Grand Committee
(11 years, 10 months ago)
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Arrangement of Business
(11 years, 10 months ago)
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The Deputy Chairman of Committees (Baroness Harris of Richmond)
My Lords, if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Groceries Code Adjudicator Bill [HL]
(11 years, 10 months ago)
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Viscount Eccles
Viscount Eccles
My Lords, Amendment 37 would knock out Clause 9, or elements of Clause 9, so I will confine myself to speaking to Clause 9, which provides for enforcement using financial penalties. The clause is very important. It is probably the most important debating issue during the progress of the Bill. There is a wide range of views within the Committee about the clause, from my suggestion that it should be taken out altogether to the Government’s position that it should be discretionary, given the right amount of evidence, for the Secretary of State to introduce financial penalties and, on the other hand, that that discretion should be removed and that penalties should start as soon as the Bill is enacted.
Before Parliament agrees to a regime of fines—administrative or quasi-judicial fines—it is incumbent on us to give it careful thought and have sufficient evidence. It is a serious matter to give any regulator or adjudicator the power to impose fines. The clause comes against the background that the industry as a whole—the retail industry and its suppliers—has been enormously successful. If we want evidence of that, we have only to look at the Food and Drink Federation’s evidence, which says, look how wonderfully successful our members have been and what a fantastic contribution they are making to the economy. I am sure that that is right. As the Competition Commission stated, the general public have benefited hugely from the growth of the supermarkets, because of not only price but also choice. All sorts of things are available at reasonable prices to the general public which would not be there if it were not for the supermarket industry.
I quite accept that there have been bumps and glitches along the road, and no doubt there will continue to be. It is a very big industry with very tight margins. The Co-op’s net margin before tax is 2.8%. There is not a lot of room there and it is clear that, from time to time, there will be arguments about sums of money which we might not think considerable but which to a supermarket working on narrow margins are indeed considerable.
There is in our body politic a certain distaste for competition. We do not have many really competitive markets in this country—take a look at banking and quite a lot of other industries. Within the political body politic, there is also wariness about competition. It seems rather distasteful that people should fight so hard for business and to make that business more efficient. What type of behaviour by the supermarkets in breach of the GSCOP, the code of practice which is imposing excessive risk and unexpected cost on suppliers and leading to the ultimate disadvantage of the public—which is a straight rendering of the Competition Commission’s position—justifies the imposition of a system of fines?
In our last sitting the noble Lord, Lord Knight, very helpfully cited some examples of things that do not go as well as they should. His most striking example was the matter of delivery schedules. He started with a reference to notice periods, reasonable notice and the vagaries of supply. This matter is covered in the code of practice to this extent. If you will forgive me, I think that we should take note of what is in the code of practice. In part 1, under “Interpretation”, it states:
“Reasonable Notice means a period of notice, the reasonableness of which will depend on the circumstances of the individual case, including:
(a) the duration of the Supply Agreement to which the notice relates, or the frequency with which orders are placed by the Retailer for relevant Groceries”.
In his presentation the noble Lord, Lord Knight, said that there were some people with no contract. I think that that is absurd. I cannot understand why the representative bodies of the suppliers do not pull themselves together and make sure that their members do have supply contracts. If there is anything that a trade association could contribute to its membership, it would be good advice on how to get a contract that is enforceable. If suppliers are entering into contracts that are not enforceable, they had better get up to speed. I started taking orders for steel castings when I was 25, and the idea that I would have ever entered into a contract to supply anyone—the British Steel Corporation, for example, a very powerful body at that time—without anything written, is unthinkable.
The code goes on to state that,
“(b) the characteristics of the relevant Groceries including durability, seasonality”—
we are back to lettuce—
“and external factors affecting their production; (c) the value of any relevant order relative to the turnover of the Supplier in question; and (d) the overall impact of the information given in the notice”—
that is, the “reasonable notice” notice—
“on the business of the Supplier, to the extent that this is reasonably foreseeable by the Retailer”.
While the Competition Commission has taken this matter into account, it has had to handle it with what might be described as a certain amount of flexibility, because of the variability of the circumstances.
Part 3(3) of the code—and this of course is binding within all supply agreements—states:
“Variation of Supply Agreements and terms of supply
(1) Subject to paragraph 3(2), a Retailer must not vary any Supply Agreement retrospectively, and must not request or require that a Supplier consent to retrospective variations of any Supply Agreement.
(2) A Retailer may make an adjustment to terms of supply which has retroactive effect where the relevant Supply Agreement sets out clearly and unambiguously:
(a) any specific change of circumstances (such circumstances being outside the Retailer’s control) that will allow for such adjustments to be made; and
(b) detailed rules that will be used as the basis for calculating the adjustment to the terms of supply.
(3) If a Retailer has the right to vary a Supply Agreement unilaterally, it must give Reasonable Notice of any such variation to the Supplier”.
That is exactly why I have asked for the Office of Fair Trading to produce its reports. It has now had 20 compliance reports: two years’ worth, from 10 different supermarkets. It either believes those compliance reports or it does not. Those compliance reports either record breaches or alleged breaches of the code of practice under these paragraphs or they do not. For us to proceed without understanding the present situation is a dereliction of Parliament’s duty.
I welcomed the list suggested by the noble Lord, Lord Knight. I am not sure that jam with less sugar in it than some other jam is a subject that quite comes under the code, any more than pomegranate dust in chocolate does. I would just comment that exotic chocolates are mostly sold not through supermarkets, but through Thorntons or Hotel Chocolat. There are specialist retailers in exotic chocolates. Who else, one then asks, produces a list of those things which demonstrate a type of behaviour that might justify the introduction of an administrative penalty system? Does the OFT produce a list? It has been looking at this market. It has the power to refer what it thinks is anticompetitive to the Competition Commission. Does the Competition Commission have a list? Do the trade associations have a list? I have asked them all to let me know what they would like to see investigated. They have come back more or less with the same answer: their members will not tell them because they are too frightened.
Quite honestly, that will not do. It is not evidence. It is assertion and raises the question about suspicion. Do Her Majesty’s Government have a list? Do the Members of this Committee have a list? If there are lists, that is great—I am here to be convinced, as I think I said on Tuesday. At the moment the principle behind this clause is quite unsupported by evidence. What, the question becomes, about the clause itself? In detail it is very faulty. There is no maximum amount. We have no idea what the Secretary of State would do if there was a piece of secondary legislation. We do know that we have too much legislation. We have too much secondary legislation. Secondary legislation is not scrutinised properly. After that we have too much litigation. Here is this clause saying, “Oh well, go to the High Court or the Court of Session in Scotland”.
Does Parliament really want to set up another set of administrative fining, trying to fine big people who will have pretty good legal advice and pretty good arguments to put forward? Do you want them in court every five minutes? This does not seem to be in the public interest. The whole process is incredibly costly. The impact assessment does not begin to try to analyse how it would work and who would be charged what and what expenses in total would be incurred. It is a bland document. It says in various places that it is difficult to know how this will work and how that will work. However, it is worse than there being a lot of costs incurred. Who finally is going to pay? Times are what they are, and it is the least able to pay who ultimately will pay. The Co-op’s margin, as I said, is 2.8% before tax. Let us suppose that it is put to fines, goes to law and spends a lot of money—where will that cost end up? The answer is: in the prices in the shops. What can the 10 sensibly do but alter their margins? The best net margin is Marks and Spencer’s—although I have found it difficult to find out how that is split between clothing and food—at just over 6%. That is the highest margin that I can find.
Lord Knight of Weymouth
My Lords, with all respect to the noble Viscount, we have amendments coming up later regarding the powers to fine. All that we on this side want to do at this stage is say that he will not be surprised that we disagree with him, and that we will explore at greater length the reason why. Suffice to say that the Federation of Small Businesses, the National Farmers’ Union and the Country Land and Business Association, to name but three of the submissions that I have had, think that we should go further on the powers to fine than the Bill does. We have support from across the House; the noble Lords, Lord Razzall and Lord Teverson, my noble friends Lord Borrie and Lord Grantchester, and the noble Baronesses, Lady Randerson and Lady Byford, have all put their names to amendments that say that we should go further. We think that the status quo is the minimum. The Select Committees of BIS and Defra are also supportive of the powers to fine. I am happy to leave it to the Minister to persuade her noble friend that he should withdraw his amendment.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
There is a challenge to start the day on. Our discussion on my noble friend Lord Eccles’s amendment is the first discussion today on financial penalties although I know that we have more to come, as the noble Lord, Lord Knight, has just said. As I said at Second Reading, the Government believe that the enforcement methods of recommendations and requirements to publish—so-called “name and shame”—are likely to be sufficient to ensure a higher level of compliance with the code. However, should those powers be insufficient, it is important to have the reserve power of allowing the adjudicator to impose financial penalties.
Before I continue, I say to my noble friend that here he has someone who understands supermarkets and these large companies and how they work. I have said before and will say again that I was a supplier to six of the largest supermarket groups. I ran a successful and happy business during that time, but of course I did it in the 1980s and in those days there was no written contract for chilled food at all. I had no written contract, so every time I filled a lorry with £50,000-worth of smoked salmon or smoked mackerel I could not even get insurance on it because I did not have a contract that I could show anyone. I took a risk in making those journeys every day but it was advantageous to me to do so. I am fully aware, as are the Government, that there is a relationship between the supermarkets and their suppliers and, ultimately and inevitably, to the consumer.
The Secretary of State would not activate this power lightly. The process by which he could do so is set out in detail in Schedule 3, but key aspects include the fact that the Secretary of State may make such an order only if he or she thinks that the adjudicator’s other powers are inadequate, and that before making such an order the Secretary of State must consult a range of parties, including the large retailers and the representatives of suppliers and consumers. The Bill provides sufficient checks to ensure that the power is introduced only if it is genuinely needed.
Maintaining the possibility of imposing financial penalties is essential if we are to be confident that the adjudicator will have the necessary powers to enforce the groceries code. The noble Viscount, Lord Eccles, was worried about the reasons for not prescribing the maximum fine in the Bill. It is more appropriate that such a maximum be informed by experience; for example, of how much retailers might be gaining from non-compliance. This experience can be gained only once the adjudicator is operational. Should the Secretary of State make an order to introduce fines, the order must specify the maximum penalty that may be imposed or how the maximum penalty is to be calculated.
The very existence of the reserve power will contribute strongly to ensuring compliance with the groceries code. Large retailers will be conscious that there is the prospect of a swift introduction of financial penalties if there is evidence of significant non-compliance with the groceries code and the existing regime seems not to be sufficiently effective. Clearly, all large retailers will prefer to avoid this situation arising.
The Bill’s provisions on financial penalties both encourage compliance with the initial enforcement regime and provide an important reserve power should stronger methods of enforcement be necessary. I therefore propose that the provision stand part of the Bill and ask my noble friend to withdraw his amendment.
Viscount Eccles
My Lords, my noble friend starts from a zero base. If we read her words carefully in Hansard, we will find that it is as if we have no idea whether supermarkets are behaving in a fair-dealing way and we have to have in the locker a threat. Yet we have had a code of practice, which was thought not to be satisfactory and has been beefed up. I have heard nobody in this Committee say that the new code is unsatisfactory—I have heard the noble Lord, Lord Knight, suggest that it should be extended but I do not think that anybody has quarrelled with it. It has been in force for two years. All the 10 supermarkets have appointed compliance officers and all of them report publicly—with the exception of a German-owned supermarket that does not report publicly in this country—to the Office of Fair Trading. To say that we need the Bill to ensure compliance with the code is just wrong. We have all the evidence that we need to know whether the code is being complied with. Where other things are not being reported which either come under the code or could be thought to do so, I absolutely accept the need for their inclusion. It was for a list of those things that I was looking.
My noble friend’s taking on large orders for smoked fish with no written contract is beyond comment. She was obviously taking excessive risk, but it was not being passed on by the supermarkets, which no doubt would have been perfectly willing to enter into a written contract. She was undertaking that risk on her own account and I do not see what an adjudicator could do about that, except give some good advice.
Unfortunately, I am unsatisfied with the Minister’s reply and intend to raise the matter at the next stage of the Bill. Meanwhile, I beg leave to withdraw the amendment.
Lord Howard of Rising
“(2) A large retailer, subject to any enforcement measure set out in this section, may appeal against those measures to the Competition Appeals Tribunal.
(3) If the Adjudicator requires information to be published, the large retailer may appeal to the Competition Appeals Tribunal—
(a) prior to any information being published; or(b) following the publication of any information.”
Lord Howard of Rising
My Lords, Amendment 37A essentially would give the supermarkets a right to appeal if they felt that there was a miscarriage of justice or that something has not been done correctly. The adjudicator will be policeman, judge and jury. It seems wrong that there is not some form of mechanism whereby someone who feels that they have been wrongly treated should be able to have recourse. I am sure that the adjudicator will be brilliant but people make mistakes and mistakes are made. On the previous occasion when we were in Committee, the noble Lord, Lord Browne, spoke well on the need for things to be fair and to be seen to be fair. This is an extension of that argument.
I also think that the retailers we are talking about are above averagely susceptible to bad reputation. Naming and shaming is very effective and there should be a way in which they can stop that before it happens if there is likely to be a miscarriage of justice. Noble Lords may recall that during the passage of the Financial Services and Markets Act under the Labour Government, the noble Lord, Lord Saatchi, introduced a right of appeal. I am sure that the Conservative Party would not want to change that sort of precedent. In the interests of justice and fairness, I hope that the Minister will give full attention to what I have said. I beg to move.
Lord Borrie
My Lords, the noble Lord, Lord Howard of Rising, has made a significant point. He did not specifically mention one aspect of what he is proposing; namely, that in relation to appeals Clause 9(4) already provides for an appeal against the imposition of any financial penalty, which is the most serious penalty that might arise from the adjudicator’s decisions under this Bill.
Whereas the Bill states that the appeal is to the High Court in England and Wales and the Court of Session in Scotland, the noble Lord, Lord Howard of Rising, wants it to be to the Competition Appeal Tribunal. I can see a lot of point in that. After all, the adjudicator’s basis for action is to deal with the excessive risks which are transferred from the retailer to the supplier and the possibility of unexpected costs being shifted from one to the other. Given that those proposals emanated, as we all know, from a report of the Competition Commission, it may be very suitable that any appeal against an adjudicator’s financial penalty should be to the Competition Appeal Tribunal, as the noble Lord is suggesting, rather than the ordinary courts, if I may put it like that—the High Court and the Court of Session.
The Competition Appeal Tribunal has a president who is a High Court judge and specifically experienced in competition matters. The other members of the tribunal are lay members who are appointed because of their knowledge and experience of competition matters. The noble Lord, Lord Howard, has an excellent point but he wants to go further and allow an appeal not only against financial penalties but against any of the other powers of the adjudicator, such as naming and shaming or requiring information et cetera. I do not think, any more than those who devised the Bill think, that there needs to be an appeal on those matters or powers that the adjudicator may exercise.
Baroness Byford
My Lords, I must admit that when reading through the Bill very carefully, I am somewhat sympathetic to the proposal to have some form of appeal apart from that in Clause 9(4), which the noble Lord, Lord Borrie, just mentioned, where an appeal can be made directly to the High Court. I am grateful to my noble friend for tabling this amendment. I also share the concerns of the noble Lord, Lord Borrie, that it should not affect anything other than the severest penalty of fines. Mischief could be had by way of delay. I have followed proceedings on the Bill all the way through, and when amendments arise I will try to make sure that the issues are dealt with as quickly as possible. I wonder whether it might be helpful—it probably is not—if the provision were added before or after Clause 9(4) rather than in the place suggested by my noble friend Lord Howard of Rising. That might be a better place for it, if the Minister is inclined at all to be sympathetic to the idea. It is reasonable that retailers who are taken to court or held up on grounds of not adhering to the code should be able to appeal in some way. I am no lawyer but I would support having a lesser approach. However, the other one will still be there as well. I do not know how the Minister will respond to that.
Lord Browne of Ladyton
My Lords, I support the amendment in part. The complexity of the legislation is such that it takes a bit of figuring out to work out exactly what effect it will have on the regime that will otherwise persist. If I understand the ambition of the noble Lord, Lord Howard, it is to introduce a right of appeal on the part of a retailer in respect of any of the enforcement consequences and that those appeals should all be to the Competition Appeal Tribunal.
In the current structure of the Bill that seems to be unnecessary because there is no enforcement mechanism in respect of recommendations. The matter of whether or not recommendations are accepted is entirely for the retailer. The recommendation is made, which the retailer either accepts or does not, and there is no enforcement mechanism. We will come to my discontent with that structure in a later amendment today, I hope. There is no necessity for an appeal against a recommendation because the retailer is effectively its own appellate body in respect of a recommendation. Retailers can ignore it, and appear to be able to do so without consequence.
On the “naming and shaming”, which is the operative phrase used for the second of the enforcement mechanisms, I agree with the noble Lord that in commercial and reputational terms that could be much more significant for the retailer than a fine. If we get to fines in this structure, I expect that they will be substantial, otherwise they would be pointless. Naming and shaming could be significantly damaging to the reputation of a business built up over decades. I know that witnesses who have given evidence to the BIS Select Committee and been party to the discussions on these matters in the consultation period which has informed our deliberations have differing views on how retailers will respond to naming and shaming and whether it matters to them. I think that an argument can be made that it is a significant penalty and that, in fairness, there ought to be an opportunity for the retailer to have that decision reviewed or appealed in some way before it is implemented.
I note with some interest that the amendment moved by the noble Lord, Lord Howard, creates a right of appeal even after the penalty has been imposed. I can see the merit in that, but it seems to me that if we accept that there ought to be an appeal then we ought to stay the execution until the appeal takes places. There is no point in pardoning an already executed prisoner. That would be a pointless exercise in many ways apart from—well, I do not want to take the analogy too far.
To that extent I support the argument of the noble Lord, Lord Howard, and his amendment—so I support it in part. That may, in my experience of this Committee today, be the kiss of death to the proposed amendment, no matter how sensible or fair it is. The noble Lord has the advantage, of course, of the partial support of the noble Lord, Lord Borrie. That might persuade the Government that there is sense in the amendment, as that seems to be the touchstone in determining whether there will be a positive response from the Treasury Benches. However, the question—and I think it does a service to our consideration—feeds into our later deliberations on the issue of fines. I would just say in passing to the noble Viscount, Lord Eccles, that I agree with much of what he said. Although I do not agree with the reasons why he is making the arguments, I will try to explain later why I agree with much of what he said and why I think that it was really important. There is a fundamental systemic misconstruction in relation to fines in the middle of the Bill which we need to address.
The Committee’s deliberations so far are getting to the heart of the issue of the workability of this regime. I suggest, with respect, that it is incumbent on the Minister to explain why there is this differentiation in approach. Why are there three methods of enforcement? One of the methods is not enforcement at all but is simply a suggestion which can be accepted by the retailer. One is a fairly draconian consequence for a substantial business which will probably operate in all of our communities, and have a replication in all of our communities, but a consequence in which there is no system of appeal at all. The third method, and I will come to it in more detail later, either should be in the Bill or it should not be in the Bill—but it should not be halfway in—and that is financial penalties.
I would say, finally, that I am grateful to the noble Lord, Lord Howard, as I am also to my noble friend Lord Borrie, for their comments on expansion of the Competition Appeal Tribunal. I will need to go away and research the issue. When I first read the Bill I thought that adding to the workload of the already overworked High Court in England, Wales and Northern Ireland and the Court of Session in Scotland may not be a wise thing to do. It almost certainly will be an inordinately expensive process. There will have to be at least five or six wigs on each side of this argument when it gets to that level of debate. If this can be done much more efficiently through the Competition Appeal Tribunal and in a less litigious way then I would support it. However, I will go away and think about that. I suspect that we will have an opportunity at a later stage to deliberate on that, and I may find myself falling in foursquare behind the idea of an appeal to a Competition Appeal Tribunal as opposed to otherwise overworked courts.
Viscount Eccles
My Lords, I have an amendment in this group. Before I speak to it, however, I should like to say briefly that anything that would lower the cost of settling disputes is to be welcomed. The High Court is not to be welcomed in that regard. After all, the intention behind the code of practice was, and is, to provide a method for settling disputes that does not involve the courts or a tribunal at all. As I say, I still hope to find that the Committee can be persuaded that that is the best way of settling disputes.
My amendments go to the naming-and-shaming part of the enforcement by seeking to leave out specifying what information is to be published, how it must be published and the time by which it must be published. I have a later amendment that is a substitution because I would like the criteria that are to be used to cover the matter of publication to be in the guidance under Clause 12. I am on board with the adjudicator being in some form of sensible dialogue with the supermarket about what the information should be and how and when it should be published. However, Clause 8(2) is far too prescriptive and will lead to endless arguments. When we come to the matter of appeals, we have to remember that we do not actually have to write someone having a right to appeal into an Act of Parliament; there is nothing to stop them going to court if they want to do so and think they have a good case. I suggest to the Committee that we should be careful about making the Bill so adversarial, instead of looking for sensible and fair dealing and agreement.
Lord Browne of Ladyton
I agree with the noble Viscount that in the current environment it is impossible to stop people going to court. They will find a way to get to court, and that way will probably be judicial review. If one has sufficient resources behind one—we are talking here about the 10 biggest retailers in the country, and no one apart from the Government has resources that can match them—and feels strongly enough about an issue, one is entitled to find a way to get to court. The problem is that if Parliament does not allow a right of appeal then it will probably have to go by some form of judicial review. What is unsatisfactory about judicial review is that it deals with the process more than it deals with the content, although the content quite often enforces the process. Invariably, one then has to start again. Instead of concluding the matter, therefore, that may just cause it to start again at even greater expense. While the noble Viscount recognises that we cannot stop people going to court, I suggest that it is better if we can provide a sensible and efficient method of reviewing decisions that people who are aggrieved can take advantage of.
Viscount Eccles
My Lords, I completely agree. I am not trying to be prescriptive at all. All that I am saying is that if people feel that they are being unjustly dealt with and they have the resources, they will find some way of challenging what they think is that unjustifiable behaviour. We are debating this matter against the background that no one has yet been able to say what sort of behaviour by the supermarkets they want to see investigated by the adjudicator. If we knew that, we would be in a better position to decide how severe the enforcement procedures should be.
Lord Knight of Weymouth
My Lords, I rise in support of my noble friend Lord Browne’s position, which he articulated very well. The noble Lord, Lord Howard of Rising, has raised an interesting issue. The Competition Appeal Tribunal came into force in 2003 in order, as its website says:
“To hear appeals on the merits in respect of decisions made under the Competition Act … by the Office of Fair Trading … and the regulators in the telecommunications, electricity, gas, water, railways and air traffic services sectors”.
It does a few other things as well. The noble Lord is asking the Government a reasonable question about whether there should be an alternative to the court in respect of appeals. As my noble friend has said, this is about the merits of the decision as well as the process by which the decision has been made. I look forward to what the Minister has to say.
Baroness Wilcox
My Lords, much of the debate about sanctions today has focused on financial penalties. However, I value the opportunity to discuss the rationale behind the other enforcement powers available to the adjudicator. The noble Lord, Lord Howard of Rising, has brought forward two amendments which would together extend the right to a full merits appeal so that it applied to all the enforcement methods and would be to the Competition Appeal Tribunal. The Bill already provides for a full merits appeal to the court against financial penalties, if these are introduced. In the case of recommendations or the requirement to publish information, the Government believe that judicial review is more appropriate.
In the case of recommendations, it must be emphasised that these are non-binding on retailers. There is no consequence which follows if the retailer does not comply, other than the possibility of a further investigation, which could lead to the imposition of a further sanction only if a further breach of the code were found. We therefore believe that, in this case, a full merits appeal would be clearly inappropriate.
The Government acknowledge that for the requirement to publish information the arguments are more finely balanced. However, having considered this in depth, we believe that judicial review remains the most appropriate form of appeal. The reasons for this were set out in the Government’s response to the BIS Select Committee’s report. They include the independence and impartiality of the adjudicator and the breadth of matters that an investigation is likely to consider. The critical difference between the requirement to publish and a financial penalty is that in the latter case there is a very direct and immediate consequence for the retailer, whereas a publication of information is rather different. It should be remembered here that this information will not in itself determine that a retailer has any obligation to a particular supplier. The supplier would still need to bring his case to arbitration to seek damages or any other remedy.
Finally, we have also taken into account the implications that a full right of appeal against a mere requirement to publish could have for the effectiveness of the adjudicator. A full right of appeal, requiring the repetition of a detailed fact-finding exercise, could seriously delay the requirement to publish and so substantially diminish its impact. Taking these matters into account, the Government consider that a full right of appeal is needed only against financial penalties and that otherwise the possibility of judicial review by the court will be sufficient.
In addition, the noble Lord seeks to replace the principle of appeal to, or review by, the High Court or Court of Session with appeal to, or review by, the Competition Appeal Tribunal. While the adjudicator is being introduced on competition grounds, the details of the practices addressed by the groceries code are not the same as anti-trust cases or the other issues dealt with by the Competition Appeal Tribunal. The High Court or Court of Session in Scotland is therefore an appropriate place for such appeals to be heard.
However, I have listened to your Lordships today who support what the noble Lord, Lord Howard, has said or want to question this issue further. Therefore, I am willing to consider this point and will invite the noble Lord, Lord Howard, to a meeting, as well as any other noble Lords who spoke, including the noble Lords, Lord Borrie and Lord Browne, the noble Baroness, Lady Byford, and the noble Viscount, Lord Eccles.
I turn to the amendment proposed by the noble Viscount, Lord Eccles. The Bill contains clear requirements for the adjudicator as to what they must specify to the retailer if they require a retailer to publish information. The noble Lord has suggested that these be removed. I believe that it is important that if a retailer is being asked to publish information, it should be told what information it must publish, how the information should be published and the time by which it must be published. Otherwise, the instruction will be unclear or it could leave too much discretion to the retailer concerned. Given that this is a means of enforcement to be used following a breach of the code, I also believe that it is reasonable for the adjudicator to be able to specify what information is to be published, as well as when and where it is to be published.
Accepting this amendment would make the Bill less clear and would weaken one of the adjudicator’s means of enforcement. In asking the noble Lord, Lord Howard, to withdraw his amendment, I repeat my offer to him to meet me and my officials.
Lord Browne of Ladyton
I am grateful to the Minister for giving way; I have no desire to prolong proceedings this afternoon. In anticipating that the noble Lord, Lord Howard of Rising, might accept the invitation to discuss these matters further, I would welcome being a party to those discussions.
Will the Minister ask those advising her to take into account the interaction of Clause 8(3) with the expectation that review will be conducted by way of judicial review? That has the potential to create a multiplicity of actions that are entirely unnecessary. She indicated that there was effectively no enforcement mechanism in relation to naming and shaming. But there is such a mechanism, by way of injunction or specific performance, in Scotland. I can see a judge in the Court of Session in Scotland or in the High Court in England having an application before them and saying, “I cannot go into the merits of this case. They are for another forum”. A judicial review will be raised at the same time and the interaction between the two will have to be worked out by judges in the same courts involving enormous expense all because there is no appeal. That is inevitable.
Baroness Wilcox
I think that I may have an answer for the noble Lord now, but as we will be discussing this further we will come back to it. The requirement to publish needs an enforcement mechanism. We should not oust the rights to judicial review and therefore we need both. That is the answer that I am giving now. We shall take it into consideration with everything else. I want at least to be sure that I am giving an explanation that is clear. In the mean time, I ask my noble friend to withdraw the amendment.
Lord Howard of Rising
I thank noble Lords for their support, which is something that I am not really used to but is nevertheless very welcome. The essential difference is between financial penalties and naming and shaming. Those of us who are old enough to remember a certain gentleman referring to his jewellery being cheaper and not quite as good as a Marks and Spencer sandwich will know that that was the end of his business. It was finished. The businesses that we are talking about are very susceptible to reputation. They work on very thin margins and do not need many people to move for those to be affected. I am very grateful to the Minister for agreeing to look at the issue. When she does so, she will need to look at two or three ancillary points as they all tie in together. In the mean time, I beg leave to withdraw the amendment.
Lord Browne of Ladyton
“( ) In the event that a recommendation has not been followed, the Adjudicator may invoke the remaining enforcement measures referred to in section 6.”
Lord Browne of Ladyton
My Lords, the amendment addresses the issue referred to in the ninth report of the BIS Select Committee as “escalation of enforcement”. I am sure that the noble Baroness will be very familiar with that report. The issue is encapsulated with all the arguments in a couple of pages of that report, starting at paragraph 120.
If I have understood the Bill correctly—leaving aside the issue of fines which we will come to in some detail shortly—the Government propose that the adjudicator will have enforcement powers that include making recommendations and what has come to be known as naming and shaming. We have had a discussion about that so I shall not go back over it in any detail. If, however, the retailer involved ignores the enforcement mechanism of recommendations, there is nothing that the adjudicator can do except to bear it in mind for the next time. Or, if a further complaint resurrects that issue, I understand from what I have read that there is a possibility of further investigation and then of going back to the original set of penalties to see if an appropriate one can be imposed, taking into account that on the previous occasion the retailer ignored the lesser penalty which was designed to start the process off.
As with many other aspects of the Bill, I can see why the Government in seeking some form of light-touch regulation—although that phrase is out of fashion at the moment—have built an escalator into the Bill. I fundamentally disagree with this but the Government are seeking Parliament’s permission to do very ill defined things at some time in the future by way of a process that is totally inadequate: for example, by increasing the powers of the adjudicator in relation to fining. They are asking Parliament to give the adjudicator a similar type of power; that is, to be able to escalate their response as the record against an individual retailer builds up. I have proposed this amendment because that is totally unsatisfactory. It is inappropriate to ask Parliament to do that.
The much simpler answer to this is to say that if the adjudicator’s recommendations are ignored, the adjudicator should be able to escalate. They should be able to go back and say, “Well, I gave you a chance but you ignored me, so I’m now going to ratchet the penalty up because your behaviour in ignoring my recommendations has exacerbated the original behaviour”. As the noble Viscount, Lord Eccles, points out, it would be much better if we were doing all this against a body of evidence showing that that was how the retailers were behaving, but we are not. However, all that has been discussed and, it would appear, investigated over the best part of a decade, with recommendations having been made and accepted. There is quite significant support for this process, but if it is to mean anything there has to be some element of common sense about it.
It seems entirely inappropriate to leave the adjudicator in a position where, if their recommendations are ignored, the adjudicator either has to find some method of starting again or has to store that up for a later date, saying, “The next time that you come round, I will take that into account in the penalty that I will impose”. If the adjudicator ratchets up the naming and shaming, we may have to wait until we have these promised discussions about naming and shaming and other enforcement to find out whether the adjudicator will be in any stronger a position on that than on recommendations. Simply put, Clause 7 concerns “enforcement using recommendations”. There is no sanction provided in the event that recommendations are not followed. There needs to be a sanction and this amendment provides it from the Bill itself.
Interestingly enough, that is the Government’s position—or, at least, it was the position articulated by the Government’s Minister to the BIS Select Committee in his evidence. When Ed Davey gave evidence to the BIS Select Committee, he answered the question about this matter by saying that that was the Government’s expectation of the adjudicator. He had subsequently to explain that he was sticking by the mechanism in the Bill, but his intuitive position—the phrase that the Select Committee uses in recording and commentating on his evidence—was that the adjudicator should have the opportunity to escalate. He is right. The Government should be consistent with the intuitive position that their Minister holds and put to us legislation which reflects that, as this amendment would do. I beg to move.
The Lord Bishop of Wakefield
My Lords, I support the amendment. My commitment to the issues lying behind the legislation goes back a very long way. In terms of suppliers and retailers, it is rooted in the issues of the locality in which I have lived for the past nine or 10 years. This instinct has been reinforced by my experience more widely. Wherever possible, I have been trying to urge us to move forward on this and it is greatly encouraging to see that something is happening at last. At the root of this is the issue of the fairness of the market. Going back many years, when there were lots of debates about how effectively employers and employees were represented in the labour market, the key issues were its fairness and whether the balance of power was too strong in one direction or the other. That is the problem with which we are dealing. Anything that we can do to ensure that the legislation as finally enacted gives the adjudicator proper teeth so that abuses can be addressed. Some of the abuses that have come to my knowledge have been quite hair-raising. I hope that we support this amendment and that we make sure, if it appears that what is required is being ignored, that we allow the adjudicator the possibility of taking other forms of enforcement.
Lord Borrie
It is very useful to have the views of the right reverend Prelate the Bishop of Wakefield. He has attached his name to one or two amendments later, so we look forward to further contributions from him. I agree with my noble friend’s wish to ensure that if recommendations made by the adjudicator are not carried forward, he or she can come back to the Bill to see what other action can be taken, including the possibility of financial penalties.
Addressing a question to the Minister rather than to my noble friend, who proposed the amendment, Clause 6 states,
“the Adjudicator may take one or more of the following enforcement measures … recommendations … information to be published … impose financial penalties”.
I wonder whether the Bill already enables the adjudicator to go from one to the other if the first proposal—recommendations—is not accepted, or is it the Minister’s view that he can do only one of those things and not come back and open up lines of discussion as to whether one of the other measures can be taken later?
Baroness Byford
My Lords, I am grateful for this amendment. It gives me a chance to seek clarification yet again. My understanding from the noble Lord, Lord Borrie, was that the adjudicator would go choose between (a), (b) and (c). I did not think that it would be (a) or nothing, (b) or nothing, or (c) or nothing. I hope that as it stands it will be able to look at different ways of coming back to it.
I go back to an earlier contribution that I did not come in on. It keeps being said that there is little evidence. It is not surprising that there has not been much evidence in the past; that is why the Bill is necessary. In the past an individual supplier was the only person who could bring evidence. That individual supplier was known and future trading was very difficult.
Only this morning, I was in conversation with a vegetable supplier whom I happened to meet informally. She was telling me that one of the retailers she supplies had agreed a contract which had gone through, but, because the retailer thought that the circumstances were different, it had asked for a rebate on the contract that had been agreed. Surely that is extremely unacceptable. I hope that the Bill will deal with that. The reason that we have not had evidence is that people would not have come forward as the Bill will enable them to do.
Lord Howard of Rising
That is precisely what happened to me. I just said, “That’s fine. We won’t supply you any more”, and they said, “Fine, we will pay the full amount”. It is a commercial transaction between two commercial bodies.
Baroness Byford
I accept that, and in some instances it is possible, but sometimes with perishables it is not. If you take the contract away, what do you do with the goods? They are already lost. Although I accept my noble friend’s interjection, I do not agree with it because certain things have no shelf life; they are there or they are gone.
Lord Howard of Rising
My instance was strawberries, and I assure my noble friend that they have a very short shelf life.
Baroness Byford
Yes, but perhaps my noble friend was in a better position than that supplier; there was clearly a problem there.
I welcome the amendment and am glad that we have a chance to debate it. I hope that when we come to later amendments concerning fines, we will be able to strengthen the provisions. I do not know whether that will make this amendment unnecessary—I seek clarification on that, because I do not know the Minister’s point of view. If we fail later to strengthen the whole section on fines, the amendment will be extremely important.
Lord Knight of Weymouth
My Lords, I will not add to the excellent case made by my noble friend Lord Browne, but he has my support.
Baroness Wilcox
My Lords, the point raised by the noble Lord, Lord Browne of Ladyton, is important and the Government have considered it carefully. It was also raised by the Business Select Committee in pre-legislative scrutiny, as the noble Lord mentioned, and the Government amended the Bill in response. I take the opportunity to respond to the noble Lord, Lord Borrie, who asked whether the Bill already allows such escalation. That is not our intention. In Clause 6, subsections (a), (b) and (c) are not intended to be sequential. One or more measures would be imposed at the same time following one investigation. I hope that that is helpful.
The question is: what should be the adjudicator’s options if a retailer does not follow a recommendation? Before answering this question, I emphasise two things. First, recommendations are not mandatory. If they were, that would give too much power to the adjudicator: he or she could essentially tell retailers how to run their business. Recommendations are meant to be the lightest touch form of sanction, not the most severe. Secondly, there may be good reasons why a retailer has not followed a recommendation. For example, a retailer might decide that it can more effectively comply with the code using a different method than that recommended by the adjudicator.
Having said that, there must be some way in which the adjudicator can follow up recommendations. After considering the BIS Select Committee’s report, the Government chose to provide for this in three ways. First, Clause 7(2) requires the adjudicator to monitor whether a recommendation has been followed. Next, Schedule 2, paragraph 1(2) provides the adjudicator with powers to require information from a retailer for the purpose of monitoring whether a recommendation has been followed. Thirdly, Clause 4(1)(b) allows the adjudicator to begin a further investigation if there are reasonable grounds to suspect that a retailer has failed to follow a recommendation. It is possible that a failure to comply with a recommendation could indicate that a retailer was continuing to breach the code, but a new sanction could be imposed only if a further investigation found that this was the case. Taken together, these clauses provide an effective means for the adjudicator to follow up a recommendation while still being fair to the retailer in question.
My concern about the amendment in the name of the noble Lord, Lord Browne, is that to impose a new sanction without a second investigation could be unfair and damaging to the retailer. After all, just because it has not followed a recommendation does not mean that it has actually broken the code.
I hope that noble Lords will agree that the Bill as it stands already encapsulates the principle embodied by Amendment 40.
Lord Knight of Weymouth
With respect, I do not think that the Minister has properly addressed the notion that at some point, reluctant as the Government may be, they may agree to the adjudicator having the power to fine. If naming and shaming has not worked, then surely it is reasonable for the adjudicator to escalate to impose fines without having to reinvestigate, with all of the delay consequential to that, before using the power to fine. Is this just an indication that in reality the Government do not ever want to offer the adjudicator the power to fine?
Baroness Wilcox
That cannot be the case, because we have made an arrangement that fines can be imposed, though it will be the Secretary of State who allows that. Yes, if there is a continuing breach—not just a failure to follow a recommendation—obviously that would be the response.
Lord Browne of Ladyton
My Lords, I am extremely grateful to the right reverend Prelate the Bishop of Wakefield, my noble friend Lord Borrie, and the noble Baroness, Lady Byford, for their support. The noble Lord, Lord Borrie, is a very wise and knowledgeable man. At least, today he has displayed that; I am not sure if he was so consistent the other day. I am very grateful for his support, and I must at least be fairly near the right answer on this occasion.
The Minister’s response disappoints but does not surprise me, because there has been a consistent recommendation that the adjudicator should have the power to escalate right throughout all of the consultation process on the Bill. Indeed, the Business, Innovation and Skills Select Committee, at the end of its deliberations, supported escalation. I know that the Government’s position was not to support it.
Let me respond to the Minister in this way, as I am sure we will debate this again: in the first instance, if there is a recommendation, that means the retailer has—in the view of the adjudicator—broken the groceries code. We are starting from the point that the adjudicator is dealing with someone in breach of the code. The powers of enforcement following investigations cannot be imposed unless the adjudicator is satisfied that a large retailer has broken the groceries code.
Of course, failure to follow a recommendation is not evidence that a large retailer is continuing to break the groceries code. There may be any number of reasons why a large retailer may refuse to accept, carry out or respond to, a recommendation. I agree with the Minister in that regard. However, in her argument she said that the Government have granted the adjudicator the power, in those circumstances, to consider as part of the follow-up a yet further investigation, because a refusal to accept a recommendation will in some circumstances imply a continued breach of the code. Those are the only circumstances that I can see in the Bill where the adjudicator can initiate an investigation where he has no reasonable grounds to believe. It is the failure to follow a recommendation that gives him the power to institute the new investigation.
Baroness Wilcox
Before the noble Lord withdraws his amendment, to which he will no doubt return on Report, it might be useful for me to comment. It is possible for a retailer to have breached the code and the adjudicator to decide that a recommendation is enough. The adjudicator will not know for sure whether a failure to follow a recommendation is also a breach of the code. That will need to be further investigated to be fair to the retailer.
Lord Browne of Ladyton
I am very grateful to the noble Baroness who is utterly generous in responding to every point that is made in these debates. It is very helpful in understanding how this complicated system will work. Essentially, this is a plea to make this legislation less complicated. If it is occupying so much of our time in trying to work out what it all means, perhaps it is just too complicated and we are trying to be too clever. I beg leave to withdraw the amendment.
Baroness Randerson
Baroness Randerson
My Lords, Amendments 45 and 47 in my name relate to the ability to impose fines, which has been referred to and anticipated by several speakers today. Under the Bill, it is assumed that naming and shaming will be sufficient to bring errant retailers into line, which requires a specific second-stage decision by the Secretary of State for the adjudicator to be able to levy fines. I believe that this is a cumbersome process which will lead to delays, including, possibly, changing the behaviour of supermarkets. It would undermine the freedom and independence with which the adjudicator should be able to act.
The amendments in my name and those of my noble friends would remove references to the Secretary of State and would therefore allow the adjudicator to impose fines from the outset. Of course, the adjudicator does not have to impose a fine if he or she finds a breach of the code. He could simply admonish the retailer concerned and make recommendations. I fully accept that the loss of reputation for retailers would be the key punishment. A reputation takes years to build and can be lost in a day. Therefore, the loss of reputation will matter to them considerably. For some retailers, it may be that breaches are sufficiently frequent to justify fines. I believe that having to wait for the Secretary of State to make the decision to ensure that fines can be levied is lengthy, cumbersome and unnecessary.
The history of this legislation is rather tortuous. I say that with absolutely no criticism of my noble friend the Minister or this Government. I make no criticism of the previous Government. I am simply pointing out that it has taken years to get to this stage. We are now moving to a legislative basis. Let us not put any further hurdles in the way of a fully effective system.
The Deputy Chairman of Committees
I remind your Lordships that if this amendment is agreed to, I cannot call Amendment 46 because of pre-emption.
Baroness Byford
I shall speak to Amendment 46, which is in my name and that of the noble Lords, Lord Borrie, Lord Knight and Lord Grantchester. Here we come to the crux of the Bill. I am sure that the Minister has gathered that there is great support for the Bill. A couple of colleagues do not feel that way, but the majority of us want the Bill to succeed. I tabled the amendment because I felt that if the adjudicator has to go back to the Secretary of State, that will delay things. Briefings from the Food and Drink Federation, the NFU, the Federation of Small Businesses and the CLA all support the adjudicator being able to impose fines.
To cite the CLA’s brief, it believes that it should be the sole responsibility and a significant power of the adjudicator to impose financial penalties on large retailers where it is clear that there has been a serious breach of the groceries code and where the other two enforcement actions—making recommendations and requiring information to be published by a large retailer—are inadequate in relation to the nature and size of the breach. Indeed, it may very well be the case that a supplier will not be able to continue unless there is financial redress for the damages caused by the infringement. It believes that the Bill must make it clear that the adjudicator retains the power to impose financial penalties and that awards to those suppliers affected by the breach of the code by large retailers must come from the proposed consolidation fund.
My noble friend has just explained, but I reinforce my concern about delay if the Bill remains as drafted. One of the problems of suppliers is getting paid for things that they have supplied. I go back to the earlier comment of my noble friend Lord Howard of Rising when he said that it is up to the person who supplies to go away. The arrangement that I heard of this morning was done retrospectively. The contract had been agreed, the whole supply had been sold, so they could not say, “No, you cannot have it”, because they had already had it but were changing the ground and asking for a reduction in the agreed payment. They could not take the goods back, because they had been sold.
I am happy to support the lead amendment in the group, but if the Bill is to succeed, it must give the adjudicator the chance to impose financial penalties. Clause 9(1) clearly states, “The Adjudicator may”—it does not say that it must—
“enforce through imposing financial penalties”,
but only if it goes back to the Secretary of State. Is what is proposed the norm or have we taken a new step? Why is there that reluctance to allow the adjudicator to impose fines?
To go back to our earlier debate on appeals, if some form of appeals system is strengthened and if the amendment we debated earlier would assist, the requirement for it to go back to the Secretary of State would be even less needed than under the Bill as it stands.
The Lord Bishop of Wakefield
My Lords, once again I support the general tenor of the amendments. Some of the same issues that were raised by the noble Lord, Lord Browne of Ladyton, in the previous debate are here. It seems to be about complexity, and the ability to take action swiftly is crucial. The Minister talked about fairness to retailers but it seems to me that part of the issue is getting fairness into the system. There is a clear unfairness to suppliers and it is once again about trying to change the culture and address the question of balance within the market.
I shall give two examples. The first concerns an individual retailer who insisted that a particular supplier of dairy products must, if he wanted to continue to be a supplier across the board of this very large retailer, pay a premium of £150,000. Without that premium the products would no longer be retailed in a very large number of stores within the chain. The supplier refused for two reasons. First, he felt that there was a lack of morality in the demand and secondly, he could not afford to do it. Happily he was switched on enough to be in touch with people who immediately complained that they could no longer get the products. In our marvellous electronic world, he was able to send them down the road to another local retailer. That is one example with one retailer.
The other example, which we all know about only too well, has been a continuing debate in the past 10 years on the issue of milk suppliers and getting a fair price for milk. Here it involves not just one retailer but a series of retailers acting together in their own best interests. I can understand their best interests. Perhaps if I were one of them I might want to push the same line. But in the end, it has the effect of driving suppliers into an impossible position.
First, we need swift action because it soon becomes clear that whatever legislation we produce is effectively weak as it gets pushed back all the time. Secondly, I take the debate about naming and shaming, and costs, but I only have to refer noble Lords to yesterday’s news about Barclays Bank. Whether the management of that bank will survive in their present roles, I have no idea, but it will not do them very much good to find that they have to pay £290 million in fines. I am not suggesting that we are talking about that level of fine here, but unless there are serious mandatory controls, we shall enact legislation that in principle is thoroughly positive and good, but which in practice does not get the market more evenly balanced.
Lord Borrie
My Lords, I am very happy to follow the right reverend Prelate as I agree entirely with everything that he said. He gave useful examples. I attached my name to the amendment tabled by the noble Baroness, Lady Byford, because I was convinced—I think I said something like this at Second Reading—that this provision should be in the Bill rather than there being just a possibility of a statutory instrument being laid at some later stage, with all the delays and question marks that that would involve. It should be in the Bill that there is a possibility of a financial penalty.
The noble Baroness, Lady Randerson, used a word with which I entirely agree, saying that the Government’s approach by not putting the power in the Bill is cumbersome. It is a cumbersome way of going about things. I am so glad that the noble Viscount, Lord Eccles, is here. If I may refer to some of the things he said earlier this afternoon, if this power goes into the Bill, I do not envisage the adjudicator taking a great deal of time thinking about penalties, the amount, and all the rest of it. I use a word most often used in criminal law, which I hope will appeal to my noble friend—deterrence. The possibility of a financial penalty —whether anywhere near that imposed by the Financial Services Authority on the bank yesterday—has a deterrent effect that is extremely important. The adjudicator will not be judged on the amounts of fines that he imposes to prove that he is a good or a useful man in his post—he will be judged as much by the effect of his powers upon the industry.
Lord Browne of Ladyton
My Lords, my understanding of both these amendments is that they are intended to have the same effect. One may be more elegant than the other, but I think that they probably have the same effect, and I support both.
I do not intend to rehearse the arguments that the noble Baroness who moved the amendment made comprehensively. However, there are some other points that are worth making, and points that we have debated already this afternoon which are worth drawing on.
First, the noble Viscount, Lord Eccles, as we began our deliberations this afternoon, encapsulated the problem at the heart of the Bill in relation to penalties. He set out quite fairly the fine as a penalty and enforcement mechanism, and the choices that face the Committee and Parliament in relation to the Bill. Either we have a piece of legislation that includes financial penalties or we do not—or, because of the road that the Government have gone down, we have a piece of legislation that kind of includes financial penalties.
However, the decision on whether these financial penalties will ever become operative lies outwith the control of those who are being asked to legislate—other than that they will, by the interaction of Clause 9, Schedule 3 and, I think, Clause 23, get an opportunity, via a statutory instrument, to have a short debate which will probably be conducted with very few people in the room, in a comparatively short time and with no power to amend. If the Secretary of State comes to the view that the history of the adjudicator’s experience thus far reveals that the operative penalties—the recommendations and the naming and shaming—have proved to be insufficient, these financial penalties can be activated.
That means that, in terms of this Bill, we cannot have any debate on what level of penalty is appropriate, what sort of circumstances would trigger a penalty as opposed to one of the other enforcement mechanisms or whether we would like rules to be made so that violations of the code can be differentiated by their nature and attract different types of penalties. I do not think that that is constitutionally appropriate. Given the nature of the sort of penalty that we must expect, it is not appropriate for Parliament to be denied the opportunity to have such a debate if the penalty is to be meaningful. I say that because this code can be enforced only against the top 10 retailers in the country. These are enormous businesses. If financial penalties are to have any effect on them, they will have to be significant.
However, there is a much more concerning issue about this construction. I am sure that the noble Baroness—or those advising her—may say, or even be able to find, an example of where something similar was done in the past in order to support doing it again—although the example will probably turn out not to have been extraordinarily successful. I am sure that in responding the Minister will say that Parliament has supervision of this to the extent that it allows this mechanism and that it is entirely proportionate—and I am sure that the word “proportionate” will be used regularly in the response. Of course, the mechanism does not give Parliament any role if it disagrees with the Secretary of State’s persisting view that financial penalties are not appropriate.
The Secretary of State holds all the cards now. The Secretary of State is constrained by this to allow financial penalties only if he concludes that the other powers are inadequate. If the Secretary of State does not conclude that, how are they accountable to Parliament? How on earth can Parliament make the Secretary of State accountable in terms of these mechanisms for not triggering this power, other than the inadequate process of Questions or maybe a Question for Short Debate? There is no mechanism whereby Parliament can say, “This is not what we intended. There are egregious breaches of this going on and the Secretary of State is not willing to trigger this power”, and that is inappropriate. There is not even a continuing method for amending this legislation or a clause that can be resurrected in some fashion. There is just no method for making the Secretary of State accountable for a continuing failure to recognise what is going on and to leave a piece of legislation ineffective because a part of it has not been enacted.
Lord Teverson
My Lords, when first I was looking forward to reading the Bill, there were two areas that I felt were of key importance. One was that we managed to expand the number of people who could bring a case to the adjudicator for the adjudicator to judge from then on, and that was well satisfied by the Government and the Minister in our discussions on the previous Committee day. The other area is this one: is this an adjudicator that counts or one that is there merely for form? Yes, there may be a question of reputation, but not all retailers are that concerned about reputation in every sense. This is a powerful tool and we know that the restricted population of these retailers is going to be sensitive to it but, to show that Parliament and the Government are serious in this legislation, there has to be a direct ability on the part of the adjudicator to be able to make fines. It is a measure of whether this is a serious creation of an appointment. It is for that reason that the amendment put forward by my noble friends is important and goes to the heart of making the Bill something that the industry on both sides will pay attention to. On that basis, I hope that the Minister’s response will be positive.
Lord Knight of Weymouth
My Lords, we were very pleased to put our names to the amendment in the name of the noble Baroness, Lady Byford, and support the noble Baroness, Lady Randerson, as well. Should the Minister, with her charm and grace, agree to these amendments, then Schedule 3 will be unnecessary, so this is the stand part debate as well. As we have heard, the adjudicator has the power to fine retailers, subject to permission—I think that my noble friend Lord Browne made good points in respect of that. We will go on to talk about the cumbersome number of hurdles that must be breached in Schedule 3 in a later debate. Schedule 3 sets out a hugely drawn-out process, which will do nothing to instil much-needed confidence in those farmers and small businesses that may have been severely affected by retailers that breached the code. We are grateful to the right reverend Prelate the Bishop of Wakefield for giving us some more examples. We need those people to have confidence in the adjudicator. The noble Lord, Lord Teverson, is right to say that giving that adjudicator the power to fine from day one would give a strong indication that Parliament and government are serious about this adjudicator being able to take on these extremely powerful retailers. As it stands, however, it is likely that fines for anti-competitive practices are even further away than 2015, given the hurdles that would have to be gone through based on Schedule 3.
Viscount Eccles
Before my noble friend replies, perhaps I may just say that whatever my view of the proper fate for Clause 9, and however the Bill turns out, I think that the message sent out by these debates to an industry attempting to provide the best possible service to the public is a very important one. I should like to say two more things. On the production of milk, it is a problem. God gave dairy farmers different natural resources. Some dairy farmers need one leg shorter than the other; some do not have to have that disadvantage. The production of milk in this country has nevertheless been remarkably stable over the past five years. There has been no decline. In other markets farmers in general are doing rather well. For example, rapeseed is extremely successful at the moment and so is the production of beef. Dairy products as a whole do not provide an adequate argument. Finally, I think that there have been just one or two references in this debate to the costs of all this—the noble Lord, Lord Browne, made some reference to cost—and there has been absolutely no reference to who ends up paying.
Baroness Wilcox
My Lords, the question of financial penalties has been one of the most hotly debated throughout the development of this policy. As the BIS Select Committee acknowledged at pre-legislative scrutiny, the point is finely balanced. The Government believe that the remedies already provided—to recommend changes and compel the offending retailer to publish information about the breach of the code—will be sufficient and will provide a more proportionate means of enforcement. In a highly competitive market, these powers, in particular the ability to name and shame large supermarkets, will be effective in enforcing the code. If naming and shaming had ceased to be news there would be a good argument that it was inadequate, but it is news. Big supermarkets competing with each other will not wish to see themselves named and shamed in front of their competitors, who would be only too delighted.
Furthermore, as I mentioned earlier, the very existence of the reserve power to fine will contribute strongly to ensuring compliance with the groceries code. Large retailers will be conscious that there is the prospect of the swift introduction of financial penalties if there is evidence of significant non-compliance with the groceries code and the existing regime seems not to be sufficiently effective.
Lord Knight of Weymouth
I am grateful to the Minister. She uses the word “swift”. How long does she think it would take?
Baroness Wilcox
I am so sorry. Did you say that I was speaking too swiftly?
Lord Knight of Weymouth
The Minister used the word “swift” in her response just now. I would be grateful if she could indicate how long she thinks it will take.
Baroness Wilcox
It is a very good question but I am not sure that I have an answer—but I will come to it.
As I was saying, the very existence of the reserve power to fine will contribute strongly to ensuring compliance with the groceries code. Large retailers will be conscious that there is the prospect of the swift introduction of financial penalties if there is evidence of significant non-compliance with the groceries code and the existing regime seems not to be sufficiently effective. Clearly all large retailers will prefer to avoid such penalties being introduced. In answer to a question asked by my noble friend Lady Byford, we already have a strong right of appeal to the court on the merits against financial penalties.
One of the final points concerned culture and the Bill’s intention. The right reverend Prelate the Bishop of Wakefield mentioned the word “culture” and I was very pleased to hear it because that is really what much of this is all about. We do not want to punish retailers, as that does not really help suppliers or consumers. We want to bring about a culture change to ensure that the code is consistently followed. An adjudicator exercising proportionate powers provided that the strong fining powers are there in reserve has the best chance of achieving this change of culture. On the other hand, the introduction of fines from the outset would be far more likely to bring about an antagonistic relationship with heavy penalties imposed and retailers appealing every decision.
The noble Lord, Lord Browne, asked whether it is right to hand all the cards to the adjudicator now without the benefit of experience as to whether they are all needed. I respect that there are strongly held views on this issue. However, I believe that introducing the Bill as it stands will bring about the best result for suppliers. If fines prove necessary they can be quickly introduced, and I will be happy to discuss the mechanisms for doing so in a future grouping when we consider Schedule 3. I do not think that it would benefit the Committee to deal with those questions now. I therefore simply ask the noble Baroness to withdraw the amendment.
Lord Knight of Weymouth
I am grateful to the Minister. With respect, although I understand that we will come on to discuss Amendments 50 and 51 to Schedule 3, when the terms will be quickly and swiftly explained, perhaps the Minister could say—just to help us in the context of this debate—how many months she thinks it will take to go through the processes in Schedule 3.
Baroness Wilcox
How do the Government plan to streamline the process of introducing the fines? Is that what the noble Lord is asking? I cannot give a definitive answer now as we need to discuss it in more detail before the next stage of the Bill. That would be the right way to do it, if the noble Lord does not mind. I can give one more answer, which I think is to the question asked by the noble Lord, Lord Browne. The Delegated Powers and Regulatory Reform Committee ruled that the procedures were appropriate and the Secretary of State can regularly be held to account at departmental Questions if he does not introduce the fines when Parliament considers them necessary. That partly answers the noble Lord’s question. If the noble Lord, Lord Knight, can wait until we consider Schedule 3, all will be revealed. I ask the noble Baroness to withdraw the amendment.
Baroness Randerson
My Lords, I thank the Minister for her detailed response. I also thank noble Lords who have spoken in this short debate in support of the amendments. I especially thank my noble friend Lady Byford for her very similar amendment aimed at the same thing. However, I am afraid that I am not reassured so far. Perhaps the answer will come when we get the definition of “swift” in the context of Schedule 3. I am not so far reassured that this process is not cumbersome. I retain the view that fines will have an important deterrent effect and that that effect will be sharpened if the fines are ready to be levied rather than subject to the approval of the Secretary of State.
The noble Lord, Lord Browne, made an important point. He said that the Bill does not give Parliament a role if the Secretary of State holds the view that there should not be financial penalties, although Parliament’s will is that there should be financial penalties—in other words, if the adjudicator’s report shows that the provision is not working as the Government optimistically believe that it will. The noble Lord, Lord Knight, pointed out that the practical implication of Schedule 3 is that fines will be levied in 2015 at the earliest. The Minister may well contradict that, but I would be very concerned if that were the case.
Baroness Byford
My Lords, I think that I have an old Marshalled List. The debate on Schedule 3 stand part is coming later, is it not?
Lord De Mauley
My Lords, perhaps I may suggest that this would be an appropriate moment to break for 10 minutes, until 4.12 pm.
Lord Grantchester
Lord Grantchester
My Lords, the issue of proceeds of fines has become prominent since last year, when the Office of Fair Trading fined certain supermarkets for raising their prices in 2003 in response to a concerted push-up on prices from dairy suppliers through their processors. Dairy farmers were responding to very low returns. The supply chain was being receptive and wished to respond without disturbing the competitive status quo. The supermarkets wanted a sustainable supply chain but the Office of Fair Trading, with its primary concern focused on prices to the consumer, fined the supermarkets, with the proceeds going to the Exchequer. That took further resources out of the supply chain, which brought it great alarm, and many in the dairy industry thought that this was unfair and counterproductive.
I will not comment further, as I understand that this case may yet be unresolved. However, the proceeds of fines levied on supermarkets for anti-competitive behaviour in a supply chain can be seen, in many regards, as different from those for most other wrong-doing. The Consolidated Fund helps taxpayers, not consumers. The complainants insist on anonymity. Rather than take money out of the grocery trade, surely we could be more imaginative.
We have doubts about whether the Government ever intend the adjudicator to levy a fine. If, on reflection, the Government find their nerve and agree that the adjudicator’s powers need to have teeth, the industry may be looking at significant sums of money if the level of fines is to have some meaning to supermarkets with multi-million pound turnovers. The proportionality of fines to the offence should also be taken into account. Have the Government done any thinking on this? Our amendment offers scope to undertake more positive action.
In early February, the House debated the report of Sub-Committee D of the European Union Committee, Innovation in EU Agriculture. The report’s main conclusion was that the UK must show leadership within the EU in order to develop a strategic approach to food production. The CAP budget should be rebalanced to increase allocation to research and innovation. All sides of the House, including the Government, welcomed the report. We have a wonderful opportunity to increase innovation in our groceries supply chain with proceeds from fines. “Innovation” includes all aspects of development in farming and the supply chain, technological development, product development, and marketing. The amendment at this stage does not seek to name a specific recipient, but rather to seek agreement to this idea.
Much of the innovation in farming originates in the supply industries that provide farming inputs: genetics of crops and animals, plant protection, animal health products and treatments, plant and machinery, and a range of expert services for financial, technical, environmental and marketing purposes. The BBSRC—Biotechnology and Biological Sciences Research Council—and the Technology Strategy Board urgently need to reposition UK agriculture at the forefront of technological advance. As an alternative, we have the Agricultural and Horticultural Development Board, as well as sector centres of excellence such as the dairy innovation centre.
The noble Lord, Lord Knight, received only today a letter from the Minister, dated 29 May, following our debate at Second Reading. In the letter, which the noble Lord has shared with me, the Minister mentions where money should go. I quote:
“There is … a risk that if the funds were earmarked for funding groceries supply chain initiatives this could lead to lobbying or even litigation over who the most suitable recipient was”.
I am not sure whether we need at this stage to specify in the Bill where precisely the money should go—the area is surely sufficient. Could that not be included as an amendment to secondary legislation under Schedule 3? Other examples do not seem to have caused a problem. For example, the regional growth fund is quite able to make awards without challenge. We have mentioned this idea to stakeholders in the industry and have received encouragement to explore this option with the Minister.
The Groceries Supply Code of Practice was needed precisely because anti-competitive behaviour stifled innovation. What better way to promote innovation in the supply chain than by using the money raised in fines from such behaviour to undertake this work? It would be the best way to provide redress to suppliers, who must be assured of confidentiality if they are to come forward without fear of reprisal. It is a pro-growth measure; pro-supplier and pro-consumer: a win-win-win. I beg to move.
Lord Teverson
My Lords, I shall speak to my Amendment 49. There is an opportunity here, as the noble Lord, Lord Grantchester has said, to be a little more innovative. I have certainly put down one suggestion in my own amendment, though I am not saying that it is exactly the right way to go. At this stage, we are talking about the principle.
I know that the Government are often concerned about what they would see as creeping hypothecation, and that fines should generally go into the Consolidated Fund. However, I was interested to read the Statement today from my right honourable friend the Chancellor of the Exchequer about the Barclays crisis, where he stated that fines paid to the FSA are used to reduce the annual levy on other financial institutions. We have an example there of where such fines do not go into the Consolidated Fund, as pointed out very conveniently by the Chancellor. If anyone knows about these Treasury issues, it is probably him—we hope, at least.
The Chancellor goes on to say that he wants to change that, and that proceeds of fines should go back into the Consolidated Fund. The reason that he is iffy about that system is that the money goes back to the financial sector. Here, we are not suggesting that it should go back to the rest of the retail sector; we are suggesting it should go to the people whom this Bill is trying to protect and promote—that is, the supply chain. There is an opportunity here for innovation, for goodwill and for common sense. I do not think that it will be the end of the Treasury trying to meet its targets in reducing the public debt. It will not be that significant, but it will be important to the industry.
The Lord Bishop of Wakefield
My Lords, I need to leave fairly soon, so I want to add something about this particular suggestion. I want to address also a broader point, since this is tied into the whole issue of financial penalties.
I was grateful to the Minister for her comment about changing culture. This is another small way in which the culture might be changed. But the crucial issue we need to grasp is that changing any culture will require whether we like it or not—and it is not a pleasant word—coercion. That is at the heart of much of what we are saying here. I do not know enough about the latest statistics to be able to respond to what the noble Viscount, Lord Eccles said a few moments ago, but, certainly, in our part of the world dairy farms are still closing and, certainly, an analysis of the past 10 years would show that the capacity for milk production has reduced. I do not know what the figures are for importing milk, but I think they have gone up significantly over these years.
All these things lead us back to innovation, which seems to be a key word to use. It is a positive word. It goes back to changing cultures and is not about punishing people. It is about trying to find a proper balance within the market, so that suppliers and retailers are doing something which has a synthesising effect: they are working together. Therefore, I hope very much that some sort of response will come from the Government at this stage. If it does not, I fear that these same questions will be asked on Report. I would gently support this pair of amendments, but in the end they push us back to the same issues that we have been looking at. If we do not face those issues, we shall still end up in a situation where we do not alter the present culture.
Viscount Eccles
Before the right reverend Prelate sits down, can I ask him whether he believes that coercion is the only way to change culture?
The Lord Bishop of Wakefield
No. It depends on what you mean by “coercion”, which can mean something very unpleasant indeed. It does mean that people will not necessarily change the way that they operate simply because we ask them to be nicer. That is the point. We know that, otherwise we would not have produced the sort of legislation that we are debating today. Even if we do not go down some of the roads that we have been debating, the whole Bill seems imply that the adjudicator must have some powers by which the present situation is changed. How you want to use the word “coercion” is another matter. I would not want it to be overpressed. After all, the worst form of coercion always leads to war and that is not what we are talking about—we are talking about precisely the opposite—but it will need firmness and robustness.
Baroness Wilcox
My Lords, the amendments being discussed here are very interesting. However, in considering them it is important to remember the purpose of the financial penalties. The financial penalties in this context, if they are imposed, are supposed to be punitive rather than restitutory or to fund any particular activity.
The amendments of my noble friends Lord Teverson and Lord Razzall raise two difficulties with regard to paying any of the proceeds to a supplier. First and most fundamentally, an investigation does not determine the liability of a retailer with respect to any individual supplier. Given this fact, it would be inappropriate to pay all or part of the fine to the supplier. Any supplier who did wish to reclaim damages from a retailer would be able to do so using the arbitration provision in Clause 2.
The second reason is linked to the climate of fear. One of the key drivers of this Bill is the need to address this problem. One of the principal reasons for investigations, as they are set out in the Bill, is to allow suppliers to complain in confidence to the adjudicator, who can then carry out an independent investigation. If an adjudicator began making payments to individual suppliers, it would become obvious who had complained and open up those suppliers to potential retribution from a retailer.
I turn to the amendments of the noble Lords, Lord Knight of Weymouth and Lord Grantchester. Given that financial penalties are a civil sanction, it would be inappropriate for financial penalties to be paid to a supplier or to a third party which did work that supported the groceries sector. In accordance with the standard principles of managing public money, financial penalties are therefore to be paid to the Consolidated Fund.
Lord Knight of Weymouth
I have a quick question. If the proceeds of funds were transferred, let us say, to the regional growth fund for it to distribute, would that be in order?
Baroness Wilcox
I think not; I shall go back again. Given that financial penalties are a civil sanction, it would be inappropriate for financial penalties to be paid to a supplier or to a third party which did work that supported the groceries sector. I must refer back to the standard procedures for managing public money. Standard practice for such penalties is that they are paid into the Consolidated Fund. This is in accordance with common practice elsewhere in competition regulation. Fines imposed by the Office of Fair Trading are also paid into the Consolidated Fund.
Baroness Wilcox
I hope that my answer satisfies the noble Lord, Lord Grantchester. I ask him, therefore, to withdraw his amendment.
Lord Grantchester
I thank the noble Baroness for her words and I will read very carefully through Hansard. We will confer and no doubt bring the amendment back, perhaps by exploring it in another way, because the supply chain is rather keen that such an opportunity is made available. I beg leave to withdraw the amendment.
The Deputy Chairman of Committees
In this group, if Amendment 51 is agreed to, I cannot call Amendments 52 to 54 inclusive and if Amendment 52 is agreed to, I cannot call Amendments 53 or 54 due to pre-emption.
Amendment 50
Lord Knight of Weymouth
Lord Knight of Weymouth
My Lords, if I am following correctly where we have got to, I am moving Amendment 50, which is in my name, and speaking to Amendments 51, 63 and 64. These are all amendments to Schedule 3 or Clause 12 and are to try to streamline the process, should we be unsuccessful in persuading the Government to have powers to fine from day one. In the exchange that we had on earlier amendments I got the impression from the Minister that she may be minded to concede a little on this, so I will be extremely brief to give her maximum time to elucidate on whatever concession she may or may not have available.
I remind the Committee that my understanding of how things stand is that the adjudicator would be established and would operate without fines. They would then perhaps do some investigations and find that they are not really having much of an effect with naming and shaming, so would recommend to the Secretary of State that the powers to fine would be useful to him or her. The Secretary of State would then make an order under Clause 9 but would have to consult a variety of people on whether to make such an order, as set out in paragraph 6 of Schedule 3. The order would then be published and we would have the time taken by Parliament to consider it. Eventually, it would be passed—at which point, the adjudicator has to issue guidance as to how he or she would then use the financial penalties and consult on that guidance. At the end of all that, the adjudicator would be able to use those powers to fine. In my judgment, that would take at least a couple of years, probably more, which is why I mentioned 2015 earlier. I am delighted, however, that the Minister is about to tell us that it is going to be a lot better.
Baroness Randerson
My Lords, I want to refer to Amendment 52 in my name. I will also be brief, as I am sure noble Lords will be relieved to hear. My amendment would simply remove paragraph 6 from Schedule 3. It fits neatly with my previous amendment, to which I spoke, because it removes the cumbersome nature of the consultation. Regarding the list of people to be consulted, in my experience with legislation the moment that you start being as precise as this is, the very next year it is out of date. Then you have to change the list by secondary legislation or amendments, and so on. It is also a strange list because it starts by being very precise and then goes on in very general terms:
“one or more persons appearing to the Secretary of State to represent the interests of suppliers”.
There is the same in relation to consumers and then, finally,
“(g) any other person the Secretary of State thinks appropriate”.
Why not just have general consultation and leave who is consulted to the common sense of the Secretary of State? Why not move to a much swifter process than this cumbersome list indicates? I urge the Minister to take this opportunity to think again about this aspect of the Bill.
Lord Knight of Weymouth
I apologise to the Committee. I should have set out what we are proposing as the streamlining. In essence, we are suggesting in Amendments 63 and 64 that the adjudicator could publish straight away the draft guidance about how they might use the financial penalties, so that we at least remove that stage in the process. I am looking forward to hearing what is said.
Viscount Eccles
Will the Minister make clear whether the consultation would necessarily include a 12-week period in which anyone who wanted to put in representations could do so? That is ordinary practice for the processing of a statutory instrument.
Lord Browne of Ladyton
It would be helpful to the Committee if the Minister were able to indicate the scale of fines that the Government have in mind if these financial penalties were ever activated. I cannot imagine that we have got this far without the Government having some idea of what the scale of those fines is likely to be. If we do not know, we are significantly disadvantaged in our debates about what this power masks, because it masks quite a lot from what I can see in the schedule.
Viscount Eccles
I fully agree with that. What industry needs is certainty. What it cannot live with is uncertainty. It needs to have as many of the factors that are going to influence what it does and the way it does it as settled as possible. Uncertainty is the enemy of good business.
Baroness Wilcox
My Lords, as has been mentioned, I listened very carefully at Second Reading when the subject of Schedule 3 was discussed. I know that many noble Lords feel that the process set out there is too clunky—I think that was the word that was used—and bureaucratic, and that it should be simpler and quicker. I assure the Committee that it was not the intention of the Government to introduce a clunky process, so this is something we are willing to look at, and if it is clunky we will need to amend it.
However, while the Government are willing to consider amendments in this area, I feel that those that have been laid today go a bit too far. In particular, the Government believe that financial penalties should be available only if the other powers are inadequate. After all, if the other powers are adequate, why do we need fines? We should not seek to punish the supermarkets for the sake of it, given the strong contribution that they make to the UK economy and to employment.
Similarly, I feel that stripping out consultation altogether is not appropriate for a significant measure. Evidence is important and consultation takes only three months. I believe it would be more appropriate to look to streamline and simplify that consultation process rather than eliminating it altogether.
The noble Lords, Lord Knight and Lord Grantchester, have put forward two amendments, both requiring draft guidance on financial penalties to be published within a year of the adjudicator being introduced. These amendments are identical except that one requires consultation and one does not. I will therefore address the principle of both together.
The publication of guidance is intended to ensure that those dealing with the adjudicator have a proper understanding of how it will act and of what is expected of them. Draft guidance on a power that the adjudicator does not have would not provide such clarity. Rather, we need to find a way to streamline the production of guidance if it is necessary, rather than producing it in advance.
I can answer two questions. To the noble Viscount, Lord Eccles, yes, the consultation will be carried out in the usual way. I hope that that is reassuring. To the noble Lord, Lord Browne, the reason for not prescribing the maximum fine in the Bill is that it is more appropriate that such a maximum be informed by experience—for example, how much retailers may be gaining from non-compliance. That experience can be gained only once the adjudicator is operational. Should the Secretary of State make an order to introduce fines, that order must specify the maximum penalty that may be imposed or how it is to be calculated.
I would like to discuss those points in more detail with the noble Lords who proposed the amendments before the next stage of the Bill, and the Government will carefully consider whether we want to bring back an amendment on the subject. With that, I ask the noble Lord to withdraw his amendment.
Lord Knight of Weymouth
I am most grateful to the noble Baroness for that commitment to discuss and the potential commitment—if a potential commitment is possible—to a government amendment. Although I am disappointed by some things that she said, I will not pick up on those but quit while I am ahead, even if it is only by a nose. I look forward to exploring with her how to make this a swift process, in common with her speaking note earlier. I therefore beg leave to withdraw the amendment.
Baroness Wilcox
Baroness Wilcox
My Lords, I shall set out the reasoning behind the amendment. As well as moving Amendment 54, I shall speak to government Amendments 91, 109, 113, 115 to 117, 119, 120 and 123 as well, as they are all establishing the same principle.
The adjudicator is intended to uphold the groceries code, which applies to those retailers specifically named in the groceries supply order. The code also applies to their subsidiaries, as Article 4(4) of the groceries supply order provides that each designated retailer will procure that its subsidiaries comply with the order. That means in particular that subsidiaries that deal with suppliers should incorporate the code into their supply agreements and then comply with it.
The Government’s policy has always been that that the adjudicator’s functions should apply to whichever companies in the retailer groups enter supply agreements and are bound by the code. However, since the Bill’s publication, we have realised that it is drafted in a way that technically would not allow the adjudicator to investigate subsidiaries or deal with any breaches of the code by subsidiaries. The amendment will correct that anomaly.
The main change is simply to include subsidiaries in the definition of “large retailer” in Clause 22. The other changes are to ensure that a more limited definition—that is, parent companies only—still applies in certain clauses. In particular, when specifying which companies have to pay the levy and which would have to be consulted, it would not make sense to include subsidiaries. I hope that noble Lords will agree that this amendment is technical, intended to deliver the policy as originally envisaged rather than to extend it, and will be able to give it their support. I beg to move.
Baroness Byford
My Lords, I think I am at the right place. I gave notice that we intend to oppose the Question that Schedule 3 be the Third Schedule to the Bill. All of us in the Room have debated this matter very fully this afternoon, and I do not propose to go through it again. I have also heard the response from the Minister that she wished to take it away and think about it. I want it recorded that, at the moment, we are looking to have some alterations to the schedule as it currently stands. I do not know if the Minister wanted to respond but if she could clarify the fact that she will take this away and think about it, I would withdraw my opposition. I hope I am correct.
Lord Knight of Weymouth
My Lords, while the Minister assesses whether there is a speaking note for the stand part debate on Schedule 3, and in addition to what we have already said, the other aspect of the schedule that I would like her to think about as she ruminates on it is that at the moment it is entirely with the Secretary of State as to whether the Secretary of State thinks that the adjudicator’s other powers are inadequate. Select Committees and other parliamentarians should have some voice within that. That is something else that she might want to think about.
Baroness Wilcox
We have already discussed the introduction of fines in detail and I made a commitment to discuss that in more detail.
Baroness Byford
I am very grateful to the Minister for that reply. In those circumstances, I withdraw my opposition.
Viscount Eccles
My Lords, perhaps unsurprisingly, Clause 10 causes me quite a lot of concern. We are debating the anticompetitive effect of imposing unexpected costs on suppliers. Now, in this clause, we will impose unexpected costs on retailers, so Parliament is doing something that the Competition Commission considers to be anticompetitive. We are doing this because of a number of factors. As I understand it, it is not the intention that the adjudicator should mount an investigation when a supplier has lodged a complaint against a retailer. That matter will go its normal course under the code of practice. The complaints that trigger investigations come either anonymously or from a trade association. Of course, there are provisions in the Bill for people to agree that they can be named, but in general it might well be that they do not.
I have heard it said that one investigation that might take place and would be, as it were, between a dispute between a supplier and a retailer, and a full-scale Office of Fair Trading/Competition Commission inquiry, is an inquiry into pig meat. I am not quite sure where I heard that but it might have been at Second Reading or somewhere. I think that it was said at the time that if there were an investigation into some alleged breaches of the code of practice in relation to pig meat, then it might be sensible for the adjudicator to bring in other forms of meat—that might be lamb or beef. If that were to happen, the next question is how many suppliers and retailers he would bring into the investigation, and how far back up the supply chain he would go. My understanding is that the adjudicator is free to do whatever he or she considers is the best way to proceed. Eventually, a report will come out that, of course, respects anonymity. The adjudicator now sends out a series of bills, not necessarily just to an individual retailer, as the clause specifies, but possibly to three or even 10 of them, whatever the number may be. Those retailers are then responsible for meeting the costs.
There is a requirement to specify the grounds, how much is to be paid, and by when. The grounds must be quite tricky if anonymity in the supply chain is going to be preserved, so I do not think that they will be very detailed. Also, they might be quite historic in the sense that if a really thorough investigation is undertaken into pig meat and other types of meat, it could easily take around 18 months. There is an appeal process, which is absolutely as it should be, but it is quite difficult to appeal unless you are provided with information about how the costs were reached in the first place. I worry about this clause and I am looking for guidance.
I want to make one other point which is similar to something I said earlier. This kind of clause attempts to portray what is happening as if no one is suffering. The consumer is not paying, the taxpayer is not paying, but the supermarkets are paying—and of course they can afford to do so. It is a populist move. The trouble is that if the supermarkets pay and their net margins are, as is the case for the Co-op, 2.8%, they will pass the costs on by increasing their prices. They do not have much of an alternative because they need to make a return on capital in order to keep on refurbishing their stores and opening new ones, so they do not have many options. I would ask this: where is the right place for these costs to fall? My answer to that is that the less regressive place would be the taxpayer. I do not think that these costs should be passed on to the supermarkets—
Lord Knight of Weymouth
I promised myself that I would not intervene on the noble Viscount, but he has been speaking for about five minutes. Is he aware that Tesco, as the largest of the retailers in this country, will have made, in the time that he has been talking, a profit of around £22,500? Perhaps Tesco could afford to pay these costs out of some of its profits.
Viscount Eccles
It is certainly true that Tesco has a higher margin than the Co-op. Its net margin before tax is around 5%. It also just happens that its margin in the UK is slightly lower than its average margin because it achieves somewhat better margins abroad. The size of Tesco’s profits is, in my view, irrelevant. Tesco is running a business that needs to achieve a margin on which it pays taxes, and it needs to make a return on the capital employed, which of course is very large. The Tesco store around the corner from where I live has just been completely reconfigured, perhaps I may say, to the advantage of the consumer. There are now more goods in the store and there is not much room to move around. In fact, if you go there between 12 pm and 2 pm, you are mown down by members of the Civil Service buying sandwiches for lunch. Nevertheless, in its broadest sense, Tesco provides an extremely good service to the public. Quoting arbitrary sums of money does not recognise the reality of life. It is to take a mythological position to say that because people are making quite a lot of money, they can always afford to pay all the costs that are thrust upon them.
If Parliament wills that there should be an adjudicator, that he or she should sit in the Office of Fair Trading, conduct investigations, have a staff and cost money, then rather than having an endless argument about how it defends invoices it has sent for investigation costs, it would be much better if they were paid out of taxes—out of the combined OFT and adjudicator budget—and do not fall on the elderly ladies with their small shopping baskets whom I see in another supermarket, called Sainsbury’s, who cannot afford to pay more for what they are getting there. The taxpayer has broader shoulders than the consumer. I beg to move.
Lord Teverson
I congratulate the Government on this clause. It is balanced, it puts the costs where they should be and acts as a break on frivolous claims and complaints. I do not understand the argument about it putting up prices, because if that is the case it is because we have an oligopolistic market. The way that markets work is that the price is set not by the cost of fines but by competition in the market and the crossing of supply and demand. If we have competition in that market—that is a big “if” and I will come back to it in a minute—the individual firm takes a hit on the fine, but it cannot put up the price because there is competition in that market. That sector argues very strongly that there is strong competition in that market, so it does not affect price. That is fundamental capitalist economics. If there is a problem, it is because there is insufficient competition in the grocery market. Frankly, if that is the case, the remedy is not here, but is clearly somewhere else altogether—in the Competition Commission or whatever follows it following any legislation this year.
As I said at Second Reading, I am a great advocate of multiple retailers. They have brought a great deal of benefit to this country, although there may be downsides as well. It is clear that if people cause the costs of an investigation, it should take responsibility for them. That is absolutely the right way to do it, and the clause reflects that. If you believe that fines will put up costs, you have to go to something other than fines. What do you go to? I do not think you go back to taxpayers. That is impossible. You would have to go back to an FSA-type system where you have approved people and you disqualify them from being in the grocery trade, but there is no way that that would work. Otherwise, I suppose you put them in jail under the criminal code, and that is clearly utterly inappropriate. I congratulate the Government on the clause. It is absolutely balanced and correct.
Lord Browne of Ladyton
I am pleased to follow the noble Lord, Lord Teverson. I think his answer to the noble Viscount, Lord Eccles, was exactly correct about the interaction of financial penalties and the truth of the noble Viscount’s arguments about the efficiency of competition. We cannot make a decision about these issues based on an entirely arbitrary judgment about what aspects of the finances of this business are relevant to this decision and ignoring the others. The noble Viscount is right about that, but he has to apply that logic to himself. He cannot say that it is all about margins and not about the scale and nature of these businesses and the amount of profit that they earn, because they are relevant to this.
That having been said, this is a very odd clause given other parts of this legislation because, however you dress this up, this is a financial penalty. I asked the noble Baroness a simple question: what scale of financial penalty are the Government prepared to countenance in relation to this legislation? The answer that I got was, “Without the experience of the adjudicator working, we have no idea”. The adjudicator has been given a blank cheque without any experience.
Viscount Eccles
I am listening intently. Will the noble Lord, Lord Browne, deal with the issue of anonymity? If my amendment were accepted, if the adjudicator believed that one retailer had breached the code, I can see that it would still be complicated but not quite as complicated. If the adjudicator has a duty to preserve anonymity, I cannot see how he could do so without widening the investigation in such a way that means it is not easy for people to identify who is being investigated. At that point, the investigation costs go up and the way of presenting them so that they are eventually paid by whatever means becomes much more difficult. How would the noble Lord deal with the dimension of anonymity?
Lord Browne of Ladyton
I do not know if I am grateful to the noble Viscount for asking me that question. If I were standing where the noble Baroness is, then I would feel I had to answer it. The only answer I can give the noble Viscount is that I will think about it. However, I suggest that for the purposes of the Committee, the fact that it is not easy to answer makes the point that he wishes to make.
There are all sorts of complexities about this legislation, many of which are necessary. I believe that anonymity at the heart of this process is necessary to build confidence in it and ensure that people come forward in this unequal bargaining position. The noble Viscount himself said that the consequences of people being exposed may be significant for them as suppliers to the retail industry. However, all of these complexities are going to keep the adjudicator awake at night in any event. This complex structure that we are creating—and we are all now willing participants in this if we do not speak out against it—is taking a reasonably good idea, which could be delivered simply, and complicating it beyond all belief. It is so complicated now, and I have taken such an interest in this over the last couple of weeks, that I might go back into practising in the legal profession, because I can see opportunities here that were not there when I practised before, and niche practices are places to make decent money now in the legal profession.
I do not support the argument that the noble Viscount puts forward, because I think costs should fall. The nature and scale of what we are dealing with here is such that if people cause this draconian step to have to be taken, then they deserve all they get in my view. They should then have to go out and compete in the market in order to make that money up in some other way.
There is another point about this clause that disturbs me, which is the part that the noble Lord, Lord Teverson, likes and is designed to avoid vexatious complaints. This is entirely the wrong way to go about this. We should be saying that the adjudicator should stop vexatious complaints and not pursue them. I cannot believe that we will be satisfied if we appoint somebody to be the adjudicator who has to resort, after an investigation, to imposing the costs of the investigation on to a vexatious complainer. I want an adjudicator who says, “I have looked at this, it is vexatious and I am not doing it”.
Lord Teverson
I am not going to present the Minister’s case, but it seems that the whole way that the early part of the legislation is written, which we dealt with in the previous sitting, was that the adjudicator is under no obligation to pursue anything that he or she feels is vexatious. That is inherent in the Bill, hence you then move on to this. I take the noble Lord’s point.
Lord Browne of Ladyton
I am grateful to the noble Lord and I think he has got my point. It seems to me that we ought to front-load the assessment of vexatiousness and not leave this bit at the end, as if somehow it balances everything and makes it appear much better than it is. We should give the adjudicator the power to say to people who bring complaints that are vexatious or without merit—and that will be revealed very quickly—“I am not taking these any further and that’s it”. People have to have confidence in this. The decisions that we want the adjudicator to make in relation to this issue will be decisions of moment and will have to be serious and important points. We do not want an adjudicator running around doing lots of small investigations. We want one or two key investigations that go to the heart of the inequities in this market, which people want the Government and Parliament to address. The previous Government started to do that. I am uncomfortable with this particular clause for a number of reasons but am grateful to it because it exposes the false logic of a lot of the rest of the provisions of this Bill.
Baroness Wilcox
My Lords, I understand my noble friend Lord Eccles’s reluctance to see individual retailers or complainants having to pay the costs of investigations. However, I think this is justified in both cases and take this opportunity to explain why this clause should stand part of the Bill.
In the case of retailers, they can be required to pay the costs of investigations only if the adjudicator is satisfied that they have broken the code. In this situation, the need for investigation and enforcement follows from their actions. It would seem unfair on retailers who have not breached the code to incur additional costs through a general levy when there is a party who clearly bears responsibility for the costs being incurred. I know from our debate at Second Reading that many noble Lords feel strongly that the costs should fall on those who breach the code rather than those who do not, wherever possible.
This is not a financial penalty or a blank cheque; it simply ensures that if a retailer breaches the code, the cost of the investigation can be borne by them, not by the other nine retailers. In the case of costs being borne by complainants, the Bill is clear that they can be expected to pay the costs of an investigation only if the adjudicator is satisfied that their complaint was vexatious or wholly without merit. That is a strong test directed at clearly irresponsible complainants rather than simply erroneous or weak ones. Without such a power, individuals might be motivated to make complaints that they know to be false or completely unjustified, wasting the adjudicator’s resources and placing unfair burdens on the retailers it investigates. Of course, the adjudicator should not pursue a case that he or she knows to be vexatious, but that may not be clear at the outset. That is simply a safeguard in case an investigation turns out to have been based on vexatious complaints.
Finally, I note that in each case, the clause says that the adjudicator may require a party to pay the costs of investigation. That is strictly discretionary. For instance, if a breach was found in a retailer but it was understood to be a matter of simple error, the adjudicator might decide that it would be disproportionate to require it to pay all of the costs. I hope that helps the noble Lord, and I support the Question that the clause stand part of the Bill.
Viscount Eccles
My Lords, I start with a technical question about the wording of the clause to which I am not looking for an immediate answer. It states that the adjudicator may,
“require a large retailer to pay some or all of the costs of an investigation”.
It is not self-evident that that means only the adjudicator’s costs. Of course, a lot of the cost will fall on third parties, including the retailer, and there are bound to be a lot of costs. My proposal that suspicion should be replaced with belief would go a long way to create more certainty about the adjudicator’s ability to turn down not just vexatious complaints but complaints for which there is too little evidence. It is my perception that when the Bill becomes law, a lot of cases will be brought for which the evidence will be sketchy, and the adjudicator will have to use his or her best judgment.
If those considerations can be given some thought and we can have a more—I criticise myself here—coherent and consensual discussion at the next stage, I withdraw my objection to the Question.
Lord Howard of Rising
Lord Howard of Rising
The amendment would enable both retailers and suppliers to request advice and get it from the adjudicator. As expressed at the moment, it is voluntary for the adjudicator to give guidance. It would be most unfair to either side if they were not in a position to get advice if they requested it. We all know that there is an existing code, but there may be times when the adjudicator may take a slightly different view; he may interpret something differently. It would be quite extraordinary if the people who were going to be bound by this, and bound by his decisions, are not in a position to be able to ask him how they should go about their business. It is very difficult to abide by the rules if the person making and interpreting those rules is not prepared to say what action should be taken in order to comply with them. This is especially so during the initial period, when there may be differences of opinion. I beg to move.
Lord Browne of Ladyton
My Lords, I shall speak to Amendment 57 in this group, standing in my name. A number of references have been made to the importance of the adjudicator as the driver of a changed culture. I have heard the adjudicator’s role referred to as a role which the Government hope will develop into a role operated by the person in the country who knows the code best. Clearly, that person and that office is the place that people should be able to look to for advice and guidance, because it will be the repository of the best advice and guidance about the code.
Consequently, I support the amendment of the noble Lord, Lord Howard of Rising, that the adjudicator should be required to give advice to those people. As the Minister said, the expectation is that a culture of changed practice will be created rather than a culture of litigation. If the adjudicator is required to provide the advice, that is an element of changing the culture. As I have already said, at Second Reading the Minister referred early on to the fact that anybody can make a complaint to the adjudicator. In winding up the debate—it is Column 764, for the purpose of the Official Report—she made reference to the importance of the public and to their desire for this area of commerce to operate in a way that addressed their expectations but which was also fair.
The public therefore have a role to play in this. They can make a complaint; they are consumers of the whole objective of improving the competition of this part of the economy. However, they are excluded from the list of people to whom the adjudicator can give advice. It seems contradictory to encourage anybody, including any member of the public, to make a complaint but not give the adjudicator the statutory power to give advice to the public. I have amended this, therefore, to include the public in the list of bodies. The noble Baroness is right that the public will want to know and understand how this code operates. Without the vires or the powers, the adjudicator will not be able to give them advice. The adjudicator ought to be able to do it.
Baroness Wilcox
My Lords, providing advice and guidance will be important in the adjudicator’s role of promoting compliance with the groceries code. I understand, therefore, why my noble friend Lord Howard of Rising wishes to see a requirement on the adjudicator to provide advice and why the noble Lord, Lord Browne of Ladyton, wishes such advice to be available to the public as well as to retailers and suppliers. I agree with the noble Lord, so it is important that the adjudicator clarifies certain issues around how he or she will work and indeed, how the public as well as suppliers and retailers will have an interest in this.
However, under Clause 12 the adjudicator has a duty to provide guidance on how he or she will investigate and has powers to provide further guidance on any issue related to the code. This guidance will be published and available to all. It is therefore the most suitable format for any obligatory communication by the adjudicator and is the best way for the adjudicator to deal with the public. Conversely, advice is more likely to be given on an individual basis to clarify specific issues with retailers and suppliers. It is likely to be given where the adjudicator notices that certain retailers or suppliers do not have a clear understanding of the code. It is also likely to be given to retailers or suppliers who are not sure whether a specific practice that is relevant to them is within the code. Advice is therefore suited to individual, potentially technical discussions of the code with those to whom the code is more directly relevant—suppliers and retailers. Any statements of general principles can be made through the power in Clause 12 to provide guidance, and those statements will be available to the public.
On whether the provision of advice should be mandatory, the adjudicator would normally be expected to provide advice when it is requested. However, the adjudicator will have a limited budget and will need to prioritise their work accordingly. It is therefore appropriate that they should have the freedom to choose whether in a particular instance giving advice is the best way of encouraging retailers to comply with the code. There could also be circumstances when giving advice would be inappropriate; for example, due to a conflict of interest. I ask noble Lords not to press their amendments.
Lord Browne of Ladyton
Perhaps I may ask the Minister a relatively simple question. If a member of the public thinks that he or she is in possession of knowledge that should support a complaint to the adjudicator, are they entitled to phone the adjudicator’s office and ask for advice as to whether that is appropriate? If not, is it common sense?
Baroness Wilcox
I do not imagine that the adjudicator will put up a barrier to people telephoning and asking questions. I imagine that they will have with them a group of people who will be able to assist anyone who comes. Looking at the adjudicator’s incidental powers, they may do anything that is calculated to facilitate the carrying-out of their functions, or is conducive or incidental to it. It is not for Ministers to interfere at this stage with how the adjudicator decides to work. I think that that covers the noble Lord’s question.
Lord Browne of Ladyton
It does indeed, and I am very grateful to the Minister for her immediate response, but she may want to compare that response with the one that she gave to my attempt to add the public to those who can get advice. It seems that the answer now is not that there are two types of communication, one appropriate to retailers or suppliers and another, which we are supposed to find in Clause 12, appropriate to the public. The answer is actually that the way in which the Bill has been drafted allows the adjudicator to give advice to the public if he or she wishes to do so. It would therefore appear that my amendment is unnecessary and that all the other responses I have just received, suggesting that it was inappropriate, are not correct.
Lord Howard of Rising
I thank the Minister for her reply, but there remains an essential difference. Under Clause 12, the adjudicator chooses what he will give guidance on. Should there be a point on which he has not given guidance and on which either the retailer or the supplier would like guidance, it would be completely contrary to any form of natural justice if they could not get it. If the guidance under Clause 12 is so absolutely brilliant, nobody is going to ask him for it under Clause 11. Should he make a mistake or omit something which he should have included, he has to be made to give an answer. That is the fundamental point.
The noble Baroness said that you have got to look at the costs of all these things. As it stands, the adjudicator has an unlimited budget. I will return to this later in our deliberations on the Bill, but I have seen no cap. The adjudicator can turn around and say to the supermarkets, “Let’s have a bit more, mate”. I beg leave to withdraw the amendment, but I will come back to it later.
Viscount Eccles
“(ba) the criteria that the Office of Fair Trading intends to adopt towards the content and timing of information to be published under section 8(2);”
Viscount Eccles
My Lords, I will be brief with this one. This is my substitute for the words that I wish to see left out in Clause 8, which are,
“specifying—
(a) what information is to be published;
(b) how it must be published; and
(c) the time by which it must be published”.
I suggested to the Committee that that was too prescriptive, but I quite accept that retailers need to know how the publishing of what has been described as naming and shaming information will take place. It would be much more appropriately included in guidance. That is why I have suggested the addition to the subjects on which the adjudicator must publish guidance and the criteria that the adjudicator—I have to amend my amendment, because I was still fighting for the Office of Fair Trading at the time—
“intends to adopt towards the content and timing of information to be published under section 8(2)”.
I put that in because I am keen to remove as much of what might be called the prescriptive, mandatory or antagonistic features of this Bill as possible, and to try to engender as much co-operation, discussion and agreement as we possibly can.
If we are going, finally, to depart from self-regulation for other forms of regulation at the same time as I am supporting a Government who claim that they are a deregulating Government, we should try to make sure that the very sensible code of practice is applied by agreement and not coercion, if I may come back to that word. This is just another small attempt to get into the Bill words which encourage co-operation rather than depending upon coercion. I beg to move.
Lord Howard of Rising
My Lords, my amendment in this group is along the lines of my previous one, such that the adjudicator “must” publish guidance. It seems absolutely inconceivable that he is not compelled to give guidance and to publish it. Imagine him refusing to let retailers know what steps they have to take to comply with his code. Another point here is one of natural justice. The adjudicator is paid by the retailers. The least that he could do is to provide them with the information on how he is going to treat them; after all, they are footing the bill. As I have said before, his interpretation may be different on these things. However, rather than waste the Committee’s time repeating the arguments, I will leave it at that.
Lord True
My Lords, having listened with great interest to nearly two days of discussion on the Bill, it does not look as if I am going to be able to trouble the scorers during the rest of the day. I should declare that I have no interest to declare in these matters. However, I feel that the point made by my noble friend Lord Howard of Rising and supported by the noble Lord, Lord Browne, is compelling. As the leader of a local authority, if I published a parking order and then did not publish guidance about what people had to do to comply with it, or if the authority did not put up notices or signs approved by the Department for Transport, the authority would be taken to court very quickly and would be acting improperly and unfairly. Concerning Clause 12(3)(b) in particular, not to require the adjudicator to give guidance on,
“steps that large retailers need to take … to comply with the … Code”,
seems an offence against natural justice. I apologise for breaking my long silence but of the many things we have discussed, this is the one where I hope that my noble friend will listen to my noble friends Lord Howard of Rising and Lord Eccles and the noble Lord, Lord Browne, who is opposite.
Baroness Wilcox
My Lords, the guidance provided by the adjudicator will help to ensure that all interested parties have a proper understanding of what they can expect of the adjudicator. Several noble Lords have brought forward amendments on what should be included in the guidance or on how that guidance should be produced.
With regard to the amendment moved by my noble friend Lord Eccles, the adjudicator will already have to publish guidance on how he or she will decide which enforcement powers, if any, to use. The adjudicator will also have powers to provide more specific guidance on how exactly he or she will go about requiring a retailer in breach of the code to publish information. However, I do not believe that the adjudicator should have to publish guidance on how he or she will approach the publication of information before such investigations can be started, especially as the approach to publication might be dependent on what breach is discovered. We must balance the need for retailers and suppliers to be informed of the principles under which the adjudicator is working with the need for the adjudicator to be able to start working promptly.
The noble Lord, Lord Howard of Rising, has tabled two amendments that I would like to address. The first is on the requirement for the adjudicator to publish guidance on a range of matters set out in Clause 12(3). Here I note that the requirement to publish guidance in Clause 12(1) is focused on specific issues, and under Clause 12(5) the requirement to publish information is given the context of a specific timetable. The adjudicator should be required to publish guidance, and he or she has to. Clause 12(1) states:
“The Adjudicator must publish guidance about —
(a) the criteria that the Adjudicator intends to adopt in deciding whether to carry out investigations;
(b) the practices and procedures that the Adjudicator intends to adopt in carrying out investigations; and
(c) the criteria that the Adjudicator intends to adopt in choosing whether to use the enforcement powers and which ones”.
While other guidance is valuable, it is not clear what would be achieved by a general requirement to publish guidance on broad topics such as the application of any provision of the code. Rather, these overarching topics are intended to indicate likely areas of guidance and ensure that the adjudicator can give guidance when the need arises.
Regarding my noble friend’s second amendment, guidance can relate to a wide range of the adjudicator’s activities and functions. It would be inappropriate to include a requirement to consult retailers without equivalent requirements to consult supplier representatives and other interested parties, which would create further bureaucracy, something that I am sure we would all try to avoid. This change is not necessary, given that the Bill already requires the adjudicator to consult any person whom he or she considers appropriate. I hope that that is helpful to noble Lords and I ask my noble friend to withdraw his amendment.
Viscount Eccles
My Lords, I am not quite sure how to put this, but I think the Committee is being let down. Once again we are being told that we are starting from a zero base, that nobody knows anything about the operation of the code and that the adjudicator will start with a blank sheet of paper. The code came into effect on 4 February 2010, having been published in 2009. All 10 supermarkets have gone through the procedures that it requires them to go through. They have included it in their conditions of purchase and sale; they have appointed compliance officers; and they have made two sets of annual reports to the Office of Fair Trading. Disputes have been running in the past 24 months and disputes have been settled.
To say that there is no base of information that the Government can rely on in drafting the details of this Bill and that before deciding how guidance should be given they have to wait for the adjudicator is indefensible. I will return to this on Report. I hope that before then there is some rethinking about the position under the code, instead of us being told time and time again that it is as if the code did not exist. I beg leave to withdraw the amendment.
Lord Knight of Weymouth
“( ) The report must include an evaluation by the Adjudicator of how well the code is working.”
Lord Knight of Weymouth
My Lords, in moving Amendment 78, in order to ease time a little, I shall speak to Amendment 82 in the next group, and in support of Amendment 87C tabled by the noble Baroness, Lady Randerson, which I support very much. They are all in connection with the annual report in Clause 14. Amendment 78 proposes that instead of reporting only when it occurs to the adjudicator that there is an issue on the code, he should have to report every year on the code’s effectiveness. That would be a more active stance and follows our concern that it should be a living code that is thought about regularly to make sure that it is always fit for purpose.
Amendment 82 reflects our wish that Parliament should have more of a role in respect of the adjudicator. Although we appreciate that the annual report, once given to the Secretary of State, would then be published and that Parliament would get a copy, it would be more satisfactory for Parliament to be listed as one of the organisations to which the annual report would be submitted.
Finally, in support of Amendment 87C, we think that the people who pay the levy to fund the adjudicator should be able to see clearly what are the operating costs. Whether they are paying a reasonable sum for the running of the adjudicator should be transparent. If Amendment 87C is accepted, so that the manner in which the levy is calculated by the adjudicator is regularly reviewed, that will provide the transparency that ensures that the adjudicator is not operating in a frivolous fashion. On that basis, I hope that the Minister is listening, as ever, and I beg to move.
Baroness Randerson
My Lords, I shall speak to the three amendments tabled in my name in this group, Amendments 85A, 85B and 87C. I shall take Amendments 85A and 85B first. As the Bill stands, the Secretary of State will review the adjudicator’s performance initially after two years and then every three years. The amendments provide that that review should take place initially within a year and then annually. We believe that the proposed two-year review period is too long before we hear anything about the achievements of and progress made by the adjudicator, and that a period of three years between reviews is too long.
If the adjudicator is doing well, retailers will change their culture and behaviour, and three years is a long time with no judgment on how the adjudicator is working. As I said earlier, it has taken a long time to get to this stage. It has taken six or seven years to get this far, so we need to know how the new system is working sooner than two years after the adjudicator has been established. I point out to noble Lords that, under the groceries code, retailers have to submit compliance reports to the OFT within 10 weeks of the end of every working year, so why should the adjudicator not report to the Secretary of State or be reviewed by him every year?
I turn briefly to Amendment 87C. Clause 15(4) sets out the detail of what the review must cover. This amendment would add a new paragraph (c) that would ensure that the Secretary of State considered both the funding for the adjudicator and how the levy was calculated. This introduces what is in many ways a different issue. It concerns the equity of a levy that is to be established on the basis that it will be set at a flat rate. This amendment introduces the concept that the levy might vary according to the amount of work done by the adjudicator in respect of each of the supermarket chains. In other words, those retailers who trouble the adjudicator a great deal by generating a lot of work—because there are a lot of complaints about them—will pay more than those retailers who generate hardly any complaints. Further, a flat-rate levy would not reflect the relative size of the different supermarket chains.
We do not have time to do so today but it would be interesting to look at the relative size of the 10 large retailers. Although they are the 10 largest, the biggest is significantly larger than the smallest of them. The flat-rate levy does not seem to reflect that. It will nurture a sense of unfairness among the retailers if there is no movement from a flat rate to a levy that reflects the amount of business that they have brought to the adjudicator—if I could put it that way. The Minister may give us some words of reassurance on this but, as a probing amendment, it is important to raise the issue this afternoon.
Lord Borrie
My Lords, I speak to Amendments 87A and 87B in this group. They stand in the names of the noble Earl, Lord Sandwich, and the right reverend Prelate the Bishop of Wakefield, who are unable to be here, so, as the third name, I am here to speak to the amendments.
As the noble Baroness, Lady Randerson, said, Clause 15 deals with the supervision of the adjudicator and his work and performance by the Secretary of State’s reviews. The times of the reviews were discussed just a moment ago by the noble Baroness. I sympathise and agree with the points that she made. The amendments of the noble Earl, Lord Sandwich, the right reverend Prelate and me are designed to link the Secretary of State’s reviews of the adjudicator’s work with the original objectives of the Competition Commission for the code. One of the objectives of the groceries code was to stop the transfer by supermarkets to suppliers of excessive risks and unexpected costs. The amendments would spell that out in the Bill.
Amendment 87B is concerned with the level of the climate of fear among the supplier community and would recognise it as a potential factor that might impinge upon the adjudicator’s ability to fulfil his or her functions. In particular, it is possible that the supplier climate of fear might be a reason for zero action by the adjudicator—but that is not a reason to abolish the adjudicator. Rather, the adjudicator would need to improve his or her processes in the light of the supplier context. We have not yet come to Clause 16, which deals with the possibility of transferring the adjudicator’s functions or even of abolishing the adjudicator, but it is plain, as we shall see, that the Secretary of State’s reviews of the adjudicator’s work may be grounds for activity on the part of the Secretary of State under Clause 16.
The point of Amendments 87A and 87B is to clarify the grounds on which the adjudicator might be reviewed or criticised by the Secretary of State and to make clear in the Bill that there is an important link—which one wants to spell out because it is not there at the moment—between the original objectives of the groceries code and the actual work of the adjudicator, which is of course reviewed from time to time.
Baroness Wilcox
My Lords, regarding the amendments tabled by the noble Lords, Lord Knight of Weymouth and Lord Grantchester, the purpose of the annual report is to provide and publish a factual description of the adjudicator’s activities. This increases the adjudicator’s transparency to scrutiny and helps suppliers, retailers and other interested parties to understand the adjudicator’s role and functions. The noble Lords have suggested that the report should include an assessment of how well the code is functioning. I understand from previous debates and discussions that they are enthusiastic to ensure we have what they are calling a living code. However, this amendment is not a suitable way to provide for it. As I said before, the annual report as it stands is a simple description of the adjudicator’s activities. Amendment 78 would make the writing of the annual report a much greater strain on the adjudicator’s resources. More fundamentally, the adjudicator does not have responsibility for keeping the code under review. That is a matter for the Office of Fair Trading, although the adjudicator has a statutory duty to recommend changes to the authorities where she or he considers such changes appropriate.
With regard to the amendments tabled by the noble Lord, Lord Borrie, I fully agree that it is important that in this review the Secretary of State should consider any factors that have prevented the adjudicator from effectively enforcing the code, and that the purpose of the groceries code is to prevent the transfer of excessive risks and unexpected costs to suppliers. However, I do not agree that it is necessary to set this out explicitly in the Bill. I believe that the existing provision, that the Secretary of State must,
“assess how effective the Adjudicator has been in enforcing the … Code”,
provides the Secretary of State with the appropriate remit to carry out a thorough triennial review. This can include an assessment of any factors that have hindered the effectiveness of the adjudicator.
My noble friend Lady Randerson proposed another amendment requiring the Secretary of State to consider the funding of the adjudicator and, in particular, the manner in which the levy is calculated. As the Secretary of State must give consent to any levy, an explicit requirement to consider this would be unnecessary. I will be happy to discuss my noble friend’s amendment further when we address levy funding in the 30th group of amendments. In general we should avoid specifying areas for the Secretary of State to consider in his review of the adjudicator, unless setting them out in statute is clearly necessary. A long list of issues to consider in the review is more likely to be treated as exhaustive, whereas the current drafting makes it clear that the Secretary of State is considering the adjudicator in broadly defined terms.
Finally, my noble friends Lady Randerson, Lord Razzall and Lord Teverson have tabled two amendments, which together would mean that the adjudicator was reviewed after each year. We of course believe that the adjudicator should face proper scrutiny from the Government and Parliament. However, this must be balanced with both the need for the adjudicator to be independent and the practicalities of such frequent reviews. The adjudicator is expected to undertake only a few reviews a year and to report on their work once each year. This does not provide a very broad basis for the Secretary of State to consider how much the adjudicator’s powers have been exercised and how effective the adjudicator has been in enforcing the code. Therefore, it would be unlikely that each review could make very clear or authoritative judgements. Allowing three years will, we feel, provide a broader range of evidence to be considered.
Annual review would also mean consultation in each year of the adjudicator, the Competition Commission, the Office of Fair Trading, all 10 large retailers, one or more supplier representatives, one or more consumer representatives and any other appropriate person. As well as providing a burden on them to respond, this would be likely to reduce the quality of each of these consultation responses, further weakening the scrutiny of the adjudicator. It is not customary to undertake reviews of independent office-holders so regularly, and introducing annual reviews in this case might bring into question the adjudicator’s independence from the Government.
One further amendment has been proposed by the noble Lords, Lord Knight of Weymouth and Lord Grantchester, to the effect that a copy of the adjudicator’s annual report should be sent to Parliament. I set out in an earlier response to the noble Lord, Lord Browne, why I did not believe it would be appropriate to send a copy of the report to the devolved Governments, as this is not a devolved matter. A copy going to Parliament, however, could have merit. I emphasise that the adjudicator will already publish the report, so this would not be a question of making additional information available to Parliament but would simply emphasise that the adjudicator’s work should be open to parliamentary scrutiny.
I would like to give this matter further consideration, both on the principle and, if this is appropriate, on how precisely it is delivered—for instance, whether it should be a matter of simply sending a copy to Parliament or if it would be more suitable to place a copy in the House Libraries or lay it before Parliament. I am therefore happy to discuss this matter further with the noble Lords concerned before the next stage of the Bill. I hope that has gone some way towards answering the questions in the amendments that were put down, and I ask noble Lords to withdraw them.
Lord Knight of Weymouth
I am relatively satisfied with that response and am happy to beg leave to withdraw the amendment.
Baroness Wilcox
Lord De Mauley
My Lords, noble Lords will appreciate that the target was to finish the Committee stage of the Bill this evening. There have been discussions among the usual channels, taking into account the position of the staff of the House. The usual channels propose to continue debate on the Bill until 7 pm, with the hope of completing the Committee stage.
Amendment 93
Viscount Eccles
Viscount Eccles
My Lords, this is a small matter of equity. Clause 15(4)(a) concerns information that may be considered when deciding whether to investigate. It confines the adjudicator to a fairly narrow range of people involved in the industry. My amendment proposes to add, to the information provided by a supplier, the words “or a retailer”. It seems perfectly possible that a retailer will have information about the operation of the code and possible breaches of it, which means that they would like to provide information. I think that they should have that opportunity in any event. I beg to move.
Lord Knight of Weymouth
My Lords, I shall speak to my Amendments 95 and 123A. The issue we are raising is that, as the Bill is currently written, it would appear that when the workings of the adjudicator are reviewed—this is specifically in relation to the ability of third parties such as trade associations to make representations and complaints to the adjudicator—and if the review decides that the arrangement is not working well and wants to change it, all that the Bill currently allows the Secretary of State to do is to completely remove the ability of third parties to complain to the adjudicator. It is a very black and white position: either all third parties can complain or all third parties cannot complain.
These amendments seek to give the Secretary of State the ability by order to list specific third parties who would still be allowed to submit information to the adjudicator. Should irresponsible third parties abuse the right that the legislation gives them to submit information to the adjudicator, the Secretary of State could restrict the number of third parties to those that behave responsibly. This would be a pragmatic way for the Secretary of State to operate should the review disclose something that he is unhappy about.
Amendment 123A simply seeks that the affirmative resolution rather than the negative resolution is used in order to give Parliament extra scrutiny if the Secretary of State wants to limit the number of individuals permitted to submit information to the adjudicator. I beg to move.
Lord Teverson
My Lords, Amendment 94 is quite straightforward: it seeks to insert a new paragraph in proposed new Section 4A(1) which allows for the adjudicator to consider,
“information provided by a trade association”.
Trade associations are important and should be involved in the structure of the Bill, and the amendment would involve them in this part of the work delineated by the Bill. It is as straightforward as that.
Baroness Wilcox
My Lords, I am grateful to noble Lords who have raised the important issue of what any restrictions on the sources of information under Clause 15(10) should involve. The Government hope and believe that third parties such as trade associations will provide information to the adjudicator in a responsible and helpful way and that this clause will never need to be activated. Nevertheless, it is important that we give proper scrutiny to the details of how the clause can be activated and what it should include.
The clause as drafted provides the most suitable way to restrict information. The sources that would still be allowed to provide information are those identified as most suitable by the Government following their consideration of pre-legislative scrutiny by the Business, Innovation and Skills Select Committee. These have been carefully considered as sources that could provide useful information without the risk of the adjudicator being deluged with complex but essentially weak complaints.
My noble friend Lord Eccles suggested that retailers should be included in the list of sources of information. Clearly retailers will have relevant information about whether a breach has occurred and this will be central to investigations. However, the place for this to be heard is in investigations, where the adjudicator can seek relevant information without revealing details of complaints. The decision to start an investigation is based on complaints or other information giving reasonable grounds to suspect that the code has been breached, not on an attempt to weigh all the arguments.
My noble friends Lord Razzall and Lord Teverson suggest that trade associations should be added to the list. However, trade associations are the primary group that this power to limit the sources of information is intended to address. The power has been introduced in the light of concerns that trade associations might raise complex but unjustified complaints. This could put a strain on the adjudicator’s time and resources, as well as unnecessary burdens on the retailers.
The noble Lords, Lord Knight and Lord Grantchester, suggest that the Secretary of State should be able to specify sources through guidance. However, such an extension would be a more serious matter than is suited for guidance, which the adjudicator must “take account of” but which is not strictly binding.
Clause 15(10) has been deliberately written to restrict the sources of information to those that are most likely to have information regarding a breach of the code. This will ensure that trade associations and other third parties have a clear incentive to act responsibly. It would be invidious to put the Secretary of State in a position where he or she had to pick which third parties or classes of third party were responsible and which were not, and such an amendment could lead to the very lobbying and campaigning that we hope to avoid.
Finally, the noble Lords, Lord Knight and Lord Grantchester, have also proposed an amendment to Clause 23 that is relevant here. It would mean that Clause 15(10) required an affirmative resolution. Throughout the Bill we have striven to ensure that a suitable level of parliamentary scrutiny is provided for any orders.
The Government believe that the negative procedure is suitable here as the content of the order is very clearly defined in the Bill, and because an order can be made only as the result of a triennial review involving widespread consultation. The Delegated Powers Committee considered this order specifically and confirmed that it was satisfied with our reasons for this being a negative procedure.
I hope that these answers to the amendments have been helpful. I therefore ask the noble Lord to withdraw his amendment.
Lord Browne of Ladyton
Lord Browne of Ladyton
My Lords, I do not think I shall detain the Committee for very long. I am hopeful that the Minister will have a simple answer to this particular problem.
The amendments are designed to do two things: they would extend the obligation of confidentiality beyond the adjudicator to his or her deputy and staff, and would provide a criminal sanction for a breach of the obligation of confidentiality. The arguments are comparatively simple. Clause 18, on a straightforward reading, limits the obligation of confidentiality to the adjudicator. If that reading is correct then this is far too narrow. The persons connected to the adjudicator should also be covered by the statutory provision, and these include, at the very least, the deputy adjudicator and the adjudicator’s staff.
The obligation of confidentiality in Clause 18, with the wording that has been adopted, can be argued to be discretionary rather than mandatory, and the amendment deleting the word “may” and inserting the word “must” clarifies that the obligation is mandatory. Amendments 102 and 103 are consequential amendments on those two provisions.
The obligation provided by Clause 18 must be enforceable, and in my view the provision of a statutory offence will ensure that the obligation is respected. I beg to move.
Baroness Wilcox
My Lords, the duty of the adjudicator to keep complainants’ identities confidential is central to this Bill. The initial market investigation, consultation and pre-legislative scrutiny all indicated that suppliers would be reluctant to complain if they thought that they would be identified, and noble Lords have made the same point in the House. The protection of the identity of parties to arbitration is likewise important. The proposed amendments on confidentiality therefore need careful consideration.
The noble Lord, Lord Browne of Ladyton, proposed a number of amendments with the clear aim of making the requirement on the adjudicator to maintain confidentiality as tough as possible. I agree that this needs to be a strong requirement. However, I believe that the Bill already achieves this.
Two of the amendments in the name of the noble Lord, Lord Browne of Ladyton, specify that the adjudicator “must not” rather than “may not” make unauthorised disclosures of information that might break confidentiality. I am confident that “may not” and “must not” have the same force here. The words “may not” are intended to be prohibitive: the adjudicator is in either instance required to refrain from making unauthorised disclosures.
Another two amendments in the name of the noble Lord, Lord Browne, specify that the duty to maintain confidentiality also applies to the deputy adjudicator and any staff. I agree completely with this as a matter of principle. However, the Government are confident that the deputy adjudicator and staff seconded to the adjudicator would already be bound by the duty of confidentiality as set out in the Bill and that therefore the amendment is unnecessary.
The noble Lord’s final amendment on this clause makes any knowing breach of confidentiality by the adjudicator or his or her staff an offence and introduces fines for anyone found guilty of such an offence. I do not believe that the threat of fines is necessary to make the adjudicator act responsibly. The adjudicator will be a public authority and will be bound to take the responsibilities under Clause 18 very seriously, as well as being bound to respect the human rights to privacy of the relevant parties. It is true that there is no sanction for breach expressed in Clause 18 but a breach would be a breach of statutory duty by the adjudicator and would in principle enable a person who suffered from a breach to claim damages from the adjudicator or to seek an injunction to prevent the disclosure if the person knew in advance.
I do not think that my noble friend Lord Eccles will be speaking to his amendments.
Baroness Wilcox
I therefore would ask the noble Lord, Lord Browne, to withdraw his amendment.
Lord Browne of Ladyton
My Lords, I am reassured by the noble Baroness’s comprehensive response, and now that her words are on the record, it will be very clear that the requirement of confidentiality applies not just to the adjudicator, as the Bill states, but to the deputy adjudicator and the staff. In making a plea for plain English, which is where we started our debate, I wonder why we do not just say what we mean in legislation, in order that we do not have to read Hansard to find out that it applies to other people. A few words here would not cost us that much. If “may not” can have as strong a construction as “must not” and the Government prefer “may not” when they mean “must not”, I am content with that as well. However, I still think that it would be better if we said what we meant rather than left it to what lawyers understand of these things.
I am impressed by the Minister’s confidence that in future this confidentiality will be respected. I have had the privilege to hold some quite significant offices in government and I have discovered, sometimes to my frustration, that where one expects confidentiality most is where one least gets it. We have a media industry that substantially operates on the basis of leaks. These stories will be of interest to many people. They will sustain the front pages of newspapers that are competing with an internet that is utterly uncontrollable. I would not be surprised if very quickly we find that trying to stem leaks out of these investigations is a problem, and I believe that we will regret that we did not put down a criminal offence to discourage that. In the current circumstances, though, and at this time of day, I do not intend to insist on this any further. I beg leave to withdraw the amendment.
Lord Borrie
Lord Borrie
My Lords, the origin of the Bill, as we all know, stems from a Competition Commission report that found fault with major supermarkets in ways that I shall not trouble to delineate now. It seems appropriate that the levy should be imposed on major supermarkets to pay for the financing of the groceries code adjudicator’s position and office. However, I prefer the wording of the amendment of my noble friend Lord Knight, so I will not push my amendment. I certainly will not push the point about not requiring the Secretary of State’s consent.
Lord Knight of Weymouth
My Lords, I shall speak to Amendments 108 and 112, and to Amendment 121, which refers to Clause 20, because it is related to the same point. For the sake of efficiency I will do it in that way. Indeed, I shall speak in relative support of the amendment of my noble friend Lord Borrie. I am relaxed about whether the wording is “must” or “shall”. I am sure that there are parliamentary draftsmen who have a very strong opinion on the most effective word as long as the meaning remains. For the sake of plain English we need to be clear about what we are doing here in Parliament. I believe that it is the Government’s intention that the adjudicator’s office should be fully funded by the levy on the major retailers and that the taxpayer should not fund it. If that is the Government’s intention they should say so and be clear in the Bill in the same way as they are about other bodies that are funded by levies. That clarity would help everybody and that is what the amendments would do.
Amendment 121 to Clause 20 would remove the option for the Secretary of State to make grants to the adjudicator so that, again, the office would be fully funded by the major retailers. That is all that that amendment would do. Amendment 112 would remove the provision for a flat rate levy from the 10 major retailers and replace it with a requirement for the levy to be calculated in proportion to annual turnover. As we have heard, there is a significant difference between the sizes of major retailers whose turnover is more than £1 billion. I think that it would be fairer, certainly initially, for the levy to reflect turnover. It may be that in time the levy would reflect those retailers that occupy the most time for the adjudicator and cause the highest number of substantiated complaints and investigations. However, for now, relative to turnover is a better solution. As I recall I think that that was what the Competition Commission recommended. I look forward to a willing Minister.
Lord Howard of Rising
I shall speak to Amendment 110A in this group, which seeks to impose some form of parliamentary discipline on the amounts of money that the adjudicator can charge. In effect, the adjudicator is imposing a tax. That is, he is compulsorily taking money from private organisations to fund his office. It would be unreasonable for such power not to be overseen. There is provision in the Bill for the Secretary of State to do so, but a parliamentary order—we all know that they are, in effect, rubber stamps—would at least give Parliament the benefit of being able to look at what is happening and comment on it. There will then be some form of external discipline over the adjudicator when he decides how much money—some call it a levy but I call it a tax—the retailers should pay.
Baroness Randerson
My Lords, I shall speak to Amendment 111A, which would amend Clause 19 by removing subsection (5) and replacing it with a new subsection. This concerns the same issue of the flat-rate levy. Clause 19(5) specifies that it should be the same for all retailers unless the Secretary of State decides otherwise and makes an order that allows it to reflect expense and time. My amendment does away with the first phase of the flat-rate levy. It is on very much the same ground as other amendments in this group. Mine would enable the Secretary of State to decide the criteria that should be applied for a variable levy.
I repeat what I said on Amendment 87C, which referred to this issue. There is a basic problem in that a flat-rate levy will not change behaviour because there will be no reward to retailers for avoiding getting into trouble and behaving well. We need to start on a strong footing and, as the noble Lord, Lord Knight, has just said, on an equitable footing that reflects the size of the different retailers. I am conscious that the Minister has said that she will deal with this issue when she responds to this group of amendments.
Lord Teverson
My Lords, I shall speak to Amendment 114, which is very straightforward. Under Clause 19(5), the Secretary of State must make an order to allow the adjudicator to differentiate. My noble friend Lord Razzall and I believe that the adjudicator should have this direct ability. Again, we have this indirect method of making decisions through the Secretary of State. I am sure that the Secretary of State has far more important things to do than decide the specific division of the levy among the small population of large retailers. If we are to have a serious adjudicator, we should give that person the authority to undertake that task. If we feel that the adjudicator’s decisions are wrong, I am sure that other provisions in the Bill will ensure that that is communicated to him or her.
Baroness Wilcox
My Lords, many noble Lords have given close consideration to how the levy to fund the adjudicator should be raised. The noble Lords, Lord Borrie, Lord Knight of Weymouth and Lord Grantchester, proposed similar amendments, respectively suggesting that the Bill should specify that the adjudicator “must” or “shall”, rather than “may”, levy funds from the retailers. I agree with the principle that the adjudicator should raise its funds from the retailers. This is intended as the adjudicator’s primary funding source. Other forms of income, such as payment for the cost of individual investigations or loans and grants from the Secretary of State, are intended to be secondary.
However, simply specifying that raising funds is obligatory would not have a clear outcome unless the Bill specified when the adjudicator must do so. The current drafting is intended to allow the adjudicator to levy funds whenever he or she deems it necessary, not to impose a schedule of when he or she may or must raise funds. I believe that we agree on the principle that the adjudicator should be funded by the retailers, but I also believe that the current drafting gives the adjudicator greater flexibility and is preferable.
The noble Lord, Lord Borrie, proposed a further amendment removing the need for the Secretary of State to give consent before a levy is raised. I am sympathetic to the principles of avoiding unnecessary hurdles and the need for independence for the adjudicator. However, this amendment would give the adjudicator a completely free hand to raise funds from the retailers without the oversight of Ministers. The Secretary of State needs only to give consent and may not direct the adjudicator to raise any levy, but some accountability is necessary.
The noble Lords, Lord Knight of Weymouth and Lord Grantchester, proposed that the levy should initially be divided according to the large retailers’ turnover. That possibility was considered during pre-legislative scrutiny, but the Government believe that it would be unfair to assume that a retailer’s size correlates with how much it breaches the code or with how much of the adjudicator’s resource it is likely to demand. The principle of fairly sharing the cost of the adjudicator is better served by the ability to vary the payments of retailers based on the estimated expense and time of dealing with them in the light of experience.
I turn to Amendment 110A, tabled by my noble friend Lord Howard of Rising. This would require an order to be made before a levy is imposed, and would mean that consultation must take place before imposing the levy and before any subsequent increase in the levy. I believe that unnecessary bureaucracy should be avoided wherever possible. The Government’s intention to fund this body via a levy has been clearly set out in previous consultations and policy documents; the mechanism for a levy and how it is to be imposed can be read from the Bill. I therefore see no need to require the imposition of an order, or for a further round of consultation, before imposing the levy, particularly when the levy is subject to the approval of the Secretary of State and not simply at the adjudicator’s discretion.
On my noble friend’s question about limiting the amount of the levy, a limit on how much can be raised could tie the hands of the adjudicator, particularly if there was a costly appeal for which funds were needed. The fact that the Secretary of State must approve each levy is an assurance that it will not be misused.
This brings me to Amendment 114, tabled by my noble friends Lord Razzall and Lord Teverson. This would remove the requirement for the Secretary of State to make an order before the adjudicator can vary the way the levy is made. Given the principles of avoiding bureaucracy that I have just set out, I am willing to look again at whether an order is necessary before a levy can be varied in the proportionate way set out in the latter part of subsection (5). The fact that individual levies would still need to be approved by the Secretary of State could provide an adequate safeguard, and I will happily discuss this issue further with my noble friends Lord Razzall and Lord Teverson before the next stage of the Bill. I hope that the noble Baroness, Lady Randerson, will also be happy to discuss this issue, as I believe that her amendment shares the same objective of avoiding bureaucratic delay. However, the Government feel that varying the levy should be a matter for the independent adjudicator and that the role of the Secretary of State should be simply to give consent.
Lord Knight of Weymouth
My Lords, I think that my noble friend Lord Borrie has already said that he will withdraw his amendment in favour of mine and I will be happy not to press mine. I am slightly disappointed in the Minister’s answer. Particularly if there are fines that are then paid to the Consolidated Fund, she is opening up the Secretary of State for considerable lobbying from the major retailers, who will say, “Well, you’ve just had a whole load of our money, so can we just waive the levy for the next year because you’ve already got the funds for the adjudicator?”. That would create some weird incentives and disincentives. It would be much more straightforward to be clear right from the outset. I know that she will reflect on that and I am happy to withdraw my amendment.
Baroness Wilcox
Baroness Wilcox
Baroness Wilcox
Lord Howard of Rising
Lord Howard of Rising
I will not keep the Committee long as I am mindful of the 7 pm deadline. The idea that the adjudicator might have a surplus is a triumph of hope over experience, rather like divorcing and getting married again. However, if there is a reasonable surplus—there should probably be a minimum above which this does not have to operate—it should be returned to those people who have paid it or, the following year, they should have a corresponding reduction. I beg to move.
Baroness Wilcox
My Lords, the Government’s intention in giving the adjudicator discretion over whether to repay retailers at the end of the year is to avoid unnecessary bureaucracy where the adjudicator is required to repay retailers before then immediately raising further funds from them. I believe that noble Lords on all sides of the House are supportive of the adjudicator being able to carry on his or her work with as little bureaucratic burden as possible, especially as in this case the burden would fall on the retailers as well as the adjudicator. I therefore ask the noble Lord to withdraw his amendment, if he feels that this is a good explanation.
Lord Howard of Rising
I thank the noble Baroness. I suggest that if there is a large surplus, it should be deducted from the following year. That would save the bureaucracy. I beg leave to withdraw the amendment.
Baroness Wilcox
“specified retailer” means a retailer mentioned in Article 4(1)(a) or (b) of the Groceries Supply Order;”
Lord True
My Lords, I apologise that I was not able to be present at Second Reading because of a local authority meeting. I am also sorry to detain the Committee on an issue that is not solely related to this Bill at this late hour. However, I hope, given the length of the proceedings and that it will take a little time to develop my argument, that Members of the Committee will be indulgent. It is the first opportunity that we have had to comment in detail on a matter that I understand is intended by some to be a pilot to many—if not all—Bills in future. I refer to so-called plain English—or, rather, those cheery questions in italics added above the normal side headings in Bills. My noble friend Lady Byford said at Second Reading, at col. 742 of Hansard on 22 May, that she found these headings “folksy” and not very helpful. The noble Lord, Lord Knight of Weymouth, said at col. 760 that he rather liked them and found that they helped clarity. I do not think that they help clarity.
I tabled amendments to remove Clauses 19 and 21 because I was advised by the Public Bill Office that this was the only way that a Member could raise this question and I did not want to hold up consideration of the rest of the Bill. However, I think that it merits some attention. I have no idea where these new headings come from. I have seen that they are a pilot for plain English legislation, but it seems to me that they must emanate from some quite high-up person in government—one of those well meaning men or women with time on their hands and clearly unworldly enough to think that the public might want to read Bills while sitting alongside me on what I hope will be the 7.33 to Twickenham.
As I was not able to speak at Second Reading, I gave my noble friend Lady Wilcox notice that I would question this approach. I did not want her to worry that by opposing Clause 19 I was opposing the whole Bill—whatever I think of the Bill, that is not my aim. My noble friend, with typical courtesy, sent me a swift reply. She told me that the intention was to make legislation more accessible to the public. Her letter referred to the demands of accessibility. I am not sure who they are coming from, but once again I see the smiley face of the high-up person in government come up before my eyes. My noble friend was kind enough not to dismiss my fear that there might be issues of logical consistency, questions on the interpretation of parliamentary intent and, indeed, the risk of value judgments that could emerge if this process spreads. I will illustrate briefly what I mean.
The heading above Clause 19 reads:
“How is the Adjudicator funded?”.
I think that means “funding” in plain English, substituting one word for the well meaning, accessible five.
However, that is not my main point. How many hours in this Committee and others do we spend debating “shall”, “may” or “must” amendments? Big questions turn on those words, and Parliament rightly considers very carefully the appropriateness of each. As regards this clause, the noble Lord, Lord Borrie, has suggested “must” for “may” in line 5; the noble Lord, Lord Knight of Weymouth, has suggested “shall” for “may”; and my noble friend Lord Howard of Rising has just suggested a “must” for “may”. I am not taking a stand on any of those debates.
The Bill is clearly drafted with a “may” in the funding power it affords to the adjudicator. It implies that he did not necessarily take a levy; nor, indeed, need the Secretary of State give consent, grants or loans. Yet the accessible heading says:
“How is the Adjudicator funded?”—
and not “How may the Adjudicator be funded?”. Some might ask, what is the intention of the Government or Parliament? Is it that he will be funded come what may—as the heading implies—or that he may secure funding, as the text of the Bill suggests? I think this is a circle that you can square.
However, we in Parliament do not have the power to amend such headings; that is why I have had to table a clause stand part amendment rather than suggest leaving out “is” and putting in “may”. To my knowledge, presently the courts do not construct any arguments on the basis of descriptive headings in a Bill. But when a new practice comes into the writing of law—and in Bills more high-profile than this—could some creative lawyers bear to stand idly by? What happens when, as here, a heading says that something “is to be done” and the Bill says it “may be done”?
Lord De Mauley
I hate to intervene on my noble friend. Perhaps it would be going too far to suggest that he is verging on a Second Reading speech, which I would not want to do that. I happen to know that my noble friend has some quite comforting words to give that might enable him to abbreviate his speech on this clause stand part debate.
Lord Browne of Ladyton
Perhaps the noble Lord will allow me to interrupt him, the comfort is to be found if he simply looks at it. The heading applies to Clauses 19 and 20, so the funding that comes from the public purse and the Secretary of State is encompassed under this heading. This is how the adjudicator is to be funded.
Lord True
My Lords, I hear what my noble friend says, and I am conscious that everybody needs to go. It is a great pity when a Member wishes to raise a point of substance on the way in which law is written—something that this House is here to deal with—he is very swiftly interrupted by a member of his Front Bench. I will try to accelerate my remarks, having been patient in this Committee.
I hear what the noble Lord, Lord Browne, says, but to answer his point, let us look at the heading on page 5, line 21:
“How is the Adjudicator supervised?”.
That smothers in obscurity the power to abolish the adjudicator in Clause 16. Only Clause 15 is about supervision, yet this Committee has been concerned about abolition. What value judgment is this, when the Bill highlights supervision and passes over abolition?
Above Clause 21, the heading reads:
“Will this law mean other changes to the law?”,
which I will now speak to. This is a nonsense, because when the Bill is commenced what is in Clause 21 will already be law, so that will just lie on the Bill as an otiose and rather foolish idea.
Finally, I will give one more example before I accept the strictures and sit down. However, I will, having been made to sit down, return to this matter on Report, and I will also listen very carefully to what my noble friend says. This matter is intended to help electronic access to legislation. If you look at the heading,
“How does the Adjudicator handle information?”,
the normal practice is that when you click on a heading on an electronic screen, the screen shows text starting from the point of the heading. Why, then, does this heading come above Clause 18 and not above Clause 17, which covers the Secretary of State’s right to require information from the adjudicator? Surely, anyone interested in how information is handled should be signposted to that new power for the Executive. Who decided to put the heading there and not above Clause 17, and why can Parliament have no say in the matter?
I will sit down now, but I submit that potentially significant issues are raised by this new practice, and I apologise, after eight and a half hours of proceedings on this, for venturing to speak for eight minutes.
Baroness Wilcox
My Lords, this is the first time that I have had occasion to respond to the noble Lord, Lord True. I know the noble Lord to be an elegant wordsmith with a passion for our beautiful language, so I would not, therefore, take lightly anything that he has said, even if he feels that he has had to be a little briefer than he would have wished.
Regarding the points that the noble Lord has raised, they are both interesting and technical. They are points on which I will seek legal advice, and I will make sure that when I return he is a happier person than he is today. I am happy to speak to him about this before the next stage of the Bill, and I therefore wonder if he would be prepared to withdraw his amendment.
Lord Howard of Rising
Could I just point out to the Minister that this is as much a point of principle as it is of detail? The point of principle should be addressed, and that is not necessarily something that concerns only lawyers, but Members of this House and Members of Parliament in general.
Lord Knight of Weymouth
My Lords, my suggestion to the Minister is that it might be helpful for her to write to the Committee, and in particular to address the very valid point that the noble Lord, Lord True, has raised; namely, that Parliament cannot amend these words. I am happy with the words in this Bill, but if this is a pilot, it would be interesting to hear the views of those conducting the pilot as to whether any consideration has been given to us being able to amend those words.
Lord True
I thank my noble friend and other noble Lords, in particular the noble Lord, Lord Knight of Weymouth. It is reasonable for a parliamentarian to raise a point of principle in relation to law-making at the first opportunity that he has. I am grateful for the indulgence of the Committee. As I said, I do not necessarily think that some of these are clear-cut cases, but there is enough doubt and uncertainty raised by this procedure. A parliamentarian must place on record in Hansard for the attention of Members of both Houses something that potentially affects the way in which Parliament is able to deal with legislation. With those comments, I beg leave to withdraw my opposition to the clause and will not oppose the Question that Clause 21 stand part.
Baroness Wilcox
Lord Howard of Rising
“( ) This Act will cease to have effect following the second review period required under section 15, unless a statutory instrument disapplying the provisions of this subsection has been laid before and approved by a resolution of both Houses of Parliament before the end of the second review period.”
Lord Howard of Rising
My Lords, I speak to this amendment, which introduces a sunset clause. This should please the Minister, as it is in line with government policy both to have sunset clauses in new legislation and to get rid of quangos. Two for the price of one, as a supermarket might put it. A sunset clause is necessary because during our debate I found myself, as a businessman, a supplier to supermarkets and a farmer, drawing different conclusions from those expressed by other noble Lords. My noble friend Lord Eccles has already commented on some of the examples quoted by the noble Lord, Lord Knight, in his robust defence of the necessity of having an adjudicator. Putting aside the fact that most of the examples were provided by pressure groups—which brings to mind the famous phrase, “They would say that, wouldn’t they?”— I would like to touch on the tales of woe about the cavalier treatment of new product development by supermarkets, quoted by the noble Lord. I do not believe that they stand up.
If a product is unfairly rejected by a supermarket, and it is a good or profitable product, it will be saleable to another supermarket. In fact, it will probably be grabbed with alacrity. If the product is not good enough to be sold to any other supermarkets, the promoter of the new product has made a bad commercial judgment. It is not the business of government to provide underwriting for commerce.
Supermarkets are always competing to provide something new and better. This is self-evident. As was said on a number of occasions at Second Reading, in the past 30 years there has been an explosion of foods available at supermarkets, without a corresponding increase in prices. That can have been achieved only by retailers constantly looking for new and innovative products. Supermarkets are constantly looking for good new products and these will find a market, if not with one supermarket, then with another. I believe—I speak as someone directly connected with supermarket supply—that this new quango will be expensive and will contribute absolutely nothing except increased costs to shoppers, who will be the ultimate payers of those costs. It is only sensible to have a finite date—which, after all, can be extended if I am proved wrong and the quango does end up making a contribution to food retailing.
Baroness Wilcox
My Lords, the Government in general support the use of sunset clauses to avoid the risk of overregulation and to ensure that regulators remain in place only where they are strictly needed. However, the Bill already contains provision for sunset and review, in that the adjudicator must be reviewed every three years and can, following such a review, be abolished if the Secretary of State considers it appropriate. Many noble Lords have expressed their desire to ensure that any power of the Secretary of State to amend the adjudicator’s powers or functions should be subject to proper scrutiny, and the Government believe that the Bill provides for that. To remove the same scrutiny for the cessation of the Act would therefore be disproportionate.
The Bill is fully in line with the Government’s broader policy on sunset and review. Therefore, I think that the job is done and I ask the noble Lord to withdraw his amendment.
House of Lords
Economy: Deficit Reduction
(11 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Barnett
To ask Her Majesty’s Government whether they remain of the opinion that their deficit reduction plan has been the right policy for the United Kingdom; and, if so, why.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, tackling the large deficit that this Government inherited was, and is, necessary to restore public finances to a sustainable path. Reversing the historic rise in public debt will strengthen the UK’s medium-term growth prospects.
Lord Barnett
My Lords, has the Minister seen the OECD’s latest figures, which show that when the Government took office in 2010 our net debt in that year was 53.9% of GDP, while in Germany it was 52.2%? By 2013, next year, they say that UK debt will be 74%, although it is likely to be higher now in the light of the latest figures, while Germany’s will still be 50.5%. The budget deficit was serious, of course, but it cannot be blamed for those figures. Does the Minister not agree that those figures show that the real reason behind this is that Germany had growth, whereas the Chancellor’s deficit reduction plan deliberately had no growth? In those circumstances, can we now expect another U-turn, shortly I hope, to provide some capital for structural expenditure, which might just help to kick-start a bit of a revival?
Lord Sassoon
My Lords, the debt figures that the noble Lord, Lord Barnett, recited precisely illustrate the structural deficit challenge that we inherited from the previous Government. We have already reduced the current budget deficit from 11% to 8% of GDP in two years, but there is much more to do, and we will do it. We will be reducing borrowing by £155 billion a year by 2016-7, compared to what it otherwise might have been under another Government. We will keep on with that task.
Lord Sharkey
My Lords, the Oxfam report, The Perfect Storm, published two weeks ago, says:
“The combination in the UK of economic stagnation and public spending cuts is causing substantial hardship to people living in poverty”.
In view of this, could the Minister tell the House what plans the Government have in place to mitigate the effects of their deficit reduction programme on our most deprived groups and communities?
Lord Sassoon
My Lords, I can assure my noble friend that the Government are committed both through the changes that we are making to the income tax system and to other public expenditure decisions to protect the vulnerable and reward those who choose to work, particularly at the lower income levels. So we have, for example, the uprating of benefits by 5.2% more than average earnings growth to protect people from rising prices; reforms to the tax credit system, so that we are tackling the deficit in a fair way; uprating the child tax credits, so that families see an increase of £135 per child this year as well as £180 over inflation last year; changes to personal allowances, which will benefit 25 million people, taking 260,000 people out of income tax altogether; and the fairness premium at £7.2 billion—I could go on. My noble friend is right, and I can confirm that this will be very much at the forefront of the Government’s thinking.
Lord Peston
My Lords, bearing in mind that the Lords reform Bill is predicated on the Government’s view that your Lordships’ House lacks legitimacy, I congratulate the Minister on his willingness—at least on this occasion—to answer our questions, albeit not very satisfactorily. I hope he continues with that.
On the substantive issue, has the Minister seen the Governor of the Bank of England’s latest, extraordinarily pessimistic forecast about the likely status of what one would have called the real economy—as opposed to the financial economy? Bearing in mind that most of the Government’s expenditure cuts have not yet been made, surely the governor in his pessimism is actually not being pessimistic enough. Does the noble Lord agree?
Lord Sassoon
My Lords, I think that the Governor of the Bank of England is, as always, being very realistic and clear about the nature of the dangers that we continue to face particularly because of the eurozone crisis. This is precisely why we will stick to the fiscal course that we have charted; why it is supported by the IMF, the OECD and business organisations here; and why it is that we have 10-year interests at 1.7 per cent. We will do nothing to jeopardise that position in the face of the very real dangers that the governor points out.
Lord Ryder of Wensum
My Lords, leaving aside the welcome reductions in corporation tax, will my noble friend please remind your Lordships of the three main supply-side measures promoted by the Treasury to encourage growth?
Lord Sassoon
My Lords, the first thing that we need to do to support growth is to continue to have companies and individuals confident that we will stick to a responsible course and keep interest rates low. It is from this that all else flows. As well as tight fiscal discipline, it is important that we have a loose monetary discipline. That is the right policy prescription. We will target our other efforts into making sure that education, infrastructure and each of the key drivers of medium-term sustainable growth are supported in all that we do as a Government.
Lord Low of Dalston
My Lords, the Minister has referred to the reduction of the deficit from 11% to 8% of GDP. However, is it not the case that the deficit on current spending has hardly changed over the course of the last year and that almost all the reduction in the total deficit has come from cuts in investment spending?
Lord Sassoon
No, my Lords, that is not correct. Last year, Government departments came in with underspends of some £6 billion—and that was certainly not all capital spending. What my right honourable friend the Chancellor was able to do this week by cutting fuel duty, putting £550 million back into the pockets of hard-working families, illustrates how we are able to use underspends and put them to very good use where they are most valuable to our people.
Lord Davies of Oldham
My Lords, can the Minister explain why the Prime Minister was the only leader of a nation attending the G20 whose country was in recession? If he is talking about inheritance, does he recall the fact that, in 2010, this Government inherited a 2 per cent growth rate and now it is nought?
Lord Sassoon
My Lords, we face very difficult challenges. For all the deficit reduction that we have done, this country still has a budget deficit higher than Greece, Portugal and Spain. Yet we have interest rates that are very much lower and the confidence of the markets, and it is off that base that sustainable growth will come.
Armed Forces Day
(11 years, 10 months ago)
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Lord Rosser
To ask Her Majesty’s Government what level of financial or other form of support they are providing for Armed Forces Day on Saturday 30 June.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, the Government are supporting this Saturday’s Armed Forces Day in many different ways. Members of the Armed Forces are involved in events up and down the country, from parades to fly-pasts, including the national event in Plymouth. As well as meeting the costs of this participation, the Ministry of Defence has made grants of some £223,000 to help communities to organise their own events. In addition, reservists were invited to wear their uniforms to work yesterday, and Armed Forces veterans were encouraged to wear their veterans’ badge. As part of the build-up to Armed Forces Day, show your support flags will be flown on all government buildings and town halls, and some local authorities are taking the opportunity to sign up to their own community covenants. This all adds up to a wide-ranging celebration of what our Armed Forces bring to this country.
Lord Rosser
My Lords, yesterday we had a Question about discrimination against our Armed Forces, and another example has been reported in the press this morning. Earlier this week, we saw Ben Parkinson carrying the Olympic torch through Doncaster. He suffered appalling injuries in Afghanistan in 2006—the loss of both legs, and brain and back injuries, which are euphemistically described as life-changing injuries. Ben Parkinson carried the torch for 300 metres. It took him 25 minutes to complete the walk. It was an act of great determination, guts and, yes, courage.
It is so that we can express our thanks, gratitude and support to our Armed Forces and veterans, and the enormous sacrifices that so many have made on our behalf, including giving their lives, that we have Armed Forces Day. In thanking the Minister for his comprehensive reply, may I ask whether the Government will review the levels of future support that we as a nation give, in whatever form, to Armed Forces Day to ensure that the crucial role undertaken on our behalf and the sacrifices made by our Armed Forces continue to be fully understood and appreciated, including by the minority of individuals and organisations who knowingly or unknowingly still discriminate against Armed Forces personnel?
Lord Astor of Hever
My Lords, the Armed Forces will be very grateful for the Opposition’s continued support, and I share the noble Lord’s admiration for the courage of Ben Parkinson in Doncaster. With regard to discrimination, the Cabinet sub-committee on the Armed Forces covenant, chaired by Oliver Letwin, will oversee work across government and ensure that momentum on all strands of the covenant is maintained. The noble Lord asked whether we are doing enough to spread the message. Armed Forces Day now has over 1 million followers on Facebook, and this shows just how much the day has caught the imagination of people in this country. We will keep the level of assistance that we provide under review. However, one of the most remarkable features of Armed Forces Day is the way in which the lead is being taken by communities themselves, rather than here in Whitehall.
Lord Dannatt
My Lords, it fairly reflects the view of those who are serving, have served in or are veterans of our Armed Forces when they say how grateful they are for the upsurge in support from the British public over the past four or five years for what they have been doing. However, there are genuine concerns about the sustainability of Armed Forces Day, notwithstanding the Minister’s previous Answer. Will he consider asking his officials to conduct a survey in the coming months of the number of cities, towns and communities that have laid on activities for this Armed Forces Day, compare them with the activities on Remembrance Sunday and the remembrance period, and try to validate the thought that a better model for the sustainable recognition of our Armed Forces in the future might be to combine on one day—probably in November—the celebration of those who have served our nation in uniform with remembering the sacrifice of those who have lost their lives?
Lord Astor of Hever
My Lords, I will certainly take the noble Lord’s suggestion back to my department. I can assure him that I have a list here of all the events taking place throughout the country, and there seems to be a great deal of enthusiasm from all sections of the country.
Lord Palmer of Childs Hill
In replying to a debate on 19 June about Armed Forces Day, my honourable friend the Parliamentary Under-Secretary of State for Defence said:
“former service personnel were encouraged to wear a veterans’ badge”.—[Official Report, Commons, 19/6/12; col. 194WH.]
Does my noble friend feel that the time has come to stop prevaricating in committees and to introduce a national defence medal to be awarded on application to all those who have served our country in the Armed Forces, and to cut all red tape and allow our service personnel to proudly wear all medals awarded to them by other nations?
Lord Astor of Hever
My Lords, the independent review by Sir John Holmes of the rules applicable to the awarding of military medals is currently under way. He is considering all known campaigns for medals, including the case for a national defence medal, and will report reasonably soon.
Lord Davies of Stamford
I know the noble Lord is a great supporter of our Armed Forces and stands up for them on many occasions. Will he therefore join me in condemning the absolutely despicable behaviour of the publican of Browns bar in Coventry the other day who refused to admit two soldiers, who had been taking part in a military funeral, because they were wearing their uniforms? Will he look again at the recommendations—there were 40 in all—of the national recognition of the Armed Forces inquiry in the last Parliament? One of those recommendations was that we should outlaw discrimination against armed services personnel and provide the same kind of protection that we provide against discrimination on grounds of sex, race, sexuality or disability, so that these incidents never happen again.
Lord Astor of Hever
My Lords, I agree entirely with what the noble Lord said about that terrible act in the bar at the time of the funeral of the serviceman who was killed. I pay tribute to the noble Lord, Lord Davies, who commissioned the report of inquiry into national recognition of the Armed Forces when he was Defence Minister, which of course led to the setting up of Armed Forces Day.
Lord Burnett
Will my noble friend explain the role to be taken by the reserve forces on Armed Forces Day, and will he elaborate a little further on the involvement of the great city of Plymouth on Armed Forces Day?
Lord Astor of Hever
My Lords, Wear Your Uniform to Work Day took place yesterday, when all reservist and cadet organisations were encouraged to wear their uniform to work to highlight their important role in the defence of our country. The Plymouth event promises to be a spectacular occasion, with a tri-service parade; a fly-past by Typhoons, historic aircraft and the Red Arrows; a steam-past led by HMS “Argyll”; and lots of other service equipment on show. I am delighted that the city of Plymouth has fully embraced its opportunity to host the national event this year.
Small and Medium-sized Enterprises: Foreign Languages
(11 years, 10 months ago)
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Lord Harrison
To ask Her Majesty’s Government what assistance they provide to help small and medium sized enterprises which export their products and services to acquire foreign language expertise.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, UK Trade and Investment provides a subsidised service, available to SMEs, which helps them to overcome language and cultural barriers in overseas markets. The service can provide a bespoke written report with in-depth advice and information on types of language learning and rates, and on recruiting students and foreign nationals to provide in-house language skills. The service also signposts companies to professional bodies such as the Chartered Institute of Linguists and the Association for Language Learning when they wish to select a provider for foreign language training.
Lord Harrison
My Lords, the House would welcome further information about what sounds a very valuable addition. However, given the recent parlous decline in British exports—attributable in part, according to Professor Steven Hagen of the University of Wales, to the failure of British firms to acquire language skills—and given that only three out of 100 British firms have any kind of language management strategy, will the noble Baroness start to set tongues wagging in the small business community in favour of learning languages? Will she ensure that the languages unearthed and mobilised during the forthcoming Olympics, especially those found among our ethnic representation, can be used to help small businesses, so that British exporters, unlike the British Government, can ensure that they are not speechless in the face of a widening Europe and a widening world?
Baroness Wilcox
Right—information on the Export Communications Review, along with all other UKTI services, will be available at Olympic business-related events. Details of the help that will be available have already gone out. We certainly wish to use the opportunity to make sure that people from our small and medium-sized businesses meet as many people from foreign businesses as possible. We are very fortunate in this country in having a multicultural society—I think that in London alone more than 300 languages are spoken. Very often it is just a case of making sure that small and medium-sized businesses realise that there are agencies that can provide their employees with the languages that they need. It is not just a matter of a requirement to learn a language; understanding the culture of the country that you are going to is also important. The French that you speak needs to be not just the French that you learnt at school but the language of the culture. UK Trade and Investment goes into small businesses with a subsidised programme to help them understand how to take their products forward by making sure that they are aware of the culture of the country they are visiting.
Baroness Coussins
My Lords, does the Minister recognise the success of language NVQs in preparing students for using languages at work, especially in the SME sector? Will she undertake to meet her DfE colleagues to tell them how much UK businesses value these language NVQs and ask that these qualifications continue to count towards a school’s performance points for the EBacc after 2013?
Baroness Wilcox
I will certainly take up that suggestion from the noble Baroness.
Lord Geddes
My Lords, I declare an interest as life president of Trinity College London, the worldwide examination body in English for speakers of other languages. Does my noble friend agree about the vital importance of foreign languages for British speakers and that it is equally important for UK Ltd that the reverse applies—that those who are not conversant with English learn to speak it better?
Baroness Wilcox
I am very impressed to hear that my noble friend is the head of such an august organisation and am only too delighted to know that he is there. I will support him in everything that he does in taking us forward, making sure that we get the growth that we need and that we can all communicate widely.
Lord Mitchell
My Lords, I shall be 70 on my next birthday and this is my first time at the Dispatch Box—all of which goes to show that in your Lordships’ House anything is possible. SMEs, very surprisingly, have been doing well recently in the area of exports. In particular, 27% of total exports to the European Union now come from this sector. However, I believe that we can do very much better. What plans do the Government have to encourage even more small companies to export?
Baroness Wilcox
If anyone would like to look up UKTI on the web to find out what is available to everyone, they will see that it is doing an absolutely marvellous job. When I came to answer this Question, I was delighted to see just how much it was doing, including being able to provide bespoke services. Small and medium-sized businesses often need to gain an all-round understanding of how to behave when they get to another country, and that is why this service is available to them. It is subsidised, and businesses can also have a review themselves. I welcome the noble Lord to the Dispatch Box.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
I think that we should hear from my noble friend Lord Cotter.
Lord Cotter
I congratulate the Minister very much on her comprehensive Answer to the Question. The points that she made and the answers she gave were very good indeed. It is important that there should be publicity about what is available, but often there is not enough. It is also important that schools, as well as businesses, provide education in languages, and that further education colleges provide special lessons in business-orientated languages, particularly Chinese and Spanish.
Baroness Wilcox
Of course I agree with my noble friend. He will know that last week we announced our proposals for the primary national curriculum. The teaching of a foreign language will be compulsory throughout key stage 2, and that will include Latin and Greek.
Taxation: Avoidance
(11 years, 10 months ago)
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Lord Clinton-Davis
To ask Her Majesty’s Government what action they are taking regarding the use of devices to avoid or minimise the payment of taxation.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, the Government act as soon as they become aware of schemes to avoid tax and challenge those by every means available. In the past year, seven schemes have been closed down with immediate effect, and since 2010 the Government have litigated some 30 avoidance cases. The Government are now consulting on a general anti-abuse rule and extending the successful Disclosure of Tax Avoidance Schemes regime to ensure that even more schemes are disclosed.
Lord Clinton-Davis
I thank the Minister for that reply. Is it not the case that thousands of extremely rich people are engaged in tax avoidance schemes and that the country is suffering a heavy loss as a result—some £25 billion? Is there not a case for setting up an all-party committee to look into this atrocious situation, which continues? What the Minister said deals with only part of the problem, not the whole problem.
Lord Sassoon
My Lords, I certainly agree with the noble Lord, Lord Clinton-Davis, about the seriousness of the problem. That is why the Government—and HMRC in particular—are tackling it with all the available weapons. I stress that the Disclosure of Tax Avoidance Schemes regime, which was introduced by the previous Government in 2004, has been a successful part of that. Of the total tax gap, that is estimated to be around £35 billion, £5 billion is estimated to be as a result of avoidance. It is important to be clear on the figures.
In relation to schemes of wealthy individuals, the K2 and Icebreaker schemes, which have had much recent publicity, are under investigation by HMRC. HMRC and, of course, the Government want to make sure that everyone, wealthy or not, pays a fair amount of tax. HMRC has rolled out some very specific initiatives within its High Net Worth Unit in order tackle even more vigorously the particular challenges around individuals of high net worth.
Lord Forsyth of Drumlean
Does my noble friend agree that the best way to avoid people coming up with complex tax avoidance schemes is to have simpler, lower taxes—which will maximise revenue and obviate the need for people to use their energies in this way—and concentrate on creating wealth and growth in our economy?
Lord Sassoon
As a general proposition, I very much share the view of my noble friend.
Lord Sassoon
My Lords, I am always prepared to consider every suggestion that comes up in your Lordships’ House. However, I think that one is getting a little radical and I cannot promise him much early progress on it.
Lord Dykes
Will my noble friend bear in mind that, as tax avoidance and evasion from the UK is at least 15 times greater than social security abuse and fraud, that the Government should therefore be 15 times more energetic in dealing with tax avoidance and evasion than they are with social security?
Lord Sassoon
My Lords, I do think that we are comparing apples and pears. We will be vigorous on both fronts. In relation to tax avoidance, HMRC has reassigned some £900 million of its expenditure within the spending round to tackle this issue. We should also remember that while the tax gap in the UK is £35 billion—about 8% of liabilities—it compares well on an international comparison. For example, the equivalent in the US is 14% and in Sweden 10%. So, yes, there are big numbers to be played for, but good progress is being made.
Lord Davies of Oldham
The House may have been encouraged by the Minister’s initial constructive response but past practice does not seem to quite measure up to his optimism. He commended the legislation passed by the Labour Government in 2004 under which accountants have to submit to Her Majesty’s Revenue and Customs any scheme which leads to tax avoidance. Was this implemented in the famous case of the comedian Jimmy Carr? Did his accountant inform HMRC? If so, what was done about it? If he did not, when are the Government going to act?
Lord Sassoon
My Lords, individual taxpayer confidentiality is very important. It is the prime reason why we are certainly not going to see individual tax returns published and, therefore, I am not going to comment on an individual case. That particular case has had a great deal of airing in the past couple of weeks.
The Earl of Listowel
Is the Minister aware of the job that charities do for their donors by picking out case histories of how their donations can make a difference to particular families and children? Might not Her Majesty’s Customs and Revenue do more to inform taxpayers about the value for money that they get in paying for services? It could give a specific example of, say, a bright graduate, recruited into the teaching profession, making a difference to particular children in an inner city area? The graduate could then say, “I am so grateful for the money that trained me and for the difference that I have been able to make to these children”. There are many concrete examples of the difference that taxpayers’ money makes to individuals, children and families.
Lord Sassoon
I agree with the noble Earl that the voluntary and charitable sectors make an enormous contribution. Often they deliver more cost-effective and better quality services than public bodies and the tax regime around charities supports that. That is precisely why we are so keen to drive forward philanthropy and a tax system to support it. I share the noble Earl’s sentiments.
Electoral Registration and Administration Bill
Business of the House
(11 years, 10 months ago)
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Lord Strathclyde
That leave be given to advance the Motion to approve the Draft Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc.) Order 2012 from Wednesday 4 July to Monday 2 July.
Draft Communications Data Bill
The Chairman of Committees
That the Commons message of 21 June be considered and that a Committee of six Lords be appointed to join with the Committee appointed by the Commons to consider and report on the draft Communications Data Bill presented to both Houses on 14 June (Cm 8359) and that the Committee should report on the draft Bill by 30 November 2012;
That, as proposed by the Committee of Selection, the following members be appointed to the Committee:
L Armstrong of Ilminster, L Blencathra, B Cohen of Pimlico, L Faulks, L Jones, L Strasburger;
That the Committee have power to agree with the Committee appointed by the Commons in the appointment of a Chairman;
That the Committee have power to send for persons, papers and records;
That the Committee have power to appoint specialist advisers;
That the Committee have leave to report from time to time;
That the Committee have power to adjourn from place to place within the United Kingdom;
That the reports of the Committee from time to time shall be printed, regardless of any adjournment of the House; and
That the evidence taken by the Committee shall, if the Committee so wishes, be published.
English Cathedrals
(11 years, 10 months ago)
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Lord Cormack
That this House takes note of the future of English cathedrals.
Lord Cormack
My Lords, I beg to move that the House notes the future of English cathedrals. In doing so, I cast no aspersions on cathedrals in Wales, Scotland or Northern Ireland: I wish to concentrate today on the cathedrals of the established Church of England.
I am delighted to have this opportunity and I am most grateful to those colleagues in all parts of your Lordships’ House who have put their names down to speak. I am particularly glad that I will be followed in the debate by the noble Baroness, Lady Andrews, the distinguished chairman of English Heritage, who has made such a magnificent contribution to causes about which we both care deeply. I am also very glad that the right reverend Prelate the Bishop of Worcester has put his name down to make his maiden speech. I am sure the House looks forward to what he has to say.
After I leave the Chamber I shall be going to King’s Cross to catch the train to Newark. It will stop at Peterborough and I will see the cathedral there. If I had the time, I could alight and go and admire the tomb of Catherine of Aragon. I could even get a train to Ely to see that glorious lantern tower rising above the fenland. In fact, I shall get off at Newark and go to my home in Lincoln.
I hope that the House will forgive me if I beg leave to agree with Pugin, Ruskin and Alec Clifton-Taylor that Lincoln is the fairest cathedral of them all. Of course, if I stayed on the train, I could go to York, that most magnificent and greatest in size of all our Gothic cathedrals, and admire the wonderful stained glass windows. I could continue to Durham, where the noblest Romanesque building in this country dominates the landscape—
“Half church of God, half castle ‘gainst the Scot”,
as Sir Walter Scott said.
However, I will not be able to do any of those things today.
I want to reflect briefly on the importance of our English cathedrals. We could all agree that one comes closest to the soul and story of a nation in its great buildings. That is nowhere truer than in our wonderful English cathedrals, especially the pre-Reformation cathedrals and those ancient foundations that were designated cathedrals either in the 16th century or after. However, we are talking not just of noble historic buildings of often unsurpassable beauty but of living, breathing, vibrant buildings, and it is important that we recognise that. They are centres of worship; that is their primary purpose, and those of us who are Christians, particularly those of us who are members of the Anglican Church, will always regard that as their primary purpose.
However, they are centres not just of worship but of music, craftsmanship and of their individual communities. I seek in this debate to underline the continuing contribution of the 42 diocesan cathedrals of England—plus, of course, the two royal peculiars of Westminster Abbey and St George’s, Windsor, which are always taken together—to rejoice at what they are and what they represent, and to stress how crucial it is that their future should be secure. We rightly talk and behave as if they belong to us all, and as cathedrals of the established church they do. Each week around 40,000 people worship in our cathedrals; last Christmas season something like a million people worshipped in the cathedrals of this land.
However, it is not just for their services that we regard them as we do. Last week I had the honour of convening a meeting between parliamentarians from both Houses and deans of English cathedrals. A number of your Lordships who are in the Chamber today were present at that meeting. It was a very interesting occasion because we were reminded by those who have the daily charge of our cathedrals what a key role they play in the social, cultural, civic and national life of England. We heard about Bradford Cathedral—not perhaps the most distinguished architecturally, although it is a very fine building, but a church where people of all communities, and faith communities in particular, are able to come together for mutual fellowship and sustenance.
We heard about Wells Cathedral—Wells, that wonderful small city, surrounded by marvellous countryside that nevertheless has many problems within it. We heard from the dean how Wells ministers to that rural community. We were reminded about how often cathedrals are the centres for concerts, exhibitions and graduation ceremonies. Only three weeks ago I went to Southwell Cathedral. There was a graduation ceremony taking place when I arrived. I went to see the exhibition to mark the 350th anniversary of the Book of Common Prayer and the Diamond Jubilee of Her Majesty the Queen. I talked to the dean and became conscious of how that cathedral, in a very small city, was the focal point for miles around. We were reminded at the meeting last week of how, at moments of sadness and rejoicing, a cathedral was a place where people came together. One thought of Soham and Ely and, on a much happier note, every cathedral in England this year has had a special service to mark the Diamond Jubilee of Her Majesty the Queen.
However, when all too easily we take for granted the beauty and dignity of our cathedrals and their surroundings, we also tend to take for granted the glory of the music and the excellence of the craftsmanship. Even the fact that cathedrals continuously patronise the arts in the best possible way tends to be taken for granted, too. I was delighted when a couple of years ago English Heritage published a document that concentrated on the new things which have been built in and around our cathedrals, highlighting in particular the sculpture in Lincoln and the magnificent tower at Bury St Edmunds, which people now talk of as if it had been there for centuries. When we take these things for granted, we ought to remind ourselves that they do not just happen; they all come at a price.
I am glad that we do not have the French system where all the fabric of religious buildings is vested in the state. That would be a great pity, and I know of no dean and do not yet know of any bishop—perhaps I will be disabused today—who takes a different view. The pride and sense of local patriotism that leads to fundraising through a sense of belonging to a community are absolutely irreplaceable and beyond price. But we have to recognise that there is no automatic direct funding from the state to support our cathedrals, nor is there such funding from the Church Commissioners. They provide for the stipend of the dean and two canons, but that is about all. To a large degree the cathedrals are still self-financing. As the Dean of Lincoln Cathedral, Philip Buckler, said to me earlier this week, cathedrals value their independence but not their isolation.
Things are better than they were. When I entered another place in 1970, there were no state grants at all. I served on the Historic Buildings Council and we were expressly forbidden to give grants to places of worship. I introduced a Bill to provide state aid for parish churches. The campaign was successful and it was followed by one for cathedrals. We are all glad and grateful for that. We are particularly grateful to English Heritage for what it has done, and I shall say a word or two more about that in a moment. But although things are better than they were, there are still real problems. This year we had the VAT bombshell in the Budget. The Chancellor has responded and we are grateful.
Listed places of worship will continue to benefit, but let us remember that each cathedral is at the centre of a series of buildings. Almost every cathedral has a close, just as we have our minster yard in Lincoln. The cathedral is responsible for the upkeep and maintenance of often incredibly important medieval and later buildings. The VAT exemption does not touch anything other than the actual place of worship. It is also limited to the year 2015, so there is no certainty of continuity. That is a pity and a great worry to those who are concerned with these issues. Money from the Heritage Lottery Fund, for which again we are all grateful, can go to interpretive schemes and to new extensions but not to the maintenance of the actual fabric of the cathedral.
All this must be seen in a context where, as we speak, Canterbury Cathedral, the mother church of the Church of England, will need £50 million over the next five years. Lichfield, which used to be my diocesan cathedral, has had to raise and spend £5 million over the past five years and will need another £7 million in the five years ahead. At Lincoln we will need £16 million over the next 10 years. All this is in addition to the £50,000 a week that it costs to keep the cathedral open. It is a similar figure in Winchester and many other places.
English Heritage has been put in a very difficult position. It has had its own grant reduced. That has meant that the carefully worked out strategy between it and the cathedrals has been to a degree undermined. That is partly because of diversion of resources to the Olympic Games. We have to face up to that. The Heritage Lottery Fund has also had resources that might have been devoted to some of the causes that are dear to us in the Chamber today diverted to the Olympic project. I wish the Olympics every success but there has been a distortion of priorities in recent years that needs to be put right.
We must recognise in all of this the positive contribution that cathedrals make to the local and national economy, music, craftsmanship and employment. Although it is wrong to define the importance of our cathedrals in terms of tourism, we must remember that those who bring so much much-needed money and, indirectly, employment to our country are attracted by our great buildings. They are attracted particularly to the great country houses and cathedrals of this country.
I make a plea to the Minister that she should discuss this matter with the Chancellor, the Culture Secretary and others. I would like to see a more generous interpretation of the VAT exemptions. That is crucially important. In Lichfield, the dean has pointed out to me that one project alone is likely to cost another £500,000 as a result of recently announced changes. That money is not easily found.
I pitch my request at a very modest level. I would like £50 million provided as an endowment for the cathedrals of England over the next five years, with the money given to and channelled through English Heritage, which has the expertise to liaise and to distribute it. That would be a particularly appropriate gesture in the year of the Diamond Jubilee, bearing in mind that the Queen is after all Supreme Governor of the Church of England. I do not think that many people in the land who appreciate things of enduring beauty and wealth, whatever their religious persuasion, would begrudge that very modest sum. I would like to feel that we could have a promise that that will be discussed. Of course, my noble friend cannot make an exact promise at the Dispatch Box.
There are two enduring images of this country perhaps above all others: Constable’s painting of Salisbury with the spire above the meadows and, from a more recent period, the picture of St Paul’s in the Blitz, rising above the smoke. No nation can afford to call itself civilised if it allows the spire of Salisbury or the dome of St Paul’s to be put at risk.
Baroness Andrews
My Lords, it is a great privilege to follow the noble Lord and to congratulate him on securing the debate. He has been an amazingly effective champion for aspects of our heritage. I very much welcome what he said today and am grateful for the generous remarks he made both about English Heritage and my stewardship of it. I very much endorse what he asked the Minister for; it is not easy for us to ask in our own name for additional funding. To make such a case is commendable because English Heritage is known to have world-class expertise and judgment in these affairs. If the House will allow me, I will talk a little about our work in respect of cathedrals. Of course, I declare my interest as chair.
It is significant that the idea of the cathedral has a much wider currency than the notion of a building or even of one faith. When we say that something is cathedral-like we mean that it is of extraordinary scale and splendour. It makes us wonder in awe at how it was constructed and by whom. When we see the traces of those early and brilliant builders, designers and engineers, we understand that both faith and genius transcend time. These places are indeed held in trust for ever and for everyone, so they obviously occupy the pinnacle of our work at English Heritage in many different ways. It is a privilege for me, as chair of English Heritage, to have the opportunity to visit so many, and to do so in the company of the people who love, cherish and know more about them: the deans, the conservation architects, the craftspeople, and indeed people from English Heritage itself, who are very fine historians. When I visit them I also get a sense of the challenges that they face, and the ambitions that they hold for the future. In his speech, the noble Lord, Lord Cormack, displayed a wonderful balance between celebration and concern about the sorts of issues that cathedrals now face, and the choices before them; choices that include opening the doors ever wider to more diverse, more challenged communities, and the responsibility for those communities that cathedrals have held over the centuries.
In my excursions I go to some very high places, to see for myself the work that is being done on the exteriors of cathedrals. The other day I was clinging on to the Norman ironwork on the great Norman windows of Canterbury Cathedral. When I managed to get down from the scaffolding I went down to the workshops to see how the glass is being conserved, and saw the extraordinary delicacy of the work being done. I also recently crawled over the roof over the Chapter House of Westminster Abbey and saw how the Victorian engineers had tried very hard to improve on what their medieval predecessors had done, and how they had found that the engineering genius of the medieval craftsmen was in some ways so much superior to their own. It is wonderful that we maintain those traditions of celebrating in stone the work of the craftsman. On the Chapter House finial you will now find the faces of the modern stonemasons who did the work—including a Sikh, who led the team—looking very sternly up Whitehall.
The work of restoration and repair—conservation of brick, glass, wood, paintings, silver and so much else—is endless and expensive. The good news is that our cathedrals, due to the loving care and craftsmanship of which the noble Lord, Lord Cormack, has spoken, have never been in better shape. That makes the scale of the challenge for the future rather immense. The story spans two decades, from the first fabric survey that English Heritage did in 1991, which revealed that £164 million needed to be spent on repair and rescue over the next decade, to our updating survey in 2009, which was repeated in partnership with the Association of English Cathedrals and the Catholic Church’s Patrimony Committee. In 1991, when we did the work, it was perfectly clear that many cathedrals, as measured against our buildings at risk register, were classified as being at risk of loss of their historic fabric—in short, they were buildings at risk. In 2009, the survey revealed that the overall state of repair had improved dramatically.
How had this been done? Well, of course it has taken a great deal of money, and I will give your Lordships some figures. However, it has also required a great deal of partnership and focus to address what needed doing after the alarming diagnosis in 1991. Funding was then made available from the Government, with which English Heritage constructed a dedicated grant scheme, and that ran until the last offers were made in 2009-10. Grants worth £48.6 million were made available to 518 cathedrals. Indeed, five cathedrals, which presented the greatest challenges—Salisbury, Lincoln, Ely, Worcester and Liverpool—received almost £20 million. The partners in this massive effort were the Wolfson Foundation, which helped us toward the end of the scheme, and of course, the Heritage Lottery Fund, which gave £45 million to over 100 cathedrals.
We are, therefore, genuinely all in this together. I pay tribute to the Cathedrals and Church Buildings Division of the Church of England—and in particular to Janet Gough—for the partnerships that it has brokered with partners such as the Wolfson Fund, the Pilgrim Trust and others in order to finance the Cathedral Fabric Repair Fund.
We have done different things. We at English Heritage address the urgent repairs: the high level stonework, the roofing and rainwater goods. It is not glamorous work, but my word, it is very important, because without that, nothing else can be achieved. Many of the Heritage Lottery Fund projects have supported not only conservation, but wider public access, and the enjoyment and understanding of our cathedrals. For example, £10.5 million went to the York Minster Revealed project, which is not only securing the great east window, but is showing every visitor who is interested how glass is conserved, £2 million went to restore Birmingham’s cathedral graveyard to its 18th century design and Durham cathedral has received a first stage pass to celebrate the Venerable Bede and the arrival of the Lindisfarne Gospels.
Where are we now? The 2009 survey revealed that there had been dramatic improvements, but that another £110 million was necessary over the new decade for ongoing care and maintenance. For example, £63 million was necessary for just five cathedrals: Canterbury, Chichester, Lincoln, Salisbury and York. English Heritage continues to be engaged with Lincoln because of the scale of the challenge. We have recently given £750,000. However, that grant has finished and we have turned our focus to areas of equal concern to the Anglican church and other faiths—parish churches and churches in the community—and the enormous challenge there, and I am pleased to say that Lincoln is now the only cathedral on the risk register.
So much has depended upon the skill and craftsmanship of the people at work. I have the pleasure of seeing it regularly. For example, in Hereford, in a lean-to shed, three apprentices—apprentices are often female these days, and often young—working just as the medieval stone masons did, carve and do the facing work in front of all the visitors who cross the precinct. It is indeed a medieval scene. These skills are being inspired and nurtured by our cathedrals, and I am delighted to say that there are increasing numbers of schemes for training and recognising these crafts because historic building skills do not belong in the past. They have as much potential for growth and are as much of an assistance to our economy and to the creation of jobs as many of our other building crafts. That is where cathedrals fit in to the national economic challenge. They are places of prayer and watchfulness, but they are also places capable of generating huge prosperity. In 2004, it was estimated that their economic impact was about £150 million.
Facing these future challenges is the way in which English Heritage wants to engage with cathedrals. Our immediate responsibility is for the protection of the fabric, hence our concern about metal theft and the guidance we have produced for cathedrals and places of worship on how to tackle it, our concern about the impact of VAT, which the noble Lord, Lord Cormack, described very concisely and well, and our continuing concern with VAT. This is not a problem that is going to go away, particularly in relation to charities that are looking after listed buildings with very little support and scope and even to owners of historic homes.
We also work with cathedrals to help them realise their highest ambitions for the future. For example, our work Creativity and Care celebrated Michael Hopkin’s magnificent extension to Norwich Cathedral, but it also points out that the mundane can be made beautiful: for example, the new fire doors at Winchester Cathedral. The challenge to every cathedral today is to remake itself as the heart and spirit of the community and to provide the cafes, lavatories, bookshops and educational spaces that enable people to feel that they belong there and understand the place and to become what Frank Field called,
“wise and willing midwives to future glories”.
We celebrated that in Creativity and Care. I remember the magnificent Tom Denny windows in Hereford Cathedral and the magnificent new font in Salisbury Cathedral. Our funding may not be what it was, but our spirit is as buoyant and passionate as ever about pursuing the partnership that cathedrals want from English Heritage, and we are happy and proud to provide it.
Baroness Garden of Frognal
My Lords, the timing is tight on speeches in this debate, so I would be very grateful if noble Lords will restrict their comments to 10 minutes.
Lord Tyler
My Lords, I congratulate my noble friend very sincerely on obtaining this debate, and I am delighted and humbled to take part. By comparison with him, I am a very ordinary Anglican. I am particularly grateful to be able to follow the noble Baroness, Lady Andrews, because she has led the English Heritage programme, not just in this field, of course, but in other fields, with great success and distinction. There is wide appreciation, which I share, of the fact that English cathedrals have an historical and continuing role not only as centres for active Christianity in our communities but as great historic buildings of wide architectural and cultural significance.
If I have any right to speak in this debate, it is as a failed architect. I had to draw cathedrals as a student and then went on to be a senior member of the RIBA staff. More importantly, as an ordinary man in the pew, I have had the most extraordinary experiences in various cathedrals. I witnessed the ordination of my two brothers in Guildford and Wells Cathedrals—an interesting contrast there. I remember taking my mother, who lost two of her much beloved elder brothers in the First World War, to a performance of the “War Requiem” in Exeter Cathedral, which was both a great cultural and religious occasion and very moving for both of us. As a humble Anglican, I witnessed a great movement forward when seven women priests were ordained in Truro Cathedral.
My only family connection with your Lordships’ House is my ancestor Bishop Jonathan Trelawny, who was one of the seven bishops who were arraigned for seditious libel and acquitted in Westminster Hall in 1688 and then triggered the Glorious Revolution. He was described by James II as the most saucy of them all. I have suggested to my family that that might be an epitaph when I go. His picture is in the Peers’ Guest Room in the House. He is the one with the Beatles haircut at the far end.
Previously, during the Reformation—I am also a failed historian—Thomas Cromwell persuaded Henry VIII that he could legitimise the nationalisation of the church, its cathedrals and its wealth, removing its temporal power and so making it concentrate on the spiritual needs of the nation. It may be thought from the theme of this debate that there are those who think it is now payback time. I do not believe that that is true, but nevertheless think that it is right for Parliament to take a real responsibility for the future of this great heritage.
There are some important dilemmas for both the church and Parliament. Our established church is the established church only for England, as is apparent from the Motion of the noble Lord, Lord Cormack. As a good unionist, I think that those who represent other parts of the United Kingdom may have a legitimate reason for expressing some concern about the treatment of the heritage of the different denominations and the different churches. As my noble friend said earlier, the cathedrals belong to us all, but there may be some queries as to who “all” is in that respect.
That is not, however, the big dilemma for either the church or the Government, because the cathedrals are an important part of our heritage. Yet I as an Anglican and the church itself are proud of the independence of the church from the state. We believe, I think rightly, that faith should be an important part of our national life but should not be nationalised by the lay state, the whole body politic of which has to be strictly faith-neutral. Yet the church is rightly looking for recognition of its role in conserving priceless parts of our cultural and physical heritage, as both my noble friend and the noble Baroness, Lady Andrews, have been saying.
My noble friend referred to the French situation. I do not think that any of us want to emulate that. That is the wrong way to go. The noble Lord’s French history is better than mine, as I know to my cost, but I think that the French situation goes back to Napoleon, who wanted to separate dramatically the state from the church. There is no established church in France, yet there the state recognises its responsibility to its national heritage and therefore its major contribution to the maintenance and conservation of all the French cathedrals.
As has already been said, there is the important issue of the Government’s and therefore Parliament’s treatment of financial support for conservation. The noble Baroness referred, as did my noble friend, to the VAT situation. I will spend only a couple of minutes on that to avoid repetition and to keep within my time limit. The VAT treatment of historic buildings, not exclusively cathedrals, is a sorry saga that goes back many years. In the excellent briefing from the Lords Library on the future of English cathedrals, there are no less than 16 pages of updates on the treatment of VAT on historic buildings, particularly churches and cathedrals. The end of the brief from the House of Commons Library says of the Listed Places of Worship Grant Scheme, which is how the Government have sought to square the circle of reducing the exemptions and then having to pay by other means:
“Further details on how the extended scheme will operate will be published shortly”.
The confusion and lack of clarity continue to this day, even weeks after the 2012 Budget, when it was thought that this situation would be clarified and improved.
From my discussions with members of the chapters of various cathedrals I know that they are looking principally for clarity at the moment. On this issue and others, we are often told that we are all in it together. Yes, in a period of austerity it is difficult to find new resources, but the very simplicity or otherwise of such schemes as the Listed Places of Worship Grant Scheme is having a very disturbing effect on the chapters and on other organisations responsible for historic buildings, not least some of the great parish churches, which are having an equally difficult time and with which I have also been in contact.
I hope that this will not be thought to be so politically correct as to be incorrect in your Lordships’ House, but I welcome the fact that we now see some women being promoted into the responsible positions in the chapters of our cathedrals. They bring new life, approaches and, perhaps, intuition to managing the very difficult situation that many of the chapters face.
The Church of England and those responsible for many other historic and religious buildings deserve from Parliament at least an improvement in the clarity and speed with which decisions are taken by the Government. In that respect at least, I hope my noble friend’s debate today will draw the attention of the Government and my noble friend on the Front Bench to the anxiety that many of us in many parts of the United Kingdom feel. We deserve to do better by those who are responsible for such an important part of our cultural, architectural and religious heritage.
The Lord Bishop of Birmingham
My Lords, I am grateful to the noble Lord, Lord Cormack, for the opportunity to celebrate the good news of our English cathedrals. He will understand that if you want to find a Birmingham cathedral, you are more likely to come to it by the future HS2 rather than by a leisurely trip up the east coast. What you will find there is a jewel by Thomas Archer, who built St Philip’s parish church on the highest point of the burgeoning new town that would fuel the industrial expansion of Britain. It was built in 1715. That building is now in the heart of the commercial and professional centre of the largest UK city outside London. It is an oasis of prayer to which people, whether visitors or citizens, come day by day to enjoy a beautiful space in which our new dean, Catherine Ogle, says you can do only one thing, and have that enhanced by the magnificent Burne-Jones stained glass windows.
At the same time, as we will probably hear again today, the choral tradition in Birmingham is of a very high standard, to the extent that Hamish Pringle recently commissioned a new choral work, based—the noble Lord, Lord Cormack, will be pleased to know—on the King James version of John, chapter 1, verses 1 to 14, which is available for parish churches as well as high days in the cathedral. The work of a new young composer, Alexander Campkin, is thus in the heart of one of our great commercial cities.
Of course, as your Lordships may know, the number of young people applying to join cathedral choirs has increased by 6.8% over the past 12 months. That is the obvious but, across England, a living cathedral is a place of civic, cultural and inter-faith engagement. We find that no less so in Birmingham than across the country. It is also a springboard for, if I may indulge this phrase, growing confident Christians in our urban and rural areas. You will find programmes not just about engagement with the regional bankers and Chatham House seminars, following the difficulties in the debate about capitalism last year, but programmes that encourage practising Christians at work to examine what it means to live well in our local community.
That is just one example of what is happening all over the country in our 42 cathedrals. We are seeing, as your Lordships will again know, a steady increase in regular congregational attendance of some 3% a year. That has been going on over the past 10 years. Furthermore, special events and regular public and civic events are even more popular than they have been for years. In 2011, for example, over 3,000 special services attracted 1 million people, and 1.84 million attended public or civic services. Our cathedrals have approximately 12 million visitors a year. They have 15,000 volunteers, people who give up their time freely to enable these places, about which we have heard that the heritage is so important, to be places of living prayer, worship and community engagement. Over 300,000 children attend our cathedrals for educational purposes during their curriculum learning in term-time.
As you look around the country—I hope that we will hear more about this from others in a moment—you will find particular things happening as the cycle of events goes on. We have heard that Coventry Cathedral has just celebrated its 50th anniversary. Of course, it has a distinctive contribution, as so many cathedrals do. In this case, it is the Community of the Cross of Nails, a world-wide gift of reconciliation in a troubled world. In Winchester, the Winchester Bible is now redisplayed. In Truro, the cathedral has been engaged in a county-wide renewal through Inspire Cornwall.
We have heard from several speakers already that this comes with a huge implication for resources. When noble Lords reflect on the age, scale and complexity of the buildings, it will not surprise them that it is estimated that some £100 million over 10 years needs to be spent across the country in ordinary cyclical repairs. I am not talking about the marvellous things that are inspired by English Heritage and other grant-making bodies, but £100 million over 10 years just to keep thing in place. Indeed, since 1991, at least £250 million of repair works alone has been carried out in English cathedrals. Of course, you can follow all this up in the English Heritage Fabric Needs survey. We have been reminded that there is no core state funding for English cathedrals. I am not going to go down that route myself but, while new work and exciting developments are funded generously, routine repairs are much more difficult. There is still a gap between the cathedral’s division grant and the overall cost that has to be paid every year.
Cathedrals are enormous, historic, heritage, prayerful, worshipful places of sanctuary for people who are shy of religion. They are places where people can come and rediscover wonder and awe, both through art and music, and, simply, the power of prayer. Their role in the life of our nation’s cities is immeasurable: civic, cultural and spiritual. It will be a huge boost to the confidence and morale of all these people who are involved, hundreds of thousands of them, in our cathedrals to hear Her Majesty’s Government give a ringing endorsement to our cathedrals in every aspect of public policy.
Baroness Byford
My Lords, I must begin by declaring my interest as I have recently been appointed chairman of Leicester Cathedral council. I congratulate my noble friend Lord Cormack on successfully achieving this balloted debate. He has spoken clearly and passionately about the important role of English cathedrals in today’s society.
Lincoln Cathedral, built in 1092, stands high on the hill overlooking the city of Lincoln and is, indeed, an impressive building. Its dean claims that it is arguably the finest gothic building in Europe. It attracts visitors from around the world. Some come to see its historic past and enjoy its architecture while others come to find a place of peace and quiet to reflect and pray.
Leicester Cathedral cannot begin to compete as it was only back in 1927 that the parish church of St Martin’s became our cathedral. What we can do is offer a warm welcome to all our visitors, whether they are people of faith or none. Over the years, Leicester Cathedral has become recognised as the place that brings together people from all faiths, a centre that attracts civic services, cultural events and, indeed, only last Saturday held our Armed Forces Day service. I hope the cathedral is seen as being there for everyone in the city and county and not just for Christian worshippers. I believe that we are there to offer a variety of daily services, but also to expand our important mission work and support Bishop Tim in his work throughout the diocese.
You can imagine our great joy when, shortly before Christmas, we learnt that Her Majesty wished to open her jubilee celebrations with a visit to Leicester early in March. Our city is truly multicultural. We have many faith groups within the community and we wished to organise a service of thanksgiving and celebration that recognised that diversity. The day for Her Majesty began at De Montfort University, from there to the cathedral, followed by lunch at St Martin’s House and, finally, a walk through the main streets of the city. It was truly a day to be long remembered and at the heart of the day was the service at Leicester Cathedral. Here, the second poorest cathedral was involved in a remarkable day.
I believe that all cathedrals, both large and small, have a crucial place in today’s society. What we should be is a place where tourists, believers and all those seeking quiet reflection feel equally at home. The cathedral is there for all, open to all, an inspiration to all. Leicester Cathedral is open daily and holds services throughout the day and, of course, is busy at weekends too. However, it is more than simply a place of worship. If one looks at the many projects that the cathedral organises, one is amazed that so few can achieve so much.
We are a centre for Christian education and a base for outreach within the city and county, supporting a wide range of community projects. Christ’s calling challenges us to go out in his name and we do just that. In Leicester, we support particular projects working among asylum seekers and refugees. We run a street pastor scheme at the weekends. The Leicester Cathedral community has developed links with the local ecumenical church charity, The Bridge: From Homelessness to Hope, which recognises significant need in the city where the number of homeless has increased over the past few months.
These are but a few of the projects undertaken by a small staff of only 11.98 full-time equivalents, supported by some 138 volunteers. Our religious education officer continues work with primary schools, through the faith journey, which links the work of the cathedral with our Sikh, Jain and Buddhist near neighbours, enabling members of those communities to talk about their own faith journey and to share in our experiences. The work of our choristers’ outreach programme has enabled 14 schools to host weekly workshops, and more than 500 children came to the cathedral for one of these events.
None of this important work could be achieved without the enthusiasm and dedication of both stipendiary and lay members. I would like to record my thanks to our dean, Vivienne Faull, and her team for their hard work, faith and dedication. The cathedral is a real focus in the city and the county, so it is not surprising that it has been the chosen venue for major services in the city and county, as the right reverend Prelate the Bishop of Birmingham said was true in Birmingham. The St Patrick’s Day service, our Armed Forces Day service, which was held last Saturday, the civic service to remember 9/11, 10 years on, and the High Sherif’s service for Leicestershire and Rutland are but a few that I have time to include.
For all this activity, the cathedral faces real challenges, many of them revolving around finance. Unlike some cities, the Leicester Cathedral parish community is small, and we have constantly to look at new ways of running what is a business. That may sound very commercial but, in truth, we have to look at what we do and how we finance our work. This short debate has given me the opportunity to talk about some of the work undertaken by a very small cathedral. It would be lovely to share the experience, and perhaps the difficulties, of Lincoln. But Leicester Cathedral has carved out for itself a real role, and will continue its work into the future.
Lord Howarth of Newport
I add with great pleasure my thanks to the noble Lord, Lord Cormack—I can hardly restrain myself from calling him my noble friend—for providing us with this opportunity to reflect on the contribution that cathedrals make to our national life and how it can be sustained. For me, personally, it is axiomatic that it is a very important question. I grew up in the cathedral city of Winchester and was educated at the cathedral choir school. I now live in the cathedral city of Norwich, where we have two great cathedrals. Not only do we have the magnificent historic Anglican cathedral, where the right reverend Prelate the Bishop of Wakefield was dean before his translation, but we are also blessed with the presence of the great Roman Catholic cathedral of St John the Baptist. Canon Duckett wrote to the 15th Duke of Norfolk to tell him of,
“our present great need of a new church”,
and ventured the exclamation and prayer:
“Oh, that God would inspire your grace to build one for us”.
And that is exactly what happened. George Gilbert Scott Jr was the architect—he was the son of George Gilbert Scott Sr, the architect of St Pancras station, which many people also believe to be a cathedral. The great church in Norwich was constructed between 1884 and 1910 in a consistently pure and beautiful early English gothic style, and was finally consecrated as a cathedral in 1976.
Between my beginning and my end, I had the privilege to represent another cathedral city, Newport in Monmouthshire. We were in the diocese of Monmouthshire, and St Woolos is the cathedral of that diocese.
For centuries, the cathedrals have shaped and expressed the spiritual, cultural and civic life of our country. They continue to do so and, as has been noted, they also contribute to our economy in attracting very large numbers of tourists. I am not a religious person, and it is hardly for me to talk of the spiritual value of our cathedrals, but non-believers also value the continuity, calm and beauty that the cathedrals afford us. The magnificence of the King James Bible and the cadences of Cranmer’s collects—on which the most reverend Prelate the Archbishop of Canterbury made some very illuminating remarks in a recent talk—are all part of the ceremony of our national life and our private solace. Of course, there are other vernacular versions, which no doubt rightly have their place.
Forty of the cathedrals of the Church of England are grade 1 listed buildings. Canterbury and Durham Cathedrals are world heritage sites. Our cathedrals are a fountainhead of music. After 60 years, I am still haunted by the extraordinarily beautiful anthem “Remember Now Thy Creator”—the words of Ecclesiastes set to music by Charles Steggall and sung by the choir in Winchester Cathedral—and uplifted when I remember the sounds of Stanford in B flat. When I was Minister for the Arts and Heritage, a brace of deans came to see me from Hereford and Southwark to share with me their anxieties about the cathedral choir schools and the problems of maintaining them. Sadly the Arts Council was deeply uninterested in their problem but the cathedrals found other ways and I understand that now, every week, more than 1,000 boys and 800 girls sing choral services. My successors did better than I did. I am pleased to say that the Government contributed £1 million a year, over four years, from 2008, towards the chorister outreach programme to enable choirmasters and choristers to visit schools. Some 60,000 children have had that benefit and around 1,600 teachers have been trained in how to teach choral singing. It would be good if, even in these straightened times, public funds could be found for a number of scholarships to enable children from poor families to attend cathedral choir schools.
The libraries and archives of our cathedrals are great repositories of the national memory. In Norwich, Camberwell College of Arts students have the opportunity of a placement in which they survey the bindings of the books in the great cathedral library. The noble Lord, Lord Cormack, drew attention to the importance of cathedrals in sustaining heritage and traditional skills in this country and I pay tribute to him personally for all that he has done to support the maintaining of these skills.
The right reverend Prelate the Bishop of Birmingham drew our attention to the impressive statistic that 300,000 children attended educational events at cathedrals in 2011. There is, I would think, no subject in the national curriculum that it is not possible to teach by using the resources that cathedrals provide. Of course many of our cathedrals—in fact I would imagine all of them—are engaged in outreach and Christian care work. I mention simply one example: the day centre for homeless and vulnerable people within the precincts of Sheffield Cathedral. We use the phrase “cathedral cities”. Cathedrals of this country engage and express the civic and the public realm. Again, the right reverend Prelate the Bishop of Birmingham told us that no fewer than an estimated £1.84 million people attended civic and public events in cathedrals in 2011. It is interesting that the Occupy movement decided that it would base its protests at four English cathedrals—not perhaps a very happy experience for all concerned; the jubilee celebrations more recently were a much better one.
In Britain, as the noble Lords, Lord Cormack and Lord Tyler, reminded us, it is not our practice to nationalise our sacred and historic buildings—at any rate, not since the time of Thomas Cromwell. The cathedrals are independent ecclesiastical corporations and take responsibility for themselves. However, there are also responsibilities that should properly fall upon the community and the state. The noble Baroness, Lady Andrews, told us of the 2009 cathedral fabric needs survey, which found that more than £100 million-worth of repairs needed to be planned for over the next 10 years. I understand that the buildings division of the Church of England is only able to contribute around £750,000 towards those needs, so there is a decanal cash flow problem of formidable proportions in a country that is not getting any richer.
The cathedrals, as we have all acknowledged, provide immense benefits to the secular realm. What is the reciprocal responsibility of the secular realm? The communities, of which Cathedrals are at the heart, rise to this responsibility. Congregations and wider circles of local people are very happy to contribute what they can. I pay a tribute to the noble Lord, Lord MacGregor of Pulham Market, who leads the fundraising campaign for Norwich Cathedral. He very much regrets that he cannot be here today because he is engaged in another public duty. The capacities of local communities to raise money to support their cathedrals of course vary. There is an inescapable responsibility on the state.
Over 19 years, English Heritage’s grants for cathedrals scheme contributed, I believe, £52 million towards this very important purpose, latterly supported, with its customary imagination and generosity, by the Wolfson Foundation. English Heritage has now been placed in a position in which it cannot afford to continue with a fund dedicated for this purpose. The Heritage Lottery Fund has also contributed £44.5 million to help the cathedrals since 1995. As our compatriots in these desolate times are consoling themselves by playing the lottery in some considerable numbers, we can anticipate that heritage lottery funding will be quite buoyant, so that is a source of hope.
However, it is not enough for the Government to rely upon the lottery to fulfil the public obligation. The Public Accounts Committee in 2009 urged that the Government should provide core funding for our cathedrals, on the analogy of the grant in aid that the Government provide for the national museums. If we think about it, it is strange to reflect that the National Railway Museum in York is subsidised by the Government to enable it to maintain free entry, whereas York Minster, without public support, has felt it necessary to charge. I admire the National Railway Museum in York but which of these institutions is of greater cultural importance to our country?
No doubt the Minister will say to me that we have a terrible problem with the deficit and that we have to cut it. But I would say that, when there is such a radical recasting of public expenditure, we need to think deeply about the proper responsibilities of the state. I hope that the state will accept that it has an inescapable responsibility to ensure that there is a decent public contribution to support our cathedrals. The public assume that there is. They would be shocked to know that there was not.
I do not want to overrun my time so I will not add to what other noble Lords have said about VAT. However, I hope that the Government will strenuously renew negotiations with the European Union to enable the anomaly between VAT on repairs and VAT on alterations to be removed. As the Government have graciously reconsidered some aspects of their recent Budget, I hope that they will also reconsider their very lamentable decision to increase VAT on alterations to 20 per cent because that will hurt cathedrals very badly, particularly when they come to develop educational or visitor facilities within their listed buildings. I look forward, therefore, to a fully considered statement of the Government’s view of their responsibilities towards our cathedrals when the Minister replies.
Lord Newby
For the benefit of the House, I remind your Lordships that this is a strictly time-limited debate and that when the clock says “10” that means that the time limit is up.
The Lord Bishop of Worcester
My Lords, I am delighted to have the opportunity to make a maiden speech today. I begin by expressing my heartfelt thanks to your Lordships for the welcome that I have received. I am very grateful to them, as I am to the staff of the House, for their help.
To make a maiden speech only three days after being introduced into the House might be thought of as being just a little precipitous. However, I like to think that it is providential that this Motion concerning cathedrals should appear today, since cathedrals are very close to my heart and they have been, literally, for most of my life. I spent most of my teenage years living almost within sight of Canterbury Cathedral and then three years living only yards from Durham Cathedral as an undergraduate. I was ordained in the cathedral of the Bishop of Chichester, whose place I take in this House, and who gave stalwart service to both his cathedral and the House. I ministered for seven very happy years as a canon residentiary at Ely and now live closer to my Cathedral in Worcester than anyone else in what I believe is the only private dwelling that has ever appeared on a bank note.
It could be argued that cathedrals loom larger, literally in every sense, in my life than in the lives of most people. However, my experience tells me that cathedrals are a crucial and enriching part of the lives of countless people who have not had the good fortune to be as closely associated with them as have I. Further, cathedrals are a living and precious part of our architectural, historical, cultural and spiritual heritage.
I support pretty much everything that has been said in the debate so far, and I hope that that will be my continuing experience in debates in this House. I take exception to only one thing—I cannot agree with Alec Clifton-Taylor’s assessment of Lincoln Cathedral, glorious though that building is, but I would refer your Lordships to his statement that medieval cathedrals are,
“the supreme expression of English architecture”.
I am sure that he would have had a good word to say also about Birmingham, Wakefield and Leicester Cathedrals—as he would about our great 19th century and 20th century Catholic cathedrals.
My own cathedral of Worcester stands at the heart of a diocese that has been in existence since 680. I am its 113th bishop and the present glorious building dates from 1184 when my sainted predecessor Wulfstan oversaw the demolition of the Saxon building. The iconic view of it from Worcester county cricket ground, standing high above the River Severn, is famous the world over and is dear to countless people in Worcestershire and Dudley—the area now covered by the diocese of Worcester—who feel committed to their mother church. Many of them will, with me, have the opportunity to welcome Her Majesty the Queen to the cathedral in just a few days’ time.
The fabric of the building, like that of most English cathedrals, is arguably in a better state than it has ever been, thanks to mammoth fundraising and indispensable grants from English Heritage, to which reference has been made. What will happen in the future, with no direct government funding, is a source of anxiety, to say the least. The problem with the lottery is that it is as its name suggests. I describe myself as an expert in lottery applications—all of them failed.
Cathedrals are not just architectural gems but hugely significant active symbols of our common religious and spiritual heritage. They are visited each year by increasing numbers of people with varying religious affiliations. I think it could be said that all these people have a real, if not expressly articulated, sense of the spiritual. Cathedrals have been described by the novelist Susan Hill as being:
“At the still point of the turning world”.
Reading the prayers left by those who have lit candles in cathedrals makes it clear that they can enable deep feelings to surface and be articulated. Cathedrals generate many millions of pounds for our economy but are not, of course, simply tourist attractions. They are vibrant hubs of culture and spirituality. Last year in Worcester, the ticket sales for the Three Choirs festival, the oldest of its kind in the world dating from the early 18th century, were higher than they have ever been. That was just one event in very many that included drama and art, as well as much fabulous music and civic occasions.
At the heart of the life of our cathedrals lies their choral tradition, which is one of their most glorious and remarkable features. I remind your Lordships that until the Reformation, choral foundations were universal throughout Europe, but England is now the only country left with such a tradition intact. In France, Spain, Germany and Italy they have all but disappeared. In Italy, an English choir had to be imported to Palestrina’s own church, the Santa Maria Maggiore in Rome, to mark a significant anniversary of his death. In this country, cathedral music has not only survived against the financial odds but improved. Alongside the daily round of worship, it enriches myriad special services and events to which thousands come, and during which architecture, words and music combine to provide a feast for the senses which feeds the whole person at a much deeper level than can be articulated in mere words.
Cathedrals are the places where bishops have their teaching seats, and they are great centres of education for people of all faiths and none, to which reference has already been made in this debate. The majority employs a qualified education officer and thousands of children are welcomed each year for outstanding learning experiences. Cathedrals have vast educational potential, much of which is tapped, as a result of their architectural, historical and social significance, their aesthetic and artistic merit, and the fact that they are the home to vibrant Christian communities. Last year, more than 3,000 educational events were laid on by cathedrals. It is not just children and young people who benefit. Debates and lectures are laid on for adults about issues of common concern to church and society. Only just over a week ago the Director of Public Prosecutions gave a lecture in Worcester Cathedral on the law and the media, in which he considered the question of the public interest.
I could wax lyrical about cathedrals for a very long time but the basic point that I want to emphasis is that cathedrals offer something that is most definitely in the public interest in all sorts of areas. They are a precious part of the inheritance of this nation and enrich our common life immeasurably. In conclusion, I repeat my thanks for the welcome that I have received from your Lordships and urge that this House should indeed take note of the future of English cathedrals but, in so doing, I urge that they should be valued, cherished and supported.
Lord Black of Brentwood
My Lords, it is a great honour to be able to follow the right reverend Prelate the Bishop of Worcester and to congratulate him on a formidable and elegant maiden speech that blended so perfectly his own experiences with the challenges of public policy. We can see from his speech what a great asset he is going to be to your Lordships’ House.
Indeed, at a time when Members of this House are under a degree of scrutiny, the right reverend Prelate exemplifies the very characteristics that make this House so special, for his range of interests and expertise is as diverse as it is deep. In fact, he began his career as a chemistry teacher, which will suit him well for our debates on scientific issues. He then became a teacher at Harrow School, trying to instil into his pupils—he would have failed with me—the basics of chemistry. That will make him a natural for debates on education, an area on which he touched today. After Harrow, he spent six years as vicar of an inner city parish at St Luke’s, Wallsend, giving him a perspective on inner city issues and social responsibility that will be much valued in this House. He has a deep interest in international affairs, too. As a longstanding member of the World Development Movement, he will be a natural in dealing with international development issues. Finally, he is president of Worcestershire County Cricket Club; he is thereby a shoe-in for sports debates. In short, the right reverend Prelate is an all-rounder whose contributions we look forward to with great eagerness.
We are all indebted to the noble Lord, Lord Cormack, for securing this debate, which has relevance and importance for every region of our country, every diocese and every parish. I am particularly pleased to take part because it gives me an opportunity to talk about two cathedrals in Essex close to my heart, and what they can tell us about the future of cathedrals across England.
I am from Brentwood, which is at the heart of the Roman Catholic diocese of Brentwood, a diocese that, quite uniquely, is exactly coterminous with the Church of England diocese of Chelmsford. Both towns have exceptionally fine cathedrals. In Brentwood, the cathedral dates back to 1861, when it was just a parish church. It was raised to cathedral status in 1917. The cathedral in Chelmsford has more venerable roots, with the first church on its site founded over 800 years ago. It became a cathedral in 1914, when the diocese of Chelmsford was created to meet the needs of the urban population east of London. Both cathedrals have changed considerably over time. Brentwood’s magnificent cathedral was substantially enlarged between 1989 and 1991 in the Italianate style by Quinlan Terry. Taking his inspiration from the classical Renaissance, this cathedral is one of the master architect’s greatest works and one of the finest buildings in Essex.
Chelmsford’s cathedral has grown more organically, with new stained glass windows in the 19th century along with a rebuilt nave and enriched porch in 1953 to mark the bonds between America and Britain in the Second World War. It now has, in the 21st century, a magnificent collection of modern art.
Both these buildings underline how cathedrals grow alongside their communities, reflecting the changes in society and constantly updating themselves, as the noble Lord, Lord Cormack, said, to remain relevant, vibrant and the focal point of the diocese they serve.
The Bishop of Brentwood, Bishop Thomas McMahon, a man of huge importance to civic life in the towns and villages of Essex, has written that a cathedral takes its name from the Greek word for chair, cathedra, from which the bishop presides as the “shepherd of the diocese”. As well as being the parish church for those who live nearby, cathedrals stand as the fulcrum of worship for local people. In Bishop Thomas’s words, they stand there,
“to proclaim and celebrate the Christian mysteries in an environment of excellence and beauty”.
In other words, they are of vital importance to the cultural and spiritual fabric of our nation and need to be cherished.
However, cathedrals, as we have heard, are not just about buildings so much as the people who are in them. The central point I want to raise, and one on which a number of noble Lords, including the noble Lord, Lord Howarth of Newport, have touched, is about the importance of church music and the choirs and organists who provide it. Our cathedral choirs are as much a part of the rich heritage that nurtures our communities as the buildings they sing in. At this point I must declare an interest as a member of the Council of the Royal College of Music.
Both the cathedrals I have talked about have prestigious choirs. Brentwood’s was formed in 1984 and over the years has undertaken tours throughout Europe. Just a few weeks ago, a young man who is a member of the choir and a Brentwood schoolboy, Harry John, was one of just 40 young people in the Diamond Choir that sang for Her Majesty the Queen at St Paul’s. In Chelmsford, an innovative choral foundation, formed in 1994, supports the work of its excellent choir, which brings world-class skills right to the heart of local communities. As the very reverend Peter Judd, Dean of Chelmsford, has said,
“when the psalm is being sung … one is privileged to be in the presence of something exquisite—rather like standing in front of an utterly beautiful painting in the National Gallery, except our Choir does not sing in central London, it is happening here in Chelmsford every day”.
Cathedral choirs perform three vital roles in our cultural life. First, they keep alive and flourishing the tradition of English church music, which is one of this country’s shining artistic achievements, dating back to the remarkable output of Byrd, Tallis, Gibbons and Purcell, and in more recent years, of course, Wesley, Bairstow, Parry and Vaughan Williams. Our cathedrals, choirs and organists have all played a central role in fostering that tradition. In the 18th century, a choirboy from Gloucester Cathedral, William Hayes, went on to become a significant composer and a pivotal figure in English musical history. Three centuries later, one of our greatest choral composers, Herbert Howells, an alumnus of the RCM, learnt his musical trade from the organist Herbert Brewer, also at Gloucester Cathedral. Charles Wood had a similar start to musical life at Armagh Cathedral. Their experience, and that of many others, testifies to the importance of local music teaching and experience in nurturing great national talent.
Secondly, they provide for those who worship at cathedrals, or are simply visiting them, something magical and mystical that lies beyond mere words. They enhance the experience of visiting our cathedrals, as indeed so many other churches, in a way nothing else can. Great buildings need great music. And the music—some of the most sublime works ever written—needs these buildings.
Thirdly, they provide real beacons of artistic excellence in their local communities. They attract new audiences to cathedrals, encourage local composers, act as a magnet for visiting musicians and provide a cultural experience that nothing else can in the same way. As Professor Robin Leaver, an internationally recognised hymnologist, has so pithily put it, church musicians are not simply there to produce,
“nice noises at various points in worship”,
but are cultural ambassadors in their own right. Equally importantly, cathedral choirs often give boys, and increasingly girls, their first taste of high-level music-making. Many go on to successful musical careers. There can be no better start to a musical life than experience in a cathedral choir.
However, cathedral choirs face challenges as much as our cathedrals do. They can prosper only if they have secure and comfortable environments in which to practise. As the English Heritage Creativity and Care report, which we have heard about today, highlighted:
“It takes resources to maintain a proud and ancient choral tradition: resources and space”.
They also need a functioning organ—perhaps the most expensive musical instrument to maintain—and dedicated teachers who so often work on a purely voluntary basis. I was delighted that the right reverend Prelate the Bishop of Birmingham talked about volunteers. They are of such huge importance. A cathedral such as Chelmsford depends on 480 volunteers to keep it going and we need to do more to cherish them.
Above all, there is a challenge to ensure that there are sufficient numbers of church musicians entering the profession to meet the needs not just of the cathedrals but the parishes that form the bedrock of the diocese. Across the world, more churches are chasing fewer music graduates. The teaching of music, particularly in our state schools, is a real issue here, although I suspect that is a subject for another debate.
Many of our cathedrals are, quite rightly, moving now to secure the future of church music and they need our support. I think in particular of the new music resource centre at Wells Cathedral, which we have heard about today, and the new Song School at Chester Cathedral. These are just the sorts of initiatives that are required to secure the future of cathedral choirs and of the proud English choral tradition.
The noble Lord, Lord Cormack, has done us a huge service by securing this debate today. Our cathedrals, with their choirs, are one of the jewels in the crown of our national life. It is right that we celebrate them, recognise the challenges that lie ahead and seek to identify ways in which they can be supported. As the right reverend Prelate the Bishop of Birmingham said earlier, a ringing endorsement from your Lordships’ House today would be a splendid way to start.
Baroness Sherlock
My Lords, I am delighted to take this opportunity to speak today about Britain’s best building. I agree with a great deal of what the noble Lord, Lord Cormack, said, with the exception of his very touching, if ultimately misguided, conviction that Lincoln Cathedral is the fairest in the country. You need not take my word for it—in a survey by the Guardian last year, Durham Cathedral came out with a ringing success, with 62% of people voting it the best building in Britain. That capitalised on its success a decade earlier, when the BBC had a similar poll and again Durham Cathedral was Britain’s favourite building. It is not hard to see why. One of the cathedral canons described one of the joys of her ministry as watching one of the many parties of schoolchildren who arrive. They come in a long crocodile, with two children hand in hand at the front. As the first children walk in, they gasp at the sheer scale and stop dead, so that the crocodile piles like dominoes as the rest keep coming in behind them. They struggle to make sense of the sheer splendour of the space. It had a very similar effect on me the first time I walked in. Strangely, the nave of the cathedral is not just enormous, it is somehow intimate. The current and rather wonderful Dean of Durham described the nave as being,
“large enough to lift our vision but intimate enough to hold us and affirm our humanity”.
In some ways, that is what cathedrals do in general, not simply architecturally.
As many noble Lords will know, Durham Cathedral was built on the site where monks bearing the body of the great northern saint, St Cuthbert, came and finally settled after travelling to escape Vikings. They had been moving around with Cuthbert’s relics and the Lindisfarne Gospels—which we look forward to welcoming home soon, at least briefly—and finally stopped after coming to a bend in the River Wear and getting stuck behind a milkmaid and a dun cow. When Cuthbert’s body refused to go any further at that point, they took this as a sign that they had chosen the right place. I am delighted that they chose such a beautiful spot, although I am sure the right reverend Prelate the Bishop of Worcester would be with me in saying that every now and again one might wish they had chosen a flatter spot. I was delighted to hear his maiden speech. It was eloquent and articulate, and I can only conclude that his undergraduate studies must have served him well. He is most welcome.
Durham Cathedral is more than an architectural marvel; it is a sacred space with a wonderful choir, which sings at eight services a week. However, that tradition is not just for a privileged minority. Durham Cathedral set up a wonderful music outreach programme, in which choristers went out to local primary schools across the county and sang for the children and then with the children. Over a period of weeks, the children would learn the music and then come together with other schools in a wonderful concert in the cathedral, which would be full of proud mums and dads who had never expected to hear their children sing music of this quality in a space such as that. It has been a wonderful developmental experience. In fact, one child who came to the cathedral with his school in exactly that fashion saw this, went back and told his mum and dad that this was what he wanted to do and some time later—two years ago—he became BBC Young Chorister of the Year. Since then, he has sung in Downing Street, at the Albert Hall and with Katherine Jenkins, and all because the school visited Durham Cathedral.
The cathedral draws people to itself from all over the world but it is also a centre for Durham itself. I went to Durham in 2006 to take a course at the university for just a year and I am still there—it has that effect on people. When I came to the end of the course, I graduated in the cathedral—an experience that many people have. During the Lumiere festival—a festival of light—the cathedral was completely filled with sculptures of light and flame, so anyone who thinks that our cathedrals are overly risk-averse or in any way scared by health and safety issues should visit Durham.
Some 120,000 people came to the Lumiere festival but 600,000 go through Durham Cathedral every year. For me, one of the great highlights of the year is the annual Durham Miners’ Gala—or the “Big Meeting”, as it is known locally—every July, when thousands of people descend on the city from across the county. This is where the traditional mining culture and trade union heritage of the county are celebrated. Even though the pits have closed, people come from every village and march through with their own brass band and banner. These are still markers of identity for the communities and the people in them. There is a service in the cathedral, the bands are marched in and the banners are paraded. When there is a new banner, the community brings it in for the bishop to bless. Last year, regrettably, we saw the 60th anniversary of the colliery disaster at Easington, in which 83 men and boys lost their lives. The Easington banner was trimmed with black and it was brought in so that the cathedral could mark that aspect of the community experience as well.
As the right reverend Prelates have said, people also bring their individual and private troubles to the cathedral. Every day, many people come in to light candles, write prayers or just sit in the quiet space. The volunteer chaplains at Durham, as elsewhere, hear all kinds of stories. There might be a soldier coming in to pray before being sent to Afghanistan, or perhaps bereaved people who do not have a faith but do not know where else to take their grief coming to the cathedral, trusting that they can somehow be held in that space. That is what a cathedral can be and what Durham certainly is—at the heart of a community to celebrate its joys, as the noble Lord, Lord Cormack, said, and to hold people in times of sorrow, to be with them and to provide a way for them to express that sorrow and be held as a community.
However, none of this is easy. It takes hundreds of staff and hundreds of volunteers. All kinds of people come through the cathedral. I am a tutor at St Chad’s College at Durham University. We, like every other college, have our annual St Chad’s Day service in the cathedral. During the service, students bring to the altar to be blessed emblems of their everyday student life, including sporting equipment, musical instruments, even the odd book, and this year, for no obviously discernible reason, a life-size cut-out of President Obama. All aspects of life are taken up and can be blessed and celebrated.
It seems to me that that role of community-gathering by institutions at the heart of our communities is one that the state has a responsibility to support in some way. Despite the fact that this is Britain’s best-loved building, was founded more than 900 years ago and is, as my noble friend Lord Howarth of Newport said, on a UN World Heritage Site, it does not have any regular government funding. The £60,000 a week that it costs to maintain the cathedral and its associated buildings and ministries has to be found by the incredibly enterprising but, surely by now, tiring dean and chapter. I applaud them for being able to do this without charging the public to come into the cathedral. It is an incredibly difficult struggle every single week. However, if people had to pay to get in, it would be hard to see either how the individuals would feel able to use it in the way that I have described or how it could fulfil that role at the heart of the community which is so powerful for our city.
When the Minister considers her response to the debate, can she give us any comfort at all regarding how the state can recognise its responsibilities? I thought that the suggestion from the noble Lord, Lord Cormack, was excellent and I would encourage her to reflect on it. Perhaps she could start an endowment to which others could be encouraged to contribute. Durham is a very poor county, yet people find the money to celebrate the cathedral. However, the cathedral is not just for us; it is for the entire nation and it is one of Europe’s architectural treasures.
Finally, I know that the Minister has an interest in Durham, and that might encourage her to visit the city at some point and to look around the cathedral. However, I urge any noble Lord or anyone reading this debate who has an interest in this matter to step into their cathedral, if they have not done so previously, to see what it can provide in an era when the gathering institutions in our communities are under threat. These can be spaces that welcome everybody, raise our vision and, at the same time, affirm and hold us in our humanity.
The Lord Bishop of Wakefield
My Lords, I cannot hope to come up to the same standards of energy and enthusiasm that we have just had from the noble Baroness, Lady Sherlock. However, I begin by saying that, as with my friend the right reverend Bishop of Worcester, whose excellent maiden speech we have just heard, cathedrals lie very close to my heart, so I am very grateful to the noble Lord, Lord Cormack, for making this debate possible.
I have spent 15 years of my life working in two very different cathedrals. For seven years I was a residentiary canon at Portsmouth, a parish-church cathedral in an urban setting right next to the great naval dockyard. Then, for eight years, I was dean of Norwich, a magnificent medieval cathedral, to which we have already heard reference, and one of the two greatest Romanesque churches in England. I am not vying for it to be the top one but it is certainly as good as Durham.
Cathedrals offer an extraordinary variety of experience, as I shall note later. There is one brief vignette which focuses something of this and which for me seemed bizarre. During my time at Norwich, we celebrated the 900th anniversary of the diocese and cathedral. Anglia Railways kindly agreed to call one of its locomotives “Norwich Cathedral”. That was very good news, but it was the final denouement of this tale to which I want to advert. At the end of the year, I was invited to Norwich station for the denaming ceremony. That seemed to me quite baffling. Most of the Anglia Railways locomotives took their names from significant places in the north-west of England, where they had previously toiled—names such as “Vulcan Foundry” and “City of Preston”. Here was “Norwich Cathedral”, named after the single greatest focus of tourism in East Anglia, with more than half a million people passing through our doors each year, and we were taking the name off the locomotive. That is an interesting reflection on how people do not always see the significance of these great buildings.
For all the talk of the decline of religion, cathedrals remain enormous magnets for all sorts and conditions of people, as we have already heard. In a recent essay on church growth, it was noted that alongside the growth in the size of congregations, mentioned earlier by my friend the right reverend Bishop of Birmingham, the spend was £91 million in cathedrals alone, and the total impact on the wider localities was more than £150 million. However, church growth just touches the fringes of the impact of these places. They are the contemporary equivalent of common ground. They are open to all who come—all can graze in their pastures, as it were. Indeed, the variety of expressions of their impact is clear in the myriad people who consider themselves to be stakeholders.
Many organisations and individuals ask to use our cathedrals—from civic services to Rotary International, and from local businesses to voluntary sector agencies. However, these stakeholders—and there are myriad others—are matched by the diverse reasons for visits by individuals. Some come as tourists; others as pilgrims. Some come for silence and solace in the face of life’s difficulties and challenges. Many is the conversation I have had in cathedrals with people in places of sadness in their lives. Some come with the explicit hope of talking and meeting up with others, so a guide in a cathedral has to be immensely sensitive, knowing when people might want to speak and when they might not. Of course, some come as aficionados of architecture, while others come simply to celebrate the place, the city in which they live.
I remember being in Norwich Cathedral one morning when a chap who had been thrown out of his house by his wife—probably for very good reasons—came up to me and said, “Ooh, it’s a big place you’ve got here, isn’t it?” It was interesting that he had lived in Norwich all his life and had never been in the building before. What was it that brought him there? Well, I just mentioned that.
In Norwich—to focus there a little longer—it is the cathedral, the university and the football team, of course, that somehow give the city its character, its personality and its status. Cathedrals give a city their soul. Cathedrals belong to everyone. In both Portsmouth and Norwich, people of other religions and people of no religious faith will talk of “our cathedral”.
Often cathedrals work with other agencies to nourish a city’s flourishing. In Norwich we co-operated with Delia Smith, the queen of cookery, in a centenary service for Norwich City football club. By good providence we even had what passed for Canaries robes of yellow and green to match the occasion.
Cathedrals, too, have been the seed-bed for the nourishing of music in our nation. We have heard so much already in this debate about the quality of cathedral music. Most significant as well is that so many of our really talented classical musicians, people now at the top of their tree in their profession—not related particularly to church matters—started their musical careers in cathedral choirs. This essential work needs to continue via proper financial support. I was very pleased to hear the noble Lord, Lord Howarth, say how important this remains, not just for our cathedrals but for the whole heritage and tradition of good music in our country.
For all these reasons, I am acutely aware of the need to respond to any moves that may undermine these great flagships of the spirit. As we have already heard many times, a month or two ago a change in the VAT regulations threatened to undermine the very breadth of what cathedrals offer. It is the alterations, adaptations and modifications of these buildings that make them speak more effectively to our own generation, so I am very thankful that we are being given respite in that area, at least for three years. However, as the noble Lord, Lord Cormack, and the noble Baroness, Lady Andrews, have said, I hope we can be reassured further that that respite will continue well beyond that time; not only do we not get proper funding, but having to pay VAT would actually take funding away from us. Therefore we are grateful for the shift on VAT and for the extra grants available.
Still, however, the issue of adequate state funding for essential maintenance and conservation is crucial. I absolutely agree with the noble Lord, Lord Cormack; I would not want the situation to be as it is in France. Nevertheless, as we have heard, English Heritage’s budget is always under pressure and now cathedrals are placed alongside other churches in an open market. We are enormously grateful for all that it has done, and I am enormously grateful to the noble Baroness, Lady Andrews, who has been greatly supportive in our diocese. I look forward to welcoming her again in the near future.
Let us go for the £50 million that the noble Lord, Lord Cormack, asked for. If you compare it with the amount of money in terms of the fuel excise duty that has been so much in the news in the last few days, or, indeed, the £1.3 billion that will go to the European Union—doubtless for good reasons—£50 million is as nothing.
Like all organisations, as well as facing outside threats, the Church of England is always capable of shooting itself in the foot. The Dioceses Commission needs to be careful not to threaten to undermine the very raison d’être of cathedrals. Merging dioceses easily dissolves important local loyalties and takes away the point of these buildings as the focus of a bishop's ministry and the character and personality of a locality. Present plans in our part of England aim to keep cathedrals for the moment even if the dioceses merge; but what will be the logic, and for how long could two or three cathedrals be justified in one diocese?
Furthermore such changes seem to ignore the essential reason for the existence of cathedrals. They are the home of the cathedra, as we have been reminded—the seat of a bishop. We need smaller, not larger, dioceses, each with one cathedral, the teaching seat of the bishop who is the focus of unity for the church in that place. As others have said, the essential reason for cathedrals is for the worship of Almighty God; that is the beginning and the end of them.
Let me end with one further telling vignette. It relates to that extraordinary outflow of emotion on the death of Diana, Princess of Wales. We opened our doors in Norwich—where I was at the time—from dawn until dusk, and I saw one woman enter the building, light a candle and pray for 10 minutes. On her way out of the cathedral she thanked me for making the great church available and said, “I am not religious or anything, but I had to come”. I reckon that 10 minutes of prayer and a lighted candle feels a pretty religious thing to do. Whatever she thought she was doing, such an act and expression of commitment is but one of so many reasons why we must work even harder not only to preserve our cathedrals but to make their ministry and service to a whole community more effective than ever. I, too, look forward to a great statement of confidence in the Government supporting our cathedrals and I hope that they might think carefully about that £50 million.
Baroness Warwick of Undercliffe
My Lords, I add my thanks to the noble Lord, Lord Cormack, for introducing this debate and, indeed, for the way in which he has championed our national heritage over many years. I speak with much less authority on this subject than other speakers, but I am delighted to contribute to a debate that has sparked such knowledge and passion, and to take the opportunity to congratulate the right reverend Prelate the Bishop of Worcester on a moving and illuminating maiden speech.
As has been said already, England’s cathedrals are some of the greatest ancient buildings in Europe. Whether ancient or more modern, each is often the largest, most architecturally complex, most archaeologically sensitive and most visited building in its town or city. While our cathedrals are first and foremost places of Christian worship, they are also cultural centres and tourist attractions. They are at once places of pilgrimage and public buildings that host great national or civic events. They are prayerful spaces that also host community events and busy cafés.
Beautiful and breathtaking their architecture may be, but as the Church of England points out, these buildings are not just heritage landmarks but contribute to the wider community in diverse ways. Often they are the only local space of any size with public access, hosting concerts, lectures and degree ceremonies; and, of course, they are still used for their original purpose. Attendance at regular weekly services in Church of England cathedrals has increased over the past decade, as the right reverend Prelate the Bishop of Birmingham said.
The number of volunteers involved in the mission and ministry of cathedrals on a regular basis has increased by 24% to 14,500—an average of 345 volunteers for every cathedral. They are truly part of the big society. Last year more than 250,000 children attended educational events at a cathedral, with Westminster Abbey adding a further 12,000 to that nationwide figure. Just under 10,000 children are being educated at schools associated with cathedrals, and more than 2,000 of these children and adults are involved week by week in providing cathedral music.
Other noble Lords provided many examples of the contribution of cathedrals to the community—I will not repeat them. They all demonstrate our cathedrals’ continuing active role in people’s lives. This also means meeting legislative requirements and offering modern facilities. It is for this reason that I support the long-running campaign by the Church of England’s General Synod to cut the rate of VAT on church repairs and maintenance. The former Council for the Care of Churches argued that,
“charging VAT on repairs … encourages unnecessary alterations and discourages … good conservation”.
The distinction between repairs and maintenance on the one hand and alterations on the other is artificial and complex to administer.
Like other noble Lords today, I welcome the recent rethink by the Chancellor of the ill conceived proposal to introduce VAT on alterations and improvements made to churches and cathedrals. Cathedral deans—who can generally be relied on to speak their minds—were quick to point out that the tax would not mean more money for the Government but less maintenance for historic buildings. Adding 20% to the already fearsome costs of keeping open our great cathedrals—let alone keeping on top of major repairs—would have made this work completely unmanageable.
As the majority of alterations to listed church buildings take place in order to improve access to them and to broaden their use by the wider community, the Chancellor’s U-turn is entirely right and proper. By increasing the annual budget of the Listed Places of Worship Grant Scheme by £30 million and amending its scope to fully compensate churches for the impact of removing VAT relief from alteration work, he has acknowledged the importance of these buildings, which, of course, should never have been overlooked in the first place. However, concern remains. Although the proposals in the Budget will have an impact mostly on alterations to listed church buildings as distinct from repairs, the Church of England is nevertheless concerned that the money available to reimburse churches for VAT charged for repair work will also be affected as a consequence of the extra demands placed on the Listed Places of Worship Grant Scheme.
I echo the noble Lord, Lord Cormack, and ask the Minister how confident she is that the £30 million will cover the additional costs borne by listed places of worship following the VAT change. Can she also be confident that the additional resources will enable 100% compensation for repair and maintenance costs eligible under the current grant scheme? I ask because I want to see more of the life-enhancing alterations so magnificently exemplified by Wells Cathedral in Somerset—a cathedral I love visiting—as well as by others in English Heritage’s report, Creativity and Care.
The report shows how thoughtfully and sensitively some of our cathedrals have been adapted and developed to remain relevant today. I, too, pay tribute to the superb contribution to this work made by my noble friend Lady Andrews. At Wells there are some 1,700-plus services, concerts, educational visits and other events organised by the cathedral each year. That amounts to about five events a day, each attracting a different public. Yet until recently the cathedral had no adequate toilet, no disabled access to many areas of the cathedral church, no education area for visiting school groups and an overcrowded restaurant.
All that has changed following one of the biggest building programmes at a medieval cathedral since the Reformation. Unblocking the pilgrims’ porch—in medieval times the main entrance to the building—has allowed access between the precinct, the cloister and the church. A new cloister provides a reception area, an expanded shop and a first-floor restaurant. It took seven years to get permissions and, in total, the work cost £7 million, much of it coming from the Sainsbury and Garfield Weston Foundations and the Heritage Lottery Fund. The end result is a triumph of 21st-century vision and sensitivity, magnificently balancing the building’s significance with the needs of modern users.
A cathedral in my home county of Yorkshire also supplies a wonderful example of where the money has been found to make alterations that serve a 21st-century community. The Leeds Roman Catholic Cathedral, built in the early years of the 20th century, now has some very modern new facilities. A thoroughgoing clean of the interior in 2005 transformed the grime of my childhood to light-filled glory. Some 25% of the £2.4 million cost was gathered by fundraising within a relatively small and not particularly wealthy diocese. Another example is York Minster, where an innovative project by the York Glaziers Trust has transformed the Bedern chapel, a medieval building in the close which I recall as merely a ruin. Winning a Heritage Lottery Fund bid in 2006 led to new flooring and a new ceiling, and CCTV that allows visitors to watch the work at close hand.
To keep our cathedrals relevant takes money, vision and commitment. This has always been so. As Frank Field pointed out, the process of refitting our cathedrals for the future has never stopped. For that process to continue today, funding is vital, as so many other contributors to the debate emphasised. So, too, of course are goodwill and volunteers.
It is not only our cathedrals that are extraordinary; so are many of the 14,000 listed places of worship in England, as other noble Lords attested. Anglican churches alone form 45% of the grade 1 listed buildings in England. In 2006, necessary repairs to all listed places of worship in England were estimated to cost £185 million a year. It is worth noting that of the money spent on the repairs, 70% was raised by congregations and local communities.
The Listed Places of Worship Grant Scheme, now totalling £42 million, is only guaranteed for the next three years. We need to know that our extraordinary legacy of cathedral buildings will be safe on our watch and that they will be given the best chance of seeing out the next thousand years. I join with other noble Lords in hoping that the Minister will be able to offer hope that the state will continue to provide its part of the necessary funding.
Lord Rowe-Beddoe
My Lords, I acknowledge with gratitude the House’s indulgence in allowing me to speak in the gap. I congratulate the noble Lord, Lord Cormack, on securing the debate. I shall not attempt to continue his elegantly described train journey through the cathedral cities of east England, but I will speak about the six great cathedrals of Wales.
I declare an interest as chairman of the Representative Body of the Church in Wales and an interest as a grateful recipient of an early education as a boarding choirboy and organ student at the Cathedral School, Llandaff, the only professional cathedral school in Wales. As the right reverend Prelate the Bishop of Worcester referred to in his excellent maiden speech, cathedral music must never ever be underestimated as a core of the cultural life of our country.
Our cathedrals in Wales range in scale from the small but perfectly formed St Asaph, now situated in the United Kingdom’s newest city, to the imposing grandeur of St David’s, a cradle of Christianity in these islands since the 6th century and declared a centre of pilgrimage by Pope Calixtus in 1123. Our newest cathedrals in Brecon and Newport are well established as key places in civic and social life; and Llandaff, a remarkable mixture of old and new, now hosts the largest organ built in this country for the past 100 years. It was beautifully demonstrated this April at a jubilee thanksgiving service in the presence of Her Gracious Majesty the Queen.
However, cathedrals will face even greater challenges in the coming years as they, as centres of excellence, continue the process of adaptation to serve an array of faith, community and outreach projects. The most recent announcements on VAT, while welcome, are still confusing and uncertain, as the noble Lord, Lord Tyler, and others have suggested. If grant provisions for returning in grant the equivalent of VAT are not retained—not only in this Parliament, as promised, but beyond—the implications are most serious. The award-winning creation of the cloisters at St David’s Cathedral, for example, would have been nigh impossible to realise if full VAT had been imposed on all the costs involved.
As the noble Baroness said, cathedrals, like all churches, face serious threats from metal theft. It is vital to continue our efforts to eradicate this crime wave. The Private Member’s Bill recently introduced in the other place is therefore greatly to be encouraged.
Lord Stevenson of Balmacara
My Lords, I congratulate the noble Lord, Lord Cormack, on securing the debate and thank all noble Lords who have contributed to it.
I was struck by the suggestion made by my noble friend Lady Andrews that the word “cathedral” has, in some senses, become detached from its relationship to buildings and can be used in other contexts in order to give a sense of scale and impact of the event being described. This debate could be called cathedral-like in the sense that we have ranged wide, with knowledge and expertise, across the histories of our cathedrals and the contribution that they make to our society.
We have benefited tremendously from the expertise around the House today. I have already mentioned my noble friend Lady Andrews, who does so much in her capacity as chair of English Heritage—she has been congratulated on her work throughout the debate—and there were also, of course, the detailed contributions of the right reverend Prelates. They have taken us into the day-to-day living in cathedrals and how that impacts on local communities, and given impressive snapshots of the work that they do.
I congratulate the right reverend Prelate the Bishop of Worcester on his maiden speech. He said that it was providential that he had come up to the House a few days before this event and that he was able to make his maiden speech, unlike so many of us who skulk around for several months wondering how on earth we are going to do it. We wait for an appropriate debate to come along, and what happens? Is it in two or three days? He was able to come up and wow us all with his contribution, which was so eloquent—as it would be, of course, from a fellow chemist.
In my researches for this I was very pleased to note that Worcester Cathedral had a Bishop Wilfrid in the early 700s and again in the 920s. There has been none since then; I am not offering, but it is time that the Wilfrids of this world struck back.
I should declare that as a Scottish Presbyterian, raised in a slightly different tradition, I am probably not the best person to address this topic today. However, we do have cathedrals. I was in Dornoch Cathedral only recently, while on holiday, and I have also in a recent lifetime sung regularly in St Giles’ Cathedral in Edinburgh and attended concerts in St Magnus Cathedral in Kirkwall. We have also heard about the cathedrals in Wales.
It is clear that, in making speeches such as this, one has to reflect on one’s experiences in these amazing buildings because of their scale, their impact and the contribution they make. Very few of us have been able to avoid addressing that as we have spoken. I suppose that I am to add to that. I now live regularly in England, although I do go back to Scotland; my cathedral highlight was probably singing, as part of a concert, Tallis’s motet “Spem in Alium” in Bath Abbey—not a cathedral in that sense, but close enough to count for this debate. It was a fantastic occasion.
Somehow cathedrals seem to attract people to visit them. We have agreed that there are 42 of them. I happened in my research to come across a story in the Sun newspaper recently about an English Heritage worker who has visited all 42 of England’s Anglican cathedrals and licked every one. He now plans to carry on licking in Scotland, Ireland and Wales. He said:
“We’ve no idea why the bet was centred on licking cathedrals—it just was. I’ve tasted a lot of new places”.
The cathedrals of Britain span the millennium, from the cathedrals dating from the 1100s to the modern cathedrals found in Liverpool and Coventry. As we have heard, they display a wide array of architectural styles, from early English Gothic to the majesty of the Renaissance at St Paul’s and the 1960s modernism in Liverpool. In the Middle Ages and up to the Reformation in the 1500s, the church enjoyed enormous power and wealth, and cathedrals are eloquent symbols of the dominant place it still holds in British society.
This debate has provided three strands of concern. The first is the question of whether our cathedrals can continue to be both ecclesiastical and, as it has been said, “common ground” places for our people. The evidence is pretty good. The worry is how we can continue to fund them in the way they are currently perceived. Many of us have talked about the places of worship scheme and I have some questions for the Minister at the end of what I have to say.
The noble Lord, Lord Cormack, said that the soul of a country was in its buildings and that we could not call ourselves civilised if the spire of Salisbury or the wonderful vision of St Paul’s in London were ever at risk. Cathedrals are living, vibrant buildings, and as we have heard they make a contribution to local communities not just with spiritual and other work but in economic terms. It is very difficult to believe that we would continue to operate in society with our weddings, our funerals, our christenings, our graduations and even in the jubilee without using our cathedrals as a centre of much of the focus of our activity. Several noble Lords have spoken very movingly about the music in cathedrals and the contribution that has been made over the years to the musical life of our country. However, as we have been warned, we must not take this for granted. We must certainly celebrate our cathedrals—we must cherish, value and support them—but we must also express our concerns to those who have the authority to ensure that they continue.
A recent BBC survey found that representatives of almost half the cathedrals in England that responded to the survey were concerned about meeting running costs in two years’ time. Despite financial concerns, only nine of the cathedrals charge a mandatory entrance fee. We have heard a bit about Durham Cathedral already from my noble friend Lady Sherlock. Durham Cathedral does not charge for entry but asks visitors to make a £5 donation towards running costs, which are about £60,000 a week. Despite the request, on average visitors donate 32p each. There is obviously a huge gap. The quandary there—this is my second point—is that the question of what cathedrals are raises the question of whether there should be a charge. The chapter at Durham has obviously discussed the idea of charging for entry “many times”. However, as the BBC report says, the chapter felt that the cathedral was a public place where people should have free access for prayer and worship.
As we have heard, in England cathedrals can obtain funding from a range of agencies, including the Heritage Lottery Fund, or HLF, and English Heritage. On the latest figures, at the last grant announcement in January, HLF had requests totalling £27 million and gave out £10.3 million, so it was oversubscribed 2.6 times. We have also heard that English Heritage has seen the amount that it has to give in grants reduced from £25.9 million in 2010-11 to £15.4 million in 2012-13 as a result of government funding cuts.
There has been an interesting campaign about the way in which VAT is levied on church repairs; a number of earlier speakers mentioned that. I have taken two or three of their points, because I think they are relevant to the general questions about how we address this.
The case was made in a paper from the Church of England’s General Synod that since the largest portion of the grant aid available to support cathedrals comes from public funds, it is rather wasteful that much of the money is then recycled back to the Government through VAT. That is an important point. It has also been pointed out that the Government take more from the VAT charged on restoration works than they contribute in grants through their various bodies. There is also, of course, the more generic point that charging VAT is a disincentive to potential donors, since people are reluctant to give money that they know will end up being paid as tax.
We have some questions for the Minister and would be grateful to have them answered at the end of this debate. One of the problems about funding the church arises from the question of whether there can be a reduction specifically of VAT on church repairs and alterations. I understand that in December 2010 the current Government stated that they saw “no realistic prospect” of an agreement at EU level to allow for historic church repairs to be zero-rated. Can the Minister confirm that the Government have now given up attempting to get this concession?
In December 2010 the Government announced that the listed places of worship scheme will continue until 2014-15, with a fixed annual budget of £12 million. However, in the Second Reading debate on the Finance Bill, the Chief Secretary to the Treasury announced that he would increase the listed places of worship scheme by £5 million a year to enable churches that have alterations to benefit from the scheme and not to be adversely affected. That took us up to £17 million per annum. I have one more loop before I get to the final figure.
The Church Commissioners said that we had got to “an insecure and inadequate solution” and that the potential VAT cost faced by the Church of England could be as much as £20 million a year. At the start of the new Session, therefore, the Chancellor announced that the Government would provide an extra £30 million a year for this scheme. He said:
“That will be 100% compensation, exactly as we promised in the Budget, for the additional cost borne by churches for alterations. It should also go a long way towards helping the situation on repairs and maintenance, where in recent years they have not been able to get 100% compensation”.—[Official Report, Commons, 17/5/12; col. 731.]
Could the Minister confirm the exact figure? My noble friend Lady Warwick said that it was £42 million per year. I make it £47 million per year. It would be nice to have an exact figure. In addition, that would make HMT the biggest funder of ecclesiastical buildings in the country, which is great; a slightly novel situation. Again, it would be interesting to confirm two things that relate to that. What did the Chancellor mean when he said that this additional grant would go a “long way” towards helping the situation on repairs? Are all alterations and repairs now to be covered by that, and if so, is it the Minister’s view that the £47 million—or £42 million, whatever it is—is now sufficient?
A final and important point is this: do the Government now believe that they have all funding in place, and will they now let the funding continue to operate, as this scheme was due to end in 2015? We would be grateful for the final word on that.
Baroness Northover
My Lords, I start by thanking my noble friend Lord Cormack for securing this debate on the important issue of the future of English cathedrals. His background in this area, as others have noted, is formidable. We have also heard from many other noble Lords with great expertise, including the noble Baroness, Lady Andrews, the chair of English Heritage, and from those with long personal involvement with cathedrals. That was shown in the outstanding maiden speech of the right reverend Prelate the Bishop of Worcester and by many others. We have also heard from two former choristers, as they identified themselves: the noble Lords, Lord Howarth and Lord Rowe-Beddoe. There is a huge debt to acknowledge.
Cathedrals represent part of our most important cultural heritage. Our ancient cathedrals hark back to an earlier age of achievement and are an example of the rich architectural treasure that we must safeguard as well as enjoy. For centuries, cathedrals have been very visible signs of our Christian heritage. One need only travel towards Chichester or Salisbury to get some idea of how extraordinary the distant spires must have been in earlier, less mechanised times or industrialised eras, or to see Durham from the train. I am not going to get into a debate as to which of these amazing cathedrals should be at the head of a league table because they all have their wonders and they are all astonishing.
In medieval times they were centres of learning as well as a source of inspiration through art and architecture, and of course they were frequently the goal for pilgrims. Their ravaging at the time of the Reformation must have been traumatising for those around. Their architecture is undoubtedly some of the greatest work this country has ever produced and their impact should not be underestimated. It was excellent to hear from the noble Baroness, Lady Andrews, about the continuity of craftsmanship that helps to support our cathedrals. The noble Baroness, Lady Sherlock, mentioned the Venerable Bede. His Ecclesiastical History of the English People, which I read in Latin during my history degree, shows that the cathedral’s role as a home for items of historical significance has hardly declined over the centuries.
Cathedrals are still at the centre of Christian life, serving their local communities and visitors, as several noble Lords said. They help visitors make sense of one strand of our history. Cathedrals work closely with local schools, offering visits and courses. They are also a natural focal point for their surrounding areas and those working in them today often reach out to the wider society around them, seeking to support mothers with young children, homeless people and the local economy. Many noble Lords, particularly my noble friend Lady Byford and the right reverend Prelates the Bishops of Birmingham, Worcester and Wakefield, outlined the social impact of cathedrals today.
Preserving and maintaining such massive and outstanding buildings, most of which date back hundreds of years, is clearly a significant challenge. I have noted the different way of funding in France that was mentioned by several noble Lords. Speakers said that they did not want religious buildings to be vested in the state. There seems to be general agreement that that is not the way to do this, and therefore we must ask how best the state can engage. Recently, a number of important restoration projects were undertaken. The noble Baroness, Lady Andrews, referred to the York Minster Revealed project, which secured the conservation of the Great East Window. The Heritage Lottery Fund has already committed £10.5 million to the project. Earlier this year the fund gave a “first round pass” of more than £10 million to Winchester Cathedral for urgent works. From a total figure of more than £44.5 million of funding to cathedral projects since 1995, more than £25 million has been directed by the Heritage Lottery Fund towards the conservation of physical fabric—external stonework, stained glass, internal floors, monuments and screens. Cathedrals are encouraged to apply for funding through the fund’s open programmes, where grants of between £10,000 and £5 million can be obtained.
We have heard quite a bit about what English Heritage has been doing. In 1991 it established a dedicated grant scheme for cathedrals. We heard about how that came about and its amazing effect as it ran through to 2010. It offered £48.6 million, together with an additional £2.9 million from the Wolfson Foundation, which has also been referred to, towards the cost of repairs. Subsequently, English Heritage stopped the dedicated scheme as its 2009 cathedral fabric survey indicated that the overall state of repair of our cathedrals had improved dramatically. It is extremely encouraging to know that. Lincoln remains the only cathedral on the at-risk register, and English Heritage is supporting it. It is therefore important to note that we can be reassured that when the problems were flagged up, Governments of different persuasions took them seriously. English Heritage took forward the work. The position of cathedrals, and to a lesser degree parish churches, has been stabilised, and the debate can be set in that context. This is a very important issue, but at least the situation is more stable than it was at the beginning of the 1990s.
DCMS has a number of schemes that cathedrals can access. This year the department has allocated a one-off £1.1 million capital grant for listed places of worship. This has been allocated to the Church of England and the National Churches Trust to distribute to buildings of all denominations and faiths across the UK. The Heritage Lottery Fund focuses funding on the non-fabric aspects of buildings. For example, a £475,000 grant was awarded to the partnership between Lincoln Cathedral and Lincolnshire County Council to ensure sufficient trainees to conserve the built heritage in the area. That is extremely important.
I will move on to VAT, to which noble Lords referred. In the 2012 Budget, the Government announced that from 1 October of this year the current zero VAT rate for approved alterations to listed buildings would be replaced by the standard rate of VAT. When this was announced, the Government also committed to extending the DCMS listed places of worship grant scheme to cover any resulting VAT costs incurred by listed places of worship for alterations following the change. Listed places of worship, including cathedrals, were already eligible for grants towards VAT costs on repairs and maintenance through the scheme. It was therefore logical to extend the grant scheme to cover alterations in time for when the VAT treatment of alterations and repairs is put on the same footing. The Church of England, on behalf of all faith groups, provided evidence to the Government that further funding was needed to enable the scheme to offset successfully the impact of the VAT change. The right reverend Prelate the Bishop of London led the discussions with the Treasury, and I thank him for doing so.
Following those discussions, the Government announced that they would provide an additional £30 million of funding per year for the duration of this Parliament for the scheme. This brings the total annual funding available up to £42 million per year and will come into effect when the VAT rate applied to alterations to listed buildings changes. In answer to the noble Baroness, Lady Warwick, the noble Lord, Lord Stevenson, and others, we are confident that this additional funding will fully cover the additional costs borne by listed places of worship following the VAT change. The additional resources will also enable full compensation for repair and maintenance costs eligible under the current listed places of worship grant scheme from the beginning of this financial year. Cathedrals of all denominations across the country will be able to benefit from this funding.
Baroness Northover
I think it is best if I proceed because this is a time-limited debate, and I hope that I will cover most of the issues. If I am not able to do so, I will write to noble Lords.
Lord Howarth of Newport
I am most grateful to the noble Baroness. Will she remind her right honourable friend the Chancellor that if he increases the rate of VAT on alterations to listed buildings from zero to 20%, it will be an irrevocable step? Under European Union law, future Chancellors will not be able to roll back on that. While we are all immensely appreciative of the £100 million that was previously provided to help listed places of worship through the listed places of worship grant scheme, along with the additional £30 million that has now been promised, the continuation of a stop-gap remedy on a time-limited basis is no substitute for a proper policy.
Baroness Northover
As I mentioned to the noble Lord, this is a time-limited debate. I am coming on to other issues in a minute. I will make sure that all the issues raised in the debate are flagged up not only with DCMS—which I am temporarily covering for in the debate; it is a great pleasure to do so—but also with the Treasury. He can be reassured about that. If there are any issues that I do not pick up in my answers, I will respond to them after the debate.
I want to pick up some of the issues that noble Lords raised in the debate. Music was a key theme in various speeches, if noble Lords will excuse the mixed metaphor. It is probably rare for one to get goose bumps in debates in the House of Lords but as the noble Lord, Lord Howarth, mentioned the specific pieces of music that we can hear in cathedrals I am afraid that that is what I got. We all recognise the importance of music in cathedrals. My noble friend Lord Black made the case that great buildings need great music. They certainly have it and we recognise the importance of making sure that it is sustained. As I mentioned, we heard from two choristers. The noble Lord, Lord Howarth, and my noble friend Lord Black urged support for music.
I emphasise that the Department for Education’s music and dance scheme will this year provide just over £200,000 for around 100 bursary schemes at independent choir schools through the choir schools’ scholarship scheme established in 1991. I hope that noble Lords will be pleased to hear that. Last year the scheme provided funding for choristers at a range of cathedrals including Westminster Cathedral, York Minster, Canterbury, Lincoln and Christ Church, Oxford. I need not say that choristers are a valued part of the music and dance scheme. The Department for Education will continue to support that scheme.
It was also striking to hear what is happening with education in cathedrals. I knew something of this and of course we know of their long history and significance in the medieval period. It was encouraging to hear from my noble friend Lady Byford, the right reverend prelate the Bishop of Worcester, the noble Baronesses, Lady Sherlock and Lady Warwick, and others how important cathedrals are in terms of education for today’s children.
We also recognise how important the cathedrals are for our tourism industry. The noble Baroness, Lady Andrews, emphasised the significance of that and we are acutely aware of it: we value it greatly. I mentioned but will reiterate, particularly to my noble friend Lord Cormack, that I will flag up the concerns expressed today both to DCMS and the Treasury. My noble friend mentioned a £50 million endowment fund for the care of cathedrals which should be given to English Heritage. I noticed the noble Baroness, Lady Andrews, welcomed that notion, which did not surprise me. As I mentioned before, the Government have committed an additional £30 million a year to the listed places of worship scheme and £500 million to heritage organisations over this spending period.
My noble friend Lord Cormack and others asked whether the listed places of worship scheme would come to an end in 2015. It is not limited in that way and does not need to end then. It is guaranteed to the end of this Parliament. We have a fixed term and so we know that that will be until 2015, but the scheme may continue after that. I am sure that what noble Lords have said today will feed into the discussions that any future Government may have.
My noble friend Lord Tyler flagged up that he felt that the details of the listed places of worship scheme were not as clear as they might be. DCMS and HMT are currently carrying out a consultation with stakeholders on the details of that extended scheme. It is extremely important that that is happening so that we can make sure that everything is covered as it should be. As one would expect, the Church of England has been closely involved in discussions and the design of the scheme so far.
The noble Baroness, Lady Warwick, the noble Lord, Lord Stevenson, and others asked how confident we were that the £30 million would be sufficient. The Church of England provided the Government with evidence on the impact of the VAT changes. DCMS, the Treasury and the Church have expressed confidence that this will cover the additional costs following the VAT change and will enable 100% compensation for the repair and maintenance costs currently eligible under the scheme.
In summary, I again affirm that the Government are very much committed to supporting the preservation of cathedrals, just as we are committed to preserving the rest of our historic environment. We offer support for cathedrals through English Heritage, the Heritage Lottery Fund, the listed places of worship scheme and the DCMS capital grant, as well as schemes run by other departments. DCMS has committed more than £500 million to heritage organisations across the spending period and recently secured an extension to the listed places of worship scheme. The Government agree that it is important that cathedrals are looked after properly and provide a great deal of support for this.
This has been a stunning debate. It has taken us out of the amazing building of the House of Lords and, in our imaginations, around these cathedrals—even if they compete with each other over which is the most stunning. That was an unusual feature for a debate but made this a very important and enjoyable one. There can be no doubting the commitment to our cathedrals of those in the Chamber or of the Government.
Lord Cormack
My Lords, I am grateful to the Minister. I am told that I only have two minutes. I would love to mention every speech but I thank all those who took part in what was a wide-ranging, passionately felt and very well informed debate. I am extremely grateful. I must single out the noble Baroness, Lady Andrews, whose presence has been much appreciated by us all. What she said was even more appreciated. I must also mention with great delight the maiden speech of the right reverend Prelate the Bishop of Worcester. As my noble friend Lord Black said in his remarkable speech, it augurs well and we look forward to the right reverend Prelate’s future contributions.
This debate has united the House in expressing concern for these glorious buildings. There might be slight differences of opinion as to which is top of the list but that matters not a jot. We are talking about some of the most glorious buildings not only in this country or Europe but in the world. I derived some comfort when the Minister said that she wanted to ensure that they were safeguarded as well as enjoyed. Grateful as we all are for what she said, I hope that she will reinforce the request for the £50 million endowment. It is a very tiny sum in the national budget, as others indicated. I very much hope that something will come of that. The sums we are talking of are small.
One of the recurring themes of the debate was the wonderful contribution of choral music and the crucial importance of maintaining that tradition, which means so much to us all. When I go to Lincoln for choral evensong, as I do every day when I am there, I come away feeling inspired, refreshed and invigorated by what I have heard, and by the solemnity of the surroundings in which the glorious music took place. I feel the same on a Sunday morning after sung matins. I am delighted by the good Prayer Book services in Lincoln. I thank all noble Lords for what they said in the debate and am most grateful to them for underlining the importance of this glorious built heritage of ours.
FSA Investigation into LIBOR
(11 years, 10 months ago)
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The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, I will now repeat a Statement made by my right honourable friend the Chancellor of the Exchequer in another place.
“Mr Speaker, I would like to update the House on the Financial Services Authority’s investigation into the manipulation of the setting of the LIBOR and EURIBOR interest rates and the Government’s response.
The London Interbank Offered Rate or ‘LIBOR’ and the Euro Interbank Offered Rate or ‘EURIBOR’ are the benchmark reference rates that are fundamental to the workings of the UK, European and international financial markets, including markets in interest rate derivatives contracts. These contracts may sound exotic, but they are the bread and butter of our financial system and are used by businesses and public authorities every day, and they affect the mortgage payments and loan rates of millions of families and hundreds of thousands of firms, large and small. LIBOR and EURIBOR are by far the most prevalent benchmark reference rates used in euro, US dollar and sterling interest rate derivatives contracts. The outstanding interest rate contracts alone are estimated to be worth $554 trillion.
Yesterday, the FSA published notice that Barclays had, on numerous occasions, acted inappropriately and breached principles 2, 3 and 5 of the FSA’s Principles for Businesses. As a result, the FSA has imposed a financial penalty of £59.5 million on Barclays. In other words, the FSA reports that this bank, on numerous occasions, did not conduct its business with due skill, care and diligence. The bank did not take reasonable care to organise its affairs responsibly and effectively, with adequate risk management systems, and it did not observe proper standards of market conduct. As the FSA puts it,
‘Barclays’ misconduct … created the risk that the integrity of LIBOR and EURIBOR would be called into question and that confidence in or the stability of the UK financial system would be threatened’.
Barclays is not alone in this. The FSA is continuing to investigate the conduct of a number of other banks in relation to LIBOR. The FSA continues to commit significant resources to its investigations into potential attempts to manipulate LIBOR, and it continues to work with its counterparts overseas and with other authorities in the UK. The investigations concern a number of institutions both based in the UK and overseas, but it is already clear that the FSA’s investigation demonstrates systematic failures at the heart of the financial system at the time.
I want to thank Adair Turner and the team at the FSA for a very thorough piece of work. However, it begs three vital questions. First, how were such failures allowed to continue undetected and unchecked—particularly in the two years before the financial crisis, when the FSA is clear that the most serious breaches occurred, and the only motive was greed? Secondly, what changes are needed to our regulatory system in the future to prevent such abuse occurring again, and to make sure that the authorities have every power they need to hold those responsible fully to account? Thirdly, what further investigations are required into the activities at Barclays, what sanctions are available, and what questions must their chief executive answer?
First, the FSA report is a shocking indictment of the culture at banks like Barclays in the run-up to the financial crisis. The e-mail exchanges between derivative traders and the LIBOR submitters read like an epitaph to an age of irresponsibility. Through 2005, 2006, and early 2007, we see evidence of systematic greed at the expense of financial integrity and stability. They knew that what they were doing was wrong: ‘Keep a secret’, one trader tells another in February 2007, ‘If you breathe a word of this, I’m not telling you anything else’. Yet no one at Barclays prevents them, no one in the tripartite regulatory system knows anything about it, and the Government of the day were, literally, clueless about what was going on.
The FSA is clear that the most serious breaches of its Principles for Businesses occurred in the years leading up to the financial crisis. Once the crisis is under way, Barclays’ concern switches from the greed of traders to concern from the management about the reputational risk to the firm. Barclays itself raises concerns about the LIBOR with the FSA in late 2007 and 2008. Yes, the financial system was experiencing a severe stress, and markets were frozen. However, it is clear that Barclays—and potentially other banks—was still in flagrant breach of its duty to observe proper standards of market conduct and to give citizens and businesses in this country and elsewhere proper transparent information about the true price of money. Britain’s tripartite system of regulation failed us in war and in peace—and the country has paid a heavy price for that.
That brings me to the second question of how we can prevent this from ever happening again. This Government are getting rid of the whole tripartite system. The Financial Services Bill now before Parliament will create a new, far tougher regulatory system. A new Financial Conduct Authority will focus, razor-like, on market abuse and protecting consumers. We have been reviewing with the FSA and the Bank of England the operation of the LIBOR regime—which was not regulated under the last Government’s Financial Services and Markets Act. The market is already changing and the role of LIBOR is changing with it. As part of our review into LIBOR and the strength of the financial regulatory architecture, we will examine if there are any gaps in the criminal regime inherited by this Government and we will take the necessary steps to address them.
I cannot comment on possible criminal investigations for individuals involved in this activity. The authorities are exploring every avenue open to them, but shockingly, the scope of the FSA’s criminal powers granted by the previous Government does not extend to being able to impose criminal sanctions for manipulation of LIBOR. As part of our review into LIBOR and the strength of the financial regulatory architecture, we are examining whether strengthening the criminal sanctions regime for market abuse and market manipulation is warranted, and if so, we will provide for these powers quickly. In addition, next week the Government will publish a consultation in response to the report on the failure of RBS, and will consider the possibility of criminal sanctions for directors of failed banks where there is proven criminal negligence.
Under the previous Government’s regime, fines paid to the FSA are used to reduce the annual levy other financial institutions are asked to pay. I am far from convinced that in all cases this is the best use of the money. We are considering amendments to the Financial Services Bill that ensure that fines of this nature go to help the taxpaying public, not the financial industry. I have also asked my officials urgently to investigate whether this legislation could be applied to the fine imposed on Barclays. However, it is clear that what happened in Barclays and potentially other banks was completely unacceptable, and that it is symptomatic of a financial system that elevated greed above all other concerns, and brought our economy to its knees. That brings me to the final point.
As I say, a number of individuals are under formal investigation by the FSA, and this number is expected to increase as the investigations continue. The Serious Fraud Office is aware of the matters under investigation, and there are ongoing discussions between the FSA and the SFO about the evidence as it develops. As far as the chief executive of Barclays is concerned, he has some very serious questions to answer today. What did he know, and when did he know it? Who in the Barclays management is involved, and who, therefore, should pay the price? It is quite right that the Treasury Select Committee has asked him to appear urgently to account for himself and for his bank. We all want to hear his answers.
The story of irresponsibility is not over yet. Our financial services should be a source of economic strength and national pride for this country. However, failures in our banks and financial system have cost the country billions and put thousands out of work. Those responsible should be held responsible. We want our financial services to support the creation of jobs and prosperity for millions. This Government are sweeping away the regulatory system that failed. They will protect taxpayers, punish wrong-doing, and put right the wrongs of the age of irresponsibility.”
My Lords, that concludes the Statement.
Lord Tunnicliffe
My Lords, I thank the Minister for repeating the Statement made in the other place. I would like to open by saying a little about the role of this House. It is probable that we will have to take account of today’s events in amendments to the Financial Services Bill. My view of the first day in Committee on the Financial Services Bill was that it was pretty apolitical and very much about getting the right result for the country. I hope that we can carry on in that way. We will do what we can to co-operate on bringing in any changes. We must, through the usual channels, make sure that there will be time to scrutinise properly.
Turning to yesterday’s events, the first area I shall touch on is what is to be done. The Government have claimed that the Financial Services Bill would have created a different result and would have markedly improved the situation. In the Statement, there is no illustration of what that means. I would value the Minister setting out briefly what parts of the Bill are going to change. I have done my best to try to understand the Bill, and I do not see the obvious areas, but if they are there, we will help get them into law and make sure they happen. If the Minister will set those things out, it would be valuable to the House.
Secondly—I shall stop the numbers because they will go on for ever—the regulation of LIBOR and its derivatives was rejected in the other place by the Minister. I am not quite sure what the Statement says. I think it says that the Government are thinking about it. I would hope that the Minister would be a little firmer than that. Surely these things, which are so important, must come into the regulatory regime and must do so soon.
The Statement talks about criminal sanctions. Criminal sanctions are extraordinarily difficult to bring about because of the burden of criminal law. It is fair to say that you cannot find them in the current legislation, and yes, okay, it is our fault—I hope my leaders do not hear me say that. One of the reasons is that it is extraordinarily difficult to bring criminal sanctions into an area such as this where the criminal burden of proof is so high, but if the Minister can illustrate with a few examples what criminal sanctions the Government are thinking about, once again, we will listen to his remarks very attentively.
Let us move on to the victims. The Statement referred to, I think, millions of families and thousands of businesses. These people have probably lost out financially. What are the Government proposing to do about recompensing them? Are they going to bring in any law, or at least address the balance between shareholders and customers in this very difficult area of financial services? This is a scandal akin to the PPI scandal, and we have to recognise its size.
There is the issue of balance. Forgive me, but I will keep coming back to it. There is the concept that the law should contain a duty of care to customers. We are not yet at that point in the Bill, but I would welcome the views of the Minister about whether we should move across that spectrum towards customers having legal rights if, through their processes, the financial institutions they are trading with have put them at an unreasonable disadvantage. It will be difficult to frame, but we have to think about this balance and we have to be in a situation—for a number of reasons that I will come on to—where victims have real care. Finally in this section, the Financial Services Bill is a good vehicle. It will need co-operation, but we encourage the Government to do it. We must do it in a highly scrutinised way.
What is going to happen to those responsible? I am sure that if there are criminal routes, they will be taken. I point out to Members of the House that, frankly, this is not for the Government. Criminal actions and criminal prosecutions are for the appropriate prosecuting authorities, and I hope we can trust those authorities to pursue any criminal sanctions with due vigour. We would expect nothing less of them, and we will be deeply critical if they do not. The FSA probably has powers short of criminal sanctions against individuals to stop them holding office and so on. It would be valuable if the Minister could lay out a little detail. Are they available? How will they be applied?
The real sanction in this case will be in the hands of the Barclays board. It is for that board to act, and to show it is acting, in a way that sends a message that this bank is going to change how it behaves. The tests set out by the Chancellor are incomplete. It is not a matter of what the chief executive knew or when he knew it; it is what action he took to make sure that he was seeking to know and that there were processes in place to assure him that proper responsible actions were being taken by his traders. Donald Rumsfeld ruminated on this. I cannot quote him exactly, but he said something quite profound: you are responsible not just for your errors but for foreseen risks and also for foreseeable risks. Foreseeable risks are risks where, by having the right structures and systems, you can look into the future and make sure that you have got it right. That is what good auditors do, it is what good risk managers do, and it is what this bank should have been doing. It should have seen these risks much earlier.
We come finally to culture change. I have been in the culture change business. I have not run a great bank, but I ran what I consider to be a great institution that is responsible for 2 million people a day and for their lives. Less than a year before I took over, it had killed 31 people. The result was that the boss at the time was fired, after a proper inquiry, his boss was fired, and I ended up head of that organisation. The key change we made was to ensure that everybody was personally responsible. If a death occurred on the Underground, it was my responsibility. It was my responsibility not to check the particular area, but to be able to assure myself that I had done all that was reasonably practical for such a thing not to happen. Indeed, on most occasions one finds that one has learnt something or has to do something more, but all the way through the management chain individuals have to be personally responsible. That burden of responsibility to probity failed in this case.
In addition, we have to look at the bonus structure. We do not talk about bonuses bluntly enough. Frankly, you introduce bonuses to change behaviours. You change behaviours in what is arguably an acceptably benign way. You get people to work longer hours, with more vigour, to be more inventive and so on, but unfortunately a bonus culture will push you to the edge of regulation. When you do that, you have to make sure that the systems are in place to prevent that push beyond the edge of regulation. That requires enormous care and is an enormous responsibility for the board.
The culture must change in the banking industry and it must change from the top. This board must be seen to take decisive action, as indeed must all boards. This is a very, very serious day. This leaves a stain on Britain. Let us be frank about it: before today, people believed that bankers were greedy and stupid, and, sadly, they now know that they are dishonest. For the financial centre of Europe, that is a pretty unhappy combination. We are calling for the strongest punishment for those who have broken trust and broken the law, tough regulation to prevent such practices and a culture change in our banking industry. We must get our economy working, and we must remove this stain on our reputation and repair it. We on these Benches will do all we can to bring that about as quickly as possible.
Lord Sassoon
My Lords, I am grateful to the noble Lord, Lord Tunnicliffe, for confirming the Opposition’s support for possible amendments to the Financial Services Bill to reflect these matters and for his frank admission that there may be lacunae in the law that now need to be plugged.
The noble Lord, Lord Tunnicliffe, asked what the Bill will do to improve matters. First, we are creating a focused conduct regulator, the FCA, which will supervise in a much more focused way than the FSA the conduct of markets because it will not have all of the prudential side to look at. The FCA’s operational objective of protecting and enhancing market integrity goes to the heart of our discussion. Because it is a self-standing body, the FCA will create a different culture and risk appetite. It will take a tougher, more proactive and more focused approach to these sorts of issues and there will be specific powers that we will discuss in detail through the Bill’s proceedings. For example, in circumstances like this, the new power of the FCA to disclose the fact that a warning notice in respect of a disciplinary matter has been issued means that the FCA will be able to disclose that it is taking action at a much earlier stage in an investigation than the FSA. So the new structure will be much better suited to dealing with this sort of problem.
There is also a lot of ongoing work to review how the LIBOR-setting process works. There are consultants involved with the BBA and the panel banks working with the FCA. There is a supervisory committee for this work on which the Treasury sits as a non-voting member but providing strategic steer for the work. I would expect findings to be published from that review within the next few months. There are all sorts of ideas floating around, such as changing the LIBOR data to actual trading data rather than the submission basis we have now and whether there should be a new LIBOR code and so on. So there are a lot of ideas, the work is well advanced and will be reported in the next few months.
The criminal law ought to be the last stage. As the noble Lord said, we have to get the culture right within the banks. We have to have appropriate powers in the FCA to be able to detect things as early as possible and take action. We need to see whether there are any gaps in the criminal law. As with the forthcoming report into RBS, there will be a consultation on whether there should be new criminal sanctions on negligent directors of failed banks. So this is very much on our mind.
The noble Lord then asked about people who have lost money. This is a difficult issue because it is not possible to know whether LIBOR has been manipulated on any particular day. It will be impossible to know what the effect of the attempted manipulation has been, if any. It is a complicated rate-setting process which means that half of the submissions that go in are excluded from the calculation. So some of these fraudulent or incorrect rates that went in—I should not presume anything that hints at criminality; that is for others—may not have got into the calculation. So we do not know whether people have benefited because the rate went up higher or lower than it should have been. People could have either benefited or lost out; it is not clear.
The noble Lord made some interesting observations about culture and management and so on. My right honourable friend did not want to list all the questions that the Treasury Committee will no doubt ask of the chief executive of Barclays but I am sure they will include one or two of the questions that the noble Lord put.
Lastly, the noble Lord talked about the stain on the banking industry. It is important to say that, although it is indeed a stain on the banking industry and that it has significant effects on London and the UK, there are also banks under investigation that are not British or headquartered and managed from the UK. There were regulatory failures in the run-up and through the financial crisis in the US and other countries. So, yes, it is a serious day for the banking industry; yes, there is a stain that needs to be dealt with; and yes, London needs to clean up its act but it is not only the UK that is involved in this.
Baroness Kramer
My Lords, the public are rightly outraged by the manipulation of interest rates and Europe is going to look more suspiciously at London just at a time when we are trying to protect the City. So there are great issues at stake.
Will the Minister explain why the FSA’s fine on Barclays is so small? As far as the company is concerned, £59.5 million is a freckle and far less than the fine in the United States. Surely it is not the senior regulator in this case. Why are there no sanctions at all—we are not just talking about criminal sanctions—against anybody senior? It is one thing to go after the traders but systematic mismanagement and manipulation of the market over four years surely affects senior people and has to engage them. The questions are to be asked by the Treasury Select Committee, which is an outstanding Committee, but surely they should be coming from the regulator with the ability to follow with direct sanctions.
Lastly, it is crucial that the Financial Services Bill is looked at again because, although we have a new form of regulator coming in the FCA, which I hope will be rigorous and effective, we must ensure in this Bill that the regulator has real teeth so that there is fear when that regulator looks again at this kind of mismanagement, and a fundamental change in behaviour.
Lord Sassoon
My Lords, I share the concerns of my noble friend. This is the largest fine ever imposed by the FSA. The US comes at this in a different way in many respects so the seriousness of the issue is demonstrated by the size of the fine in relation to anything else that has ever been done by the FSA in this country. It is the largest. The FSA sets the fines and it should do so. This has to be an independent process and I am sure nobody would want the Government involved in it.
As far as the investigations are concerned, my noble friend may be jumping ahead of the ongoing investigations by the FSA and SFO. I do not know where they will come out or who will be involved, but those investigations are going on. As for a powerful regulator for the future that is able to do this, I could not agree with her more. The FSA model completely failed. As I have already explained, the Financial Conduct Authority will be focused and will have as a core objective the integrity of markets. It will be much better placed to deal with these kinds of problems as they come up in future.
Lord Morris of Aberavon
My Lords, when I was a young barrister, I occasionally prosecuted, on behalf of the Board of Trade, persons thought to be unfit to be directors of a public company. Those cases, as I recollect, were not all that difficult. The Minister has mentioned criminal sanctions, where of course the burden of proof is the usual one and it is high. Without prejudice to a particular case, is similar procedure still available to prevent directors holding positions in future on the grounds of unfitness?
Lord Sassoon
My Lords, I am grateful to the noble and learned Lord. As I said, we have concerns about the question of directors, particularly directors of banks, to make sure that the regime is appropriate and tough enough. The regime for directors of banks, because of the special nature of their role, should be looked at on its own merits. That is why it is timely that the RBS report and consultation, going very much to this point, will be published next week by the Treasury. I hope that we will get a debate going about what is appropriate in terms of the special regime that might be appropriate for directors of failed banks if they are shown to have behaved negligently.
Baroness O'Cathain
My Lords, the Statement says that this was going on throughout 2005, 2006 and early 2007. Was it stopped in 2007, or has it been going on since then? I wonder whether it has been going on for another five years. If so, what do my Government propose that we should be doing? Can we actually believe these people?
Lord Sassoon
My Lords, on the particular case, the FSA report sets out what was going on. The important point for my noble friend is that the point of highlighting the dates which my noble friend gave was that this activity was going on before the financial crisis. It was going on in an atmosphere of greed in what were perceived to be the good times. When the financial crisis hit, the activity of the individuals at Barclays was motivated by something else, which was to do with the reputation and standing of Barclays in the market. The particular relevance of those earlier dates was to distinguish what then happened during the later period, in the financial crisis.
As the FSA and other regulators’ investigations go on, they will tell us more about the extent and duration of these activities. Given that the banks have been on warning of this for a period, I would like to think that they have taken significant steps to clean up their activity. We want to make sure that, as I have described with this ongoing review of the LIBOR system, the system is appropriate to the new market circumstances.
Lord Radice
As a former chairman of the Treasury Select Committee, I of course strongly support the idea of its investigation. Does the Minister agree that if the executives of Barclays did not know what was going on, they ought to consider their position? If they did know what was going on, they ought to resign immediately.
Lord Sassoon
My Lords, the noble Lord, Lord Radice, makes some good points, which I am sure the chief executive of Barclays will be pressed on when he comes before the successors to the noble Lord on the Treasury Select Committee.
Lord Hughes of Woodside
My Lords, in the Minister’s Statement he repeatedly says that there were failures of the regulatory system and it was matter of greed, and so on and so forth. What was going on was not a failure. It was deliberate criminal deceit. Under those circumstances, how can the Minister possibly say that criminal charges should be the last resort rather than the first resort? By all means, let us try to tidy up the system. In view of what appears to be absolute, outright criminality, we should recall that fraudsters rely on the fact that they will escape the law through such mealy-mouthed words.
Lord Sassoon
My Lords, I am certainly not going to jump to premature conclusions which are not for the Government—or, I suggest, other Members of this House—to jump to, about what is or is not criminal activity. I have made it quite clear in repeating my right honourable friend’s Statement that investigations continue by the FSA and the Serious Fraud Office. We will hear the views of the appropriate authorities in due course on these matters, but those investigations are ongoing.
Lord McAvoy
My Lords, from every noble Lord and noble Baroness who has spoken there has been consensus on the seriousness of this, and also about making sure that the appropriate steps are taken to, at the very least, prevent a repeat of it. However, moving forward should be done on the basis of honesty and not scoring cheap points. It is regrettable that the Minister used the word “clueless” to describe the previous Government. If the Government want consensus, as everyone who has spoken does, they should make sure that there is no repeat of that, or they might be asked what measures their party proposed during that time.
Lord Sassoon
My Lords, during earlier parts of today, I have criticised the former Government’s behaviour and policies on certain matters. I have commended certain things that they had done. In this case, I stand by the words of my right honourable friend the Chancellor.
Lord Foster of Bishop Auckland
Does the Minister agree that the apparently noble gesture of the directors of Barclays in waiving their bonuses this year is not good enough? I will be pretentious and say that we, the people, demand that they pay back every bit of the bonuses for the years in question.
While we are talking about this, I cannot remember—because I have been in this place for so long—whether the process of deregulation was begun by the Minister’s Government. It was the noble Baroness herself who elevated greed to a virtue. Then the whole international financial consensus pleaded with us all for soft-touch regulation. That is what they got. We were wrong, but they were wrong for exploiting it. They, and not the two Governments who have been involved, are culpable.
Lord Sassoon
My Lords, on the noble Lord’s first point, I am sure that the board of the bank in question will listen to his views on bonus matters. That is principally a matter for the board of Barclays Bank to consider.
The noble Lord, Lord McAvoy, has said that we should not get too far into prior history here. There is a risk that I will get drawn into these matters. It was Mr Gordon Brown and Mr Ed Balls who espoused very explicitly the virtues of light-touch regulation, and that was the environment in which these traders operated.
Lord Empey
My Lords, LIBOR rates could not have been interfered with by one institution alone. There would have to be accomplices. I therefore presume that that is one of the directions in which the investigation will go.
Is the time ever going to come again in this country when someone takes professional responsibility for what is going on, leaving aside the criminal activities that will be pursued by the regulatory authorities? Is no one going to take professional responsibility and suffer a professional sanction if they are found in default?
Finally, sadly, we as taxpayers own substantial numbers of banks. Can the Minister assure the House that there is no such activity in institutions that are owned or partly owned by the taxpayer?
Lord Sassoon
My Lords, on the first point made by the noble Lord, Lord Empey, as I have said, other banks are being looked at by the relevant supervisory authorities here and in other countries. All that is ongoing. I very much endorse what the noble Lord has to say about the profession taking responsibility. If the banking industry wants to be thought of as a profession, clearly it should think about how it re-establishes professional standards. I speak as a chairman of the ifs School of Finance, the former Institute of Bankers, so I feel very strongly about that and believe that the profession needs to think about it very clearly.
I am not aware of public authorities being involved. I can be pretty clear that no public body is involved in any way in the LIBOR-setting regime and therefore in what we are discussing this afternoon.
Lord Lea of Crondall
My Lords, would the noble Lord remind us of the basis of company law? In whose interests are the banks supposed to be operating? Is it, in some sense, the public interest, the customer’s interest, the worker’s interest? Whose interest is being served by the banks? Is he satisfied that there is now a general perception in this country that it is not like that at all and that the banks are operating in the interest of some people at the top of the banks?
Lord Sassoon
My Lords, I think the issue here is that, whatever the law says about the way in which the banks have to operate, the behaviour that has been exposed in this case is that of naked greed, and that is completely unacceptable whatever the legal framework. It is at heart an ethical question as much as anything else, as I see it, and is quite independent of the legal framework around it. Whatever the requirements of the boards vis-à-vis shareholders and other parties, at the heart of this—as has been exposed very clearly by these extraordinary e-mails—were individuals behaving in a most extraordinary way.
Lord Marlesford
My Lords, is not one of the most serious aspects of this whole thing the potential economic consequences that are going to come from the reputational damage to the City of London, which is so important to the British economy? Would he agree that the only way of restoring reputation from malfeasance is to seek out and deal very publicly with those who are responsible? Does he remember—I remember all too well, as I declare myself to have been a victim of it—the malfeasance in Lloyd’s of London, which was never really sorted out because no one was held to book and certainly no one suffered any particular penalty that I can recollect. One thing that they seem to be able to do in the United States is to deal very severely with individuals who are found to have misbehaved from positions of great financial responsibility.
Lord Sassoon
My Lords, I completely agree with my noble friend Lord Marlesford that the reputational consequences here are very serious. I stress the point that this is not simply a London or a UK banks’ issue as it appears. The inquiries clearly cover other regulators and other banks and we will see where they go. However, it is precisely because of the significant reputational damage that the Chancellor has come forward immediately with his response, which I repeated this afternoon.
On the question of Lloyd’s of London, without repeating the tortured and difficult history there, it is worth saying that after a long and difficult period for that market, Lloyd’s of London is at the forefront again of the world’s specialist insurance market. It has a critical position and is, I believe, stronger than ever. While we certainly do not want to go through a long and difficult period, as Lloyd’s of London did, it does show that well-regulated markets in London are capable of leading the way in innovation and value-adding in financial markets.
Lord James of Blackheath
I make one observation, perhaps as a correction of the comment made by the noble Lord, Lord Marlesford. I speak as the former chairman of the committee that created Equitas for the solution of the Lloyd’s of London problem and put in place the Equitas solution. The difficulties with Lloyd’s of London were caused, to a very large extent, by another great failure of regulation by a parallel market in America. It was not wholly a United Kingdom problem. The problems of Lloyd’s of London were exacerbated to an alarming extent by the failure of the US authorities to regulate the clubs that were put together for litigation purposes on a group class action basis relating to asbestosis, which allowed open, free entry to anyone who wanted to join, regardless of the fact that they had never been near a scrap of asbestos in their whole life. This is what created the enormity of the problem. It was a massive failure of regulation by the USA authorities that undermined a major institution, and we should not forget that. These things are never isolated.
Lord Sassoon
My Lords, I am always interested by my noble friend Lord James of Blackheath’s sometimes remarkable interventions. I think we are a little off the LIBOR case at the moment.
Education and Training: People with Hidden Disabilities
(11 years, 10 months ago)
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Lord Addington
That this House takes note of accessible education and training for those with hidden disabilities such as dyslexia and autism.
Lord Addington
My Lords, first, I thank everyone who has taken the trouble to put their names down for this debate. I must also declare a series of interests. I am not only dyslexic but vice-president of the British Dyslexia Association and patron of the Adult Dyslexia Organisation, and I work for Microlink, a company that provides support for those with disabilities and of which I am chairman.
When I linked autism and dyslexia and included them in hidden disabilities, the main point that I was trying to make was that anything that is not easily spotted at the start of the educational process, whenever someone chooses to take that, leads to problems if it impedes one’s learning or classroom situation. How early one gets in and identifies the problem is crucial.
I will say only a few words on autism, starting with Asperger’s, for the simple reason that there are many people in the Chamber who know far more about the subject and can talk from greater depth of knowledge than I will ever be able to. Those with Asperger’s, who are on the edge of a spectrum, are often identified later as a result of interaction with other people outside the home when it becomes less difficult to spot. This would be made much easier if someone was trained in the initial stages of education and in the classroom, and indeed if that training was not a limited introduction, to be able to spot it later on as problems start to manifest themselves, often simply because they were not dealt with earlier.
The problems of social interaction—taking things too literally; not being able to communicate properly; non-verbal communication, which is so important even when talking in this Chamber—create other problems if they are not picked up. We must have someone who can recognise these problems and get in earlier. I am really calling for people to be trained throughout the education process to pick these up. Also, education and training are supposed to be lifelong. All conditions for which there is not this embedded knowledge, and even sometimes when there is, are going to be spotted later on in life. Therefore, we must not limit ourselves to training just in the education sector.
I appreciate that the noble Lord, Lord Hill, may find himself having questions directed at him that might go to BIS, to the Department for Work and Pensions, or to the Department of Health—certainly in the case of autism. We had a little exchange earlier in the week when he asked what the best lead department would be to drive something. I suggest that when it comes to some of these conditions, the Department for Education could be of the most benefit, certainly for dyslexics. The basic few examples that I have given for autism and dyslexia are very clearly there.
A good point is dyslexia, because the problem occurs when one starts to use written language. Dyslexia, which I believe means “difficulty with words” in Greek, becomes apparent of course when one starts to learn to read and write. To access all forms of education and training in our society as we are going through, one has to have those two basic skills. If you do not deal with those, you are at an eternal disadvantage.
This situation is getting more prominent—I was about to say worse—for the simple reason that as we formalise our skill base more, measure it and try to support people, there are more and more occasions when you have to write something down or react to written information. Whether it is on paper or on the screen, that requirement is always there. There is a greater emphasis on the written paper in the modern driving test, as opposed to the one that I took. I do not have to go on much further because we can all think of examples. That is what we have if we do not deal with the situation for certain people.
It is reckoned that 10% of the population are on the dyslexia spectrum. I think it is 1% for autism. We could have mentioned many other hidden spectrums, such as ADHD, dyspraxia and dyscalculia. We are probably getting up to about 15% without trying. I do not know what that percentage is in every classroom, but it is a very high one, so we must have a degree of knowledge based in that classroom for early intervention.
Why have I brought this matter forward at this present time? It is because we are having a look at the whole special educational needs sector—we are coming down the track. The Government have made proposals. However, I do not know whether this was intentional—I hope that it was not—but the people concerned with these non-obvious disabilities have heard warning bells rung by some of the language that was used. This may be a chance for the Minister to muffle those bells a little in the process of his speech. I refer to things like, “We will concentrate on things and get a whole cross-departmental approach towards making sure that people go through. We will cut down the number of people on the special educational needs register. We will concentrate better”.
Unless we have people with expertise based in the front, identifying the problem, we cannot do these things. Even if we redefine someone with dyslexia as not having a special educational need, because the system can use it, they are still dyslexic, and dyslexic throughout their lives. It is not something that you get rid of; it is a disability and it is to do with the organisation of your brain. It is there for ever, as I know to my cost.
Aside from this, going into my personal history, I wonder how many other people in this Chamber have been congratulated on their improving handwriting on Christmas cards in their forties.
Lord Addington
My noble friend says “the opposite”. I look forward to hearing from him later on.
It is something that stays with you, and you have a different developmental pattern. Sir Jim Rose said in his report:
“Dyslexia is a learning difficulty that primarily affects the skills involved in accurate and fluent word reading and spelling … Characteristic features of dyslexia are difficulties in phonological awareness”—
I shall not try to say that twice—
“verbal memory and verbal processing speed … Dyslexia occurs across the range of intellectual abilities”.
There is a great deal more in that vein to be found in the document from Dyslexia Action. It is always there, and you will always have a different learning process, which means that every time you go into a new phase of your educational and training process you will always have the problem. The way in which it is dealt with will change over time, as will the way in which you deal with it and your interactions with other people. That will change under the pressures on you, but it is always there. If we get teachers trained initially and then make sure that others throughout the system have the support and knowledge of what was happening, we will take a huge step forward. We must make sure that the interaction and the different learning process never become a barrier. We must allow people to explain it.
If someone has the condition explained to them, they start to be able to take the appropriate steps to mitigate the condition. If a teacher goes up to a child and says, “You’re not stupid, you’re dyslexic”, that teacher and all other teachers have an infinitely better chance of a positive relationship than they would if they did not identify the problem. You can then go and tell the parents. The dyslexia world is full of the recurring story of parents saying, “My child is dyslexic and I have discovered that I am”. How do people get through life? They will say, “I never take notes—I always ask someone to do it for me”—as a result of having never kept a pen on their person for more than about three seconds at a time. They are dependent on partners, and so on. Those are the success stories.
In our prison population, about 70% or 80% are reckoned to have problems with literacy. Every single assessment of the prison population that has looked at it has come up with the figure of about 50% being in the dyslexia spectrum. If you take on board the idea that if you cannot access education you cannot access training because you cannot go through the process with a technical ability to read and write—and thus you cannot get employment—you have a far greater likelihood of becoming an offender. Asperger’s, I am afraid, is also highly represented. Possibly not communicating as other people do might lead to conflict. It is a very complicated and worrying situation. If you do not get in there early and coherently, it will cause problems.
What do I want done? Sir Jim Rose presented, under the previous Government, a model for the better training of dyslexics within the teacher training programme. You have to make sure that that is used not only in the initial training but throughout the system. Throughout the process of training, it is equally appropriate. The noble Baroness, Lady Wilcox, might well be able to regale my noble friend on the Front Bench with the long series of meetings that we have had over apprenticeships. The previous Government decided that they would reassure employers about standards in training and said that everyone must pass an English key skills—now functional skills—test. When challenged on this, they said that they would make a change, but I think that it fell through the cracks in the changeover of Governments. All I know is that I have spent the better part of two years chasing around to get those people the same support and help to get an apprenticeship that you currently have to get a degree—or at least for there to be no greater barriers.
At the last meeting I had, it was agreed that assisted technology could probably be used to get through this test. Someone said, “Well, no one has complained about it—we haven’t had one letter or e-mail”. You get that degree of resistance further up. I have had meetings with the Department for Work and Pensions, usually under the last Government. There is nothing new here. They said, “Well, yes, we’ve got people with needs who are long-term unemployed. We should help them”. “How?” “Oh, it’s complicated—we’d have to get more training packages”. “Yes, please do”. The Department for Education is uniquely placed to set a precedent for good training and awareness. That department can drive this. If it cannot, it can at least build the engine and hope that someone else will put their foot on the accelerator.
We must do something here to address the problem. Some 10% of the population with dyslexia are underachieving in many cases, sometimes becoming a drag on our society. The figures for autism might be smaller, but the problem is as profound, man for man, if not more so. We have to try to address the problem, but we will not do so unless we get a greater degree of awareness throughout the system. We have to get agreement. Every time a dyslexic has to deal with a form, they are at a disadvantage. Every time you ask someone to fill in a process that has anything to do with reading and writing, a dyslexic is potentially disadvantaged. We have to make sure that at all these points there is someone there who understands and, when you say, “I am dyslexic”, will understand that slight adaptions should be made. Assistive voice to text and text to voice technology is very old beer now. I have been using it personally for over 12 years. It is now comparatively easy to use. We have a way forward. This is something that could be integrated into the classroom more easily. It need not be that big a problem—all you need is slightly different patterns of dealing with this.
I look forward to hearing from my noble friend when he replies that the Government are taking this on board and that his department is driving this through the whole machinery of government. If it does not do so and merely concentrates on the schools aspect, it will leave people with a wonderful set of skills for one part of their lives and leave them to fall off a cliff the next.
Baroness Browning
My Lords, I refer the House to the Register with my interest in autism charities. It is a great privilege to follow my noble friend who has brought the debate to the Floor of the House today. He is a passionate advocate, particularly for those with dyslexia, and also always speaks out for those with what he termed—I think quite rightly—the “hidden disabilities”. As he said, somebody can meet someone they do not know, talk to them, observe them and not think that there is a problem—particularly with dyslexics and those with autism, and those on the more able end of the autistic spectrum such as people with Asperger’s syndrome.
Although there is still so much more to do, we know that several things have been done that have improved matters for all these children. When I started out as an MP more than 20 years ago, I remember in my constituency casework meeting professionals both in education and in health—doctors and teachers—who denied that autism or dyslexia existed at all. There were parents in my constituency who were paying privately for their dyslexic children to have tuition on Saturday while their classroom teachers denied that such a condition existed.
It has been a real battle to get autism up the agenda. Of course, both Houses agreed in the previous Parliament to an Autism Act. I say to my noble friend that I am increasingly concerned at the number of government departments that seem to be oblivious to the fact that there is an Autism Act on the statute book. Yes, it does focus very much on health, social care and integration—but it particularly affects those in transition out of education through those very difficult years into adulthood. I urge my noble friend—as I have urged other colleagues in other government departments—to make sure that, when they are legislating and looking at codes of practice, they look at what the House has determined should be the future for people coming out of education who are on the autistic spectrum.
In the classroom there are so many things that relate both to dyslexia and to the more able children on the autistic spectrum. I was very interested to see the article, “Dyslexia Still Matters”, in Dyslexia Action, which sets out effective practice that would make a difference. There were four very simple points, any of which could apply to autism as well. The first referred to:
“A whole school ethos that respects individuals’ differences, maintains high expectations for all”.
We know that children who are different in any way very quickly become subject to playground bullying and name-calling. All too often in a classroom situation it will become apparent to other children that they are struggling with the work. This of course applies to both autism and dyslexia. I hope that we have gone past the stage where they are subject to name-calling by teachers. That sounds rather shocking but I can think of several examples where teachers told children that they were “thick”. These memories will have remained with them well into their adulthood. One can only speculate on the impact that this had on both their self-confidence and their ability and willingness to learn in later life.
Dyslexia Action also refers to:
“Knowledgeable and sensitive teachers who understand the processes of learning”.
I am a great advocate of integrated education for children with a whole range of disabilities but I draw a line where the school does not understand the condition well enough to take those practical steps—very often environmental ones—that will enable a child to learn. I emphasise “learn” because there are children who because of their nature sit passively at the back of the classroom and allow education to wash over them year after year. It is quite common, for example, that children with autism are very sensitive to light and noise—even to the noise of a lot of children talking in close proximity. They struggle to concentrate and hold on to thought processes and eventually give up.
What happens to those children? It is not rocket science. There have been enough studies into this for us to be able to deal with it. It should not be an ongoing problem. These children start to develop what we might describe as challenging behaviour in the classroom. The children—particularly the autistic ones—who start to chuck the chairs about are the ones who suddenly get the attention. The ones who sit quietly at the back and end their school days without the benefit of the proper education that their intelligence tells you that they were clearly capable of obtaining—they are the ones we are letting down. I come back to those who start throwing the furniture about. Challenging behaviour is difficult for any teacher in a classroom setting. We are all aware of the need for the teacher to think of the whole class and not just that one child who, on an ongoing basis, may be disrupting the education of the others.
I must say to my noble friend that I have concerns and have had them for a long time. Although the Government—and the previous Government—no longer believe that so many statements should be issued, one of the reasons for trying to obtain a statement for a difficult child in a classroom setting concerns the allocation of extra teaching hours for a teaching assistant. All too often that teaching assistant is not trained in the needs of that individual child—whether dyslexic, dyspraxic or autistic—but is used all too often to assist the teacher with the general management of the class as a whole. Therefore, the need for the individual child who has a statement of educational needs to really motor on with their education is something that, very often, is not addressed just by having a teaching assistant in the classroom, particularly in respect to autistic children.
Of course, autistic children are different. It is a danger to just lump them all together. Their needs will be different. They are individuals. Their teaching needs will be best addressed by an environment and a teaching process that recognise what those needs are—which needs to be put together after very careful assessment. If we are going down the route of not having as many statements—I am a great advocate of statements; I cannot think of how many constituents I have gone into battle for who wanted a statement or challenged one, and I feel that statementing helped a great many children—there is at least a need for all children, statemented or not, to come through education with their needs being assessed and recognised. That is important not just while they are in the classroom; it is equally important when they go through that transitional period of adolescence and into adulthood, when they may need to access training such as apprenticeships, further education or, in many cases, higher education, which a great many of these children are capable of obtaining if they have the right package of support.
I want to share something with my noble friend. I suspect that his colleague in another place, Sarah Teather, will already be aware of it because on 11 July she will address the All-Party Parliamentary Group for Autism. The group has put together recommendations that we believe should apply to all autistic children. This will read across to other children. The recommendations are that every school should have a lead teacher for autism, and that all children and young people with autism and special educational needs should have an action plan, whether or not they have a statement, so that as they move through the transition period a record of what their educational needs were in school can go with them. The thing about children and education is that how you communicate with them when they have a communication disorder will apply as much when they become adults as it did when they were in the classroom. We are now talking about skills and services for life because, as my noble friend said, they will have this condition throughout adulthood—it does not apply only to the classroom.
The all-party group also recommends that there should be meaningful support for all young people with autism and SEN up to 25 years of age, including those who are not in further education. Some of these children, including some of the brightest, take a few more years than other people, because of their needs, to get there. If you do not give them the opportunity, the cut-off points in terms of their age can be detrimental. We have had debates in this House about the need to consider the needs of children through to age 25, and I think that the Government have been receptive. I hope that my noble friend will accept this.
Of the adult community with autism, 60% rely on their families for financial support and 40% live with their parents. Many people who have adult children with autism and other types of lifelong disability would recognise immediately that parenting is for life—it is for as long as you can continue to support that child. There are, therefore, very elderly pensioners supporting pension-age children. That is not unusual. It is important that we address the fact that many of these adults are sitting at home without the training or opportunity to make the positive contribution that many of them would like to make. That does not mean that you can just fix them up with a job. I commend my noble friend Lord Freud, who is not here, for personally taking a great interest in seeking to raise the number of people with Asperger’s syndrome who get into work. He has set up a group that is liaising with employers to show them that such people, with the right package of support, can make a great contribution to their own independence in paid employment and to the economy of the country.
However, we should recognise that some issues regarding disabilities in training and employment in the workplace are more easily resolved than others. Some adaptations for disabilities, after management has been made aware and has put in practical adaptations, do not subsequently take up any management time. This is particularly the case with the Asperger’s group. They need ongoing support in the workplace—although not to do the job; they can do some high-level jobs—and someone who understands how they function. How the individual functions and what works for them is as important in the classroom as it is in the workplace. We should help them make that transition and give them as much support and education in the workplace as we provide in the classroom.
Lord Morris of Aberavon
My Lords, I sincerely congratulate the noble Lord on winning the ballot for this very important debate on the disabled. I want to widen the range of his examples, because there are others who are disabled in different ways and there are general lessons to be learnt from the problems arising from how we deal, or fail to deal, with one form of disability, which then reflects on somebody else. I note the remarks of the noble Baroness who has just sat down on the importance of parenting, which is a lifetime problem. That is significant, too, for the disability that I will deal with.
I take part in this debate without any expertise whatever, not even “a veneer of expertise”, as Mr Clegg has apparently said. I declare an interest as one of my grandchildren suffers from type 1 diabetes. It is a disability that is particularly acute for the young. I am happy to say that he is able to do most things except contact sports such as rugby, which is a pity. He sails, fences and skis, which pose no difficulty. I have been trying for some time to get separate figures for research into type 1 diabetes, as opposed to type 2, the latter of which affects, in the main, older people. Type 1 sufferers—the young in the main—are growing in number at an alarming rate. At last, I think I am making a breakthrough in the answers I am getting, which I appreciate. I believe I heard the Minister, some months ago, responding to a question on the issue of education for the disabled. He was both understanding and appreciative, and I said that if the opportunity arose I might say something in the future. I believe it is only in recent years that some of the difficulties of children with problems, sometimes underlying ones, are being understood better and allowances made for them.
When I was at school, and even while my children were small, the problems of a child with dyslexia were not properly taken account of. Today’s report from Dyslexia Action states:
“Knowledge, understanding and expertise is patchy and Dyslexia Action too often still hears accounts of parents struggling to have their concerns recognised and addressed at school”.
That was the tenor of some of the remarks. The report goes on to say:
“Difficulties in their children’s learning are not picked up early enough”.
I say no more.
I return to type 1 diabetes. I attended a meeting in the House only this week on the research that is taking place on type 1. However, I fear a real breakthrough on causes and treatment is yet to come. The causes are not properly understood and more research on such things as artificial pancreases is required. Despite all the care in the world, and even with the modern pumps that are worn by children, there is no assurance that the sugar/blood condition, if that is the correct term, is correct at all times. The problem can be particularly acute at night and I would not weary the House by reciting the number of telephone calls that sometimes have to be made at night to an absent parent, of the type the noble Baroness referred to, when the child is away on school activities.
As far as education is concerned, it boils down to this: there is no guarantee what condition the child with this problem will be in the next morning. It is an unremitting battle to take every step to avoid a hypoglycaemic event—the right blood-sugar level is crucial. If a child has had a difficult night, even if he avoids a hypo, I suspect he is not in as good a frame of mind as his counterparts to face difficult and testing exams. It is very bad luck indeed if he has had a hypo the night before or even an unacceptable blood-sugar level. Should one make allowances for this kind of disability or for any other disability?
In a different world, I read of questions being asked about some notable individuals who have distinguished themselves in Paralympics in the past and I read press reports as to whether they were really as disabled as it was thought at the time. As a criminal lawyer, who has had the privilege of examining and cross-examining medical experts over the years in a whole range of cases and conditions, I know that some judgments in these fields frequently have a degree of subjectivity. Hence, the inevitable difficulty of getting acceptable yardsticks on which to make allowances.
I do not wish to traverse subjects such as cot deaths but we will all have read about the cases, some of which I have been involved in, that involve a huge amount of controversy. Part of the difficulty of getting yardsticks is that the degree of subjectivity can be very high.
I fear that I have no real answer to the question of how best to deal educationally with a child who has been close to or, worse still, has developed a hypo the night before his exams. Perhaps the way forward—this point has general application—is for examiners to have some sort of guidelines concerning the need, to be accepted by preliminary identification. I have dealt with one disability but the same applies to the kinds of cases on which the noble Lord has concentrated.
The answer—these are only suggestions—may be to provide extra time in an exam for any child with a disability, or perhaps, appreciating the problems that might be entailed, some flexibility over the timing, perhaps postponing an examination for just a few hours. Such conditions would be helpful in ensuring recognition of the problems of any disabled child, whatever his disabilities. A temporary blip in a child’s condition should not be allowed to endanger a proper assessment of his talents or perhaps handicap him unnecessarily in his further educational prospects.
Baroness Walmsley
My Lords, I, too, congratulate my noble friend Lord Addington on securing this important debate.
When reading the briefing material that came to those of us who had our names down to speak in this debate, there was one particular statistic that jumped out at me. It was that, in a study carried out in 2003, 41% of a sample of 1,000 unemployed people were dyslexic. I do not know whether there has been an update, because that was almost 10 years ago, but it is a pretty damning figure. Therefore, if your Lordships do not mind, I am going to stretch the topic of this debate very slightly beyond education and training into the employment which we hope will result from them and which is an important component of a fulfilled life.
An example from the Dyslexia Foundation about an organisation called Training Plus Merseyside in my city of origin, Liverpool, was instructive. In 2004, it was told that 4% of its clients had a special educational need. It obviously had a hunch that this was a gross underestimate, so it did something about it. It did some staff training, invested in screening tools, paid for psychological assessment and used ICT interventions, and it found that the real figure was nearer to 30%. What that tells me is that, at least at that time, the number of people slipping through the diagnosis net at school was far too large and many of those were landing up as NEET—not in education, employment or training. Indeed, all young people with disabilities are two and a half times more likely to fall into the NEET category than their fully able peers. Of course, there is a large cost, both personal and economic, to this, so we need to get it right at the education stage before the situation becomes entrenched.
The Government understand the importance of early diagnosis and intervention and have announced professional assessments of children’s health and development at the ages of two and five, as well as the phonics check at year one in primary school. I hope one can assume that the two and five year-olds’ checks are done by multidisciplinary, experienced professionals, but the phonics test will be administered by ordinary classroom teachers. That is why it is so essential that all teachers, in their initial training, have a meaningful SEN unit, including information about how to recognise and source appropriate help for children who achieve low scores in the phonics test and who therefore may suffer from dyslexia at some level.
Of course, it is far more likely that the parents will have noticed a problem—particularly with that other hidden disability, ASD—long before the child goes to primary school. It is really sad that so many of them say that they struggle to access appropriate care in therapies. I met a parent recently who noticed something wrong when their child was two and sought medical advice when he was two and a half. The doctors would not intervene until he was three, by which time his fairly normal vocabulary for his age at two had all but disappeared.
For parents with a child with severe ASD, working with their child and supporting him through his therapy and exercises is a full-time job. It is an enormous commitment, often meaning that they have to give up their own career, with the resultant stress on the family budget. However, if the condition is caught early enough and appropriate interventions are provided, the results can allow that disabled young person to be quite functional and lead a pretty normal life. However, adjustments have to be made in the education and work place and the person supported to reach his full educational potential and then become a productive worker. Even NICE says that this is a cost-effective intervention.
In schools, if the condition is not detected, as Charlie Taylor, the Government's behaviour adviser told the education Select Committee this week, it can result in bad behaviour. The noble Baroness, Lady Browning, has given us some graphic examples of that. As he pointed out, this is not the child's fault and should not be treated as such. Sadly, many employers also do not understand the conditions that we are talking about today and make no allowances.
Another thing that struck me in the briefings was the statement from Ambitious about Autism that:
“At 16, young disabled people hold the same aspirations to stay in education and find fulfilling careers as their non disabled peers”.
Well, of course they do; but, sadly, only one child in four with autism continues their education beyond school due to lack of suitable courses and lack of support. However, many do persist and get university degrees. When you think of the struggle that they have had, it is tragic to learn that a quarter of graduates with autism are unemployed. That is much higher for their age group despite the fact that seven out of 10 employers who have autistic employees report a very positive experience and would recommend employing people with autism to other employers. It is a terrible waste of talent after such a struggle. It is no wonder that many of them succumb to mental health problems, welfare dependency, and so on. This must change.
The Government have introduced the Youth Contract to help unemployed young people to get into work, and I think we can safely assume that many of them will have dyslexia or autism, or may be somewhere on either of those spectrums. Can my noble friend the Minister tell me what special provision is being made within the Youth Contract for these young people? If it is not for them, who is it for? It is doubly important that these young people are catered for with appropriate courses and support into work, especially in the light of the impending duty to stay in education or training until the age of 17 and then 18.
I return to education and the much more common condition of dyslexia. The Government have made clear their deep commitment to improving literacy. They are also changing and improving initial teacher training and continuing professional development. These two things go together. In this country we work with teachers to improve their practice. We do not sack head teachers on national television, as Michelle Rhee, the director of education in Washington DC did. We have nothing to learn from a city that let its schools get into such a bad state, where half of 15 year-olds were illiterate and 1,000 teachers were considered incompetent. Things are different here.
Will my noble friend the Minister say whether all the future vehicles for initial teacher training—including the ones in the new training schools—will have a compulsory SEN component, including training in how to recognise dyslexia and how to access the right support? Can he also say what is being done about teaching assistants? Again, the noble Baroness, Lady Browning, mentioned their importance. They are now an indispensible component of the staff of modern schools—especially primary schools—so it is vital that they have opportunities to specialise in supporting teachers with children with disabilities or special needs in their classrooms—which, actually, is most of them—and that they have a clear career path if that is the way they want to go. Can the Minister say something about that?
It surprised me recently to discover that the Open University teaching courses, often used by teaching assistants to move on to be a full teacher, do not have the option to specialise in SEN. One has to do a general teaching degree first. This is a pity as many teaching assistants already have good experience with children with special needs and could do well on a specialist teaching course. If this is not correct, I hope someone will give me the information.
As we have heard, Dyslexia Action is calling for a national dyslexia and literacy strategy. You cannot have a literacy strategy without addressing dyslexia. As the noble Baroness, Lady Browning, has pointed out, there are four simple key elements: whole school ethos; knowledgeable teachers; creative adaptations to classroom practice so that all children can be included; and access to additional learning programmes and sufficient resources. This does not seem too much to ask and I hope the Minister can assure us that this will happen.
Lord Ramsbotham
My Lords, I, too, thank the noble Lord, Lord Addington, and congratulate him on obtaining this debate. Like other noble Lords, I admire the determination with which he has pursued these issues on many occasions in the House. I welcome the fact that we are debating this issue with the Minister because, from our exchanges both during education Bills and subsequently, I know what a keen interest he takes in these matters. Knowing that we are dealing with and talking to someone who has such an interest is encouraging for those of us who have concerns in this area.
I, too, have benefitted from the briefing that we have had for this debate, particularly from Dyslexia Action. However, I do not want to speak only about dyslexia because I find from the briefings that I get from organisations in all the various parts of the spectrum—ADHD, autism and so on—that they all have similar areas of concern. The best thing we can do is to bring all those groups and their concerns together and try to unite them in a common strategy. After all, the process is the same, as I shall discuss, and it is only individuals with particular problems who have to be treated differently within an overall strategy.
I declare an interest as chairman of the All-Party Group on Speech and Language Difficulties. Currently we are conducting an inquiry into the links between speech, language and communication needs and social disadvantage. I shall mention some of the emerging evidence that we are getting because it is relevant to this issue. In that connection, we have had two days of evidence this week, which I have found the most valuable and inspiring days I have spent in this House, listening to practitioners in the field.
As I have explained to the House, my motivation stems from an experience in a young offender establishment in Scotland when the governor said to me that if he had to get rid of all his staff, the last one out of the gate would be his speech and language therapist. When I asked why, he explained that the offenders could not communicate either with each other or with the staff, and until and unless they could, no one knew what to do with and for them.
I met the marvellous woman who was carrying out this work and asked her what she did. She said she had assessed them all and found hideous shortcomings, which she was able to do something about. I asked her who was the best person in England to do this work and she named a professor at Surrey University, who I asked to come with me into a young offender establishment, and she did. She assessed the boys there and found all kinds of things which were not being picked up in other assessments conducted in reading, writing and other skills.
These include substance-abuse-induced memory loss, hearing problems and sight problems. Most telling of all, however, 100% had the communication difficulties associated with 1% of the population. Clearly, there is a link in all this. I will not bore the House, but subsequent work in putting two speech and language therapists into young offender institutions for two years, academically evaluated, proved within a month that they were an absolutely essential part of the establishment.
Secondly, it identified very clearly that picking up these problems at the age of 15 was far, far too late. It has got to be done earlier. It is not just being able to engage with the people who were looking after them in the young offender establishment; they had missed out on being able to engage with teachers throughout the whole process of life until then. No doubt, that failure had a lot to do with the fact that they were in those establishments. A statement was made to me, which I have never forgotten, that the inability to communicate was the scourge of the 20th century, and it is certainly that of the 21st century. I couple that sentiment with two other statements that I have repeated on many occasions in this House. One was the marvellous remark of Winston Churchill’s in 1910 that,
“there is a treasure, if you can only find it, in the heart of every man”,
with the clear implication that it is your duty to find it. Secondly, it is my firm belief that the only raw material that every nation has in common is its people, and woe betide it if it does not do everything that it can to identify, nurture and develop the talents of all its people, because if it does not and it fails, it has only itself to blame.
Thinking that through, therefore, I am very concerned that people with hidden difficulties and disabilities which could be identified early must have them identified, so that the talents and the treasure can be nurtured and developed not just for their benefit, but for the benefit of the nation as a whole. In preparing for this debate, I looked at my shelves upstairs and I was staggered at the amount of information and the number of reports on the subject. For instance, we had the Bercow report of 2008; the Department for Children, Schools and Families’ better communication plan; the Field report on the foundation years; the Marmot review of health inequalities; the Allen report on early intervention; a joint consultation on the new approach to special educational needs from the Department for Education and Department of Health; the Department for Education’s statutory framework for the early years; the 2012 Green Paper and the pathfinders; and, only today, another document from Dyslexia Action, Dyslexia Still Matters. These reports, together with masses of papers from the Communications Commissioner, the Children’s Commissioner and many practitioners, all say the same thing: that if we are going to make progress, we must intervene early—and the earlier the better—to discover difficulties and disabilities and do something about them as soon as possible.
I turn to the evidence that we have been hearing. I was very pleased to hear from the Department of Health that four new service models are being produced jointly by that department and the Department for Education, together with royal colleges, health visitors, UNISON and others, with pathways for parents, children and practitioners. Two have already been introduced; one for pregnancy and the early weeks of life and one for pre- and early school from two to 10. Another two will be introduced for the nine to 19 year-olds. Furthermore, I am glad to see that there is one for the criminal justice system. There is clear evidence in this that the health and well-being boards which were formed in the recent Health and Social Care Bill have a very important part to play in this. Interestingly, however, a number of our witnesses have said how much they wish that the phrase “mental health” was eliminated from our vocabulary and “mental well-being” was used instead. It is a much more satisfactory term; “well-being’ is a “doing” word, and might make people understand the problem better.
I come to the practicalities. We heard from a health visitor and a speech and language therapist from Northern Ireland that compulsory assessments are being conducted on every child at the age of two, and that health visitors have been trained by speech and language therapists to understand the symptoms they are looking for. They are picking up difficulties as well as disabilities, which is enormously encouraging. Northern Ireland has an advantage in that health and social care work together, which is not the case all over the country. The witnesses highlighted how hugely important this is because otherwise you begin to get fragmentation, which is difficult to deal with.
We then heard what is being achieved in Stoke-on-Trent. It has adopted a motto to the effect that communication is everyone’s business and regards intervention as a multi-agency activity. Some 5,000 people have been trained to identify symptoms. They are not only teachers and parents, but policemen and voluntary sector workers. People are on the lookout for these things and the response is co-ordinated. Stoke has developed a staged pathway which I believe is a model that others could follow with advantage. Indeed, Staffordshire has been fortunate to have had for many years some visionary people working in this area, with research that goes back 10 years showing the benefit of taking this sort of work further.
We heard from representatives of children’s services and speech and language therapists in Walsall. They realised that children entering secondary school had also not had problems identified. They have been assessing people as they enter secondary school. They have been doing this as a pilot for three years and they have some interesting data. Moreover, some schools have found that they have to do these assessments not just when pupils arrive, but at various stages of their passage through the school. I hope that that is not something which will be dismissed. It was interesting to note that after our evidence session, the people from Stoke married up, if you like, with the people from Walsall because they clearly reckoned that they had something to learn; you have to carry on beyond the early years.
Carrying on is the lesson in some excellent work that has been devised by the English Speaking Board for enhancing employability. What is absolutely crucial is the word “transition”. Whatever we do with those who have hidden disabilities and difficulties, having found them, we have to concentrate on the transitions from stage to stage not only throughout their education but on leaving school and making the transition into the workplace, and then on through life.
Later in the year we shall issue a report about this. It will say, frankly, that we think this is an area that needs national oversight. We are concerned that local authorities will be responsible for certain parts of it, with the healthcare and teaching sectors responsible for others. Unless someone pulls all this together, people will continue to fall through the cracks.
The other message that comes through strongly in the report I saw today from Dyslexia Action is that the solutions lie in using existing knowledge and good practice because there is masses of it out there. Rather than reinvent the wheel, for heaven’s sake, let us exploit the valuable expertise and experience of the marvellous people who do this terrific work.
As the title of this debate suggests, it is essential that appropriate teaching and training are available and accessible to all people according to their ability and talent. The ethos of the English Speaking Board is that every person is an individual with unique capabilities and problems who must not be compared with another; rather, each must be judged on their own merits. I hope that the Minister will be able to assure the House that a national approach which makes certain that people are not allowed to slip through the net from the moment of an early assessment at two years of age is what the practice will be, and that what is done in Northern Ireland will become common practice throughout the whole of the United Kingdom.
Lord Touhig
My Lords, we are indeed indebted to the noble Lord, Lord Addington, for securing this debate and also for the very powerful advocacy that he displayed when he opened it this afternoon. Finding a job is difficult enough these days, especially if you are a young person. Consider how much harder it is if you are disabled. In particular, if you are a young person with learning and developmental disabilities, accessing the right support and opportunities to find a job is especially challenging. On top of this, you are part of a substantial cohort of young people with special educational needs and disabilities, all of whom are likely to be unemployed, too.
In 2009, the Department for Education showed that 30% of young people who had a statement of special educational needs when they were doing their GCSEs, and 22% of young people with a declared disability, were not in education, employment or training when they reached the age of 18. This compares with just 13% of their peers. The Department for Education’s National Pupil Database 2009-10 reveals that just 20% of children with special educational needs and statements achieved five A*-C grades—less than one-quarter of the rate for children without special educational needs.
One person in every 100 has autism. Consider the detrimental effect that this has on the employment prospects for adults with autism. Too many autistic children and their families are being let down by the special educational needs system and are struggling to access the support that they need. That is why I and a great many others welcome the Government’s decision to reform the system through the forthcoming children and families Bill.
The noble Baroness, Lady Browning, has been a great champion and we all admire the hard work she does on behalf of people with autism. She referred to the All-Party Group on Autism’s recent report, The Right Start: Reforming the System for Children with Autism, of which I have a copy. As a result of publishing the report, we will press the Government to ensure that the legislative opportunities down the tracks for change will benefit all children with special educational needs, especially and including those with autism.
Our report, which is based on a public survey and expert evidence from young people with autism, parents, teachers and professionals, leaves us believing that the Government’s forthcoming legislation is perhaps a once-in-a-generation opportunity to make some significant change and improvement. Briefly, I will draw the House’s attention to just five key points from the all-party group report. They cover training and best practice; specialist support at school; involvement of parents and young people; transition, or the extension of the SEN system up to 25; and accountability.
On training and best practice, 84% of respondents to our survey said that teachers were not given enough training to teach and support children with autism effectively, yet we know that training is essential to understanding this complex matter. It is therefore necessary that the Government continue to fund the development of successful training programmes. We also believe that where specialist knowledge exists it should be shared. Schools should be able to draw easily on the expertise of neighbouring schools.
As a subtext, and on a matter that I have referred to before in the House, over 70% of youngsters excluded from school in England have SEN. That statistic should alarm us all. The mother of an autistic child gave evidence to our All-Party Group and said,
“My son is very articulate and very bright, but he’s autistic. The headteacher just thought that he was a naughty boy, who needed some anger management, and he got excluded on a couple of occasions”.
In a major National Autistic Society survey, 17% of children with autism have been suspended from school at least once, and more than 4% have been excluded permanently from at least one school. More than that, 32% of parents surveyed were asked to collect their child at lunchtime or before the end of the school day for reasons other than that the child was ill, and some 19% of parents reported this happening on more than four occasions.
Unless this is officially recorded, these types of exclusions are illegal, and we need to get this message across. Experts who came to give evidence told us that almost every single case of exclusion from mainstream school could have been avoided had more staff been aware of the children’s needs, and had there been better planning at school level to support children with autism.
On specialist support at school, our report highlights the fact that children with autism can have a range of complex difficulties that often need specialist support—that is pretty obvious. Far too often, however, parents say that this expertise is simply not available. We certainly hope that the Government will ensure that all children with autism have access to the support that they need, including those without a statement, or an educational health and care plan. We certainly believe that every school should have a lead teacher for autism—a point made by the noble Baroness, Lady Browning.
Moving on to the matter of involvement of parents and young people, we discovered that less than half of parents of children with autism considered that they were truly involved in shaping the support that their children need and receive at school. Autism professionals we met agreed with this, and so did 30% of the teachers. Over 90% of parents said that they wanted to be more involved, and that they wanted schools and local authorities to work closely with them, sharing information and ensuring that a consistent approach is taken at home and at school.
The SEN system is to be extended to 25 year-olds, and they, too, must be involved in the decisions that affect their lives. As for transition, for too many families the struggle for services intensifies as young people reach adulthood, and as we were told in one evidence session, as statements of special educational need come to an end it often feels “like falling off a cliff”. The Government have decided, I believe rightly, to extend the SEN system to 25 year-olds, but they must ensure that many more young people with autism can access the support and opportunities they need to live independent adult lives, and that those who are able can enter apprenticeships and gain employment. Our inquiry was told by one parent:
“When my son leaves school he has no future. I suggested work experience placements for young people with autism. At the moment they have nothing”.
That is simply unacceptable.
In quoting the noble Lord, Lord Freud, again, I echo the words of the noble Baroness, Lady Browning, who has been a great supporter of and friend to those who work actively on behalf of people with autism. The noble Lord said that the Government want to increase the number of people with autism in work to 30%, doubling it from 15%. We all share that ambition and we back him to the hilt in that.
Finally I will touch on accountability. An important aspect of any reform must be greater accountability for parents. Too many parents who came to give evidence to us said that they had to fight constantly to gain access to the support that their children needed. That is why we need an effective complaints system encompassing all state-funded schools, and it must be a priority, in order to ensure that parents have confidence in that system. Like many others, I wait eagerly for the children and families Bill, hoping and praying that it will help to show us the way forward.
Lord Clement-Jones
My Lords, I join other noble Lords in congratulating my noble friend Lord Addington on initiating this debate. Like them, I commend him on his consistency and persistency on these topics over many years. I must first of all declare an interest as the honorary president of Ambitious about Autism, the national charity for children and young people with autism, and I also declare a family interest in dyspraxia.
We have made some progress on the education of children on the autistic spectrum over a period of years, both under the previous Government and under this. I pay tribute to the two current Ministers who have shown an interest in this subject: my honourable friend Sarah Teather and my noble friend Lord Hill, who is to reply today. I will use this important debate to highlight the situation faced by young people with autism at a slightly older age and to suggest some solutions that might improve their ability to access education, training and employment. In view of the superb contributions that have been made in the debate, I will inevitably echo quite a large part of what other noble Lords have said.
What stops young people with autism accessing education and training? Ambitious about Autism research shows that 51% of Britain’s schoolteachers have never received training to help them support children with autism. The noble Lord, Lord Touhig, referred to exclusion. Children with SEN are currently disproportionately likely to be excluded from school as a result of this lack of skills and understanding in their teachers. Responding to our research, 43% of parents reported that their child with autism had been formally excluded within the previous 12 months, and 55% of parents said that their child with autism had experienced an illegal exclusion of the type mentioned by the noble Lord in which parents are called in the middle of the school day and told to take their child home. Department for Education statistics show that 27% of children with SEN are excluded from school a year, which is eight times the rate of children who do not have SEN. Exclusions have an obviously damaging effect on pupils’ educational progress and attainment. They also put pressure on parents. Many parents have said that their child’s exclusion had a detrimental effect on their employment and therefore on their family finances.
Beyond the problems surrounding exclusion, the current lack of teacher training in autism means that young people with autism are often in a classroom without any teaching staff who understand their needs. Quality of teaching is very important in ensuring that pupils with autism are appropriately recognised and supported and go on to reach their potential. Just one in four young people with autism continues their education beyond school. This is in part due to a lack of suitable provision, which my noble friend Lady Walmsley mentioned, poor funding structures and a workforce that requires additional support and training to support learners with autism. However, we know that young people with autism want to access employment and training, and we also know that they need the right support in order to do so. While there is a dearth of education and training available, young people with autism have very limited options.
A host of reports from recent years provided evidence that the transition to adulthood for young people with autism and other disabilities is poor and that there is a serious lack of educational opportunities for this group. Ofsted states that,
“the real choice of education and training opportunities at 16 was limited for many young people with learning difficulties and/or disabilities. Inspectors found few courses available for young people with the lowest levels of attainment”.
What impact does this have? The social impact of unemployment for young people with autism is huge. Not continuing in education or training beyond school leads to a loss of potential for young people and society. Disabled young people are 2.5 times more likely not to be in education, employment or training than their non-disabled peers, which is a direct result of failure to access appropriate education or training. Many young people with autism have very limited choices when they finish school. Often their only options are to stay at home with their parents or go to a residential care home, often with people twice their age. Failure to provide opportunities for education and training that will lead to employment denies young people with autism the right to fulfil their potential and contribute to society.
In addition to social costs, failure to provide for young people with autism leads to higher long-term financial costs. The National Audit Office found that £1 million per person could be saved by supporting young people with learning difficulties to gain the skills to live more independently. It also found that supporting a disabled young person to access work reduces lifetime costs to the public purse by £170,000.
So what is the solution? First, we need training for all school staff in autism and an awareness of other special educational needs and disabilities. I accept what the noble Lord, Lord Ramsbotham, said about bringing all of this together. This could include compulsory SEN training and a core autism module in initial teacher training. It is important that it is not just teachers who are included but also teaching assistants and supervisory staff such as mealtime supervisors.
Secondly, a school admissions code that ensures schools and admissions authorities are obliged to place children with autism in suitable schools is essential. We must guarantee an excellent education for all children and young people with autism. It is essential that schools have fair exclusions policies that ensure exclusions do not occur as a result of an unmet special educational need.
Thirdly, we need to ensure that government initiatives such as the Youth Contract are accessible to young people with autism and other disabilities, as a number of noble Lords said. Can the Government explain how they will make the Youth Contract fully accessible to disabled young people? Can they confirm that Access to Work funds will be available for young disabled people doing internships and volunteering placements?
Raising the participation age to 18 is welcome, but it appears little thought has been given to what this might mean for young disabled people, many of whom are not in employment, education or training—not through choice but through a lack of suitable provision. The raising of the participation age will help young people only if it coincides with the development of more and better educational provision. Have the Government committed the extra funding that is needed to meet the additional needs of young disabled people who are currently not participating? How have they calculated the level of this need? The funding must take account of all additional needs, not just those of young people with statements of SEN.
As part of Finished at School, Ambitious about Autism made a number of recommendations to improve post-16 education for learners with autism. I welcome the fact that one of those recommendations—a legal right to educational support for young disabled people up to the age of 25—has been adopted by the Government. I hope that, accompanying this, there will be a funding system that will give young people and families more information, choice and support, a cross-government focus on outcomes and destinations for young disabled people and a further education workforce with the skills to support young people with autism to achieve their ambitions.
It is not, however, all about government action. Ambitious about Autism, my own organisation, has launched a new strategy to create more and better services beyond school age. As part of the strategy, the charity is developing and launching new services to enable young people with autism leaving school to continue to learn so that they can transition to living and working as part of their home community. Its aim is to establish a new community-based college that is a partnership between specialist and mainstream provision.
Lastly, I have a few points on education, training and employment for people with Asperger’s syndrome—high-functioning autism—as well as others on the autistic spectrum. As the National Autistic Society says, while there are similarities with autism, people with Asperger’s syndrome have fewer problems with speaking and are often of average or above-average intelligence. They do not usually have the accompanying learning disabilities associated with autism but they may have specific learning difficulties. These may include dyslexia and dyspraxia, or other conditions such as attention deficit hyperactivity disorder or epilepsy. With the right support and encouragement, people with Asperger’s syndrome can lead full and independent lives.
People with autism, including Asperger’s syndrome and high-functioning autism, often have much to offer employers. With the right support, they can contribute fully to the workplace. In a study carried out by Research Autism in 2008 for NAS Prospects (London) on the experiences of employing people with autism, seven in 10 employers questioned had had a positive experience of employing someone with autism and said they would recommend it to others.
The NAS has launched its Undiscovered Workforce campaign, which works at a national level with Ministers, employers and others, and at a local level with campaigners, MPs, local businesses, universities and individuals. I commend that campaign. I also very much welcome the particular interest shown by my noble friend Lord Freud in his capacity as Welfare Reform Minister—this was mentioned by the noble Baroness, Lady Browning—and the interest shown in employment issues by my honourable friend John Hayes, the Employment Minister in BIS. The NAS seeks to increase the availability of specialist employment support for those seeking work and those already in work to transform attitudes and increase opportunities for people across the autistic spectrum to fulfil their ambitions in the workplace.
Therefore, will the Government pull all these aspects together through their disability strategy, the Youth Contract and the forthcoming children and families Bill—which has also been mentioned in this debate—to make sure that young people with autism and others with special educational needs are appropriately supported to enter further education, higher education, training, apprenticeships and employment? I look forward to hearing what the Minister has to say.
Lord Storey
My Lords, I, too, thank my noble friend Lord Addington not just for securing this debate but for his passion in making sure at every opportunity that these matters are at the forefront of our consideration. I am sure that his determination will succeed.
I declare an interest as a practising head teacher. I was very mindful of what my noble friend Lady Browning said about young people being labelled in the past. Because of their learning difficulties, they were often regarded by their peers, and sometimes by their professional teachers, as “thick”. From my first teaching job, I remember a teacher who was very keen on literacy and would test every child on their reading age every month. She had a chart on the classroom door with the names of all the children—there were 40 of them then—and their monthly reading age. Because some of the children had learning difficulties—sometimes specific learning difficulties, sometimes global learning difficulties and sometimes dyslexia, although we did not know that at the time—their reading age never moved. Therefore, the teacher would say, in an almost patronising way, “Poor little Michael”, or, “Poor little Dominic”, or whatever their name was. That was not the fault of the teacher but it created huge problems. These were not just learning problems; as was rightly said, it often led to bullying.
This did not just happen in schools. When I was doing my education degree, I vividly remember a very highly regarded lecturer in education almost dismissing dyslexia, saying, “There’s no such thing. It’s just made up. They don’t have dyslexia in China, do they?”. That was often the view at the time. Thank goodness we have moved on.
We then moved on to a period in which we began to understand dyslexia and other learning difficulties but did not know what to do about them. Resources were very limited. It would often be a parent who came into the school and said, “I think my child is dyslexic”. The teacher would say, “Oh yes?”, and would eventually get around to thinking about what might be done about it, but the resources were not there. We have come light years in what we are now able to do. Both the previous Government and this Government have taken enormous steps regarding special educational needs and are to be congratulated on what they have done. That is not to say that there are no further things that we should do.
I give one example of the progress that we have made, which touches my heart. A very close friend of mine has a daughter who has mild cerebral palsy. Although she required a bit of pushing from her parents—she was in the independent sector—she has been supported all the way through her education. She is now at Leeds University, which has been fantastic in supporting her. She obviously has a scribe whenever she is doing exams and so on. When she could not get the work in on time, they said, “Come on, we’ll help you and make sure that’s right”. She repeated one year. This year, she will get her degree and the following year she will do a two-year masters degree. That is something of which, as a nation, we can be duly proud.
The only reason I got involved in this debate is my own personal experience. The previous Government rightly used the phrase, “every child matters”. If we are going to make sure that every child matters, that has to be in everything. I look at my own school and at what we now do. First, we have an ethos that recognises particular special needs issues. On dyslexia, we have a qualified SpLD teacher who is, thanks to government funding, undergoing her masters. She is qualified to diagnose specific learning difficulties. The staff are also trained to identify characteristics of learning difficulties. They then use a checklist and go to the head of special educational needs. If that resource did not exist in schools, we would have to try and buy in a specialist teacher, or we would have to go and get the school psychologist, which would often mean a waiting list of six to 12 months. Having the resource in the school itself, having the staff qualified and trained, makes a huge difference.
What happens when a child is identified as dyslexic? Obviously, we involve the parents. We put together strategies in the classroom. We look at intervention strategies. We look at one-to-one teaching. We look at a multi-sensory programme of teaching. Most of us learn in an auditory or visual way. If a young person is dyslexic, we need to do lots of oral work and what we call “over-learning”—learning strategies to cope.
What do we need to do as a country? Again, I agree with my noble friend Lord Addington and other noble Lords have made the same point. We need to ensure that the training is there. In each school, there ought to be somebody who is fully qualified. That needs to be a crucial, integral part of our initial teacher-training course.
A lot of colleagues will have had information from Dyslexia Action, and the Dyslexia Foundation from my home town. The work that they have done to case study and highlight has been tremendous.
I am grateful to the Minister for always being prepared to listen and give information. I think that he is probably fed up of my Questions, but I have asked him a number of them on dyslexia. They not only show that we understand what needs to be done, but they indentify next steps. The money that has been made available by the Government is to be commended. However, looking at the uptake of funding and the number of people who have taken training places, region by region—I will not embarrass various regions—there are huge regional variations and that gives me cause for concern.
In a recent Question I asked whether the Government would consider asking teaching training providers how many compulsory courses there were and how many optional courses there were. Sadly, we do not hold that information centrally. We need to hold that information. We need to know how many teacher training establishments make this provision, so that we can plug the gaps. We need to get that information.
I agree with my noble friend Lord Clement-Jones that we have made huge progress. I am heartened at what we have heard but I am absolutely sure that progress will continue to be made. With the noble Lord, Lord Hill, a Minister who listens and I am sure is prepared to act and, in the other place, a Minister, Sarah Teather, who believes strongly in special educational needs and early intervention, I am hugely optimistic.
Baroness Jones of Whitchurch
My Lords, I thank the noble Lord, Lord Addington, for initiating this debate today. He has an impressive track record of campaigning on these issues and both he and a number of noble Lords have given some very well informed and passionate contributions this afternoon. I really appreciated the opportunity to listen and learn. I would also like to place on record my thanks to all the people—both the individuals and the organisations—who wrote to us with some very constructive solutions for the way forward, but also with some harrowing accounts of some of the problems we face with these issues.
I begin by reiterating the point acknowledged by my noble friend Lord Morris, the noble Lord, Lord Ramsbotham, and others in the debate, that while dyslexia and autism represent a proportion of the problem, there is a bigger challenge of hidden disabilities. For example, to give some other statistics, more than 3 million people have asthma in the UK, one in 200 people had epilepsy and one in four people will experience mental health problems—or should I say mental well-being problems—with an increasing number of young people in this category. Overall, it is estimated that around 70% of people with a disability in this country have a hidden disability. As the noble Lord, Lord Ramsbotham, rightly suggested, there is much to commend a united strategy to tackle these issues although there are individual elements to each of the disability issues, as we know and as we have rehearsed this afternoon.
The truth is that we have improved our medical skills in diagnosis and treatment, but these have not been matched by the ongoing learning and support guarantees necessary to enable young people to lead enriched lives and fulfil their potential or—as the noble Lord, Lord Ramsbotham, put it—to enable us to find the treasure within them. Despite the progress resulting from the Equality Act, we are still confronting levels of both overt and covert prejudice, institutionally and socially. These are lifelong challenges with very different solutions needed at every stage.
As we have heard, for young people with hidden disabilities in particular, even once a diagnosis has been made there is a subsequent fear of being adversely judged and labelled, or alternatively being disbelieved. At the same time, young people do not want to draw attention to their disability and appear to be different, either because they are embarrassed or, as we have heard this afternoon, because they fear bullying in a school or social environment. As a result they do not always access the funding and resources to which they are entitled.
While the original SEN programme played an important part in moving disability and special needs towards centre stage in the design and provision of local authority, school and personalised support—I thank the noble Lords who paid tribute to the previous Government’s efforts in this regard—it had undoubtedly become too bureaucratic and formulaic in its execution. There were too many agencies involved, no incentives for joined-up services and a degree of piecemeal funding.
Therefore, we welcome many of the aspirations in the Government’s special educational needs Green Paper and their response to the consultation. We support the concept of a single, simpler birth-to-age-25 assessment process and care plan with the right to a personalised budget for parents and young people to buy in support services. Parents tell us that these proposals match their aspirations for their children’s ongoing care. We welcome the requirement for earlier testing and intervention—another point made by noble Lords this afternoon.
We welcome the emphasis on providing an education that will help young people with disabilities into meaningful employment. But given the complexities of the new arrangements, and the need for parents to be reassured that there will be an improvement in the support given to their children, we would caution against rushing into legislation before the outcome of the 20 pilots, which are currently experimenting with the new proposals, have been properly evaluated.
The Minister will know that the interim report on the pathfinder pilots published this week is already flagging up some worrying concerns. For example, it is proving difficult to get agencies to work effectively together; assessments are being duplicated, not streamlined, as was the original intention; and the higher costs are judged not to be sustainable. More importantly, there are increasing criticisms that, contrary to their stated and well received objectives, the pathfinders are failing to involve young people themselves in the shaping of the new services. I raised this matter in Questions earlier in the week, and I once again urge the Minister to confirm that the full conclusions of the pathfinders will be evaluated before the Children and Families Bill is published. I would be grateful for his comments on this.
We would also expect the Government to set out clearly how the funding for these new, improved services will be guaranteed at a time when specialist posts are being lost due to deep cuts to council budgets and to health and welfare budgets. Could the Minister explain how the transition from separate budget heads in education, health and social care to an integrated, personalised provision will work in practice? Will they be expected at a local level to transfer funds into a separate pot, and it will it be ring-fenced?
As the Green Paper acknowledges, and a number of noble Lords around the Chamber this afternoon have said, education and training are central to addressing the needs of young people with hidden disabilities. As has been mentioned, it starts with initial teacher training courses and the need for compulsory modules on identifying, understanding and providing for children across the full spectrum of disabilities. It needs to be supplemented by specialist teachers trained in supporting young people in the classroom. It also requires sufficient teaching assistants, properly funded and trained to support the individual learning needs of specific children in the classroom. Those points were echoed by the noble Baronesses, Lady Browning and Lady Walmsley.
It also requires top-class careers provision in schools, which can give disabled young people specific advice about further and higher education courses and the employment options available to them. The Minister knows our continued concern about the quality of advice being provided by the new schools-based careers service, and we have a specific worry that children with specialist support needs will not get individual face-to-face advice to aim their skills at achievable ambitions. Perhaps the Minister could comment on this. Surely it should be a fundamental right of all children throughout the education system to have the same rights. Can the Minister clarify the legal position with regard to SEN children having access to academy places, and their rights once admitted? Would he agree to review the legislation if it is found to discriminate against statemented or SEN children?
While no one would pretend that the provision in schools is perfect, the message from many disability groups and individuals is that it is the transition from school to higher or further education and ultimately into meaningful employment that remains the biggest challenge. Parents who have seen their child have good support at school can be shocked when they view the adult options available when their child reaches the age of 16 or 18, with specialist adult facilities dominated by much older attendees, often with complex needs, or when they are faced with an FE syllabus that does not provide courses on a full-time basis, leaving parents struggling to provide home care at other times of the week when courses are not being provided. This is why FE colleges need to be centrally involved in pathfinders and why it is essential that they have a statutory duty to be involved in the transition planning for individual young people at a very early stage in their education so that appropriate provision can be laid on in the FE colleges to meet their needs sufficiently in advance.
Finally, as several noble Lords have highlighted, the real challenge highlighted in this debate is about those with hidden disabilities finding and keeping meaningful work. As the noble Baroness, Lady Walmsley, and the noble Lord, Lord Touhig, identified, the statistics are, quite frankly, depressing. Disabled people are twice as likely to live in poverty as non-disabled people. Some 22% of young people with a disability were not in any form of education, employment or training when they reached the age of 18—twice the level of their peers. The Labour Force Survey showed that, in 2011, 41 per cent of men and 43 per cent of women designated longer-term disabled were also unemployed. The result, as we have heard, is too many young, capable people trapped at home with increasingly elderly parents.
The Sayce report for the Department for Work and Pensions identified a number of solutions with which we concur, particularly the personalised approach and the expansion of the Access to Work scheme, which they describe as the Government’s best kept secret. This helped 37,000 disabled people into work in 2009-10. However, it needs to be better funded and more focused on helping those with hidden disabilities into work. The Government also need to focus on those with mental disabilities rather than seeing their role as just providing practical adaptations and support. Much greater emphasis should be placed on helping people access mainstream apprenticeships rather than separate, short-term internships, as seems to be the trend at the moment.
These are challenging issues—particularly challenging against a backdrop of central and local government cuts and welfare reform—that might face any Government. This Government have set out ambitious solutions for helping those with disabilities access quality education and jobs. However, with reducing budgets, the practical implementation may well elude them, leaving parents and young people frustrated and disappointed. In this context, I look forward to hearing what the Minister has to say in response to this debate to reassure us.
The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford)
My Lords, I would congratulate my noble friend Lord Addington but I think he has had enough praise already this afternoon. He spoke, as I knew he would, with a great deal of knowledge. We all know the passion that he brings to the subject. I was grateful to him for doing so, and to my noble friends Lady Browning and Lord Clement-Jones, and the noble Lord, Lord Touhig, who spoke with equal authority about autism. The noble and learned Lord, Lord Morris of Aberavon, brought up the subject of diabetes, which I thought broadened the debate in an interesting way. The noble Lord, Lord Ramsbotham, spoke about speech and language difficulties, which is another manifestation of some of these issues that we are seeking to find solutions to.
As well as being a good debate, it is a timely one because, as noble Lords have said, the Government are introducing their children and families Bill, which in a way, I hope, sets the framework for much of what we have discussed this afternoon and how we hope to be able to improve things in future, because that Bill seeks to put into legislation a new framework for the education and training of disabled children, young people and those with special educational needs. The whole purpose of that new approach is to seek to promote better and earlier identification of children’s needs—one of the recurring themes this afternoon—and a better transition from school to further education, higher education, adulthood and the world of work, which I think is one of the other recurring themes of this afternoon.
To my noble friend Lord Addington, who was keen that I should muffle some bells, I think was his phrase, I would say—I am sure he knows this—that the purpose of these reforms is not reclassification or trying to knock people off lists but about trying to bring together what has been too disparate a range of provisions into a simpler and more coherent whole.
Perhaps I may set out our overall policy direction, bring your Lordships up to date with the latest position in some key areas, and then try to respond to the main points put to me. We have heard a number of facts this afternoon. It is the case that there are some 220,000 children with statements of special educational needs. Last year, there were more than 165,000 young people aged between 16 and 18 with a self-declared learning difficulty or disability studying in mainstream further education colleges. We know that these children are less likely to achieve well at school and are four times less likely to participate in higher education. At 16 or 17, young people with learning difficulties and/or disabilities are almost twice as likely as their peers not to be in education, employment or training. Those figures and others that we have heard this afternoon powerfully underline the case for reform.
As we have been reminded, under the current system, needs are often picked up late, families too often have to battle to find out what support is available, teachers and lecturers feel hampered by bureaucracy and lack the skills and confidence to meet those needs; and young people over 16 with SEN have weaker entitlements to support in colleges than if they had stayed at school, and lack clear routes into independent living and work. I think there is broad agreement that the system needs to change and that the objectives of the Government’s reforms are the right ones. I welcome the support given by the noble Lord, Lord Touhig, and the noble Baroness, Lady Jones of Whitchurch, in that respect. I accept her point that there are practical issues that we will need to work through. However, the direction of travel has broad endorsement.
Put simply, our goal in these reforms is that from 2014 we will have a better integrated assessment process that is more streamlined and better involves children, young people and parents. There would be a single education, health and care plan for children and young people with statements or learning difficulty assessments for post-16 education in the current system. This would help to deal with the important point raised by my noble friend Lady Browning and others about the current cut-off at 16 and the problem that brings. The proposals will include an offer of a personal budget, for those who want it, to give families greater control over the services they use. The plans will give parents the right to express a preference for any state-funded school, including academies, or college. There will be a requirement that local authorities publish a local offer of services for disabled children and young people, and those with special educational needs. We will also introduce statutory protections comparable to those currently associated with a statement of SEN for 16 to 25 year-olds in further education, with access to routes of appeal.
In order to prepare the ground for the new system, as the noble Baroness, Lady Jones of Whitchurch, said, we have set up 20 pathfinders, covering 31 local authority areas and their health service partners. These pathfinders are testing out many of the proposals set out in the Green Paper, such as education, health and care plans and the local offer. I listened to the points made by the noble Baroness about some of the practical concerns, and I agree that my department will need to reflect on them and take them into account as the proposals are taken forward. We will publish an interim report later in the autumn, and we will work with a range of different services to take the lessons on board.
We are also keen to make progress with the Bill in order to get the new system in place. We plan to publish draft SEN clauses for the proposed children and families Bill in the first week of September. A period of consultation and pre-legislative scrutiny will follow before the Bill is introduced to Parliament in spring 2013. That will provide an opportunity to pick up on some of these practical issues. Subject to the approval of Parliament, we hope that the Bill will gain Royal Assent in spring 2014.
One of the recurring themes this afternoon has been the importance of early identification. Here we are taking action on a number of fronts. We are, for example, recruiting and training an additional 4,200 health visitors by 2015, and identifying whether a child is disabled or may have SEN is a core part of the training for those health visitors. When parents have concerns about their child’s development and learning, they will be offered additional support and, where appropriate, referred to another health professional such as a speech and language therapist or a paediatrician.
We are also working to bring together the early years progress check at age two in the new early years foundation stage with the healthy child programme health and development review at age two to two and a half. That picks up on a point made by my noble friend Lady Walmsley. Our long-term ambition is to develop one properly integrated health and early years review to support children’s development, drawing on the expertise and professionalism of both the early years and the health workforce.
We are working with the Department of Health to see how we can best achieve this. We have asked Jean Gross, the former communications champion for children and young people, to lead a group exploring ways of improving that information sharing, and are expecting findings from that in October this year. Our aim is that the new integrated track, bringing these two aspects together, will be introduced in 2015, when the additional health visitors to whom I have just referred have been recruited.
A number of noble Lords raised the issue of reading difficulties. My noble friend Lady Walmsley mentioned the phonic screening check, the first of which was carried out earlier this month. It will help to identify pupils who have not met the expected standard in phonic decoding, and schools will then be expected to provide appropriate support to help them make good progress and master these essential early reading skills. I think it was alluded to this afternoon that it was the Rose review that underlined the benefits of systematic synthetic phonics for teaching those with dyslexia.
There is also some evidence that schools are getting better at identifying children with autism. The department has been collecting data on the number of children with different types of SEN who either have statements or are on school action plus. The statistics show that, in 2004, 31,000 pupils were identified as having an autistic spectrum disorder. This had risen to 61,500 in 2011, which seems to suggest that there is a greater recognition of autism in the education system. However, there is still a need to recognise and diagnose autism earlier, and we certainly expect local areas to take account of guidelines that are available, such as the National Institute for Health and Clinical Excellence’s guidelines on the identification and diagnosis of autism.
I will say a few words about early language, an issue raised by the noble Lord, Lord Ramsbotham. In March, the Government announced an early language development programme to train practitioners to help children up to five years old, particularly those with SEN, by focusing on improving communication and language skills. The programme will help the most disadvantaged children with a special focus on the under-threes, who are at risk of language delay. The new early years foundation stage framework, which my honourable friend Sarah Teather has been working on and which is to be introduced in September this year, will also make a number of improvements. There will be a stronger emphasis on the three prime areas most essential for children’s healthy development: communication and language; physical development; and personal, social and emotional development. We have commissioned the Early Language Consortium to deliver a three-year early language training programme to train practitioners to identify language development problems and then work with children and families.
That takes me to the importance of teachers and training, which is one of the recurring issues. My noble friend Lord Storey spoke in a very practical way about some of the steps that a school takes in dealing with these issues, which I found helpful, as opposed to some of the more abstract ways in which the issue is explained to me in the department sometimes. We are taking action in a number of ways to improve teachers’ skills in identifying and addressing the special educational needs of children and young people. The new standards for qualified-teacher status include a specific focus on meeting the needs of children with special educational needs or those who are disabled, which was a question raised by my noble friend Lady Walmsley. We have launched a scholarship scheme for teachers to improve and extend their knowledge and expertise when working with disabled pupils and those with SEN, including their knowledge in specific impairments. That scheme has already awarded funding to around 400 teachers to undertake specialist postgraduate qualifications.
My noble friend Lady Browning and others also spoke about the importance of teaching assistants having the necessary skills, so we have launched a similar scholarship scheme for the most able support staff working with disabled pupils and those with SEN. That should enable support staff to gain degree-level qualifications to build their skills and expertise, including in specific issues such as dyslexia.
The Teaching Agency has developed advanced-level materials on autism, dyslexia, speech, language and communication difficulties, and behavioural, emotional and social difficulties. We have increased the number of special school placements available for initial teacher training to up to 900 in 2011-12. We have provided funding for up to 9,000 school SENCOs to complete the mandatory higher-level SENCO award, and we are also funding a further 1,000 SENCOs in 2012-13.
Reference was made to the role of the voluntary sector, and we are supporting that sector as well in helping teachers and schools. Through the voluntary and community sector grant programme we have funded the Dyslexia-SpLD Trust, providing £1.4 million over two years, to raise awareness and support parents. We also provided a grant to Dyslexia Action, with the RNIB, to make more than 650 core texts available in a digital format for dyslexic pupils.
In addition, we are funding the Autism Education Trust to develop national standards for those working with autistic children, as well as training at universal, enhanced and specialist levels, and delivering that to at least 5,000 staff across the country.
Perhaps I may say a few words about the Achievement for All programme, which coaches and supports schools in improving the attainment of their pupils with special educational needs. We know that schools using the programme saw children make greater progress in English and mathematics than other SEND children across the country. In a significant number of schools involved in the pilot, they even exceeded the progress of non-SEND children nationally. An independent evaluation carried out by the University of Manchester showed that pupil attendance was significantly improved, with an average increase in attendance of just over 10%. It also showed significant improvements in behaviour, including lower levels of bullying—one of the issues that we have talked about—stronger relationships between schools and parents, and a greater awareness of and focus on special educational needs. We are now spending £14 million to roll that programme out across the country so that more children can benefit. More than 900 schools have joined the programme since last September and the number is on course to be 1,500 by the end of this year.
We also talked about successful transition into adulthood—an issue referred toin particular by my noble friend Lord Clement-Jones. We are running a trial of supported internships in 15 further education colleges this autumn. We are providing funding over a couple of years to 25 colleges to test different models of post-16 work experience, and 13 of the colleges involved in the trial will be testing models for young people with learning difficulties.
We are consulting on a more flexible approach to study programmes for all 16 to 19 year-olds, which we think will lead to that whole age group getting more valuable skills and qualifications. We are also providing funding to encourage greater partnership working between clusters of independent specialist colleges, FE colleges and schools so that they work together to improve local provision for young people with learning difficulties and disabilities and share expertise and delivery arrangements. We are going to increase the number of clusters further this year.
Furthermore, the Learning and Skills Improvement Service and the National Institute of Adult Continuing Education have launched specialist qualifications for college teachers working with disabled young people. We think that that will improve the expertise in the FE workforce.
I am pleased to say that more young people with learning difficulties are completing apprenticeships. In 2010-11 more than 17,000 people with a learning difficulty or disability successfully completed an apprenticeship, and that figure has increased in each of the past five years. The number of apprentices declaring that they are dyslexic more than doubled between 2005 and 2010. My noble friend Lord Addington will not be surprised to hear that the success rates for apprentices with dyslexia are similar to those of their peers. Almost 70% of apprentices declaring dyslexia succeed at their apprenticeship compared with 75% of those who do not report a learning difficulty.
The Government will issue an action plan later this summer with a number of measures to increase the accessibility of apprenticeships for young people with learning difficulties and disabilities. That will be aimed at colleges and training providers. I know that my noble friend Lord Addington has been discussing that with colleagues of mine. He has offered to help, I think, with the production of that guidance. We are grateful for that offer and I am sure that will be extremely helpful.
The noble and learned Lord, Lord Morris of Aberavon, raised the question about exam adjustments. There is a system of exam adjustments in place; schools and colleges can put arrangements in place to provide things like extra time, supervised rest breaks or assisted technologies.
The Youth Contract, which was mentioned by my noble friend Lady Walmsley, should support more than 55,000 16 and 17 year-olds over the next three years. It will certainly benefit those with learning difficulties and disabilities because they are disproportionately represented in this group of young people who are not in education, employment or learning.
The noble Lord, Lord Touhig, raised the important point about accountability. The new exclusions process, to be introduced in September, will provide additional safeguards for pupils with SEN. In particular, there will need to be an SEN expert to provide advice to the independent review panel. On the point about exclusions raised by the noble Lord, Lord Touhig, and my noble friend Lord Clement-Jones, I agree that the statistics clearly show that the groups we are discussing are disproportionately affected by exclusions. The Government’s trials, based on an approach pioneered in Cambridgeshire to try to give schools a far greater incentive to tackle the problem at source rather than excluding pupils and leaving it to other people to sort out, are going forward. They had great results in Cambridgeshire. Trials are taking place now in 11 local authorities and 300 volunteer schools, and I hope that that will be part of the solution to tackling exclusion.
The issue of careers was raised by the noble Baroness, Lady Jones of Whitchurch; I know that that is a concern of hers. We have been clear in the guidance that, for the kinds of group that we have been discussing, those with learning difficulties and other disadvantaged groups the expectation is that schools and colleges should provide face-to-face guidance.
That has been a slight canter across the terrain, and I hope noble Lords will forgive me if I have not picked up on everything. If there are some specific points, I will follow them up. However, I hope that what I have said conveys the range of activity that is under way and the extent of the Government’s aspirations. As my noble friend Lord Storey and others reminded us, it is easy to forget sometimes just how far we have come. Many people have made that possible over a long period of time, and there is good work to build on.
The fundamental reforms to the system proposed by my honourable friend Sarah Teather is ambitious, but rightly so. I am glad that there is broad support across the House for those reforms, and I hope that they will provide the platform for the further exposition of some of these issues to which the noble Lord, Lord Touhig, referred. I hope also that noble Lords will accept that, in the important area of helping those with hidden disabilities, this Government have been making progress, and I hope that I have shown that we are certainly committed to making more.
Lord Addington
My Lords, in the few moments remaining to me in this debate, I would like to thank all those who have spoken. I could speak again at considerable length, but I do not think that would be wise. The only thing I would say is something that we used to hear from the previous Government when we were in opposition. They used to state, “We have done more”—I think it was in the field of disability—“than any other Government before us”. My response was, “Yes, you have, and so you damn well should have”. That is also true of this Government now, in this field. If we can leave it, having said that we have made things a little better than they were before, and hopefully a lot better, we will have succeeded. However, we are standing on the shoulders of what has gone before, much of which was good, despite the mistakes, and I hope that we can carry on in that vein. This discussion has demonstrated a degree of consensus that is actually very helpful.
Dementia
(11 years, 10 months ago)
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Lord Touhig
To ask Her Majesty’s Government what steps they are taking to provide support for people with dementia.
Lord Touhig
My Lords, a debate on dementia is long overdue. Indeed, the last time your Lordships’ House debated dementia was on 25 June 2009.
Today there are 800,000 people with dementia in Great Britain, and two-thirds of them are women. Currently only 43 per cent of people with dementia have a formal diagnosis, yet we all know that diagnosis is the key to accessing information, treatment and support services. There will be more than 1 million people with dementia by 2021 in this country. This year alone it will cost us £23 billion. Currently there are 600,000 family carers of people with dementia.
While significant resources are being spent on dementia, they are often being spent inefficiently and in ways that do not meet the needs or aspirations of the people with dementia and their families. Improving services for people with dementia could therefore boost outcomes and also prove cost effective for the taxpayer. Over a million people living with dementia in the United Kingdom by 2021 will present a major challenge as people with dementia are significant users of both health and social care services, and there remains an unacceptable variation across the country in the quality of services and support. Too often, people with dementia are unable to access the support they need and are frequently failed by the current system. Urgent reform of the social care system is needed, along with a real priority attached to dementia, if we are to improve lives.
As a former member of the Public Accounts Committee in the other place, I well remember the 2007 report by the National Audit Office which found that the health and social care response to dementia was inadequate and that spending on dementia, while significant, was poorly used. The Alzheimer’s Society 2009 report, Counting the Cost, showed that there was an unacceptable variation in the care of people with dementia in the hospital service. It found that people with dementia were staying in hospital on average a week longer than other people admitted for the same reason. A report for the Department of Health by Professor Banerjee in 2009 estimated that 180,000 people with dementia were being prescribed anti-psychotic drugs but that two-thirds of the prescriptions were inappropriate. Anti-psychotics rob people with dementia of their quality of life and lead to 1,800 deaths a year. In January 2010, the National Audit Office’s interim report on dementia found that progress on implementing the national dementia strategy in England had been patchy and had got off to a slow start. The Alzheimer’s Society’s 2011 report, Support. Stay. Save., found that half of people with dementia were not getting the support they need.
Last March, the Prime Minister’s challenge on dementia laid out further key commitments on research, healthcare and dementia-friendly communities. The Queen’s Speech in May outlined the Government’s plans to introduce a draft Care and Support Bill for England. We are told that the Bill will set out how the Government will modernise care and support law to ensure that local authorities fit their services around the needs, outcomes, experiences and aspirations of the people. We are told that it will build on a personal budget agenda, simplify the laws around social care and improve the way in which people get information about their due entitlements. Dementia plans and strategies are in place in Northern Ireland, Wales and Scotland, all of which emphasise the need to improve awareness, diagnosis and services.
While the vast majority of care for people with dementia is undertaken by family carers, people with dementia frequently use social care services. The current system does not work for the person receiving care, it does not work for the person providing the care and it certainly does not work for the taxpayer. The chronic underfunding of social care over many years has driven down quality, choice and accessibility. Over the past four years, the increased demand for social care has outstripped the increase in expenditure by 9 per cent, and the ability of people with dementia to live well is increasingly under strain. People with dementia are being unfairly penalised by the existence of what is called the dementia tax.
Individuals and families are spending tens of thousands of pounds to access the care they need, while care for people with other medical conditions, such as cancer, is free. The Alzheimer Society’s 2008 report, The Dementia Tax, found that people with dementia and their families are willing to make a contribution to the costs of their care. However, they need a fairer deal which protects them against very high costs and which also guarantees the quality of care. Where one lives determines the level of care received, as councils decide locally at what level to start providing support. Across the country, people cannot get essential care, while some in a neighbouring authority can. A patchwork of complex rules and assessments makes claiming what people are entitled to difficult and off-putting. The highest spending local authority, Tower Hamlets, spends five times more than Cornwall, the lowest spending authority.
People have a limited say over the care they receive. Choice and control is the experience of too few people. Out of two million older people in England with care-related needs, 800,000 receive no formal support at all. The lack of support early in the condition leads to a substantial pressure on long-term care and acute sectors. Some 10% of the respondents to the survey Support. Stay. Save. reported that the person with dementia was admitted earlier than expected into long-term care because of inadequate support in the community early on. A similar proportion reported that the person with dementia was admitted to hospital when it could have been avoided because there was lack of early support in the community. This is despite evidence that early intervention is both cost-effective and is what people with dementia and their carers want. The care paid for by local authorities is too often provided to people who have significant need when evidence shows that investing in care earlier would reduce demands on the National Health Service. The Alzheimer’s Society has been campaigning for many years for a change in the way we pay for care. The forthcoming social care and support White Paper is an historic opportunity to overhaul our care and support system.
What can we do to make a difference? The Dilnot commission proposed a fair system where no one would lose more than 30% of their assets. That would help. However, without additional government funding, England’s social care system will not be fixed. The recent Nuffield Trust report identified a number of funding options that could release funds to invest in the social care system. The Government must begin a public debate on where money for care could come from. Money intended for social care must be used for care, and not for filling in potholes. At present, each local authority decides which of the four levels of fair access to care services eligibility criteria they will fund: low, moderate, substantial or critical. It is profoundly unfair that two people living either side of a local authority boundary—they could be living either side of a road—could be entitled to significantly different levels of care. The Government must introduce a national eligibility strategy to improve consistency and fairness across the country. Progress has been made, but we have a long way to go.
Just over two years ago I took part in a march. It was a memorial march in memory of people with dementia who had died. I walked with a man whose wife had not spoken a word in 18 months. He was her carer; he sometimes had respite when his son could take over. His wife was doubly incontinent; they had no shower or toilet facilities on the ground floor. He told me that the only day he was confident that she was kept clean was the day that she went to a day centre, where they had showers, and so forth. He was battling hard in order to find funds to provide these basic facilities on the ground floor of his home. I came away full of despair after talking to that man. I am sure that noble Lords must have had similar encounters.
When we last considered this subject, in a debate introduced by the noble Baroness, Lady Murphy, in 2009, she told us that the average age of your Lordships was 68 and that one third of us will die with dementia. That brings it home that every one of us must know or will have an encounter with someone who has dementia. We really must do something about it. We have a duty to those in our society who are desperately locked away almost as prisoners of illnesses of the mind. It is down to those of us who can still articulate and make the case to ensure that the Government and we as a society do something to improve the quality of life for people with dementia.
Baroness Barker
My Lords, I thank the noble Lord, Lord Touhig, for enabling us to hold this debate and for his eloquent and moving introduction. I confess that I am a veteran of pretty much every one of our debates in this House over the past 10 years. We have had dementia strategies and dementia plans, and I congratulate the previous Government on their work on those important documents, which have moved us forward. Dementia is something that affected my family until last December, when my mum died having, in her words, “kind of lost the place a little bit”. That was her euphemistic way of talking about dementia. It is a subject that for the past 20 years I have followed with a great deal of interest because, as noble Lords know, I work with older people.
I want to sound a somewhat more hopeful note than did the noble Lord, Lord Touhig, and I do so because two or three things have happened that give cause for optimism. Building on the work of people like the noble Baroness, Lady Greengross, and the all-party parliamentary group, as well as on important reports from Alzheimer’s bodies, the Prime Minister’s Challenge on Dementia and the updated dementia strategy are extremely good documents because they move us forward. Not only are they forward-looking, they are quite detailed. The strategy talks not just in broad terms about the need for more research and support, but it begins to draw down different areas in order to achieve a series of things which, over the next five years, will bring about real and actual change in both communities and the health service. They will be of benefit to people who have dementia and their carers.
The Prime Minister’s Challenge on Dementia is based on three things: raising awareness and understanding, early diagnosis and support, and enabling people to live well. There is a commitment to increase research funding to the unprecedented level of £66 million, some of which is to be spent in social care, which is extremely helpful. Some of the money will be spent on redesigning services in the health service, but some will also go to the Medical Research Council for further research into brain scanning. We are beginning to move away from broad strategies into more targeted and focused areas. I was pleased to see that resources are to be devoted to developing dementia-friendly communities. That is not jargon. People are starting to work towards a definition of what that is all about.
For more than 20 years I have followed the work of the Dementia Services Development Centre at Stirling University, both under its previous director and now under Professor June Andrews. It has contributed more than any other organisation to the understanding of dementia as an illness, to understanding the needs of carers, and to enabling academics and healthcare professionals to move forward. Recently, Professor Andrews gave a talk about design. She and her colleagues had been involved in a community pilot study in the Forth Valley. People from various disciplines worked for a year to see how, within their existing resources, they could manage things differently. I was pleased to see that not just the health service but organisations like the police, libraries, churches and the general public felt more confident in their ability to deal and interact with people who have dementia. We are getting close to the point where a diagnosis of dementia is not going to lead to older people and their carers automatically being cut off from the life they enjoyed previously and which, for many years to come, may still have some meaning for them.
Professor Andrews talked about the issue of design, and particularly design in people’s homes. I am very pleased that some of the people involved in the Prime Minister’s challenge are designers and private companies, looking at how they can respond in practical ways to the challenge of dementia. Professor Andrews also talked about the need to develop things like glass-fronted fridges so that people know that they have food. I look forward to the time when homes have glass-fronted freezers because I stopped counting the times that I had to throw away a freezer’s worth of food because my mum forgot about it and it went bad. Design, lighting and so on in people’s homes can make a tremendous difference to their ability to remember.
I want to focus on one particular area that has not been mentioned so far. Many older people with dementia also have other disabilities. If you are a carer supporting somebody and you try to find out about adaptations, they will be designed for a particular physical disability and not for someone who has a physical disability and also dementia. In this hopeful time, designers could look at the potential to design appliances for the home for people who have the multiple disabilities that most older people will develop.
One particular area we should focus on is telecommunications. It is great that there is enormous change going on in the world of telecommunications and that, for example, phones can now be used by people with hearing disabilities who could not use one before. Yet there is absolutely no point in having a phone that has wonderful functionality if you cannot learn to use it. Professor Andrews made an important point about the ability of people to design things in future that will have new functionality but will look like the objects that people with dementia remember—retro-designing things so that people can continue to use them.
I am also pleased that in the dementia challenge we are finally recognising that in future all health and social care professionals, whatever their discipline, will deal with people who have dementia. That will include dentists, pharmacists and others. We are now moving to a point where basic pre-qualification training for all health and social care professionals has to include dementia, whatever the area of specialism.
In the short time available, I will raise one more point. Last December, the Alzheimer’s Society produced a report, Short Changed, about the experiences of older people with dementia, and their carers, with banking and financial services. Older people with dementia are particularly vulnerable to financial abuse. We have known that for years. We knew it 15 years ago when the noble Baroness, Lady Greengross, set up Action on Elder Abuse. It is now more than five years since the passage of the Mental Capacity Act. At that time, the Office of Fair Trading and the British Bankers’ Association produced guidelines about tightening up procedures in relation to people who lack mental capacity, but we still have problems. Anybody who listens to “Money Box” will regularly hear reports of irresponsible lending to people with dementia.
I make one particular suggestion: will the Government, with the Office of Fair Trading and the British Bankers’ Association, now do some further work on banking services for people who lack capacity? Will that work draw a difference between people who have learning disabilities, people who have mental health problems which may be episodic and people who have dementia? All three have different issues but at the moment the banks treat them all the same. That is causing a problem, not least for carers of people who have dementia, who are worried and trying desperately to enable their relatives to keep control of their finances for as long as they can. They want a backstop for when the time comes when their loved ones can no longer manage.
Dementia is a terrible thing, and it is going to happen to more and more people as we live longer. It is going to become a part of life for more of us. I am not a Pollyanna, but having read the dementia strategy and the Prime Minister’s Challenge on Dementia, I think we now have reason to be much more hopeful than we have ever been that we will be able to see people living well with this terrible disease.
Lord Wills
My Lords, I, too, thank my noble friend Lord Touhig for securing this debate. My mother lived with dementia for many years and in the early stages suffered greatly from it. What she went through in the early 1990s was depressingly instructive about the state of dementia care at that time in the London suburb where she lived. My mother was diagnosed in 1993, but that diagnosis took place only after my sister and I ignored the advice of our mother’s GP, who said there was no point in a diagnosis as nothing could be done for our mother if her increasing memory loss and confusion turned out to be the result of dementia. When the diagnosis was confirmed and we asked the GP for help, the GP who had cared for my mother and looked after our family for 25 years, she said that she was very sorry but there was nothing that could be done medically and she could not help my mother any further.
No support was offered to us by the local NHS or the local authority. We were on our own while my mother was rapidly deteriorating, bewildered and panicked by what was happening to her. My sister and I, with six young children between us, could not care for her in our homes, so we looked for a care home for her, but we could not find anywhere that we felt would provide anything like a real home for her. So we searched for carers to look after her in her own home. We were untypically fortunate enough to be able to do that, and we went through one carer a week for six months, as we could find nobody able and willing to take on the complex task of caring for someone suffering from dementia. Finally, when we had really begun to despair, through some good luck, we found a caring woman who looked after my mother wonderfully for the last four years of her life and helped make those years, for the most part, happy and peaceful.
Finding a carer was not the end of the problems that we faced. As my mother’s general state of health declined, she spent more and more time in hospital, and at one point in 1997, she was having to be fed through a tube. The consultant then insisted that she no longer had any quality of life and that the tube should be removed and she should be allowed to die. My sister and I disagreed and the consultant then tried to bully us—and I use that verb advisedly—into following his advice, telling us that we were being selfish and that the bed was needed for a patient who would benefit from it more. The pressure he exerted on a daily basis was intense and caused us great anxiety and distress, but we still resisted and, in the end, we were able to find a hospital that took a different approach and we moved our mother there. Through its loving care, my mother recovered, the tube was removed without her dying as a result and she was eventually discharged and went home where she lived for a further nine months, mostly happy and peaceful.
I have told this personal story at some length because it illustrates the state of dementia care at that time in that outer London suburb and is typical of the experience of so many people, many of whom are unfortunately unable to care for their relatives in the way that we were able to care for our mother. It typifies the experience that so many people living with dementia and their carers went through at that time. There was no empathy with the patient, no support for relatives and carers and a pervasive inadequacy of care.
Twenty years ago, I assumed that was the way things were and had to be, but in 1997 I was elected as the MP for North Swindon and I found that in Swindon, thanks to the imaginative work of Dr Roger Bullock and his colleagues, dementia care was immeasurably better than that received by my mother. There was respect and dignity in the way care was delivered, there was an underpinning belief that those suffering from dementia could still enjoy a good quality of life, and there was dedication to providing therapies to that end, all of which had been notably absent from the care on offer to my mother.
I agree with the noble Baroness, Lady Barker, that over the past 10 years, the practice in Swindon has become more typical and the neglect and indifference experienced by my mother less so. There has been real progress and there is better understanding of the disease. The national dementia strategy launched by the previous Government in 2009 was a landmark, and I hope there are no members of the medical profession today who still believe that those suffering from dementia cannot enjoy a reasonable quality of life. I agree with the noble Baroness, Lady Barker, that the Prime Minister’s Challenge on Dementia, which was published three months ago, is most welcome. It sets out some of the progress that has been made and there is a commendable determination to go, as the Prime Minister puts it, further and faster. I am concerned, however, about the obstacles that remain in the way of such progress. It is depressing, for example, that the Alzheimer’s Society, which does such invaluable work in this area and for whose support I shall always be grateful, found in 2009 that there was an unacceptable variation in the care of people with dementia on hospital wards, as my noble friend Lord Touhig has just outlined. There are still no national eligibility criteria for access to care and there should be. As my noble friend has pointed out, the difference between the highest spending local authority at Tower Hamlets is five times that of the lowest spending one in Cornwall. This sort of variation is neither fair nor justifiable.
Moreover, as my noble friend Lord Touhig has said, the most pressing need is to sort out adequate funding for social care. As the population ages, the number of people suffering from dementia increases. There are 800,000 today and that is forecast to rise by 25 per cent in the next 10 years alone. There are at least 600,000 carers today and that number is almost certainly an underestimate. These figures are never accurate and they are almost certainly a significant underestimate. That number is bound to rise, too. Because they receive too little support, people with dementia are admitted earlier than they need to be into long-term care and into hospital when adequate support in the community might have rendered that unnecessary. This is a wasteful, inefficient and above all unfair system.
There is also the continuing refusal of the Government to extend the protections of the Human Rights Act to all those in care homes. It is perhaps those with dementia who are most in need of such protections and the application of those fundamental human rights principles of dignity and respect. We have debated this issue recently in your Lordships’ House and the Minister was adamant in his refusal even to contemplate the extension of such protections. I still hope he may think again, if not today, at some point in the not-too-distant future.
Finally, I want to address the issue of innovation, which is so important in all issues to do with health care but particularly so in this area of health and social care where our understanding of this disease is growing exponentially. We have to listen to and learn from the experience of those who are living with it and their carers. I pay tribute to the Department of Health because I think it is taking some worthwhile initiatives to foster such innovation, but significant problems remain. For innovation to flourish, two things are required: first, empowerment of the frontline; and, secondly, the ability to roll out best practice so that everywhere in the country can benefit from it.
Ten years ago I was so impressed by the quality of dementia care I found in Swindon that I wanted to help develop it into a model that could be replicated across the country quickly and easily. So in 2002 and 2003 I worked intensively with all the relevant local agencies, in the NHS and the local authority and with local carers, to develop new and better mechanisms. The innovative proposal that emerged from that process offered choices for different care packages to sufferers and carers. It offered integrated care and a unique role for the voluntary sector, all of which successive Governments and professional bodies and the All-Party Parliamentary Group on Dementia have said are important.
This proposal required no extra funding. That meant, however, that local managers would be required to be highly efficient in their management of resources and they were concerned that this new challenge might affect their ability to meet all the targets that the Department of Health then required them to meet. So they needed some assurance that, if they were to embark on this enterprising initiative, they would not be penalised by the Department of Health for missing any other targets as a result.
This was a difficult issue, especially as the then Government were so driven by targets. As this was an important initiative, however, formulated not by an MP but by outstanding frontline professionals and patients and carers, I would have expected at least a dialogue about it. I wrote several letters to two successive Health Secretaries and I never received even the courtesy of a substantive reply. It was not that the idea was rejected; Ministers refused even to discuss it. Even their Special Advisers saw no point in discussing it.
I should say that the noble Lord, Lord Adonis, an adornment to your Lordships’ House, then in the Prime Minister's Policy Unit, was enthusiastically supportive but sadly that counted for nothing in the face of an indifference from the Department of Health which stemmed, as far as I have been able to work out, from the fact that this idea did not originate in the Department of Health.
I understand that the Government’s reforms will relax the sort of control from the centre that stifled the Swindon initiative, but maximising the benefits of self-directed support of the sort that that initiative envisaged requires an adequate infrastructure of information and services to support patients and carers in their choices. Ministers say that they want personal budgets to be the norm by 2013. That could produce some of the same outcomes that the Swindon initiative envisaged and which research by the Mental Health Foundation has shown are valued by carers and users. However, these desirable outcomes can be secured only if there is adequate infrastructure in place.
At a time when so much control is being passed from the centre to local agencies, and local authority and NHS budgets are under such pressure, is the Minister confident that such infrastructure will be adequate everywhere across the country—not just in the places of excellence, such as Swindon, but everywhere? Can he be confident that there will not be the same unfair, uneven provision from area to area that has characterised dementia care in the past and about which my noble friend Lord Touhig spoke so eloquently? It is increasingly accepted that, nationally, dementia care has been unacceptably neglected for far too long and that, locally, provision has been far too uneven. I hope the Minister can demonstrate real commitment to going, in the Prime Minister’s words, “further and faster”, not simply by saying it—which I am sure he will, with his characteristic grace and eloquence—but by demonstrating that in future there will be the quality of care that all those with dementia and all those caring for them deserve, and that it will be available everywhere in the country.
Baroness Greengross
My Lords, I start with three lots of congratulations. First, I congratulate the noble Lord, Lord Touhig, on securing this debate, which is of the utmost importance, and on speaking so eloquently, as did the other noble Lords who have spoken. Secondly, I congratulate the previous Government on introducing the dementia strategy and on the research summit, which I was privileged to co-chair. At the summit, important plans were laid, which could lead to a lot of change. Thirdly, I congratulate the Prime Minister. I was in the hall when he spoke and heard his speech. I have never heard him speak as well as he did on the dementia challenge. He is obviously very committed to this, as am I—I am passionate about it—and it was wonderful to hear what he said.
What has changed is that we are having a debate on dementia when people are not afraid to mention it. It is, as the Prime Minister said, as things were with cancer a long time ago and later were with AIDS. We can now talk about dementia. People know that it is absolutely essential to get things going and changing with regard to dementia. We must implement the action. The Government are committed to what the previous Government were committed to. We have all-party agreement that this is of the utmost urgency. We must get this right now.
What we face is largely due to recent medical success. We are now able to control or get rid of many of the acute illnesses that used to take people away from us, particularly cancer, heart disease and so on. We have had wonderful success but must now face, in effect, an enormous crisis, which is mounting not just in this country but across the world. It is on a par with climate change and it is of the utmost urgency that we get this right. We have to get more money into research and care, we must have staff who can do the caring, and families must be helped with the caring that they need to do. There is an enormous amount that needs to be done. The fear of people in this country is now not nearly as much about cancer as it is about dementia. As the noble Lord said, one in three of us will die from it and the costs are immense. If we get things right, we can reduce those costs.
The all-party group has 70 Members from both Houses and the wonderful thing is that they come to the meetings. I chair three other all-party groups and am a member of others. People do not come—they are too busy doing other things—but the group on dementia is very well attended. We have had some marvellous results from the inquiries that we have carried out on some of the subjects mentioned by the noble Baroness, Lady Barker, such as early diagnosis, anti-psychotic drugs and staying too long in hospital if you have dementia. That last is totally inappropriate, both for the person with dementia who goes in with a broken arm or a fractured femur but also for all the other patients who cannot sleep, rest or get better. It is appalling. To be blunt, we know that 20% of our acute hospitals now need converting into primary-care-led hospitals where the sort of treatment from which people with dementia and others with chronic diseases could benefit is introduced. It is quite difficult to persuade Members of the other place that they will be re-elected if they join forces in changing the hospitals in their local constituencies. However, that is what needs to be done if we are to meet the need of the fast-growing numbers of people who suffer from one of the dementias.
We also know that early diagnosis is essential. As the noble Baroness, Lady Barker, said, there are things that can be done. There is some hope now. Early interventions into the neural networks can achieve change. It is not far off that we will actually be able to do something about dementia, not just helping people to live better but moving towards a cure. We must all get together to get the research under way and properly funded, globally as well as nationally, and all benefit from it. It is essential that early intervention in neural networks is pursued.
Much has been said about the need for better hospital care for people who do go into hospital, and about better care in the community, in which I have been very much involved, looking at the human rights of people who need care and support in their own home. I will not joint the debate with the Minister about where human rights are applied, but I will say that human rights are really important as a training tool, where you start with the person and look at respect, dignity, the right to have some social interaction with others and the right to family life. That means that you do not separate husband and wife if they go into a care home. The care worker has to spend more than 15 minutes with the patient, because you cannot clean them up, give them a meal, arrange their day, get things ready, look after them a litte and have a chat in 15 minutes. We have to change the rules and standards of care in people’s homes. If we look at those issues as an infringement of human rights, it helps us to train people to get it right. I do not blame the providers of care in people’s homes. Many of them are struggling to make ends meet, too. We need a better system of funding for that. We need local authorities to come together, as some are now doing, so that those people who have to do everything in 15 minutes and then travel without being compensated for the travel or time of travel will not have to do so. At least several boroughs or local authorities are getting together to minimise the risk of that happening. So things can be done which do not cost a great deal.
We have to get cost-effective care. We have to look at the standards of care and the training of staff. We also have to look at the status of staff. Care work, work with people in their own homes or care homes, is low status and very low paid. Why would they continue to do that? They are very committed or they would not have got into it in the first place. In fact, if you go and work on the Tesco cash till, you get shares in the company, you have mates to talk to, you have regular hours and, when you go home, you know that your work is finished. That does not happen if you are caring for people with dementia. It does not happen if you are caring for vulnerable people anywhere. This is why our staff leave and take up other jobs—they are under pressure. We really must get the care regime right.
Moreover, we must make sure that “integration” really means something, because if we do not join up our services and include housing and care, both health and social care—and we have an opportunity to do it—and if we do not get it right, we will be letting down some of the most vulnerable people in society. The role of health and well-being boards and the commissioning groups are critical to getting this right. We can, in fact, do it now. If we also look at annual budgets of local authorities and make sure they do not continue to be threatened with the loss of their central government grant, we can begin to get some preventive work introduced locally as well. It is a disgrace that we can only look after people when they are in a critical condition. If I were a director of adult social services, that is what I would do—we would all do it—and that does not help people to remain fit and well for as long as they possibly can.
We can and must do something about dementia. We have all-party agreement on the urgency of this, and on the need for change in our attitudes and in our services, and in the integration of care for those with a terminal disease, which does not get treated as a whole at the moment. If we do not get agreement and act now, we cannot call ourselves a reasonably compassionate society.
Baroness Pitkeathley
My Lords, I thank my noble friend Lord Touhig for securing this debate and for introducing it so passionately. In your Lordships’ House, we often talk about the ageing of society. People are living longer—a lot longer—and this is a subject for rejoicing and a tribute to developments in society and health provision. However, as we have heard, one of the other consequences of this development is undoubtedly the increase in dementia. We are all aware of the figures and I will not repeat them. Although there have been some welcome developments in recent years, not least as a result of the publication of the dementia strategy and, latterly, the Prime Minister’s commitment, there is still a very long way to go. Most people with dementia and their carers are not living well.
Although we have made progress, we still have a lack of awareness. Dementia is not something we really want to discuss, still less plan for within our families. I always remember when I was leading the carers’ movement that we managed to get a dementia storyline placed in one of the leading soap operas. However, it did not last long because the issue of incontinence might have had to be faced and the producers felt that the viewers did not want to know about having to wash soiled sheets.
There are also great difficulties in diagnosis. Let us not forget that up to 40% of acute hospital beds are occupied by dementia patients, but of that number as many as 80% have their condition diagnosed after they have been admitted. They are, therefore, being nursed and treated by non-specialised staff who may have little or no experience of the condition and of whom it is unfair to ask the skills and competences which such patients need.
It may be that GPs are reluctant to diagnose dementia because, as the noble Lord, Lord Wills, has reminded us, they believe there is no cure or because they do not want to depress either the patient or his or her relatives. However, without proper diagnosis, there is no hope at all of putting patients and their families in touch with the services they badly need. We should not forget either that the number of people with dementia that each individual GP sees during their career is relatively few and we should not expect them, therefore, to be an expert in diagnosis. What we can and should expect is that they are willing to make referrals to experts who can make a diagnosis. Talk to the family of any dementia sufferer and they will almost invariably tell you a long and distressing tale of how long and how much persistence it took to get a proper diagnosis.
The third thing is the lack of support. Dementia can be coped with but support services are vital and they are in short supply, and I am afraid they are getting shorter. Caring services are in crisis due to lack of funding. Talk to anyone engaged at the sharp end and the story is the same. Fewer and fewer older people, including those with dementia, qualify for local authority support, and many services provided by the community and voluntary sectors are disappearing. Those services especially under threat or gone already include those aimed at preventing those with low-level needs from reaching a crisis situation.
Let me tell your Lordships about Raymond, who is 85 and cares for his wife, Margaret. He says that Margaret,
“has been diagnosed with dementia. My caring changes from day to day and week to week. You are living on a knife edge—you don’t know what the next hour or day will bring … I have a nurse who comes to get”,
Margaret,
“up at 7.30 in the morning and then puts her to bed at 7.30 in the evening”,
but her visits are now only 15 minutes long—and Raymond has been told that they have to be cut down to nine minutes in the next year. Margaret,
“goes to a care home from 9.30 until 3 in the afternoon”,
every Wednesday,
“which is a great help. They have games and entertainment. I can get down to my jobs while”,
Margaret is away. It used to be Wednesday and Thursday, but it has been cut down to one day a week. He goes on to say:
“Caring is very tiring. I try to cope to the best of my ability but I find I can’t take it in my stride. Life is very stressful, especially the practical work. I prepare meals and do the housework … I pay someone to sit in with”,
Margaret, once a week,
“while I go out … I go to a carers’ meeting on a Friday. It’s like opening another door. I can get back to normal. The tension goes away and my head clears. We talk among ourselves and there is a pleasant atmosphere. We all have a tale to tell. I find out how other carers overcome their problems. It’s an escape valve. You are with your own kind—people who know what you are experiencing. Without the day centre and the carers’ group I couldn’t manage … I don’t know what I would do”.
Although Raymond is 85, he does not want to give up caring for his wife. However, unless he has what he calls his escape valve, what will happen to him? I have to tell your Lordships that the day centre provision is under threat and the carers’ group, which was set up by a local authority worker, is now run by carer volunteers.
The noble Lord, Lord Touhig, reminded us how important it is to support the families who provide the bulk of care for dementia sufferers. As I often remind your Lordships, they are saving the nation £119 billion a year, so it is in all our economic interests to keep them in a caring role. But it is also important for the future because we will need many more carers. If they are not also going to become a drain on our economy in their old age, we have to support them now and enable them to stay in paid work as long as they can. The recent report published for Carers Week, In Sickness and in Health, tells a very distressing story about the health of carers as a direct result of their caring responsibilities. No fewer than 87% of them said that caring had a negative impact on their mental health and 83% on their physical health.
Carers and the people they care for already pay for services. If they are not eligible for social services or their income is above a threshold, they have to pay, which can range from domestic assistants to care workers. Services can be arranged with the local authority or trust, and others through private companies. This is often the cause of financial distress for carers. With the introduction of personal independence payments and changes to employment and support allowance, this may lead to substantial numbers of people losing benefits, which may mean that the person being cared for can no longer purchase the service. That means that carers will have to find alternative ways in which to pay for a service by dipping into their savings, getting into debt or simply going without.
In the current economic climate, there are concerns that an already struggling system is going to be further hit. Cuts to services will only make matters worse. For some carers, the ultimate impact will be giving up caring themselves because their health has deteriorated so much that they can no longer do it. That comes at a significant cost, as the person they care for will need to be admitted to residential care. For others, they are storing up serious problems for their future. Who will be there to provide the care in their place, if carers can no longer carry on?
I have three questions for the Minister, who I know is very aware of carers’ problems. Indeed, I was most grateful to him for attending a carers event that I hosted last week and for taking time from his very busy schedule to speak to carers and hear their problems. I appreciate that and know that he has always been concerned about this issue. Let me put the three questions to him. When will the Government act on the issue of sustainable funding for social care? The reform of the law on care is very welcome and I understand that we will hear about that shortly in the White Paper but we have to address properly the funding issues. How can we ensure that there is ongoing support for carers, including giving them a break—the kind of break that Raymond has just once a week that enables him to keep going? We heard rumours at one point from one of the Ministers that the Government were planning to enable GPs to prescribe respite care for carers. Is there any truth in that? On the subject of general practitioners, how in the new structure of the NHS do the Government plan to monitor the performance of GPs with regard to carers, since they are so important for them as a first port of call?
Baroness Wheeler
My Lords, this has been a comprehensive and authoritative debate on one of the major health and care challenges facing us today: namely, how we provide treatment, care and support for people suffering from dementia and ensure that their families, carers and the staff in hospitals, care homes and those who come to the patient’s own home can help them have the best quality of life and care. As one would expect, many of the key concerns and questions on improving research, diagnosis, understanding, services and support have been ably put by noble Lords during the debate. I will not repeat those. I look forward to the Minister’s response.
Of course, I also pay tribute to my noble friend Lord Touhig for securing this debate and for his excellent opening speech, setting out the context, the stark facts, the progress and developments since the national dementia strategy was launched by the Labour Government in 2009, and the challenges that we still face. Most importantly, I appreciated his reference to carers of people with dementia because they are so important in the debate—whether they have 24-hour caring responsibility in their homes, are family members supporting a dementia sufferer or are supporting their loved ones in residential care.
My noble friend Lady Pitkeathley also spoke passionately about carers, as you would expect. Ensuring that the everyday experience of carers is heard in debates such as this is vitally important, and the House is better informed for it. As a trustee of our local carer support group in Elmbridge, Surrey, I know that about 70 per cent of carers we support locally are caring for somebody with dementia. The dementia ranges from people experiencing the early disturbing signs of the onset of dementia, who, with their families, are wondering what the future will hold and how they will be able to cope, through to those in the severe advance stages, still cared for at home or in residential care, either with respite or permanent care.
Speaking to just a small number of these carers, two things are particularly striking—apart from the love and dedication that it takes to cope and carry on. First, the carer never stops feeling responsible, even when the husband or relative has had to go into hospital or residential care. Secondly, it is striking how much better we need to become at understanding the range of care and support that is needed, and at providing flexible community personal support and day and residential care that treats people with dementia with dignity and helps them maintain their quality of life.
I will quote from one carer whose husband with dementia is in residential care because she could no longer cope with him at home. She said:
“I had him home this weekend, which was nice but he was very distressed when I took him back this morning because he clearly didn’t want to be there. It makes me feel so guilty and sad, because when he is with me he is full of smiles and hugs, and I feel I am betraying him by taking him back. He has become unsettled generally because one of the residents in his wing has severe dementia and shouts and swears all day long. It is having a negative effect on my husband and the staff, but when I raise my concern with the home manager, he makes it clear that there is nothing he can do”.
Why this care manager feels unable to take action is a complex mix of failing to understand the spectrum of care that is needed and failing to respect the individual’s needs and the impact their behaviour has on other people with dementia, as well as on their carers and families. It is also often about poor assessment of the patient’s needs, lack of resources, inadequate training and the low pay of staff. As Carers UK has stressed, carers often report challenges in finding appropriate services with the necessary expertise to provide the right care, environment and support—a problem faced by my noble friend Lord Wills, as he explained.
This failure to find adequate care means that it will be more difficult for families to accept practical help or take a respite break, as they do not have confidence in the quality and appropriateness of the care. Also, as evidence to the Dignity in Care Commission set up by Age UK, the NHS Confederation and the Local Government Association has shown, poor or neglectful care, even for just a few days, can have a devastating effect. Locally, I was told of a care home that billed itself as having a “specialist” dementia ward. However, the reality of the care it provided—or did not provide in this case—meant that an elderly lady admitted for respite care to give her husband a break deteriorated so badly during her short stay that she was unable to return home because she could no longer get to the toilet on her own or feed herself. She is now in permanent residential care. The respite experience pushed the husband over the edge and he was no longer able to cope.
As I always stress, there is of course good-quality care and best practice in day care, assessment centres and residential homes across the country, and the huge challenge, as usual, is to raise standards in the homes where there is poor care to their level. I pay tribute to key improvement tools such as the Age UK’s initiative, My Home Life, which promotes quality in care homes for older people. It is an exemplar programme that helps staff to optimise the quality of care in their homes and has the active support of the Relatives and Residents Association and the national provider organisations representing care homes across the UK.
For dementia, the need for more research, early diagnosis and the importance of providing integrated health and social care for people to improve services are key elements, as noble Lords have stressed. The Alzheimer’s Society’s estimate is that two-thirds of people living with dementia live in their own homes, and a third live in care homes. The reality, however, as we on these Benches have repeatedly stressed, is that current inadequacies and failures of the system will not be addressed without tackling the crisis in the funding of social care. As all key stakeholders in the voluntary, public and independent provider sectors, as well as care professionals and service users, have stressed, a full package of reforms that address legal, current and long-term funding is needed.
How can local authorities that are currently having to cut £1 billion from social care budgets provide adequate or improved community care support, not just for people with dementia but for people with other lifelong conditions such as stroke damage or diabetes, and for their carers and families? I understand that new figures revealed by the Alzheimer’s Society and MHP Health Mandate also reveal an alarming 12% increase in the number of emergency hospital admissions for people with dementia since 2006. Is this not evidence that the community services that are needed to help people live at home are woefully inadequate to meet current or future demand?
I ask the Minister if he can update the House on when spring will finally arrive and the social care White Paper will be published. What will it cover? We know it will focus on the reform of social care law, which is very important, but does he not agree that making changes to the legal rights and entitlements of elderly and disabled people without dealing with the issue of how the services are to be funded now and in the future will only create more expectation and demand that cannot be met?
On the question of improving early diagnosis, can the Minister update the House on what progress has been made by local NHS organisations in developing plans to improve diagnostic rates, as set out in the Prime Minister’s dementia challenge? The challenge also made £54 million available through the dementia Commissioning for Quality and Innovation—CQUIN—programme to hospitals offering dementia risk assessments to all over-75s admitted to their care. Can the Minister update the House on how many hospitals have received payments under this scheme and how many hospitals have offered such risk assessments to all over-75s?
On the issue of keeping track of how the national dementia strategy is being implemented, I understand from the Mental Health Foundation that Andrew Lansley at last year’s Dementia Action Alliance event promised that there would be an annual report on progress. This would be a really important lever to help drive through improvements. Can the Minister advise us on when the first annual report will be published?
Finally, as regards the White Paper, can I press the Minister, when he updates us, to advise us on whether it will set out a clear timetable for addressing the recommendations of the Dilnot report, as well as a full government commitment to the cross-party talks on this, and to standing by the Prime Minister’s pledge to deal with social care funding in this Parliament? As he knows, the Minister has promised the House that the Government will not shy away from tackling this issue. I have pressed him on this matter on a number of occasions, and I must say that his responses have become increasingly expansive as we have gone on.
On 11 June, he assured me that the Government are,
“absolutely committed to introducing legislation at the earliest opportunity in this Parliament to establish a sustainable legal framework for adult social care”.—[Official Report, 11/6/12; col. 1137-8.]
That much we of course knew by then but, on 18 June, the Minister assured me that the Government’s,
“aim has been and remains to legislate in this Parliament to create a fairer, more just and better funding system for social care”.—[Official Report, 18/6/12; col. 1542.]
So today I am hoping that he will be able to go the extra mile and commit the Government to producing a timetable in the very near future for consultation on the Dilnot recommendations, and for implementation of long-term funding proposals in this Parliament.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, I begin by congratulating the noble Lord, Lord Touhig, on securing this debate and thank him for his compelling speech. As all noble Lords have emphasised, dementia is one of the most important health and social care issues that we face as a society. The statistics are staggering. The 670,000 people with dementia in England will double over the next 30 years, and the current £19 billion cost will inevitably spiral.
Dementia affects not only health and social care but all of society, and the speeches today have brought that dimension graphically to life. We need to be better prepared. Dementia is a priority for this Government, and we are working to ensure that it becomes a priority for every part of our society—communities, banks, supermarkets and transport. All need to become dementia-aware and dementia-friendly. That is why, on 26 March, the Prime Minister set out the Government’s challenge on dementia, to go further and faster in implementing the national dementia strategy in three key areas: driving improvements in health and care, creating dementia-friendly communities and improving research into dementia.
I was grateful to my noble friend Lady Barker for what she said about the challenge. We do mean business in this important area. Nationally, three champion groups are driving delivery. The first meetings of the three groups have already taken place and work is well under way to make progress on the challenge. The champion groups will report their progress in September 2012 and again in March 2013.
People with dementia, their families and carers have told us what is important to them and what will help them to live well with dementia. They want to receive an early diagnosis and timely, good-quality information that will help them to make informed choices about their care. I listened with dismay to the story the noble Lord, Lord Wills, told us about his own mother in that context. They want the treatment and support they receive to be the best for their dementia and their life, regardless of whether they are cared for at home, in hospital or in a care home. They want the care they receive at the end of their life to be compassionate and appropriate and to support their exercise of choice.
Early identification of those who care for people with dementia is crucial so that they can be directed to the information, advice and support that will help them in their caring role. The NHS operating framework requires the NHS to work more closely than ever before with local carers’ organisations and councils to agree plans, pool their resources and make sure that carers get the support and breaks they deserve.
However, there are other reasons why change is so important. The challenging economic context, as noble Lords have emphasised, makes it even more important for new and more efficient models of service delivery. That is why we have launched an innovation challenge prize of £1 million for NHS organisations to develop ideas for transforming dementia care. Through the dementia care and support compact, the social care sector is committing to leading initiatives to improve the quality of care for people with dementia. That includes work to ensure that people with dementia are clear about what they have a right to expect of care services.
The noble Lord, Lord Wills, asked about the funding for all this. The Government have already made increased funding available to the NHS and many of the aims of the challenge should deliver savings. For example, the CQUIN goal of improving the recognition of dementia in hospital should lead to people with dementia spending less time in hospital, and ensuring that people with dementia are diagnosed early should stop them going into crisis. The Prime Minister’s challenge is about the NHS and social care making better use of the resources already available to them.
The noble Lord, Lord Touhig, asked about the eligibility criteria for care. The imminent White Paper on care and support—I stress that it is imminent—will set out our plans to transform the care and support system for everyone, including people with dementia. The noble Baronesses, Lady Pitkeathley and Lady Wheeler, asked me for further and better particulars on our plans for publishing the White Paper and indeed for reforming the funding of social care. The care and support White Paper and the progress report on funding reform for social care will be published simultaneously and, I hope, very shortly. I believe that I can go no further than I did the other day in responding to the noble Baroness, Lady Wheeler, but I can reaffirm the Government’s intention to legislate on both funding reform and the reform of the law on social care as early as possible in this Parliament. Clearly, following the publication of the White Paper and the draft Bill that will go with it, we will wish to hear from all sides of the House and indeed from all sectors of the community about the direction of travel and the detail of our ideas.
The noble Baroness, Lady Pitkeathley, asked about the role of GPs. As part of the Prime Minister’s challenge, we are actively working with the royal colleges to identify how best to improve early diagnosis through awareness, education and training at GP level. Early and accurate diagnosis is, as the noble Baroness and others emphasised, very important in ensuring that people with dementia can access the support and information that everyone needs when they receive the dismaying news of this dreadful condition.
My noble friend Lady Barker spoke about adaptations for those with multiple disabilities. I agree with what she said. It is important that designers think about people with dementia when designing products for older people. The department provided funding to the Design Council to run a project to encourage design for people with dementia. There were 185 entries, which shows that designers take this seriously and that the design community is very definitely rising to the challenge.
The noble Lord, Lord Wills, spoke about the Swindon project and innovation. I can tell him that we very much want to see good, innovative practice spread out across the NHS and social care. That is why we have launched the innovation challenge prize for dementia, to which I referred. We are very much looking at innovation as part of the implementation of the Prime Minister’s challenge. Incidentally, the dementia challenge is to achieve a dramatic reduction in the proportion of people who have undiagnosed dementia, with evidence of a step-change in the diagnosis rate and a strong service response. The challenges in this and other areas will be open for a minimum of three years, which should encourage health communities and organisations to confirm their intention to apply for a prize.
The noble Lord, Lord Wills, also referred to human rights. We very much welcomed the publication of the report of the EHRC inquiry into human rights in home care for older people. The report found evidence of mixed practice. While we should be positive about those who deliver good-quality care services—and there are many—there is no excuse for bad practice. We believe that the report performed a valuable service by shining a light on the care and support provided in that most private of spaces—people’s own homes. We cannot tolerate poor quality in any of our care services. I completely agreed with what the noble Baroness, Lady Greengross, said about training. Care and support that respects human rights must be the foundation on which we build to make a reality of our vision of better health and well-being and better care for all. We will continue to work with the EHRC, the Care Quality Commission, local authorities and care providers to ensure that poor practice is rooted out.
The noble Baroness referred, quite rightly, to workforce issues and training. We know that two-thirds of people in care homes have dementia, so it is vital that the workforce is trained in dementia care. Indeed, 10 leading care home and home care providers have already signed the dementia care and support compact to which I referred, and we aim to have 50 organisations signed up by September this year. The compact sets out the organisation’s commitment to deliver high-quality, relationship-based care and support for people with dementia. I think that that statement of intent gets the process off to the right start.
The noble Baroness, Lady Pitkeathley, rightly reminded us of the vital contribution that carers make to society, a theme taken up, very perceptively, if I may say so, by the noble Baroness, Lady Wheeler. The Government have taken strong action to support carers. We set out our priorities in Recognised, Valued and Supported: Next Steps for the Carers Strategy, published in November 2010, and we are providing additional funding of £400 million to the NHS between 2011 and 2015 for carers’ breaks. As we set out in Innovation Health and Wealth, published last December, from April 2013 access to all CQUIN rewards will be dependent on commissioning support for carers in line with NICE and SCIE guidelines.
Furthermore, the 2012-13 NHS operating framework requires the NHS to work more closely than ever before with local carers’ organisations and councils to agree plans, pool their resources and make sure that carers get the support and break that they deserve. I very much hope and believe that that will have a positive effect on the thousands of carers of people with dementia in England.
Although dementia can be a crushing condition, we must not lose sight of the fact that people do live well with it. We need a profound shift in culture and behaviour if we are to reduce the stigma of dementia. All too often dementia is ignored, and the work of carers and other professionals goes unrecognised. Business and civic organisations are part of the solution. They can help to create dementia-friendly communities where people with dementia and their carers can remain and do the things that we all take for granted, such as travelling around and shopping. As so often, my noble friend Lady Barker was completely right in what she said on this theme. We need to create communities in which people are not ashamed of or embarrassed by dementia.
As we have a few minutes in hand, with the leave of the House I will continue a little longer. We need to create communities that show a high level of public awareness and understanding about dementia, communities where people with dementia and their carers are encouraged to seek help and where people know enough about dementia to be able to help someone with the condition. By 2015, there will be at least 20 places recognised as working towards being a dementia-friendly community. Places and organisations that meet the criteria being developed as part of the Prime Minister’s challenge will be awarded dementia-friendly status. I can say to my noble friend Lady Barker that, as part of the dementia-friendly communities strand of the challenge, we are working with banks to ensure that they and their staff understand the needs of people with dementia and that staff are dementia-aware.
The noble Baroness, Lady Greengross, mentioned an important part of the Prime Minister’s challenge, dementia research, spanning basic research through to living well with dementia and increasing capacity and capability across the entire research system. It commits the National Institute for Health Research, the Medical Research Council and the Economic and Social Research Council to increasing funding for research into dementia from £26.6 million in 2009-10 to an estimated £66.3 million in 2014-15.
Over the next three years, the NIHR will support the four new NIHR biomedical research units for dementia, projects resulting from the recent NIHR-themed call for research on dementia, and additional work depending on the volume of high-quality applications received. In addition to the increase in funding for dementia, the MRC will spend over £3 million to support the UK brain banks network. This connects all the UK brain banks for the benefit of donors, researchers and future patients. This money includes £500,000 a year to improve the process for donating brain tissue by meeting the costs of collection through the NHS. The ESRC is making £5 million of additional funding available to fund research into the prevention of dementia and interventions to maximise the quality of life for people with the condition.
There is much that the Government are doing and much more yet to be done. To address the challenges of dementia, we need a response not only from the NHS but from society as a whole.
Lord Wills
My Lords, as there is a little time—this is not my intervention—I want to place on record how enormously heartening I found the Minister’s response to the debate. I feel inspired by much of what he said and I want to put on record my thanks to him for his response.
My question is this: are there any milestones in place to measure progress in meeting the Prime Minister’s challenge and, if so, what are they?
Earl Howe
My Lords, if the noble Lord will allow me, I shall write to him on that. The answer, broadly, is yes, we want to see progress made by certain steps of time. However, time does not permit me to spell that out now.
There are already significant signs of progress up and down the country. The Prime Minister’s challenge is about mobilising not only the NHS and local authorities but all the resources that our communities have to offer. A great deal of good work is already going on and is beginning to lead to a steady increase in diagnosis rates, which is promising. The result of that will, of course, be that many more people will get the treatment and care that they need and that their loved ones deserve. Long may this continue.