half a million people a year who would now be eligible for help will be excluded. If people are left with no alternative but to grin and bear it or try to represent themselves, usually against a trained lawyer experienced in the field, where does that take equality of arms? I sat as a recorder for some years in both criminal and civil cases. A litigant in person was the one thing I most dreaded. The whole case took far longer as everything had to be explained—the procedure and the law, which usually I had no time to check. I had to help them with the evidence, with cross-examination and, indeed, with every aspect of the case. The rest of the list, which was always long, often went out of the window.
The Government’s own research shows that poorer outcomes, longer delays, fewer settlements and overall a greater likelihood of injustice occurs where someone is not represented. To take away legal aid in cases where at present there is no practical alternative and to leave so many of our poorer people without help in a time of need is to strike a blow at fairness itself. We may all have to stomach many unpalatable cuts in these difficult times but we would be mad to dismantle the very structure of one of the pillars of our constitution which goes to the essence of fairness in our society and respect for the rule of law.
When we come to the Committee stage of this Bill for my part I shall support the amendment which the noble Lord, Lord Pannick, indicated that he would put down and which the noble and learned Lord, Lord Woolf, indicated that he would support, which will place clearly on the head of the Lord Chancellor a duty to secure that legal aid is made available in order to ensure effective access to justice. If we cannot stop unpleasant and painful cuts being made, we can at least stop the pillars of our constitution being knocked down in this way.
Lord Shipley
My Lords, my noble friend Lord Thomas of Gresford indicated that I would say something about access to justice. My concerns relate to the planned reduced availability of legal aid and the impact on the voluntary sector, in particular on law centres, which helps those who lack the resources to buy their own representation. I wish to address the issue from two perspectives—first, law centres, and secondly, the court system.
Law centres are non-profit legal providers. In 2010, Newcastle Law Centre opened 550 casework files on a mix of welfare benefits, housing, immigration, asylum and employment—including discrimination—cases. The law centre works closely with and complements the work of Shelter and Citizens Advice and it meets a gap in provision. All 550 cases were for clients on low incomes who might not otherwise have received legal representation. In addition to those 550 cases progressed, Newcastle Law Centre gave some 2,000 instances of one-off advice to individuals—people who might manage themselves or could secure advice and help from elsewhere. In that year this law centre’s income was just £346,000 with nine full-time equivalent workers. Experienced solicitors were paid on average £29,000 a year and experienced caseworkers were paid £25,000 a year. That figure of £346,000 is made up of £206,000 from the Legal Services Commission, £60,000 from the Equality and Human Rights Commission, £65,000 from Newcastle City Council—I declare my interest as a member of that council—and other incidental income. Within this year’s budget there has been a 10 per cent cut in contract fees already.
In England and Wales there are 52 law centres and all of them have a legal aid contract with the Legal Services Commission. The Law Centres Federation estimates that up to 18 of the 52 law centres—that is just over a third—receiving Legal Services Commission funding would close as a consequence of this Bill. These 18 are primarily or entirely funded by legal aid work. The curtailment of the scope of civil legal aid hits law centres hard as it focuses on those areas in which law centres specialise—welfare benefits, employment, housing, debt and so on. In Newcastle funding will be reduced from £206,000 to £48,000 as a consequence of the abolition of the Legal Services Commission. This cut cannot be taken in isolation since the Equality and Human Rights Commission grant of £60,000 is disappearing as well. In total at least 63 per cent—effectively two-thirds—of Newcastle Law Centre’s income is set to disappear, which leaves us with the question of what will happen to those 550 cases and where those people will get the detailed help that they need.
Secondly, I want to address the issue of access to the court system. In December 2010 the Ministry of Justice announced the closure of 142 courts—93 magistrates’ courts and 49 county courts—out of a total of 530 courts in England and Wales. Although the business of these courts is being transferred to other courts, the court closure plans have caused the loss of experienced caseworkers and counter staff, while simultaneously making it more difficult to access a local court.
The proposed removal of public funding from private family cases—essentially, divorce, contact and residence disputes—will decimate the legal profession in these areas. Legal aid firms already typically work for only £50 an hour for this type of work. They provide excellent value for money in these critically important cases. Without their continued help, access to justice for our most vulnerable will be severely harmed and social cohesion damaged. Without that help, legal rights may not be enforced. With this modest but crucial income stream removed, many legal aid firms will withdraw from this work and many will go out of business altogether. If they do, there will be no going back. Having left this type of work, it is unlikely that firms will return to it should there be a later change of mind by government.
Initial access to proper matrimonial legal advice is often a gateway to other areas of social welfare law, including housing and debt. It may minimise conflict between separating parents and head off social services involvement and potentially expensive, harmful and disruptive care proceedings at much greater cost to the state.
Those members of the public who avoid the temptation simply to take the law into their own hands will be forced to attempt mediation. Should mediation fail, the parties will be forced, unrepresented, into a complex and technically difficult arena. While the judiciary are experienced in dealing with litigants in person, there is likely to be a flood of unrepresented litigants, which will severely impact on the courts’ business and lead to delay, lack of proper presentation of cases and potential injustice. The reduction in experienced court staff will exacerbate the situation, as there will be no one to help guide the public through the procedures and forms they need to complete to prepare their own cases. Cases which might have proceeded smoothly through the system will require direction hearings, with greater judicial input, for the judge to explain to the parties in layman's terms what is required to prepare and present their cases, and final hearings will be lengthened.
Budgetary cuts have already led to a reduction in the number of sitting days for part-time judges, leading to overlisting of cases, longer adjournments and greater inefficiency in the court system. Justice delayed is justice denied, and there is a very real and serious risk that those delays will only worsen when the flood of litigants in person starts to come through the system.
The removal of legal aid as proposed could have many unintended consequences. I hope that we shall be able during the passage of the Bill to make changes which guarantee effective access to justice for all. That means access to good-quality, face-to-face, free advice from a qualified person, and representation when it is needed for those without their own resources to enable them to pursue their right to equality under the law.
Lord Alton of Liverpool
My Lords, it must surely remain one of the highest ideals of any society, perhaps its very first duty, to provide equal and unfettered access to justice regardless of economic status. Justice is not a commodity to be rationed. Any legal system which depends on the amount of money that you have before you can seek redress forgoes the right to describe itself as just. Sadly, unless this Bill is significantly amended along the lines suggested by my noble friend Lord Pannick and by many others in your Lordships' House today, these proposals will be judged as a huge assault on access to justice.
Specifically, I want to speak about the changes to legal aid and to success fees, and the deleterious impact which these changes will have on victims of personal injury and on claimants who have modest means. I particularly regret that the Government did not accept amendments in another place to retain legal aid in cases of clinical negligence and have chosen to ignore significant and broad-based opposition, which includes the Judges’ Council and the Lord Chief Justice.
I take as my starting point the Bar Council's assertion that it is profoundly concerned about the impact that the Bill's proposals could have on access to justice, particularly for some of the most vulnerable members of society. It says that access to justice will be replaced by do-it-yourself justice; that access to justice will be seen as an unaffordable luxury; that there will be a concomitant and inevitable short and long-term decline in the availability of quality advocacy services. That point is underlined by the Law Society, which says that the Bill ensures that serious injustice will be done and that clients with physical or mental health difficulties or low levels of education may be unable to resolve their problems in the absence of support through legal aid.
Take the specific example highlighted by Tony Whitston of the Asbestos Victim Support Group, who vividly points out that mesothelioma sufferers will have to bear their share of risks by paying up to 25 per cent of their damages for pain and suffering in legal costs. That should be simply be unconscionable. Many learned jurists from Lord Bingham to Hartley Shawcross have been quoted in our debates today. Let me rely instead on the Greek philosopher, Thucydides, who proclaimed:
“Justice will not come . . . until those who are not injured are as indignant as those who are injured.”
For those who have contracted mesothelioma, or who are in the position of the lady who spoke with such dignity at a meeting here last week about the life which lies ahead of her in bringing up a brain-damaged baby, we in this House need to be indignant on their behalf; indignant at the prospect that recourse to law will in future be denied them; indignant that their damages may be swallowed up in meeting legal costs. Forcing mesothelioma sufferers—many of us who have been constituency Members of Parliament will have met victims, whose life expectancy is nine to 12 months from diagnosis—to surrender as much as 25 per cent of damages, which average about £65,000, because of austerity measures or charges of ambulance-chasing or compensation culture or the bad practice of some claims management companies, is cruel and unjust.
I would particularly like to draw the attention of the House to a case involving the president of the Liverpool Law Society, Mr Norman Jones; a case which ended in the Supreme Court and is known to the noble Lord, Lord Bach. Hugely significant in the development of the common law concerning mesothelioma, the judgment has given hope to many thousands of asbestos victims who probably would not be entitled to compensation had the Supreme Court appeal by the defendants not been dismissed.
The judgment in Sienkiewicz v Greif (UK) Ltd was given in the Supreme Court in March this year. Mr. Jones handled the action under a conditional fee agreement. There were CFAs for the County Court proceedings, the Court of Appeal and the Supreme Court. Norman Jones tells me that without the 100 per cent success fee payable under the CFAs, the risks of the handling this case would have been totally beyond his firm. Putting it bluntly, he says, had it lost, his firm may have been facing bankruptcy. It is not only the claimant who will suffer—so will many of their representatives. Small practices and single-handed solicitors working in disadvantaged cities and regions are likely to be the most badly affected by these proposals.
Donal Bannon, the director of the Liverpool Law Society says that Liverpool is one of the most deprived cities in Europe and that the impact of the proposed reforms will have a disproportionate effect there. I asked the Liverpool Law Society for more examples and it sent me several. They include a medical negligence case, a vicious-circle case involving an unemployed drug addict, where no one is willing to bear cost liability for an expert witness, and children's cases that they say would simply be out of the reach of anyone but the very rich without public funding. It says that the idea that mediation can resolve all these matters is delusional. One of its member solicitors says that if we want a society where only the rich can litigate, then we are certainly heading in the right direction.
This is why the Bill represents a huge assault on access to justice. Lord Justice Jackson stressed the importance of making no further cuts to the availability of legal aid, specifically in the case of medical negligence. He stressed,
“the vital necessity of making no further cutbacks in legal aid availability or eligibility … the maintenance of legal aid at no less than present levels makes sound . . . sense and is in the public interest ... On the assumption that it is decided not to maintain civil legal aid at present levels, the question may possibly arise as to whether any particular area of civil legal aid is particularly important and should be salvaged from the present cuts. My answer to that question is that of all the proposed cutbacks in legal aid, the removal of legal aid from clinical negligence is the most unfortunate”.
If we are right to be indignant about the removal of legal aid in cases of personal injury, spare a thought, too, for the impact of the Bill on children. The Bar Council says that 68,000 children and young people will be affected by the withdrawal of legal aid and that 54,000 fewer people will be legally represented annually in the family courts. The Children's Society, which works with more than 50,000 children a year, bears this out. It says that it is concerned that the changes will affect the poorest and most vulnerable families, including,
“children who will suffer as a knock on effect of limited access to justice for their parents or carers”,
for reasons such as,
“parental disability, language barriers, poverty and mental health issues”.
I have a non-pecuniary interest as patron of the National Association of Child Contact Centres which, over the past year, has worked with more than 9,000 families 15,000 children and delivered 30,000 hours of contact. Many of those who work in the centres do a wonderful job in helping families to settle their differences and move on, without the courts or lawyers being involved—something of which I know the Government would approve. However, NACCC has flagged up its concern that this Bill will result in a big increase in the number of self-referrals that it will have to deal with: It says that many will be inappropriate and beyond its mandate, resources or its capacity. It says:
“This in turn creates extra work in terms of gathering information, assessing that information and then arranging, monitoring and reviewing contacts. To make matters worse, all of this is happening at a time when many of our Centres are already dealing with record numbers of referrals and managing ever increasing waiting lists to access their services”.
The prospect is already having a disastrous impact. NACCC cites one co-ordinator who left a centre in Norfolk recently and who said, “I am a volunteer—the amount of work and the level of responsibility that goes with it is now simply too much”. The centre had been running for 15 years but has closed because no one else was prepared to take on that role of co-ordinator.
Whether it is a victim of domestic violence or abuse about which we have rightly heard a great deal today, the position of a remote indigenous people living in a rainforest seeking redress against a British company, the mother of a brain-damaged baby or a man dying of mesothelioma, the same principle of being able to seek the righting of a wrong must apply.
As the Bill currently stands, it will significantly further restrict the scope of legal aid, it could leave the United Kingdom in breach of our human rights obligations, it may well create a chaotic situation in our courts, put conditional fee arrangements out of the reach of most people and save a lot less than the Government have speculated. Above all, Parts 1 and 2 of the Bill fail the ultimate test: does the Bill ensure access to justice regardless of wealth or means? Clearly, the answer is no. There can be no talk of equal access to justice if it is becomes dependent on the amount of money a person has. It is about that that this House should be indignant.
Baroness Massey of Darwen
My Lords, in this far-reaching and detailed debate, I shall speak about my concerns for children, young people and families in relation to the Bill. I am surrounded by eminent lawyers and I am not a lawyer, but when I hear about the concerns of legal organisations and the voluntary sector, that reinforces my own concerns.
I remember David Cameron recently expressing a commitment to turn around the lives of the country's most troubled families. When I see what is happening in education, health, social care, welfare reform and now this Bill, those words seem empty. I know that the Minister is interested in children and young people, but can he encourage the Government to examine the impact of their Bills, individually and collectively, on the lives of children and families? Otherwise, we will pay for this in more ways than one. I wish the Government would look at children and families in a holistic way. They may reach better conclusions.
I turn to the Bill. The Bar Council has stated:
“Justice does not come at any price. The Government has opted for cut price justice, against the views of the overwhelming majority of respondents to its consultation on legal aid”.
The Bar Council points out, as have many others, that removing private family law from the scope of legal aid may cost the taxpayer more, not less. As the noble Lord, Lord Alton, has just said, there will be fewer people represented annually in the family courts, and more children and young people will be affected by the withdrawal of legal aid. In the case of victims and alleged perpetrators of abuse, children and young people could be cross-examined by the accused, with resultant threats to their welfare. The Family Justice Review has pointed out that protection for vulnerable witnesses exists in criminal, but not in family, courts. Many organisations are concerned about the potential outcomes of this.
The Interdisciplinary Alliance for Children points out that the loss of legal aid will increase the trauma of divorce and separation and disputes about children. Family courts and family lawyers can help with solutions to difficult problems in a child-centred way. Issues not resolved through such negotiations and mediation may leave parents struggling, and many of them will not take on that struggle. This could mean that parents will lose contact with their children, or a loss of protection for the child. The alliance has stated that this Bill is not child or family friendly and does not recognise the impact on children caught in the middle of parental disputes. The Bill fails to recognise the impact on people who have to represent themselves. It ignores the impact on victims of domestic abuse, as has been so eloquently expressed in the debate. I will not say much about this, except that domestic abuse can often impinge on children and set up cycles of abuse, particularly in relation to the behaviour of boys.
In my capacity as chair of the National Treatment Agency for Substance Misuse, I have often had contact with the Kinship Care Alliance. Family and friend carers often care for a child because of a crisis in the parental home; for example, death, drug or alcohol misuse, divorce, prison or domestic violence. It is estimated that there are around 300,000 children living with friends or family carers. Previous Bills have discussed the plight of such carers, particularly grandparents who may be impoverished by this extra responsibility of looking after children. Following consultation on the Green Paper, the Government announced that private law applications would be retained within the scope of public funding where a child is at risk of abuse, but not in other circumstances. That could be, for example, where lack of legal aid prevents a family or friend applying for an order to provide a permanent residence for a child.
The Bill as it stands could prevent family members taking immediate action to protect children. To get public funding to apply for a residence or special guardianship order, they will have to provide evidence of abuse. This could delay the child being given residence in a relative's home. There are other issues here, such as the 12-month time limit when a child has been in the care system or under a child protection plan for more than 12 months. Early intervention by family and friend carers in the cases of such vulnerable children is vital. I beg the Government not to introduce such restrictions to legal aid and ask the Minister whether he will meet me and representatives of family and friend carers to discuss this serious and urgent issue.
There is much concern about child poverty. About 2.6 million children in the UK live in poverty, 1.14 million of these in a household affected by disability. Cuts to legal aid for advice on entitlement and appeals for welfare benefits will work against the Government’s ability to deliver on their targets. The organisation Just Rights points out that it would cost only £10 million to protect current legal aid entitlements for children under 18, and £40 million for 18 to 24 year-olds. Some 41,000 children aged under 18, and 124,000 18 to 24 year-olds, accessed legal aid in their own right last year. These cases related to employment, debt, immigration, welfare benefits, clinical negligence and criminal injuries. Community legal advice telephone services helped more than 21,000 children in 2010-11. It has been estimated that each year more than 1 million 16 to 24 year-olds failed to get advice for their civil justice problems, with knock-on costs of around £1 billion. The Government say that they will open an exceptional funding scheme for legal aid. What exactly does this mean? Can the Minister offer some clarity?
There is a Private Member's Bill on trafficking led by the noble Lord, Lord McColl, to be discussed this Friday. Child victims of trafficking may have immigration claims that are not asylum claims and will therefore no longer qualify for legal aid. Trafficking cases are very complex and require expert legal advice and representation. These cases of children who have been abused, exploited or neglected should surely be within the scope of legal aid.
There are concerns from the Standing Committee for Youth Justice, the Prison Reform Trust, Liberty and the Howard League about the youth justice elements of the Bill. These have been discussed earlier so I will not go into them but I am concerned about the issue of 17 year-olds. I think that the Minister made reference to this earlier. Perhaps it has been resolved but I would like to hear more about the safeguards regarding youth cautions and 17 year-olds.
I close by going back to the important issue of legal aid. Resolution, formerly the Solicitors Family Law Association, expresses its extreme concern that under this Bill the poorest and most vulnerable in society will have reduced access to justice. This concern is shared by many noble Lords and was eloquently expressed by the noble Baronesses, Lady Stern and Lady Mallalieu, and the noble Lord, Lord Alton. Another concern that many noble Lords have is that removing this access could increase government expenditure. Noble Lords will see this as an imperative to re-examine parts of the Bill. We cannot leave families, children and young people in distress. That is cruel and uneconomical. I look forward to the Minister’s response.
Baroness Turner of Camden
My Lords, this is a very complicated Bill but it is obviously being introduced as part of the Government’s plan to cut costs. The problem is that it involves the possible loss of rights of poor and vulnerable people—human rights to which they are entitled as members of a civilised society. It has been suggested to me that the proposals contained in the Bill represent the most seismic shift in civil litigation in living memory.
The Legal Services Commission, which is concerned with the provision of legal aid, is to be abolished. The Lord Chancellor will now have a duty to provide civil and criminal aid, and in order to do so he will have a director of legal aid casework, who will, of course, have staff. Why it should be necessary to do away with one body and its staff and replace it with another is by no means clear. What is clear, however, is that there will be a range of services for which legal aid will not be provided. Most of these deal with the type of problems that can cause stress, trauma and often damage to ordinary people during their normal working lives. The Government seem to believe media accusations that we have become a “compensation culture” even though the noble Lord, Lord Young, who originally provided advice to the Prime Minister in these areas, said that this was a myth.
Much of the Bill has been justified by the claim that means other than legal action can resolve many difficulties. This is disputed by many organisations that have made representations to Peers on the Bill. Some of the areas likely to be adversely affected by the provisions of the Bill are family courts and legal aid casework. This is a problem because often the future of children may be at stake. Children are often the victims of family break-up. Actual domestic violence may be eligible for assistance, but the degree to which assistance will be available is not clear. Again, there are many problems because much domestic violence takes place in a family environment. I understand that local authorities have some responsibility in such cases, but, again, it depends on regulations and what these will be is far from apparent. Many of the problems involved have been fully explained by my noble friend Lady Gould of Potternewton.
Cases involving housing will not be covered, except where homelessness is threatened. Welfare cases, particularly disputes about benefit entitlement, are also unlikely to be covered. Citizens advice bureaux have already expressed concern about the provisions of the Bill. They have often been complimented by Ministers for the work that they do, much of which is concerned with debt counselling and welfare counselling. The benefits system is complicated and individuals often do not know what their entitlement is, and so they do not claim it. Then complications arise, with the necessity for claims to be pursued. However, the CABs are facing cuts in provision, to the extent of £350 million in the first year. They say that these cuts will interfere with their ability to do the job which they are appointed to do.
An issue which causes much concern is the failure to cover clinical negligence. Almost all the organisations that have made representations to us have raised this. The Bar Council has protested. Removing legal aid for clinical negligence would remove access to justice for the most vulnerable people. Legal aid for clinical negligence cases costs £17 million out of a legal-aid budget of £2.2 billion, so it is a relatively small amount of money.
Another area of concern is that of personal injury. Many personal injury cases are funded by conditional fee agreements, which are commonly known as no-win, no-fee. These normally allow for a success fee to be claimed by the claimant lawyer in a successful case and that is usually paid for by the losing defendant or the defendant's insurance company. A clause in the Bill will prevent the success fee from being recovered from the losing defendant and the fee will instead be taken out of the damages awarded to the injured person. An injured person will not therefore receive the full compensation to which he or she is entitled. It really seems as though the Government are anxious to make it as difficult as possible for an injured person to secure compensation for his or her injuries. Moreover, the Government's plan is to make injured people pay for some of their legal costs when someone else has injured them in the first place. As many such people are elderly or infirm that seems very unfair.
As far as I can see, employment cases are not to be regarded as eligible for legal aid. The Government apparently take the view that means other than legal ones are available; no doubt they are referring to the arbitration system. However, recently a government statement about employment law indicated that charges would be made to the dismissed employee before his or her case could be heard by the tribunal. Reference has been made to a fee of £1,000. The tribunal will not consist of lay representatives from both sides of industry but there will now be a judge sitting alone; in other words, a more legal system, but of course no legal assistance.
I hope that the TUC is paying attention to all this. Ordinary workers need the trade union movement more than ever. Unions have a record of successfully representing members and they also now provide a fairly comprehensive legal-aid service to members. But this is an unfair Bill and, unless we succeed in amending it, many people will suffer undeserved stress and trauma in incidents for which they have not themselves been responsible. We must do what we can to prevent that.
Lord Clement-Jones
My Lords, I declare an interest as a member of the Law Society and as a partner in an international law firm. Even so, I venture with caution into this arena, so I shall be brief, especially as so many excellent speeches have been made tonight. By background, I am a commercial lawyer, but I became involved in politics largely as a result of my experience volunteering in the early 1970s at the first law centre, the North Kensington Neighbourhood Law Centre set up by Peter Kandler, in the immediate post-Rachman era. I joined the Legal Action Group, founded in 1971 by my noble friend Lord Phillips, and thereafter I have taken a strong interest in the development of the law centre movement and the extension of legal aid into key areas of family law and social welfare. Until now, I thought that we had been making steady progress in ensuring that, where rights had been given, there would be adequate access to justice to enforce them, regardless of means. The contents of this Bill heavily lead me to doubt that belief.
I recognise that savings need to be made in the budget of the MoJ; the current legal bill is £2.2 billion. However, the extent of withdrawal from scope of legal aid is quite breathtaking and I believe it will put the clock back more than 40 years. We are told that more than 650,000 people will be affected in total. As we have heard, it seems that Lord Justice Jackson is not happy that these cuts are part of the package. They will cripple CABs and law centres and many will have to close. We are told that 18 out of 56 law centres are at risk and that they are already suffering from a 10 per cent cut in legal aid fees. My noble friend Lord Shipley has illustrated that extremely clearly. Granted there is planned to be some transitional support but, over time, the law centres will lose some 77 per cent of their legal aid funding. Do the Government think that we will all go back to volunteering in order for people to get the legal help that they need?
Furthermore, in the first instance, even where legal aid is available, the only initial recourse will be via a telephone gateway. This will badly disadvantage the more vulnerable, who will find the telephone much more difficult to cope with than a face-to-face meeting, as many noble Lords have said. This will save the princely sum of £2 million, we are told. All these cuts will fall hard on the poorest and most disadvantaged members of society, who are already being heavily impacted by government welfare reforms.
Contrast the contents of this Bill with the one line in the coalition agreement which says:
“We will carry out a fundamental review of legal aid to make it work more efficiently”.
What kind of mandate is that for the sweeping nature of this Bill and its changes to legal aid? As if that were not enough, as has already been said, the Lord Chancellor will have the right to omit further categories from the scope of legal aid by order, but not to add to them. What is the justification for these changes: the so-called compensation culture? As we have heard, the report by the noble Lord, Lord Young, said that this was a myth perpetrated by the national press. If the grounds are purely cost-cutting, why has the MoJ not taken more seriously the Law Society’s suggestions for savings of between £249 million and £384 million, and sat down to explore them? As we have heard, the impact assessments of the MoJ are not underpinned by any proper research into the unintended cost to the taxpayer and other government departments—indeed, the MoJ admits it. How can it cast doubt on the Law Society’s projections for efficiencies, procedural reforms, and cost-cutting in other areas, or the CABs’ claim of what the impact will be on them?
In many ways the most unfair and emotionally disturbing aspect of the Bill, however, is the proposal to do away with legal aid for clinical negligence except in exceptional cases. This is particularly because very ill and very injured children are often involved. I want to describe a typical case which has been cited to me by a well known firm of personal injury and clinical law specialists:
“Our client Felix was born at the Royal Surrey County Hospital in Guildford in 2002. He was born premature but healthy. Sadly his prolonged neonatal jaundice was not adequately and promptly treated, so he suffered severe brain injury and has cerebral palsy. He requires 24-hour care, including waking specialist nurse care at night. After his claim was issued at the High Court, the hospital admitted liability and has made damages payments ‘on account’ of the final damages settlement that we hope will be reached before the trial, fixed for next year. Felix can now be provided with the care, equipment and therapies he so desperately needs. His damages settlement will be strictly based on his needs, as well as the massive impact his condition has upon his family.
Felix’s claim is funded by legal aid. This meant that if Felix had lost his case, he and his family would not be liable for the costs of the Trust, and that they were able to instruct lawyers with the ability to deal with his complex claim. Under the new LASPO regime proposed by this Government, Felix’s family, who could not themselves have paid to bring a case, could only have brought a claim if they could both find a law firm willing and able to fund the investigation and running of Felix’s complex claim, and perhaps also pay for insurance to cover the risk of paying the Trust’s costs if the claim failed. Felix would also have lost a substantial slice of his carefully calculated damages to pay that part of his costs the Trust would no longer be obliged to pay. These same issues apply to many of our clients’ claims”.
It goes on to say:
“Compensation payouts are not lottery wins. They are calculated in great detail in an attempt to normalise the lives of both the injured and their families following traumatic events. They can provide for care costs, adaptations to accommodation, equipment such as wheelchairs and hosts, and vehicles”.
Firms in this field say that without legal aid, especially to pay for the early investigations and medical reports, and exacerbated by the 25 per cent cap on success fees, they will in general find it very difficult to act on a regular basis with a CFA for victims of medical negligence unless their chances of success are assessed as at least 70 per cent.
All for what? An estimated saving of £10 million. The NHS Litigation Authority said that removing legal aid for clinical negligence would undoubtedly cause NHS legal costs to escalate massively and increase public expenditure. The Minister may say that of course some exceptional cases will be funded if failure to provide funding would breach the applicant's rights under the 1998 Act—but he knows that this has been very narrowly interpreted by the European Court of Human Rights.
The one bright spot in Part 1 is the fact that specific provisions for legal aid for children with special educational needs and disabilities has been strengthened: but even here, it needs to be made clear that this will continue beyond 16 to the age of 25 and will cover more than a school setting.
In conclusion, we all celebrate the passage of the landmark Legal Aid and Advice Act 1949, which had such a major, positive impact on the enforcement by ordinary citizens of their legal rights. This Bill risks being remembered for another, more negative reason. I urge the Minister to listen to the voices in the House today, and those in Committee, so that we will be able radically to alter its worst features before it leaves this House.
Lord Rix
My Lords, I will put my weight behind those who oppose removing welfare benefits from the scope of legal aid provision. The point was put most forcefully by the noble Lords, Lord Phillips of Sudbury and Lord Howarth of Newport, and by other noble Lords. The expectation that people with a learning disability will be able to represent themselves at tribunals is thoroughly unrealistic, particularly as advocacy support will also be made more difficult to access. However, I know that many noble Lords have particular and forthright expertise in this area and I am reassured that any points I might make on the issue will be, or have been, more than adequately covered.
I will focus on other sections of the Bill, and in particular on issues around sentencing. It was notable from the exchanges in the Commons that this is a Bill of two halves. The first one concerns legal aid and the second concerns everything else. In this respect, only the first half of the Bill has been subject to any form of scrutiny. That is not to say that there has not been discussion and indeed progress on the issues of the sentencing and punishment of offenders. I wholeheartedly commend the Government on announcing their intention to equalise the sentences given to perpetrators of disability-motivated murders from 15 to 30 years. This is a vital step if, at long last, we are to view disability hate crime as a serious issue. I know that it has significant support on all sides of the House and throughout many organisations, 21 of which have signed an open letter to the Secretary of State for Justice endorsing the proposal.
Mencap’s Stand by Me campaign—I declare an interest as president of the Royal Mencap Society—urges that disability hate crime should be tackled at the earliest opportunity. While I recognise the positive roles that the Government are playing with regard to the issue, it is important that Ministers take the opportunity to recognise the many challenges that remain. Disability hate crime happens on a number of different levels. Murder is one such level, but it applies equally to a spectrum of abuse from name-calling to physical violence. This is why I hope to use the passage of the Bill to put forward the case for disability hate crime to continue to achieve parity across all aspects of sentencing.
For example, issues still exist around the enforcement of Section 146 of the Criminal Justice Act 2003, which makes provision for a sentence uplift for any crimes in which disability is deemed to be a motivating factor. Although the provision exists, the requirement for joined-up work by the police, the Crown Prosecution Service and the courts to implement the sentence uplift means that it is very rarely used. Additionally, the Attorney-General's power to review sentences that he or she considers “unduly lenient” is an issue that requires great consideration. This discretionary power applies only to particular types of offences, including crimes against the person that are racially or religiously aggravated, but not including many hate crimes against individuals on the basis of their disability. Given that disability is a protected characteristic in Section 146 and, I hope, soon to be in Schedule 21 to the Criminal Justice Act, this seems to be a perplexing anomaly that creates an inconsistent picture about the seriousness with which disability hate crimes, at all levels, are treated.
Unfortunately, limits of time dictate that I cannot raise further points about which I have concerns in any great detail, particularly the treatment of people with a learning disability in prison. According to the Prison Reform Trust report No One Knows, published in 2007, between 20 and 30 per cent of,
“offenders have learning difficulties or learning disabilities that interfere with their ability to cope within the criminal justice system”.
However, the identification of people with a learning disability in the criminal justice system remains a complex area and there are currently no effective tools in place to measure the situation accurately. This means that many learning-disabled offenders are not accessing the appropriate support or services that they need and, equally, that provision is often not made by police and other public bodies to account for the potential reasonable adjustments that this group might require while in the system.
Provisions around employment in prisons, changes to conditional cautions and the need for accessible information to be available to individuals at all stages of the system are particular priorities. Indeed, I believe that it is essential to provide access to justice for people with a learning disability, no matter on which side of the criminal justice system they find themselves. I hope that the Minister will meet me and other noble Lords before Committee to try and move matters along towards a satisfactory outcome. I shall wait patiently until the end of this rather lengthy session in the hope of an affirmative answer, even though, as I am approaching my 88th birthday, it is long past my bedtime.
Lord Collins of Highbury
My Lords, this Bill covers a wide range of issues. The only common thread is that they all come under the auspices of the Ministry of Justice. However, I detect a more disturbing theme after listening to the debate today, which is that those who are most vulnerable in our society end up paying the price for these changes. Because of the time constraints on us today I have little alternative but to focus on one specific area of the Bill, Part 2, on litigation and the funding of costs.
We often hear, and we have heard today, of the so-called “compensation culture”, fuelled by media stories about individuals receiving large compensation payments, constant adverts in the media offering the promise of a handsome settlement if they claim and businesses fearing litigation and being subject to expensive insurance premiums. However, as many of my noble friends have pointed out today, the noble Lord, Lord Young, noted that the problem is one of perception rather than reality.
In early 2010 Lord Justice Jackson recommended radical changes to the system to address this problem. Unfortunately, the view of many victim support groups is that he relied heavily on information from the liability insurance industry but took very little evidence into account from the claimants’ point of view.
The Government’s subsequent Green Paper, aimed at implementing the Jackson recommendations, reflected this one-sided approach by stating in its introduction:
“we are endeavouring to ensure … that unnecessary or frivolous claims are deterred; and that as a result costs overall become more proportionate”.
Many people suffering from diseases and injuries were naturally outraged at the suggestion that they make frivolous claims or that they should suffer because some people might do so. They feel that they are being denied access to justice because of the actions of others.
In publishing their policy plans following the consultation, the Government continued to ignore practically every submission on behalf of claimants. My fear is that the Government are using a sledgehammer to crack a nut, especially in the light of other developments since the Jackson report was published. I suspect this is why the impact assessment contains so little data in support of their arguments. Past figures are of little use when a fixed capped costs regime, including success fees, operates under the RTA fixed-cost portal. Road traffic claims are 80 per cent of all personal injury claims, so only a tiny proportion of personal injury cases will not be subject to fixed costs. The cases that will be affected are those that are of higher value and greater complexity. This one-size-fits-all approach imposes a form of collective punishment on those who are innocent victims and who are lumped in with trivial claims and dishonest claimants. Personal injury claimants are being used to discipline solicitors to force them to keep down their costs. To impose, as we have heard today, more stress and anxiety on people who suffer serious industrial diseases is simply heartless.
Who saves from these proposals? Clearly the insurance companies do, but whether such savings are passed on in reduced premiums is a moot point, as my noble friend Lord Monks pointed out. Who pays? While the cost of litigation will be reduced, what will the cost to justice and fairness be? One of the many quotations I received that moved me was from someone who through no fault of their own is now suffering from exposure to asbestos. They said:
“How can this be morally correct? To make in my case, the most heartbreaking time of my life and the family, much harder to bear. My case has not reached court yet ... Being diagnosed was a big shock. To then be expected to pay legal costs from any compensation that might be awarded adds yet more worry that is not needed”.
On the question of justice, I think two quotations are incredibly relevant:
“Compensation just means that money worries don't compound a very difficult and upsetting situation. It also acts as a deterrent to those who flout the laws on asbestos”.
“Guilty defendants should pay all the costs making companies now think about health and safety of its employees and the financial implications not only now but in the future”.
This last point is critical when you see that, despite our health and safety laws, many industries have an appalling record for accidents.
Finally, who are the losers? Despite the savings to the insurance industry, the changes will actually cost the taxpayer rather than save any money. In a paper shortly to be published by London Economics, Moritz Godel and Dr Gavan Conlon show that while the direct savings attributable to the Jackson proposals are substantial, estimates based on public data suggest that they will be outweighed by direct and indirect costs resulting in a sizeable net loss to the Exchequer of £70.2 million per year. The main sources of loss are tax and the recovery of payments from public bodies resulting from PI claims. So, on the behalf of the real people behind Britain's dreadful industrial disease and accident statistics, I plead for the Government to think again and put fairness and justice first.
Lord Gold
My Lords, the Bill proposes many sensible changes to the civil justice system, although this debate has highlighted some serious issues of disagreement, particularly in relation to legal aid. I was certainly heartened and encouraged by the Minister’s comments at the beginning of the debate that he is here to listen and I hope that he will be sensitive to some excellent speeches that we have heard this evening. Today, perhaps because I am looking for safety, I am going to concentrate my remarks on Part 2 of the Bill, which deals with litigation funding and costs, a subject of which I have some knowledge. I feel guilty to say that I have very little knowledge of legal aid.
At the outset I formed a somewhat simplistic view of the Bill—not the easiest thing to do, as it happens. Accepting that some reform of the legal aid system was required to reduce the high financial burden on taxpayers, it seemed to me that in order to continue providing access to justice to all, which is certainly desirable, one answer was to encourage greater use of private funding through conditional fee arrangements and “after the event” insurance to plug the hole left by the reduction in legal aid. Accordingly, it did not sit well with me that in Part 2 of the Bill, which largely seeks to implement Lord Justice Jackson’s recommendations, private funding was being limited through the abolition of the recoverability of success fees, which has been the cornerstone of conditional fee arrangements and of ATE insurance premiums. Surely, I thought, what we should be doing is making it easier to fund litigation privately so that any reduction in legally aided cases would to some extent be alleviated.
Many commentators on the Bill, including the Bar Council and the Law Society, have expressed grave concern that the effect of these proposals will be to limit access to justice as many claimants who cannot obtain legal aid will be reluctant to risk losing and having to pay their own legal costs as well as those of the other party. Indeed, the Law Society goes sufficiently far as to suggest that the ATE market is likely to collapse. Having reflected on these submissions, I am much more sanguine and believe that the negative predictions of the system collapsing are somewhat exaggerated. In practice, a claimant who has the benefit of a conditional fee arrangement and after the event insurance may well not be required to pay anything towards the cost of the litigation. We have heard a lot about that today. Whatever his own costs, he may well not have to bear anything at all.
There has to be some merit in the action in the first place, otherwise neither the lawyers nor the insurers would be prepared to fund the claim. However, in assessing whether to agree to offer a CFA and ATE, I am sure that some account is taken of the effect that such an arrangement is likely to have on the opposing party when it is known that the claimant has a free run to trial and no risk of having to pay any costs whatever the outcome. Even the toughest of defendants will realise that there may be commercial sense in settling with such a well funded opponent.
The Government’s proposals seek to remove the ability to recover either the success fee or the premium for ATE insurance. Instead, it is proposed that on a capped basis both the success fee and the insurance premium must be financed from the damages award that is made. We have had some criticism of that today from many noble Lords. To help compensate the claimant for this financial burden, the Government propose that damages awards should be increased by 10 per cent. However, that will not be sufficient to bridge the gap. Some critics say that this is unfairly eating into the compensation being awarded to a claimant. The noble Baroness, Lady Turner of Camden, made that point very clearly and very well. The result, of course, is that victims will no longer receive 100 per cent of their compensation. A second complaint, as I mentioned earlier, is that the ATE insurance market is thought likely to collapse. Thirdly, the legal services market is thought unlikely to be willing to absorb the greater losses that cases of lower value, higher risk or greater complexity would present. Solicitors will be disinclined to take on anything but the most winnable cases.
I now want to compare the position of these claimants with that of litigants who receive no financial aid and have to finance their claims themselves. First, one can be sure that self-financing litigants do not usually risk having to pay their opponents’ costs by bringing claims that do not have a good chance of success. Those who pay are more cautious than those who have no risk, or, to be somewhat colloquial, have no skin in the game. Secondly, as the noble Lord, Lord Hunt of Wirral, who is sitting next to me, pointed out—what seems like many hours ago—the victor in civil litigation never recovers all of his costs. That is so, even when so-called indemnity costs are awarded. As a norm, the winning party may recover something in the order of 60 per cent of his total bill. He has to finance the balance and he has to do that from the damages awarded. In other words, the successful self-financing claimant is not able to keep for himself the whole of his damages award. A proportion of it will go to his solicitors to bridge the gap between the solicitor’s bill and the money recovered from the losing party. Why should litigants who enter into CFAs and take out ATE insurance be in a better position? Why should they not give up some part of their award to pay the costs?
Finally, are the proposals in the Bill likely to bring down the ATE insurance industry? I do not think so. First, I believe that the ATE insurance market is more resilient than many fear. I do not know the figures. None of those writing to me—I have had many letters and e-mails—has indicated how much money is being made by the ATE insurance market, but I suspect that it is rather a large figure. If I am right, there will be room for the insurers to swallow some of the cost by reducing their premiums and thus reducing the cost that claimants have to contribute from their damages award. It is a question of finding the right balance. I would hope that, with a little pressure, we could move in the right direction.
For all of these reasons, I believe that what the Government are seeking to achieve in the Bill, so far as funding is concerned, should be supported. The present system does not achieve the right balance. I fear that the availability of CFAs and ATE insurance has encouraged some, who otherwise would have been wary of litigating, to bring claims on the basis that they have nothing to lose and everything to gain. I suspect that a number of claims would not otherwise have seen the light of day. That is not to say, of course, that these claims lack some merit. Indeed, if one is to give access to justice to all who want it then theoretically we should actively pursue a course that allows such claims to be brought even if, ultimately, they fail. However, asking taxpayers to fund claims that non-funded claimants would not themselves bring because they are too speculative and therefore risky is not the answer.
Our legal aid bill in this country is too high. As the former Justice Secretary, Jack Straw, acknowledged at the beginning of 2009,
“legal aid per head in England and Wales is higher … than in any other country in the world, including common-law countries”.—[Official Report, Commons, 26/1/09; col. 28.]
As the noble Lord, Lord Clement-Jones, said just a few minutes ago, the legal aid bill is now £2 billion a year.
As for outside funding, I suspect that this will be harder to obtain in smaller cases where solicitors and ATE insurers may calculate that it is unlikely that they will recover a sufficiently high figure to cover the costs and provide even a partial success fee. In truth, it may well be that these smaller cases are not financially viable unless supported by legal aid.
The Government’s answer, which I wholly support, is to encourage greater use of mediation. If the parties can be persuaded to mediate their claims at an early stage, perhaps before litigation has commenced and substantial legal costs have been incurred, there could be considerable benefit to the parties. It is far better for them if moneys are used to settle the dispute rather than to be spent on lawyers’ fees. Indeed, in some cases, the parties themselves may mediate claims without lawyers being instructed. With the right encouragement to mediate and help from an experienced mediator who ensures that each party is helped through the process and treated fairly, I envisage that many disputes will be settled at a far earlier stage than is the case once proceedings have been issued and entrenched positions are taken.
I should declare an interest in that I sometimes sit as a mediator, but not in cases of the size that we are discussing today. My experience is limited to dealing with large civil cases where mediation usually occurs late in the day after considerable work and costs have been incurred. If the Government’s present proposal of encouraging mediation is to succeed it is imperative that it happens at an early stage before the costs have been racked up.
There is much detail in this Bill to review in Committee but I hope, as I said at the start of this speech, that the Government will be sympathetic to some of the very moving speeches that we have heard today.
Lord Faulkner of Worcester
My Lords, at this late hour I do not intend to detain the House for long and shall concentrate on just one issue. In Committee, I intend to table two amendments to Part 3, Chapter 8, to amend the Scrap Metal Dealers’ Act. The first would have the effect of making cash transactions in the buying and selling of scrap metal illegal. The second would introduce criminal charges for theft of scrap metal which take into account aspects of the crime other than the value of the scrap metal stolen.
Subject to final guidance from the Public Bill Office, which has been extraordinarily helpful to me thus far, these two amendments would add scrap metal theft to the offences listed in Chapter 8, joining knife crime, dangerous driving, squatting, and force used in self-defence. Given the huge public outcry at the prevalence of scrap metal theft, I hope that, given the way that this Bill is structured with the four offences already listed in Clauses 128 to 131, the Government will support what I am proposing. If there were ever an issue where the universal refrain is “something must be done”, this is it.
I invite the House to bear in mind that ACPO puts the national cost of metal theft at £770 million. The problem is particularly acute on the railways—as the noble Earl, Lord Attlee, knows well and I am delighted to see him in his place—where signalling cable theft caused 16,000 hours of passenger delays in the past three years. I am told that this has now reached epidemic proportions with eight actual or attempted thefts every day. Metal theft from electricity networks rose by 700 per cent between June 2009 and June 2011. Other examples are lead from church roofs, manhole covers, telephone wire, and, most despicable of all, brass plaques from war memorials. Almost no aspect of our national life is escaping.
I am not saying that my amendments will provide the complete solution, but they would undoubtedly help. The move to cashless transactions is seen by all the interested parties as an essential step in the process of getting this business under some sort of control. Introducing his Metal Theft (Prevention) Bill in the other place last Tuesday, Mr Graham Jones MP said that he had been told by the industry that,
“scrap metal is a £5 billion industry, with an incredible £1 billion estimated to be exchanged in cash payments”.—[Official Report, Commons, 15.11.11; col. 709.]
As an indication of what we are up against, I would draw your Lordships' attention to a giant screen advertisement at West Ham United's football ground, which was seen on 27 September and which, I believe, is there on a regular basis. It says, in huge letters, “We want your scrap for cash”, followed by three exclamation marks. All that was missing were the three words “No questions asked”. So my first amendment will deal with cash transactions.
The second will provide for a sentencing regime that relates to the consequences of a crime, not the value of the metal stolen. So if the cost to the community in terms of, for example, passenger delays on the railway is £250,000, caused by the theft of signalling cable worth only a few hundred pounds, that much higher loss would be taken account of in any penalty imposed. I suspect that particularly unpleasant metal theft, like the brass plaques from war memorials, could also attract exemplary penalties.
I have already given notice of my intention to introduce these amendments to my noble friend Lord Bach, to the government Chief Whip and to the noble Lord, Lord Henley. I have no wish to score points on this issue. I just want the Government to get on with it and for the House to approve the necessary amendments to this Bill.
Baroness Doocey
My Lords, I wish to focus on the impact that the proposed changes to legal aid provision will have on people claiming disability benefits. The welfare benefits system is complex and, despite the best efforts of all involved in a claimant's initial application, mistakes are frequently made. More than half of all welfare benefits funded through legal aid relate to disabled people, and the legal aid system enables them to challenge decisions made about their lives and their income.
To pursue an appeal, a claimant must have at the very least a working knowledge of the rules for benefit eligibility, which are set out in a range of different regulations. The complexity of the extensive legal precedents determining the criteria for being,
“virtually unable to walk”,
is just one example where professional legal advice is invaluable to anyone appealing against a welfare benefit decision.
The recent report published by the disability charity Scope, Legal Aid in Welfare: The Tool We Can’t Afford to Lose, explains the challenges for claimants negotiating the complex appeal process unaided. The report notes that, between October 2008 and February 2010, of the 60 per cent of appeals in which disabled people were eventually successful in receiving employment and support allowance, the claimants initially had been deemed to have no factors affecting their ability to work. This underlines the importance of disabled people being able to have the tools necessary to appeal benefit decisions and get the right level of support.
Quite apart from the difficulties that the Government’s proposals would create for disabled people, I fear that the Government are making a rod for their own back. Central to the welfare reform programme is the desire to get more decisions right the first time round, reducing the necessity for a large number of appeals. Currently, 40 per cent of cases taken to appeal in relation to employment and support allowance decisions are upheld, so the Government's aim is laudable. However, the benefits system will remain complicated for large numbers of disabled people as well as for Department for Work and Pensions decision-makers; and incorrect decisions are likely to continue to be made relating to the benefits and support received by disabled people. Indeed, in the words of the Employment Minister overseeing the Welfare Reform Bill:
“There will always be decisions that we get wrong the first time round, however hard we try to perfect the system”.
It is worth noting the ambitious scale of the Government’s welfare reforms. The replacement of disability living allowance with the new personal independence payment will affect 3.2 million disabled people. The migration of disabled people from incapacity benefit to employment support allowance or jobseeker’s allowance will affect 1.8 million people, and the transition to universal credit during 2013-17 will affect a reported 12 million people.
When employment support allowance was introduced in 2008, there was a fourfold increase in appeals in the first year and nearly 200,000 appeals in the second year. So with a reform on this scale it is almost inevitable that there will be an increase in the number of inaccurate benefit decisions and that disabled people will need legal advice to challenge these. I share the Government’s desire to reduce the number of appeals against welfare decisions. However, this reduction must not happen because the loss of legal aid prevents disabled people challenging decisions.
I also have serious concerns about the impact that withdrawing welfare benefits from the scope of legal aid will have on the tribunal system. It is almost inevitable that the number of litigants who appear in front of a tribunal without receiving proper legal advice will increase, as will the backlog of cases facing the system itself. Legal aid undoubtedly helps individuals to navigate the tribunal system. Relating medical evidence to conditions of entitlement can be technical and beyond the understanding of most people without legal advice. I would also suggest that legal aid provides excellent value for money when compared with the cost of a tribunal panel, which is nearly twice as much as the fixed fee per case for legal aid.
The Government want to get more disabled people into the workplace so that they can lead increasingly independent lives. It is therefore essential for disabled people to receive tailored, appropriate support in order to help those who can get into employment. If disabled people are placed on incorrect benefits as a result of an incorrect decision that they cannot effectively challenge, they will not be able to access this support. I will give an example. An individual who is wrongly placed on jobseeker’s allowance, who should be receiving employment support allowance, will not have access to the specialised work programme or work choice that would support them into employment. Without this support, it is likely that such an individual would be unable to find work and would remain on jobseeker’s allowance for a longer period of time, perhaps even incurring sanctions. Indeed, the Government’s own research shows that many disabled people find the support provided by disability living allowance vital in ensuring that they can stay in employment and close to the labour market.
Without legal aid to allow disabled people to challenge incorrect decisions effectively, it is inevitable that more disabled people will find themselves further from the workplace, receiving incorrect benefit awards or lacking support to find employment, and therefore the Government’s intention to get more disabled people into employment will be undermined. It is my intention to return to this issue when we reach the Committee stage.
Baroness Lister of Burtersett
My Lords, I apologise that I have not been able to be present for much of the debate, but it would have meant absconding from the salt mines of the Welfare Reform Bill in Grand Committee, where I had an amendment down. In fact, I see the two Bills as being intimately connected, not least because what the Government herald as the most fundamental reform of social security for 60 years, to which the noble Baroness, Lady Doocey, has just referred, will coincide with the removal of social welfare law from the legal-aid scheme—a double whammy, for sure. I shall focus on this in my remarks, although I am aware that there are many other aspects of the Bill which are causing concern, such as its implications for children and young people, including immigrants, women, asbestos victims, tenants and squatters, who will be unnecessarily criminalised. According to the Law Society, the provisions in Part 1 represent the most profound change to the structure and nature of the legal-aid system in England and Wales since it was set up in 1949. Whole categories of law will be removed from the scope of legal aid in an approach that the Law Society considers to be fundamentally misguided.
Also in 1949 TH Marshall delivered his groundbreaking and influential lectures on citizenship and social class in which he discussed the Legal Aid and Advice Act as an example of a social right of citizenship which attempted to remove the barriers between civil rights and their remedies and to strengthen the civil right of the citizen. The current Bill restores the barriers between civil rights and their remedies and weakens the civil right of the citizen. It represents an assault on a key building block in the overall edifice of citizenship. Indeed, some years ago the National Consumer Council referred to access to information and advice as the “fourth right of citizenship”. In its briefing, Justice also reminds us that when the 1949 Act was before your Lordships’ House, it was presented as providing legal advice for those of slender means and resources so that no one would be financially unable to prosecute a just and reasonable claim or defend a legal right. In other words, Justice contends, it is misleading for the Government to suggest that the scope of legal aid has expanded beyond its original intentions.
What has certainly changed is the nature of social welfare law. In the other place, a number of references were made to the Child Poverty Action Group’s national welfare benefits handbook. I declare an interest of a kind in that I wrote the first edition of that handbook in the 1970s. It was about 20 pages long. Today it is 1,620 pages long. It is a symbol of the complexity of this area of law, testified to by DWP Ministers themselves. While universal credit might represent a simplification in the structure of one area of social security, it is also introducing new complexities. As Scope points out, the lesson from previous social security reform is that it increases the need for legal advice significantly during the transition period, a point made by the noble Baroness. The assumption that social welfare law does not justify help under the legal-aid scheme because it is insufficiently complex or important is, not surprisingly, challenged by a wide range of representations made on the Bill and by a recent Civil Justice Council report. A common theme voiced in an e-mail I received from the CAB local to my university in Loughborough is that timely legal advice can prevent a problem escalating and thereby save money in the long run. Where a problem cannot be resolved, legal advice is particularly important in helping people prepare appeals to the courts or the Upper Tribunal. We are not talking about large numbers here so perhaps the Minister could tell the House just how much money is being saved by removing legal aid from such cases.
Citizenship is in part about the relationship between individual citizens and the state. A recent report from the chair of the Administrative Justice and Tribunals Council argued that the Government are making it more difficult for citizens to challenge decisions made by the state. The removal of legal aid from social welfare will make the situation worse. The report of a commission of inquiry into legal aid states that legal aid plays a vital role in holding the state to account for its mistakes and failings. The suggestion in the Government’s response to the consultation that Jobcentre Plus and the benefits advice line are substitutes for independent legal advice is thus risible, never mind that it is their mistakes which often give rise to the need for advice in the first place. I find it strange that a Conservative-Liberal Government want to weaken the position of the individual citizen against the state in this way.
The suggestion that citizens might turn to Jobcentre Plus is made in the context of the Government’s acknowledgement that,
“Respondents have told us that other sources of advice, particularly the voluntary sector, may not be able to meet the demand for welfare benefit services because of factors such as local authority cuts”.
The welcome one-off £20 million support package to CABs notwithstanding—and I will be interested to hear whether it is the same £20 million that was announced earlier—I fear that the combination of local authority and legal-aid cuts will mean the destruction of the legal advice infrastructure so crucial to protecting that fourth right of citizenship I spoke about earlier. The equality impact assessment demonstrates that the citizens who will be disproportionately hurt will be those who are ill or disabled, female and/or of a black or minority ethnic group. As other noble Lords have eloquently demonstrated, we have a responsibility to defend the rights of these citizens in the name of justice.
Lord Lloyd of Berwick
My Lords, at this late hour, I, too, will confine myself to a single, rather narrow point on legal aid. It concerns a particular aspect of claims for clinical negligence; namely, the cost of obtaining expert reports.
In almost all cases, expert reports are a prerequisite if a claim is to succeed. The cost of such reports is usually covered by after-the-event insurance in the manner described by the noble and learned Lord, Lord Woolf, and, before him, by the noble Lord, Lord Faulks. Since 2000, the premium paid by the plaintiff to obtain such insurance has been recoverable from the defendants, usually the National Health Service, whether the plaintiff wins or loses.
It was the Government’s original intention that premiums payable for ATE insurance should cease to be recoverable, along with success fees and referral fees. However, the Government listened to certain concerns, particularly about the effect that that would have on funding expert reports. The point was put very clearly by the Minister in the other place on 2 November. He said:
“Such reports, which can be expensive, are often necessary in establishing whether there is a case for commencing proceedings, which raises particular issues if recoverability of ATE insurance is abolished. In responding to these concerns, clause 43 provides, by way of exception, for the recoverability of premiums in respect of ATE insurance taken out to cover the cost of expert reports in clinical negligence cases”.—[Official Report, Commons, 2/11/11; col. 1027.]
As a consequence, the Government introduced Clause 43 as we now find it.
My concern is not about the Government’s objective, quite the contrary—I agree that the cost of obtaining reports should not in any event fall on the plaintiff. However, I would respectfully suggest that there is a much better way of achieving that desirable objective, rather than the rather complex provisions that one finds in Clause 43. I hasten before anything else to add that this is not my idea, but an idea of Lord Justice Jackson. I echo the tribute paid by the noble Lord, Lord Hunt, to what Lord Justice Jackson achieved, by my calculation, nearly five years ago. It was an astonishing achievement in less than a year. In that respect, he has really done the state some service. His suggestion is that if clinical negligence generally is not to be covered by legal aid, it should at least, by way of exception, cover the case of expert reports, since expert reports are, as the Minister in the other place has already accepted, an exceptional case.
Why then is legal aid a better way of achieving that desirable result than what is contained in Clause 43? The reasons are set in Lord Justice Jackson’s lecture, to which reference has already been made by the noble and learned Lord, Lord Woolf, and others. I pick out only two of his reasons. The first is cost, a point touched on by the noble Lord, Lord Gold, quite recently. At the moment, after-the-event insurance premiums are at an all-time high. The Law Society says that the cost of ATE insurance is “currently prohibitive”. They are a major element in the cost of clinical negligence cases, which currently falls on the taxpayer and will continue to fall on the taxpayer if Clause 43 stands.
Secondly, Clause 43 is inefficient. The cost of obtaining expert reports will fall on the state—on the taxpayer—however wealthy the plaintiff. The great advantage of legal aid in this context is that it is selective and only available to those who qualify. That, surely, is as it should be.
The cost of making legal aid available for obtaining reports would be, as I understand it, a mere £6 million per year, but the savings to the public purse, by amending Clause 43, as I shall suggest in due course, are far greater than that.
Whatever view the House may eventually take about legal aid for clinical negligence generally, I hope that both sides of the House will accept that it should certainly be available in the case of expert reports, in accordance with Lord Justice Jackson’s views.
Lord Beecham
My Lords, not for the first time, although I think it is fair to say no doubt inadvertently, children and young people will be among the prime casualties of government policy. The Family Rights Group reports that 300,000 children are living with family or friends as carers because of illness, violence, separation, drug abuse or whatever by their natural parents, and a third of these carers give up work to look after the children. They can apply for a residence or guardianship order, but the Bill will allow legal aid funding only where the child is at risk of abuse and in particularly constrained conditions.
For example, under Clause 10, evidence of abuse would have to be provided, including ongoing criminal proceedings for child abuse, where a local authority child protection plan is in being, or where a court has found that child abuse has occurred within a period of 12 months prior to the application. Therefore, a carer cannot obtain funding to anticipate a situation in which a child might be abused, nor will an application be able to receive legal aid support 12 months after the last incident of abuse. I hope that the Minister and the Government will look very closely at the requirements to facilitate the granting of legal aid in circumstances in which, for example, there is a reasonable cause for the carer to fear that abuse would occur even if it has not already occurred.
Alternatively, the 12-month time limit for proving abuse should be waived, and in particular there should be no bar to obtaining funding for resisting an application to discharge an order simply on the grounds that any abuse took place more than 12 months before that application was made. Equally, funding should not be restricted where the court has made a Section 37 order requiring the local authority to investigate whether abuse has occurred.
In any event, the restriction of legal aid funding to instances of child abuse, as such, is much too narrow a definition. Of course, where the welfare of children is concerned, access to justice should surely not depend on private resources where legal aid is not available.
The position of children is affected in other ways, too. The noble Lord, Lord Alton, referred to the fact that 6,000 children will be denied legal aid and assistance. Indeed, 69,000 youngsters between the ages of 18 and 24 will lose access to legal aid and advice. The range of cases is quite remarkable. There are nearly 2,000 employment cases, 9,000 debt cases, 11,000 immigration cases, 210 education cases, 9,000 welfare benefits cases, 1,090 clinical negligence cases, and up to 34,580 private law cases involving children. Those are very significant figures, and large numbers of young people will therefore be denied legal aid.
The Government seem to rely on the voluntary sector to pick up the slack that will be created by the withdrawal of legal aid funding. Citizens Advice estimates that the 500,000 people whom they currently serve will lose out because of cuts that they are sustaining. They have an 80 per cent success rate in the cases that they bring, supporting claims with legal advice. They estimate that 75 per cent of their cases in debt would lapse, and they take on an astonishing 9,400 cases a day nationally.
The noble Lord, Lord Shipley, referred to the difficulties faced by law centres and quoted extensively the position in Newcastle. In fact, virtually the same observations were made at cols. 844 and 845 in Hansard on 26 October, when I made a speech that very much involved Newcastle. However, I undertake to the noble Lord that I will not bring any action for breach of copyright whether or not no-win no-fee arrangements are available to me. In any event, the point is well made and it is broader than simply Newcastle.
Local authority cuts to law centres nationally average 42 per cent; in London the average is 61 per cent. Four law centres have received a complete 100 per cent reduction in their funding from the local authority—in Birmingham, Oldham, Warrington and Wythenshawe in Manchester. More may well be on the way. The total cut in grants from local authorities to law centres is some £7 million. That has to be set against the £20 million, to which others of your Lordships have referred, which the Government are proposing to award in a grant. I understand that reference has been made to that £20 million about 14 different times. Whether it is the same £20 million no doubt the Minister will advise us, but perhaps when he replies he will indicate whether it is a one-off payment or whether it is envisaged that it will be continued. If it is a one-off payment, frankly, it will not go very far to staunch the flow of resources from law centres at a time when demand will constantly be rising.
I do not for a moment suppose that the Minister would associate himself with the rather strange attitude evinced by one of his ministerial colleagues in the Ministry of Justice who was reported in the Guardian last October as saying that legal aid work will be useful filler for unemployed lawyers, or for women returning to work. That is hardly a sensible definition of legal aid and what it has to offer.
Many of us have been concerned that the Health and Social Care Bill, with which we continue to deal at some length, will undermine the National Health Service. It is clear to many of us in your Lordships' House that this Bill clearly demonstrates that the Government are taking a wrecking ball to the structure of access to justice. That is in the context in which, on their own figures, 80 to 85 per cent of cuts to legal aid will affect the 20 per cent poorest people in this country. I can do no better than conclude with the words of Lord Justice Jackson in his report from which the Government have cherry-picked their selection of reforms. He said very explicitly:
“I do not make any recommendation in this chapter for the expansion or restoration of legal aid. I do, however, stress the vital necessity of making no further cutbacks in legal aid availability or eligibility. The legal aid system plays a crucial role in promoting access to justice at proportionate costs in key areas”.
Those should be the watchwords of any reform. Thus far, the Bill does not match them.
Lord Wigley
My Lords, I apologise, as did the noble Baroness, Lady Lister, for missing half this debate because of being engaged in the Welfare Reform Bill like a number of colleagues. Time is limited so I will confine my remarks to what I see as the most pressing elements of the Bill. My interest lies mainly in Part 1, but I would like to welcome a provision contained in Part 3, which abolishes the discredited system of indeterminate sentences. IPPs have been controversial. They effectively introduced life sentences by the back door for a huge range of offences. The Government are right to abolish them, although I am concerned that the new system would introduce a mandatory life sentence for those convicted of a second listed offence, so removing judicial discretion.
Unfortunately, the Government seem to be replacing one contentious system with another, which promises to throw up a number of problems. I ask, as did the noble Baroness, Lady Stern, a little earlier, why abolishing IPPs cannot also apply retrospectively. Those serving IPP sentences are languishing in our prisons since little focus is placed on putting them into rehabilitation programmes. Not enough thought seems to have been put into determining a prisoner’s tariff. On average, these prisoners serve 244 days beyond their tariff and it costs roughly £30,000 to keep somebody incarcerated for that period of time. If you multiply that by the 2,229 prisoners who are in that situation, you get a figure of no less than £68 million. The IPP regime has been a rather costly mistake.
Turning to Part 1, the cuts to legal aid propagated by this Bill are, I believe, unethical and will have a damaging effect on the make-up of our legal system. What is more, as the report published by the House of Lords Constitution Committee last week made clear, the cuts go against the constitutional right to legal advice. The cuts will create a market for the supply of legal aid driven by cost rather than the needs of the clients. Profits made by legal aid firms are relatively low and any move to fixed fees for all cases will mean suppliers will be encouraged to take on only the least complicated cases.
The most vulnerable clients, including those with mental health problems and people with a range of disabilities, may find it impossible to gain access to free legal advice due to the complications often arising in these cases, as described so effectively by the noble Baroness, Lady Doocey. As we have heard from many noble Lords, legal aid will also be denied to patients injured as a result of medical negligence as well as workers who have suffered illness due, particularly, to asbestos exposure. I was involved with that campaign 20 years ago, as I had a Ferodo factory in my former constituency.
At present civil litigation claimants are able to bring cases under the no-win no-fee system, which the Bill seeks to overhaul. Claimants can take out “after the event” insurance, ATE, to pay the defendant’s costs if the claim fails, while solicitors counter the risk of claims with success fees which are payable on winning a case. Under the new system, as I understand it, successful claimants will have to pay some costs and “after the event” premiums out of their compensation. Without ATE insurance, the risks of bringing a claim will simply be too great, so the right to redress will be lost for those caught up in the most distressing cases involving clinical negligence.
These proposals are totally unacceptable and made worse still when we note that the Government failed to carry out a full assessment of how their proposals would affect disabled people. Not even those suffering domestic abuse will be guaranteed free legal advice under this Bill. During earlier stages of the Bill in the House of Commons, the Government refused to recognise that the definition of domestic violence contained in the Bill is too narrow. This will leave vulnerable women without the support that they most certainly need. What is more, if the perpetrators of domestic violence are not entitled to legal aid and so act as litigants in person, they will be able to cross-examine witnesses, which will surely cause unnecessary anxiety.
The proposals included in Clause 12, which threaten to limit legal advice in police custody through secondary legislation, are also deeply worrying. This is yet another proposal on which the Government failed to consult and is a move which has been widely criticised. Errors and abuses at the police station can lead to miscarriages of justice, which are exceptionally difficult to resolve. The Bill as it stands allows the Lord Chancellor to replace advice in person in custody with telephone advice. This would be a dangerous step indeed. I strongly oppose the proposals to introduce a mandatory telephone gateway, which would mean that those seeking legal advice for discrimination cases would have to speak by telephone to an adviser, who may not be legally trained, to find out whether they are eligible for legal aid.
Many claimants, including those with disabilities and those with caring needs and learning difficulties, may be prevented from accessing the legal aid scheme due to communication problems. That is a real barrier to equal access to justice. The proposals ignore many subtleties that surround abuse and will abandon some of the most destitute and vulnerable people in our society without access to support. I urge the Government to reconsider these aspects of the Bill.
Lord Bach
My Lords, no one could have listened to the speeches made in your Lordships' House today without recognising that the Bill we are debating is of very great importance. All three parts of the Bill could be major Bills in their own right, and all three touch on fundamental issues of justice and the rule of law in our society, whether it be the new proposed offences, the replacement for IPP provisions in Part 3, or the radical changes to the conditional fee system in civil cases and the resulting shift in the balance of power between claimants and defendants in Part 2. Other issues include the fact that there is no replication in Part 1 of the duty of the Lord Chancellor in the Access to Justice Act, and Clause 12 and police stations, which the noble Lord, Lord Wigley, just spoke about.
The Government intend to cut legal aid by in effect decimating a system of social welfare law that over the past 40 years or so has cheaply and successfully helped many of the poorest people in our society to have access to justice and to resolve their legal problems. The Bill’s definition of domestic violence has been described by many noble Lords as absurdly narrow and one that will lead to many victims being deprived of vital assistance. Whether it relates to any of these concerns or all of them, the Bill goes directly to the issue of what kind of society we want to live in. The stakes could not be higher.
I of course congratulate all noble Lords who have spoken in today’s debate. This has been in many ways an astonishing debate, with a depth of knowledge and experience in this field that perhaps very few legislatures anywhere could match. However, it is surely no surprise that the vast majority of those who have spoken from all around the House are highly critical of the Bill and many of its proposals. Her Majesty’s Government must take note of this widespread sense that they have not got it right. They should be prepared to listen and, more importantly, to act on what has been argued so trenchantly and so often in the House today. We will listen with even more attention than usual to the Minister when he sums up to see whether real compromise is in the air. I hope that it is. If it is, the House will welcome it, but if it is not the House may well have to do its duty on some future occasion.
I forecast, perhaps unwisely, that there will be less disagreement around Part 3 than is usual when we discuss sentencing in this House. Of course, there will have to be considerable debate and close scrutiny as so much of Part 3 has been added so ridiculously late. Even now it is not clear that it has been sufficiently thought through. Clause 114, for example, with its mandatory indeterminate life sentence for a second listed offence, does not seem to be very different from the IPP system it is there to replace. A prisoner will still not know when he is to be released. It will still depend on the Parole Board, which will have the same information as it does for IPP prisoners now. An indeterminate sentence is an indeterminate sentence, whatever it is called, or does the clause find itself in the Bill solely to appease hard-line elements of the coalition, even though the numbers caught will be absolutely minimal? We will also want to look at bail provisions in the context of the tragic Jane Clough case and at the new Clause 130 offence of squatting in a residential building. That certainly deserves some discussion. The House will have taken special note of the speech of the noble Baroness, Lady Newlove, speaking as she did on behalf of victims.
On Part 2, my noble and learned friend Lord Davidson has told the House in clear terms what our position is. Whatever view we may take of Lord Justice Jackson's report, it is clearly a prodigious personal achievement. It reminds me of a kind of magisterial work of art, large and grand, produced by eminent Victorians. However, it is no use Her Majesty’s Government hiding behind Jackson because the whole world knows that they picked and mixed his conclusions as though they were choosing sweets. If there is one thing that Jackson was clear about—he was clear about a lot—it was that his proposals were a package to be taken as a whole or not at all. To many of us, as we have heard today, one of the key findings of Jackson was that there should be no reduction in civil legal aid. Noble Lords have quoted him, but my quotation is this:
“Legal aid is still available for some key areas of litigation, in particular clinical negligence, housing cases and judicial review. It is vital that legal aid remains in these areas”.
He goes on to talk about eligibility. That is pretty straightforward but it is actually rejected by the Government. I ask the Minister why the Government have rejected what Lord Justice Jackson said so clearly about clinical negligence and legal aid.
This is a critical point because the Government intend, as part of their £280 million cut in civil legal aid, to save £11 million or £10 million—I have a figure of £17 million but that may be out of date—by taking clinical negligence out of scope. The idea that conditional fee agreements alone are satisfactory for this type of law has been ridiculed by everyone in the House and outside. Many commentators believe that a number of victims, including children, will never be able to get access to justice. Is that the sort of society in which we want to live?
That brings me to what many—and, I must be honest, I—consider the meanest and most wretched proposal of all: the decimation of social welfare law. The rest of my speech will be devoted to that part of Part 1. Whether you call it social welfare law or poverty law or the law of everyday life does not matter very much, but what matters hugely is that the Government are proposing that it should no longer be possible for a citizen who cannot afford it to get legal advice to deal with a legal problem, however complex, involving welfare benefit law. The same goes for employment law, which is completely out of scope. Much housing law will come out of scope, as will practically all debt law and some education law too. As the Bill stands today, that means that there will be no legal advice or representation, even at the Court of Appeal or the Supreme Court. Just to state that proposition shows how absurd it is.
The supposed savings are as follows: including immigration, £81 million; excluding immigration, £61 million. That means that in the social welfare area alone more than 350,000 people a year—it is much wider if you take the other parts of Part 1—will not be given the sort of legal advice that they receive today. Even where the law is still in scope, fixed fees, which are far from generous, have already been cut by 10 per cent. Anything left in scope, of course, will have to go through a mandatory phone gateway, including community care cases. One can hardly think of a sillier area of law to put through a mandatory phone gateway than community care.
Despite many progressive reforms by different Governments to simplify the legal system to make it easier for participants to access and understand, the reality remains that law and enforcement of the law is an often complex and stressful experience for many in our society. The legal aid system was created to address evident inequality in the legal system. We give legal aid contracts to law centres and CABs because they help those most in need. What is the point of legal rights if there is no ability to enforce them?
The value of the advice that is currently available is unchallenged. The respected academic Professor Dame Hazel Genn, in her seminal work Paths to Justice, pointed out that legal problems are not single ones, but come in clusters: it is not debt on its own, for example, but welfare benefits, debt and housing. If legal advice is given early and well, it can and does change lives. If that advice is not given, problems grow, become more difficult to resolve, and can end up in loss of job, loss of home, loss of family, social exclusion, of course, and sometimes descent into crime. All this costs everybody: the individual involved, the Government, and society too.
How can the Government justify this change to a system which—and I want to stress this point—up to now has been supported by all three main political parties in this country? The Conservative Party has a proud tradition of supporting law centres. The Liberal Democrat Party clearly does too, and I hope we do as well. This system has always been supported by the political parties. It has not worked faultlessly—of course not—but it has worked pretty well for many years.
This proposal is the exact opposite of any concept of the big society that one might want to consider. Who are the people who will lose out? We have heard about them throughout the afternoon. If there is no legal aid for welfare benefit advice, some of the biggest losers will be people with disabilities. These people often need legal advice to obtain the benefits they have a right to. The figure of 78,000 disabled people who will be denied specialist legal help for complicated welfare benefit problems is staggering. But the Government say, at the moment, “No, these people do not need legal advice. They can do it themselves. It is all general stuff. It is all comparatively easy”. Actually, the DWP guidance now runs to, as I understand it, 9,000 pages: a good deal more than the CPAG guidance that my noble friend first wrote. As the president of the Social Entitlement Chamber, Judge Robert Martin has said that where people have not had legal advice, about 10 per cent of hearing time at welfare benefit tribunals is spent just explaining what is going on. No wonder that the noble and learned Baroness, Lady Hale, said in her Henry Hodge Memorial Lecture:
“The idea that the law in some of these areas is simple and easy to understand is laughable”.
This is an example of judicial understatement if ever there was one. And yet her Majesty’s Government seem set on this course, all for an alleged saving in welfare benefits of £25 million per year. This is a Government who are prepared to pay out £250 million in order that people can have weekly rather than fortnightly bin collections and £125,000 per year to—is it 40 plus?—police commissioners around the country. This is not a sensible priority at all.
Children and young people will be losers too. As we have heard, they have civil justice problems that require advice. There is academic research to show that there is a relationship between civil legal problems not being solved and crime. This seems incredible in the year of the riots. To cut legal help for the young age group is absolutely crazy—perhaps as crazy as abolishing the successful Youth Justice Board. Both legal aid and the Youth Justice Board work as early-intervention measures to ensure that our young people have a future.
Of course we know that lawyers who work in this field are not fat cats. Many sacrifice a career in high-paid private practice because they consider that the work is so important. Their fees have been cut by 10 per cent. Further legal aid cuts will rip apart law centres, CABs and solicitors’ firms, which will have to close. I ask the noble Lord: where will people go then?
The honourable Member for Bradford East, the Liberal Democrat David Ward, made a brilliant speech on Report in another place on 2 November. I was privileged to see and hear it; I watched from our seats in the other place. He attacked these proposals with passion and good sense—and, with nine Liberal Democrat colleagues, including his Deputy Leader, voted against the Government. He made two important points. In the first, he stated:
“It is a very dangerous thing if we are going to use deficit reduction as a justification for almost everything we might do”.—[Official Report, Commons, 2/11/11; col. 976.]
His second point came in his final words. He said:
“Someone once told me that the world is divided into two groups of people. There are those who, when they see somebody walking down the street with a walking stick, believe in kicking the stick away because it will make that person stronger, and there are those who believe that if they kick away the stick, the person will just fall over. We are in grave danger of making some of those who are, by definition, the most vulnerable in our society fall over, and we will still have to be there to pick them up, at even greater cost to the public purse. It does not make sense; we should not do it”.—[Official Report, Commons, 2/11/11; col. 977.]
Then he sat down.
That is one way of putting it. Another way was expressed in the quote by the late Lord Bingham, which I will not repeat now. Both quotes, in different ways, make the point that equal access to justice is at the heart of our democracy, and that Governments should be very wary of tampering with that principle.
The Government’s proposals are deeply wrong in three distinct ways. First, they are—I choose the word carefully—immoral. They deliberately look only at the impact assessments that the Government themselves produced; and they deliberately pick on the poor and the vulnerable. Secondly, they represent a serious denial of access to justice, as the Constitution Committee powerfully argued. Thirdly, far from saving money, they will cost much, much more.
The Minister often uses the phrase, “To govern is to choose”. He is quite right. When in government we put forward proposals that would have saved much more than the cut in social welfare law that this Government propose. Our intention to cut back on the number of criminal solicitors with LSC contracts would have been very controversial—much too controversial for this Government, who chose instead to take on not powerful interests that might give them a hard time but the poor, the vulnerable and those who cannot represent themselves in court, let alone begin to fight the power of government.
I end by saying that noble Lords—I hope in a non-partisan spirit and across the House as a whole—should say that in this case the Government have made the wrong choice. If necessary the House must take up the fight and stand up for those who cannot stand up for themselves. The House has a tradition of looking after the interests of those in our society who have little power. In this of all cases, we must not let them down.
Lord McNally
My Lords, I hope that the House will understand that in a debate of 54 contributions, I am not going to be able to answer them all in detail this evening. Indeed, many of the questions will be better raised at Committee, with specific details of the Bill.
The noble Lord, Lord Rix, and the noble Baroness, Lady Massey, asked whether I would meet them on the specific issues they raised. Of course I would be delighted to do so. If they will contact me I shall fix something up. The noble Baroness, Lady Whitaker, asked whether the letter from Professor Ruggie could be put in the Library of the House. I will certainly arrange that. It is already on the internet. It might be interesting to the House to know that Professor Ruggie is no longer the UN special representative for business and human rights; he has joined a Boston law firm. Whether that is promotion, I do not know, but that is the fact.
The noble Lord, Lord Faulkner, came with his proposal about amendments to deal with metal theft and the dangers it poses. I cannot give him a definitive answer at the moment, other than that there is an inter-ministerial group looking at this issue as a matter of priority, and we will look at any proposals appropriate to the Bill. I have lost sight of him again—oh my God! Thank God we did not give the Speaker more powers; he would have named me by now.
It has been a very interesting and well-informed debate. Let me take to start—because he was quoted—my colleague from the other place, Mr Ward, who said that we must not let deficit reduction dominate everything that we do. Of course, unless we address the issue of deficit reduction, many of the things that we subsequently do—
Lord McNally
I stand by that quote, then. If we are going to take that attitude, and if we are going to avoid taking tough decisions, we will face far greater economic problems. This idea that somehow we can put things off until tomorrow is perhaps why we are where we are today, and why we have to take the decisions that we will take today.
I heard closely what the noble Lord, Lord Howarth, was saying. Of course, it was a wonderful speech. A number of the speeches made today were wonderful speeches, if we believe that there is no limit to the amount of money that we can spend on legal aid; that there was somehow a golden age when this was all available. However, we know well—
Lord Howarth of Newport
The difficulty in the position that the Minister is taking is that while he may indeed reduce the Ministry of Justice’s expenditure, he is exporting his cost to other government departments and to local government. Far from reducing the deficit in public finances, the policies of his department are likely to increase it.
Lord McNally
That is the speech the noble Lord made earlier. He knows, as I well know, that across government, except for two special cases—health and overseas aid—departments have had to make severe cuts. In each of those departments, there are people who could make speeches, like those that have been made today, about how those cuts hurt specific sections of society. But there is no getting away from it: the Ministry of Justice is a department with a budget of just over £9 billion. Its commitment was to cuts of £2 billion in a department that spends on only four things—prisons, probation, legal aid and staff and court administration. Each of those has taken a hit. If noble Lords are successful in stopping the changes we have made in legal aid, those other parts will take a hit as well. I can tell noble Lords that it may be heartbreaking to hear some of the stories today, but for me, it has been heartbreaking to see very good staff who have served the Ministry of Justice well having to leave through no fault of their own. We have a probation service, which does exceptionally good work, that is under pressure. There are no soft options and no easy ways in this. We have tried to put forward a series of suggestions.
Listening to some of the distinguished lawyers, they do not fully appreciate that their profession is in flux. The way law is delivered and by whom it is delivered is going to change. I do not think the full impact of alternative business structures and changes in the way chambers and solicitors are organised is fully appreciated yet. They will mean changes, and they may be changes that make a big difference to the way that legal advice is delivered. I heard the disparaging of telephone advice, but the world is changing and lots of people receive advice on the net and by telephone. Indeed, I went to the Law Society’s prize giving for solicitor firms of the year and I was intrigued by how many of the prize winners now have web pages where people can go. You can get lots of advice for free before you press the button to hire them. It is a changing world in some of these things.
I understand that when campaigning groups are campaigning they always produce figures that will be brandished around in debates like this. For example, I point out that none of the horrendous cuts that we are being told about actually yet impacts on CABs. I hold up my hand on the £20 million. I thought of saying that when I was doing economics there was something about the velocity of money, and I think this is an example of it. I do not know whether it has been around 14 times, but it is, I confess, the same £20 million that was advised earlier, but it is a very useful addition. We are across the department looking at this very special problem of advice centres and the CAB to see whether we can bring forward proposals longer term.
I go back again to this idea that somehow we are moving from a principle in terms of legal aid. It invites the question: what is so magic about £2.2 billion or £2.1 billion against £1.7 billion? It is less, and it means cuts, but it is not a move away from some absolute commitment to pay for everything, whatever, which seemed to be the thrust of some of the speeches earlier. Once you have a budget, you make choices within that budget, and that is what we are doing. These reforms will still be spending £1.7 billion a year on child protection proceedings, most judicial reviews, international child abduction, special educational needs, community care, discrimination, debt and housing cases where a home is at immediate risk, mental health cases and 95 per cent of funding for child parties.
I accept that a number of issues have been raised today that need the kind of scrutiny and expertise that this House brings. The Government have not sprung these issues on an unsuspecting country. The proposals on legal aid were in the Green Paper that was published over a year ago. Certainly, some of the more recent additions will need the close scrutiny of this House, but it is not true that we brushed aside the Law Society’s wonderful ideas for saving the money in different ways. We considered its proposals very carefully, and we are looking very closely into the one for more efficient prosecution and reimbursement of legal aid funds. A great deal of its proposals were shuffling responsibilities and costs around Whitehall or producing new taxes, which is not the same as making savings.
I also take on board the very strong concerns that were voiced about domestic violence. I believe that we have tried not just with these measures but with other government measures to try to give support and help in this area. We should go through this in Committee and I will be able to respond to amendments that are put down at that stage. The same is true of clinical negligence. These issues have been raised with considerable passion and they merit closer scrutiny in Committee.
Those who are experienced as Ministers will know that I cannot make any commitments at this stage, other than to suggest, as I did earlier, that we use Committee for a useful and productive examination of the Bill. I take on board what a couple of my noble friends said about advice at police stations. I suggest that they put down an amendment on that. The noble Baroness, Lady Grey-Thompson, suggested that we had not listened to earlier consultation. That is not true. I will not weary the House by going through them but there are at least a dozen examples of specific changes we have made during the consultation process. I take the advice of the noble Lord, Lord Gold, that the best way I can end this debate is the way I ended my opening speech; that is, to recognise that the range of expertise in this House will be extremely useful to us when examining this in Committee.
This may excite noble Lords or send them into depression, but we have something like three months of parliamentary time looking at this Bill in its various stages. I cannot go further on these issues than saying that we will listen, but we will listen to some very serious points that were made in a very serious way. I hope on that basis we can move to Committee and that the House will give this Bill a Second Reading.