Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Baroness Andrews)
My Lords, if there is a Division in the House the Committee will, of course, adjourn for 10 minutes.
British Waterways Board (Transfer of Functions) Order 2012
(11 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Taylor of Holbeach
That the Grand Committee do report to the House that it has considered the British Waterways Board (Transfer of Functions) Order 2012.
Relevant documents: 58th Report from the Merits Committee, Session 2010-12; 43rd Report from the Joint Committee on Statutory Instruments, Session 2010-12; 1st and 4th Reports from the Secondary Legislation Scrutiny Committee.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Taylor of Holbeach)
My Lords, I hope that we will be able to debate the Inland Waterways Advisory Council (Abolition) Order 2012 at the same time as this order.
I am pleased that we have the opportunity to debate these two orders in Grand Committee today. As noble Lords will know, they are very important for the future of the leisure industry and as a national resource. The transfer order transfers the function of the British Waterways Board in England and Wales to a new charity, the Canal and River Trust, which I will refer to from now on as the CRT, and makes a consequential provision in Scotland. The British Waterways Board will continue to operate as a Scotland-only body and will be accountable to Scottish Ministers.
The second order abolishes the Inland Waterways Advisory Council, an independent advisory committee to the UK and Scottish Governments. The Scottish Parliament has given its consent to the transfer and abolition orders, and the National Assembly for Wales has given its consent to the transfer order. Both orders have been subjected to the enhanced affirmative procedure and examined by the Secondary Legislation Scrutiny Committee here in the Lords—I shall have to get used to the committee’s new name; we probably remember it as the Merits Committee—and by the Environment, Food and Rural Affairs Select Committee in the other place.
I shall now briefly summarise the aims and objectives of these orders and pay consideration to the points of interest that were raised by these committees. The background to this project began under the previous Government, and I am grateful for the cross-party support it has received. It is no exaggeration to say that it would not have made the rapid progress that it has without the broad consensus that has been reached across Parliament. I pay tribute to my noble friend Lord Goodlad and the members of the Secondary Legislation Scrutiny Committee for their constructive engagement in scrutinising these orders. We have read the committee’s report carefully and I shall respond to its recommendations during the course of this debate.
The transfer of the waterways will give those who are passionate about them increased opportunities to get involved and influence the way in which their waterways are managed. We have consulted widely in preparing for this transfer. I am confident that the clear public support for this change will make CRT a successful charity. The Government have agreed to provide a 15-year grant agreement worth around £800 million, a settlement which the CRT has described as tough but fair. The grant agreement will give the waterways a level of financial certainty that will enable them to plan for the long term, as we would wish, realising efficiencies and achieving best value for money. As was requested by the Secondary Legislation Scrutiny Committee, I have arranged for a draft of the transfer scheme to be laid in the Libraries of both Houses in advance of today’s debate. The scheme provides for the transfer of British Waterways’ assets and liabilities and is the counterpart of this order.
In order to allow for scrutiny of the financial development of the new organisation, I am happy to agree to the committee’s recommendation that Defra should provide Parliament with a Written Statement setting out the financial position of the CRT two years after the draft order is made.
In its consideration of the draft order, the Environment, Food and Rural Affairs Select Committee in the other place questioned the Government about property and charitable income projections for the new charity. I assure noble Lords that while there is a degree of uncertainty with any projection of future income, the CRT has undertaken extensive due diligence and is confident in the projections.
The estimates of charitable fundraising were finalised in 2011 and reflect recent attitudes to charitable giving. They are based on evidence-based market research, expert judgment and benchmarking by a leading consultancy in the sector. The CRT has recruited a fundraising team that is motivated, not daunted, by the challenge ahead.
The CRT trustees believe that the projections for growth in commercial income are prudent. British Waterways has a proven track record in property management and has outperformed industry benchmarks. It has shown itself to be an excellent custodian of the commercial property portfolio, which has become vital to the sustainability of the waterways. Its careful management of the property portfolio and the safeguards that we have put in place through this transfer will ensure that these assets continue to supply the waterways with much needed revenue.
We have also received a number of questions about volunteering. I am confident, indeed excited, that the move to the charity sector will significantly increase volunteering on the waterways. Indeed, the creation of the CRT has already boosted volunteering numbers—a sign of the public’s enthusiasm for the move ahead. This is a good thing for society at large and for the waterways, but let me assure your Lordships that the CRT will not be using volunteers to replace existing staff. Volunteers will be used only to undertake activities that British Waterways cannot do at current staffing levels.
During the 60-day procedure in Parliament, Defra received representations from two separate groups of private boaters. One group asked for reassurance about the consultation procedures to be followed for making orders under Sections 104 and 105 of the Transport Act 1968. Such orders concern changes to the classification of a waterway or to the prescribed navigation dimensions to which a waterway must be maintained. My officials have given the requested assurances, and the consultation process will be set out in the memorandum of understanding between Defra and the CRT, which I shall publish in due course.
The second representation was from the National Bargee Travellers Association, from whom many noble Lords will have received communications. This is one of a number of organisations that look after the interests of boat dwellers. The NBTA has already issued responses to our two consultations in 2011 and submitted reports to the EFRA Select Committee and the Secondary Legislation Scrutiny Committee. We addressed the NBTA’s concerns about human rights and the application of the Freedom of Information Act 2000 in our evidence to parliamentary committees.
In response to its most recent representation, I can give the NBTA an assurance, on behalf of the CRT, that the CRT will not exercise its powers to remove a vessel that is thought to be someone’s home without first taking the matter to the county court and obtaining a declaration from the court that the removal is lawful.
Further, I assure the Grand Committee that the transfer order does not create new enforcement powers for the CRT. The CRT, as statutory undertaker, will have the same powers to manage the waterways as British Waterways has now. The existing safeguards that apply to the use of these powers will continue to apply to any enforcement action taken by the CRT.
In response to a recommendation from the Secondary Legislation Scrutiny Committee, I am also happy, on behalf of the CRT, to assure the Grand Committee that the Canal and River Trust will take into consideration the specific needs of all stakeholders, including itinerant boat dwellers, in the development of all future by-laws. My honourable friend the Waterways Minister, Richard Benyon, will write to the NBTA in due course to set out our position on the other points it has raised.
The creation of the CRT will significantly improve our national dialogue about the waterways. The CRT’s governance model will bring some 200 people into the business of running the waterways, whether as trustees or as members of the council or the waterways partnerships. With all this expertise and engagement, the CRT will become the Government’s principal, although not our only, interlocutor on the waterways in the years ahead.
The creation of the CRT means that the Government will no longer need an independent statutory body to advise on the waterways. The proposed abolition of the Inland Waterways Advisory Council is part of the department’s simplification of our very complex delivery landscape. In addition to improved accountability arising from the creation of the CRT, the abolition of the IWAC will lead to greater efficiency, effectiveness and economy. It will, for example, save £200,000 a year.
I should acknowledge that the abolition of the IWAC has proved mildly controversial. There were only 35 responses to our formal consultation—less than a tenth of the responses to the consultation on the creation of the new charity, for example—but most of those who responded wanted to keep the IWAC, at least until the Environment Agency navigations transfer to the new charity from 2015-16. We have considered those views carefully. However, I believe that the practical work to prepare for the transfer of the EA navigations is better carried out by our officials, working very closely with our engaged and committed stakeholders. To the extent that we may need independent advice from time to time, it is more cost-effective to commission such advice as needed, rather than have a standing body, which, in the way of the world, would find work to do.
In moving the Motion to consider the abolition of the Inland Waterways Advisory Committee, I should acknowledge the very valuable knowledge and expertise of its current members. They have made a useful contribution to the development of government policy on inland waterways, and my honourable friend the Waterways Minister wrote to them all to encourage them to make their knowledge and expertise available to the CRT.
In conclusion, moving the waterways to the new waterways charity and abolishing the Inland Waterways Advisory Committee will bring many benefits. This transfer will enable waterways users to have the opportunity to play a role in the governance of the waterways and bring their passion and expertise to the waterways they cherish. Local communities will have a greater say in how their local canal or river is run. This is localism in action.
Volunteering will increase, benefiting society, heritage and the environment. The financial footing of the waterways will be sustainable into the long term. New commercial and private income streams will become available. The long-term grant agreement offers the security that the new project needs. Fifty years after British Waterways was created, it is time to move on. With that in mind, I commend these draft orders to the Committee and beg to move.
Lord Grantchester
I thank the Minister for his introduction of these two orders. If the Committee will allow me, I shall make a few remarks, reserving the right for my noble friend Lord Knight to respond from the Front Bench. I apologise and ask the Committee to forgive me if I have an eye on the clock and do not stay quite long enough to hear the Minister’s full response to the debate. I have pressing duties elsewhere.
From the perspective of south Cheshire, where I live and which along with neighbouring counties has extensive canals across it, the abolition of the IWAC is greeted mostly with resignation, neither receiving widespread support nor opposition. This would be in keeping with the low number of responses received to the consultation. In the past, I have been approached on several waterways issues, although on this one the Minister can be relaxed by and large. However, this lack of enthusiasm seems to be because there is a feeling among IWAC members that this order is a fait accompli, as evidenced when Defra announced the abolition of IWAC ahead of announcing the findings of the consultation about IWAC. I know that the Minister in the other place, Richard Benyon, had to issue apologies to Graham Evans MP for John Edmonds, the chairman of IWAC. Having said that, the arrangements, protections, appeals processes and so on will very much remain as before, so the change is viewed as largely cosmetic.
I know that all members of IWAC are very passionate about waterways and will always have their best interests at heart. I urge the Minister and his department to make full use of the knowledge and expertise of IWAC members, especially on such issues as volunteering, environmental protection, tourism and restoration, all of which will need to be addressed by the new Canal and River Trust. I know that members of IWAC, which is an independent, advisory and unpaid body, will give their time and expertise freely and would have gladly continued under the umbrella of IWAC. No doubt they will continue to do so. I am sure that the Minister would wish to confirm that his department recognises that that will continue to be the case, as these members would provide an excellent conduit to the CRT on behalf of all waterways users on all matters concerning the waterways.
Baroness Parminter
My Lords, I thank the Minister for his clarity in setting out a number of issues around this order. Given that there are quite a few speakers, I shall focus on one issue and invite the Minister to say a few more words at the end.
The issue that I wish to raise is how we will ensure that the new charity—the Canal and River Trust—reflects the full duties and responsibilities entrusted to the British Waterways by Parliament. I refer specifically to the duty towards those who live on waterways without a fixed mooring. I have checked the Charity Commission website and can find no mention for the new charity of duties to those whose homes are on the bodies of water that the charity will control. As such, the new charity’s purposes and responsibilities do not reflect some duties that currently exist in legislation and which British Waterways undertakes. This is not a newly contentious matter as, at the beginning of the 1990s, British Waterways sought to remove the rights of boat dwellers who did not have a permanent mooring. Parliament took a different view and the result was Section 17(3)(c)(ii) of the British Waterways Act 1995, which enables boats to be licensed without having a permanent mooring as long as they do not spend more than 14 days in one place. The committee is concerned that people who have had the right to live on the waterways but without a fixed mooring might lose those rights.
As my noble friend mentioned, the Lords Secondary Legislation Scrutiny Committee produced an excellent report on this recently. The evidence from Mr Evans of British Waterways to the committee says that the Canal and River Trust,
“will be a much more engaged organisation that will reflect the will of the people”.
However, reflecting the will of the people is not at all the same thing as recognising historic duties and responsibilities.
Having met representatives of the proposed new charity—as a former chief executive of a small conservation charity, I wish it well and know just how difficult it is to meet all the competing needs of stakeholders—I have no doubt that it intends through its council, its waterway partnerships and its specialist advisory groups to construct a far more open constitution than ever before on the waterways. However, engagement with some stakeholders is not always easy. Itinerant boat dwellers, for example, do not have a representative body, but their needs need to be considered alongside those of all other waterway stakeholders. To that end, it is illuminating that in the Government’s own explanatory document for the transfer, paragraph 7.16 highlights the “greater involvement” of,
“communities which live alongside waterways”,
and “waterways’ users” in how the waterways are to be managed in future, but excludes any mention of communities that actually live on the water.
I understand that any future by-laws from the charity will be subject to ministerial confirmation and I am grateful for the clarity from the Minister on that point. However, I would like it to be explicit on the record that the department will write to the CRT to ensure that the new charity must take all specific needs of stakeholders into account in developing future by-laws.
Further, it should be explicit that the grant agreement, which my noble friend also mentioned and which I think is for £800 million, accompanying the grant will set out the terms of the final agreement, and that it will make clear that the safeguard to consider the specific needs of all stakeholders, including itinerant boat dwellers, will be part of a condition for the grant being given.
To be clear, the House has a long history of ensuring that the rights of all stakeholders are upheld on the waterways. In the absence of any duty towards those people who live on the waterways in the new charity’s charitable remit, the Government must by other means ensure that this duty is safeguarded in the future. I welcome what the Minister has said, but I would like to be absolutely clear on the specifics of how the Government will assure that.
Lord Smith of Finsbury
My Lords, I begin by declaring my interest as chairman of the Environment Agency. I very much welcome the transformation of the British Waterways Board into the new Canal and River Trust and I am grateful to the Minister for the helpful way in which he introduced our discussion. I particularly welcome two things about what is happening. First, I welcome the encouragement and facilitation of increased public and community participation in decision-making about what happens to our waterways. I very much hope that the Government’s intentions in this respect will come to fruition in the way in which the new CRT operates. Secondly, I very much welcome the funding package which the Government have put in place to enable the transfer. In the spirit of the times, it is a somewhat generous package but it will enable a really good start to be made on the work of the new trust.
It is, of course, the Government’s ambition to go a bit further in two to three years’ time and to include the Environment Agency’s navigation responsibilities in the new Canal and River Trust. I welcome that ambition and we in the Environment Agency will do everything that we can to assist the process. At the moment, we have responsibility for something like 1,000 kilometres of statutory navigation. This includes, crucially, the River Thames and the River Medway, Rye Harbour, the Great Ouse, the River Nene, the Stour in Suffolk, the Wye and the Dee conservancy in Wales—substantial navigable rivers of iconic importance. Our responsibilities for those waterways include a duty to maintain them in a condition in which people can safely enjoy the statutory public right of navigation that exists on them. We will continue to endeavour to fulfil those responsibilities to the very best of our ability in the run-up to any transfer to the new trust.
We should remember how popular our waterways are. In 2009-10, the last year for which we have accurate figures, there were approximately 70 million visits to our waterways. There are 32,000 registration holders—boat owners and operators—on our navigations alone, let alone on the canals and waterways that will come under the new body. In the current financial year we will be investing around £10 million of grant in aid and £7.5 million of income, a considerable amount of that coming from boaters, in managing and operating the navigation structures on these waterways.
As we prepare for the further handover, and as we bear in mind the responsibilities that the new trust will have, a few points need to be borne in mind, and I very much hope that the Government will do so. First, on rivers in particular—this differs to a certain extent from canals—there are different traditions for different rivers; they do not all operate in exactly the same way with the same expectations for boat operators and users. Including an appreciation of the subtle differences between different waterways in any assessment of how things move forward is going to be important.
Secondly, and with the events of the past weekend weighing heavily on my mind, we need to bear in mind the need always to manage rivers for flood risk management. The importance of marrying navigation responsibilities with the continuing flood risk responsibilities that the Environment Agency will continue to have in waterways that transfer will eventually be an important part of what happens. Thirdly, it will be important that the money is there for any enhanced responsibilities that the new trust has when transfer occurs in a few years’ time.
Fourthly, in looking at how the new trust operates, both in its initial phase and in the second phase after the transfer of EA responsibilities, it is important that the new trust all the time bears in mind the interests of boat owners and users and the people who want to use our rivers for recreation, for quiet enjoyment and for the solace that very often our rivers can bring. It is being accorded an important responsibility. I have every confidence that the team and the arrangements that are being put in place will enable that to happen, but I hope that the Government will keep a wary eye on making sure that it does.
Lord Hodgson of Astley Abbotts
My Lords, I also thank my noble friend for the explanation of this order. I share the enthusiasm of the noble Lord, Lord Smith of Finsbury, for this good and imaginative proposal. I do so for practical reasons. One is that, as it says in paragraph 8.12 of the Explanatory Memorandum,
“one of the benefits of moving out of the public sector will be that it should enable and encourage more innovation and diversity in the way the new charity grows its income”.
There is also an emotional reason: the first holiday I ever spent, aged 16, with three friends from school, was to hire a canal boat and travel the Shropshire Union Canal and over the Pontcysyllte aqueduct on the way to Llangollen. I doubt that you would be allowed to take a boat out now aged 16, but in those days we did not have as much health and safety as we do now. When one compares and contrasts some of the things that one sees on the waterways now with what was going on then, one sees that a lot of the developments and improvements have been made by voluntary labour, so this is a welcome extension of a trend that is already present in the waterways movement.
The putative board very kindly had a briefing meeting on 6 July last year. It explained its plans for the future, and exciting indeed they were. However, one of the questions that I would like to funnel to it through my noble friend regards the enormous cultural shift that there is going to have to be within the organisation in order to pick up and respond to the challenges of working in the private sector. As some noble Lords know, my life is in the City. When I said, “Just tell me a bit about the return on capital and post-investment appraisals”, and those sorts of things, there was an answer but not one that I would describe as being of sufficient crispness if this organisation is to hold its own against the very sharp commercial operators with which it will have to carry out joint ventures to develop its various assets. It was slightly hazy. It is important that this very imaginative proposal should succeed. Therefore, I very much hope that this body will be able to up the game, if that is the right expression.
Lord Berkeley
My Lords, when I first heard about this transfer by way of what I still call the quango cull Bill, I welcomed it. I agree with the noble Lord, Lord Smith, that the settlement seems pretty good. The Parliamentary Cycling Group, of which I am a member, was taken along the towpath from Islington to a very nice cycle repair café on the canal called Lock 7. We were given a very interesting briefing about the changes taking place on the waterways. It was an excellent presentation and I came away thoroughly impressed. It is a great place to pedal along in the winter because there is a high-voltage cable under the towpath, so when everything else is snowy you can still go along without slipping into the canal.
The Minister said that the British Waterways Board had a prudent track record in property management, but that is not the view of the people who sent me e-mails—other noble Lords may have received similar messages—which I presume reflect the tenants’ view. The National Bargee Travellers Association, many of whose questions the Minister sought to answer, states:
“These families live on the waterways lawfully by virtue of s.17(3)(c)(ii) of the British Waterways Act 1995”.
Will the same rights of occupancy exist even if those families have to move under the new trust? They are clearly worried, saying:
“The assurances given by British Waterways of greater public accountability exclude itinerant boat dwellers”.
That is quite worrying, because there is no way in which they can seek parliamentary discussion as they could when BWB was state-owned. I hope that the Minister can give an assurance that nothing is going to change in that regard, even if there is less parliamentary scrutiny.
I heard also from a man who is one of apparently some 200 people who are in litigation with the British Waterways Board. I do not want to go into the detail of individual cases, but there are allegations of “criminally extracted licence fees” during the past 20 years on the Grand Union Canal and talk of costs reaching £500 million, which seems surprising. What will happen to cases that are pending or currently being heard in court when the transfer takes place? It is clear that people are worried about that. The Minister said that the Government would provide a Written Statement on the Canal and River Trust in two years. It might be useful to include in it a progress report on outstanding court cases from the old regime. I hope that these matters can be resolved without any more uncertainty. I look forward to the Minister’s response.
Lord German
My Lords, I, too, welcome the orders, which I believe are the result of long and very hard negotiation. If the preparedness of the new trust to handle the financial affairs of our waterways is an issue, satisfaction should be drawn from the number of noble colleagues and noble Lords opposite who have congratulated it on the amount of money that it has been able to extract from the Government. It is indicative of the robust way in which the new trust has engaged that it has brought to a conclusion financial matters that started some way back from the £800 million which the Minister mentioned. That protection over 15 years will enable the new trust to make plans, and the asset base along with that will provide it with a very useful way of driving forward change.
The issues I am slightly concerned about, and about which I seek some clarification from the Minister, concern the way in which the new governance structure will run and the ability of the new trust to ensure that it is inclusive and serves those who use our waterways. From the documents before us, it appears that the trust has decided not to go for a membership-base as an organisation, unlike the National Trust, which some people have suggested fulfils a similar task. Could my noble friend tell us what was the reasoning behind not going for a membership organisation, when this is clearly an opportunity to develop the uses of our waterways both for leisure and health purposes—not to mention the tourism benefits, which are obviously very important to us? The current structure of the organisation is that we have trustees, a national council and 12 waterways partnerships. I would like to congratulate those involved in the negotiations to secure an all-Wales waterways partnership in addition to that—and here I declare my interest as president of the Monmouthshire, Brecon and Abergavenny Canals Trust, part of which is affected by this order, part of which is not because it remains in local authority and other ownership.
The third issue I would like to raise, apart from governance, is that of safeguarding for the users. Paragraph 8.5 of the Explanatory Memorandum to the British Waterways Board (Transfer of Functions) Order 2012 talks about access to towpaths and refers to an explicit safeguard in the trust’s obligations. While it states that the transfer protects the status quo, a sentence or two further on it states:
“As the majority of towpaths are not currently public rights of way and access is permitted at British Waterways’ discretion, this is a significant new protection”.
There seems to be a contradiction here in that the status quo may prevail, but it is not clear whether it is the intention of this order to extend towpath access or simply to transfer the status quo and give the Canal and River Trust discretion over access? I would be grateful if my noble friend could explain this.
The other safeguarding issue relates to the by-laws, which I believe my noble friend referred to earlier. It is a requirement that they should be approved by the relevant Minister. Could my noble friend explain the publication procedure that the Canal and River Trust will undertake prior to these by-laws being submitted to the Minister and what the process will be for ensuring that this happens?
My final question, which again is a bit of a cheeky one but I am going to ask it anyway, refers to paragraph 8.13 of the same memorandum, which reports that the Government sought views on a name for the new charity. The most popular was the National Waterways Trust, “waterways” being the most popular word in the consultation. The trustees subsequently named the charity the Canal and River Trust. However, in Wales it will be known as Glandwr Cymru, meaning Waterways Wales, which seems an unusual choice when it is to be called the Canal and River Trust. I do not understand whether Canal and River Trust/Glandwr Cymru is the title of the new trust in its entirety, or whether waterways in Wales will come under a trust that is a subset of the Canal and River Trust known as Glandwr Cymru. Perhaps my noble friend could explain the translation, and indeed why the word “waterways” will be used in Wales but not in England.
I have one further point, which the noble Lord, Lord Smith, reminded me of: the Environment Agency transfer of navigation rights, which, as the noble Lord says, is part two of the agenda here. The Canal and River Trust as it now stands does not manage large-scale infrastructure in our waterways or large-scale weirs. Is that a necessary part of the exercise in this interim phase on what that transfer should do and where the expertise should come from in order that the Canal and River Trust can then manage these larger structures, which, like Teddington lock, are very important to the security and safety of our land in this country?
Lord Framlingham
My Lords, I am not sure whether my remarks relate directly to the transfer functions, but this is an opportunity for me to get rid of the bee that I have had in my bonnet for some time now about the relationship between waterways and youth unemployment. Some months ago I was studying a map of British waterways and it struck me that they wind throughout our country and are never very far away from centres of population. They could well be combined with an imaginative and, I hope, simple scheme to help our young unemployed. Many years ago I worked for British Waterways. This is not such a mad idea; I ran it past the Prime Minister, although admittedly on a social occasion and he did not hang around for long, and he thought, at least initially, that it sounded like a very good idea.
Think about it for a moment. The skills required to renovate and maintain our waterways include everything from pulling out Tesco trolleys to skilled bricklaying, piling and digging—all sorts of skills. I would have thought that it ought to be possible to invent a scheme that allowed young people to use their talents across that whole range of skills and give them something to do. At the end they could be given some kind of certificate or qualification that would benefit both them and the waterways. It would have to be kept simple but I envisage something really quite formal, with jobcentres throughout the country linking the whole thing together. Initially this might perhaps sound a little imaginative, but think about the geographical relationship of the waterways to centres of unemployment and the jobs requirement. A whole variety of jobs could be found for young people, and they could be given different kinds of qualifications, allowing them to start very simply and then build up their portfolio of qualifications as they went. I do not know whether they would need money; I would like to think that young people would work for the benefits that they were already getting, but I appreciate that that is a little controversial. They might well be prepared to do that, though, to get the value out of the schemes that they were being offered.
I put that on record as a suggestion but I will also follow it up in other quarters as best I can. I hope that the Minister might at least log it and give it some thought.
Lord Greenway
My Lords, I apologise for coming late to the Grand Committee, and I apologise if I say something that has been said already. It is especially pleasing to see the Minister back on maritime affairs in some form or another. He will recall that we spent many hours dealing with the Marine and Coastal Access Act some two or three years ago.
I welcome the proposed measures. As the noble Lord who sat down just now has said, as no doubt have many others, they were subject to extensive negotiations. I know full well that the British Marine Federation was very worried when they were first mooted but, as a result of the negotiations and especially of the welcome funding, its fears have been allayed. I certainly wish the new organisation a slightly better start than the Marine Management Organisation had. That was set up by the Marine and Coastal Access Act and the first few months, to put it mildly, were somewhat disturbing. Since then I am glad to say that things have improved enormously. I wish the new organisation well.
Finally, and rather flippantly, the Shropshire Union Canal was mentioned by the noble Lord, Lord Hodgson of Astley Abbotts. Most noble Lords will know that I am a boating man, but I am very much a deep-sea boating man. I am afraid that I am a bit of a stranger to canals. However, I did once find myself standing above a bridge on the Shropshire Union Canal during the annual yachting shoot. It was a glorious, frosty, autumn morning, and never have I more wanted to be on a canal boat travelling along that most inviting-looking stretch of water. I might add that the only pheasant I saw all day craftily flew under the bridge beneath me, so the score was pheasant 1: Greenway nil.
Lord Martin of Springburn
My Lords, I, too, apologise for being late to the Committee. Monday is a day for travelling from Scotland, and I travelled within yards of the Forth and Clyde Canal, which I wish to talk about. I am dependent on trains and other modes of transport to get here. I declare an interest as I know that that is important in this place. I am a card-carrying member of the Forth and Clyde Canal Society, which was started at a time when people saw no value in the canal that runs from the west of Scotland to the east. At one stage in the 1960s, part of the canal was filled in to accommodate a motorway, but because of the good people in that organisation, that has been rectified and it is now navigable from the west to the east.
I remember from reading the history of the canal, which is absolutely fascinating, that the Member of Parliament who was responsible for putting the legislation through—we know that canals need parliamentary legislation—was a Mr Lawrence Dundas. I do not think he declared the fact that he owned land in the east coast in an area called Grangemouth, for which he was a Member of Parliament. However, I declare my interest here. I feel that British Waterways Scotland does an excellent job. Through the co-operation of everyone, including central government, the Scottish Government and the local authority, we have built the great Falkirk wheel—a fantastic piece of technology that lifts the barges from the Forth and Clyde on to the Union Canal. I understand that no more energy is used than would be used for 10 electric toasters. The early pioneers of canal building were fantastic surveyors, builders and civil engineers—Telford being one of them.
Over the years, the tow-paths of the canals have been used like a public park. They have become very safe places for dog-walking, cycling and running, so it is not only those who have a boat or a barge who can enjoy the canal. It should also be remembered that within our cities, the canal is the one area where young people, who are perhaps living in housing estates that could be improved, have the ability to see our wildlife without necessarily having to go into the countryside.
I know that this is not written into this order, but I put it to the Minister that if he is speaking to anyone in British Waterways, a major advantage of the Caledonian canal is that seagoing shipping can cross from Europe through to the west coast of Scotland because the waterway is very big and there is no worry about tides. However, at its east side the Forth and Clyde Canal ends at the River Carron, which goes into the River Forth and is tidal. That means that it is not so easy for anyone who has leisure or sea-going yachts to negotiate their way into the Forth and Clyde canal. I understand that there might be proposals to canalise, in the technical jargon, that part of the River Carron. I hope that that can come about because leisure and tourism are very important for our canals.
In my former constituency is an area called Port Dundas, which is a canal port. A great warehouse there was lying derelict but developers came along and developed it in a very positive way. As a result, one of the poorest municipal wards in Britain, if not in Europe, then had very wealthy people staying in that ward. That was a positive thing because it meant that there were then people in the community who could look at their neighbours’ problems and see what they could do to help. Many of them got involved in community projects in adjoining housing estates such as Possil Park and Hamiltonhill, which I do not expect other noble Lords to know about. My point is that that development helped other people socially. Those buildings were of course built very solidly and have become attractive flats. Other developers then came along and said, “Well, if it can be done at Port Dundas, it can be done along the banks of the canal”.
I hope I might be allowed to say that some development can be positive, such as the warehouses at Port Dundas, but that some other developments are not too attractive. The developer might come along in good faith and with the best of intentions. However, the community always has to have a say in what developments should go on because people are very proud of their canals and the environment thereof. I hope that whenever consultative bodies are consulted, it is borne in mind that the local communities, which have been there for years, should never be overlooked when it comes to the concerns that they might have about development.
Lord Knight of Weymouth
My Lords, it is a pleasure to contribute to this debate. We on this side of the Committee support these orders, but I shall qualify that as I go along, as is my job. It has been a debate in which some good points were made. I will not rehearse all those points, however good they were, for the sake of saving time.
It is a pleasure to follow the noble Lord, Lord Martin, not only because I heard him say the word “order” again, which brought back many happy memories from my time in the other place, but because, given that he talked about how well British Waterways was operating in Scotland through development and the various uses of the canals to which he referred, implicit in his speech was the question of whether as a result of this transfer, which does not apply in Scotland, British Waterways will have the capacity to continue doing that work in Scotland: and, indeed, given the demise of the Inland Waterways Advisory Council, whether a voice is being lost in Scotland for the users of waterways.
The ideas of the noble Lord, Lord Framlingham, around youth unemployment would have been ideal for the former future jobs fund. I shall be interested to hear whether the Minister thinks that the new youth contract will latch on to those interesting ideas about how the waterways and work around the waterways may be used.
The main point I wish to make is that these orders come from a cross-party consensus, and I was pleased that the Minister acknowledged that at the outset. I have heard from various interest groups and stakeholders about these proposals and, with the notable exception of the National Bargee Travellers Association, the feedback on the transfer has been very positive, particularly from the Inland Waterways Association and the British Marine Federation.
As we have heard, the diligence and strength already shown by the trustees of the Canal and River Trust in negotiating its 15-year funding agreement with the Government is a positive sign of things to come. It also demonstrates that many of the building blocks for the new trust are now in place and ready for the transfer. Clearly there is good potential now for improved governance and for new income sources to be developed for our waterways with, I hope, a reduced cost base and, as we heard from the Minister, an increased engagement by volunteers.
I also pay tribute to the work of the Secondary Legislation Scrutiny Committee and, in particular, to its first report, which went into these issues in some detail. It reminded us of the tests that we should deploy when considering these orders, which arise from the Public Bodies Act, including the tests of efficiency, effectiveness, economy and accountability. The report ran through those issues in a helpful way. As the committee has set out, the tests of efficiency and effectiveness broadly revolve around how well stakeholders will be engaged. As I have said, I am comfortable with that.
However, we have now heard from a number of speakers in the debate about the concerns that have been raised with me and many others by the 5,000 to 10,000 itinerant boat dwellers who live on our canals. I look forward to what the Minister has to say on that issue because it also touches on the third test of accountability. The deputy chair of the National Bargee Travellers Association, Pamela Smith, in her e-mail to me—which I am sure many others have received—set out some of the details of the transfer of powers. She said:
“If the transfer takes place, the Canal and River Trust will have powers to make subordinate legislation; powers of forcible entry, search and seizure; powers to compel the giving of evidence and powers whose exercise will necessarily affect the liberty of an individual. Our homes will be at greater risk after the transfer”.
She said that they have no legal recognition or protection for their homes and that the transfer of British Waterways to the Canal and River Trust will remove the minimal protection of their homes that derives from the parliamentary scrutiny of British Waterways. It is obviously quite serious if that group of 5,000 to 10,000 people feel that there will be less accountability as a result of these transfers.
When the Minister responds, I would be grateful if he could comment on the role of the Waterways Ombudsman in helping to deal with some of these matters. Given that we are about to go into Committee tomorrow on the Groceries Code Adjudicator Bill, has the Minister given any consideration to a code of conduct for the new trust in respect of its relationship with this group of boat dwellers? With such a code, the ombudsman could then police for us. Would that help to give that community some reassurance about the operation of the trust?
The third of the tests that the committee reminded us of was that of economy. I was pleased to hear the Minister give a commitment to meet its request for a Written Ministerial Statement on the financial position of the new body two years after the trust has formed.
Finally, I should not let the passing of the Inland Waterways Advisory Council go without comment. Reading between the lines of the committee’s first report, I noted that it did not see that much of a case had been made for its abolition and looked forward to the Minister setting out more detail, which to some extent he has already done. I will be interested to know how stakeholders will be heard from in policy-making. However, I shall not die in a ditch over IWAC because, in my single year of being the Canals and Waterways Minister at Defra, I do not recall getting any real input from it. It can perhaps pass, therefore, without too much mourning. I look forward to the Minister’s comments.
Lord Taylor of Holbeach
My Lords, it is always good to hear from a former Minister about his experience of his portfolio. I understand the points that noble Lords have made, but I am also gratified by the fact that these statutory instruments have received widespread support in what they seek to achieve. That is a reflection of the fact that Parliament has felt that there is a role for a new form of governance for British Waterways, and the CRT represents just that.
I have a number of points to make, which I could rattle off in one go but it might be better to refer to them as best I can as I summarise the debate. There may be some things that I miss, in which case I hope that those behind me will remind me of them so that I might at least write to noble Lords.
The welcome given to the orders by the noble Lord, Lord Knight of Weymouth, reinforced the view of the Grand Committee that they are proper orders to be presenting to Parliament. It was good to hear from the noble Lord, Lord Smith of Finsbury, his understanding of what the Government are seeking to achieve. We are looking at the possibility of bringing the Environment Agency’s waterways into the Canal and River Trust. I spent Friday afternoon at Black Sluice on the South Forty-Foot Drain, which is an example of the way in which the agency has provided for waterways users. It has built a lock at that sluice, and plans for that area and the Haven at Boston will mean that there should be increased use.
The Fenland waterways partnership represents important recognition that the Fenland waterways, which have relatively underused water courses, can be developed in this way. There is logic in that development, and we look forward to working with the Environment Agency and the noble Lord on achieving that. He was right, too, to tell us that there are important elements of flood risk management in the management of canals and, if we dare cast our minds back three or four months to when we talked about this, water management and supply. It is important that these elements are part and parcel of that. Leisure use is of course very important and will be the way in which most people judge these developments, but other aspects of policy will look to the waterways for other reasons.
On the creation of the CRT, I reassure the Committee about its transparency and openness; that is what it is about. We have set up a governance structure through the board of trustees, the council and the waterways partnership that is inclusive and gives all interested parties an opportunity to be represented and have their voices heard. I reassure my noble friend Lady Parminter that the council has four directly elected boaters within its ranks. It is not designed to be an exclusive body; it is inclusive in its very essence.
A number of noble Lords mentioned the NBTA. I understand that this group has been vociferous in trying to bring its particular concerns before Parliament, but I hope that it in turn is reassured, as the Committee will be, that the CRT is actually setting up a small advisory committee to advise senior managers responsible for boating and navigation matters—on a less permanent basis than the IWAC, I might say, but it will include at least one boater without a home mooring. I hope that his or her understanding, and the campaigns that they will be able to bring to that advisory committee, will be in the interests of itinerant live-aboard boaters.
It is important to emphasise to my noble friend Lady Parminter and indeed others that the rights of boat dwellers will not be removed or weaken as a result of this transfer order. The Human Rights Act, the Equality Act and the Freedom of Information Act will all apply to the CRT as it carries out its statutory functions. It will be a charity that seeks to engage with all its stakeholders, and there will be opportunities at every level of the organisation for stakeholders to be involved. It will be up to members of the public who are passionate about the waterways and want to get involved to get engaged with the CRT through its governance structure. I have already mentioned the advisory committees, which will have the responsibility for advising on boating and navigation matters.
I think that I have covered the point about resident boat owners. Their rights are contained in statute in the British Waterways Acts, not the charity’s articles of association. A number of noble Lords asked if I could reassure them on that; I believe that the noble Lord, Lord Berkeley, made that point.
The noble Lord, Lord Knight, discussed the question of the Inland Waterways Advisory Committee. His personal anecdote reinforced the Government’s belief that we are doing the right thing in abolishing it, and his noble friend Lord Grantchester, who cannot be in his place now, made the same point. While it is right that the IWAC is abolished, though, I thank its members for their commitment and service. I hope that they will, as other noble Lords have suggested, engage with the CRT to enable the trust to benefit from their expertise in the future.
Lord Knight of Weymouth
I have since discovered that the future jobs fund did provide jobs for a number of people, including 56 young people who worked on the Leeds and Liverpool Canal, for which the fund won an award. Perhaps the Skills Minister will be pleased to learn of the success of that previous scheme and will look at ways for it to be replicated using the Groundwork charity.
Lord Taylor of Holbeach
Here was I thinking we were in the vanguard of new ideas, but now I discover that we are actually trundling along behind. None the less, I shall still make sure that that is done.
Finally, I am delighted that HRH the Prince of Wales has agreed to be the trust’s patron. It is wonderful that the CRT canal boat was in the jubilee pageant, along with 60 others. I believe that we are achieving something very different and exciting for our historic and much-loved waterways, and that they will be cared for by future generations as a result.
Inland Waterways Advisory Council (Abolition) Order 2012
(11 years, 10 months ago)
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Lord Taylor of Holbeach
That the Grand Committee do report to the House that it has considered the Inland Waterways Advisory Council (Abolition) Order 2012.
Relevant documents: 58th Report from the Merits Committee, Session 2010-12; 43rd Report from the Joint Committee on Statutory Instruments, Session 2010-12; 1st and 4th Reports from the Secondary Legislation Scrutiny Committee.
Electoral Registration Data Schemes Order 2012
(11 years, 10 months ago)
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Lord Wallace of Saltaire
That the Grand Committee do report to the House that it has considered the Electoral Registration Data Schemes Order 2012.
Relevant document: 2nd Report from the Joint Committee on Statutory Instruments.
Lord Wallace of Saltaire
My Lords, the order will provide the legal basis for a second electoral registration data-matching trial by enabling the sharing of specified data between the DWP and local authority electoral registration officers. An initial round of data-matching schemes took place in 2011 and, in the Government’s response to pre-legislative scrutiny and public consultation on individual electoral registration and amendment to electoral registration law under Command Paper 8245 of February 2012, the Government announced that they were minded to use data matching to simplify the transition to individual registration for the majority of electors, subject to further testing this year.
Before I set out what the order does, perhaps I may provide the Committee with some background, with which I think most noble Lords present will already be familiar. All sides of the House agree that we need to improve our electoral registration system. We need to make the register both more accurate and more complete than it is at the moment. We need to ensure that it is not vulnerable to fraud but that people find it as easy as possible to register and are encouraged to register.
The Committee will recall that an initial round of data-matching schemes took place last year. The initial trials involved comparing the electoral register against other public databases in order to identify people who were missing from the register, which would then give an electoral registration officer the chance to contact them and find out whether they wished to be added to the register. The 2011 data-matching schemes were also aimed at identifying potentially inaccurate and/or fraudulent entries on the register. The electoral registration officer would then be able to take the necessary steps to remove them.
The evaluation of these schemes told us that further piloting work was required, and I shall say more about that in a few minutes. An unexpected benefit of last year’s pilot schemes was the discovery that it might be possible for a significant majority of existing electors to be confirmed as accurate to an acceptable standard by matching the electoral register against data held by the DWP. We hope that this will address one of the criticisms of some of our individual registration proposals, but there may be a risk of a reduction in the number of registered eligible voters. In the transition to individual registration, those electors whose details were confirmed through data matching would therefore be automatically placed on the new individual electoral registration register without having to make a new application.
We want to test this proposition in the pilots run under the order, but with a larger sample so that we have good, robust evidence. The instrument before us now will enable us to test the capability of the data-matching process to confirm existing electors on the register. It will involve a range of areas in England, Wales and Scotland. The results of the trial will be evaluated by the Cabinet Office and the Electoral Commission and will enable us to confirm that this matching process will assist the transition to 2014 and enable us to find a process for carrying it out. I should add that the reason for not including Northern Ireland in this pilot scheme is that Northern Ireland already has moved to individual electoral registration.
Lord Rennard
My Lords, I wonder at the outset whether the Minister might be prepared to make a short statement of principle about the purpose behind the orders. What I want to hear particularly is that the underlying purpose is at least as much about the completeness of the electoral register as it is its accuracy. That will be crucial in approving the direction in which the Government are travelling.
Perhaps I may ask him specifically about the decision not to provide a full regulatory impact assessment of the orders. The Government state that there should be no impact on the private sector, but potentially reducing significantly the completeness of the electoral register could have a big impact there. I know that the credit reference agencies have made a number of representations to the Government on this issue. We think nowadays about the way in which many businesses do business. They do it online over the internet; they provide goods and services to people to addresses that people fill in online. If they are unable to check the accuracy of those addresses, as they generally do on the electoral register, there could be a detrimental impact on business if we fail on the key issue of completeness of the electoral register.
It seems to me that the success of the transition to individual electoral registration will be hugely important for elections post the general election due in May 2015. It will be less important for the election of May 2015 because of the carry-forward provisions, but will be hugely important for elections in future. It will be hugely important to the boundary review process for future boundary reviews—not the present one, based on the current registration process—but for those due to begin on 1 December 2015. Will the Minister confirm that it is crucial to have independent verification of the success of the move towards independent electoral registration, of which these instruments are a part, before it is considered safe to proceed either with elections under the new system or with future boundary reviews?
I have a question on a detail that emerged from the previous pilots which the Minister now suggests will be addressed in future pilots. It was discovered in the initial pilots that quite a few people were eligible to be on the electoral register. The DWP database showed clearly beyond any reasonable doubt that these people were entitled to be on the electoral register, but they were not on it. I understand from the order that in future pilots, if people are entitled to be on the electoral register and it is clear beyond the shadow of a doubt that they should be on it, they will be chased to get them on to it. That would seem to be commendable, but if we know beyond a shadow of a doubt that someone should be on the register, why should we chase them to get them on to it?
I can see that if we followed models that I have advocated in the past that require a signature as part of the registration process, you could chase these people for a signature. However, if the DWP database has their national insurance number, name and address, and all satisfactory methods show that they should be on the electoral register, why chase them? If they are to be chased, how do we know that they will be chased effectively and consistently? It would be a great shame if, in chasing these people, some individual electoral registration officers sent a very cursory letter and left it at that, while others used best practice and perhaps sent a series of repeat letters or e-mails pointing out the likely future sanctions if people failed to comply with what will be a legal requirement. In making sure that this works effectively, there will probably be a requirement for ring-fenced funding for local authorities to make sure that they do their job in relation to this. I very much look forward to the Government’s and the Electoral Commission’s evaluation of these pilots.
Lord Kennedy of Southwark
My Lords, I am delighted to have this opportunity to speak in this Grand Committee debate on the Electoral Registration Data Schemes Order 2012. I say at the outset that I agree with the comments of the noble Lord, Lord Rennard.
I advise the Committee that I am a member of the Electoral Commission, which commented on this order earlier this year and which will evaluate the pilot schemes when they come to an end. I hope that the Government are in listening mode today. It is fair to say that they did not listen very much last time, which is part of the reason why we are back here today with a second set of orders. The last set of pilots was unclear. The pilots did not have a common methodological framework, which made it difficult to evaluate their effectiveness as a data-matching tool to prove complete accuracy of the register.
As has been said, the Government decided to speed up the IER process. Let us be clear, IER is already on the statute book. It was brought in by the previous Labour Government. The Minister needs to provide the Committee with proper assurances that everything is being done to make the register more accurate and complete. These powers will assist the process and action can be taken following the process. My concern is that these proposals may well improve the accuracy of the register but that completeness will suffer, with the register being less complete. As has been said, accuracy and completeness are different things.
I ask the noble Lord to clarify a few things in his reply. Can he explain the methodology behind the pilots? Will they test the processes that will be made available to local authorities if they are rolled out nationally? Can the Minister comment on the management of the pilots, as well as on the staff and budget provisions? What are the proposals for communication between the pilots, data holders and the Cabinet Office? Perhaps I may also ask him to comment on how he sees the data-matching process being used to confirm the identity of existing electors and how he sees the confirmation process working.
I would not say that the Government have wrapped themselves in much credit on these matters so far. These are serious issues and I hope that the noble Lord will give a commitment to write to me in detail on the points I have raised today. I do not want to have to raise them again when the order reaches the Floor of the House, but I give him notice that I will do so if necessary. With that caveat, I look forward to his response.
Baroness Hayter of Kentish Town
My Lords, I thank the Minister for introducing the order. I guess that if I have one word of advice for him, it is, “Listen to the last two speakers”. I know that my noble friend Lord Kennedy was an agent and could get votes where no others were found. Sadly, to our detriment, the noble Lord, Lord Rennard, also had a great ability for doing that—something for which I have never quite forgiven him. However, both noble Lords have a lot of wisdom and experience behind them in these matters.
We welcome this second set of pilots. Their aim is to ensure both the accuracy and, we hope, the completeness of the register, as both the noble Lord, Lord Rennard, and my noble friend Lord Kennedy have said. I think that we all rather bemoan low turnouts in elections, but of course the true level of participation would be lower if we took into account the votes of those who would be eligible to vote if only we could catch them all. Clearly the Government have a responsibility to act to ensure that we find and register all those for whom our predecessors, particularly of my gender, fought so hard for the right to vote. Just a few days ago, we heard of the great yearning of the people of Burma for the right to vote, and that puts an onus on all of us to make sure that those who have won that right have the ability to cast their vote and to do so easily.
The order is part of the process of checking on the proposed way of building up individually compiled electoral lists so that everyone, with the minimum of difficulty, is able to cast a vote, and we welcome that. I do not have 20 questions for the Minister but I am afraid that I do have a dozen.
First, and most importantly, is the fact that we will not have the evaluation of these pilots until after the Electoral Registration and Administration Bill becomes law. Therefore, what happens if the pilots demonstrate real concerns over the process used, such that we doubt whether the 2015 register will really be complete and accurate? What happens if they suggest that there are still adjustments to be made so that, although the system could eventually work, it will not be robust in time for that election or indeed for the boundary review that comes just after it, to which the noble Lord, Lord Rennard, referred?
Secondly, the evaluation will be held by both the Electoral Commission and the Cabinet Office, but what if their assessments vary? What discussion will take place in this House or the other place before individual registration continues, regardless of the outcome of the pilots?
Thirdly, there is still scope for additional pilots, but who would authorise them and would they be done in time?
Fourthly, what if the pilots were to indicate that extra resources were needed, either in particular localities or among particular age or other groups, to increase completeness? Will the Government respond to such an indicated need or will the pilots simply demonstrate the problem but not lead to solutions?
Fifthly, is the Minister satisfied that the spread of authorities is sufficiently varied to produce robust findings? The one that pulled out would obviously have had many students in its area, so some assurance about the student population in the others would be useful. Are there any provisions for any sort of understudy in case one of the remaining 14 was to pull out?
Sixthly, when this was debated in the other place, the question of a register for a Scottish referendum was raised—needless to say, by a Scottish Member of Parliament. Being equally parochial, on Friday I had been planning to ask the Minister whether the new register would be available in time for a referendum on the reform of the Lords, especially one on the electoral system to be used in selecting the new senators, given that the Government gave us a referendum on the election system for the House of Commons. However, having heard over the weekend that there is, I gather, going to be no referendum, either on the electoral system or on this major, significant constitutional change, I have a more minor question to ask instead. Will the Members of your Lordships’ House be able to vote for the elected one-third of the House in May 2015 and, if so, will we be caught by the data-matching pilots?
Lord Wallace of Saltaire
My Lords, I am tempted to start by saying that I now have writer’s cramp from attempting to write down all those questions as they were thrown at me. I remind the Committee that we all share an interest in this and I hope that it is very much an all-party concern that we should have as accurate and complete a register as possible. I think that we also all share an awareness that our electoral register has been becoming less accurate and complete, for a number of reasons. Young people have been moving around more and, in particular, I fear that a number of them are not actively interested in getting themselves on to the register. It has also been rather more difficult, particularly in some inner-city areas where people are in multiple accommodation and moving relatively quickly, to keep up with people as they move.
I think that we also all share an awareness that the issues about which people hold what data are moving very fast. The Government now collect a great deal of data that were not available for collection before. Private sources, from Experian to Google to Tesco, also collect a great amount of data, and there are some very large issues that we will have to deal with over the next few years about how that is handled and what privacy guarantees are introduced to hold on to the individual’s rights against what I see from one of my notes is regarded as the data-collecting state. In revising the register, we have to take all these different issues into account.
The purpose of the pilots is to ensure that individual electoral registration is as complete as possible. In answer to the noble Lord, Lord Rennard, the issue of the impact on business and credit checks is one that we are aware of, but it is not something that many young people are aware of. When the Bill comes before the House we will have to discuss that in detail, because a lot of young people do not understand that your credit registration and the way in which business can operate with you partly depend on whether you are on the register. That is part of what may need to be an information campaign on all this.
There certainly will be independent assessment of the effectiveness of these bilateral pilots. I liked the question about what happens if the Cabinet Office and the Electoral Commission come to different conclusions on this; if they did, clearly they would have to discuss and reconcile their evaluations of the schemes. Actually, it is highly desirable that there should be two different forms of evaluation. I remember going to talk, when I worked at a think tank, to the new research director of a major international company and him asking his predecessor, who was introducing me, why they needed advice from a think tank when the company had its own research department. The former head of the research department said, “Because you might want a second opinion”, and the same is true in this case. Involving both the Electoral Commission and the Cabinet Office is a good way of making sure that there is a second opinion and, if the second opinion is different, that will have to be reconciled.
I think that I understood the noble Lord, Lord Rennard, as saying that we might even think about putting people on the register automatically if they were found on the DWP database or, alternatively, only if they responded to follow-up letters or visits. Again, that is something that we will be discussing when the electoral registration Bill hits the Lords. It is an important and difficult issue, because it raises questions about citizen involvement and responsibility as opposed to individual privacy when it comes to this public database—indeed, one of the most important public databases that we have.
I should say to the noble Lord, Lord Kennedy of Southwark, that local authorities manage registers, and electoral registration officers work for local authorities. With these pilots, we are very much concerned to look at the completeness dimension. Last year’s pilots looked rather more at accuracy and I assure the noble Lord that it is very much a concern of ours that this should be as complete as possible. Combining my answer to him with at least one of the dozen or so questions from the noble Baroness, Lady Hayter, that I wish to answer, I remind noble Lords that electoral registration officers already make use of a number of data sets that are available to local authorities. These include the register of births and deaths, council tax records, registers of households in multiple occupation, local land and property gazetteers, housing benefit applications, lists of persons in residential and care homes and, when allowed, details of attainers—those aged 16 or 17—held by education departments.
In Northern Ireland, the move to individual electoral registration has led to an improvement in the completeness of 18 year-olds coming on to the register because authorities have worked actively with Northern Irish schools to encourage 16 and 17 year-olds to come on to the register and to check names as they arrive. There are problems in some English local authorities where there are district and council authorities and the ERO belongs to one authority and the schools belong to another. That, again, is a question we might wish to discuss further when the Bill comes to the House. However, in looking at completeness, we hope that the use of secondary schools and 16 and 17 year-olds will help to ensure completeness in one of the precise areas where we are worried about the number of people who put themselves on the register.
Are we confident that the methodology in place this time is sufficiently robust to deliver successful pilot schemes? We are confident. We have adopted a more prescriptive approach to the pilot methodology than was possible last year. There is clear guidance for each of the pilot areas, on the basis of which we hope to draw robust conclusions from the evidence. We have developed the methodology in liaison with the Electoral Commission and we have asked all the pilots to agree to the methodology before they start work. That means that we have started work on developing a more sophisticated algorithm to reduce the resource intensiveness of the process for electoral registration officers.
As to the purposes of these orders, the impact is limited to the pilots and not beyond. Again, we will return to many of these issues when we are discussing the Bill. Are more pilots needed? This is an on-going process in consultation with the Electoral Commission and if more pilots are needed—and the area of young people is one that we are particularly concerned about—we will continue to a further pilot. Are we satisfied with the spread of authorities? We are satisfied that we have a sufficiently robust spread of authorities. One or two extra rural authorities might have been more appropriate—in the other place, the question of Scottish rural authorities was raised—but this is a fairly good spread across all three countries and across a range of different authorities. We are confident that this will give us a fairly strong result.
I am afraid that I am unable to say at the moment whether Peers will be able to vote in 2015 for the third of this House that will be elected. I was happy to hear the noble Baroness say “will be elected in 2015”. I promise to buy her a drink after she and I have been to vote on that occasion—if and when we have been allowed to do so.
Are there any other questions that I should have answered? Will further work be undertaken? We have said yes, it will. On the question of whether the new register will be ready for the Scottish referendum, we are determined that the same basis for the register will be in place throughout the country for each election. The impact of the pilots will not be used for a different foundation for the electoral register from one local authority to another. The purpose of these pilots, which have been worked on with the Electoral Commission and others, is to ensure, as far as possible, that everyone in the country and in different political parties has the maximum confidence that the new register is both as accurate and as complete as possible. We shall return to this issue if we need more pilots—it would require another order—and when we discuss the individual Electoral Registration Bill in the House.
Office of Qualifications and Examinations Regulation (Determination of Turnover for Monetary Penalties) Order 2012
(11 years, 10 months ago)
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Lord Hill of Oareford
That the Grand Committee do report to the House that it has considered the Office of Qualifications and Examinations Regulation (Determination of Turnover for Monetary Penalties) Order 2012.
Relevant document: 2nd Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford)
My Lords, I am grateful to the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee for their careful consideration of this order. Noble Lords will be aware that neither committee commented or thought that the House’s attention should be drawn to the order.
First, I shall give a little bit of history. Noble Lords will recall that it was as a result of concerns raised by Members of this House that we introduced a provision into the Education Act 2011 giving Ofqual new powers to impose financial penalties. That was against the backdrop of the errors in exam papers during last summer’s exam season. That power was commenced in May this year. It addresses the gap in Ofqual’s range of sanctions, as previously there was nothing between a power to direct and the ultimate sanction of withdrawing the awarding organisation’s recognition. This change brings Ofqual into line with similar regulators and is consistent with the Regulatory Enforcement and Sanctions Act 2008.
At the time, last year, the Government accepted the argument that a strong regulator needs a range of powers, including the ability to impose financial penalties. Fining is a flexible sanction which we expect to act as a deterrent to awarding organisations breaching regulatory requirements. In many circumstances it would provide a more proportionate response than the most severe sanction of withdrawing recognition. At the other end of the spectrum, as we have seen with other regulators, fines give a stronger public signal about the significance of the breach than giving a direction to take corrective action or public censure.
It is of course important that there should be limits on any fine. For that reason, we agreed that Ofqual’s power to fine should be subject to a cap of no more than 10% of the awarding organisation’s turnover. We also agreed that the definition of turnover for these purposes would be set out in an order made by the Secretary of State and subject to the affirmative procedure.
A wide range of awarding organisations operate in England: Ofqual currently recognises 179. They possess very different characteristics, including in relation to the way in which they derive income and the relationship between their regulated activity and any other activities that they undertake. In order to gauge the balance of views on this issue, we undertook a 12-week consultation on the draft statutory instrument, which ran from December to March this year. Parallel consultations were carried out by Ofqual and by the Welsh Government in respect of a similar power that has been introduced in Wales.
When we discussed this matter last year, I explained that it was our intention to define turnover in relation to activity that Ofqual regulates, rather than using a broader definition based on all an awarding organisation’s activity, which could include unregulated activity and activities beyond the United Kingdom. However, when it came to drafting the statutory instrument, it was clear that this would prove difficult to achieve, because in fact a number of awarding organisations have no income from regulated activity. Sticking to our original proposals would have resulted in those awarding organisations being able to operate without threat of this sanction. That could have led, for example, to an awarding organisation that charges for proprietary qualifications being treated differently from an employer awarding body that awards its own, very similar, qualifications to its employees without charging. For that reason, we consulted on an order that defined turnover in relation to all an awarding organisation’s activity in the United Kingdom.
The 35 responses that we received to the consultation were broadly in favour of the power to fine in principle, of the geographical scope of the power and of the proposal to calculate turnover on the basis of a business year. However, concerns were expressed over the inclusion of all income in the definition of turnover, rather than limiting the definition to income from regulated activity.
We understand the concerns of both large organisations and small charities, especially those that generate none or very little income from regulated activity. We have considered those concerns carefully and looked at a number of different options, including one proposed by Pearson that we should adopt a two-tiered approach, using one definition based on regulated activity where appropriate and a second based on all activity when an organisation does not derive income from regulated activity.
Set against these concerns, we have had to take account of the importance of establishing a regulatory regime that is simple, fair and consistent in its treatment of awarding organisations. Having considered the alternative options, we were not persuaded that any of them met this test. We think that calculating turnover must be done in a way that treats all awarding organisations equally. As the scope of regulated activity is narrow, being concerned only with the award or authentication of qualifications to which Part 7 of the ASCL Act applies, income from related activity, such as the publication of textbooks, would have been excluded from any definition that uses regulated activity as its basis. A differential approach could therefore have the effect of limiting the exposure of an awarding organisation that derives income from regulated activity, while placing no such limits on one that does not.
The order that is before us for consideration today defines turnover in relation to all of an awarding organisation’s activity in the United Kingdom. That approach mirrors the one already agreed by Welsh Ministers, following consultation and debate. If agreed by Parliament, this order will provide a consistent framework for awarding organisations operating across England, Wales and Northern Ireland. That matter was important for respondents to the consultation.
Alongside the consultation on the statutory instrument, Ofqual consulted on its policy on fining. That policy was published in May and makes clear the factors that Ofqual will consider in determining whether an awarding organisation should be subject to a fine. It will consider the harm done and whether a fine is likely to improve compliance with regulatory conditions in the future. It will also consider whether another regulatory body, such as the Welsh Government, has already imposed a financial sanction in relation to the breach.
Having decided that a fine is appropriate, Ofqual will take account of a range of factors in determining the amount of that fine, to ensure that it represents a proportionate penalty. This includes the likely impact of the fine on the awarding organisation’s provision of regulated qualifications and its turnover from regulated activities in relation to its total turnover, to avoid a disproportionate impact on awarding organisations with multiple business interests. Ofqual is required to give notice of its intention to fine, setting out reasons, and then to have regard to any representations received in response. Should Ofqual decide following any such representations to confirm the fine, the awarding organisation has a right of appeal to the First-tier Tribunal. Appeals may be made on the basis of the imposition of the fine and on the level of the fine imposed. While the independent appeals arrangements are in train, any fine is suspended.
There is no financial incentive for Ofqual to impose a monetary penalty. All money received in the payment of a fine will be paid into the Government’s Consolidated Fund. The definition set out in the order allows Ofqual to have a flexible monetary penalty policy that can take into account the diverse nature of the qualifications market. We set out to define turnover in a way that is fair, transparent, relatively easy to administer and consistent with the approach taken by the Welsh regulator. I believe that that is what we have done. I also believe that Ofqual’s commitment to act in a way that is proportionate, accountable, consistent, transparent and targeted, and the safeguards that are in place, should reassure awarding organisations that the fining power will be used proportionately and appropriately. I therefore commend this order to the Committee.
Lord Sutherland of Houndwood
My Lords, I support the order and commend the Government for bringing such a sensible conclusion to a complex inquiry. In doing so, I declare an interest as being currently and for the next month chair of one of the bodies mentioned in the supporting papers, the Associated Board of the Royal Schools of Music. I mention that body also to illustrate how complex the measure is, because it probably means that the department, or certainly Ofqual, would have to check reasonably regularly that the way in which it had constructed the annual turnover figure was accurate. The figures for ABRSM given in the supporting paper show the turnover as being just over £31 million, which was probably the figure for two years ago. That turnover is based not simply on the 300,000 candidates in this country but on 300,000 candidates overseas and shows the complexity involved in determining turnover for activity in the UK. I know that it is simply an illustrative figure in an illustrative paper, but it makes the point that there would have to be accurate checks and agreement with the organisations in question. I do not think that the eventuality will arise, but, if it did, one would need to know in advance on what figure the 10% cap was based. Another slight complexity, again illustrated by the case of ABRSM, is that the figures are to be examined in Scotland as well as in the other three jurisdictions named in the paper. I am not sure whether that makes a difference, but it is the kind of detail that should be checked out. However, I support warmly the direction in which we are now moving.
Lord Lingfield
As noble Lords will remember, I brought up this issue during the passage of the Education Bill, so I shall not rehearse the list of difficulties that we all saw in the newspapers during 2011 and in previous years—the noble Lord, Lord Sutherland, told us a lot about those, too. The principle of giving Ofqual powers to fine awarding bodies that have been in dereliction of their duty seems entirely proper and necessary, which is why I support the Government. Their proposals seem entirely fair. The awarding bodies are a disparate group and it was always going to be difficult to devise a scheme that coped with all the differences, but the decision to limit turnover for the purposes of Ofqual regulation to all activity within the UK seems appropriate. Sufficient safeguards are built in: there will be an appeal mechanism; Ofqual will be required to state its reasons for using its powers, as the Minister has told us; and there will be a review of the order and Ofqual’s activities. Those are enough. A great deal of needless distress was caused to pupils and their parents, and a lot of difficulties were created for colleges, schools and universities. I hope that the order will be used to alleviate those problems. We shall see whether it does, because it can be reviewed.
Baroness Jones of Whitchurch
My Lords, I thank the Minister for his explanation of the reasoning behind the order and for his earlier letter to the noble Lord, Lord Lingfield, providing an update on the steps taken since we last discussed this matter during scrutiny of the Education Bill.
We share the Government’s determination to drive up standards in the conduct of examinations and to ensure that Ofqual has the suite of tools necessary to hold awarding organisations to account for any mistakes made, particularly if they have a wider impact on overall public confidence in the exam system. We therefore approach scrutiny of this order with the positive view that it is in our interests for Ofqual to demand, and ensure, the highest possible standards in the administration of the exam system.
I could of course begin by questioning whether this order is already out of date given the Secretary of State’s apparent decision, leaked last week, that from autumn 2014 O-levels will be revived and the current exam board free-for-all replaced by a single exam board for each subject. Yet I realise that however short-lived this order turns out to be, we have a responsibility to deal with it as best we can. However, in one sense the Secretary of State’s announcement has a common cause with the order here today because the fact that there are so many different awarding organisations of every shape, size and constitution, as we have heard, is the central cause of the headache for Ofqual about how to regulate them fairly and consistently. I suppose that it begs the question as to whether we have allowed too many bodies to spring up to enable consistent marking and proper qualification comparisons to be achieved. In this context, however, I have a few specific questions.
Lord Hill of Oareford
I am grateful for the brief comments that have been given in support of the steps we are taking. I am particularly grateful to my noble friend Lord Lingfield for originally raising this issue. We are glad to have been able to address it. I am also grateful for the support from the noble Lord, Lord Sutherland of Houndwood, who rightly pointed out the complexity and disparate nature of these organisations, to which the noble Baroness, Lady Jones of Whitchurch, also referred. That is what has driven us to the conclusion that we have reached.
The noble Baroness, Lady Jones of Whitchurch, raised specific questions. First, I was grateful for her general support of these moves, and I agree that the desire behind them is to raise standards and confidence in our exam system. I know she shares that goal. I also agree with her concern that we need to guard against the unforeseen consequences of some of these moves. I shall try to respond to her specific questions.
Her first question was about the concern that smaller awarding organisations might inadvertently be driven out. I said earlier that the safeguards that Ofqual has put in place, on which it has consulted, are designed to ensure that the power is used in a way that will, I believe, be both appropriate and proportionate. In particular, Ofqual will exercise its discretion regarding whether to impose a fine and the level at which to do so. If the imposition of a fine would be likely to render the awarding organisation unable to provide regulated qualifications in future, I do not believe that Ofqual would use its fining powers. The case that she raised of the small or charitable organisation is guarded against in Ofqual’s discretion. At the other end of the spectrum, it is also the case that larger organisations might be concerned about the danger of a disproportionately large fine. As has already been said, the 10% figure is there as a cap; it is not a guide to the appropriate level of fine.
The Ofqual guidance makes clear the factors that it will take into account. Ofqual will certainly take into account the relationship between an organisation’s total turnover and its turnover from regulated activities, thereby protecting awarding organisations with multiple business interests. The noble Baroness, Lady Jones, asked whether Ofqual will publish its policies so that we can see that in black and white. It published Taking Regulatory Action last month, section 6 of which sets out its policy on fining. I will make sure that a copy is sent to the noble Baroness. The document sets out all the various stages and processes in a very open way. She also raised the important question of safeguards against passing on fines. In its enforcement policy, Ofqual has set an expectation on awarding organisations that the cost of fines must not be passed on to users. If an awarding organisation’s fees do not represent value for money following the issue of a fine, Ofqual has a power to cap them, so I agree with her.
The noble Baroness raised concerns about potential double-counting and the need to guard against an awarding organisation being penalised twice for the same breach. One of the factors that Ofqual will have to consider when deciding whether a fine is the appropriate sanction is whether another regulatory body, such as the Welsh Government, has already imposed a financial sanction in relation to the same breach. It has a duty to be proportionate and will look at the circumstances in each case but this sanction is intended primarily for serious and persistent breaches. If all is going well, it will not need to apply these sanctions at all so awarding organisations should not fear being penalised twice for the same breach.
The noble Lord, Lord Sutherland of Houndwood, asked specifically in passing about Scottish qualifications. The order covers turnover based on all activity in the United Kingdom so it is the case that qualifications awarded in Scotland would count.
I certainly take the point on which the noble Baroness, Lady Jones, ended, that fining punishes failure and does not in itself improve standards, which is the key issue that we want to address. Ofqual has a range of measures in place to drive up standards and qualifications. It set these out in its published approach Taking Regulatory Action, which includes imposing general conditions of recognition on all awarding organisations and employing a risk-based approach to regulation. That has been set out and was published in the same document in May. I shall ensure that the noble Baroness has it.
I hope that that addresses the main concerns that were raised. I am grateful for the support for this measure and particularly to noble Lords who first brought it to the Government’s attention and urged us to move on it. I am happy to have done so.
Broadcasting (Local Digital Television Programme Services and Independent Productions) (Amendment) Order 2012
Baroness Garden of Frognal
That the Grand Committee do report to the House that it has considered the Broadcasting (Local Digital Television Programme Services and Independent Productions) (Amendment) Order 2012.
Relevant document: 3rd Report from the Joint Committee on Statutory Instruments.
Baroness Garden of Frognal
My Lords, this instrument is part of a series of measures that have been introduced recently to help a new generation of local TV services emerge across the UK. The UK is more or less alone in Europe in not having a developed local TV sector. The Government are seeking to address this anomaly. Parliament has already provided the communications regulator, Ofcom, with fit-for-purpose regulatory powers to license local TV services. Ofcom will select a strong infrastructure provider to support individual local TV services, and media businesses now have the freedom to enter new markets at local level.
Local TV will provide communities with relevant and targeted content and contribute towards the local democratic process. With the launch of Ofcom’s licensing bidding process in May, an initial 21 localities across the UK are in the running to get a local TV station, the first of which we hope will be up and running from next year. While the Government have already taken significant steps towards making local TV a reality across the UK, there is more that can be done to ensure the sustainability of this new market.
The instrument before the Committee is a deregulatory one. It seeks to remove a regulatory burden on new local TV services while ensuring that there is a diverse range of applicants participating in the licensing bidding process. The existing regulatory framework in respect of independent producers is designed to encourage investment in production at the national level through a national quota system, mitigating the dominance which large-scale broadcasters previously had in the production sector. However, these rules do not need to apply to local TV. Indeed, imposing a quota on new local TV services starting up for the first time could pose cost and compliance burdens.
In addition to imposing a production quota, the existing rules prevent independent producers holding a majority stake in a new local TV enterprise, unless they forfeit their independent status. The measure before your Lordships deals with both matters. This instrument will result in two changes. First, it will exempt local TV broadcasters from the requirement under Section 309 of the Communications Act 2003 to source 10% of qualifying programme content from independent producers. The quota and its compliance requirements could be a significant burden on local TV services, which are likely to have small programme budgets. It might be difficult for a local TV broadcaster to find independent producers to deliver suitable programmes against the quota obligations without distorting its programming strategy and commercial decisions. Local TV is a market which has historically faced a number of barriers preventing its success, so the Government would like to keep the regulatory burdens to a minimum.
The UK’s independent production sector is, of course, a very successful part of our media market and its growth has been partly due to the 10% commissioning quota. Removing the quota will not prevent local TV providers sourcing content from independent producers but it does relieve the local TV services from the potentially significant cost obligation of having to source at least 10% of their scheduled output when they are just emerging in a new market. Local TV providers can look to independent producers to provide high-quality and diverse content. We are saying that there should not be a legal requirement for local TV broadcasters to ring-fence a specific amount of content for independent productions. The proposed measure will apply only at the local level. The quota system will remain in place for all national and regional broadcasters.
Lord Stevenson of Balmacara
My Lords, I am grateful to the Minister for giving us some context for the order. It is a pity that so few of our colleagues have turned up to debate and enjoy the discussion, because this is an interesting topic. I am even slightly surprised to see that the Minister has managed to lose her civil servants as well. They must have tremendous confidence in what she is proposing and I quail at the prospect of trying to put down a few points that she might consider. I apologise if my voice gives out; I have a sudden summer cold and I am struggling to get my points across.
As we have heard, the proposals are part of a package to get local TV up and running. These provisions remove the 10% independent production content quota from applying to local television services and remove the ownership ceiling for independent producers to have full ownership of local TV services without losing their independent status.
The UK independent production sector is a great economic and cultural success story. In less than 10 years it has grown from a cottage industry to the world’s biggest exporter of TV programme formats. Sector revenues have grown from £1.6 billion in 2004 to £2.3 billion in 2010, with companies of global scale emerging, and it is heartening that production companies can be found right across the UK, not just in London. The independent sector now makes around 50% of qualifying UK television programmes and employs more people than the combined TV divisions of the BBC, ITV, Channel 4 and channel Five. However, it would not be so successful—indeed, some people would argue that there would not be an independent sector at all—if it had not been for the 10% independent production quota. It is that simple.
The proposals that we are discussing today have been subject to a public consultation. However, we need to do a reality check here on several grounds. First, the consultation had a very limited reach. The DCMS confirms that a total of 12 responses to the consultation were received from a range of organisations, including potential local TV providers, independent producers, industry bodies and other interested parties. This is from one of the best resourced and most vibrant TV economies in the world. What, I wonder, does that tell us? Secondly, the limited number of responses received raises questions about what other parts of the industry think about these proposals. There was nothing from advertisers, nothing from ITV, nothing from Channel 4—although S4C responded—and nothing from regional newspapers or other media interests in localities. Scotland is represented, but what of Wales and Northern Ireland? Local government is not present, despite the ostensible impact that this will have on its initiatives.
Thirdly, although there are responses from the BBC, the trade union BECTU and PACT, which represents some 500 producers in the UK, the report does its best to reduce all responses to numerical equivalents across the 12 responses, with very little attempt to differentiate producer interest from public interest or potential licence holders from competitor interests at a regional or national level. I should be very grateful if the Minister would comment specifically on how she justifies basing her proposals in the order on this very flawed and inadequate consultation. Can she explain how the department considers it to have been a sufficient exercise? Can she also let us know whether it considered any other ways of getting a better sense of the industry’s views, which would have allowed it to draw meaningful conclusions about why these methods were rejected, if they were?
I thought that this Government accepted the need for evidence-based policy, but I struggle to see what compelling evidence exists on the 10% quota, for example, when I read:
“Of those who responded, three respondents supported removal of the quota, one suggested a quota increase, five did not comment and three were opposed to a change”.
The DCMS consultation response goes on:
“One industry body stated that there is a strong demand from independent producers to provide content for local TV services, so local TV licence holders should not have difficulties in finding independent producers willing to make content for them in order to meet the quota. However, other respondents (including potential local TV providers) suggested that a 10% quota would be a significant burden for any local operator, given the local TV station cost assumptions, and could present an administrative barrier to long term sustainability”.
One can, without much difficulty, assert that those bidding for a licence are likely to support the lifting of the quota as much as PACT, the independent film and TV-makers’ trade body, are likely to oppose it, but what evidence was produced to back up the Government’s assertion that a quota would indeed be a significant burden and should be refused? Perhaps the Minister could enlighten us later.
To be frank, this consultation was a complete failure. The fact is that there is nothing in the published responses to justify the decision that the Government want to take today. If you take the trouble to read the submissions made to the public consultation, as I have, you are left in no doubt that, despite the paucity of response, the general feeling is that there is no case for removing the 10% quota and there is a real danger in lifting the 25% ceiling on ownership by independent producers.
It is probably too late to revise this order, particularly as I understand that Ofcom is currently advertising local TV licences, so I will end by suggesting some things that the Government might wish to consider. There is strong evidence of a willingness by independent producers to provide local content for local TV services. The strength of the sector undoubtedly derives from the 10% quota applying elsewhere in the system and, if it ain’t broke, why fix it? I suggest that the Government should consider, as PACT rather generously, in my view, suggests, the introduction of a grace period of perhaps two or three years during which the quota would not be enforced at a local level.
Secondly, the Government should require Ofcom to publish the percentage of independent productions that has actually been transmitted by licensed local TV stations each year, so that we have an evidence base. The department should commit today to making local TV services compliant with the quota in, say, three years’ time.
There is concern in the production community that the removal of the quota in the case of local TV will be the thin end of the wedge as far as regional and national production is concerned. Therefore, I suggest that the Government confirm today that this is a truly exceptional case which is being considered only because the AVMS European directive permits member states to disapply the 10% quota in relation to television broadcasting intended for local audiences that does not form part of a national network. Also, in line with the AVMS directive, the Government should confirm that they have no intention of relaxing quotas for other broadcasters.
In relation to the proposal to remove the 25% ownership ceiling on independent producers owning a local TV licence, the Government should recognise and be sensitive to the fact that this will be seen as opening the door to pressure from other bodies to amend the definition of independent producer in other contexts. In particular, there is concern that this would reopen calls from Channel 3 licensees, such as STV, to qualify for independent producer status. We therefore suggest that the Government take this opportunity to confirm that they will not amend the current definition of independent producer more generally.
Finally, given that as a result of these and other changes one or more independent production companies would be able to own one or more local television stations, the Government should recognise that this undermines the fundamental rationale for the current distinction between independent production companies and broadcasters. These proposals, together with the Media Ownership (Radio and Cross-media) Order 2011, which removed all local cross-media ownership rules, would appear to suggest that a single media organisation will be able to run a majority of news services in a local area while at the same time potentially having a large interest in national news provision. I suggest that the Government take this opportunity to confirm that they are very concerned about media plurality and will require Ofcom to review the impact of these changes on that fundamental issue within three years of the first licence being awarded.
The Minister called this a deregulatory order and suggested that we should support it for that reason. However, I fear that it will cause quite a lot of damage to the independent production sector and will not be appropriate invigoration for local media activity. I apologise for my voice, which is just about to give out, and thank noble Lords.
Baroness Garden of Frognal
I thank the noble Lord, Lord Stevenson. I am grateful that his voice did not give out—although, in the absence of any officials, if it had given out a little earlier it would have made my task slightly easier. However, I shall attempt to respond to some of the questions he raised.
The noble Lord commented on the small number of responses to the consultation and their limited range and he asked why that was. The consultation was widely publicised and therefore the replies that came in were from people who were interested in coming back to it. I like to assume that the small number of responses was due to the fact that the proposals were widely acceptable within the industry. The order has met with positive responses from the people who responded to the consultation and from other people who were aware that it was going on but chose not to respond.
I share the noble Lord’s enthusiasm for the independent sector and I am grateful for the positive comments that he made on that issue. We certainly have a very lively independent television sector and we would not wish to do anything to disadvantage it. Part of the purpose of the order is to ensure that it can continue as a lively and vibrant sector.
The noble Lord asked about the relaxing of the 10% quota. This is purely for local television stations; there is no intention of relaxing the quota more widely. We recognise that the quota has been a significant factor in ensuring that independent television remains as well supported as it is. He indicated his concern about media plurality and we share his concern. Media plurality is an extremely important aspect and we would not wish this order in any way to impact on it.
The noble Lord made a number of other points which we will take away for further consultation. This is an ongoing issue. We know that 21 stations will be involved in the first pilot and that there will be more developments in due course. We will have time to review and amend if any of the proposals within the order do not work out as the Government intend them to.
I reiterate that the legislation will support the long-term success of the local television market by reducing the regulatory burdens and creating commercial incentives to invest, particularly at a local level and for smaller providers.
Armed Forces Act (Continuation) Order 2012
(11 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Astor of Hever
That the Grand Committee do report to the House that it has considered the Armed Forces Act (Continuation) Order 2012.
Relevant document: 3rd Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, I am pleased to speak to the Armed Forces Act (Continuation) Order 2012. The purpose of the order is to continue in force the legislation governing the Armed Forces for a further period of one year, until November 2013.
I should like to say a few words about the legislation that the continuation order is set to continue—that is, the Armed Forces Act 2006 as amended by the Armed Forces Act 2011. The 2006 Act made significant changes to the legislation governing the Armed Forces and established a single system of service law for the first time. The single system applies to all members of the Armed Forces, wherever in the world they are serving.
The 2006 Act was fully implemented and came into force on 31 October 2009. I am pleased to say that the services say that the 2006 Act is doing a good job—the modest scale of changes made to it by the 2011 Act is testament to that—so I am confident that the 2006 Act will continue to serve the Armed Forces well for many years to come.
Your Lordships’ House has enjoyed full and interesting debates on matters of great importance to the Armed Forces, none more so than during last year’s passage of the Armed Forces Act 2011, which received Royal Assent on 3 November last year. That Act continued the Armed Forces Act 2006 for a further year, allowed it to be continued by annual Order in Council until 2016 and made various provisions to amend the Armed Forces Act 2006.
I should also like to say a few words about the 2011 Act. Although it is modest in size, its provisions are wide-ranging, partly as a result of the Ministry of Defence normally bringing forward primary legislation only every five years. I am pleased to report that over half the provisions in the new Act have been commenced, and an implementation programme for the remainder is well under way. Our aim is to complete the largest part of that work by spring 2013. Notably, for the first time, and as a result of this Act, the Armed Forces covenant is now recognised in legislation. The 2011 Act places an obligation on the Defence Secretary to report annually on progress made by the Government in honouring the covenant. The first report will be published at the end of this year. The Armed Forces covenant makes a clear commitment by the Government on how service people should be treated. Now, this and future Governments will be held to account on what they deliver on the covenant.
I should make a further observation about the order that we are considering today. Previous Governments have given an undertaking that Ministers moving instruments subject to the affirmative procedure will tell the House whether they are satisfied that the legislation is compatible with the rights provided in the European Convention on Human Rights. We believe that the order that we are considering today is compatible with the convention rights. I welcome this opportunity for another interesting debate. I beg to move.
Lord Craig of Radley
My Lords, I thank the Minister for his introduction. The Armed Forces Act 2011 introduced into law the concept of the Armed Forces covenant, as he has mentioned, and the particular requirement for the Secretary of State to prepare an Armed Forces report. I was pleased to note when that report is due to appear.
As the Minister knows, I have also tabled a Question for Written Answer about compulsory redundancies. I asked whether, in selecting personnel for compulsory redundancy, consideration was given to their immediate pension point. For the record, is the Minister able to answer this question now? There has been considerable anxiety and press coverage. There is a feeling that the Government are solely focused on achieving financial savings rather than showing understanding for the effect on the individuals involved of a sudden abrupt end to their aspirations of a lifetime career in the Armed Forces. Equally, it is a difficult time to find alternative employment in civilian life.
The effect is of course not confined to the individual but spreads to their immediate family and friends, who are as shocked, taken aback and worried about the future as the individual being made redundant. What steps is the Ministry taking to help those who are being sacked? There seems to be little in the public domain to give confidence that these individuals are being looked after with sympathy and real understanding for their plight. It would underline the value of the military covenant, and show that personnel should be considered, if a more proactive approach to the impact of redundancies on the individual were to be taken by the Ministry of Defence.
Lord Rosser
My Lords, lest any of the points I wish to make should be construed as meaning otherwise, I make it clear at the outset that we of course support this order, which enables our Armed Forces to remain in existence, by law, for at least a further year by providing that the Armed Forces Act 2006 will not expire on 3 November 2012, as currently scheduled, but instead will continue in force until 3 November 2013. As the Minister has said, the 2006 Act also brought together various orders of discipline in the Armed Forces while the 2011 Act enshrined the Armed Forces covenant in legislation.
Depending on one’s point of view, this order is either a piece of archaic ritual bearing no relevance to the way that we should be conducting the affairs of our nation, or indeed the affairs of our Armed Forces, in the 21st century or an essential constitutional prop, ensuring that anyone who might be tempted to think otherwise knows that our Armed Forces remain in existence to perform their role not because they think—or anyone else thinks—they should, but only because the representatives of the people in Parliament have decided that that should be so, with that decision having to be renewed and restated each year. As I understand it, the order that we are discussing stems from the Bill of Rights Act 1689, or 1688 by old-style dating, which restated in statutory form the declaration of right presented by the Convention Parliament to William and Mary in March 1689, inviting them to become joint sovereigns of England while further restricting the powers of the sovereign by laying down certain constitutional basic rights, in respect of which the Crown was required to seek the consent of the people as represented in Parliament. Among those basic rights was that no standing army could be maintained during a time of peace without the consent of Parliament.
I am not sure that the people of this country are quite as suspicious, in the 21st century, of a reigning monarch deploying a standing army as they were in the 17th. While other countries have suffered and do suffer from military dictatorship, I am not convinced that it is the existence or knowledge of the requirement for this Armed Forces Act continuation order to be agreed each year by Parliament that is preventing or deterring a takeover of this country by the military. There may just be other, rather more powerful and influential factors and considerations at play. Having said that, is it literally the case, as I understand it, that if this continuation order was not approved our Armed Forces would cease to exist from early November, or is there in reality other legislation or a decision of Parliament that would enable them to continue in being?
I make these points seriously to understand what failing to renew the Armed Forces Act 2006 for a further year—I stress that this is not a road I am suggesting we go down—would mean in practice, as opposed to theory. We have an Armed Forces Act every five years. If there is a continuing widespread feeling, as is presumably the case, that Parliament should have to make a regular decision in order for our Armed Forces to continue in existence, one wonders whether there is still a need for this to be done every year as opposed to, say, every five years in the Armed Forces Act. The debate on this annual order does not seem to be regarded as an opportunity for having a wide-ranging discussion or debate, no doubt because there are other, better ways of having more frequent and lengthier discussions and debates on our Armed Forces in your Lordships’ House. It is presumably also the case that if the other place had reservations or concerns at any time, it could bring things to a head—not least by declining to agree to the necessary expenditure needed to maintain our Armed Forces for the following financial year. Nor does it seem likely that your Lordships’ House, as an appointed House, would decide to vote down an order on such a major issue as retention of the Armed Forces, and surely not when the other place, the elected House, had voted for the order.
Lord Astor of Hever
My Lords, I am grateful to the noble and gallant Lord, Lord Craig of Radley, and the noble Lord, Lord Rosser, for their support in the debate today. The noble and gallant Lord asked about compulsory redundancy. When selecting personnel of the Armed Forces for compulsory redundancy, no consideration was given to the proximity of the immediate pension point. As we reduce the size of the Armed Forces, our priority is to ensure that the services maintain the correct balance of the skills and experience across the rank structures that are required to deliver operational capability now and in future. It is that which has determined the redundancy fields.
The noble and gallant Lord asked whether we were focused just on financial saving. The department has gone to great lengths to carry out these redundancies as sensitively as possible. We fully understand that making the transition from the Armed Forces into civilian life can be daunting and we remain committed to helping service leavers in taking this important step. The Ministry of Defence offers service leavers a wide range of activities that help to facilitate the transition to civilian employment. The support offered is built around preparing the service leaver for future employment in terms of accessing appropriate opportunities for reskilling as well as accessing suitable civilian job opportunities.
The majority of resettlement provision is contracted out to the career transition partnership—the partnering relationship between the MoD and Right Management Ltd. The contract is successful as 97% of eligible service leavers use CTP, 93% of whom tell us that they succeed in becoming settled or gain employment within six months of leaving. That figure increases to 97% after 12 months, and 57% will have had two jobs.
I am grateful for the support of the noble Lord, Lord Rosser. He asked whether, if we did not approve what we are doing today, the Armed Forces would cease to exist. He also asked whether there was other legislation or a more appropriate way of doing this. A change was proposed by the Ministry of Defence in the Armed Forces Bill in 2005 but was resisted by the Defence Committee and the Select Committee that considered the Bill. Both committees favoured retaining the present arrangements and the Ministry of Defence amended the Bill accordingly. What would the effect be if the order were not made? Unless the Armed Forces Act 2006 is continued, there would not be lawful authority for the disciplinary system that governs the Armed Forces. I hope that that addresses the issue.
Lord Rosser
Can I be clear, at least in my mind, that the only effect of not continuing this order would be the impact that it would have on the disciplinary system and not on the reality of our Armed Forces continuing to exist?
Lord Astor of Hever
My Lords, I think I need to write to the noble Lord. The disciplinary issue is pretty important but it is quite complicated, to the extent that I probably do not have time to provide an answer now, but I shall write to the noble Lord. If I may, I shall study the Hansard record of the points that have been raised and write to the noble and gallant Lord and the noble Lord if I have anything to add to these exchanges.
Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc.) Order 2012
Baroness Wilcox
That the Grand Committee do report to the House that it has considered the Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc.) Order 2012.
Relevant document: 2nd Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, the purpose of this order, which amends the Companies Act 2006, is to implement the legislative changes required to support the reforms to the Financial Reporting Council—the FRC—from 2 July 2012, announced by the Government in March.
The FRC is the UK’s independent regulator, promoting high quality corporate governance and financial reporting to foster investment. It discharges its responsibilities by setting codes and standards and monitoring the conduct of market participants in specific areas to ensure that they comply with the relevant regulatory requirements.
Noble Lords may remember that the House of Lords Economic Affairs Select Committee criticised the number of organisations engaged in the oversight of accounting and auditing in its report published on 30 March 2011. In addition, the Government’s The Plan for Growth report, published in March 2011, highlighted concern that the FRC’s structure might lead to a duplication of effort. This would potentially cause overregulation but also increase the risk that major weaknesses were not addressed.
The FRC is highly regarded but its structure is complicated and hard to understand. Its seven operating bodies, with separate boards and secretariats, restrict its ability to respond to issues that cut across structural divisions. For example, no single operating body has a remit sufficient to tackle broad questions around the handling of risk, the future of audit and corporate reporting. Following the 2008 financial crisis, such issues had to be addressed by the main board, making use of its ability to bring together the high levels of expertise across the operating bodies. Furthermore, the FRC’s effectiveness is constrained by its current powers regarding the accountancy and auditing profession that it oversees. The FRC is being restructured to ensure that it is best placed to meet the challenges created by the global financial crisis, but the board does not have the powers to achieve the necessary change on its own.
The Government and the FRC issued a joint consultation document on 18 October 2011 on the proposed reforms to the FRC’s structure and powers. A summary of responses was published on 27 March 2012. A total of 75 responses was received from stakeholders. There was a wide range of views, some supportive of the proposals and others challenging the case for reform. All views were considered carefully and taken into account in the joint government and FRC response. The FRC’s reforms will give greater clarity to the boundaries between the professional bodies and the FRC and enhance the FRC’s independence from the professional bodies in its role as the UK’s lead audit regulator.
The final-stage impact assessment, published alongside the Government’s and FRC’s finalised proposals, identified direct savings to business in the order of £0.4 million a year. These largely resulted from the ability to settle disciplinary cases without a public hearing, subject to the necessary publicity.
The order will delegate statutory powers to the FRC board rather than its operating bodies as at present, with the exception of the Financial Reporting Review Panel powers, which move to the new Conduct Committee; provide the FRC board with powers to determine and require, rather than request, that recognised supervisory bodies impose sanctions in respect of poor quality audit in certain circumstances; permit certain disciplinary cases to be concluded without a public hearing where the auditor concerned agrees, although they remain subject to appropriate publicity; and provide the FRC board with powers to impose directions and financial penalties on the recognised supervisory bodies and recognised qualifying bodies for shortcomings in discharging their regulatory responsibilities.
These changes, taken as a whole, will enhance the Financial Reporting Council’s effectiveness as part of the wider UK regulatory framework and ensure that the United Kingdom has a powerful, joined-up voice on the international stage. I therefore commend this order to the House. I beg to move.
Lord Flight
My Lords, I would like to put on record that this is important legislation. In effect, it sets up a full-scale regulator of the accounting profession comparable to the FSA in the financial services industry. To some extent, I am slightly surprised that this is only an amendment to the Companies Act as it contains many important changes. However, I welcome the order and its economies. I am glad that there was full consultation and I am curious to know the reaction of the institute and of the profession generally.
One or two important matters follow from the order. First, who appoints the senior executives of this new regulator? I have the highest regard for Stephen Haddrill, the present chief executive, but I do not know whether it is a self-appointed body or whether there is any accountability to Parliament or the Treasury Select Committee.
My first question at the time of the banking crash was: where were the auditors? The only point of an audit is to show whether institutions are in either good or bad order. Sets of banks’ accounts running to 500 pages were totally impenetrable and impossible to understand and, as far as I am aware, in no case were the auditors whistleblowers. I do not know whether this enhanced FRC will have the powers to change that situation, but some form of review of what happened to the auditors during the banking crash could be of some use.
My other point—the committee of the noble Lord, Lord MacGregor, also made this point—is that the FRSA’s accounting standards have been a disaster. They have, in essence, painted an over-rosy picture in good times and an over-negative picture in bad ones. There is a widespread view that they need changing and that they are particularly unsuitable for banks. Every time this matter is raised, nothing ever happens and it is not clear where responsibility lies. However, I imagine that it will be a duty of the greatly enhanced FRC to consider the matter and make recommendations, not only to the profession but to the Houses of Parliament as well.
We have an important new body. It was necessary and timely to tidy it up in the way that it has been, but on those two points there is some unfinished business.
Baroness Hogg
My Lords, as chairman of the Financial Reporting Council, I thank the Minister very much for pursuing these reforms, which, as she has said, and this has been reinforced, were largely stimulated by an important report by a Select Committee of this House on its inquiry into the audit profession. These changes will enable us to break down some of the silos within the existing regulatory structure of seven operating bodies to which the Minister rightly referred. We need to be able to share knowledge across the organisation in order to operate more effectively, both in our conduct role in the UK and in the international debate on codes and standards, which has been so rightly pointed out. An example of the issues here is that the point is not just the forum in which the international financial reporting standards are set but the process for implementation, because a number of important changes are due to take place to elements of the IFRS, of great importance in respect of banks, that it falls to the European Commission to implement. At the moment, the Commission is taking the view that it does not wish to implement until all amendments have been concluded, but we are urging the Commission to get on with this because we think that some important changes are needed.
If I may help the Minister to respond on the appointment issue that has been much discussed, as the Minister is aware, I, as chairman of the FRC, am appointed by the Secretary of State, as is the deputy chairman. We then appoint the executive team. We have taken the view with these changes that there needs to be some outside input into the process for appointing other members of the board. In much the same way, we are adopting the practice that is common for many public appointments now of appointing an outside assessor to review the way in which we consider appointments to the council and are involved in the nominations process. There is no change in any of this with the change in the regulatory structure, but we thought it right to raise our game in this area and discuss this with the department, and we are putting those arrangements in place.
The changes before the Committee today are to enable us to determine and impose proportionate sanctions for poor quality audits and expedite action by the recognised bodies where we have identified areas for improvement. This enables us to cut across the different bodies in order to put in place inquiries regarding codes, standards and performance. For example, I draw the Committee’s attention to the inquiry that we launched under the noble Lord, Lord Sharman, to look at the issue of going concern, which is the critical issue that came to the fore in the discussions over where the auditors were in relation to bank auditing during the financial crisis. The Committee may have noted the publication of this report very recently.
We see the reforms very much as a beginning rather than an end in themselves. We hope that the consultation will be a start of a deeper and wider relationship with our stakeholders, not just in the profession but, very importantly, within it, and we hope that we will help other regulators and other interests to identify and address the challenges facing all those responsible for corporate governance and reporting in the UK. I thank the Minister very much for bringing the reforms forward.
Lord Young of Norwood Green
My Lords, I, too, thank the Minister for her introduction to the statutory instrument. As we on the opposition Benches have argued for some time, we need a better and more responsible capitalism that better serves the people of this country.
That is why this side of the Committee supports the role of the Financial Reporting Council in promoting high standards of corporate reporting and governance in the UK which, as I think the Minister will recognise, we strengthened in 2004 through the Companies (Audit, Investigations and Community Enterprise) Act following major global corporate collapses such as that of Enron. With business rightly under particular scrutiny, the FRC’s work is more important than ever. The noble Lord, Lord Flight, stressed the importance of these changes and rightly asked where the auditors were during the financial crash. There are those who suggest that they were perhaps too close to the companies that they audited. I would welcome the Minister’s view on that.
Despite what I have just said, corporate reporting and governance in the UK are widely recognised domestically and internationally as being of a very high standard. The FRC’s integrated and market-led approach to regulation underpins these standards. We know that this approach continues to receive strong support from companies, investors, the accountancy profession and other stakeholders. The Minister may know that my honourable friend the Member for Hartlepool, following his line of questioning to the likes of Sir David Walker in the Enterprise and Regulatory Reform Bill Committee, has said that he is keen for the UK to maintain its undoubted place as the best country in the world for high quality corporate governance. Inward investment and the location of multinational firms here in the UK flow to some extent from the high-quality and stable regulatory corporate governance and auditing framework we have here. We cannot be complacent on this matter, as noble Lords have already said, and must ensure that it stays best in class.
The FRC should be central in ensuring good remuneration practice and shareholder activism so that it remains in the spotlight. That is why the shadow Business Secretary, Chuka Umunna, has called on the Government to make provision for the FRC to produce an annual report on the state of corporate governance in Britain. This would ensure that shareholder activism, good pay and remuneration practice were kept high on the national agenda. I would welcome the Minister’s views on that.
While we welcome today’s measures, it is disappointing that the Government are watering down their corporate governance measures as contained in the Enterprise and Regulatory Reform Bill with a climbdown on the proposal for annual binding shareholder votes on executive pay. On its own, this measure would not have been sufficient and would not have solved the issue of excessive director’s remuneration, but it would have been a step in the right direction.
I have a number of questions for the Minister. Michael Izza, chief executive of the Institute of Chartered Accountants in England and Wales, has been cautious about the proposed changes. He said recently:
“It is important for the FRC and the government to recognise that there might be a lot of people hoping that this new structure is effective but want it to be proved”.
That is not exactly a ringing endorsement from a key player in the accountancy profession. What evidence can the Minister provide to reassure those who have expressed concern about the new measures?
Page 17 of the impact assessment states:
“The primary focus for FRC regulation should be publicly traded and large private companies (defined as those with a turnover of £500m or more)”.
This is probably a naive question, because it is not an area in which I profess to be a great expert, but why was the limit set at £500 million or more? An awful of lot companies have turnovers just below that, so I would be interested to hear the Minister’s view.
With the FRC’s six standard-setting boards streamlined to two, the Accounting Standards Board will no longer exist. How will the Minister ensure that responsibility for ensuring the effective implementation of international financial reporting standards is maintained? Why will the reforms be reviewed only in three years? That seems a long time. Will there be any proposal for an interim review—let us say at two years, when I would think there would be quite a large body of evidence?
Given the importance of these changes, which has been stressed, I would have thought that would be worth while. Again, I would welcome that. Looking at the post-implementation review plan, under “Basis of review” it states:
“As part of its commitment to the principles of good regulation, the FRC is committed to reviewing the proposals in this reform package to ensure that they meet their objectives at a reduced overall cost to business”.
I do not cavil at reducing the cost to business; I understand that. However, I would tack on to the end of that, “while maintaining the quality of audit and independence”. I am sure that is what will happen, but when we are talking about the basis of the review, it seems to me that that ought to be on the top line, given the concerns we have expressed and not buried somewhere else in the post-implementation review plan.
The FRC’s inspection of accountancy firms earlier this year found that 10% of the audits sampled fell into the lowest category, with “significant concerns” raised, leaving the rate of improvement in auditing standards too slow in the aftermath of the financial crisis. Looking at the comment on page 23 of the Explanatory Memorandum, the situation really is quite disturbing. It states:
“Evidence from the Audit Inspection Unit shows that although standards of auditing in the UK are generally good there are areas for improvement. Of the 11 audits (13.5%) requiring significant improvements in 2010/11, six were listed or AIM companies and the audits of three unlisted subsidiaries of overseas banks (out of 10 bank and building society audits reviewed) were assessed as requiring significant improvements”.
I think that is quite a worrying comment, so once again I would welcome the Minister’s views.
Will today’s proposals make it easier for the FRC—[Interruption.] Someone has forgotten to turn their mobile to silent. We have all done it. Will today’s proposals make it easier, as the Government’s consultation paper has stated, for the FRC to,
“ensure it has the powers to respond proportionately and effectively where problems are identified”?
Page 27 of the Explanatory Memorandum says:
“The FRC estimates that the ability to resolve cases without going to tribunal will save the cost of 3 tribunals over the 10 year policy period”.
Again, I do not argue that that should not be done. I just want to add, “as long as we are confident that the quality of the investigation will not in any way deteriorate as a result of that change”. It makes me think back to the review process, which was perhaps shorter than the three-year proposed period.
What consideration has the Minister given to the Institute of Chartered Accountants in England and Wales Audit Quality Forum in pulling together these proposals? The forum has been in existence since 2004, tasked with promoting quality and confidence in the audit function. What specifically has the Minister taken from the forum’s work in drafting these proposals?
On a European dimension—and I certainly concur with what the noble Baroness, Lady Hogg, said—how does the proposal considered today fit in with the broader question currently taking place in the Commission regarding the future of audit and the condition of the audit market? What is the Government’s policy on some of the proposals coming out of the Commission, such as mandatory rotation of audit firms—which relates to the question of independence—mandatory tendering and the separation of audit from non-audit services?
While we are on the subject of Europe, are the Government satisfied that there is no risk that the new sanction powers proposed for exercise by the FRC will be subject to challenge from the European courts? What legal advice has the Minister taken with regards to this? I have read the impact assessment and see that the Government have downgraded the benefits provided by these proposals in the face of additional scrutiny from stakeholders. Has the Minister ensured that none of the measures proposed in today’s statutory instrument will inhibit investment and possible growth?
As we know, the FRC is connected to the capital markets, and capital-raising forms a part of this. Has an assessment of the efficiency of capital markets been made? Will the Minister act upon the demands of my honourable friend the Member for Streatham in the other place and get the Financial Reporting Council to produce an annual report on the state of corporate governance in Britain? Can the Minister confirm that the statutory requirement to publish business plans will not impede the existing flexible arrangements between the FRC and recognised supervisory bodies, which allow the flow of confidential information between the bodies? Is the Minister satisfied that the FRC is abiding by its own good governance guidelines—in particular, applying lay membership to its own oversight committees and ensuring independence in this regard from the operations of the body? Has the Minister seen any examples to date of the recognised supervisory bodies failing to exercise sanctions that fell short of what the FRC/BIS would have preferred to be applied?
I think that I have given the Minister enough to cogitate upon. I apologise for the number of questions but I concur with the noble Lord, Lord Flight, that this is a fundamentally important change. Given the problems resulting from the financial crisis and the eternal question, “Where were the auditors?”, I think that my questions are merited. I shall quite understand if the noble Baroness cannot answer every single one of them but I hope that I shall receive something in writing in due course.
Lord Flight
Perhaps I may just correct myself. I think that I said FRSA when I meant IFRS. I apologise.
Baroness Wilcox
I thank noble Lords very much for the exchanges that we have had. I thank the noble Baroness, Lady Hogg, for being here today—I am delighted about that. She seems to have answered several questions for me, which is an enormous help. Of course, there are many questions to answer. This is a very big and wide area, and it affects so many different organisations that it is right that I should receive more questions than I can answer at the moment. However, I shall endeavour to answer some of them. In talking about appointment issues and so on, the noble Baroness, Lady Hogg, has more than likely provided answers but I shall try to respond to some of the questions from my noble friend Lord Flight.
I think that he asked who appoints the senior executives—a point that I think the noble Baroness, Lady Hogg, answered. The FRC is a company overseen by its board and it will appoint its senior executives in line with the best human resources practices. The additional points made by the noble Baroness were very useful and she gave a better answer than mine.
The Accounting Standards Board sets standards for financial reporting and has regard to best practice. This includes reference to international developments—the IFRS—as well as responding to developments and thinking in the United Kingdom. The use of international accounting standards is subject to EU approval, as always. The adoption of international standards, and amendments to those standards, follows consultation with the member states, and the FRC and the UK work closely with the EU and the IASB to influence these wherever they can.
My noble friend Lord Flight asked who the FRC will be accountable to following the reforms. The FRC will continue to be accountable to government and ultimately to Parliament in relation to the exercise of its statutory powers, and it will also be accountable to the key stakeholders, including the investor community, which relies on the quality of corporate governance and reporting in the United Kingdom. The FRC will report annually to the Secretary of State on the exercise of its powers.
My noble friend Lord Flight and the noble Lord, Lord Young, asked where the auditors were during the financial crisis. When considering financial institutions, it is important to note that the primary regulator of those institutions which was most prominent during the financial crisis was the Financial Services Authority and not the FRC. The FRC works closely with the Financial Services Authority with a view to ensuring that regulatory action is taken where appropriate. We believe that the changes to the FRC’s structure will enable it to bring its full resources to address any emerging problem much more quickly and effectively than was done at that time.
The financial crisis has been looked at, as we heard, by the House of Lords Economic Affairs Committee. Although it raised a number of issues relating to auditing, some of which are addressed by these measures, the Government do not take the view that these issues were at the heart of the crisis. The “going concern” issues mentioned by the noble Baroness, Lady Hogg, are important, but there were also failures of prudential regulation. If I have missed anything from those questions, it will of course be picked up by the sturdy band behind me, who have been frantically trying to answer all these questions.
Thankfully, the noble Lord, Lord Young, welcomed this measure before setting off with a flurry of questions, all of them right and relevant. I shall try to answer a few for the moment and then, if it is all right, I will reply in writing. Why is the FRC jettisoning the tried and tested ASB/APB brands, and what effect will this have on the FRC’s capability to influence at an international level? International influencing is a central objective of the FRC. The Government and the FRC recognise the contribution that the FRC’s standard-setting bodies have made, while remaining convinced that the changes proposed are needed to strengthen the UK voice. In the new structure the FRC should be better equipped to tackle the most strategic issues and to provide high-quality thought leadership, as well as continuing to develop excellent technical solutions. Standard-setting is increasingly debated in the United Kingdom, in the European Union and internationally in fora that cover a wide range of issues. The FRC needs to exert influence accordingly in these areas. The FRC board has the experience, the seniority and hopefully, through the new structure that we propose, the authority to do that.
On the question from the noble Lord, Lord Young, on auditors’ independence, the Government and the FRC acted in the wake of the crisis to improve transparency. Furthermore, proposals are now being considered in Europe on this very question. The noble Lord also asked about reporting on corporate governance. The FRC is required to make an annual report on its activities, and that report is laid in Parliament.
Baroness Wilcox
A quick nod from the Box, or a quick “We will write to you”?
Baroness Hogg
If I may help noble Lords, we have recently undertaken to produce an annual report in addition to this one on the operation of the corporate governance code, which embraces all aspects of corporate governance, and another one on the stewardship code, which covers the activities of investors and the extent to which they are performing as active owners of the companies. Those are two separate reports produced every year in addition to the main report that the Minister has mentioned.
Baroness Wilcox
Absolutely marvellous; I thank the noble Baroness. On executive pay, the answer that I have is that the Government’s proposals will introduce the necessary restraint and shareholder involvement without unduly burdening shareholders and business more widely.
The noble Lord, Lord Young, asked whether there will be an interim review. There is no proposal for such a review, but the Government have regular contact with the FRC and will continue to do so in future. We will also meet key stakeholders regularly and ensure that any emerging issues are addressed quickly as part of our normal engagement with members of the board and senior executives.
We are continuing to negotiate in Europe on the EU proposals on auditing. Some, such as the mandatory rotation of auditors, concern us while others, including the proposal on improving the auditors’ report, we support in principle. Those are the answers that I have at the moment to the noble Lord’s questions. There were a lot more, but I hope that he will feel that I have tried to reassure him that we are on the job. We will definitely be writing in response to his other questions.
I thank noble Lords for their consideration of the draft order today. Consistency and continual improvement in the regulatory landscape are essential if we are to provide an even stronger, more supportive environment in which businesses can prosper and grow for the benefit of the whole economy. The order will mean that the FRC is better placed to respond more quickly to matters of concern in the market. Its approach will be more targeted and proportionate, and I believe that it will have a more powerful, joined-up voice both domestically and in the international arena. I commend the order to the House.
Care Quality Commission (Registration and Membership) (Amendment) Regulations 2012
(11 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Hunt of Kings Heath
That the Grand Committee takes note of the Care Quality Commission (Registration and Membership) (Amendment) Regulations 2012 (SI 2012/1186).
Lord Hunt of Kings Heath
My Lords, I declare an interest as chair of an NHS foundation trust, a consultant in the health service and a trainer in relation to Cumberlege Connections.
When we debated the Health and Social Care Act 2008 (Regulated Activities) (Amendment) Regulations 2012 in Grand Committee on 22 May, we touched on CQC’s governance, the PAC report of 12 March and the department’s capability review. The noble Earl will know that the PAC expressed some serious concerns and that his department’s capability review acknowledged that CQC could have done more to manage operational risk and provide better strategic direction.
The review recognised that the department and CQC had underestimated the scale of the task of combining three regulators into one organisation while developing and implementing a new regulatory model. The review also made recommendations to strengthen the board and the board structures, and to establish a unitary board with a majority of non-executives but with senior executives sitting on the board to enable a tighter accountability relationship between non-executives and senior executives. Let me say at once that the Opposition do not oppose these changes which bring CQC governance more into line with that of the National Health Service. While governance is important, underlining it are probably questions about CQC’s capacity to discharge its wide and important responsibilities.
I have read very carefully CQC’s response to the performance and capability review that has now been published. That fairly sets out the scale of the challenge that it faced. However, the CQC acknowledges that the strategy devised at the outset of the new regulatory body failed to take into account the complexity of the changes in the regulatory review regime and, in particular, the workload implicit in recognising so many providers, merging three organisations into one, while reducing costs and changing the working patterns and skill requirements of many of the staff who were either inherited or taken into the new organisation.
That is a very helpful recognition. Many who have been concerned with the architecture of CQC would have to take some responsibility for that; I do not detract from my own Government’s responsibility. We are trying to learn some of the lessons and hope that they can be embraced within the new strategy that CQC will take forward under its new leadership.
Nor do I ignore the progress that CQC has made. Creating a single regulator of health and adult social care services spanning, as CQC points out, more than 22,000 providers of 40,000 services is no mean challenge. Today’s Written Ministerial Statement in another place by the Minister of State, Mr Paul Burstow, concerning the Winterbourne View private hospital, which draws on the reports of the Care Quality Commission’s inspection of 150 hospices and care homes, also indicates the value of the work that has been undertaken by CQC.
Baroness Jolly
My Lords, we all want the CQC to be effective and efficient. The noble Lord, Lord Hunt of Kings Heath, has laid out a clear description of its history and where it is now. It has a difficult task: it has to balance registration complexity for those providing both health and social care and ensure safety and quality of services. Of course, since the Act of 2012, all providers in the public, private and voluntary sectors are involved and it has to extend its remit to include dentists and GPs. It has a huge task. There have clearly been failings in the past, but the organisation as a whole has faced up to them and has made many strides forward.
We have this SI as a result of the Health and Social Care Act 2012. It is in two parts—registration, and governance and membership—and it throws up more questions than answers. I was reminded of a long time ago when I was a CHI reviewer. The training was superb; the teams went in and the inspection was intensive and penetrated every corner. Perhaps there would be some mileage in looking back at that model to see whether it could be incorporated into what currently exists.
Lord Hunt of Kings Heath
I was interested in the noble Baroness’s comments about the CHI training process. Does she agree that one of the great advantages of the CHI approach was that, when a team went in, it had respect because the people in the team were the equals, if you like, of the people whom they were inspecting and, although it was an inspection and allowed people to work with an inspection team, it was almost a development opportunity for the organisation as well?
Baroness Jolly
Certainly that was my experience. Although there were instances where we had uncomfortable inspections, afterwards an awful lot of work was put in to try to remedy issues that had been raised. The team went in as a team and worked as a team. Everyone on the team had experience of working within the NHS in one format or another and, although we may not have carried out identical roles to those that we were inspecting, there was a clear awareness that we knew what we were about. I shall not carry on at great length because of the time.
The amendments to the registration are a tidying-up exercise. All that we are doing is replacing the National Patient Safety Agency with the NHS Commissioning Board Authority, so it is a cut-and-paste job, if you like. Will the Minister confirm that in due course this will subsequently transfer to the board when the board becomes the board and not just the authority? Will the Minister clarify the situations where deaths and other incidents in these situations involving service users—vulnerable people—are reported and say why they might be reported to the board and not to the CQC? If we are to learn anything from this information, it is critical that the board commits to publishing it on a regular basis. It also needs to be part of the board’s regular agenda.
On a related issue, will the Minister update the Committee on deaths of service users and untoward incidents, which cause difficulty for carers and, in the case of untoward incidents, the patients themselves? During the consideration of the 2012 Bill, there was much debate about the duty of candour. Will the Minister give us some sort of update on where things are? I remind him of his comment on 27 February:
“I reiterate the commitment that I have given today that the Government intend to use the ‘standing rules’ regulations to specify that the contractual duty of candour must be included in the NHS standard contract”.—[Official Report, 27/2/12; col. 1055.]
That was a welcome move but I would appreciate it if the Minister could update us on where we are. I appreciate that this will not happen overnight; it will require training and a large amount of cultural change.
I move on to the governance and board membership issue. Today we had the interesting interim report on the Winterbourne View Hospital. Bearing that in mind, will the Minister reflect on whether he believes that the new governance arrangements proposed in these regulations will minimise or even avoid a repetition of this level of behaviour or such an appalling lack of dignity for those with learning disabilities? Does he believe that adequate funding is available for the CQC? Again, the noble Lord, Lord Hunt, gave us a long list with numbers relating to its remit—it is really broad and deep. The Committee would probably feel comfortable if it felt that the CQC was being ably supported with adequate resources. It has had a difficult role in changing times and it can use its registration requirements to drive up quality. To that end, the Government must work with it. I think that we would all agree that service users and carers deserve no less.
Baroness Wall of New Barnet
My Lords, I, too, support my noble friend’s view of the CQC. I want to mention, as he has done, the work carried out by the previous chief executive and the chair of the CQC, and welcome the new chief executive. The noble Lord may remember that when we had a discussion in the House on the social services Bill about care in some care homes, he made a plea, in response to a question, that we should look at the CQC’s responsibilities and not blame the CQC itself for everything that happens. More and more, that is certainly my view.
I am not aware of any detail of the alternative ways that the noble Lord and the noble Baroness, Lady Jolly, have mentioned, but I am concerned about—my noble friend raised this issue—the credibility of the CQC. I have noticed from my experience in the trust that the more responsibilities the CQC has been given, the greater the perception that it is going to be very thinly spread and that its expertise will in some way be weakened. That may be people’s view rather than the reality, but I think that we owe it to everyone who has a relationship with the CQC not to dilute it by continually adding to its responsibilities. I know from my own experience how important its inspections are, certainly in hospitals.
The noble Lord referred to my trust, which covers a two-district general hospital, and also to some very small GP practices and other areas of work. I am a great supporter of the CQC, as the noble Lord will know. I feel that it has done a tremendous job and has made a difference compared with what happened before it came into being. I want to strengthen that rather than in any way to dilute its reputation. For example, people who work in my hospital say, “My goodness, it’s doing everything now”, but what does that really mean? I am sure that the noble Earl will have listened to everything that has been said and that he will think very carefully about what the CQC’s credibility means to all of us in terms of its responsibilities.
Earl Howe
My Lords, I am most grateful to noble Lords who have spoken and shall endeavour to cover the questions and points they have raised in a moment. However, before I do so, perhaps I may briefly take the Committee through the purpose of this instrument.
The regulations before us today make changes to two areas of the legislation that affect the operation of the CQC. The first component of this statutory instrument makes two small amendments to the Care Quality Commission (Registration) Regulations 2009 to replace references to the National Patient Safety Agency, the NPSA, with references to the NHS Commissioning Board Authority. The second relates to the make-up of the commission’s board. I shall say more about the purpose of these changes in a moment but I should like to reflect on the importance of the Care Quality Commission as the independent regulator of health and adult social care services in England.
The commission plays a vital role in providing assurance that patients and service users receive the standards of care that they have a right to expect. All providers of regulated activities in England, regardless of whether they are public, private or voluntary sector organisations, are required to register with the commission. Providing a regulated activity without being registered is an offence. In order to be registered, providers have to comply with a set of registration requirements that set the essential levels of quality and safety. Where providers do not meet these essential levels, the commission has a range of enforcement powers that it can use to protect patients and service users from unsafe care, including, in the most extreme cases of poor care, closing down services. The changes to the commission effected through the Health and Social Care Act 2012 are to strengthen the CQC as the quality regulator of health and adult social care services.
I shall now explain why we need to make these changes to the regulations included in the instrument under debate. Under Regulations 16 and 18 of the CQC registration regulations, registered providers of regulated health service activities have been required to notify the CQC of unexpected deaths of service users or other serious incidents, except where such providers have already reported the death or incident to the NPSA. This exception was designed to reduce the reporting burden on providers, preventing the duplication of reporting to both the NPSA and the CQC. Notifications to the NPSA were processed through the national reporting and learning system, the NRLS, and notifications made in the circumstances described in Regulations 16 and 18 of the registration regulations were passed on to the commission by the NPSA. However, from 1 June, responsibility for oversight of the NRLS transferred from the NPSA to the NHS Commissioning Board Authority. Therefore, the amendments to which I referred were needed to reflect the changing ownership of and responsibility for the NRLS and to update the exception and allow it to continue from 1 June.
Relevant notifications to the NRLS will continue to be passed to the CQC under the new arrangements. To set this in context, as noble Lords are aware, the arm’s-length bodies review in 2010 recommended the abolition of the NPSA, and provision is made for the recommended abolition in Section 281 of the Health and Social Care Act 2012. Provision in the Act is also made for the NHS Commissioning Board to have responsibility for the patient safety functions formerly carried out by the NPSA. I shall briefly reiterate why we believe this to be entirely sensible and in the best interests of patients. Patient safety has to be the key priority for all those working in the health service. It can never be allowed to be seen as an add-on or an afterthought.
For that reason the Act puts safety at the heart of the NHS, not at arm’s length. Safety is, of course, a central part of quality and we believe that the board, as a body legally responsible for ensuring continuous quality improvement in the NHS, will be best placed to drive a powerful safety agenda throughout the NHS. Embedding safety across the health and social care system is vital. That is why oversight of the patient safety function has been conferred on the shadow body—the NHS Commissioning Board Authority—from 1 June. The NPSA did not have the authority or position to fully exploit the information gained from the NRLS. In contrast the board will have the necessary authority and, being positioned at the very heart of the system, will be better placed to lead and drive improvements. Patients rightly expect that all NHS services will be safe. We believe that by making the board responsible for safety, we are placing that responsibility at the centre of the NHS.
The second part of the regulations makes changes to the regulations setting out the composition of the Care Quality Commission’s board. These changes are in response to the recommendations of the Department of Health’s review into the performance and capability of the commission. The review recommended that the department should take steps to strengthen the board, including changing its structure to that of a unitary board, so that instead of comprising only non-executives, senior executives can also be appointed and held to account by the non-executive members. The model of a unitary board also potentially offers strength in combining the strategic views of the non-executives with the organisational knowledge of the executives. In addition, the performance and capability review recommended that the Secretary of State should strengthen the board by appointing new non-executive members to existing board vacancies. The regulations, therefore, remove the bar in the commission’s existing regulations stating that the Secretary of State cannot appoint an employee of the commission to the board, so allowing for the creation of a unitary board. The regulations also extend the number of members who can be appointed to the commission’s board so as to accommodate the senior executives. The upper limit is currently set at 10, and these regulations extend that to 12. That allows flexibility in the appointment of new executive and non-executive members to strengthen the board’s capability.
I was very grateful for the comments of the noble Lord, Lord Hunt, on the appointment of David Behan as chief executive of the commission. I am sure he will agree that David’s wealth of experience around adult social care and local government system reforms at the department as director-general for social care, local government and care partnerships will stand him in excellent stead for his new role as chief executive of the CQC. David’s previous experience as the first chief inspector of the Commission for Social Care Inspection and as president of the Association of Directors of Adult Social Services, as well as his other front-line experience, will also be a great advantage to the commission.
All noble Lords who spoke asked about resources and funding. It is important to recognise that the CQC recovers fees from providers to cover the cost of registration. In addition, it receives grant in aid to cover its other functions. Every year, the CQC agrees its business plan with the Department of Health and its financial position is kept under constant review. We have agreed that the CQC will receive additional funding for staff recruitment in 2012-13.
Allied with the question of resources was that about the CQC’s capability. We have every confidence in the CQC’s ability to provide the effective regulation of providers of health and adult social care. I welcomed what the noble Baroness, Lady Wall, had to say about that. As the noble Lord, Lord Hunt, has acknowledged, huge improvements are being made in the delivery of its core task of providing assurance that services for patients and service users are safe and of appropriate quality. The CQC leadership is now demonstrating greater confidence and challenge. The recommendations that we made in the performance and capability review are aimed at building on performance during the past 12 months to strengthen capability further and to improve accountability, including accountability with the department.
We are committed to supporting and strengthening the CQC. We are clear that the CQC should continue to focus on its core role of assessing whether providers meet the essential levels of safety and quality through its registration function. The department is assured that the CQC is delivering its core functions and learning from its implementation of the registration system, improving the way in which it carries out its core business to provide a better service. We have emphasised to the CQC the importance of ensuring that providers continue to comply with regulations and safety and quality requirements. The CQC continues to monitor closely the information on service providers that it receives and takes regulatory enforcement action if it finds the safety and quality of services to be lacking in any case.
We are committed to developing the role of the CQC as the quality regulator of health and adult social care services in England. The functions that the CQC will gain as a result of the Health and Social Care Act 2012—joint licensing with Monitor, information governance monitoring and hosting Healthwatch England—and the potential transfer of functions from the Human Fertilisation and Embryology Authority and the Human Tissue Authority, subject to consultation, are all aimed at strengthening its role in assuring the safety and quality of health and adult social care services.
I emphasise that these changes will not happen overnight. For example, the delivery of joint licensing is not expected until 2014, and any transfer of functions from the HFEA or the HTA will not happen until 2015. The CQC will have a number of years to prepare for these functions, including assessing the resources needed to carry them out. During this time, the department will work with the CQC to ensure that it is ready to take on the functions at a pace that avoids distracting the commission from its core responsibilities and placing the delivery of its current functions at risk.
The noble Lord, Lord Hunt, spoke about the CQC’s methodology and in particular the “generic model of regulation”. Professional regulation, as he knows, conducted through the GMC, the GDC and other professional regulators, focuses mainly on the competence of the individual professional. However, the way in which organisations are managed and their systems work, together with factors such as the suitability of premises, also affects the safety and quality of the services provided. CQC registration will ensure that competent individuals meet the needs of their patients without putting them at risk from potential system or premises weaknesses. It is encouraging that both the General Practitioners Committee and the Royal College of General Practitioners have issued joint statements with the CQC illustrating the profession’s acknowledgment of the need for CQC registration and the light-touch approach that the CQC is taking to bringing providers into registration.
I argue that there is a generic element to the regulation process, but that does not mean that the CQC approaches its task on a one-size-fits-all basis. I have accompanied CQC inspectors when visiting a dental practice, and I know that there are non-generic elements of its methodology that apply only to dentistry. The CQC has worked with stakeholders and trialled its processes to keep these to a minimum, but it is important that it has the capacity to take action where services do not meet essential standards.
Lord Hunt of Kings Heath
My Lords, I thank the noble Earl for his comprehensive response and the noble Baronesses, Lady Wall and Lady Jolly, for joining the debate.
The noble Earl can take it that there is general cross-party support for the work of the CQC; we wish it and Mr Behan well. The tasks that it faces are formidable, but I hope that with the resource increase referred to by the noble Earl and the spirit of support and co-operation, it will be able to make progress in the next few years.
I should like to raise two points. First, I did not mention the National Patient Safety Agency in my opening remarks, although I was tempted to do so. I understand the point the noble Earl is making. The main responsibility of the NPSA, of which I was chair a few years ago, was to record these incidents and then send out reports of the trends. The issue was with what happened to put that into practice. The noble Earl’s argument is that by bringing that into the NHS Commissioning Board it will be more in the mainstream of the architecture and more likely that the reports of those trends will be taken account of in the health service. The risk is that the National Reporting and Learning Service will no longer be seen as independent because it is part of the management structure and that, in the future, staff will be more reluctant to report incidents. All I ask of the noble Earl is that his department keeps a close eye on the number of incidents that are reported. If there appears to be a tailing off, the Government might need to revisit the issue of where the NRLS is placed.
Secondly, on the approach and methodology of the CQC, I fully accept that life has moved on since the CHI model. The CHI model was certainly not perfect but, as the noble Baroness, Lady Jolly, suggested, it benefited from high-quality inspection teams. I am glad that the noble Earl listened carefully to what I had to say on that matter and I hope that this can be the start of a more general engagement on the work of CQC and its methodology. It enjoys support for what it does and we want it to do well in the future, but we would also like to take part in these important discussions.
Having said that, I thank all noble Lords who have taken part in the debate.