Grand Committee

Tuesday 9th October 2012 Grand Committee

Tuesday, 9 October 2012.

Arrangement of Business

Tuesday 9th October 2012 Grand Committee

Announcement

15:29

[The Deputy Chairman of Committees (Lord Geddes)]

My Lords, before we commence, it might be for the convenience of noble Lords if I remind them that each debate is limited to one hour. If any of those debates should take less than one hour, the Grand Committee will adjourn for the balance of that 60 minutes. In the first debate, there are a large number of speakers and I have been asked to remind Back-Bench speakers that speeches are limited to four minutes, which means that when it says four on the time clock, you have had the four minutes.

Education: Further Education Colleges

Tuesday 9th October 2012 Grand Committee

Question for Short Debate

15:30

Asked By

[Baroness Sharp of Guildford]

To ask Her Majesty’s Government what assessment they have made of the potential contribution of further education colleges to their local economies and communities.

[Baroness Sharp of Guildford]

My Lords, I asked for this debate because I wanted to draw attention to a report which came from a commission that I chaired last year looking at the role of colleges in their communities. Our remit was to investigate the role that further education colleges,

“can and do play in their communities and the added public value they can bring to these communities as leaders of learning”.

You will see that this remit reflects the title that has been given to this debate and I am delighted that so many people have put their names down to speak in it. I am only sorry that it means that they have so little time to speak.

It is worth starting with some statistics. There are 347 further education colleges in England. They serve a total some 3 million students, 1 million aged 16 to 18 and 2 million aged 19 or over. They offer an immensely wide range of courses, from basic numeracy and literacy through to graduate-level studies. In subject matter, they range from agriculture to Zen Buddhism. The communities that they serve are widely diverse: they provide for black and white, rich and poor, public and private sector, employers and employees, helping young and old alike to gain and enhance their skills and education, and providing pathways to further and higher education and better jobs. We learnt early in the commission that there is no such thing as a typical college—each is very individual —but the best of them stand out, reaching deeply into the communities that they serve and providing leadership and encouragement, so that these communities are, in the words that the Prime Minister used to describe his vision of the big society,

“free and powerful enough to help themselves”.

As in other areas, the coalition’s aims have been to free up the college sector from the micromanagement and centralised control that dominated their lives in the first decade of this century and to give their leaders the space, flexibility and discretion to shape their own futures within broad parameters. One of those broad parameters was that they should better serve and be answerable to their communities, not only to employers in terms of local skills needs—although this is a very important priority—but also to individuals in the community in terms of opening up new opportunities and raising, and helping meet, aspirations. This is important because, as all the research shows, positive outcomes from education in turn promote health, happiness and a sense of well-being.

In our report we suggested that one of the keys to success was for colleges to work in partnership with other organisations, to link up with employers, charities, local authorities, police, youth offending teams, health services, Jobcentre Plus and all kinds of organisations. In many cases, both partners gained. It was a win-win situation in which colleges were fulfilling their primary role of promoting and extending learning and skills among young people and adults while at the same time, for example, providing youth facilities which helped limit crime and anti-social behaviour; or providing adult learning, which gave older people or ethnic minorities a sense of purpose and fulfilment far more effectively than any local authority friendship service or mental health therapy could do. We coined the term “dynamic nucleus”, because our vision was of colleges at the heart of their communities, acting as a catalyst and sparking off a whole range of such shared activities. I sometimes use the analogy of a Catherine wheel: the college is at the centre but sparks off all kinds of other activities. There was potential, we argued, to unlock “social energy” within the community which, if channelled to positive ends, could increase both economic and social productivity.

Two important factors underpin this vision. The first is leadership. In visiting many colleges in the course of the inquiry, I was impressed by the inspirational leadership to be found in the best of them. These people were not just competent administrators; they were entrepreneurs and creative thinkers, prepared to try out new ideas, take risks and perhaps, above all, find ways of getting things done. In part, such leadership is innate, but it can also be learnt by example and by training. It is vital that we nurture such leadership and prepare to train more to take up the challenge. I pay tribute to those in the sector who recognise how important training and CPD are in improving the quality of teaching and the learning experience for all students.

The second factor is to make sure that these leaders are given the scope to be creative and entrepreneurial. Last year’s Education Act gave colleges a good deal more autonomy, which was a move in the right direction, as is the move by the Skills Funding Agency away from the detailed funding formula to the single adult skills budget. We argued, however, that if colleges were to be expected to “seed” a whole lot of new activities, they needed greater flexibility on the funding front. In particular, we argued for what we called an innovation code: a funding formula that, subject to proper audit procedures, would allow up to 25 per cent of the adult skills budget to be used to meet local priorities.

In many respects the Government’s White Paper published last year, New Challenges, New Chances, provided a very positive response to our recommendations. In particular, John Hayes, then the Minister responsible for skills and adult education, shared our vision of strong, entrepreneurial colleges. There are many good things happening. Both the SFA and Ofsted recognise and will be looking for evidence of community involvement and responsiveness to local needs. The community learning trust pilots are going ahead. The new foundation code of governance comes into play this year and looks to accountability to the college’s “wider community” and an annual statement of public value. I am immensely encouraged by the support that has been forthcoming from BIS, the department with primary responsibility, and by what is happening on the ground among the colleges themselves.

I do, however, have a number of quibbles, and I would be grateful if the Minister could respond to these. First, I am very disappointed by the interpretation of the innovation code. Although we were delighted that New Challenges, New Chances picked up the idea, we should have read the small print more carefully, for what is being proposed, which has now been further developed in the guidance recently issued by the SFA, provides only very limited flexibility. Indeed it limits that flexibility to using funds to meet specific skills gaps that have been identified with local employers and where there is not at present an appropriate qualifications credit framework—QCF—qualification. The college may use funding from the adult skills budget to research and provide the course while a suitable qualification is developed. However, this is far from the idea of encouraging creative and innovative thinking to seed new projects, often to be run in partnership with others, which might in due course be developed into such a qualification, but where securing funding from, say, the ESF or the localism budget might be more important.

This in turn raises questions about the whole management of the skills budget and the development of localism. There is at present a fuzziness, it seems to me, about where responsibilities lie. Who, for example, is responsible for identifying and initiating responses to skills gaps? Is it the LEPs—on which, incidentally, colleges are still badly under-represented—or core cities? What is perceived to be the role of the employer ownership pilots? Where, if at all, do local authorities fit in?

My third and final quibble concerns the emphasis we put in our report on the benefits of partnership. I ask the Minister whether enough effort is being made to put joined-up thinking into the local agenda. Take, for example, the development of the National Careers Service. While no one disputes the need for good information, many of those seeking careers guidance want not just the website but face-to-face guidance. Is it not sensible for there to be a link-up between a college’s careers service, which advises those who take college courses, and those referred to the NCS by Jobcentre Plus? Is co-location of the two services not a good idea? Why should it not be pursued?

I will end by reiterating the general thesis of the report: there is considerable potential for colleges to play an active role in promoting growth, prosperity and well-being within their local communities, but the greatest benefits come from working in partnership with others, be they employers, the public sector or voluntary organisations. The more we can do to encourage such partnerships, and to encourage organisations to be innovative and creative in forming them, the more we are all likely to benefit.

15:39

[Baroness Wall of New Barnet]

My Lords, I want to thank the noble Baroness, Lady Sharp, as I am sure will many other noble Lords, for the opportunity to debate this important issue. More and more FE colleges are recognising and understanding the importance of their role. I also congratulate the noble Baroness on the interesting report she produced in November last year and associate myself with at least two of the findings that she has just covered: certainly on the lack of flexibility in the funding, but equally on the careers service, which has gone from multiple opportunities to a single website, which people find less inviting and more remote.

I know the work of many FE colleges across the country and could describe some of their initiatives but want to concentrate in the short time we have on the Liverpool Community College. This is the only FE college in its home city. I was introduced to the college by EAL, the awarding body whose qualifications are a key part of the college strategy to help local people into work and offer employers what they need: a pool of skilled, motivated and well-rounded workers who live and work locally, affecting the local economy and bringing added value to their community.

Seeing the emergence of green technologies in the region, the college has benefited from the interest many young people have in gaining environmental qualifications, which they see as work, and quality of life and community improvement opportunities. This learning is inside and outside the college, involving students and out-of-work residents, raising awareness of how everyone can make a difference locally. People are involved in some very impressive projects throughout the city, as this qualification has spread itself further afield.

The city has two famous football clubs. I want to refer quickly to the joint working between the team I support, Everton Football Club, and the college, which are working with local employers, opening up opportunities for hard-to-reach residents. The success of their current project is already making a big difference both economically and culturally by giving participants a stake in their community. Individuals, young and old, unemployed—people who have been looking for work for ever—really love to go to the club, not only to get fit but to work around the business there, and the economic and green environment is really part of the way in which that project is working.

[Lord Geddes]

Perhaps I can advise the Committee very briefly. The electronics have gone. Therefore, noble Lords will have to exercise their mathematical abilities and deal in multiples of four.

[Baroness Wall of New Barnet]

I will conclude, if I may. I was so inspired when I looked at the number of colleges that I could talk about today by just how much is going on. Like the noble Baroness, Lady Sharp, I want to share the fact that more of this could happen if we just had that flexibility and encouragement that we are seeking.

15:43

[Baroness Brinton]

My Lords, I also pay tribute to the noble Baroness, Lady Sharp, for securing today’s debate, but she has done much more than that. She has championed the sector for decades, and her most recent role, as chair of the independent commission, has shown how she really understands what the sector already does and what it, government and employers need to do in the future.

Our further education colleges are the hidden gem of our education system: the breadth of teaching and learning that they cover, the large and varied number of students that attend, and—key for today’s debate—the importance and relevance for our local economies and communities. The noble Baroness, Lady Sharp, spoke about the strategic position of further education in the UK today. With only a brief time to speak, I want to focus on how FE colleges work within specific sectors.

If our universities are sometimes described as the brains trust of Britain, the FE colleges are certainly the engine room that provides people with the right skills at the heart of the economy. My young hairdresser, Harry, went to West Herts College at 16 and for three days a week was apprenticed to a salon which worked closely with the college. Three years on, he is a confident and skilled hairdresser who has benefited from both arrangements. He is now employed by the same salon, which has been delighted with him. The key has been the partnership between student, employer and FE college, with the college as the dynamic nucleus to which the commission refers. His route is one that we might expect—the bedrock of providing key skills for all local economies, whether in hairdressing, plumbing, catering or construction.

I also want to applaud the teaching and learning for more specialist sectors. For example, in Dundee, over the past few years a real economy in digital technology has emerged, quite specifically in digital games. Forget Pac-Man, we are talking about the dark arts of highly complex technical computing skills as well as artistic and performance art. Working with local, usually very small, creative companies, Dundee College has developed a number of courses at varying levels to help provide this growing and increasingly profitable sector with trained staff. That includes using professional standard facilities, providing good practice-based skills for essential entry-level technician jobs, while at the same time preparing students well for moving on to honours level work right at the cutting edge of technology and creativity.

Dundee College also links into the highly effective Scottish Creative Loop, and Skillset, the sector skills council for the creative arts, to give employers and students the best information and support. This is happening not just in Scotland, nor just in the creative sector. Whether it is specialist healthcare pathways, heritage construction skills or skills for the financial sector—wherever you look—many of our FE colleges are playing an essential role in providing the new specialist skills needed for UK plc to grow out of the recession.

I agree with my noble friend Lady Sharp that FE colleges need to be represented on local area and economic partnerships as well as work closely with sector skills councils. They certainly need more flexibility with funding routes. My one regret is that the message is not always known, even by funding bodies and government agencies, let alone by many employers. While the burden to celebrate and develop this excellence rightly remains with the FE sector, let us help them sing it from the rooftops because it is key to our country’s future.

15:47

[Lord Bilimoria]

My Lords, in 2005 I was appointed chancellor of Thames Valley University, now the University of West London. At that time I was by far the youngest university chancellor in the country. Prior to that I had been on the board of governors of TVU for five years, and I saw first-hand the unique contribution that a modern institution like TVU was able to make to education. In many ways, it was the other end of the spectrum of traditional universities, such as my old university, Cambridge. TVU was able to reach people and teach courses that Cambridge could never dream of.

One of our mottos at TVU was “Further and Higher” because it provided both further education and higher education where students had the opportunity to come in and study quite often a vocational FE course and then had the option of moving straight into employment with that qualification and knowledge, or to stay on, study more and move into higher education and graduate with a degree. In fact, the very successful community colleges in the United States, which were based on two-year courses, have historically enabled students who were unable to go to university to engage in post-secondary education and, if they had the will and were able to, to progress on to universities and obtain undergraduate degrees.

I would like to ask the Government what measures they are taking to provide students of further education colleges with opportunities to progress to universities and to top-up their FE qualifications to graduate. Are they encouraging formal links to be made between FE colleges and neighbouring universities? At TVU we were able to provide this under one roof, which made it much easier. I have seen the power of education: once people’s eyes are open to it and they are on that ladder, they want to learn more. Are we providing enough opportunities for our people to do this?

I thank the noble Baroness, Lady Sharp, for initiating this debate, and for her commendable report on putting colleges at the heart of local communities. American FE colleges are called community colleges because they are meant to be accessible to their local communities. Basically, there should be opportunity and accessibility for school leavers, particularly now that the Government have made it mandatory for children to continue education until the age of 18, and for adults who want to engage in FE for the first time, quite often part time, as well as for those who want to learn more to improve their prospects or to change their tack, at the community’s doorstep.

At TVU we worked very closely with the businesses and the communities surrounding our campuses. However, the Government have put in harmful cuts to adult education. Will they admit that adult learners will be deterred by the fact that they will now be expected to take out loans to fund their further education? Is this the way the Government want to encourage our workforce to get skilled?

Our FE colleges provide so much vocational training that is desperately needed to improve the skills of our workforce. We have a skills shortage in this country. The Government’s apprenticeship schemes are great and laudable, but does the Minister agree that apprenticeships can be greatly enhanced by attending FE colleges as well and gaining qualifications in a formal setting? At TVU, the London School of Hospitality is one of the jewels in our crown. It is one of the best hospitality and catering schools. We created a course with Buckingham Palace for butlers and valets. The students gain work experience in the palace, as well as attending classes at the London School of Hospitality. They have on the job, on the ground training, as well as the benefits of being in a college environment.

I see that the report of the noble Baroness, Lady Sharp, recommends ways of helping SMEs with apprenticeships and consultancy support. Will the Government support this? We talked of FE colleges working with the local community. A few years ago in Hounslow, Gillette closed down its famous factory and moved to eastern Europe. TVU helped train and reskill the redundant workforce so they could be re-employed.

The Government are removing the educational maintenance allowance. Students will now be deterred from pursuing full-time further education from the ages of 16 to 18. Do the Government not think it is important that we should encourage our children in that age group to be full-time students, and that this will harm them?

In conclusion, Britain’s greatest strength is its people. British education is respected around the world. Our universities and those of America are the best in the world. However, to be able to compete in particular with the rising powers of China and India, we have to prioritise education and skills and support further education, both in modern universities like the University of West London, and in the form of local FE colleges, integrated into their local communities. This is key to our country being able to compete in the future.

15:51

[The Lord Bishop of Derby]

My Lords, I, too, thank the noble Baroness, Lady Sharp, for giving us a chance to look at this area. I will briefly draw on a case study from Derby College in my own diocese, and then raise three issues that we could look at more seriously.

The college is rising to the challenge of the report in terms of inspirational leadership, entrepreneurship and partnership. Its first core purpose is to develop individuals. The second is to support economic development. The third is to contribute to community cohesion and social action. It takes individuals and puts them in an economic and community framework: that is its core purpose. There are 30,000 learners, of whom 7,000 are full-time. That is a lot of people in one city in the network.

There are exemplary partnerships with local industry. Recently an engineering careers academy was set up. New apprenticeships were launched this year to meet the needs of local employers. People are working very hard in that area.

In the community there is citizenship training through national citizenship projects. Particular needs in Derby are met. Sadly, we have problems with the sexual exploitation of young people. The college is designing programmes to reach out and help young people and others in the community think about that. There are very imaginative schemes using art and working in care homes with older people. In terms of economic engagement and community involvement, there are some very impressive things.

I will flag up three issues briefly. One is funding—predominantly government funding. The college is doing all it can to look for new income streams and to be more efficient, but if we are going to maintain the very rich resources that we are developing and grow them in the way that the report suggests, we need to look at a suggested framework for resourcing this kind of enterprise. Could we do some common thinking about that and look at a common suggested framework for resourcing? If we allow each project to struggle with small local deals, we will return to the old world of projects that last for a few years and then run out and have to be renegotiated, with a lot of wasted energy. The Government and others could help with a suggested framework for resourcing.

The second thing was alluded to by another noble Lord. These colleges need to be engaged with LEPs much more strongly than they are. The pattern is very patchy across the country. In Derby the college is not involved with the local LEP. That is to its detriment and to that of the LEP.

Finally—noble Lords would expect me to say this—the report does not mention the importance of faith communities. In the mix of what community life is about and its potential for energising new citizenship, faith communities are increasingly important in providing that energy. I hope that in this sector there could be encouragement for that kind of engagement.

15:54

[Baroness Warwick of Undercliffe]

My Lords, it is excellent that the noble Baroness, Lady Sharp, has secured this debate, and I add my thanks to those already expressed for her commission’s incisive work last year investigating the role of further education colleges in their communities. As the former chief executive of Universities UK, I cannot emphasise enough the enormous importance of further education to higher education, particularly at the local level. It remains my passionate belief that all who can benefit from a higher education should be given the opportunity to do so; and for a huge number of people, whether school leavers or mature learners, that opportunity comes via their local FE college. It provides accessible routes to HE for thousands who might otherwise not benefit, and who then bring their enhanced skills and their ideas back into the local community.

But the “HE in FE” role is perhaps not as widely appreciated as it should be. The higher education that is delivered in FE colleges is often local employer-led. Half of all foundation degrees are now taught in colleges, and students are much less likely to come from families with a tradition of higher education. FE colleges have been key to improving access to higher education for disadvantaged or under-represented groups. Ethnic minorities, for example, make up 21% of students in colleges compared with 13% of the general population. Nearly a quarter of young, full-time first degree entrants to colleges come from neighbourhoods with low rates of participation in higher education. This is more than double the rate for all such entrants starting at universities.

To take another example, a group I have spoken about on previous occasions are children coming out of the care system. They remain one of the most under-represented groups in further and higher education, although some modest improvement has been made over the last few years. Research by the charity Buttle UK has shown that FE colleges are the most common route for care leavers into higher education. Yet the National Care Advisory Service says that up to a third of leaving care services have been forced to scale back provision because of budget cuts, despite rising numbers of young people requiring support. Can I put in a plea to the Minister that she can reassure us that even the modest gains we have made are not lost and that care leavers are not left further behind?

Further education colleges offer people the opportunity, on their doorstep, to gain skills and qualifications that meet local economic and social needs. The commission’s report rightly emphasises the importance of partnerships in ensuring that FE colleges can meet the whole spectrum of education and training needs of local communities. But they need support, and it is regrettable that recent pressures on budgets have seen some partnerships face difficulties as funding, for example for lifelong learning networks, has come to an end and there is now a cap on student numbers.

A core area for all FE colleges is providing apprenticeships. I applaud the innovative development of apprenticeship training associations where the colleges themselves, not the SMEs, become the employers, and everyone benefits. I hope that the Minister will tell us what the Government are doing to popularise ATAs as a cost-effective way for SMEs to take on apprentices around the country.

Finally, we know from the commission’s findings that FE colleges make the greatest contribution where they can provide courses and qualifications that meet local need, providing local people with skills. This requires, above all, as almost everyone else has said and the commission itself emphasised, flexibility. I hope the Minister will tell us whether the Government will now take up the commission’s recommendation that up to 25% of colleges’ adult skills budgets should be made available to meet locally assessed needs. FE colleges really can change the lives of those failed by schools, who have lost jobs or who need a change of career. FE colleges at their best should be at the very heart of their local communities.

15:58

[Lord Shutt of Greetland]

My Lords, I commend my noble friend Lady Sharp on the work set out in her report and, indeed, on initiating this debate. Let me declare my own interests. In 1973 I had the privilege of being appointed as a governor of the Percival Whitley College in Halifax. We later changed its name to the Calderdale College. I served for almost 25 years until 1998, including 19 years as chair of that body. I recall believing at the time that the only constant thing about FE was change. It is now 14 years since I stepped down, but I commend the present regime and congratulate it on its continued role. It has had recent enhancements to facilities, and is currently involved in a £6 million building enhancement programme.

It was my original intention to speak on governance, but I need to speak a little more about FE in Calderdale. I want to be certain that Calderdale is still well placed to contribute to the local economy and community. It has come to my notice that one of the local secondary schools is hoping to open an alternative college in September 2013, which will replicate some of the work that the college is engaged in. Now, the circumstances are these. Competition is okay, but—at FE level—Bradford is 10 miles away from Halifax, and Huddersfield is rather less so. Burnley and Rochdale, at the other end of Calderdale, are very near to Todmorden, too. So there are alternatives. It is always right that there is an alternative in case faces do not fit.

Also, in the period 2013-19, the projected population of those who are 16 to 19 will reduce by 8%. There is a consultation going on, in accordance with Section 10 of the Academies Act 2010, but that consultation looks like motherhood and apple pie. I ask the Minister whether the Secretary of State for Education specifically considers demographic trends, existing education and training provision and value for money when deciding whether to approve an application to open a free school for 16 to 19 year-olds. I also ask how far in advance of the provisional opening date of a free school for 16 to 19 year-olds the Secretary of State undertakes his statutory duties under Sections 9 and 10.

I very much see the point of a free school where there may well be lack of provision and potential numbers are on the rise, but now I am doubtful about that. A free school is one thing, but there seems to be an absence of free money about. Clearly, there is some detail in what I have been asking and I would be very happy, if the Minister cannot deal immediately with what I have said, to see that in writing.

16:02

[Lord Jones]

My Lords, as the Times first leader states today, the question of where this country stands in the world economy remains. How will it make its way in the world and respond to the competitive pressures from the East? When I began my parliamentary life in the constituency that I represented, we had three great manufacturing industries, 10,000 jobs in textiles and 13,000 in steel. Today, we produce no steel and no textiles. These cyclical manufacturing industries fell prey to competitive pressures from the East.

I am very glad that the noble Baroness, Lady Sharp, chose this debate. I am convinced that FE colleges will help to buttress and develop what remains of British manufacturing industry. FE colleges are at the heart of reskilling and retraining the British economy. Deeside College in north-east Wales stands alongside the third great industry that I mention: aerospace. This magnificent college helps one of Europe’s greatest companies, Airbus, to retain world leadership in civil aerospace. Airbus employs nearly 7,000 people in north-east Wales. Deeside College trains Airbus apprentices to a high standard. The Airbus factory in north-east Wales produces the wings of the iconic, world-famous giant jumbo, the A380. The FE college’s engineering department brings the apprenticeships to world standard.

The Airbus director is Paul McKinlay. The college principal is David Jones. The training manager is Gary Griffiths—the greatest trainer, arguably, in Britain. This collaboration of college and factory guarantees prosperity for the north-west and for north-east Wales. This collaboration ensures British paramountcy in the immensely demanding and fiercely competitive sphere of technical manufacturing. College and factory guarantee an industrial future for Wales and the north-west.

I believe that investment in FE colleges will enable Britain and Wales to emerge more quickly from debilitating recession. I believe that FE colleges as a trainer are Britain’s medium-term answer to the great crisis that western nations face. I see our universities as the long way forward, but no praise can be too high for FE colleges in Britain today.

16:05

[Baroness Maddock]

My Lords, I, too, congratulate my noble friend Lady Sharp on securing this debate and on her report, which everybody has appreciated this afternoon in their contributions. The report clearly shows the importance of further education colleges in their communities. It concludes that an FE college is embedded in its community in almost every town and city in England and Wales. However, where I live, in Berwick-upon-Tweed, we are not in that happy position. That is in stark contrast to the situation when I lived in south-west Hampshire and was chairman of governors at Brockenhurst College, which at that time was, I think, in the top three.

My purpose in taking part in the debate is to highlight the very low level of FE provision in north Northumberland. We are at the heart of a very rural area with a sparse population. We have one high school with a sixth form in the town. The next nearest high school is at Alnwick, 30 miles away, or one hour by bus. The nearest college is at Ashington, which is more than 50 miles away and one and a half hours by bus. There is, of course, a college in Newcastle, which is 67 miles away and 50 minutes by train, but because it is quite a long way away the cost of that train journey is quite high. I am pleased to say that, since the Liberal Democrats took minority control in Northumberland, students can now get their train fares to Newcastle paid.

Northumberland College in Ashington delivers some courses locally—mainly trades and other practical skills involving some of our excellent local tradesmen. There are some good apprenticeship courses, but the college does not do any A-level courses. As a town we have a very low skills base and we have low levels of take-up of further and higher education. It is difficult to get the exact figures for Berwick because the last Government reorganised local government in Northumberland and we now just have figures for the whole of Northumberland, which do not reflect the very great differences between the north and south of the county. Again, I cannot get the exact figures—I used to be able to get them from Berwick Borough Council—but we have almost the lowest average wage in the country. Those who leave Berwick for higher education tend not to come back, as there are few job opportunities locally.

Many in Berwick have been working to try to improve FE provision with a view to getting some higher education opportunities as well. Under the Labour Government, I supported local efforts to bid for the programme for more universities, particularly for communities such as ours that are a long way from higher education. Despite being the furthest from higher education in England, we were unsuccessful.

Local efforts have not been helped by local government reorganisation and the demise of One North East. We thought that various sites and buildings owned by the local authority and One North East might provide the possibility for a college. I regret to say that, during 13 years of the Labour Government, there were no new college or school buildings anywhere in north Northumberland. Travel to colleges elsewhere is expensive and takes time, as I have indicated. It is not helped by the fact that the A1 in north Northumberland is still a single carriageway, despite dualling to the south and to the north over the border in Scotland.

I have two questions for the Minister. Are the Government aware of gaps in FE provision such as those in north Northumberland? What opportunities are there now for the development of an FE college in our area embedded in its community and providing the benefits so clearly set out in the excellent report of my noble friend Lady Sharp?

16:09

[Lord Young of Norwood Green]

My Lords, I, too, congratulate the noble Baroness, Lady Sharp—although I was tempted not to, just in the interest of time. This is a bit like speed-debating on a serious and complex issue. I also congratulate her on her report, which had the benefit of being succinct as well as interesting in its analysis.

The noble Baroness’s timing for this debate is right too. Ed Miliband’s speech, at a certain conference that I was at last week, focused on the important issue of skills and training. He also set out a clear vision. A Britain that recognises high-quality skills training is just as important to our modern economy as academic qualifications. Our concern about the Government's approach to education and training relates to its inconsistencies. Michael Gove wants to bring back two-tier academic exams—but I will not pursue that issue any further now, in the interest of time. However, we think that that is an antiquated view of education in the light of the needs of a modern economy.

We believe that we need to meet the challenge of every young person staying on until 18 by making maths and English mandatory for all and creating a new gold-standard technical baccalaureate. I would be interested to hear the Minister’s attitude to that proposal. I was pleased to see that the noble Lord, Lord Baker, welcomed it.

We must once and for all get rid of the perception of vocational qualifications as somehow second class—an attitude which I think persists. If I have one criticism of the report it concerns the comment about colleges opting,

“to retreat to the low-risk areas of 16-19 provision and apprenticeships”.

When I read that I thought, “Hmm, they’re not always low risk”. One of the problems with apprenticeships is, unfortunately, that there are some examples of low-quality apprenticeships that undermine the brand value that we have spent a lot of time trying to restore. I do not say that in an attempt to score any points, I think that it is a really serious issue. I think that apprenticeships are currently getting the attention and merit that they deserve, with more and more companies actually treating apprentices, when they finish their apprenticeships, as though they were graduating. That is what we want to encourage.

We have concerns about the Government's record. The noble Lord, Lord Bilimoria, talked about the scrapping of EMAs and the trebling of tuition fees. Support is being withdrawn for people aged 24 and over who are taking A-level equivalent courses and above—that is level 3 and higher, which includes apprenticeships. Loans of as much as £4,000 are also being introduced for FE students. We cannot help but feel that that will act as a deterrent at a time when we want to encourage more retraining, more reskilling and lifelong learning.

I do not have the opportunity to pick up all the key points made today but I endorse many of them, especially the point made by my noble friend Lady Warwick about ATAs—I would be interested to hear the Minister’s response on that—and the point about group training associations, which are a key part of encouraging more companies to offer apprenticeships. The UK’s track record on that is still abysmally poor. Only about one-third of FTSE companies offer apprenticeships, and only 4% to 8% of companies offer them. That is an abysmally low figure. The Government are failing to lead by example by not ensuring that apprenticeships are a key part of the contractual liability when government contracts are let. We did that when we were in power and that is why we ended up with nearly 400 apprentices in the Olympic contract as well as with another 400 in Crossrail. I cannot understand why the Government do not want to go down that particular road.

I am conscious of the time and do not want to incur the Committee’s wrath, so I will conclude with just a couple of quick points. As I said, lifelong learning and upskilling of our workforce is central to producing a modern, high-wage, flexible economy. I agree with the points made about the importance of the careers service—it is not good in its current form. I also agree with noble Lords who made the point about FE colleges being better represented in local enterprise partnerships. As for the idea of the dynamic approach, when I looked at the diagram I thought for a minute that the Liberal Democrats had embraced nuclear power—but then I realised that it was just a metaphor. Nevertheless, it is a good one.

16:15

[Baroness Garden of Frognal]

My Lords, I thank my noble friend Lady Sharp for initiating this debate and for raising such an important matter. The House has benefited many times from my noble friend’s knowledge and experience of the further education sector. Her report, A Dynamic Nucleus, has provided a seminal contribution to our understanding of the pivotal role played by further education colleges in their local economies and communities, helping millions of young people and adults to gain and enhance their skills and education. Both the quality and the number of contributions that we have had to the debate today indicate just how seriously we take it in this Chamber. One of the other things touched on by my noble friend was the fact that FE promotes well-being, while the right reverend Prelate mentioned the promotion of citizenship and social engagement. Those are factors that we must not neglect in the role of further education colleges in the community.

The report celebrates the work that colleges up and down the country are doing to support their communities and employers and sets out clearly the challenges and opportunities for the further education sector, local partners and commissioning bodies, as well as central government and its agencies. At the heart of the report’s recommendations is a recognition that there needs to be a shift away from accountability upwards to the Government and outwards to college communities, learners and employers. This view is central to the Government’s further education reform plan, New Challenges, New Chances, published in December last year. I join in the tributes paid to the Minister, John Hayes, who has been working with us on these issues for a long time.

Through these reforms we have stripped back the number of intermediary bodies that had flooded the further education system. We have removed top-down targets and prioritised funding on those who need it the most. Learner and employer demand drives the system as funding follows the learners. Through the Education Act 2011, we have also removed restrictions and barriers around college governance. I know that these are issues close to the heart of my noble friend and, indeed, to many others who have spoken. Colleges are now able to consider different, innovative delivery models and partnerships, including joint models with academies and universities, and mutualisation models to offer greater choice and diversity to learners and employers. Perhaps I may pick up this point in connection with the remarks made by the noble Lord, Lord Bilimoria. In addition, we have responded to the Public Accounts Committee’s concerns about the level of bureaucracy in the system, with a comprehensive cross-government simplification plan. By delivering this plan, we seek significantly to reduce the red tape faced by colleges and providers.

Many of the recommendations in the report were for the sector itself to deliver, including sector bodies, and some progress has been made. In respect of those recommendations for the Government, we have supported and actioned them all. In order to support effective planning, the Skills Investment Statement 2011-2014, published last December, set out budgets for two years: an indicative budget for the 2013-14 financial year alongside the actual budget for 2012-13. In addition, resulting from my noble friend’s report, the Skills Funding Agency launched the Innovation Code to enable colleges to respond rapidly and flexibly to local business and employer needs and to meet current and emerging skills gaps. I have noted what my noble friend said about the feeling that that has not been implemented in the way and to the extent that she envisaged in the report. What I can say is that the agency is planning a communications campaign for November 2012 to promote the code with colleges and other training providers. This is under review and we hope for comments under that consultation to come back and inform it. The noble Baroness, Lady Warwick, mentioned the point about 25% of colleges’ annual adult skills budgets being devoted to locally assessed priority needs. In fact, the Government’s recommendation is that there should be no target for this; it should be a more flexible provision.

For the sector, the report called for greater involvement of employers and the local community in the design and delivery of the curriculum. There are some terrific examples of colleges working with their communities to develop their learning offer. We heard about some of them today. The noble Baroness, Lady Wall, talked about what is happening at Liverpool with green technologies and so on. There are other examples. Hull College Group uses local groups and forums to develop its learning offer and to shape the organisation. Barnet and Southgate College targets its learning offer to families in disadvantaged areas by working with regeneration groups and faith groups. I stress to the right reverend Prelate that faith groups come into these projects, and rightly so. Local libraries also come into the work of Barnet and Southgate College. Derby College’s Employment World supports adults to enter or re-enter employment, again working with employers.

Colleges are working to deepen their engagement with their communities and employers and are becoming more transparent about their performance and future plans for meeting the needs of their communities and employers. They are stating these aims most clearly. I know that colleges and providers recognise that they need to do more to foster effective working relationships with local strategic bodies, for example local enterprise partnerships—they came up from time to time in the debate today—core city regions and local authorities. To do this, they will assess local labour market needs, agree skills priorities and shape their local skills offer to support local economic development and growth. Leeds City College has a particularly strong link with the local area: the chair of governors is also the chair of the local enterprise partnership. It seems to be a very happy arrangement.

All this work means that colleges need to be ready, and supported, to respond to the reforms—and the sector is stepping up to the challenge. For example, the Association of Colleges report, Thinking Outside the College, provided guidance to support continuous improvement in community engagement and accountability. Many colleges have participated in the work undertaken by NIACE on community curricula. The 157 Group is leading on work looking to the future at what colleges and providers will need to adapt to the changing needs of learners, employers and communities. I pay tribute to the AoC, NIACE and the 157 Group for the tremendous work that they do in this area.

I will pick up on one or two points made in the debate. The issue of local enterprise partnerships was raised by my noble friend Lady Sharp and others. The primary role of LEPs is to articulate and raise employer demand for and investment in skills. They work collaboratively with a wide range of interested bodies in their areas, including local authorities, which play a very important part in this, and independent providers. In core cities and in London we provide city regions with targeted funding to support collaboration with local providers.

My noble friend Lady Brinton, the noble Lord, Lord Bilimoria, and others raised the issue of funding. In a time of limited resources it is critical to prioritise investment where the impact will be maximised. That has been towards individuals who would not otherwise have undertaken training and where market failures are strongest. We focus full government subsidy on the young, on those lacking basic English and maths skills and on the unemployed. We have also protected the £210 million a year budget for informal adult and community learning. I think we would all agree that that is a very important part of the offer.

The noble Lords, Lord Bilimoria and Lord Young, mentioned the possible impact of loans on adults. The introduction of loans repayable on the same basis as those for higher education will maintain access to advanced and higher-level learning for adults aged 24 and over. We will monitor that to ensure that there is no disadvantage in the system.

The noble Baroness, Lady Warwick, and the noble Lord, Lord Bilimoria, talked about the progression from further education to higher education. FE already provides 40% of new entrants to higher education, hosting around 180,000 students on HNCs, HNDs, foundation degrees, apprenticeships and other entry-level qualifications. Many colleges have long and established track records in offering level 4 and above. However, some of this was neglected in the past.

I noted the reference to TVU. I come from that part of the world and remember when it was a high-ranking catering college and how much the provision was incorporated within the university. I was fascinated to hear that students were working in Buckingham Palace, but I am not sure how many apprentices Her Majesty can take on. Obviously it is a very good route for those who choose to go that way.

There is provision to support learners following the ending of the EMA scheme and to target that funding more appropriately. My noble friend Lady Brinton mentioned hairdressing and plumbing. When I started work at City and Guilds, I dealt with hairdressing qualifications and I have great admiration for those skills. The work that is being doing with digital technology in Dundee is definitely one of the skills of the future.

The noble Baroness, Lady Warwick, mentioned care leavers. That is a very important area that we need to look at in all sorts of respects, in particular their ability to go on and have fruitful lives, as the records of care leavers are currently woefully below those of others. The other point raised by the noble Baroness, and by the noble Lord, Lord Young, concerned colleges helping SMEs through the ATA.

I am conscious of time. My noble friend Lord Shutt mentioned the proposal of the Maltings 16-19 free school. If I may, I will write to him on the specific points of that case, but it is out for consultation at the moment, so he will be able to feed into that consultation. The noble Lord, Lord Jones, raised, quite rightly, the issue of manufacturing and how further education is very well placed to support manufacturing. This is certainly an area that the country will need to increase in order to pull us out of the recession.

My noble friend Lady Maddock raised the issue of Berwick. We are publishing a report with Defra on community learning in rural areas, considering issues such as transport, class sizes, rural broadband and so on. Several of our community learning trusts are based in or include rural areas, as acknowledged in Defra’s recent report. My noble friend and, indeed, my noble friend Lady Sharp mentioned the National Careers Service. I regret that I do not have more time to go into that but I hope that I can write to them on that matter and where there are gaps in that funding.

This is a new and exciting phase for further education colleges, and their communities and employers have high expectations of them. I am confident that colleges will meet those challenges head-on and continue to deliver a rich and diverse choice to their learners, employers and local communities. I believe that the quality of this informed and incisive debate has contributed to the issues that we will all need to address and bodes well for the future of this particular sector. I once again thank my noble friend Lady Sharp for securing this debate and thank all the noble Lords who have contributed on this important issue.

[The Deputy Chairman of Committees]

I commend all noble Lords on their amazing temporal self-discipline. We have finished three minutes early. The Committee stands adjourned for three minutes.

16:27

Sitting suspended.

UK Trade and Investment

Tuesday 9th October 2012 Grand Committee

Question for Short Debate

16:30

Asked By

[Baroness Liddell of Coatdyke]

To ask Her Majesty’s Government what progress has been made in improving the performance of UK Trade and Investment in relation to small and medium-sized enterprises in the United Kingdom.

[Baroness Liddell of Coatdyke]

My Lords, I am very grateful to have this opportunity to raise the issues in this debate, which I asked for quite a long time ago. I did so after hearing the Minister address a business breakfast on UKTI. Two things struck me. First, there were great similarities in some of the things that he said in his speech to what I said 10 years previously when I was doing his job. Secondly, we do not get anything like enough opportunity to discuss this issue, particularly in the troubled economic times that we are in.

SMEs are great drivers of the economy but they are going through a particularly difficult time. From the beginning I say that I am a friend of UKTI, but I am a critical friend and am not yet 100% certain that we have the delivery mechanisms in place to address some of the issues that are essential to the growth of SMEs, both in exporting and in operating within the domestic economy.

Let me begin by paying tribute to the Government and to the GREAT campaign. I have been a great fan, to coin a phrase, of cross-government working in relation to foreign direct investment. I have often felt that we missed a trick in not bringing together the British Council, VisitBritain—in which I have a registered interest as a director—and UKTI to promote what Britain is and what Britain is good at. In the run-up to the Olympics and the Paralympics, the GREAT campaign was an enormously good showcase for the values of Britain as well as for its skills, design and capability. I should like to ask the Minister what will happen to GREAT now that the Olympics and Paralympics are out of the way. What will happen to the money? Will GREAT go on? Will the money be continued? Or, will everyone huddle back in their silos, keeping well out of the way of the traffic, in case they dare to talk to one another at any point in the future? Those of us who travelled internationally and saw the GREAT posters and material in a lot of international airports realise what a powerful advocate it is for the UK.

I have a long interest in working with entrepreneurs seeking access to international markets. I suppose that I am a poacher turned gamekeeper in that I ended up as a head of mission. I have worked directly with UKTI and have to take some responsibility for some of its failings as well. One of the big criticisms that is made of UKTI—I am not 100% certain that it is justifiably a criticism—is that it is biased towards big business. It is difficult to envisage a situation where UKTI would not get behind big business. The scale of some of the projects that are either for export potential or for foreign direct investment is so overwhelming. It is easy to work with big business because it is structured in such a way that it is easy to interrelate with it. We are always told about the great advantages to SMEs of the supply chain.

I say to the Minister that a camel can go through the eye of a needle easier than a small firm which does not have an international name can get into the procurement department of a major multinational. There is a body of work within what used to be called the DTI—it must be about 10 years old now—that looked at the supply chain in the oil and gas industry. Some of the best technology that exists in that industry has grown out of SMEs, yet the best closed shop in the world is multinational procurement. It makes the BMA and the Law Society look like a bunch of amateurs. It is critically important to get the people with the ideas and the ability to develop the business before the guys in the big businesses who actually buy those things. I think that that is an area that UKTI does not devote enough time to. Not all of it is about spending money; some of it is about knocking on doors. Some of the clever and influential people who gravitate towards UKTI, I would suggest, should turn their minds to how to make that supply chain work more effectively. I do not like the idea of SMEs taking scraps from the table, but if you run an SME—and I have run an SME—you really would do anything to get your foot in the door in that kind of context.

In this, I feel that I am criticising some of my dear friends. There are issues about the commercial acumen within UKTI. Some of it is because of the nature of an organisation whose staff rotate every four years, particularly with Foreign Office staff. You can get somebody who is a brilliant Arabist or an expert in hard languages running a UKTI operation. I know that 400 staff have had commercial awareness training but, frankly, nothing concentrates the mind more than seeing the whites of the eyes of a customer who will maybe take their business elsewhere. It is hard to teach people commercial awareness. I know that proposals have come up, year after year, about secondments into business, but it is very easy to second somebody into Rolls-Royce, BAE or GlaxoSmithKline. It is very difficult to second somebody into Joe Bloggs’ widget makers. I often think that that kind of white-knuckle experience is missing from some of the experience in UKTI.

I know that there have been considerable changes at the top. UKTI appeared before the Select Committee on SMEs not so long ago. I have never quite graduated on to a Select Committee; I am a new girl in here. However, I notice that it was pointed out that 75% of the new managing directors come from the private sector. Can the Minister tell us if any of them have ever grown a company from start-up, or if they have come from a business that is not AIM or FTSE listed? The psychology is very different. I notice from the annual report that there is great emphasis on attracting overseas venture capital. The best venture capital in the world is about six stations from here on the Jubilee line. One of the problems with accessing venture capital is that the risk profile of an SME is different. There is no opportunity to spread risk in the way that you can with a major company, as I found out when I referred to this in my maiden speech along the corridor and was summoned in by 3i. There is a venture capital gap; there is no getting away from that. The cost of administering a venture operation in a small business is sometimes much higher. It is easier to get £50 million, sometimes, than it is to get £50,000. That needs to be addressed, and we need to find a route to do so. I would like to know how this new service that would link companies is actually going to work.

I was interested in the Secretary of State, Vince Cable’s, announcement last week about a new banking facility using the Co-operative Bank and the Unity Trust Bank. That was interesting, as it is not one of the big banks. I should declare an interest as a life-long co-operator with an account in the Co-op Bank. One of the problems with the banks is that small businesses are terrified of them, first because they often do not get the money, and secondly because of the pernicious system of personal guarantees. If you want money from a bank you can put your granny up as collateral. I think of the number of deals that I have lost because a husband has gone home to the wife and said, “I have got to put the house on the line”. If my husband came home and said that to me, I would chase him. It stands to reason that if you are asking people to take significant personal risk, you are limiting the prospects that are available for them. Many people go to informal investment. I pay tribute to Business Link in bringing in business angels.

Time is running on, so I will jump very quickly to another area. Can the Minister give us some idea of how the defence and security organisation is settling in as part of UKTI? That is a very difficult area for SMEs to crack. Often they need a guy with all the gold braid on him just to get in the door of a Government who might be in the procurement business. The annual report is very coy about how DSO is doing. If the Minister can give us some information, I would be very grateful.

In my last few seconds I will say to the Minister that there is one area in which officials will say I am out of date—but I have checked and I am not. UKTI is probably the most bureaucratic organisation under the sun. I have worked in many organisations but never in one that is quite so bureaucratic. Will the department look again at the bureaucratic structures of UKTI? There are good people there trying to do a very difficult job. Let us make it as easy for them as possible.

16:40

[Lord Cope of Berkeley]

My Lords, I am delighted that this debate is taking place. I thank the noble Baroness, Lady Liddell, for instituting and promoting it. The timing, however it has come about, means that its chimes well with our work in the Select Committee on small and medium-sized enterprises and exports, which I have the honour to chair. Our remit is rather wider than this debate. We are concerned with all the Government’s work to support SMEs in exporting. We are interested not only in UKTI, on which this debate has focused—which is fair enough; I am not criticising it—but on UK export finance and the Government’s role in deregulation, tariff negotiations, tax issues, procurement policy and so on.

The Government can help through diplomacy over tariffs and other restrictions on trade, as well as by their purchasing policies, and by Ministers actively promoting trade, as the Minister does so energetically around the world. I hope that I am correct in saying that the promotion is for SMEs as well as for large businesses such as those mentioned by the noble Baroness.

Commentators write about the difficulty of exporting manufactured goods, for instance to India, because labour there is cheaper. They do not often mention that there is usually a 30% to 40% tariff barrier to be overcome. The same is true in Brazil with many goods. That is also a great part of the difficulty that the Government can help with by their energetic diplomacy to try to get free trade.

Our committee published a call for evidence before the recess and received a large volume of responses from organisations, companies and individuals, including academics working in the field. We and our staff are busy going through them—as the noble Lord, Lord Haskel, who is a fellow member of the committee, will confirm. We have also started taking oral evidence. We are in the middle of a series of visits to different parts of the country to meet SMEs of every size and kind, and next month we plan to visit Brussels and Germany.

Visiting companies and organisations in the recess, and looking through the evidence as it came in, I was struck again by the variety among SMEs. It is something we must always remember when we talk about them. Variety is one of the essential facts about SMEs. They come in all sizes, and very different dynamics drive them. They are in all kinds of business. We are very conscious that they are in every sector. We will not be able to ignore the food sector, for example, because the noble Lord, Lord Haskins, is on the committee and he will see to that. Nor can we ignore the creative sector because we have the noble Lord, Lord Grade, as well.

If successful SMEs have one characteristic in common, it is above all that they are problem solvers. They do not let difficulties stop them. If they do not have a can-do attitude, they simply do not succeed. That does not mean that government in its various forms cannot make life easier for them, if only by getting out of the way. Positive help by Government for SMEs has existed for a very long time—since before I was small firms Minister in the Government of the noble Baroness, Lady Thatcher, 25 years ago. These days, of course, much of it is channelled through UKTI, but it also comes from local enterprise partnerships, chambers of commerce and so on. I will not comment directly today on the work of UKTI, as we are in the middle of our evidence taking and deliberation, but we are interested in, for example, whether the criticism made by the noble Baroness—that UKTI is too big business-oriented—is valid.

Nor do I want to comment today on the role of UK export finance with respect to SMEs, which is developing once more after a period in which it was not. I look to my noble friend the Minister for reassurance that his colleagues in government take SME exports as seriously as I know he does. I hope that he will also set out what UKTI is doing to reinvigorate its pitch to SMEs. As far as I can see, too few of them know of the help that they can get from UKTI, either directly or sometimes indirectly, channelled through other organisations, such as the ones that I have mentioned.

We have to recognise that many SMEs either cannot be helped by the Government or do not want to be helped by the Government or anyone else. After all, as far as many of them are concerned, the whole point is to do their own thing. In some cases, people are trying to do something differently from what they did when they worked in large firms and so on. Nevertheless, others want reassurance that it is all possible—it is possible to create a business and to export to difficult countries around the world. The fact is that it is possible. We have already come across some remarkable stories of SMEs doing business and exporting. Britain needs SMEs to flourish and particularly to export. We need to stimulate more potential entrepreneurs and to try to help them when they want to export. UKTI has a very important job looking after the interests of the entrepreneurs, the people who work for them, their customers and, of course, the UK itself.

16:47

[Lord Cotter]

My Lords, I would like to start with the talk. I seem to remember a recent advertising slogan, “It’s good to talk”. How do we do that, when it comes to business? I believe that too often from the beginning of the current crisis we have heard talk about austerity and cuts. Austerity and cuts were emphasised long before they started happening. I think that that was negative talk, which had quite an impact on business. The continued talk about cuts and austerity, not balanced by talk about growth and going forward, has been a negative aspect. I hope that the Minister, whom I welcome in his role, will consider that point. It is not just for the business department to talk positively about this; it is for the Treasury and others as well. We need to correct the deficit but, as I say, we need the positives.

I congratulate the noble Baroness, Lady Liddell, on securing the debate today, which is about trade and investment. The Government have made a start with the Britain Open for Business initiative, in which there are many encouraging ideas. I hope that the Minister, later in the debate or at another time, will talk about the implementation of that. We need continual monitoring of progress.

I take on board the point made by the noble Lord, Lord Cope, about the need for publicity, so that people are aware of what help is available. A recent FSB report said that, in the case of UKTI, only 6% of small businesses were engaged. Out of those 6%—it may be wrong, but that is what was said—83% were encouraged by their contact. I take on board the point made by the noble Baroness, Lady Liddell, about concerns that too much is directed towards big business rather than small businesses. On publicity and the need for people to be aware of what is available, I know, having been in small business, how little time we have to consider, when we are thinking about how to survive, what else is available out there. I say to the Minister that, in lots of different ways, publicity is needed, direct or otherwise, to ensure that small businesses know that there is something out there that can really help them.

There is a need for us to be welcoming in this country and for Britain Open for Business to actually mean something. In this connection, I again go back to the talk, and to what is said and what happens. I hear quite often that foreign firms and investors have great difficulty in getting visas for key staff, more so than in most countries in the European Union. We need to look at that and see whether it is correct. If it is correct, we need to look at it very carefully, because it does not take much bureaucracy and red tape for someone coming from overseas to feel that this country is unwelcoming.

In this connection, I refer to a recent controversy involving the London Metropolitan University. As a result of it, there was talk of revoking the licence of the university. The implications for students from overseas were such that they could have lost their opportunity of an education in this country. It is a major area of concern. Again, a message was going out, and it is very difficult to counteract messages once they get out and to say, “No, no, that’s not the case”. That was a case where the message was quite negative for this country.

We need to talk up business. For SMEs, publicity is crucial in order to know what is available. We should not go against the need to reduce the deficit; rather, we should emphasise the need to encourage business—not just business alone but the Treasury and other departments in the Government.

I look forward to the Minister engaging with us and reporting back on what progress has been made with the various initiatives. The noble Baroness, Lady Liddell, referred to her time in the other place. When I was in the other place, I argued time and again for the need for Ministers or politicians to appreciate what a small business is all about, and for civil servants and others to have placements in small businesses. I read that the Government were doing that a lot more, but I stress to the Minister that it cannot happen enough. Having struggled myself, I know that a Minister or civil servant would have to work in a small business for only two or three days to realise what a difficult field it is and how many skills you need to run it. I strongly support what has been said by previous speakers and underline to the Minister the points that I have made about involvement and speaking up for business.

16:53

[Lord Hunt of Chesterton]

My Lords, I welcome this debate, introduced by the noble Baroness, Lady Liddell. I have experience with high-tech SMEs applying UK research and have had discussions with medium-tech SMEs around the world. I declare an interest as chair of a small company in Cambridge and am glad to say that we have just sold software to Beijing to predict its air pollution, which is quite a coup for the UK. It is the same software as that used in London and reported on by Ministers in May.

We have to remember that the development of SMEs was once extremely controversial politically. For example, in Cambridge, both the Conservatives and the Labour Party were dead against Cambridge turning into a high-tech town, and one of my Labour colleagues said, “My God, this is going to turn Cambridge into an inland Bournemouth”. We have moved a long way since those days. All parties now accept the importance and social value of SMEs. I believe that there is some statistic that shows that some two-thirds of UK school leavers would have their own business if they could, whereas the figure is less than one-third in France. I do not know where that statistic came from, but I heard it some time ago.

A propos the strange remarks of the Chancellor yesterday, I should add that SMEs are not here as a sort of gambling operation, they are here to set up and do tasks and to provide reasonable employment. They are not speculations. Some people speculate on them—good luck to them—but that is not the primary role of people who have set them up, including people I know.

SMEs were invented by the Victorians and are remarkable organisations. Being a limited liability company enables you to do things you cannot do as a charity or as a partnership; an SME can do them. I support the present Government in their efforts to simplify things for SMEs so that they can run better. It is very much easier for SMEs here than in France, for example, which I know because our company deals with colleagues in France. The tax regime was improved by the Blair-Brown Government, particularly in maintaining tax relief on research. The present Government had a few wobbles on that when they first came in, but now they are solid on allowing tax relief on development.

The role of women in SMEs has increased enormously. Our own software company is composed of 80% women and is thus probably unique in the world. We have a very firm No. 2 who is a woman, and she jolly well made sure of that. The important point to make is that the Government introduced regulations to ensure that companies enable women to come back into employment. This is allowing highly skilled women to stay in the SME workforce.

This debate is about the role of UKTI. One of the issues for SMEs in Europe is the question of funding for research and development. The Technology Strategy Board is an effective body, and it is gratifying to note that the present Government have maintained it. However, I did not see any reference in the UKTI document provided for this debate to its connections with the board. It is important that UKTI should work with the TSB to look at where the overseas market areas are. In my view, we are still way behind the United States, which funds research undertaken by foreign scientists. Two or three of my papers were immediately funded to do research over in America; there was no such funding over here.

The other important feature of SMEs is the matching-grants approach adopted by the European Commission. In Britain it is difficult to get this sort of funding. You cannot easily get money from the research councils, so the approach of the EC of providing a matching grant equal to the funding provided by the SME is a good one. We do not do that in the UK and I believe that we could move more in that direction.

Last year I went with the noble Lord, Lord Oxburgh, to the big water show in Singapore. It is the world’s biggest annual exhibition of water. Water does not feature much in this UKTI report, perhaps because it is a low-growth industry, but it is jolly important. We saw enormous displays of water technologies from all around the world. Britain had only a small display, and we heard grumbly representatives from British companies say that they got little support from UKTI to come to meetings such as this one. They were very vociferous. In fact we met the UKTI man who had come down from Kuala Lumpur. He listened to and recognised those grumbles. He commented on it later, when I visited the embassy and high commission, saying that there are so many trade exhibitions that there simply is not the funding available to enable small UK companies to attend.

The other important task for UKTI and the Government is the promotion of the role of governmental agencies in the UK. I used to be the head of the Met Office. At no point did my job description include anything to do with British industry. I complained about it to the then Conservative Government. They said, “Why don’t you go to the Sunday fete and help them?”. I was pretty cross and I expostulated about it. The representative, now a fine Member of the House of Lords, then said, “Well, that is the sort of thing they do in France, isn’t it”. The point is that our big government agencies could play an enormous role. However, the Environment Agency is not allowed to promote UK environmental software or technology abroad. I have spoken to the head of the agency about it. We have extraordinary limitations.

I have almost used up my six minutes. I believe that this document is helpful. Finally, there is a new point that is very interesting. As I understand it, the UKTI is now providing funding in order to bring companies into the UK, such as into the high-tech centre in east London. Doing that is fine, but the department might talk to those British companies which are working in the same area so as to make sure that it is about collaboration, not spurious competition.

17:00

[Lord Bilimoria]

My Lords, when I accompanied Prime Minister Tony Blair on his visit to China and India in 2005, we christened the British Airways plane that we travelled in “Blair Force One”. In his excellent speech in India, Mr Blair said that he was wearing two hats: one as Prime Minister of the United Kingdom and the other due to Britain’s presidency of the European Union at that time.

I, too, am speaking in this debate wearing more than one hat. The first is as the founder and chairman of Cobra Beer, which I founded with my business partner, just the two of us. It grew from a micro-business to a small business to a medium business—the full spectrum of an SME. The second is now as the chairman of a larger business with a global joint venture with one of the world’s largest brewers, Molson Coors, headquartered here in the UK, and a joint venture with Molson Coors in India. I am also wearing the hat of the founding chairman of the UK India Business Council, where I have had the privilege of working closely with UK Trade and Investment, which has funded and supported the UK India Business Council. In fact, the UKIBC would not exist without UKTI’s support.

Ronald Reagan is famous for saying that the nine most terrifying words he had ever heard were, “I’m from the Government and I’m here to help”. I think that that is very unfair, as government can genuinely assist business, not only in creating the right environment for business to flourish but in the way that UKTI helps British businesses go global. Yet it saddens me that when I make speeches around the country and ask an audience of, say, 200 businesspeople, “How many of you do business with India?”, just a few hands go up.

I thank the noble Baroness, Lady Liddell, for initiating this debate. The reality is that only 20% of British companies export—that goes for SMEs as well. If that could be increased to 25%, that would add another £36 billion to the UK economy. SMEs are the engine of our economy. According to the Secretary of State for Business, more than half the monetary value of the UK’s exports comes from SMEs. SMEs employ more than 60% of the private sector workforce and there are 4.4 million SMEs in the UK. In the past 12 months, UK Trade and Investment has helped more than 25,000 businesses, of which more than 90% were SMEs.

It baffles me why businesses do not make more use of the help that UKTI can offer. From my own recent experience, in 2009 we signed our global joint venture for the whole world, excluding India, with Molson Coors. Three years ago, Molson Coors was not interested in India and said, “You keep India”. A year later, as the global joint venture was progressing well, they expressed an interest in looking at the Indian opportunity. When I accompanied the Molson Coors team to India, we met with Barry Lowen, the head of UK Trade and Investment in India, who was able personally to reassure my colleagues from Molson Coors of the Indian opportunity. This helped greatly and a year later, in 2011, we signed a joint venture for India, called Molson Coors Cobra India, and bought, upgraded and expanded the only brewer in the state of Bihar.

A year later, in June 2012, the global board of Molson Coors, its enterprise leadership team, for the first time in its more than 200-year history, held a board meeting outside the United States, Canada and the UK—in India. During that visit, UKTI and the British high commission organised a high-profile event in Delhi for the board to meet key individuals who provided a variety of feedback, which gave the board the confidence not only to continue to support the Indian joint venture but, all being well, to sanction further expansion in India in the years to come. The role played by UKTI and the British high commission was absolutely instrumental.

As the noble Lords, Lord Cope and Lord Cotter, said, what more can the Government do to get this message out to British business, particularly SMEs, to take advantage of this help that is available to all British businesses? UKTI is on the ground in 96 countries. It is present around the world and can do much for British business and SMEs: it can carry out market-entry research, OMIS reports, at very reasonable rates; it can make introductions; it can help to host events; it can provide networking opportunities, host and organise trade delegations—I could go on. Why do businesses not know about this and make more use of it?

The Government have rightly woken up to the fact that Britain does not have a balanced economy. We have let things slip. In 1978, manufacturing was 26% of GDP; today it is barely 12%. In 1970, services accounted for 54% of GVA and manufacturing 40%; by 2009 it was 78% and 17% respectively. We need to encourage manufacturing. What we have not lost is the ability to be the best of the best in manufacturing in the world. In terms of advanced engineering, just look at Rolls-Royce, whether cars or aero engines. Look at Jaguar Land Rover—at our whole automobile industry in fact. At Cobra I am very proud that, first and foremost, I am a manufacturer.

What are the Government doing to encourage innovation? The noble Lord, Lord Hunt, alluded to this. It is a shocking fact that the UK Government’s investment in R and D is well below that of other advanced economies. Sweden’s investment is 3.5% of GDP; in Finland and Japan it is 3.4%; in Germany 2.5%; in the US 2.7%. In the UK it is only 1.8%. Skills development is crucial. According to the World Economic Forum, the UK workforce is 18th in the world, far behind those of Japan, Germany, Sweden and the Netherlands, for example.

The good work that UKTI does cannot operate in a vacuum. Government has to create the environment to help the capacity and capability of British businesses to excel and to be able to export and compete around the world. It needs to create the environment with a competitive tax regime and low red tape and regulation, which will attract inward investment and so help SMEs. Our taxes are too high, although I am happy to see that a survey published today says that, where red tape is concerned, we are actually far better than many other countries. Thankfully we are not in the euro, but our exports are still too dependent on the euro. UKTI must continue to encourage British businesses to look more globally, particularly to countries such as India. We are a trading nation, we are outward-looking, we are an open country and we can only succeed and compete by encouraging our businesses to go global. Otherwise the world will leave us behind.

17:06

[Lord Haskel]

My Lords, before I came into your Lordships’ House, I, too, was in business. Many of the points that my noble friend makes about UKTI now were also apparent back then, long before my noble friend was there.

As the noble Lord, Lord Cope, said, I am serving on the committee that is looking into this very matter. As he explained, we have started our inquiry, so what I have to say benefits from our early work. Of course UKTI was a very early port of call for this committee. My impression is that here is an organisation in the midst of change, as my noble friend Lady Liddell pointed out. There are new people in senior jobs, some from the private sector. Some local appointments have yet to be made, but in general their task seems to be to reorganise the way in which they work. I believe that we all welcome this. The proposed direction of travel seems to overcome some of the criticisms that we have heard, such as UKTI making its services known, identifying priorities and getting those parts of government such as the Foreign Office and the Home Office to share these priorities and to work more closely with UK Export Finance, the old ECGD. However, it is early days.

However good UKTI is, its work alone will not improve our balance of payments. It is the businesses that have to export and it is the SMEs that are doing more and more of this. The real task must be to find out what it is that prevents small businesses from exporting. Is it lack of finance, lack of know-how, lack of knowledge about the markets, lack of contacts, lack of confidence or just plain old lack of interest? Perhaps the most difficult of these to deal with is lack of interest. You can demonstrate that exporting provides opportunities to increase turnover and to raise productivity and profitability, but people have to be receptive to these arguments. People also have to be prepared to take the risk as well as to undertake the hard work. So UKTI will have to be selective. It is the people that make the difference—this is the can-do attitude that the noble Lord, Lord Cope, told us about—and I believe that UKTI will have to recognise these people.

The main problem for those businesses that do export seems to be finance. The banks say that they are most anxious not only to finance exports but to provide additional services such as debt collection, document preparation, insurance and seminars on exporting, yet somehow businesses say that the banks are their biggest problem. Indeed, Mr Cable, the Business Secretary, said during an interview at his party’s conference that his department’s research showed a high rejection by banks of SMEs wanting to export. There is a mismatch somewhere. I am not sure what UKTI can do about it. After all, the Government have introduced several schemes to try to put this right with what I can only describe as mixed success.

In addition, there are other organisations trying to help exporters: financial service companies that will discount invoices; organisations that will fund your customer so that they can buy your product; the Institute of Export, which provides valuable and necessary skills training for exporters; market research organisations; mentoring schemes; and some large companies that help companies in their supply chain to export. The British Chambers of Commerce and trade organisations also supply information and try to help. Then there are the European single market incentives that the noble Lord, Lord Hunt, spoke about, such as the Enterprise Europe Network and the internet’s points of single contact. There is a lot on offer. So what is the role of UKTI with all this other help available? It is certainly not to duplicate it.

That brings me back to where I started: people. From the exporters whom I have met and from my own personal experience as an exporter, I know that the one thing that really convinces small businesses to get into exporting is when they meet somebody else who has done it and done it successfully. Perhaps they got into exporting by a chance visit, through some technical, scientific or commercial meeting, or through social networking or selling on the internet. The Government, somehow, have to encourage this. Perhaps one way would be to reduce the cost of travel for exporters by allowing a rebate on the air ticket tax, as they do on VAT. I finish where I started. It is this personal aspect that is the most effective, yet it is the most difficult. This is where UKTI has to work hardest if it is going to succeed.

17:12

[Lord Mitchell]

My Lords, my noble friend Lady Liddell has done us a great service in securing this debate. We must thank her for that as well as the very impressive speech that she has just made. The contribution made by speakers from all parties is tribute to the importance of SMEs in the national economy.

It is no surprise that my party fundamentally disagrees with this Government’s economic policy, most particularly their refusal to moderate austerity and revert to a growth-based strategy. Yesterday, George Osborne said that there is no alternative. Today, David Cameron says that the economy is slowly healing. However, this morning, the IMF says that our economy is contracting and today’s trade figures are appalling. I wonder what planet these people live on.

In the SME world which I inhabit, the effect of austerity has been devastating. Without credit, businessmen simply cannot expand their businesses and cannot employ more people. I had guessed that by this stage of the debate every aspect of what UKTI does would have been covered, so I am going to stay away from it, at least directly, and talk about other agencies which the Government have to promote SMEs. The Government have been almost manic in introducing new programmes supposedly to help SMEs, but the results have been somewhat anaemic. The fact is that announcing a programme is one thing, making it work is something else. Not surprisingly, the Government have chosen the high street banks to deliver many of their programmes. The suspicion is strong, however, that instead of befitting small and medium-sized business as intended, the banks are directing these funds either to the more highly profitable consumer sector or else towards bolstering their own balance sheets.

The business growth fund owes its genesis to Project Merlin, which as the Minister will know was an undertaking written in blood by the banks to benefit British industry. But what do we see? We see the fund in many instances investing in companies not by funding investment or cash flow but, perversely, by cashing out managers and shareholders. The word on the street is that the business growth fund is a total failure. I would like to hear the Minister’s view on this.

I come to the business finance partnership. This is a £1.2 billion pot, of which £700 million is supposedly committed to mid-sized companies. It aims to promote alternative and non-traditional channels of finance. I am told by people who are in the know that little has happened. There is also the regional growth fund. Out of £1.4 billion earmarked for this project, only £60 million has been received by business. “Glacial” is a word I used to describe the fund. The enterprise guarantee scheme is also a flagship project. Again, I would like to know how it is progressing. There is also the export enterprise finance guarantee scheme that was launched to fund exports and is directed at SMEs. It is all good stuff, but by June of this year it had allocated only £3 million—or so I am told.

One government initiative that I fully support is the seed enterprise investment scheme introduced by the Chancellor this time last year. I am contemplating investing in various start-up companies, using this structure. It is very tax efficient. However, it seems almost like a state secret. No one I know, and perhaps very few of your Lordships, has ever heard of it. Why has it not been marketed and why does it last for only one year? Schemes of this nature need time to bear fruit. Pulling up the project by its roots after one year to examine whether it is growing is hardly the way to develop a policy geared to providing new investment in new companies. We need business angels to help fund exciting businesses, particularly in my area, which is technology. Using the tax system to help angel investment is an excellent idea. I will make a plea to the Minister that may sound strange coming from a shadow Minister. The SEIS is a very good scheme. Please leave it in place, and please market the programme seriously so that more potential angels are attracted to invest.

The programmes introduced by the Government have been woeful in their level of success. For the most part they have been ill thought through and incompetently implemented. My advice to the Government is to think deeper about projects to help SMEs, to put much more effort into marketing them and, most of all, to give them time to develop.

17:17

[Lord Green of Hurstpierpoint]

My Lords, I begin by congratulating the noble Baroness, Lady Liddell, on securing a very important debate on trade and investment, especially relating to small and medium-sized enterprises. The role of UKTI is complex and I will focus my remarks on the involvement with SMEs. I assure the noble Baroness that SMEs are an extremely important focus. As the noble Lord, Lord Bilimoria, reminded us, more than 90% of the client base of UKTI is SMEs. I will talk a little about how an organisation that, as the noble Lord, Lord Haskel, commented, is in transition—I agree that it is—and is attempting to make sure that it does the best possible job of support for SMEs.

The noble Baroness has long supported business, as Economic Secretary to the Treasury and Minister for Energy and Competitiveness in Europe in the first term of the previous Government, and as a successful high commissioner in Australia who was very active in supporting British business there. I checked the statistics. Whereas in most markets over the past 10 years Britain steadily lost share or had a share so low it was difficult to lose, in Australia between 2006 and 2009 we at least had a stable share and in some respects, particularly services, grew it. I am afraid that it rather declined after 2009; I wonder whether this was cause and effect.

I think that we all agree that we face a national challenge as we seek to rebalance our economy and find a stable and sustainable growth path that will create jobs. The old model that was in place in the run-up to the financial and economic crisis is, as we all know, bust. The economics textbooks state that if we cannot grow on the basis of consumers piling on debt and government spending growing larger, it will have to be on the basis of more successful trade and investment.

I shall not comment much on investment because it is a separate and complex topic, except to say that, on the whole, this country has had for a number of years a fairly good record in attracting foreign direct investment. We cannot be complacent. We need to ensure that government policies are in place to ensure that that performance continues. However, we have a big challenge in trade. We have had a weak trade position for the past 40 to 50 years—this is not a new problem. For most of those years, trade has been a drag on growth rather than a contributor to it. I have already mentioned our market share in goods, which is down and/or the lowest during the past 10 years in virtually every priority market. It is rather better in services, but when you look at our performance in places such as Brazil, China, Colombia, Indonesia, Japan, Mexico and Russia—I could go on—you see that it is lamentable, being behind not only that of the Germans, which might be expected, but that of the French and the Italians, and I can think of no good reason why that should be the case.

I share the view of so many noble Lords who have spoken in this debate that it is critical that we focus strongly on SMEs. SMEs account for more than half of all goods exports—they account for rather less of services, but they are none the less an important part of the export proposition. We are behind the European curve. The noble Lord, Lord Bilimoria, has already mentioned that only 20% of our companies export versus a European average of roughly 25%. One way of looking at our challenge is to seek to get our SME propensity to export up to that European average. If we did that, we would go a long way towards curing our trade deficit problem.

I am convinced—again, I echo the sentiments of a number of noble Lords—that we have the potential to do this. The sheer variety of SMEs is an extremely important factor. The thing that I have enjoyed most about my job during the past 20 years is going around this country—I have gone around the world a lot, of course—meeting businesses of every shape and size in every sector and every region of the country. You find examples of creative, energetic exporters, with a high profile in their local community, who are going out and taking on the world. If one ever had a moment’s doubt about this country’s ability to pay its way in the 21st century, you need only to do what I have been doing to allay those doubts.

Furthermore, the evidence is clear that there are significant efficiency gains on average for any company that gets into the export markets. Therefore, succeeding in this SME exporting campaign is not only addressing our balance of payments but strengthening the backbone of the economy while we do it.

The Prime Minister last November set a target of 100,000 extra SMEs in the export markets by 2020. There is a strong focus on emerging markets, because, as I think we would all recognise, that is where the growth is coming from now and is likely to continue to come for the next generation. The central gravity of the world’s economy is shifting from west to east and from north to south, and the emerging markets in Asia, the Middle East, Latin America, Africa—at the moment, six of the 10 fastest-growing countries in the world are African—represent opportunities.

However, we all know that this is a challenge and that the first time that an SME exports is a daunting proposition—“Where do I begin? How do I go about it?”. As a number of noble Lords have said, they do not have the administrative apparatus that larger companies have; they are often one-person bands or employ 10 or 20 people. It is a difficult task. What is the role of UKTI in this? It is many-sided, but it is critical. It is there to provide direct help. There is a public commitment on the part of UKTI to double its client base from around 25,000 now to 50,000 by the end of 2015. It should be there to provide specific services to small companies. It has two particular packages that are well targeted to their needs: a Passport to Export package, which is for a first-time exporter; and a Gateway to Global Growth package, which is for those businesses that have already moved into one market and are looking at opportunities in others. It provides market information; it helps form partnerships overseas; and it is there to help deal with the finance access question, which I shall return to shortly. It is there to nurture investors, too, but I shall not dwell much on that, if noble Lords will allow, on this occasion.

What is the present condition of UKTI? First, it has a clear strategy. We have a list of priority countries on which we are focusing—there are 19 of them, four topmost and another 15 in a second tier. You might guess three of the topmost—China, Brazil and India. The fourth is Turkey rather than Russia. There are particularly interesting strategic reasons for engaging as proactively as possible with Turkey. Russia is in the next tier.

There is a clear focus on the sectors that we should cover. There are five main groups of sectors with 18 subsectors, one of which includes water and environment technology. I believe that there is a lot of work to do to ensure that the sector competence in UKTI is up to the demands of private sector businesses going into the export markets. We have work to do on that. I can assure noble Lords that we are on the case.

A new management team is in place. The noble Baroness, Lady Liddell, asked whether any of them had a background in the private sector, and specifically whether they had worked with smaller companies. I am pleased to report that the person we brought in to take specific responsibility for the SME business of UKTI comes from the private sector. He has had a 25-year career as an MD or group executive of more than 20 different SMEs over time in a range of sectors, including pharma and automotive software. His last position before joining UKTI was as CEO of Biocompatibles International. I think that he has demonstrable and credible expertise. I am pleased to report that because it is important as regards a key leadership position in UKTI. It should not be the only position occupied by someone with clear private sector experience. We need to ensure that there are plenty of others through the system.

I am very interested in the comments that the noble Lord, Lord Cope, and others have made about the importance of getting practical secondment experience into SMEs. I shall take that thought away and see how we can make a reality of it. Although I am ashamed to say that I have never done it myself—I have worked only in big companies—I fully take the point that seeing what it is really like on the inside is important.

A new structure is in place that will give a clear focus on SMEs and on what we call high-value opportunities. They are the opportunities in infrastructure in particular in many overseas markets where very large spending is taking place by overseas Governments and where I believe that there is an opportunity to bring together on a cohesive basis the British offer, which will include not only some big companies but, critically, some SMEs as well. We have been putting our money where our mouth is.

[Lord Hunt of Chesterton]

In addressing that point, will the Government do more to enable SMEs to attend these very large trade shows where these jobs and this technology can be displayed? The difference between the UK and other countries is enormous in that respect. As I understand it, the Government decided to cut back on funding of that sort. Can the Minister reassure us?

[Lord Green of Hurstpierpoint]

I am very pleased to reassure the noble Lord, Lord Hunt. When I arrived in this position I took the view that we had cut back too much. One might debate whether some of the earlier spending was fruitful but it may have been cut back too much. We have pulled it out of the nose dive and I am pleased to report that we have just allocated an extra £3 million to trade access programme activities, which is the area of trade fair attendance that the noble Lord is calling for.

This year, out of 288 missions, 178 were specifically focused on SMEs, a statistic which I should mention. I hope to reassure the Committee that we are serious about this. SMEs are critical to the long-term success of the economy and to the export challenge for this country. They are therefore at the centre of UKTI’s objectives.

There are plenty of challenges. More than one noble Lord has mentioned awareness. At the moment, the evidence is that about 56% of companies are aware of UKTI, which is simply not good enough. There is evidence also that only 24% are aware of UK export finance, which is miles away from being good enough. The satisfaction rates for the quality of service is not yet good enough. It is not that bad but it is in the mid-70s. I think that it should be at least in the high 80s or low 90s. Therefore, there is a direction of travel that we must make sure that we get to, which is partly about the quality of the people in UKTI. We are setting up a new unit within UKTI to focus on venture capitalists, because it is important to encourage venture capital into the economy and link it up with business opportunities.

I am conscious that my time is running out fast so I will just say a word on finance. The finance issue is quite complex. It is about venture capitalists and seed money. The noble Lord’s comments about the enterprise investment scheme resonated very strongly with me. I will take them away and we will see what we can do, but we are very clear that this is an important scheme.

More generally on business banking, there is a clear need to reinvest properly in business banking. In some ways I am better placed than many to say this. The banks have disinvested—unintentionally, but none the less in fact—in their business banking capabilities over the past 20 years. We need to turn that around. We need to reskill the banks. The good news is that the CEOs are all very committed to this. The challenge is that it is going to be a bit like turning around an oil tanker—I am afraid that it will take some time and we have some work to do on that. But I can assure noble Lords that I hold regular round tables with the banks, at both CEO and head of commercial banking level. I and the Secretary of State are on this case.

I am very conscious that I have run out of time. I thank the noble Baroness for introducing this debate and noble Lords for participating. This is a challenge that I care passionately about, as I hope noble Lords can tell. We have a great deal to do but I believe that we can be successful as long as we stick at it.

Health: Cancer

Tuesday 9th October 2012 Grand Committee

Question for Short Debate

17:32

Asked By

[Baroness Gardner of Parkes]

To ask Her Majesty’s Government what assessment they have made of the increase in cases of cancer of the head and neck, in particular in younger age groups.

[Baroness Gardner of Parkes]

My Lords, my reason for bringing this debate today is to improve awareness of the increase in cases of cancer of the head and neck, and to consider what actions should be taken to deal with these very unpleasant and often fatal conditions. Tongue cancer and mouth cancer are the most common in the group of cancers of many sites within the head and neck area. My particular interest is oral cancer, which, as a former dentist, I look on as cancer of the mouth, but the definition includes head, neck and throat cancers, and the title of the debate is to widen the subject.

Oral cancer is the 15th most common cancer in the UK. Assessment is important but progress towards earlier diagnosis, urgent follow-up and specialist treatment is the real essential. Great work is being done in study, research and treatment, in London by the Eastman Dental Institute, King’s College London Dental Institute and the Royal Marsden, and others in different parts of the country. I would like to record my thanks to these organisations, and to the Oracle Cancer Trust, a charity that does much to help patients and increase awareness, for the data it provided me for this debate.

To quote from a review article published in Oral Diseases in 2010:

“Worldwide, oral cancer has one of the lowest survival rates and poor prognosis remains unaffected despite recent therapeutic advances. Reducing diagnostic delay to achieve earlier detection is a cornerstone to improve survival. Thus, intervention strategies to minimise diagnostic delays resulting from patient factors and to identify groups at risk in different geographical areas seem to be necessary. The identification of a ‘scheduling delay’ in oral cancer justifies the introduction of additional educational interventions aimed at the whole health care team at dental and medical practices”.

In the UK, between 1989 and 2006 there was a 51% increase in oral, tonsil and base of tongue cancers in men, from seven per 100,000 of the population to 11 per 100,000. Unfortunately, almost half of the oral cancers are diagnosed at stages 3 or 4, which are the advanced stages. Delay in diagnosis is now considered to be either patient delay or professional delay. Diagnostic delay is measured by the number of days elapsed since the patient notices the first signs and/or symptoms until a definitive diagnosis is reached. Studies suggest that 30% of patients delay seeking help for more than three months following the discovery of symptoms of oral cancer. There is a great need to improve public awareness not only of the condition but of the need to seek assessment as soon as possible, thus increasing the possibility of effective treatment. Early diagnosis can decrease morbidity and may improve overall long-term survival. In cases of laryngeal cancer, diagnostic delay has a remarkably worsening effect on survival.

What is the cause of oral cancer? Most cases of carcinoma are linked to lifestyle factors and should therefore be preventable. Most important is the excessive use of tobacco and alcohol, and in some groups, betel quid juice is relevant. Diet is significant, and another reason in favour of fresh fruit and vegetables. The recommended five portions a day should include red, yellow and green fruits. In a minority of cases, particularly among younger patients where known risk factors are absent, human papilloma virus, HPV infection, is now thought to be a likely cause. HPV infection has also been considered as a cause of oropharyngeal cancer. It is hoped that the recent HPV vaccination programme in teenage girls may have a longer beneficial impact on the incidence of this cancer. People with poor dental health, such as sharp broken teeth, dental sepsis or trauma from ill-fitting dentures, are at a slightly increased risk. An ulcer—a lesion that breaks the surface lining of the mouth—that fails to heal within two weeks with the appropriate therapy and correction of any possible causative factors, and for which no other diagnosis can be established, should be suspected of being a malignant ulcer. Hardening or enlargement of the lymph nodes in the neck are another warning sign, and attention must be sought by the patient.

There are many potentially malignant conditions, but I do not have time to list them today. It is for clinicians to be aware of these and to diagnose them. The public need simply to be aware that any noticeable change in the mouth should not go unheeded. Dental professionals need to keep abreast of the latest developments, and they can do this through lifelong learning, as they remain the major diagnosticians. However, it is essential that family doctors should be aware of oral anatomy so that they know the difference between normal and abnormal. When carried out competently, screening of oral mucosa should not take more than three minutes, and training should mean that these procedures are effective. Dentists should give advice to patients to enable them to recognise the signs and symptoms at an early stage and thus to seek early treatment. This would help, but it needs to go wider than that; pharmacists and dental hygienists need to do this as well.

A study published in 2010 in the British Dental Journal showed that oral cancer is an important health issue in Scotland. Some of the young appreciate that alcohol and tobacco are causative factors, but the findings suggest that even among people who have the disease, understanding of the link between alcohol, tobacco and oral cancer is still limited. A number of people could recall the related television campaign and supported the view that it had played an important part in their own diagnosis and treatment. The West of Scotland Cancer Awareness Project, funded by Cancer Research UK, led many patients to make an initial appointment with a health professional to have symptoms investigated. I understand that this is the body which financed the television programme. This is a most important message, and a number of patients with oral cancer reported that it was the programme that had saved them. I hope that the Minister will pass that message on to the Department of Health.

Intra-oral cancer is particularly lethal, whereas cancer of the lip is less so. In my early practising days, many of my patients presented with a white patch on their lower lip. This is called leukoplakia and is considered pre-cancerous. In those days it was common to see men walking around with a fag hanging on their lip. Holding a cigarette or pipe almost constantly in place on that spot was one of the main causes of the symptom. Leukoplakia still occurs but for different reasons, as lifestyle habits have changed. The important thing to realise is that any white or red patch in the mouth should not be ignored. It requires proper assessment and treatment without delay.

I cannot say too often that early diagnosis is essential for the successful treatment of any cancer. Years ago, when we had free dental examinations, people went more regularly to the dentist, and early lesions were discovered, mostly by dentists. Dentists are usually still the first to see a mouth cancer, but it is essential that GPs are aware of the need to do routine checks, particularly if the patient has not had a dental check-up for some time.

Above all, the public need to be aware of the warning that comes with any change in their mouth, or any ulcer that does not heal. They should present immediately for assessment and possible treatment. If the practitioner—doctor, dentist or nurse—believes that there is cause for concern and the condition does not improve with treatment within two weeks, the patient should be referred for a biopsy, which is the only definitive diagnostic tool. If cancer is suspected, the referral must be marked “urgent”, in accordance with NICE criteria, to reduce the pre-treatment interval. The number of patients who attribute their successful treatment to the fact that they saw a Department of Health warning or information is high.

I will make a few brief points to close. There needs to be a referral change. In your Lordships’ House I have for some years pressed for mouth examinations to become routine when any patient attends an accident and emergency department or polyclinic—about which we seem to hear less now—and that in the interests of treating numbers and managing to finance this, unqualified staff could be trained in the first instance to carry out a quick check. If there is any cause for doubt about the mouth condition being normal, they would refer the patient up the line to either a specialist nurse or a dental hygienist who would then decide whether they should be referred further so that appropriate treatment could be provided, urgently if indicated. The previous Labour Government agreed that this would be a worthwhile thing to do and confirmed that semi-skilled health workers could carry out these brief mouth checks. It would not require qualified dentists or doctors at the preliminary stage. I still think that this would be very valuable and I press the Minister to give it serious thought.

17:42

[Baroness Jolly]

My Lords, I thank the noble Baroness, Lady Gardner of Parkes, for securing the debate. It is timely and allows all areas around the treatment of head and neck cancers to be discussed. I will examine areas around diagnosis, prevention, treatment and the pivotal role that cancer networks have played in achieving improved head and neck cancer services.

The noble Baroness is well known for her championing of the role of the dentist. In the area of cancers of the head and neck they can be key players in diagnosis, spotting signs and symptoms before the patient and their GP. However, there are issues around this that need resolving in the area of the training and continuing professional development of dentists and GPs.

The evidence on the incidence of head and neck cancers and their occurrence in younger age groups is mixed. The prime causes of most of these cancers are smoking, alcohol and a poor diet—back to the five a day and three different-coloured fruits—as well as the human papilloma virus. That suggests that the age range of those affected might be wide.

There is a clear public health role in prevention. If Public Health England and public health departments in local authorities carry out the roles envisaged for them in the Health and Social Care Act, the incidence of these cancers should reduce. However, care must be taken to ensure that the NHS, Public Health England and local authorities co-ordinate their approaches and campaigns. At least three-quarters of oral cancers could be prevented by the elimination of tobacco smoking and a reduction in alcohol consumption. The scheme to make cigarette purchase less easy is to be welcomed and I urge the Government to follow the advice and not the tobacco lobby in adopting plain packaging for cigarette packs at the earliest opportunity.

Can the Minister tell the Committee what plans the Government have to address the issue of underage drinking in the home? Despite the scenes of rowdy young people in town centres, most alcohol is actually drunk at home by young and old alike.

As we have heard, HPV is often linked to oropharyngeal cancers. The evidence of this cancer has doubled in 10 years. There must be a case for vaccinating all teenagers and not girls alone. Will the Minister consider looking at the evidence for this?

Most people do not know that radiotherapy cures more cancers than drugs. Cancer patients should have access to treatments that their doctors think will be best for them. It is essential that new radiotherapy techniques, such as intensity modulated radiotherapy—IMRT—are rolled out swiftly. IMRT can be really beneficial to patients with cancers of the head and neck. It focuses very much around the cancer itself and does not spread to surrounding tissue. It is a welcome announcement that £15 million is to be found for such targeted radiotherapy treatment. For this to be widely available across England there are implications for both equipment and training, but it is a good start.

Currently all aspects of cancer care are co-ordinated by cancer networks, multidisciplinary teams looking at the whole pathway through diagnosis, treatment, hospice and palliative care where required, and aftercare when the patient returns home. This is all about integration at work. They have played a key role in driving up the quality of cancer services and patient experiences for the past 12 years. I draw attention to the excellent work of cancer networks and raise some concerns about their future in the new system.

In England there are 28 cancer networks that, since 2000, have been bringing together providers and commissioners of cancer care to work together to plan and deliver high-quality, integrated cancer services for people living with and beyond cancer in their local areas. These networks drive forward local cancer strategies. They are a key source of cancer expertise, encourage service redesign and integration, and monitor the performance of providers to highlight poor outcomes. Many cancer networks have been central to the implementation of NICE’s guidance on improving outcomes on rarer cancers. Many of the cancers that we are discussing today fall into that category. More specifically, they have also been acknowledged as key players in delivering NICE’s service guidance on improving outcomes in head and neck cancers. These are not common cancers, and the networks have been used to disseminate information.

NICE recommends that networks should be charged with deciding which hospitals will diagnose, treat and care for these particular patients. So when it comes to the quality of care that people living with head and neck cancers receive, networks have been driving service improvements throughout the country. An example of integration and service improvement is the Greater Manchester Cancer Network, which has a head and neck clinical sub-group with the aim of overseeing, supporting and bringing together multidisciplinary teams working on these types of cancer to ensure that each patient gets the most appropriate treatment and the highest standards of care. There are several networks that have co-ordinated to inform local strategies for head and neck cancers and to promote integration: East Midlands, Anglia, Central South and North London to name a few. These have been absolutely pivotal. They have also been critical in driving up patient involvement. The Peninsula Cancer Network hosts head and neck cancer support groups across Torbay, Cornwall and Plymouth for people who find it difficult to eat, drink or speak after having treatment due to head and neck cancers.

It was encouraging that, last year, the former Health Secretary made a public commitment to fund and support cancer networks in 2012-13. I welcome the proposals on clinical networks recently published by the NHS Commissioning Board Special Heath Authority which officially establish cancer networks as strategically clinical networks in the new NHS.

However, the significant changes proposed for the new structure for cancer networks leave me with a worry about how networks will be supported in delivering their key services. In the sector, there are fears in three distinct areas. The first fear is of a drastic reduction in the staffing levels for cancer networks. The proposals indicate that there will be only eight permanent staff in each regional team, compared to 20 staff members currently in post per network. Research carried out by Macmillan also showed that a number of network directors reported difficulties in recruiting and retaining staff because of uncertainty around resourcing. Can the Minister assure the Committee that cancer networks will have sufficient staff to carry out their functions effectively?

The second fear is of a loss of experienced directors, which would have an impact on the effective running of cancer networks. Under the proposals, existing directors with a wealth of knowledge in the development and delivery of high-quality cancer care in their region will have to reapply for their roles. Recruiting and training senior staff, some of whom have had no previous experience in cancer, could have a negative impact on the quality of services and support that cancer networks provide. Can the Minister suggest what steps he will take to ensure that experienced directors and cancer experts are retained?

The third fear is of cancer networks’ role being limited to early diagnosis. Although improving earlier detection of cancer is essential to preventing people dying prematurely—as we have heard today, head and neck cancers often go a long time before they are detected—cancer networks need a comprehensive remit to be able to continue delivering the functions mentioned above. They must continue to play a leading role in improving outcomes and the experiences of people living with head and neck cancers across the pathway. Can the Minister confirm that cancer networks will be able to continue delivering functions that cover the whole pathway? Cancer networks have played a leading role in delivering improved outcomes for rarer cancers, including head and neck cancers. I am pleased that the Government have recognised their value and formally established them as strategically clinical networks. However, significant steps are needed to ensure that they continue to have a comprehensive remit beyond early diagnosis. The Government should be mindful that severe reductions in resource would make it difficult for them to meet their commitment of supporting networks after 2013 and reaching their ultimate ambition of saving 5,000 lives a year. I would be grateful if the Minister could update the Committee on the Government’s plans for cancer networks and reassure us that they will have sufficient resource, human and financial, in the system.

I again thank the noble Baroness, Lady Gardner, for securing such an important debate. We must not forget that the NHS reforms offer an opportunity to refocus on delivering the best possible cancer care and outcomes for all patients, including those with head and neck cancers.

17:52

[Baroness Morgan of Drefelin]

My Lords, I congratulate the noble Baroness, Lady Gardner of Parkes, on securing this important debate and thank her for her very informative and helpful introduction. As we move towards the new health system, it is vital that people with rarer cancers are fully recognised and receive the specialist care that they need so that outcomes can be improved in the less common as well as the more common cancers. I declare an interest as chief executive of Breast Cancer Campaign, which is a research charity.

As noble Lords know, the Government published their strategy for cancer in January 2011, stating their ambition to save an additional 5,000 lives from cancer every year by 2014-15, to improve the experiences of cancer patients in England and to narrow the gap in cancer outcomes between different groups in society. In turn, the All-Party Parliamentary Group on Cancer, of which I am a vice-chair, published a report in 2011, Effective Cancer Commissioning in the New NHS, which set out recommendations that would support the NHS in achieving the Government’s aims.

The all-party group has spent this year campaigning for implementation of our recommendations, focusing particularly on the new accountability structures, the NHS outcomes framework and the commissioning outcomes framework. We have raised the issue of improved outcomes in less common cancers, including the head and neck cancers that we have heard about today.

Key to improving outcomes and to achieving the Government’s ambition of saving an additional 5,000 lives from cancer each year is earlier diagnosis, as we have heard so eloquently put by the noble Baroness, Lady Gardner. The earlier a cancer is diagnosed, the greater the chance a patient has of surviving it. That is why the all-party group has long campaigned for the NHS to be measured against one-year cancer survival rates as well as five-year survival rates for all cancers and all ages—not just the common cancers.

That is because in the new health system the NHS outcomes framework will be used by the Secretary of State to hold the NHS Commissioning Board to account for its performance. As such, it sets the overall direction and priorities for the NHS. We were pleased that the Government included one-year and five-year cancer survival rates for breast, lung and colorectal cancer for people aged between 15 and 99 in the NHS outcomes framework. However, as we know, cancer is one of the biggest premature killers in this country and we do not believe that the current version of the framework goes far enough.

We know that 53% of people who die from cancer in the UK have a rarer cancer, such as head and neck. There is a significant gap in survival rates between people with a rarer cancer, such as head and neck cancers, and those with a more common cancer. For example, the five-year survival rate for brain cancer is less than 20% compared with more than 80% for breast cancer. We must take steps to ensure that survival rates for rarer cancers improve and catch up with those for the more common cancers such as breast cancer. Across the board, there is a lot more to do and we need to do more. The APPGC is calling for one-year and five-year survival rate indicators in the NHS outcomes framework to be extended to all cancer types.

We are pleased that the Government are listening to our concerns and know that, as a result, they are considering developing a composite survival rate indicator which would include rarer cancers. While we recognise the efforts being made to address the current absence of focus on rarer cancers, we believe that a composite indicator should be in addition to, rather than a replacement for, existing indicators. There is a very important reason why that should be so. It is vital that any new indicator provides additional insight into performance relating to rarer cancers. A composite indicator covering all cancers could mask poorer performance by the NHS in relation to rarer cancers through improvements in relation to the more common cancers. We should be concerned about that. Can the Minister say what progress has been made towards developing a composite indicator? Would it apply to those cancers not currently covered in the framework, such as head and neck cancer?

From Answers that I have seen to parliamentary Questions it appears that there will be a separate publication route for the composite indicator. Will the Minister be able to explain that a bit more? Could he reassure the Committee that any composite indicator will be in addition to existing indicators that are already planned and will not serve as a mask for poorer performance in the less common cancers?

While it is vital that the NHS Commissioning Board is held to account, it will be the clinical commissioning groups which will play a key role at the local level in achieving that additional 5,000 lives saved. The commissioning outcomes framework will be used by the NHS Commissioning Board to hold CCGs to account. In August this year, the Commissioning Outcomes Framework Advisory Committee published recommendations for indicators to be included in the framework. The APPG on Cancer was shocked that only one cancer-specific indicator was included in this recommendation—that of under-75 mortality. It may be that we have not understood it properly, so I look forward to being corrected on that.

However, the APPG on Cancer believes that the omission of one-year and five-year cancer survival rate indicators at this level is a serious oversight and a missed opportunity to ensure that every CCG prioritises not only the earlier diagnosis of cancer but the commissioning of high-quality services. We cannot understand the reasons for the omission. I have been assured that, once the boundaries for CCGs have been defined, survival data will be available at the CCG level, so it should be workable. Given all this, can the Minister support the inclusion of one-year and five-year cancer survival rates in the outcomes framework for CCGs?

We are also calling for proxy indicators for cancer survival, which are particularly important for less common cancers. They are: stage of cancer at diagnosis, which we have already heard about, and cancers diagnosed as an emergency admission. We want these to be included in the commissioning outcomes framework as quickly as possible because this is about gearing up the services in real time to improve as we go forward. These measures will provide a more immediate picture of where improvements are needed in the early detection of cancer. By assessing the performance of CCGs on these through the COF, local commissioners will be encouraged to contract services that improve early diagnosis.

I support the remarks made by the noble Baroness, Lady Jolly, regarding cancer networks. I do not want to repeat the detailed points that she made, but I, too, believe strongly that cancer networks have a vital role to play in continuing to drive up standards and achieving the Government’s vision to save additional lives. I was concerned to be advised that, with the NHS Commissioning Board undertaking specialist commissioning and CCGs commissioning other aspects of patients’ care, patients with head and neck cancers could find their care pathway being commissioned by two entirely different levels of NHS commissioning. That is just one example of the role that cancer networks can play in improving quality, outcomes and the patient experience.

Can the Minister reassure us that there will be sufficient staff, including experienced directors? Will they be retained in each individual cancer network so that they can deliver their functions effectively? Can he reassure us also that the cancer-specific expertise that currently exists in networks will not be lost through this restructuring and that cancer networks will be tasked with driving improvements across the whole cancer journey? As the noble Baroness, Lady Jolly, has stressed, it is not just about early diagnosis; cancer networks have a vital role to play throughout the patient journey.

Once again, I congratulate the noble Baroness, Lady Gardner of Parkes, on securing this important debate. It is essential that we use opportunities such as this to raise awareness of the less common cancers, as she has most ably done.

18:03

[Lord Hunt of Kings Heath]

My Lords, I, too, welcome this debate and thank the noble Baroness for instituting it and for the very important points that she made. I refer the Committee to my declaration of interests, which includes a number of health interests. I also echo the noble Baroness’s remarks about the role of dentists in this area. She and I have a long-standing interest in this profession, and it is important that when we consider what action needs to be taken we look at the contribution that dentists can make.

At the start of the debate, the noble Baroness said it was important to draw attention to the increase in the incidence of several head and neck cancers between 1990 and 2006. My understanding from work helpfully produced by the Library is that we have seen the incidence of oral cavity cancers increase by more than 30%, salivary gland cancers by around 37% and palate cancer by 66%, while that of thyroid cancer has doubled.

Incidence rates for all types of cancer vary significantly between those strategic health authorities and cancer networks with the lowest and highest incidence, and the geographical pattern of distribution varies from cancer to cancer. This may well reflect the distribution of different risk factors, including those that predominantly affect certain ethnic groups. We have to bear that in mind when deciding what action needs to be taken.

It is important to have accurate and up to date information available. I was interested to read the National Head and Neck Cancer Audit 2011 and the remarks made by Sir Mike Richards, the National Cancer Director. He pointed out that there have been further improvements in the completeness of the data submitted, but that more needs to be done. He urged cancer network directors, medical directors and head and neck cancer site-specific groups to reflect on this. Bearing in mind the remarks of the noble Baroness at the beginning of our debate, the more accurate information we have, the more we will be able to see the scale of the issue we face and decide what action needs to be taken. I hope that the noble Earl, Lord Howe, will be able to say something about how he thinks we might improve data collection in the future. The noble Baroness, Lady Morgan, made some important points about indicators, outcome measurements and requirements. Again, I hope that the noble Earl will be able to give some comfort to her with regard to looking at an extension of those requirements in the future.

I want to reflect on the points raised by all noble Lords who have taken part in the debate on the importance of improving public recognition, early diagnosis and treatment. I hope that the noble Earl will be able to say something about how this might be done, and perhaps how the work of GPs and dentists might be recognised and what we can do to encourage those professions to identify symptoms and advise their patients so as to make sure that where there is a suspicion, patients are encouraged to seek diagnosis and treatment.

Obviously, the backdrop to this debate will be the implementation of the Health and Social Care Act 2012. The noble Baroness, Lady Jolly, said that the reforms would allow for a refocus on these issues. I am not quite sure that I agree with her. Her speech was a very good description of why it would have been better if we had not had the reforms in the first place, and I think that there are a number of questions one has to ask about the architecture. We are looking for some further information about reports that the Government are going to reduce the number of cancer networks, along with their resources. The noble Baronesses, Lady Jolly and Lady Morgan, both spoke about that. It is important to note that the cancer networks have been universally regarded as a good thing that has led to a much more co-ordinated response. Given that we are now moving towards a much less integrated healthcare system, there is a real risk in reducing the effectiveness of these networks.

I would remind the noble Earl of the success of his department in relation to stroke services in London and the benefit of a strongly co-ordinated approach by reducing the number of centres for hyper-acute services. That is now being rolled out across the rest of the country. Surely we need that kind of co-ordinated leadership in relation to cancer services. I am not confident that simply leaving it to a smaller number with fewer resources working with clinical commissioning groups will do what is required. I hope that the noble Earl will be able to say something more about that.

I particularly noted the comment made by the noble Baroness, Lady Jolly, about the role of cancer networks in helping to select which hospitals should provide specialist services. I very much support that. It will be important, in thinking through the future provision of cancer services, not to forget the role of hospitals. There is a great danger in the current mantra that everything is decided through the commissioning network and the role of hospitals is simply to do what commissioners tell them to do. Obviously, chairing a foundation trust, I am somewhat biased, but I have to say that most innovation and most ideas come from those hospitals where professionals work—the reality is that mostly they are the people who know what needs to be done. That is the importance of the cancer networks. The market mantra is that commissioners decide what should be done and then the providers do what they are told, but what we need in future is much more of a partnership. That applies to all cancer services.

Does the noble Earl think that clinical senates might play a role in this? I think that we are all signed up to the idea of clinical senates, but none of us quite knows what they are going to do. It occurred to me that, given the expertise that the senates will have in their membership, they might be able to give advice to clinical commissioning groups on the effective services that need to be provided in relation to cancer services.

Let me come on to health campaigns. The noble Baroness, Lady Jolly, referred to the need for local authorities and Public Health England to work together. I echo her question about how the department will ensure that that happens in the future.

Finally, I pick up the point raised by the noble Baroness, Lady Morgan. It will clearly be important that we ensure that enough money is invested in research in these areas—identification, early diagnosis and early treatment. I wonder if the noble Earl could say a little bit more about how he thinks research should be invested in in the future. This is a very important debate and I am sure that we are all grateful to the noble Baroness for instituting it. We look forward to the noble Earl’s response.

18:12

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, I begin by thanking my noble friend for tabling today’s debate and for her excellent speech. I am aware that this is a very important issue for her, for everyone who has had a diagnosis of cancer of the head and neck, and for their families and friends.

The incidence of head and neck cancer in England rose from over 8,300 to over 9,600 between 2007 and 2010, while the incidence in the under-65s rose from just over 4,800 in 2007 to over 5,600 in 2010. We know that for most cancers death rates are set to fall significantly in the coming decades. This is encouraging and highlights the impact of changes in lifestyle, particularly reductions in smoking, and improvements in the speed of diagnosis and the treatment of cancer. As noble Lords have pointed out, there are a number of risk factors that can increase the chances of developing cancer, including oral cancer. Cancer Research UK has recently estimated that over a third of all cancers are caused by smoking, unhealthy diets, alcohol and excess weight.

Let me look first at smoking. The Tobacco Control Plan for England, published in March 2011, sets out three new national ambitions to reduce smoking prevalence—among adults, among 15 year-olds and in pregnancy—and sets out a comprehensive range of tobacco control actions at all levels to achieve these ambitions. The Committee will also be aware of Stoptober, a new and innovative campaign that encourages smokers all to start their quit attempt together on 1 October. As for alcohol, the Government’s alcohol strategy includes a strong package of health measures. These build on the introduction of the ring-fenced public health grant to local authorities and the new health and well-being boards, giving local areas the powers to tackle local problems.

Most people know that smoking causes lung cancer and sunburn causes skin cancer. However, far fewer people know that a poor diet, obesity, lack of physical activity and high alcohol consumption are also major risk factors for getting cancer. To deliver on improved outcomes, public health services will provide people with information about these risk factors so that they can make healthy choices.

We know that HPV is associated with around a quarter of head and neck cancers. The National Institute for Health Research Clinical Research Network is currently hosting four trials focusing on the link between HPV and head and neck cancers. The Medical Research Council is also currently supporting two studies relating to the links between HPV and head and neck cancers.

Late diagnosis is also a cause of avoidable deaths from cancer in England. Generally, as my noble friend Lady Gardner pointed out, the earlier a patient is diagnosed with cancer, the greater the chance of being successfully treated. In order to achieve earlier diagnosis, we need to encourage people to recognise the symptoms of cancer and seek advice from their doctor as soon as possible. We also need doctors—and, where appropriate, dentists—to recognise these symptoms as possibly being cancer and, where appropriate, refer people urgently for specialist care. The Government have committed over £450 million over this spending review period to improve earlier diagnosis. Through the national awareness and early diagnosis initiative jointly led by the department and Cancer Research UK, we are working to improve earlier diagnosis by raising public awareness of the symptoms of cancer and encouraging earlier presentation. We are developing a “constellation of symptoms” campaign during January to March 2013 which will highlight symptoms that might be the result of a number of cancers, including rarer cancers.

We will hold the NHS to account for improvements in outcomes through the NHS outcomes framework. As the noble Baroness, Lady Morgan, mentioned, we are working with the London School of Hygiene and Tropical Medicine to develop a composite survival rate indicator which covers all cancers to ensure that performance on rarer cancers can be monitored effectively. In addition, there is a cancer mortality indicator that is shared between the public health outcomes framework and the NHS outcomes framework, which is designed to improve prevention—to reduce incidence—as well as improve diagnosis and treatment.

The balance between composite and tumour-specific cancer survival indicators always needs to be considered. It is currently being considered. I would say to the noble Lord, Lord Hunt, on the composite indicator, that these are complex measures requiring linkage of ONS population statistics with cancer registry data and attribution to clinical commissioning groups as well as testing the robustness of the measures. It is likely to take some months to complete the work that is currently in train. The commissioning board will decide, of course, on the content of the commissioning outcomes framework. It is expected to publish a list of measures for 2013-14 in the autumn. If the composite indicators are not included in the 2013-14 framework, the board may choose a separate publication route for the data that exist to ensure that the information is available transparently to the public.

I know that there is concern on the part of Macmillan Cancer Support, among others, around proxy indicators. I understand that the NHS Commissioning Board Authority is now engaging with clinical commissioning groups and other stakeholder organisations to discuss the shape of a commissioning outcomes framework, as I mentioned, for 2013 and beyond.

We recognise that there is a role for dentists in the early detection of some head and neck cancers, including mouth or oral cancers. We are working to ensure this, and the new patient pathway currently being trialled in 70 practices provides dentists with decision support based on current best practice. Patients receive comprehensive oral health assessments at regular intervals under this pathway. Those assessments require dentists to systematically assess the soft tissue as part of the clinical examination and include a social and medical history which, through the questions on smoking and drinking, allow the dentist to assess the patient’s level of risk for oral cancer and, if appropriate, offer advice on lifestyle changes. The pathway is being piloted as part of the work to design a new dental contract. The Government are committed to introducing a new contract based on capitation and quality. Supporting dentists to systematically provide high quality care through the pathway is a key part of this. I can tell both my noble friends that the General Dental Council has recently confirmed that improving early detection of oral cancer is to be included as a recommended topic in its continuing professional development scheme. More generally, the department supports the British Dental Health Foundation which sponsors annually a mouth cancer action month; officials work closely with the foundation as well.

Once head and neck cancer is diagnosed, patients need to have access to appropriate and consistent treatment, delivered to a high standard, across the board. Improving Outcomes in Head and Neck Cancers, published in 2004, set out recommendations on the treatment, management and care of patients with head and neck cancers. We have made a commitment to expand radiotherapy capacity by investing around £150 million more over four years until 2014-15.

My noble friend Lady Gardner raised the issue of public awareness of oral cancer. Work is underway on the third edition of Delivering Better Oral Health, a toolkit for the dental team. This will update the section on tobacco and oral health. A patient-facing version is also in development which will seek to make the public more aware.

My noble friend Lady Jolly spoke about vaccination and asked why boys, indeed all teenagers, were not vaccinated. The Joint Committee on Vaccination and Immunisation did not recommend the vaccination of boys because high coverage of the vaccination among girls means that it is not cost-effective to vaccinate boys to prevent cervical cancer. However, as with all vaccination programmes, the JCVI keeps its recommendations under review. The HPV vaccine is offered free each year under the national programme to girls aged 12 to 13 in school year eight. That is because the HPV vaccination is best given before the onset of sexual activity. Routine immunisation started in 2008, and a phased catch-up of girls aged up to 18 years of age was also implemented. However, scientific evidence is constantly coming forward and the JCVI will no doubt take account of that as necessary.

The noble Baroness, Lady Morgan, spoke about outcome measures for rarer cancers. Of course, she is quite right that early diagnosis is important in rarer cancers as it is everywhere else; we are addressing that, as I have mentioned. It is also important to improve treatment, and the recent announcement on radiotherapy means that access will be improved for specialised radiotherapy treatments such as stereotactic radiosurgery, used predominantly for brain tumours. Proton beam therapy is also an area that we are looking at closely. We are developing two proton beam therapy facilities, in Manchester and London, to be operational by the end of 2017. This treatment improves outcomes for a number of rarer cancers, including those which affect children.

My noble friend Lady Jolly asked what plans the Government have to address the issue of underage drinking while in the home. The new “Change for Life” programme helps people check if they are drinking above the lower-risk guidelines or not, and offers tips and tools to cut down. Dame Sally Davies, the Chief Medical Officer, will be overseeing a UK-wide review of the alcohol guidelines so that people at all stages of life can make informed choices about their drinking.

The noble Lord, Lord Hunt, and my noble friend Lady Jolly spoke about clinical networks. The final number of strategic clinical networks, and therefore the number of doctors, nurses and others who will support them, will be determined locally to meet the needs of patients. The full structure for strategic clinical networks will be published shortly. The establishment of clinical networks, hosted and funded by the NHS Commissioning Board, will ensure that patients everywhere in England benefit from dedicated clinical networks for four priority conditions and patient groups: cancer, cardiovascular disease, maternity and children’s services, and mental heath, dementia and neurological conditions. These networks will receive £42 million of national funding in the next financial year. We anticipate that these strategic networks will be supported and funded through the 12 network support teams. These teams will be hosted, again, by the NHS Commissioning Board local area teams. We anticipate an arrangement that would see support teams employing their skills across different networks as needed, but one that would also involve designated subject experts such as those with expertise in cancer commissioning.

The noble Lord, Lord Hunt, asked about research, which I agree is important in reducing deaths from cancer. The National Institute for Health Research health technology assessment programme is currently commissioning a feasibility study for assessing the clinical and cost effectiveness of photodynamic therapy for the treatment of locally recurrent head and neck cancer. The National Institute for Health Research Clinical Research Network is currently hosting 33 trials, including the four I mentioned earlier, and other well designed studies into head and neck cancer.

To conclude, the Government have set out an ambition in Improving Outcomes: A Strategy for Cancer to save an additional 5,000 lives each year by 2014-15. This means halving the gap between England’s current survival rates and those at the European best—and our aspiration is to be among the best in Europe. As my noble friend Lady Gardner has made clear, it is not just about saving lives after a diagnosis, it is also about preventing the cancers to start with. The Government’s strategies for prevention are designed to tackle increasing incidence.

18:25

Sitting suspended.

Bangladesh: Human Rights

Tuesday 9th October 2012 Grand Committee

Question for Short Debate

18:31

Asked By

[Lord Hussain]

To ask Her Majesty’s Government what assessment they have made of the human rights situation in Bangladesh, in the light of reports of disappearances of well-known politicians.

[Lord Hussain]

My Lords, for at least a decade I knew Bangladesh to be only a progressive, multi-party democracy and a thriving economy in south-east Asia. It also receives £250 million in aid from the United Kingdom every year—until 2015, at least. However, in the past few years reports of corruption, torture, extrajudicial killing and the sudden disappearance of journalists and political activists from opposition parties have energised me to call for this debate.

According to Amnesty International, hardly a week goes by in Bangladesh without people being shot in Rapid Action Battalion, or RAB, operations. The RAB is a special police force created to combat criminal gang activity throughout the country. However, since its inception in 2004 the RAB has been implicated in the unlawful killing of at least 700 people. The Amnesty International report goes on to say that such deaths are typically explained away as accidental or as a result of RAB officers acting in self-defence, as victims are said to have been killed in “crossfire”. In many cases, the victims were killed following arrest. Nevertheless, investigations carried out either by the RAB or by a government-appointed judicial body have not resulted in judicial prosecution. The outcome of the judicial investigations has remained secret and the RAB has consistently denied responsibility for any unlawful killings. RAB officials say that other wrong-doings have been addressed through administrative action against offending RAB personnel. Reports that the RAB has widely used torture and excessive force have similarly gone nowhere. Despite persistent allegations, Bangladeshi authorities have taken no action to prosecute RAB personnel. I shall give some of the examples in the report.

Rahima Khatun was shot in the head by Rapid Action Battalion officers on 3 June 2011 in a slum near the central Bangladesh district of Narsingdi. Rahima, aged 35, had objected when officers tried to arrest her husband. Seconds later, she was seriously injured by a bullet fired from one of their weapons. Now out of danger after receiving intensive medical care and detained for allegedly dealing in drugs, she is the first woman known to have been shot by the Rapid Action Battalion.

Another example is Limon Hossain. On 23 March 2011, Limon, a 16 year-old student, was shot in the leg by RAB officers in Jhalakathi. His injuries were so severe that four days later his leg had to be amputated. Limon Hossain’s family said that he had been shot while bringing the cattle back from the fields. Like the families of many other victims, they said that the RAB had no reason to shoot Limon and that the officers involved should be brought to justice.

There are other cases where deaths are not explained. In some cases, the RAB has not even explained how people whom witnesses say were detained by the RAB were later found dead. Nazmul Huq Murad, Forkan Ahmed and Mizanur Rahman went missing on 17 April 2010. On 18 April, Murad’s brother received an anonymous phone call saying that Murad was in RAB custody. The family’s inquiries brought no news of him until 27 April, when his body was found in the Mohammadpur area of Dhaka. It was buried in a ditch with the other two men, Forkan and Mizanur. The bodies bore severe injuries, including knife wounds. Ligature marks on the wrists showed that they had been tied with rope. The families of Mizanur and Forkan had also received messages that the two had been arrested by the RAB on 17 April. The RAB has not acknowledged that the men were in its custody and no credible investigation has ensued. According to the human rights organisation Ain O Salish Kendra, known as ASK, 216 deaths occurred in custody this year, including 116 deaths in prison. Many of the deaths were allegedly the result of torture.

I turn to the disappearance of a former Member of the Bangladesh Parliament, Mr Ilias Ali, and his driver. According to Amnesty International, Ilias Ali, the organising secretary of the Sylhet division of the opposition Bangladesh Nationalist Party, disappeared together with his driver, Ansar Ali, on 17 April 2012. I had the opportunity of meeting Mr Ilias Ali in Luton during his visit to the United Kingdom in 2011. He spoke to a hall full of British Bangladeshis passionately about Bangladesh and showed his concerns on the growing human rights situation and corruption in that country. He did raise fears about his own safety on his return, but was determined to go back and fight for the rights of his people through democratic means. Since his disappearance, his family has been in touch with me asking for help from the British Government to secure his safe return. The family firmly believes that government secret agents or the Rapid Action Battalion are responsible for Mr Ali and his driver’s abduction. These fears are shared by many both in the country and abroad. According to Amnesty International:

“His is the latest in the spate of disappearances in which security forces, including the Rapid Action Battalion ( RAB) have been implicated, though they deny detaining those missing”.

Its report goes on to say:

“There appears to be a pattern of disappearances—a concentrated effort to eliminate people deemed undesirable”.

On the investigation procedures, the Amnesty report further adds:

“Prime responsibility for investigating deaths during RAB actions has so far fallen to the RAB itself. This is a clear conflict of interest. When the accused is tasked with investigating an accusation against it, the basic principles of independence and impartiality are compromised. The accused is free to destroy the evidence, distort the records and engineer the outcome. The content of RAB inquiries remains secret; their results have repeatedly been the same. None of the publicly available RAB investigations has ever blamed RAB personnel for an extrajudicial killing; rather, these investigations, where they have occurred, have blamed the victims, calling them criminals and portraying their deaths as justified”.

War crimes tribunals are another anomaly that I am sure the noble Lord, Lord Avebury, will probably have something to say about.

With that information, I should like to ask the Minister whether the Foreign Secretary would raise the question of human rights abuses with the Bangladeshi Prime Minister and ask for fair trials for the accused. Can UK aid to Bangladesh be linked to its human rights record? Finally, can I ask the Minister to pressurise the Bangladesh Government for Ilias Ali and his driver’s safe recovery and release?

18:39

[Lord Harris of Haringey]

My Lords, we are all grateful to the noble Lord, Lord Hussain, for securing this debate on an extremely important issue. For me, this is a follow-on from the Oral Question that I asked on 23 May about what representations had been made about the disappearance of Mr Ilias Ali and other opposition politicians in Bangladesh.

In his reply, the noble Lord, Lord Howell of Guildford, who was then Minister of State at the Foreign and Commonwealth Office, talked about the representations that had been made by the United Kingdom Government with eight other EU countries, when they had called on the Bangladesh authorities to conduct a thorough investigation into Mr Ali’s disappearance. In reply, I hope that the Minister will be able to tell us what further representations or further dialogue there have been with the Government of Bangladesh since that Answer given by the noble Lord, Lord Howell.

At that meeting, the noble Lord, Lord Avebury, who is to speak after me, raised the question of whether it was possible to engage the UN working party on disappearances. I would be interested to hear what the noble Baroness can tell us about whether that engagement took place.

Interestingly, the noble Lord, Lord Howell, in his responses to various questions on that date, referred to £1 billion of aid being given by the UK Government. I am not clear about whether he was aggregating several years together, but it is important that the Government address whether there is a relationship between the sums involved, over whatever period, and the human rights record. Is that something that can legitimately be expected as a quid pro quo for the support that this country gives to the people of Bangladesh?

The most important point to make in this debate is that the case of Mr Ilias Ali is not an isolated one. Mr Ali and his driver disappeared on 18 April, and two weeks earlier Mr Aminul Islam, a leader of the Bangladesh Garment and Industrial Workers Federation, was allegedly picked up by members of a law enforcement agency and horribly tortured and killed. In December 2011, Nazmul Islam, another opposition politician, was found strangled just a few hours after he had been dancing with his wife. His wife received very little assistance from the police when she reported him missing. I would be grateful for guidance from the Minister on her understanding of the developments that there have been in the investigations of these cases since then.

What is the Government’s latest assessment of the level of political violence in Bangladesh? We need to understand that. One of the most concerning features of this is the alleged complicity of law enforcement agencies, in particular the Rapid Action Battalion. The noble Lord, Lord Hussain, gave us a horrifying catalogue of cases which, it is suggested, are associated with their activities. There seems to be a culture of impunity among the security forces, and anyone who falls foul of the authorities is therefore vulnerable. Since 2004, there have been more than 1,600 extrajudicial killings in Bangladesh. To UK eyes, there are horrifying levels of political violence, with 300 people killed in 2006, 250 in 2009 and so on.

We have to recognise that political violence is not all on one side. There has perhaps been a trend in Bangladeshi politics for supporters of the ruling party—whichever one that might be—to feel that they are able to attack opposition supporters with a certain level of impunity. I think that comes from the broad powers that the law gives to the Government, which means that the Government of the day is, in effect, given control of the police as one of the spoils of victory.

Bangladesh is a fragile democracy and one of the poorest nations of the world—though one with tremendous potential if it is given an opportunity. The levels of political violence and alleged abuse of state power to suppress the opposition reflect very badly on the Government of that country, and on the efforts that are being made to generate wealth and development there. I have a simple question for Her Majesty’s Government. What can they do to make clear that such violence and attacks on opposition politicians are not acceptable? What further representations have been made, and what are planned? Is this being made a condition of future aid?

18:45

[Lord Avebury]

My Lords, I, too, congratulate my noble friend Lord Hussain on initiating the debate, and in particular on focusing on the horrible catalogue of disappearances and extrajudicial executions, most of which are attributable to the Rapid Action Battalion. I will ask my noble friend, pursuant to the question of the noble Lord, Lord Harris—we have not really had an answer—what the Government have done to persuade Bangladesh to ratify the International Convention for the Protection of All Persons from Enforced Disappearance, and what they have done to persuade the Bangladesh Government to issue visitor invitations to the working group on enforced and involuntary disappearances, the special rapporteur on extrajudicial executions, or the special rapporteur on torture. As far as I know, the Bangladesh Government have not issued invitations to any of these groups, so there is no open invitation for these mechanisms to come to Bangladesh.

I will talk about recent attacks on minority communities. I will begin with the mob violence against indigenous Paharis in Rangamati on 22 September, in which an estimated 60 people were injured, eight of whom were admitted to hospital. The three co-chairs of the Chittagong Hill Tracts Commission—of whom I am one, and declare my interest accordingly—wrote to the Prime Minister, Sheikh Hasina, calling on her to instigate a full and impartial investigation of the event and ensure that the perpetrators are brought to justice. The problem is that whenever these attacks occur, the police and army are either nowhere to be seen or, if they are there, stand idly by and allow the violence and destruction to continue.

Another instance was the orgy of destruction of Buddhist temples and houses starting in Ramu on the evening of 29 September and extending to a number of other centres before it was finally brought under control. More than 20 temples and monasteries, including one at Sima Bahar dating from 1706, and at least one Hindu temple, were torched, as well as scores of houses and shops. Muslim houses in the same areas were left untouched, proving that local people were involved. The police officer in charge said that he was unable to stop the rampage because 10,000 marauders arrived from elsewhere in lorries, well armed with gunpowder and petrol, machetes, sticks, iron rods and tomahawks. The following day the mobs descended on Patia in Chittagong and Ukhia in Cox’s Bazar, where again they were able to destroy sacred Buddhist relics, books and temples, and to burn houses to the ground without the police intervening.

These events should be seen in the context of previous attacks on Buddhist monasteries and indigenous people in the CHT, motivated by land grabbing. In this instance, too, the competition for land in a lawless situation may have been a material factor. In the letter to Sheikh Hasina that I mentioned, we reiterated our concern that much of the violence in the CHT is related to the land disputes between Pahari and Bengali settlers. We pointed out that the land commission had failed to rule on a single dispute in the three years of its existence, that it is now without a chairman and that its rules of procedure are still under review.

The Prime Minister assured Buddhist leaders that those responsible for the appalling crimes would be prosecuted, and 300 people were reportedly arrested. However, a general investigation of the facts, covering the failure of the police to act when there were warnings several hours ahead of the impending violence, and the relationship of this attack on a vulnerable minority to others of a similar nature, should be conducted under the chairmanship of someone independent of the police, the political parties and the heavily politicised judiciary.

Finally, there are widespread concerns about the conduct of the war crimes trials. At the request of the All-Party Parliamentary Human Rights Group, the International Bar Association assessed the legislative framework of the tribunal in 2010 and concluded that it fell short of recognised international standards and that it required reform. The IBA, the US war crimes ambassador Steven Rapp and others have also criticised the court’s procedures and the evident bias of the tribunal chairman. To address these concerns, the Parliamentary Human Rights Group is asking the IBA to conduct a fresh assessment of the tribunal, its procedures and practices to date in relation to international standards, seeking advice from Ambassador Rapp, the UN High Commissioner for Human Rights and its special procedures mechanisms. These proceedings are no longer a matter for leisurely discussion by legal scholars. The tribunal’s failings, and the looming threat of the death penalty on conviction of the defendants, are a stark reality. For this reason, I hope that the IBA will give this request priority and that when my noble friend the Minister comes to reply, she will give her blessing to the request.

18:51

[The Lord Bishop of Derby]

My Lords, I, too, thank the noble Lord, Lord Hussain, for securing this debate. We have heard some very powerful speeches about the horrific level of direct political violence, as well as the noble Lord, Lord Avebury, introducing the wider context of a culture of abuse of human rights. I will pursue that in a slightly wider sense, first, in terms of the treatment of the Rohingya refugees, who are Muslims. The director of Human Rights Watch says that the camps they are in are some of the worst in the world and that the Government seem to have no strategy for dealing with that problem. The Government of course claim that they lack resources, as a poor country, to deal with all these refugees and there is an issue about whether they are turning them away or trying to send people back. I ask the Minister and the Government, not least in relation to our investment in aid, what we can do to support efforts in capacity-building for good citizenship and changing a culture where this inter-group violence is so destructive.

I declare an interest as a trustee of Christian Aid and want to give three little examples of what Christian Aid Bangladesh is doing to build capacity between different groups for more harmonious living and better citizenship. First, there is a human rights education and community mediation programme, which is trying to change the mindsets of people who find themselves potentially in conflict. It is working particularly with women, who are often marginalised from any participation processes, and is trying to establish local organisations for mediation and proper, civilised engagement around issues rather than the direct action that the noble Lord, Lord Avebury, has just been referring to.

The second piece of work is to improve participation by different groups in local government. Again, the infrastructure is in its infancy. This is trying to encourage citizens to use that infrastructure and develop local ownership of what policy-making is about, rather than the frustrations that have been referred to.

The third area is to work with partners in rural areas of poverty, particularly to help single women and households headed by women to take a full part in economic development. Christian Aid Bangladesh is working, with its partners, in something like 175 villages, with 17,000 people involved. The issue I would invite the Minister to comment on is that clearly there are major issues about political violence, as we have just heard, and the use possibly of security infrastructure to deliver on that. Particularly in the way we use aid, and consider the future use of aid, to what extent can the Government take into account and encourage the kind of capacity-building of responsible citizenship among different groups that seems to be the only long-term hope for trying to create an atmosphere and a sense of responsibility of mutuality whereby people with different traditions and economic pressures might learn to work together, and therefore to undermine the pressures that surface, as we have seen in these horrific mutual attacks between groups and the killing of enemies?

18:54

[Baroness Uddin]

My Lords, I declare my interest as an honorary president of the All-Party Parliamentary Group on Bangladesh, which I chaired for more than six years. I want to concentrate on the briefing provided by the chair of the APPG, who has only recently returned from a visit to Bangladesh. I will restrict my comments to the briefing and particularly raise the matter of the empowerment of women and the UK’s role and support.

Over the past three and a half years, the Bangladeshi Government have taken some positive steps, including enacting the law against domestic violence and introducing a national policy to advance women’s rights. The Government have taken an important step to protect the rights of minorities. They passed the Vested Properties Return Act, and the Cabinet also approved the Hindu Marriage Registration Bill. While I understand and accept that Bangladesh has a strong set of laws to tackle violence against women, implementation remains poor. We would all acknowledge that. That is reflected in an article written yesterday, although I have not seen much of it, on the increasing number of underage marriages that are taking place. That is of deep concern. I know that we are all familiar with the commitment of the Prime Minister and the Leader of the Opposition to advancing women’s empowerment, and I am sure that the current Government will be concerned by the matters we are raising today.

I know that the chair of the APPG has raised these issues with leading figures in Bangladesh and with organisations in the field, as has Secretary of State Hillary Clinton, who visited Dhaka this year, most notably on human rights. She raised her concerns publicly during her visit. The fact that Bangladesh has increased its visibility and presence in international forums and is seeking to enhance its reputation gives us all an opportunity to progress some of the concerns that have been raised.

During my time as the chair of the APPG, I deepened my knowledge about Bangladesh and have come to know much more about governance in Bangladesh, to which I had not paid much attention in previous years. Of course I should say that it is where I was born and I have family ties. I therefore visit frequently and have some understanding of what is happening on the ground. I listened carefully to what noble Lords said and it pains me to hear about the harrowing incidents and experiences that they referred to. I shall not comment on them because it would surely just be repetition.

I would add my voices to those, including my noble friend Lord Avebury, who are calling for an internationally recognised practice and procedure to be adopted by the International Crimes Tribunal. As someone who lived amidst the tragedy of the 1971 liberation war, I understand the deep-seated grievances of those who experienced and witnessed rape, pillage and death, and the desire and need of the victims of those atrocities in 1971 for justice and closure. So we must welcome some of the recent amendments to improve the procedures of the tribunal to ensure that the law and the trial process meet international fair trial standards. I can only imagine that the Bangladeshi Government would be interested in that.

Despite what has been said by some noble Lords, I should like to observe that there is significant independent coverage in the media of some of these issues, including disappearances and the deaths of journalists, as well as crossfire killings. We are not alone in raising these matters.

Human rights violation is not a phenomenon that is the exclusive prerogative of any one nation. As we all know, we in Britain have been accused of blatantly disregarding or ridiculing human rights both in the recent past and historically. It is therefore imperative that we ensure, whenever questions arise about the violation of citizens’ rights, that natural justice and due process is fundamentally adhered to in all that we do, so that we can ask our friends to do the same.

I have had a brief look at the many briefings about the UN reports that were sent out in the past 12 hours and observed that there is a huge distinction between the language used for the developed world and that used for the developing world. There seems to be a sense of superiority when referring to human rights violations in other countries, which makes it easy for those countries—who are, if you like, on the other side—to accuse us of double standards. We must be cautious when advocating human rights that we are advocating something to be practised everywhere, not just in one particular country. Deep concerns are expressed in the briefing material about the impact of the moratorium on schooling approved by the Government. This is impacting on a massive scale on girls’ education. I believe that DfID programmes support many of these schools, although not directly. I would therefore ask the Minister: should DfID work with some of the existing charities to ensure that schools remain open?

I would also ask the Minister: how does DfID strategy sit vis-à-vis women’s empowerment in Bangladesh? I understand that DfID has increased significantly its budget to enable the development of large-scale projects through, I believe, the NGO, the Manusher Jonno Foundation. It provides training, advocacy and seminars on women’s rights to minority women in Bangladesh. However, from what we are hearing and according to these reports, the impact seems to have been very limited. There are many questions for DfID to answer. Can the Minister tell us how DfID is evaluating this programme vis-à-vis the concerns raised both in this debate and by some human rights organisations? Are there specific criteria for increasing women’s participation and strategies to counter violence against women and ensure the protection of minority rights? If so, how does DfID explain these continuing concerns?

19:02

[Baroness Brinton]

My Lords, I, too, congratulate my noble friend Lord Hussain on securing this important debate on a subject that, frankly, needs to be discussed more openly for the safety of politics and democracy in Bangladesh but, more importantly, to save the lives of those who dare to oppose the Government.

For those of us who remember Bangladesh 40 years ago—the bitterly fought war, the emergence of the new nation, as well as the many natural disasters that Bangladesh has had to face—we recognise that this is a country struggling against many odds. Most of us have watched and willed Bangladesh to take its place as an open and emerging democracy in the 21st century. But the recent, continuing and increasing disappearances of people, especially politicians, is worrying. With elections due next year, it does not take much to see that the silencing of opposition individuals who may either be a threat to or a thorn in the side of the current Government is a useful but illegal tool. As has already been referred to by my noble friend, Human Rights Watch and Amnesty International have both catalogued very specific examples in shocking detail. Prime Minister Sheikh Hasina says that her Government have zero tolerance for extrajudicial killings, but she has singularly failed to investigate allegations properly or to bring the perpetrators to book. Actions speak louder than words.

One of the most publicised disappearances, already referred to, has been that of Ilias Ali and his driver. I will not go over the details of that case, but I will say that when the Prime Minister asked the police to investigate, she also accused him, quite extraordinarily, of going into hiding so that his own party could cast guilt on the ruling Awami League party. Protests at the time objecting to politicians’ disappearances were quelled by tear gas, batons and bullets from the local police.

More recently, and perhaps more worryingly, when Sheikh Hasina was being feted in the UK during the Olympics, she had ordered the arrest of Mir Quasem Ali, a leading member of the Islamist party Jamaat-e-Islami, who is well known both as a politician and through his ability to reach people through the Jamaat newspaper and media group. It appears that his real crime has been to criticise the war crimes tribunal set up by Hasina, which seems to take a very retributional approach rather than the justice and reconciliation examples set in South Africa and, more recently, Northern Ireland. I hope that Bangladesh might turn to look at that model. During the Olympics when Sheikh Hasina had a meeting with Ed Miliband, she gave a public undertaking that,

“all the future elections in Bangladesh will be held in a complete fair and neutral manner”.

Let us hope that that is the case.

There are other human rights issues too, on which others have touched. There has long been concern at UN and international level about the role of women in Bangladeshi society, with a real worry that female education still is restricted to suitable domestic training. With a woman head of state, that is ironic. Forced marriage for young girls also remains a real problem, to which the noble Baroness, Lady Uddin, referred earlier.

One man who has done much to develop the economic independence of poor women in Bangladesh has felt the wrath of the Bangladeshi Prime Minister. We know Mohammed Yunus as the Nobel Prize winner who, more than 30 years ago, almost single-handedly developed microcredit for women desperately trying to survive on not even subsistence-level incomes. Lauded across the world, and teaching other countries how to model his Grameen Bank, most would assume that he would be equally celebrated at home in Bangladesh for his work that has saved the lives of millions, and has given meaning and brought income to millions more women—but not a bit of it. It is said that the Prime Minister thought that she should have received the Nobel Prize herself.

Regardless of that, there has been a very public vendetta against him. I am told that there is a Bangladeshi word for this and I apologise if I pronounce it wrongly. It is “hinghsa”, which means vindictiveness or jealousy. This seems to be a state form of jealousy. As a result, Mr Yunus has been forced to retire from the Grameen Bank at short notice on a technicality and a public tribunal. The Government say that they have the right to do this because the Grameen Bank is a government bank, but the majority of it is held by very small stakeholders with the Government owning 3%.

My noble friend Lord Hussain referred to the specific issues of the Rapid Action Battalion in Bangladesh. I want to raise one matter that so far has not come up. In the past, the UK has provided training for the RAB, which is worrying. I understand that the staff from the NPIA have also taught the RAB appropriate intervention and interviewing techniques that meet international standards. But the flagrant breaches of these standards by the RAB must now cause us to question whether we can continue with this training. It is interesting that for exactly this reason the US has now stopped training in this method and financial support.

It also is worthy of note that the World Bank and the IMF have delayed payments and loans to Bangladesh because they are so concerned about the situation there. Despite that, we still provide £250 million a year to Bangladesh in aid through DfID. Surely, the time has come for us to review this in light of the human rights cases, especially those designed to undermine and prevent the democratic process from taking place, as a matter of urgency. Please can the Minister let us know what the Government are going to do to ensure either that payments are withheld or that there are proper strings attached to any aid we might provide. Worries about terrorism should not permit state-sponsored terrorism.

19:08

[Lord Carlile of Berriew]

My Lords, perhaps I may take a minute in the gap of this important and timely debate. I have been taking an interest in the war crimes trials in Bangladesh. As a result, the Bangladesh law Minister, Shafique Ahmed, came to see me recently at his request. I asked him if I could take a group of senior lawyers of all parties from your Lordships’ House to see the war crimes tribunal and to have open access to everyone concerned, including the defendants in their place of incarceration. He agreed to this in principle and was very clear about his agreement. But that was done orally. I now await written confirmation that that can take place.

However, I have been awaiting that written confirmation for a considerable time, which is beginning to concern me. I would be very grateful if the Minister, in her response to this debate, would confirm that it is the Government’s view that such a visit would be timely; that it would give the potential to assess properly the war crimes tribunals; and that the Bangladesh Government should be encouraged to comply with the oral assurance that they have already given.

19:09

[Baroness Royall of Blaisdon]

My Lords, I, too, must thank the noble Lord, Lord Hussain, for initiating this important debate. Following discussions with some Bangladeshi friends at the beginning of September, it was an issue that I, too, intended to pursue, but I am very grateful to the noble Lord for doing so. These are matters of great concern to many people in this country, including the diaspora, many of whom are not only concerned about individual cases but are deeply ashamed of what is happening in their country.

This debate also provides me with an opportunity personally to welcome the noble Baroness, Lady Warsi, to her new post. The noble Lord, Lord Howell of Guildford, was an excellent FCO Minister and I put on record my personal appreciation of his diligent work in the Lords at all times. However, I know that the noble Baroness will herself do a splendid job.

Of course, we celebrate the fact that Bangladesh is a democracy—albeit a fragile one—and there are some good things happening in the country, not least the empowerment of women thanks to the Grameen Bank, which now has projects in Glasgow and on the west coast of Scotland. That is an interesting development in our north-south relationship. We have much for which to thank Mr Yunus, who I believe is a very fine man.

However, this afternoon, we have heard some very disturbing facts and figures about torture, murder and enforced disappearances, including of politicians. Indeed, we have heard of some horrific cases of torture leading to death. This is an intolerable situation in any country but especially in a democracy which is a member of the Commonwealth. The rule of law should be an integral part of any democracy, especially in a country that is part of our Commonwealth family. These are the actions that one might associate with a lawless, despotic state, not a 21st-century democracy.

As we have heard, Amnesty International, Human Rights Watch and other human rights organisations believe that there is a pattern of enforced disappearances in Bangladesh, with the abduction and persecution of specific groups of people seeking to protect vulnerable groups or running opposition party campaigns. It is clear that human rights defenders, trade union activists, student activists and opposition party members have been targeted, and it appears that Bangladeshi security forces have been involved in the disappearances—particularly the Rapid Action Battalion. Like the noble Baroness, Lady Brinton, I question whether it is any longer appropriate for us to provide training for the RAB, and I would welcome the Minister’s comments on that.

I understand that the Bangladeshi Prime Minister pledged to ensure that extrajudicial executions would be stopped, but the killings and disappearances continue. Indeed, there have been 216 deaths just this year. As my noble friend Lord Harris of Haringey said, there is a culture of impunity no matter who is in power in Bangladesh, and that must be stopped.

The noble Lord, Lord Avebury, drew attention to the violence against minority communities in Bangladesh. For example, more than 20 Buddhist temples and monasteries and at least one Hindu temple, along with scores of homes and shops, were set on fire during attacks in the southern cities of Cox’s Bazar and Chittagong earlier this month, according to Amnesty International reports.

The noble Baroness, Lady Uddin, spoke of laws that have been passed to protect minority communities and to ensure the empowerment of women. However, these laws have to be implemented, and the action of government forces, with the culture of impunity, is counter to the laws that have been passed.

I was interested to learn of the assurance given by Sheikh Hasina to my right honourable friend Ed Miliband. I will discuss that with him to see how we might ensure that the next elections really are free and fair and bring about the necessary changes in Bangladesh.

What discussions are we now having with the Bangladeshi Prime Minister and his Government bilaterally, at EU level and through the Commonwealth to ensure that these abominable practices cease? What progress has been made since the noble Lord, Lord Howell, answered the Oral Question from my noble friend in May?

The noble Lord, Lord Hussain, quite rightly drew attention to the development aid that we give to Bangladesh. While I would certainly not wish to put the poorest people in Bangladesh in harm or to jeopardise their futures, I wonder whether there is any way of linking human rights to the future provision of development aid.

The right reverend Prelate the Bishop of Derby spoke of the excellent work of Christian Aid in capacity-building, among other things. Although I recognise that our aid will be targeted at the poorest people, I very much hope that it also includes capacity-building, because the poorest people need that in order to be empowered. Therefore, I hope that we are able to support the work that Christian Aid is doing.

I was interested to hear what the noble Lord, Lord Carlile, said about the war crimes tribunal and the invitation to him and Members of this House, and I very much look forward to the answer from the noble Baroness. Like the noble Lords, Lord Avebury and Lord Harris, I would also be interested to learn whether the UN working party on disappearances has been invited to Bangladesh. If not, we should encourage Bangladesh to issue an invitation and, together with our European and Commonwealth friends, put pressure on the country to ensure that the working party is invited in to do the work that it really must do to ensure that there are no further disappearances and to find out what has happened to those people who so tragically have disappeared.

19:15

[The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi)]

My Lords, this is my first debate in my new job. I thank the noble Baroness, Lady Royall of Blaisdon, for her kind remarks. The noble Lord, Lord Howell, was indeed a formidable Foreign Office Minister and truly will be a hard act to follow. It is apt that this is my first debate. My mother always says of my birth that Bangladesh was born a few days before I was, and indeed last year I had the privilege of celebrating my 40th birthday as Bangladesh celebrated its 40th.

I thank my noble friend Lord Hussain for introducing this important debate. I have found it both informative and stimulating. I know that noble Lords have taken a close interest in the human rights record of Bangladesh, including reports of disappearances. Human rights remain a crucial component of our bilateral and multilateral discussions with Bangladesh and form a key part of my role as Senior Minister at the Foreign Office. At the start of this Government, my right honourable friend the Foreign Secretary made it absolutely clear that human rights are essential to and indivisible from the UK’s foreign policy objectives. While the UK enjoys a strong and long-standing relationship with Bangladesh, we will not shirk from our responsibility to highlight our concerns about human rights.

The UK Government are concerned, as are many noble Lords here today, over reports of disappearances in Bangladesh. I note that reports from human rights organisations suggest that 24 disappearances and more than 60 extrajudicial killings have taken place between January and September this year. My noble friend the Parliamentary Under-Secretary of State, Alistair Burt, visited Bangladesh this year and raised the subject of disappearances directly with the Bangladeshi Prime Minister, Sheikh Hasina, as well as the leader of the Bangladesh Nationalist Party, Khaleda Zia. He also raised the disappearance of the well known politician, Mr Ilias Ali, the organising secretary for the Bangladesh Nationalist Party and former MP for Sylhet. I had the privilege of meeting Mr Ali when he came to London in 2011, as did a number of parliamentarians. I note with concern that he has been missing since 17 April.

However, I can inform noble Lords that since the response given by the noble Lord, Lord Howell, in May this year, we have continued to urge the Government of Bangladesh to investigate fully any reports of disappearances. Indeed, at a meeting with Sheikh Hasina and the Bangladeshi Minister for Foreign Affairs, Dr Dipu Moni, on 28 July, my right honourable friend the Foreign Secretary noted Members’ concerns and urged the Government of Bangladesh to conduct thorough investigations. The British High Commission in Dhaka continues to make representations to the authorities on this matter and has been assured that every effort continues to be made to establish the circumstances of any disappearances, including that of Mr Ali and his driver. Indeed, I raised our concerns just last Friday with Foreign Minister Moni. I can assure the noble Lord, Lord Harris of Haringey, that we will continue to raise these matters.

This afternoon noble Lords have raised broader concerns about democracy and human rights in Bangladesh. As noble Lords may be aware, Bangladesh has a population of more than 150 million people living in an area the size of England and Wales. It is a physically fragile country and one of the poorest in which the UK’s Department for International Development works. In a country where one in three people lives below the national poverty line and 80% of people live on less than $2 a day, the need for support is clear. Problems with infrastructure and recurring hartals do not foster an environment for growth. Added to this, Bangladesh has a difficult political history and is set to hold elections as early as next year.

Strong, independent and democratic institutions working under the rule of law are fundamental to the Bangladesh of tomorrow and to the nature of UK-Bangladesh co-operation. This is why respect for human rights is integral to the UK’s large development assistance programme in Bangladesh. Alongside its work providing basic services to the poorest and most vulnerable in Bangladesh, DfID invests heavily in strengthening civil and political rights, provides extensive support to civil society organisations to help marginalised communities demand their rights, and promotes more accountable policing and access to justice. It is vital that law enforcement officials and the judiciary are impartial and empowered to investigate any complaints fairly and transparently.

I am encouraged by assurances from the Government of Bangladesh that they are committed to protecting human rights and follow a zero-tolerance policy on extra-judicial killings and torture. However, human rights will remain a crucial component of our bilateral and multilateral discussions with Bangladesh, as it did when the Foreign Secretary met the Prime Minister on 28 July. This is a country with enormous development potential that is making incredible progress working towards achieving almost all the millennium development goals. Our assistance is fully in line with UK values and our commitment to international human rights standards. We will continue to provide our support to Bangladesh through our development programmes and as a key international partner.

Specific questions were asked about the DfID programme. The UK’s aid programme is directed through non-governmental organisations. The Government of Bangladesh receive no direct budgetary support from the British Government. Any reduction would be felt hardest by the people who need it most, including women whose empowerment is a key part of the DfID programme.

The right reverend Prelate the Bishop of Derby raised the important work of Christian Aid. Like other noble Lords, he rightly asked whether we could link DfID aid to human rights. I simply say yes—by avoiding direct budgetary support. Where we have concerns we have done just that.

The noble Lord, Lord Harris, asked about the UN working party on disappearances. This is a non-governmental body through which UN member states cannot raise specific cases or specific countries. However, I will explore that further and write to him.

My noble friend Lord Avebury raised the issue of war crime trials. The British Government support the principle of war crime trials to hold to account those who may be guilty of crimes committed during the war of independence. The noble Baroness, Lady Uddin, raised some important points in relation to her own experience of that period. We also believe that it is essential that any trial meets appropriate human rights standards. Defendants should be given a fair trial, including the right to conduct a proper defence, and trials should be open and transparent. We have called on the Bangladesh Government, publicly and privately, to ensure that trials meet appropriate international standards, and we will continue to do so.

With EU partners, the UK also continues to make clear our strong opposition to the application of the death penalty in all circumstances. This is quite pertinent when tomorrow we will remember the annual day against the death penalty.

The UK, along with EU partners and other likeminded countries, will continue to follow the progress of the war crime trials. We regularly discuss them with other interested groups, including non-governmental organisations. The UK has not offered any legal observers. However, the Government of Bangladesh have stated publicly that they would welcome independent monitoring. Any foreign-funded project, including trial observation, would require the approval of the NGO affairs bureau in Bangladesh.

My noble friend Lord Avebury made specific proposals. I will consider them and respond in writing, as I will do to the question raised by my noble friend Lord Carlile of Berriew.

My noble friend Lady Brinton raised concerns about the treatment of Muhammad Yunus of Grameen Bank. The British Government have huge respect and admiration for Professor Yunus. We strongly support the work of Grameen Bank in lifting the very poor out of poverty. To enable this to continue it is important that the integrity, efficiency and independence of Grameen Bank is protected. The concerns of the noble Baroness will be raised at future meetings.

My noble friend Lady Brinton also raised concerns about the conduct of the Rapid Action Battalion. We regularly raise with the Government of Bangladesh our serious concerns about allegations of human rights abuses by law enforcement agencies, including the Rapid Action Battalion. The British Government are not currently providing training to the RAB. The previous training programme ended in March 2011 and focused on the provision of human rights and ethical policing training.

My noble friend Lord Avebury also raised the recent appalling attacks on the Buddhist community. These have, quite rightly, been condemned by the Government of Bangladesh. In relation to concerns raised about citizenship and intercommunity tensions, again, there are specific projects which DfID is engaged in that help to empower and build communities to allow those relationships to sit with ease. However, I take this opportunity to congratulate the right reverend Prelate the Bishop of Derby in relation to the work of Christian Aid and of faith charities generally.

Let me conclude by thanking again my noble friend Lord Hussain for securing today’s debate. This is a story of two halves. While there is remarkable progress being made on poverty alleviation, there are considerable human rights challenges facing Bangladesh. I restate that the UK raises these and other difficult issues with the Government of Bangladesh regularly. Our public and private remarks to the Government of Bangladesh will continue to underscore our consistent message that values are at the heart of our foreign policy, and that it is neither in our character nor in our interests to have a foreign policy without a conscience.

Finally, why does this matter to the United Kingdom? As noble Lords may know, the UK enjoys a strong and long-standing relationship with Bangladesh. We were the first European nation to recognise Bangladesh and our two countries are united by ties of family, trade and education. There are nearly 500,000 people of Bangladeshi heritage living in the United Kingdom—indeed, some are Members of the House of Lords. We are determined to nurture our strong bilateral relationship and support Bangladesh to secure the stable and prosperous future that its people deserve. We want to see Bangladesh succeed and its human rights record improve. This requires effective governance, increased transparency and tackling the issue of disappearances. As recently as last Friday, Foreign Minister Moni and I agreed that these things are best achieved by working together.

The UK and international partners will continue to provide support to Bangladesh through our development programmes. I know that your Lordships will agree that this is in the interest of not only Bangladesh but all those who care about Bangladesh. I will certainly take your Lordships’ concerns on board and will make sure that they form the basis of discussions. I know that the Bangladeshi High Commission is represented today and that it, too, will be taking on board the concerns raised by noble Lords.

Committee adjourned at 7.27 pm.

House of Lords

Tuesday 9th October 2012 Lords Chamber

Tuesday, 9 October 2012.

14:30

Prayers—read by the Lord Bishop of Derby.

House of Lords: Appointments

Tuesday 9th October 2012 Lords Chamber

Question

14:36

Asked By

[Lord Hunt of Kings Heath]

To ask Her Majesty’s Government whether further appointments to the House of Lords are expected to be made during the remainder of the current Parliament.

[Lord Wallace of Saltaire]

My Lords, any appointments will continue to be made in line with the commitment in the coalition programme for government to reflect the share of the votes secured by the political parties at the most recent general election.

[Lord Hunt of Kings Heath]

My Lords, yesterday the Leader of the House, the noble Lord, Lord Strathclyde, made it clear that, regrettably, he and the Government will not support the Bill of the noble Lord, Lord Steel, in the other place. Given that, and given the size of this House, is the Minister really saying that the Government are determined to make dozens more appointments, to increase the size of the House and to shore up the political majority of the Government? Surely not.

[Lord Wallace of Saltaire]

My Lords, the idea that we are packing the House with coalition Peers is a little idiotic. Of the 122 appointments made since May 2010, nearly one-third, 39, have been Labour Peers. That is not packing the House on one side. The largest group in the House remains the Labour Benches.

One of the ways in which we wish to maintain a vibrant House is to refresh the House from time to time. The committee on retirement has proposed that the statutory retirement scheme is now available. We regret that only two Peers have so far availed themselves of it. However, 20% of this House is now over 80 and, as we know that life expectancy in this House is very good, we encourage others to consider that scheme.

[Lord Forsyth of Drumlean]

My Lords, how will my noble friend explain to the voters of this country the Government’s policy to reduce the size of the House of Commons in order to save public money when they are now proposing to increase the size of the House of Lords at public expense, having previously brought forward a Bill arguing the importance of reducing it?

[Lord Wallace of Saltaire]

My Lords, the Government are not proposing to increase the size of this House. Sadly, we have lost 40 Members since May 2010; I dare say that, sadly, we may lose more over the next two years. The question of refreshing the House from time to time therefore arises.

[Lord Grocott]

The Minister’s Leader, the Deputy Prime Minister, has repeatedly said—and I agree with him, which surprises me—that the House of Lords, the Second Chamber, is too big. How can it be that I agree with the Minister’s Leader while he disagrees with him? Can he explain to us why he disagrees with the Deputy Prime Minister?

[Lord Wallace of Saltaire]

I am very glad to hear that the noble Lord agrees with Nick. We in this House have to be very careful about saying, “We’re all very comfortable here and we all want to stay, and no one else should be allowed to come in until there has been a longer process”. Over a five-year period we need to consider the balance of the House and the question of the occasional refreshment of its Members, and we are certainly not going to close our minds to that in an interim House. We will certainly encourage some of the older Members to consider statutory retirement or a long-term leave of absence.

[Lord Tyler]

My Lords, to avoid understandable suspicion, and indeed accusations, of personal self-interest, would it not be wise for the Government to give a lead and say that, as far as Ministers are concerned, no MPs who voted against the Government’s reform Bill should be nominated to this House?

[Lord Wallace of Saltaire]

I do not think that I ought to answer that question. I am very conscious that there are those who, in the Corridors of this House, have said to me, among others, that those who are asked to leave the House should be compensated for doing so. To that I would say that membership of this House is a privilege, not a right, and the idea that one has to be bought out before one leaves is not one that should be considered.

[Baroness Hayman]

Will the Minister now answer a question about which the Government have been reticent? To which of the political parties contesting the last general election does the coalition commitment that he has reaffirmed today apply?

[Lord Wallace of Saltaire]

My Lords, over lunch I made a calculation which, even though I was unable to find a calculator, I hope was correct. If one were to be strictly accurate, the Labour Party as represented in this House is roughly in tune with the percentage that it received in the last election. The noble Lord, Lord Pearson of Rannoch, is as good as 10 people. The most underrepresented group, as the noble Baroness, Lady Hayman, knows, is of course the Liberal Democrats.

[Lord Cormack]

My Lords, if the Government take this House and Parliament seriously, how can they continue to refuse to contemplate reforms along the lines of those included in the Bill introduced by the noble Lord, Lord Steel? My noble friend has referred to this as an interim House. Some believe that it can be a permanent House, giving permanent value to our constitution. The Government are flying in the face of that fact.

[Lord Wallace of Saltaire]

My Lords, the consensus in this House is not the only factor which has to be taken into consideration. The House of Commons voted by a substantial majority in favour of the principle of an elected second chamber. All three parties had the principle of an elected second chamber in their manifestos in the last election and the coalition programme stated that we will establish a committee to bring forward proposals for a wholly or mainly elected upper chamber on the basis of proportional representation. We want to achieve a consensus. I am looking at the noble Lord, Lord Richard, who has laboured very hard to achieve a consensus on reforms. That is clearly the only long-term way forward.

[Lord Richard]

My Lords, the noble Lord said that I tried very hard to get this House and everybody to agree that it should be an elected second chamber. Of course I did. But if the Government have decided that they are not going to go for an elected second chamber, they really must look at the size of this House. You cannot just leave it on the basis that it is going to creep up to nearly 1,000 and then pretend that somehow or other the Bill introduced by the noble Lord, Lord Steel, will rectify it. It will not. If the Government have any sense—I am not sure that they do on this issue—they should now commit themselves actively to pursuing policies whereby the size of this House can be reduced.

[Lord Wallace of Saltaire]

I would welcome proposals from noble Lords as to how we achieve that. I have mentioned already the voluntary retirement scheme. Let us discuss off the Floor of the House the possible acceptability of a maximum age.

[Lord Steel of Aikwood]

My Lords—

[Lord Scott of Foscote]

My Lords—

[Noble Lords]

Steel!

[Lord Scott of Foscote]

I am grateful to the noble Lord. Does it remain the Government’s intention that when members of the Supreme Court retire, those who are not already Members of this House will be invited to become Members of this House?

[Lord Wallace of Saltaire]

My Lords, those Supreme Court judges who were Members of this House before the Supreme Court was separated from it are currently on leave of absence. I am not aware that the Government have any definite position on what will happen to those appointed to the Supreme Court since it was separated from this House.

The Steel Bill has clearly now become extremely popular with a number of Members of this House. I am not entirely sure whether it is the emasculated Steel Bill which people wish to promote or the original Steel Bill. I have worked through several efforts to get the Steel Bill through the House, but it has not received much welcome in particular from a number of hereditary Peers.

Parliamentary Constituency Boundaries: Review

Tuesday 9th October 2012 Lords Chamber

Question

14:45

Asked By

[Lord Touhig]

To ask Her Majesty’s Government how much it has cost to conduct the review of parliamentary constituency boundaries in the United Kingdom.

[Lord Wallace of Saltaire]

My Lords, the four Boundary Commissions spent about £5.8 million up to the end of August 2012 on the boundary review. They expect to spend about £3.8 million from September 2012 to the end of the review.

[Lord Touhig]

I am sure that I am not alone in believing that that money would be better spent keeping disabled people, like the Remploy workers, in a job, but we are where we are. We remember that the Conservative and Lib Dem Peers were united in their enthusiasm to pass the Bill to reduce the number of parliamentary constituencies. Does the Minister expect both coalition parties to be equally united and enthusiastic to vote for the final report of the Boundary Commissions when it comes here next year? Furthermore, will the Minister be voting for it?

[Lord Wallace of Saltaire]

My Lords, we are a coalition. We have our open disagreements. I recall well the official who said to me last year that it was really rather easier working with this coalition than with the Blair/Brown coalition because we have our disagreements in the open whereas they plotted against each other. When it comes to the vote next year, we will consider our views.

[Lord Rennard]

My Lords, would the Minister agree that perhaps any further public spending would be better aimed at making sure that some of the millions of people in this country who are entitled to vote but are unable to do so because they are not on the voting register are included in those registers, so they can participate in the democracy of our country, rather than on the Boundary Commission review process, which is now clearly, simply, an academic exercise?

[Lord Wallace of Saltaire]

My Lords, we will be returning to the question of why people resist registering to vote during the Committee stage of the individual electoral registration Bill, and I commend to Members of the House the Electoral Commission study on it, which was published in June.

On how much has been spent, the previous boundaries review cost £13 million. This review was estimated to cost £11.5 million and it is now expected to cost £9 million. Much of the remaining £3.8 million has already been committed, so even if we said “stop” now, the possibility of saving very much money would be small.

[Lord Foulkes of Cumnock]

My Lords, the Deputy Prime Minister has said that Liberal MPs and Liberal Peers are going to vote against the boundary changes. Is it not crazy to continue with it? Surely, we are going to waste nearly £4 million which could be better used. Why are we going ahead with it? I understood that the new chairman of the Conservative Party said that the plan is to withdraw these proposals. Can the Minister make it clear? Are they really pressing ahead with these proposals, given that the Deputy Prime Minister has said that they are effectively dead in the water?

[Lord Wallace of Saltaire]

I am glad to see that the noble Lord reads the Daily Mail which, I think, was where the report came from. Primary legislation requires the commissions to report to Parliament before October 2013, and it would require primary legislation to stop that. It would then be for Parliament to consider the recommendations. There is precedent for Parliament voting against the acceptance of a Boundary Commission review; it was done by the Labour Government in 1969.

[Lord Kakkar]

My Lords, do Her Majesty’s Government consider that the 221 hours and 24 minutes over 35 days spent in your Lordships’ House and the other place on the Parliamentary Voting System and Constituencies Bill was a wise and mature use of precious parliamentary time, in view of the fact that the Deputy Prime Minister has suggested that Liberal Democrat Ministers and MPs will vote against the secondary legislation when it comes before this Parliament?

[Lord Wallace of Saltaire]

My Lords, I think that it would be a little brave of me to say what I thought was a useful use of the time of this Chamber or of the other Chamber and what I thought was not. I have sat through a number of debates over the last 15 years that I have felt were not useful uses of this Chamber’s time.

[Baroness Hayter of Kentish Town]

My Lords, is it not necessary that we have some certainty here? It is not just about money. There are candidates to be selected and party organisation to take place. The Prime Minister can bring certainty now by introducing primary legislation, or by making it absolutely clear that these boundary changes will not be going ahead, which will save money and enable people to get on with the existing boundaries.

[Lord Wallace of Saltaire]

My Lords, I take that point and I simply reiterate that in all matters of political and constitutional reform and order, it is much the best if we can achieve consensus among all the parties. However, we have to remember that one of the reasons why we are not proceeding with House of Lords reform is because the Labour Opposition in the House of Commons voted down the programme Motion.

Olympic and Paralympic Games 2012

Tuesday 9th October 2012 Lords Chamber

Question

14:51

Asked By

[Lord Wigley]

To ask Her Majesty’s Government what is the current estimate of the outturn cost to HM Treasury of the London 2012 Olympic and Paralympic Games.

[Viscount Younger of Leckie]

It is clear that the Olympic and Paralympic Games this summer were a great British success story. Much credit should go to all those involved in the complex planning, organisation and implementation of these events. Following the post-bid review of costs, we announced in 2007 a total public sector funding requirement of £9.3 billion. Our quarterly report in June 2012 showed that we were below budget, with £476 million remaining in uncommitted funding. We await the October report, due out soon, and there is every reason to believe that we will remain below budget, so we still expect the total outturn cost to be less than £9 billion.

[Lord Wigley]

My Lords, in wishing the Minister well with his new responsibilities, I concur with his sentiments and those expressed yesterday about the undoubted success of the Olympic and Paralympic Games in London. I congratulate all concerned, particularly the Paralympic competitors, who taught the world to maximise personal achievement, despite handicap, through their own endeavours.

As the next major international athletic competition in the UK will be the Commonwealth Games in Glasgow in 2014, will the Minister confirm that the same principle of direct Treasury financial support will be given to the Glasgow games as was given to the London Olympics? Likewise, will he confirm that, in the event of the 2026 games coming to Cardiff, they can work on the same assumption?

[Viscount Younger of Leckie]

I thank the noble Lord for that question. I do not have any details, looking ahead, of those particular events. I do not believe that we are quite at that stage. However, I will absolutely keep the noble Lord’s sentiments in mind and will return to him when I can.

[Lord Anderson of Swansea]

My Lords, the Games have meant that it has been a remarkable year, but there has been one failure. The Minister will recall the promise made at the outset of the Games that all parts of the United Kingdom would benefit from the expenditure. In fact, the regions of Wales have benefited very little indeed from this £9 billion. It has amounted in effect to a massive subsidy to London and the south-east. In what way, perhaps for the amount not spent or in other ways, will Wales, Scotland, Cornwall, the north-east and the north-west be compensated for the failure of a clear promise?

[Viscount Younger of Leckie]

I do not agree with the noble Lord’s question to the extent that I believe that the whole of the United Kingdom has benefited. I would point out that the legacy of the Olympic and Paralympic Games will not be seen for some time. I would also point out, as we have Welsh representation here today, that £38 million of business was generated from Wales. Indeed, a lot has happened throughout the United Kingdom and we should remember the thousands of sports clubs that have been set up, the school sports around the whole country and the youth sport strategy, which covers the whole country, not just London.

[Lord Addington]

My Lords, does my noble friend agree that the soft legacies of the Olympics are probably the most important and that a classic example of such legacies must be the role of the volunteers? What activity are the Government undertaking to ensure that such events as next year’s Rugby League World Cup, the Rugby Union World Cup in 2015 and the Commonwealth Games maximise and build on that model of volunteering, which has been so valuable?

[Viscount Younger of Leckie]

I am delighted that my noble friend has brought up the issue of the volunteers. They were absolutely fantastic. Noble Lords may or may not know that there were 70,000 Games makers. They were volunteers. It is fair to say that their travel within zones one to six was paid for, and I think that they managed to receive their lunch, but otherwise they very willingly and always with smiles gave of their time. In answer to my noble friend’s question, looking ahead to the rugby events that he mentioned, I do not quite know where we stand but I hope to come back to him soon with that information.

[Lord McConnell of Glenscorrodale]

My Lords, looking forward to the Commonwealth Games in 2014, are the Government aware that the new Emirates indoor arena in Glasgow is now open, including the Sir Chris Hoy velodrome? It is not only open but was delivered within a budget of £113 million and on time. It is now being used by the public two years ahead of the games. Will the Government congratulate Glasgow City Council on this achievement, wish it and the organising committee well and ensure that the work of the noble Lord, Lord Coe, on the legacy from the Olympics includes every part of the United Kingdom?

[Viscount Younger of Leckie]

I am delighted that the noble Lord has mentioned Glasgow; I come from north of the border. I wholeheartedly agree with the comments that he has made.

[Lord Deben]

Before my noble friend is led astray by those who want to complain about things or ask that they should be extended, will he repeat that this is a remarkable achievement, that it was brought in within budget—something that most people said was impossible —and that there should be very clear congratulations from this House to those who have achieved that end?

[Viscount Younger of Leckie]

I wholeheartedly agree with my noble friend. Indeed, it is a tremendous feat that we are looking as if we will come in well below budget. The House should remember that that particular budget was set as far back as 2007, although it was admittedly revised from the 2003 pre-bid. I pay tribute to LOCOG, which produced a balanced budget and did tremendously well in sponsorship. It should be congratulated wholeheartedly.

[Lord Dubs]

Does the Minister agree that among the many successes of this remarkable summer has been that of projecting the Paralympics on to the national stage in a way that has never happened before? Can we congratulate the television people—I think it was Channel 4 in this case—on giving the people in the Paralympics that enormous prominence, which I believe will change attitudes to the Paralympics for ever?

[Viscount Younger of Leckie]

I wholeheartedly agree with the noble Lord. Having watched much of the Paralympics, I was greatly moved by the events. I was also greatly impressed by the television coverage, to which the noble Lord alluded, and by the previews of all the events, not just the Paralympic ones. For example, I thought that the UK editing was outstanding. I do not think that we have ever seen that before in any other Olympic Games.

[Lord West of Spithead]

My Lords, does the Minister agree that one of the great successes of the Olympics and Paralympics was how well our military stepped into the breach and made them run well, and that they deserve immense congratulations on that? That means that the cost figures may not be exactly what they seem. The military can always provide a capability in an emergency of any kind in this country. Does the Minister agree that reducing our military by some 30,000 is a bit of a problem when one looks to the future?

[Viscount Younger of Leckie]

I take note of what the noble Lord has said. I do not want to go into the cuts element of that, but say only that I wholeheartedly agree with him that the military stepped into the breach, as it were, extremely readily, again with smiles, and that they should be wholeheartedly congratulated.

[Lord Howell of Guildford]

My Lords, I wish to reinforce what the noble Lord, Lord Wigley, has said. Will the Minister bear in mind that the Commonwealth Games in Glasgow in 2014 will be a spectacular event and a major help to this country vis-à-vis its position in the Commonwealth network, which is growing in strength at all times? The fact that one of the biggest indoor athletic stadiums in Europe has been built bang on time and well within budget is a major achievement. Will the Minister tell all his colleagues in government that it should be supported to the maximum and that the public should give all the encouragement to it that they gave to the Olympic Games?

[Viscount Younger of Leckie]

That is very much noted. I thank the noble Lord very much; he is absolutely right.

Railways: Franchises

Tuesday 9th October 2012 Lords Chamber

Question

15:00

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what is their estimate of the cost to the public purse of cancelling the contract award for the West Coast Main Line railway franchise.

[Earl Attlee]

My Lords, my right honourable friend the Secretary of State for Transport will make a full Statement in the other place at the earliest opportunity. The department will remunerate fully bidders for the direct and reasonable costs of putting together their bids and expects this cost to be approximately £40 million. The department expects additional costs from mobilising Directly Operated Railways, reissuing the tender and carrying out two independent reviews. The department will monitor these costs closely and be fully transparent in keeping the House informed.

[Lord Kennedy of Southwark]

My Lords, it is very regrettable that the noble Earl has not taken the first opportunity in Parliament to say sorry for this fiasco. He should be truly ashamed of what has gone on so I invite him to take the opportunity to apologise. Why are the Government saying there have been regrettable and unacceptable mistakes and yet no Minister is accepting responsibility?

[Earl Attlee]

My Lords, some noble Lords express disappointment that a full Statement has not been made. Nobody asked for a full Statement. I was very willing to answer a PNQ yesterday afternoon but there was not one because we have the topical question today. As for ministerial responsibility, noble Lords know perfectly well that this was a highly regrettable mistake by officials, not by Ministers.

[Lord Bradshaw]

Will the noble Earl send word to his colleagues elsewhere that no new franchises should be let for any railway until full consideration is made of the high level of risk which the Government are seeking to transfer to the private sector? I believe that the private sector is unable to bear that risk because predicting revenues 15 years hence is nearly impossible. I commend him to the Mayor of London who is running the London Overground railway on an entirely different basis where the revenue risk lies with the GLC and the people running the franchise are paid to operate the railway efficiently but are not expected to take these unbearable risks.

[Earl Attlee]

My noble friend asks extremely good questions and that is the purpose of the Brown review which will look into the franchising system and report back to us by the end of the year.

[Lord Adonis]

My Lords, does the noble Earl agree, given the scale of the debacle we have seen on the west coast main line, that the responsibility of senior officials and Ministers should be examined in the forthcoming review? Is he aware that since last Tuesday the only steps that have been taken have been the suspension of three fairly junior officials and the establishment of a review under a member of the DfT’s own board, whose colleagues include all of the senior Ministers and officials of the department? Does the noble Earl agree that this is not a wise proceeding in public policy and it is probably not very moral either?

[Earl Attlee]

My Lords, I do not agree with the noble Lord. The first step that the Government have taken is to set up two inquiries. The first one, headed up by Sam Laidlaw, will look at exactly what went wrong. If there was ministerial failure, no doubt he will identify that.

[Lord Adonis]

Sam Laidlaw is a member of the DfT’s own board. Is the noble Earl not aware of that?

[Earl Attlee]

My Lords, if there is anything wrong with the report, the noble Lord will be able to challenge me in this House on that very point. The first inquiry will look at what went wrong. The second inquiry will look at the wider franchising issues, as I said in response to my noble friend. We should be proud of our civil servants. I certainly feel honoured to be served by them. However, officials are human and can make mistakes, even big ones. Nevertheless, I want to make it perfectly clear that I retain full confidence in my department’s officials and I am more than content to account for their activities in your Lordships’ House.

[The Lord Bishop of Exeter]

My Lords, in the light of the noble Earl’s earlier answer about the award of other franchises, is he aware of the concerns that are already there about the award of a new franchise for the West Country? Can he indicate the likely impact of any review and the rerunning of this bid on the award of other franchises, including one that has a considerable impact on the economy of the south-west?

[Earl Attlee]

My Lords, it is a little early for me to answer in that much detail, but the process for the western region is being paused. However, the difficulty, of course, is with the west coast main line franchise.

[Lord Davies of Oldham]

My Lords, the House should congratulate the noble Earl on being one of two junior Ministers in the department who have survived. Is it not the case that the other Ministers who presided over this debacle scuttled just before the news broke, thereby denying the absolutely fundamental principle of parliamentary democracy that the buck stops with Ministers?

[Earl Attlee]

My Lords, that was a good try. We will have to see what the reports come out with.

[Lord Campbell-Savours]

My Lords—

[Lord Butler of Brockwell]

My Lords, the chairman of the Public Accounts Committee has pointed out that since 2006 there have been eight separate Secretaries of State—more than one a year—and since 2001 there have been six different Permanent Secretaries at the department. In view of that, are the Government surprised when things go wrong in a department?

[Earl Attlee]

My Lords, if that is the cause of the problem, I am sure that Sam Laidlaw will identify it.

[Lord Campbell-Savours]

My Lords, if I were to table—

Economic Affairs Committee

Tuesday 9th October 2012 Lords Chamber

Membership Motion

15:07

Moved By

[The Chairman of Committees]

That Lord Skidelsky be appointed a member of the Select Committee in place of Lord Currie of Marylebone, resigned.

Motion agreed.

Justice and Security Bill [HL]

Tuesday 9th October 2012 Lords Chamber

Order of Consideration Motion

15:07

Moved By

[Lord Wallace of Tankerness]

That the amendments for the Report stage be marshalled and considered in the following order:

Clause 1, Schedule 1, Clauses 2 to 15, Schedules 2 and 3, Clause 16.

[Lord Foulkes of Cumnock]

My Lords, how is it possible to get clarification of what the noble Earl, Lord Attlee, said in reply to a question? I was not clear whether he said that a Private Notice Question, if we tabled one, would be answered by him this week. It is unsatisfactory that we have not had an apology or any explanation for one of the worst débâcles we have seen for years.

[Noble Lords]

Order!

[Lord Foulkes of Cumnock]

This is in order. Surely the Deputy Leader of the House can answer.

[The Minister of State, Ministry of Justice (Lord McNally)]

You are not in the other place now and you are abusing the procedure of this House. That matter is not before the House at the moment.

[Lord Foulkes of Cumnock]

With respect, we are considering the business of the House, and when my noble friend Lord Barnett raised the matter previously, he was abused by the Leader of the House for doing so. My noble friend was told by the Leader of the House that consideration of the business of the House—currently relating to consideration of the Justice and Security Bill—was the point at which to raise these matters. Surely the Deputy Leader of the House can give us an answer. Will we get an answer to a PNQ if it is tabled later this week?

[Baroness Royall of Blaisdon]

My Lords, perhaps I may explain to my noble friend and other noble Lords that to date we do not have business questions in this House. It is very difficult to raise them and we must ask the Procedure Committee to look at the matter. I agree that there should be space to ask business questions. I should also explain that PNQs are a matter for the Lord Speaker of this House, but I advise the Government that tomorrow I will certainly table a PNQ on the west coast main line for consideration by the Lord Speaker, because it is imperative that we receive answers to these questions.

[Lord McNally]

That was an extremely helpful intervention from the Leader of the Opposition. Let us move on.

[Lord Barnett]

My noble friend Lord Foulkes referred to me and the Leader of the House. I should explain to the House that I have since had a personal apology from the Leader of the House, although I cannot help thinking that it should have been in the House.

[Lord McNally]

I take note of that. If we go down the route of business questions, perhaps without the abuse that goes on in the other place, we could have discussions in the usual channels.

Motion agreed.

Defamation Bill

Tuesday 9th October 2012 Lords Chamber

Second Reading

15:10

Moved By

[Lord McNally]

That the Bill be read a second time.

[The Minister of State, Ministry of Justice (Lord McNally)]

My Lords, first, I welcome the noble Lord, Lord Browne, as the lead opposition spokesman on the Bill. I look forward to working with him and with the noble Baroness, Lady Hayter, on it. I also welcome the noble Lord, Lord Ahmad, as my chief aide. He has taken over in the Ministry of Justice from the noble Baroness, Lady Verma, who used to placate me on the Front Bench from time to time and to help me through Bills. I should, perhaps, put on the record that I hope that the noble Lord, Lord Ahmad, will provide a link with Members in all parts of the House—not only on this Bill but on MoJ business in general. I look forward to working with him.

I am delighted to open this debate today as the Defamation Bill begins its passage through the House. The Bill fulfils the commitment in the coalition agreement to review the law of libel to protect legitimate free speech. I would like to begin by thanking those in the other place for their work on the Bill so far—in particular my right honourable friend the Secretary of State for Justice and Lord Chancellor, Chris Grayling, and his predecessor Kenneth Clarke. I also thank the Ministers, old and new, in my department who have assisted in steering the Bill through the other place. However, I consider that today the Bill has come home. Indeed, it was in this place that my noble friend Lord Lester of Herne Hill produced a Private Member’s Bill on this subject back in 2010. I would like to take this opportunity to place on record my enormous thanks to my noble friend Lord Lester, and to his expert team of Heather Rogers QC and Sir Brian Neill, for their advice and assistance to me and to the Ministry of Justice in helping us to develop the provisions that are contained in the Bill here today.

However, my vote of thanks does not stop there. The Defamation Bill was published in draft in the first Session of this Parliament for full public consultation and pre-legislative scrutiny. The Joint Committee of Parliament that was established to undertake that scrutiny was expertly chaired by my noble friend Lord Mawhinney. I am grateful to him and his colleagues on the committee for their very careful consideration of the issues and for their extremely detailed and helpful report. I have also made it part of my responsibilities to engage in discussions with a wide range of interests outside Parliament who have brought this issue to the forefront of public debate, many of whom have provided briefings to this House in advance of today’s debate. It would be remiss of me not to extend my thanks also to the many groups and individuals that responded to our public consultation on the draft Bill.

This Bill was built on a Private Member’s Bill, followed by consultation, pre-legislative scrutiny, a draft Bill and consideration in the other place. It is not a Bill that divides us on party lines. Indeed, I have made no secret of the fact that my intention in bringing this Bill before Parliament has always been to end up with legislation that works. I believe that it is timely because of the mounting concern in recent years that our defamation laws are out of date, costly and over-complicated. They give us the worst of all worlds by damaging freedom of speech without affording proper protection to those who are defamed.

Freedom of expression is the cornerstone of our democracy. In an open society, people should be at liberty to debate a subject without fear or favour, whether the matter is political, scientific, academic, religious or anything else. That is how power is held to account, abuses of authority uncovered and truth advanced. However, freedom of speech does not mean that people should be able to ride roughshod over the reputations of others without regard to the facts. Careers and indeed lives can be destroyed by false allegations that are incapable of properly being answered. The issue for our defamation laws is ultimately one of striking the right balance between protection of freedom of expression on the one hand and protection of reputation on the other.

The law as it stands has allowed a situation to develop where the threat of lengthy and costly proceedings has sometimes been used to frustrate robust scientific and academic debate, to impede responsible investigative journalism and to undermine the good work undertaken by many NGOs. Nor can it be a matter of pride when powerful interests overseas with tenuous connections to this country use the threat of British libel laws to suppress criticism as part of so-called libel tourism.

It is also a fact that our current libel regime is not well suited to the internet. Legitimate criticism sometimes goes unheard because website operators, as providers of the platforms on which vast amounts of information are published, often choose simply to remove material which is complained of rather than risk proceedings being brought against them. Meanwhile, individuals can be the subject of scurrilous rumour and allegation on the web without meaningful remedy against the people responsible.

We need to refocus and modernise our law on defamation so that it offers effective protection, whether offline or online, for both freedom of speech and the reputation of those who have been defamed. It is my hope that the Bill will do that, but I am well aware that this is new territory for legislation.

I now turn to the detail of the Bill. I see it as a first priority to ensure that the law is reformed so that trivial and unfounded actions for defamation do not succeed and indeed are discouraged from being started. Clause 1 therefore raises the bar for a statement to be defamatory by proposing that it must have caused or be likely to cause serious harm to the reputation of the claimant. Where the draft Bill sought views on a test of “substantial harm”, which was intended to reflect current law, the new clause draws on the views of the Joint Committee on the draft Bill and the balance of opinions received in consultation by nudging up this threshold. Our intention is to give more confidence to defendants such as those in some of the cases brought against NGOs and scientists in recent years.

Alongside a stronger test, we also want to simplify and clarify the defences available to those accused of libel. As they stand, they are unnecessarily complicated and too narrowly focused on cases relating to mainstream journalism rather than the online world, NGOs, academics, scientists and so forth.

The Bill also clarifies that qualified privilege extends to reports of scientific and academic conferences. In a further important step forward for the protection of scientists and academics, Clause 6 creates a defence of qualified privilege for peer-reviewed material in scientific and academic journals—again, as recommended by the Joint Committee.

There are also provisions seeking to address libel tourism, which has damaged this country’s reputation around the world as an advocate of freedom. Although relatively few foreign libel cases ultimately end up in British court rooms, I am concerned about the use of threatened proceedings by wealthy foreigners and public figures to stifle investigation and reporting. Clause 9 of the Bill addresses the issue in a measured and proportionate way while avoiding any conflict with European law. It clarifies that a court will not hear a case against someone who is not domiciled in the UK, another EU member state, or a state which is a party to the Lugano Convention unless satisfied that England and Wales is clearly the most appropriate place to bring the action. It should help to ensure that powerful interests around the world will not easily be able to use British justice to gag their critics, which is a move that I hope will be welcome across the House.

In addition to protecting freedom of expression and reputation, the Bill seeks to modernise the law. Currently, website operators are at risk of action for the content of material that they may host, even if they do not control the content. Most operators are not in a position to know whether the material posted is defamatory or not and very often, faced with a complaint, will immediately remove material rather than face the possibility of defamation proceedings, however real or remote that possibility may be. That leads to an unnecessarily chilling effect on free speech.

The Government want a libel regime for the internet that makes it possible for people to protect their reputations effectively but also ensures that information online cannot be easily censored by casual threats of litigation against website operators. Clause 5 of the Bill sets out a framework for how we wish to achieve this.

As your Lordships know, technology develops apace, and rather quicker than primary legislation. Had we sought to specify the detail of the system that we propose for the internet, we would have risked it being out of date before noble Lords had concluded their considerations. Rather, we propose that much of the detail will be set out in regulations. We will be seeking views on the content of these regulations by the end of the year.

The Bill will make significant changes to the law of defamation—changes that I would argue are very much for the better. However, they should not be seen in isolation. As I have already mentioned, one of the biggest areas of concern in relation to defamation proceedings centres on the costs involved. As the House will recall, earlier this year we had some debates about the costs and funding provisions on what is now the Legal Aid, Sentencing and Punishment of Offenders Act. Part 2 of that Act reforms no-win no-fee conditional fee agreements, or CFAs, to reduce costs and to make them fairer as between claimants and defendants. Those provisions come into effect in April next year, including for defamation and privacy cases. During those debates, particular concerns were raised by a number of noble Lords—the noble Lords, Lord Martin and Lord Prescott, and others—about the effect of our reforms on less well off parties. At that time, I acknowledged those concerns, and I gave a commitment to look at the rules on costs protection for defamation and privacy claims in preparation for when the defamation reforms come into effect.

I have asked the Civil Justice Council to help us on costs protection for defamation and privacy claims by looking at the case for it and options for reform. The council is an advisory body chaired by the Master of the Rolls. I have asked him to report by the end of March 2013. That will allow us to make, if appropriate, any rule changes in time for the Defamation Bill coming into effect.

In addition to the issues on costs, we are developing a new procedure to resolve key preliminary issues at as early a stage as possible, which was something that I know was of great interest to the Joint Committee. Currently, cases can drag on for too long before they reach full trial and that can lead to costs being built up unnecessarily. Getting early resolution of key issues often leads to early settlements. The Government are keen to encourage that. The Government are grateful to the Joint Committee for its recommendations, including those on the use of alternative dispute resolution in defamation cases. However, when looking at procedural reform, we need to be aware of the wider context, and recommendations that impact on this area may come out of Lord Justice Leveson’s report.

While I believe that it is important to wait for the outcome of the Leveson inquiry with respect to the procedural aspects of defamation reform, I am clear that we should not allow that process to impact on the content—or indeed the timescale—of our reforms to the substantive law contained in this Defamation Bill. Leveson is largely focused on issues other than defamation and should not be used as an excuse to delay this Bill. Opportunities to get this area of law right do not come along too often. There was a Defamation Act in 1952 and another in 1996. This is the first opportunity we have had to consider the law in Parliament since the explosion of the internet age and we might wait a long time for another chance. What is more—and with perhaps uncharacteristic modesty—the other place has left scope for this House to apply its expertise to this Bill. My approach has been to listen and apply the dictum of the late President Truman, “Spread a little of the credit and you will be surprised how far you can go”.

In another place, my ministerial colleagues at the Ministry of Justice made it clear that there is one area of the Bill in particular where we are reflecting in the light of the views we receive. This is in the area of the defence of responsible publication on a matter of public interest, contained within Clause 4 of the Bill. I am sure there will be more views forthcoming on that clause during the debate. I will be sure to take note of them and we look forward to further discussions on Clause 4 in Committee.

I believe that the package of measures contained in this Bill meets our aim of rebalancing the law in a fair and effective way, so that free speech is not unjustifiably impeded and so that debate on issues of public importance is able to thrive, while still providing appropriate remedies for those who have been defamed. It is a sound, reforming Bill and one that I hope can command cross-party support. I genuinely look forward to working with all parts of the House to bring forward a Bill of which we can be justly proud. In commencing our work, perhaps we should take on board the warning contained in the editorial in today’s Guardian, which says that,

“weighing free expression against protection of reputation is art as much as science”.

Fortunately, we have an abundant supply of both artists and scientists in this House. I commend the Bill to the House.

15:27

[Lord Browne of Ladyton]

My Lords, I thank the Minister for his welcome. I had not expected to deal with this legislation and I have spent quite a substantial part of the Recess reading up. For a moment, I thought that I had missed something else. I knew that there was a failure of communication over the content of the reshuffle in certain places and I wondered if the noble Lord, Lord McNally, maybe knew something about a phone call that I should have got during the reshuffle that did not materialise. I also take this opportunity to welcome the noble Lord, Lord Ahmad of Wimbledon, to his post in the department. I look forward to working with him closely on the Bill and to his educating me on the detail, to the extent that I have been unable to master it so far.

We support the Bill to the extent that it seeks to reform our outdated libel laws. We also support it because—as the noble Lord, Lord McNally, made plain—it has its roots in what the previous Government did and because all three main political parties committed themselves to reforming defamation law in their election manifestos. However, as the Minister reminded us in his letter yesterday, that commitment to reform was translated in the coalition agreement to a commitment to review the law of libel to protect free speech. The word “reform” somehow fell off the agreement when the two parties went into discussion on a commitment to reform.

The first question for the Minister is whether the Bill, which in its present form largely codifies, and reforms little, is a reflection of the commitment of the coalition Government or is the aggregate position of two reforming parties on defamation law. The Minister, or the noble Lord, Lord Ahmad, may have an opportunity to enlighten me about that at some stage during the course of this debate.

We support the Bill, but are critical friends of it and hope to see it amended significantly during its passage through your Lordships’ House. I thank the Minister both for his speech of introduction and for the helpful letter that he circulated yesterday, I believe to all Members of the House. I am told by informed sources that he is the department’s principal promoter of the Bill and is the Minister who was responsible for piloting it through the Committee stage in the House of Commons. Apparently the Commons did not share his passion for reform of this area of law; accordingly we have high hopes of him.

Before I turn to specific clauses of the Bill, I want to associate myself with the words of the Minister to the extent that he has recorded thanks and appreciation to those who have played a role in getting the Bill to this stage. I associate myself with the recognition of the noble Lord, Lord McNally, of the role played by the Libel Reform Campaign and others too numerous to mention. If the Minister will excuse me, I will not go through the exhaustive list of all those who have been lobbying us—our inboxes are all full of their briefings on this. I am sure your Lordships will want to pay tribute to my right honourable friend Jack Straw and the working group that he established when he was Secretary of State, and of course to the Joint Committee of both Houses, under the able leadership of the noble Lord, Lord Mawhinney, which scrutinised the draft Bill. It is also appropriate to recognise the sustained contribution of the noble Lord, Lord Lester, particularly in relation to his original Private Member’s Bill and beyond. I suspect that both the Joint Committee report and the Private Member’s Bill will prove to be sources of inspiration when we come to Committee.

It is important that in any review and reform of defamation laws we get the right balance between freedom of speech and expression on the one hand and protecting reputations on the other. There have been justified concerns that our defamation laws are outdated, have fallen behind technological developments, have restricted freedom of expression and have attracted libel tourism. I say “our” defamation laws despite standing here as a Scottish lawyer and never having practised in English law, if noble Lords will excuse that poetic licence for the purpose of making my points.

The current system is also skewed by the high cost of defamation proceedings. The Defamation Bill should leave us with laws that are clearer and, much more importantly, more proportionate. As I have already made clear, we welcome a number of elements of this Bill. However, we are disappointed with the way in which the Government have approached it in the other place and feel an opportunity has been wasted, thus far, to reform and improve our defamation laws. What we have here, subject to one or two minor changes, is not reform but codification. As we know, a Joint Committee of both Houses scrutinised the draft Bill and came forward with a number of suggestions for how the final Bill could be improved. Many of these were ignored by the Government. In the House of Commons, we were concerned that the Bill as originally published did not address a number of problems and we sought to amend the Bill to improve it. The Government refused to take on board suggested amendments, although they turned up on Report with two of those amendments, redrafted, which were accepted. We will revisit many of these in Committee but this is not the time to go through the detail of the Committee stage.

Finally, the Government so far have failed to publish much of the detail of the Bill in the form of regulations and guidance. I listened carefully to the Minister’s assurances about what we can expect in the future. They have repeatedly been asked to publish more information on regulations and other parts of the infrastructure that are important to understand the effects of this Bill but so far have refused to do so. It is undoubtedly the case that for this and other reasons, although this will be in Committee relatively soon, it will be difficult properly to scrutinise and discuss many aspects of the proposals in the Bill in the absence of that information. We will not be able to work out what this will mean on the ground unless we have some sense of the infrastructure in which it is to sit.

I listened carefully to the warning from the noble Lord, Lord McNally, in relation to what I am about to do. The conclusion of the passage of the Bill will come shortly before the anticipated report by Lord Justice Leveson. It comes in the context of a continuing but as yet unshaped review of the law of privilege, and with the failure of the Government to show their hand on the rules on cost protection for defamation in privacy claims. All the regulations that we have been promised will be required for significant parts of the Bill.

The Bill consequently sits in a much broader, potentially confused and changing landscape. This may not be able to be fully clarified by the Government during their deliberations. However the maximum amount of clarity must be given to ensure that this set of reforms or changes will be sustainable beyond those that we can expect from the Government and the response to Lord Justice Leveson, or in relation to the changes in the rules for the court or the rules on costs.

This is a relatively small Bill, now with 17 clauses. I will deal with these clauses relatively quickly, concentrating on where we see the need for further scrutiny, or have criticisms or proposals for amendment in mind. Clause 1 seeks to impose a higher threshold for bringing a claim, a requirement that a statement must have caused “serious harm” to be defamatory. We support this higher hurdle for the reasons set out but believe that there needs to be greater clarity as to what “serious harm” would mean in practice. We will probe the Government to get that clarity in Committee. Clauses 2 to 7 set out the defences that will be available for a claim of defamation. Some replace or codify common-law defences; others create new defences. We will probe the Government’s thinking in relation to Clauses 2 and 3, but we broadly support them and see them as an improvement in the law.

We will test whether, as drafted, Clause 4’s intention to address responsible publication of matters of public interest makes the law clearer and more readily applicable outside mainstream journalism as claimed. The Government’s assertion that it does is not supported by the evidence of the Libel Reform Campaign. Simply replacing an existing defence that does not work and is not accessible with the statutory codification of it does not solve the problem. More importantly, there is a growing and persuasive argument that there is a place for a whole new approach to this issue, either through a new and effective public interest defence in addition to what is in the Bill, or by sweeping away what is presently in the Bill and recasting it.

On Report in the other place, the Under-Secretary of State, Mrs Helen Grant, indicated that the new ministerial team had an open mind about that proposal. This is what I believe the rather enigmatic Clause 7, mentioned on page 2 of yesterday’s letter from the noble Lord, Lord McNally, refers to. He expanded on that today and has told us that is exactly what he has an open mind about. It would be helpful if we heard discussions across those interested parties and across the House to see whether we can come to agreement on a reform or recasting of this part of the Bill to make sure that it passes the test that he set in his letter to us yesterday.

We think that Clause 5 is ill thought-out and incomplete. It creates a new defence for the operators of websites where a defamation action is brought against them in respect of a statement posted on their website. Importantly, the detail of the defence—we are told—will be provided in draft regulations which we have not yet seen and the shape of which we do not know. We have requested that the regulations be approved through affirmative rather than negative resolution procedure because they are so significantly important to this process, but so far that change has not been accepted. It may be that this new listening department will be prepared to reconsider that. This is a key area. Technological developments have advanced much quicker than our laws, and we need well thought-out and potentially sustainable reform because this area of our life moves much quicker than any other. We will need to try to anticipate how those who wish to defeat any regulation we put in place will move in order to defeat that regulation. We will be seeking more clarity on this clause, and seeking to amend it in Committee.

We welcome Clauses 6 and 7 and are pleased that the Government followed the committee’s recommendations and, particularly, that Clause 6 introduces a new defence of qualified privilege relating to peer-reviewed material in scientific and academic journals. Clause 8 introduces a single publication rule to prevent an action being brought in relation to publication of the same material by the same publisher after a one-year limitation period. We support this clause.

Clause 9 addresses libel tourism. Concerns have been expressed that defamation law in England and Wales is more protective of reputation than elsewhere in the world and that London has become the preferred location for defamation actions involving parties with only a tenuous link to the jurisdiction. Although the extent of this issue is subject to debate, while we agree with the need to reduce the potential for trivial claims and address libel tourism—whatever its extent—we think that the necessary changes should be made to the Civil Procedure Rules before the Bill comes into force, so that we are able to discuss the practical implications of this change.

We support the objective of Clause 10—to limit the circumstances under which an action can be brought against someone who is not the primary publisher of the statement—but do not think it affords sufficient protection. We tabled a number of amendments in the other place and we will revisit almost all of these.

We support Clause 11 but would like to see detailed guidance relating to the criteria for the judge to consider when deciding whether a jury trial should be ordered. I digress from my notes here to remind noble Lords that I am a Scottish lawyer. I practised all of my life in a jurisdiction where we did not have the deference to jury trials that the English jurisdiction has. I did it also during a period when we shared a Parliament—when both Houses of this Parliament regularly legislated for the administration of justice both in civil and criminal jurisdiction in a non-jury environment without any demur or question as to whether or not it was doing injustice.

Since I have become a parliamentarian, I have listened to hours of English men and women saying that the only way to deliver justice is through a jury trial, and that any other way of doing it is an injustice. I am always mildly amused by that, as your Lordships can imagine. Although now that we have our own Parliament things are different, there are hundreds of years of this Parliament legislating for a country in which the prosecutor decided whether you got a jury trial. It did that without any concern at all. I say finally, to summarise and get myself out of this kind of cul-de-sac that I have got myself into, that I could paper the wall with the names of miscarriages of justice that I have witnessed in courts, many of which have been perpetrated by juries. Anyway, we support Clause 11—but would like to see the detailed guidance relating to how the judge will apply it—and we welcome Clauses 12, 13 and 14.

The Bill does not make any specific provision for costs or striking out claims. Instead, we are asked to accept the assurance of the Minister and his ministerial colleagues that these issues will be dealt with elsewhere. I remind the noble Lord, Lord McNally, that during the progress of the Legal Aid, Sentencing and Punishment of Offenders Bill to which he referred earlier, he gave my noble friend Lord Prescott an assurance that the problem which my noble friend identified about costs in defamation actions would, and I quote narrowly here, have to,

“be dealt with fully in that Defamation Bill”.—[Official Report, 27/3/12; col. 1332.]

Now, that is not dealt with in this Bill but now the noble Lord gives another set of assurances that we have to accept as to how it will be dealt with. We are concerned about access to justice under the Bill and would like to see the issue of costs addressed in it. The Legal Aid, Sentencing and Punishment of Offenders Act 2012 has abolished the recoverability of success fees and after-the-event insurance premiums. Claimants in defamation actions will no longer be able to insure themselves against costs—and even if they are successful, they may have to pay some of their damages in lawyers’ fees. There are a number of possible ways to address defamation costs, one of which the noble Lord, Lord McNally, explained to us, but we intend to explore all of them in Committee in the hope that we can find something that will allow the noble Lord to make good on his commitment to my noble friend Lord Prescott.

We would like a provision for striking out claims included in the Bill and hope to discuss in Committee the possibility of including a provision to that effect in Clause 1. We intend to table again the suggestion from the committee that corporations should be able to instigate proceedings but that the threshold should be higher for them: that is, where the corporation can prove substantial financial loss. We are concerned that the continued inequality of arms between parties will continue to limit access to justice for many less wealthy claimants.

In my short experience of your Lordships’ House, it is not uncommon for speeches here to be peppered with comments that legislation has left the House of Commons incomplete and barely scrutinised, leaving much work for this House to do. What is less common is that a Bill is sent on its way from the House of Commons with almost every speaker there saying that the degree of scrutiny and revision necessary will have to be carried out by this House because it has not been carried out by their House. However, that is exactly what was said repeatedly by Members of all parties, including Ministers, when the Bill was read for a third time in the House of Commons on 12 September.

In his contribution to Third Reading, the Secretary of State for Justice paid tribute to my right honourable friends in the Commons for the measured, constructive and thorough way in which the Bill proceedings had been conducted. We intend to continue that approach and expect in return that the Government’s promise of an open-minded approach, made repeatedly during Report and Third Reading in the Commons and repeated by the Minister in his letter yesterday, will be lived up to.

15:46

[Viscount Colville of Culross]

I declare an interest as a producer/director still working at the BBC and as a vice-chairman of the All-Party Parliamentary Libel Reform Group. I very much welcome the Bill. I have read the lengthy evidence given to the Joint Committee and its incisive conclusions and pay tribute to its work. I also thank the Libel Reform Campaign for its help, and of course the noble Lord, Lord Lester of Herne Hill, for his extraordinary campaigning work over many years to reform our libel laws. I am in awe of the very hard work and thought that has gone into the drafting of this Defamation Bill.

The Bill centres, quite rightly, on the careful balance that has to be drawn between the right of an individual to a reputation and the preservation of free speech and expression. Britain’s record of free speech has been one of the great sources of inspiration to the world since the Glorious Revolution in the late 17th century stopped the censorship of newspapers and pamphlets in this country. I have just made a history documentary that attempts to find out why the Industrial Revolution took place in Britain rather than in other scientifically advanced European countries. One of the programme’s conclusions was that 18th century Britain boasted a liberty of speech and intellectual discourse that allowed the free exchange of ideas between scientists, technicians and industrialists. The industrial enlightenment, as it is called, allowed the creation of inventions and industrial progress that transformed this country into one of the most powerful and prosperous in the world, and much of its success rested on the power of free speech.

This freedom has been counterbalanced in statute since the passing of the first civil libel laws in 1843, and they have developed through subsequent Acts and changes in common law to protect the reputation of the individual. However, I fear that in recent years those very libel laws and the threat of their use against a wide range of authors from journalists to scientists and NGOs is having an increasingly oppressive effect on free speech. Our present libel laws seem to have tipped the balance too far in favour of the claimant.

I have worked as a journalist on regional newspapers and for our major television networks for most of my career. I have first-hand experience of the threat of libel action limiting my ability to publish all the information that I had gathered in the course of an investigation, but my experiences are limited and on a small scale. In the course of preparing for this speech, I have spoken to journalists and media lawyers in some of our most respected broadcast and newspaper companies. They have told me of many instances when, during the course of investigations into powerful individuals or companies, they have been confronted by an ever-increasing torrent of letters and threats from libel lawyers, often multiple firms of libel lawyers.

At a time when there have been revelations of misconduct—and in some cases criminal misconduct—by journalists, one or two media organisations have been singled out for being well regulated and responsible. One of those is the organisation for which I work, the BBC. It is at the forefront of responsible investigative reporting. Indeed, the work of “Panorama” has brought us important and revealing programmes that hold to account powerful commercial and religious organisations and even a Member of your Lordships’ House. This exercise of free speech seems to be a crucial pillar of our democracy.

However, even at the BBC the chilling effect of our present libel laws is being felt. The corporation’s head of current affairs, Clive Edwards, a long-term colleague of mine, said in a recent speech:

“In my 25 years working in investigative journalism I have to say the current climate is the worst I can remember and it’s getting to the point where I have serious concerns about the future of investigative reporting”.

This is the man who is ultimately responsible for “Panorama” and other investigative programmes.

What is ironic is that one of the defences for responsible journalism built up by the common law is now being used as a stick with which to beat journalists in an attempt to prevent publication: the so-called Reynolds defence. This defence lays down 10 non-exhaustive factors, the use of some but not all of which should be enough to protect fair and responsible journalism, even if the absolute truth of the statement cannot be proved. At the moment, however, prior to publication or broadcast, lawyers representing companies and individuals under investigation are increasingly demanding that journalists, scientists and NGOs should abide by all 10 factors in order to prove that they have acted fairly and responsibly.

During the course of one recent “Panorama” investigation of a controversial organisation, the programme makers received upwards of 1,000 pages of legal letters, at a going rate of £400 a page, to try to influence the content and prevent the programme’s transmission. Every letter required a response by the BBC lawyer that had to be checked by the programme makers and executives. The present libel laws are costing respectable media organisations a fortune in their own lawyers’ fees and are exhausting journalistic talent in refuting these claims. This must be having a detrimental effect on the number of investigations that can be undertaken. It cannot be right that the rich and powerful are using our libel laws to attempt to suppress reporting and are using their lawyers to act like back-street bullies to suppress investigation.

This Bill goes a long way towards improving the situation and redressing the balance towards the protection of free speech. Clause 1, on serious harm, requires a claimant for the first time to prove that there has been serious damage to their reputation or financial situation. I am sure that this obstacle will stop trivial and vexatious cases coming to court. Clauses 2 and 3 create statutory defences for truth and honest opinion, which will help to protect free speech. Clause 6 is a tremendous step forward in protecting scientists and NGOs who want to express their concerns without fear of litigation. It is long overdue and I know is very much welcomed by those communities.

However, there are one or two areas of the Bill that cause me a little concern, and I hope that they will be tested during the passage of this Bill through your Lordships’ House. Clause 4 gives a welcome defence of responsible publication on matters of public interest against libel. Subsection (2)(a) to (i) contains the list of 10 factors that can be used in the defence of responsible journalism. The Explanatory Notes say that these are,

“a non-exhaustive list of matters to which the court may have regard in determining whether a defendant acted responsibly in publishing a statement”.

However, in the light of the way in which libel lawyers are using the present 10 factors of the Reynolds defence as 10 hurdles for journalists to cross, I am not sure that their codification will improve the situation.

I would also ask whether this clause accounts for the changes in the common law that have taken place as a result of the Supreme Court decision in the case of Flood v Times Newspapers Ltd. This now allows for the reasonable belief of the editor or publisher to be taken into account as part of the defence. This clause as it stands seems to be a step backwards. I ask the Minister if he can think of a different way of wording this clause that would both bring it up to date with the Flood judgment and deal with the problems of the 10 factors in the Reynolds defence.

Clause 5 is of utmost importance in that it recognises the overwhelming importance of the internet as an arena for free speech in the 21st century. If this Bill is to be future-proofed, it needs to get this clause right. Social media such as Facebook, Twitter and blogs are an ever more powerful method of disseminating information. Many of the operators and much of the comment take place outside our jurisdiction. Nevertheless, we must try to achieve a balance for claimants, website operators and authors based in this country.

Clause 5 goes a long way towards creating this balance between a defence for website operators against allegations of defamation while also giving claimants redress for defamation. However, I ask the Minister to be aware that the clause could be used by people who want to unmask the identity of an anonymous individual, maybe a whistleblower or someone like that, by using a spurious defamation claim to force a website operator to do so. There needs to be some burden of proof when making the claim that a remark is defamatory before it should be removed.

I also welcome Clause 9 on jurisdiction, which goes a long way to diminishing the threat of libel tourism in the London courts. Although there have been only a limited number of actual cases from abroad in the English courts, these laws have certainly been used as a chilling effect on free speech internationally. As this clause is drafted, it will not help British defendants who are being sued by overseas claimants living outside the EU, and that is a source of concern for me.

On Clause 12, I am anxious that the demand for a summary statement of the judgment will duplicate the jobs of regulatory bodies such as the PCC, the BBC Trust and Ofcom, and I am sure that this issue will also be considered in whatever forum Lord Justice Leveson comes up with for considering complaints against the media. To allow a judge to force a paper or a broadcast to put up an apology on the front page or at the top of the television news seems to me to put the judge in the editor’s seat. I ask the Minister whether that is in the interests of free speech and responsible journalism in this country.

This Bill goes a very long way in addressing the concerns that many of us have for guarding free speech in this country. Any changes that I have suggested must not become a charter for irresponsible journalism or comment. There have been some wonderful and important debates on the Bill in the other place, but I am sure that its passage through your Lordships’ House will bring about the crucial amendments that will ensure that it becomes the once-in-a-lifetime chance to rebalance the freedom of speech and the reputation of the individual in an era of extraordinary change and upheaval in our media.

15:56

[Lord Mawhinney]

My Lords, I, too, welcome the Bill. The Minister will recall conversations that he and I had about whether the Government were genuinely serious in wanting to legislate. We had been brought to the starting point on a number of occasions over past decades but had never actually managed to get the race under way. I pay tribute to him, and I want it to be a matter of record that I personally believe that without the intervention and leadership of the noble Lord, Lord McNally, this Bill almost certainly would not have emerged from the depths of government. I hope that he will accept that compliment; there may not be a regular flow of them through the whole process, but at least I start as I would like to be able to continue.

I thank my colleagues from your Lordships’ House who were on the Joint Committee. I am slightly nervous because four of the other five are due to speak in this debate after me. Nevertheless, I record my appreciation to them for their support, intellectual rigour and common sense.

I was pleased that the Minister started by affirming the Government's commitment to freedom of expression. That is hugely important and it is put under pressure in a whole variety of ways, not just in defamation but every day. I listened carefully to what the noble Lord, Lord Browne of Ladyton, said; he talked about the Bill being seen in a broader context. I am not sure if he used the word “context”, because it was the word “broader” that caught my attention. I have had the privilege of being in this Building, at both ends of the Corridor, for 33 years now. One of the most significant changes in that period has been the inhibition of freedom of expression through creeping political correctness. It is not necessarily defamation per se, but it is an insidious threat to freedom of expression and I encourage the Minister to remember that as we take the Bill through. We are dealing with one very important threat to freedom of expression, but we should not fall into the mistake of believing that it is the only one.

He and I have discussed Clause 1. The Government started on “substantial” and finished on “serious”. We decided that “serious and substantial” was even better. I noticed that the Government’s response to the Joint Committee report was that two words, “serious” and “substantial”, might make for confusion. May I tell my noble friend that “serious and substantial” was the testimony to our committee of the noble and learned Lord, Lord Mackay of Clashfern? He may not be good enough for the Government, but he was certainly persuasive enough for the Joint Committee. I encourage my noble friend to put “serious and substantial” back in to the melting pot. All of us agree that the bar needs to be raised, and that trivial issues and threats need to be disposed of quickly.

I turn to Clause 4 and the so-called Reynolds defence. I am not sure that the noble Viscount, Lord Colville of Culross, read all the evidence to our committee. If he did, he accurately reflected it in his speech. A lot of people said to us that they were not sure about these 10 different tick boxes that constitute Reynolds. We know that they do not all have to be ticked, but there is confusion out there. Increasingly the legal world and aggressive lawyers are moving to try to make all 10 a prerequisite. I hope that the Minister will think carefully about what the noble Viscount said. There are still tick boxes in Clause 4. From talking to the noble Lord, Lord Lester of Herne Hill, to whom this House is indebted for his work in this area, I know that there are other more general ways of writing Clause 4 that would totally remove any confusion from a tick-box-type regime. I hope that the Minister will look at that again before we complete the Bill in this House.

Clause 7 and with it Clause 6 seem to me big improvements on where we are at the moment. I say to my noble friend that it was the committee that came up with the idea of using peer-review of scientific and medical documents and theses as a way of getting that qualified privilege. I pay particular tribute to the noble Lord, Lord Bew, who led that conversation in the committee. I can tell the Minister that we were more nervous that qualified privilege might or might not be applicable to conferences. I do not think that because qualified privilege should be available to peer-reviewed articles that conferences automatically get lumped in to the same category. They require separate consideration. So I welcome Clause 7 and its associated Clause 6.

I want to turn to a couple of the issues that were part of the consultation aspect of the draft Bill and to pick up in particular one that the Minister himself picked up, which was the issue of cost. I am not sure that I have the fluency to relay to your Lordships in permissible language the strength of feeling around cost as a barrier to people getting their legal rights. That is very tricky because it is quite difficult to write legislation about costs, so the temptation—I think the Minister may have skirted around the temptation in his earlier comments—is to say, “We’ll think about it. We’ll devise ways and it’ll all be all right on the night”. Given how long we have waited for legislation on this area, I know he will understand that cost needs urgently to be addressed now. We made a number of recommendations. We think that in a defamation case, the speed of consideration of the preliminary issues by a judge is crucial. We were told that a lot of time and money is spent because neither side knows what individual words mean or how the judge will interpret them. Bills get racked up into astronomical sums when a meeting with the judge in the first week or two could take that cost barrier completely out of the system.

I understand that my noble friend and his colleagues get very nervous when the case management of judicial cases gets mentioned by anybody who is not a fully qualified judge, solicitor, barrister or, preferably, all three, but the rest of us have permission to express opinions, even if we are not in the judicial system, and I want to express an opinion. I know that government Ministers have the ability, in however these things are done, to let it be known to those in the judicial system who have responsibility for case management that government would be pleased if this were to happen or would be encouraged if that were to happen. This is an area that needs to be grabbed by Ministers. Of course, you are raising questions about the judgment of the judiciary. In one sense, I am not. I want it to be independent and to do its thing totally free of political interference, but I want it to do it in a way that is good for my former constituents. I want it to be friendly for the claimant. Running systems that do not challenge existing procedures but hold up the process, thus driving up the cost, is not good for my former constituents. There is a serious cost bar issue that needs to be tackled head on by judges making early decisions and somebody writing into the Civil Procedure Rules government-inspired guidance and perhaps duties in the area of case management that would bring defamation law back into the purview of the ordinary citizen of this country.

The second thing that the Joint Committee felt very strongly about was the need to put in requirements for judges initially to direct towards mediation and arbitration before a case goes to court. I have read government documents truthfully saying that the Government want to encourage out-of-court settlements, that going to court is the last thing they want and so forth. This is an opportunity to do something about it. The committee felt very strongly indeed. I have sided with the noble Viscount, Lord Colville of Culross, but I now have to disagree with him. The committee’s evidence was that a system of mediation and arbitration that led somebody to say sorry was perhaps one of the most effective ways of dealing with defamation available to us, yet the system is not set up to encourage people to get together and say sorry. I wish I had a piece of paper of the realm for every one of my constituents who has come to a surgery and said, “I don’t want any money. I just want them to say sorry”. The committee believed that there are times when the judge should have the power to require an apology to be printed, occasionally on the front page of a newspaper, depending on the seriousness of the case. I know the editor’s argument, “If the Queen dies that day, is she supposed to go to page 15?”. It is a spurious, nonsensical argument. All you need to do is say, “It has to be done in 72 hours”, or 96 hours, or whatever it is.

We need out of this Bill a system that is more geared to ordinary citizens and not to the exclusive ones. For the first time in my life, I am going to associate myself with a Labour Party slogan; we need a defamation system that is for the many and not just geared to the convenience of the few. There was a healthy discussion in the committee about the merits of statute law and common law. The judiciary likes common law because it makes the system more flexible; but ordinary people do not understand common law, whereas they can go and look up statute law. So, to the extent that this Bill will codify, it is in the interests of ordinary citizens because it makes the law more understandable.

The committee dealt with the question of trial by jury. There are very few jury trials now, but we were not persuaded that they should be done away with; therefore I welcome Clause 11. I need to say to my noble friend, not least out of courtesy to those who served with me on the committee, that while I have appreciated various clauses in this Bill, we all reserve the right to raise Joint Committee proposals, which the Government, without the opportunity of discussing them with us, have thus far rejected.

I will finish on one other big issue, which, if my reading of the Bill is correct, has not actually been dealt with. What happens on the internet moves very quickly, and the committee was persuaded that holding the providers to account was not the way to go forward. We welcome that decision by the Government. That having been said, what is on the internet falls into two categories: that which is by an identifiable person and that which is truly anonymous. The committee’s view was that if it is identifiable, the laws of the land as they apply should apply to the internet as well as to every other aspect. The issue of the anonymous is much more difficult, and is made more so by the fact that the internet is worldwide and we have to be careful. I can see nothing in this Bill that even touches on what you do about anonymous defamation. We in the committee were not certain, and we were very tentative, but I will tell the Minister what I would like. I would like a differentiation, a cultural change in this country, so that over the passage of time, if you do not put your name to it, it cannot be taken seriously. If you do not put your name to it, it cannot have any legal standing. That cultural change will not happen overnight. It may be a five-year or a 10-year process. However, unless somebody comes up with a better way of offering some element of defamation protection to those on the internet who prefer to behave anonymously, let us try to create a situation in which over time nobody takes it seriously and therefore nobody pays any attention to it. That is at least a form of protection. I am always happy to step down if the Minister comes up with a better solution, though I do not see it in the Bill.

I welcome the Bill and congratulate the Minister on it. My sense is that it is not party political. I wish him well in getting it through the House speedily and on its way as its implementation is necessary to improve our defamation procedures.

16:15

[Lord Sugar]

My Lords, I have concerns that the changes being made to the defamation laws are too lenient, to the advantage of the printed media—the national press.

I have listened very carefully to the noble Viscount, Lord Colville, who rightly stated that we should not suppress freedom of speech and that responsible media owners are being attacked by frivolous and derisory claims. However, I am afraid to say that laws that are drafted and crafted with responsible members of the media such as the BBC in mind are abused by the biggest culprits that cause the problems in the marketplace. I speak as a past claimant who has taken the media to court on numerous occasions. I will not go into the details at the moment but being a details person I became deeply involved in the legal procedures and feel that I am somewhat of an expert, albeit I am not a lawyer, on the laws of defamation, of which I now have a good understanding, and, more to the point, on the tricks of the trade played by the media in interpreting and using the law for their benefit.

At this juncture it is useful to remind your Lordships that there is one thing, and one thing alone, that is of prime importance to the media, and that is money and how much their pockets will be affected. The days of the Elton John million-pound awards have long gone. Nowadays, judges advise juries on libel damages by making comparison with damages receivable for, say, a broken ankle, a broken leg or the loss of sight in one eye. I say that this is flawed. Those comparable damages are most probably the result of an accident whereas there is no accident involved in printing lies. We now see the top end of damages people receive for libel being in the region of £100,000 to £150,000. I understand the current proposal is that damages for personal injuries actions, and therefore libel damages, are to be increased by approximately 10%. I will explain why that is still inadequate.

Most people, particularly some minor celebrities or, more to the point, politicians, cannot afford to fund a fully fledged defamation case. Up until recently it has been possible for lawyers to take on those cases completely free of charge to the claimant. If they succeed, the lawyer is entitled to charge the claimant up to double his normal fee, and the claimant would then be able to claim this double fee from the defendant, together with the cost of procuring an insurance policy to cover the case in the event that the claimant lost.

I am advised this is all being discarded and will no longer be possible. Instead, from approximately 2013 we will have a situation whereby lawyers will be able to take on cases on a contingency basis. We have to look at the ramifications of this. Why would a lawyer, with all due respect to lawyers, take on a case on a contingency basis when the ultimate goal for the claimant may be in the region of £150,000? The lawyer’s share of that would not make up for the fact that the lawyer, when doing the case on a contingency basis, is risking not being paid at all if their client loses. And from the claimant’s perspective, any damages they receive would be eaten up by the contingency fee and the shortfall in cost between the actual costs and those costs that they are awarded from the defendant. I believe that this is a non-starter. We will have arrived back at a situation whereby only the rich, such as I, can afford to take on the media while others have to be beaten up and can do nothing about it.

I ask your Lordships to consider another commercial aspect of the media printing untrue stories. If a newspaper decides deliberately to print a pack of lies on its front page to attract more readers at the point of sale, that is a much cheaper way of boosting a paper’s circulation than engaging in an expensive television advertising campaign. Why is it much cheaper? Because the media can immediately agree in communication that what they wrote was wrong and addend it with, say, a Part 36 offer of £50,000, thus throwing the gauntlet down to the claimant as to whether they wish to risk going to court—a very cheap way of dealing with things with little or no apology required. Apologies in any case, as your Lordships know, are usually postage-stamp-sized and not on the same page as the offending article. In most cases they are buried towards the middle of the newspaper without so much as a picture of the offended claimant. This matter has to be addressed and the noble Lord, Lord Mawhinney, was quite right to raise it here. I think newspapers must be forced by the courts to print a retraction or apology on the same page as the offending item appeared and with the same prominence. This, together with higher damages, will make them wake up and act far more responsibly.

On the technical front, whereas in the past the claim of fair comment in an article had to be supported by facts within that article, I am advised that this has changed or that there is a proposal for changes to that effect to be embodied in the Bill, so that the facts supporting allegations made in an article do not have to appear in the article itself but just have to be facts that existed at the time the article was written. The writer does not even have to show that the readers of the article in question would have had to know those facts. As a possibly stupid but extreme example, a journalist might write an article saying that in his opinion a particular person was a thief and a thoroughly untrustworthy individual without referring to any facts to support that in the article. If challenged in court, he might say that the person he wrote about—say, a middle-aged man—once stole a Mars bar from a sweet shop when he was seven. The statement does not have to be a reasonable one or even one a reasonable man could have held; it just has to be that person’s honestly held opinion, however bigoted.

I am further advised that the defence of responsible journalism, also known as the Reynolds defence, is now being modified. These days when a journalist phones me up with an allegation of something or other, I say, “Sorry, old chap, but you are wrong and I am not prepared to comment. I do not see why I should become your editor for an article which you wish to produce”. Why should the onus be on the claimant to go into detail as to why an article should not be published or why the article is inaccurate, presenting all the facts to the journalist in order to be able to rely on that statement at a later stage, should the matter ever go to court? However, as I understand it, if I do not do that I am at risk of the journalist subsequently relying on the responsible-journalism defence by saying, “I did seek his comments but he didn’t tell me why what I was writing about him was wrong”. I do not think that that is fair. My method is very fair. I should be able to say, “I’m not your editor; I have told you that what you’re about to print is wrong, and it is at your risk that you go ahead and publish it. In the mean time, I will reserve my rights”. That is how it should be; after all, I did not ask him to write anything about me.

I conclude, however, on a more upbeat matter. It is not all doom and gloom. I applaud the fact that many cases may now be heard without a jury. I support that completely because in the past, I am afraid to say, claimants who are not used to being in a witness box have been badgered by smart lawyers and made to look either stupid or like liars. Another important aspect is that jurors often cannot follow the finer legal points being raised by both parties and can sometimes come to their verdicts based upon their opinions of the individual who is bringing the action—in other words, their personal thoughts on whether they like the claimant as a person or what they stand for in public life. That clearly is not fair and I welcome the fact that a judge who can see through the badgering of a witness will ultimately decide the verdict on the facts and the law. I ask the Minister to take into consideration the points that I have raised

16:26

[Lord Lester of Herne Hill]

My Lords, unlike the noble Lord, Lord Sugar, I warmly welcome this much-needed Bill. Its central aim is to reform English defamation law to strike a fair balance between the fundamental right to freedom of expression, public information and the protection of a good reputation. As the noble Lords, Lord McNally and Lord Browne of Ladyton, have said, the Bill is needed to give better protection to free expression, while ensuring fairness and responsibility in journalism, the necessary protection of the right to a good reputation, and access to justice by the weak against the rich and powerful. It is not and must not be an unbalanced charter for the media. It has to protect the journalists, scientists, doctors and activists caught up in recent cases.

I very much welcomed what the noble Lord, Lord Browne, had to say. I express my admiration of Scots law, which he was too modest to mention. My experience has been that in this area Scots law and practice has been more progressive than it has been south of the border. I will always remember Lord Keith of Kinkel in a case that I argued in front of him. He was a breath of fresh air in the House of Lords in giving leadership in that case. That ought to be recorded.

The Bill has been prepared in light of the report by the well informed Joint Committee on the Government’s draft Bill, ably chaired by the noble Lord, Lord Mawhinney, the public consultation, and the views of civil society and the media. The unsatisfactory state of English defamation law is notorious and well recognised here and abroad. It is mainly based on the common law and has had very limited scrutiny by Parliament for more than a century. Its subject matter is too important to be left to the courts to reform on a piecemeal basis. That is not their function. The legal principles need to be prescribed by Parliament and guide the courts to interpret and apply the law.

English common law suffers from uncertainty and encroaches too broadly on free expression. It has failed to adapt to the changing world of communication by means of the internet and the world wide web. The litigation common law engenders is costly and often protracted. It has a severe chilling effect, as many noble Lords have said, on free speech—not only of powerful newspapers and broadcasters but of regional newspapers, NGOs and individual public critics. That chilling effect breeds self-censorship and impairs the communication of public information about matters of legitimate public interest and concern that are vital in a modern democracy. Under the previous Government, Parliament recently abolished several common law speech crimes inherited from the Court of Star Chamber, including criminal libel and judicious, blasphemous and obscene libel. I say in the presence of the Minister that I hope that we will soon, as the Law Commission suggests, abolish the archaic common law crime of scandalising the court—a crime used to punish journalists elsewhere across the common law.

However, the fear of damages and massive legal costs induced by civil libel law is markedly more inhibiting than the fear of criminal prosecution. It is the NGO, the whistleblower, the citizen critic or the website host who tends to take the line of least resistance by censoring information and opinions which the public need to know in order to avoid the costly and uncertain litigation that benefits many of my friends and fellow practitioners at the English Bar.

I will say something briefly about the Leveson inquiry. I welcome the fact that the Government have not been blown off course by the Leveson inquiry. Lord Justice Leveson’s report may have implications especially for Clause 4 on the defence of responsible publication and on whether the successor to the Press Complaints Commission should be recognised without being regulated by the Bill to enhance public confidence about its independence and effectiveness. My right honourable friend Simon Hughes MP expressed concern in the other place that, if Lord Justice Leveson does not produce recommendations until December, it may be necessary to come up with further legislation. That would be regrettable. I would hope that it might be possible for Ministers to suggest to Lord Justice Leveson that he make an interim report soon with his recommendations for better regulation of the independent press so that we may take it into account during the passage of the Bill in this House. I know that the noble Lord, Lord Hunt of Wirral, hopes this too. He is unfortunately unable to take part in this debate but he has authorised me to say this.

In scrutinising and improving the Bill, the first aim should be to strike a fair balance between private reputation and public information as protected by the common law and the constitutional right to free expression. The second aim is to simplify and clarify the law to assist the claimant whose reputation has been significantly and unjustifiably damaged. The third is to require claimants to demonstrate that they have suffered or are likely to suffer real harm as a result of the defamatory publication of which they complain. The fourth is to modernise the defences to defamation proceedings, in accordance with the overwhelming requirements of the public interest so that free expression is not chilled by self-censorship and coercive litigation. The fifth is to discourage so-called libel tourism. The sixth is to encourage the speedy resolution of disputes, including the use of mediation and alternative dispute resolution as well as wise, firm and early case management by the courts. The seventh is to make trial by judge alone the normal mode of trial, rather than trial by judge and jury. To my surprise, I discovered that the media much prefer the reasoned judgment of a judge to the uncertain and occasionally arbitrary trial by jury. The final aim is to modernise and extend statutory privilege. I hope that we will manage to get rid of what is known as the “Neil Hamilton defence” in Section 13 of the 1996 Act

The Bill does not deal with changes in the civil procedure and costs rules, which are as important as the Bill itself. As the noble Lords, Lord Browne and Lord Mawhinney, have emphasised, it is important to know how the Government intend to enhance access to justice and to create a level playing field between the strong and the weak. It is also important for the Civil Justice Council, chaired by the Master of the Rolls Lord Dyson, to begin its work urgently on the new procedures during the passage of the Bill. I very much hope that it might be possible to do that before the Bill leaves this House—at least in some draft form.

I turn briefly to one or two aspects of the Bill that have been mentioned and need to be explored in Committee. I shall concentrate mainly on Clause 4—the defence of responsible publication—which, as currently drafted, is regressive. My right honourable friend Simon Hughes MP noted that the Reynolds defence does not work and that we need to move from the common law position. As counsel in Reynolds, I enthusiastically agree. I was unsuccessful in persuading the Law Lords to adopt a workable public interest defence for responsible publication. Instead, they adopted a list of factors which have made the defence virtually unworkable. In my Bill, we attempted to produce a shorter list of factors, and the Government have made a similar attempt in Clause 4. However, the clause has been widely, and rightly, criticised by the Official Opposition and Simon Hughes in the other place and by the Libel Reform Campaign.

Clause 4 rightly abolishes the common law Reynolds defence but it does so without adequately reflecting the importance of editorial discretion, as emphasised by Lord Dyson and by the Supreme Court in Flood. That increases the likelihood that judges will revert to treating the list of relevant factors as a check-list and be tempted to put themselves in the position of editor when determining whether or not publication was responsible, rather than respecting a range of permissible editorial judgments.

Various proposals have been put forward—I shall not bore the House by going into them at this stage—but I suggest that what is needed is a clause that sets out the principles of protecting honest and reasonable publication in the public interest, which deals with mistakes and ongoing publication, and which respects editorial discretion. We need what the Guardian editorial describes today as:

“A robust public interest defence that offers some security where matters under debate are of public concern and are the subject of honest opinion”.

As the noble Lord, Lord Mawhinney, and the noble Viscount, Lord Colville, have said, the trouble with listing factors is that they become a check-list that may be underinclusive or overinclusive and they lack legal certainty. In my view—and, more importantly, in the view of the leading experts on defamation law, Sir Brian Neill and Heather Rogers QC, to whom I express admiration and gratitude—it is far better to articulate the general principles of this key public interest defence without setting out a list of factors, leaving it to the courts to interpret and apply the principles on a case-by-case basis.

I suggest—it is only to get the civil servants thinking that I mention it at this stage—that Clause 4 might be replaced by a provision on the following lines. This does not come from me; Sir Brian Neill suggested it. First, it might say that it is a defence in an action for defamation (a) for the defendant to show that the statement complained of was on, or formed part of a publication on, a matter of public interest, and (b) if the defendant honestly and reasonably believed at the time of publication that the making of the statement was in the public interest.

Secondly, in the case of publication for the purposes of journalism, the court shall, in determining whether the requirements of (a) and (b) are satisfied, give a wide discretion to the editor or other person responsible for the publication as to the content of the statement, the form in which the statement was made and the timing of the publication. That really comes from Lord Dyson in Flood.

Thirdly, for the avoidance of doubt, the defence under this section may be relied upon irrespective of whether the statement complained of is a statement of fact or a statement of opinion. Fourthly, a defence under this section shall not succeed—I repeat: shall not succeed—if the claimant shows that he asked the defendant for the publication of a correction of the statement complained of and that the request was unreasonably refused or granted subject to unreasonable conditions. In my view, that encapsulates what should be the defence without the need for a check-list of exhaustive or non-exhaustive factors.

On a different point, Clause 5 deals with the liability of website operators for material posted by third parties. The detail of the new rules has wisely been left to be dealt with by regulations, as we have heard. That is sensible, given the complexity and changing nature of the issues involved. However, like, the noble Lord, Lord Browne, I suggest that the draft regulations should be published when we consider Clause 5 in this House. As he has indicated, regulations should be subject to the affirmative resolution procedure because of their importance in this country and internationally.

Perhaps I may say a word about Clause 9 that the Media Lawyers Association drew to my attention and which no one has mentioned so far. Clause 9 deals with proceedings against a person who is not domiciled in the UK or in a member state of the EU or of the Lugano convention. I am not sure why it deals only with that and not with proceedings brought “by a person”. Clause 9 should deal with both “by” and “against”, unless there is some good reason to the contrary.

The Bill provides a once-in-a-generation opportunity to reform this area of the law. We are being watched attentively across the common law world where English law has had a bad influence, to the point where the United States Congress and President Obama legislated to prevent English libel judgments from being enforced there. American media lawyers have told me that they wish that they could do in the United States the kind of reforms that we are contemplating here. In the words of today’s Guardian editorial:

“The better free expression is protected here, the better the UK can argue internationally against oppression and persecution”.

16:41

[Baroness O'Neill of Bengarve]

My Lords, it is a great honour to speak after the noble Lord, Lord Lester of Herne Hill. We all owe him a great debt for his persistence, his focus and his depth of knowledge on these topics. I shall be briefer but I have two interests to declare. First, I am a trustee of Sense about Science, which has worked to improve the ways in which scientists and science writers communicate with the public and to reduce the risk thereby of them being taken to court for defamation if they are challenged by received views or very often by commercial interests. My second interest is perhaps proleptic: I have been nominated, but not yet confirmed, to chair the Equality and Human Rights Commission.

Defamation raises extraordinarily complex issues and the Bill not only has to deal with the deficiencies of current legislation, on which there is a considerable measure of agreement—its costs, its delays, its uncertainties and its clarities—but it has to do so, as many noble Lords have noted, in the context of huge transformations in communications technologies, about which I shall say nothing in detail. However, these changes are central to many other pieces of legislation that we have considered and shall be considering. We need to take a consistent view across different pieces of legislation. For example, I have in mind legislation that bears on copyright in the digital age and on the need to reformat material—for example, for archiving, preservation or republication—but not on material that is deemed thereby to have breached copyright or to have published a new work.

We need to take account of that in debates about the draft regulations for data protection, which, if implemented, will lead to a uniform approach to data protection across the EU. We need to bear that in mind in all legislation that bears, or purports to bear, on forms of transparency and openness and on the protection not only of rights of reputation but of rights of privacy. I believe that this is a central piece in a jigsaw of legislation that has come before us, and will come before us, which makes it all the more complex and important to get it right and to test it in a full range of ways.

It has been widely said, and it is expected, that your Lordships’ House will insert a public interest defence into the Bill to distinguish between different types of communication, with the aim of protecting those in the public interest from accusations of defamation—at least up to a point. For example, communicating scientific findings needs protection precisely because some may think that this is very unwelcome and may harm certain reputations, including, of course, commercial reputations. I believe that Karl Popper’s famous claims in The Open Society and Its Enemies are still a landmark in liberal society because of his insistence that science and the public understanding of it proceeds by conjecture and refutation. Science is not a matter of discovering and then asserting what is true, but a systematic practice of identifying claims that might be true, testing them against evidence, seeking new evidence if necessary, and discarding claims that fail the test of evidence. Scientifically impressive claims are those that survive energetic attempts at refutation, so we must allow the statement of scientific claims that might turn out to be false in order to test them.

Unless we allow the publication and promulgation of claims that may be false, science cannot proceed and communicating science to wider audiences will be severely harmed. However, I do not think this means that anything goes. While the legislation provides for protecting peer-reviewed scientific publication, which is very important, it does not yet offer ways to protect science journalism, other science writing and other journalism that seeks to investigate matters of academic substance from the risk of silencing by corporate or other interests. Given the costs—of which we have heard a certain amount—to those sued for defamation, such silencing is likely to be mainly invisible: a matter of subtle deterrence that prevents the public knowing what is not published.

Of course, we cannot demand that science writing, science journalism or other journalism on matters of fact should undergo peer-review processes. Peer review has different aims and is too slow and too costly, although I accept that the reality is that much of this writing and journalism is done by practising scientists and reflects a culture that takes those standards seriously. However, we can say something about some of the more elementary standards which science writing and other serious writing should meet if it is to be protected by any public interest defence. Even if we cannot immediately set out sufficient conditions for publication to count as a matter of public interest, we can set out some necessary conditions for it to do so.

A few years ago, as all of us remember with some nostalgia—or perhaps not—we were fairly good at distinguishing between gossip and publication. Publication could be regulated to prevent defamation if one knew who the publisher was. Defamatory gossip often did not travel far and was dealt with by local social sanctions. Gossips acquired a bad reputation and malicious gossips acquired a poisonous reputation. Malicious gossip traditionally became a matter for legal action only in unusual cases. Today that boundary is eroded. As the noble Lord, Lord Mawhinney, said, we encounter anonymised publication on a global scale and with global reach. These waters can be dangerous. Anonymised communication may cloak poison pens, those bent on revenge, those with undeclared financial interests and, of course, good old malicious gossip. Anonymity with global reach is available and makes defamatory communication much easier. A problem that we must address in passing this legislation is first to distinguish communication that is in the public interest—and so should receive protection—from quasi-communication that should not.

Let me explain quasi-communication. Part of the remedy here is quite simple; any speech or writing that is in the public interest should at least meet minimal standards to count as communication and not the lower standards required for mere dissemination or disclosure of content, whose origins, assumptions and authors can remain hidden and immune from questions about their methods and assumptions, their claims and their evasions. The public interest is indeed an interest in openness but not an interest in mere disclosure. That, so to speak, is the unintelligent form of openness. The intelligent form of openness meets more than those minimal standards; it opens matters to check and challenge by members of the public.

The communication, as I see it, that deserves protection is forthright and challengeable. It is designed to be accessible to others, is intelligible to them and provides adequate information for readers, listeners or viewers to assess the evidence and assumptions on which it was based and, if they choose, to respond. I do not see a case for protecting quasi-communication that does not meet the adequate standards for the openness to check and challenge, except in a limited number of cases, which I will come to.

A great deal of content that floats around the internet may be accessible. Some of it of course is very hard to find. Much of it is intelligible, at least to some, and often to many, audiences. However, anonymised content often is simply not assessable. By contrast, responsible journalism and other writing, including science writing and broadcasting, are both intelligible and assessable by others. There may, as I suggested, be limited exemptions, for example for highly sensitive types of investigative journalism, which we shall have to consider, but by and large anonymised communication is simply not assessable by the public. They cannot tell whether it is rumour—and if so, malicious rumour—or whether it is the smoke of a burning fire that they need to look at closely. When a query about data, evidence or measurement arises, no one can seek clarification because the information is just floating around as mere content and no one’s word.

The communication that we need therefore to protect is not mere dissemination or disclosure but genuine communication that seeks to reach its audience, aims to be intelligible to them and is assessable by them. That, I think, is the starting point for public interest defence that would reach into many of the areas that have worried many Members of your Lordships’ House who have spoken in today’s debate and many members of the public.

16:52

[Lord Morris of Aberavon]

My Lords, I apologise for being a little late and mistiming my arrival from my Millbank office. This is an important reforming Bill, even if it does not set the Thames on fire. As my noble friend Lord Browne of Ladyton reminded us, good work was commenced under Mr Jack Straw and continued by this Government. There have been important contributions from many bodies. Above all else, I pay tribute to the energy and scholarly pursuit of the subject by the noble Lord, Lord Lester, without whose work we might not be debating this issue today at all. We have all benefited by the publication of a draft Bill and the subsequent consultation. In the committee, we valued the heavy lifting done by the noble Lord, Lord McNally. Contrary to the surprise expressed in the Commons, Governments of different hues do pursue Bills whose groundwork has been done and prepared by previous Administrations.

On this occasion, Parliament took the wise course of setting up a pre-legislative committee, from both Houses, on which I served. The substantial unanimity on the need for reform that already prevailed was consolidated by the unanimous report of the committee under the wise chairmanship of the noble Lord, Lord Mawhinney. The noble Lord and the committee were able to deliver on time. The committee was fortunate in his leadership. It had a formidable task. None of us, I believe, was a leading expert in this rarefied field of law. My only experience, as a lifelong criminal practitioner, was advising on one case of defamation alone in my whole career. Perhaps this was a good thing. But throwing a discrete subject like this into the laps of parliamentary colleagues— however distinguished—was a heavy burden to tackle. There is a general belief in favour of pre-legislative scrutiny but it comes at a price. We sat for 18 sessions from April to October, and each session entailed considerable preparation. It may be an indication of how much time was saved to Parliament that the Commons disposed of it in five sessions of Committee. I do not propose to make any Committee points, but will concentrate on the broad thrust of some aspects of the Bill. We shall return in due course to look at some of the valuable comments made and some of today’s observations from the noble Lord, Lord Lester.

I welcome the Bill now, as I did in the committee, and give it my support, subject to what I have just said. Its object is to simplify the law of defamation and to make the law more transparent and more accessible, laying the ground for reducing the stratospheric and chilling state of costs in that field of litigation.

The Bill’s twin aims are to protect freedom of speech and at the same time provide adequate protection for reputation. It also seeks to come to terms with the technological developments of our age. The man or woman in the street needs easy access to the law, hence the observations of the noble Lord, Lord Mawhinney, that he prefers statute to common law. That may be so, but we should seek to ensure that the burdensome costs of bringing and defending actions, particularly cases brought by the powerful, are made more tolerable.

In addition to legislation, a great deal can be achieved by the reform of court procedures and stronger, earlier case management by our experienced judiciary. This should be strongly encouraged. The missing link in this debate, which we have been told about already—the lacuna—is the lack of publishing of regulations and the Civil Procedure Rules necessary to achieve this. The Government have had enough time to lift this veil. It is a serious criticism which should be remedied before too long; we should know what they have in mind as regards the regulations and changes in procedures.

Trial by jury has now to all intents and purposes fallen out of use. I remember the time when one of the most senior High Court judges, Sir Michael Davies, presided over most such trials. When the jury came to assess damages, he suggested that if they regarded the damage to reputation to be high, they should think of the cost of a detached house; if moderate, the cost of a medium-sized car; and if comparatively small, the cost of a nice holiday. Such words were a simple guide but, as far as I can recollect, they usually seemed to work.

The very fact of the possibility of a jury trial—remote as it now is—increases the cost of preparation and delays decisions. As part of the process of aiming to reduce costs, it was wise of those drafting the Bill to try to eliminate the possibility even further. In practice, it would no longer be a presumption. The matter will be left to the judges, but there may still be those rare instances—and the committee considered them—where, for example, public figures are involved and judges might find it in the public interest to have a jury trial. I hope that they would be very rare indeed. As one who has spent more than half his life addressing juries in criminal cases, I do not yield one iota in my defence of such a system where the liberty of the subject is at risk. We had some indication in the comments by the Minister that there would be, in effect, no read-across to criminal trials. I am sure that we will get that assurance before the end of this debate; I would value it very much.

The committee wrestled with the problem of definition but could not come up with one save to leave it, as I have said, to the experience of judges and a practice which has hardened over the years. The issue of limiting costs goes deeper. There should be every encouragement to the early determination by a single judge of many of the issues. Where jury trial in a particular case remained on the table, it would fetter their jurisdiction to determine many such matters. The costs implications are obvious. The simplification of the law and the early determination by a judge of issues, including striking out, coupled with the possibility of mediation and arbitration, should go a long way to lower costs.

The draft Bill proposed that,

“a statement is not defamatory unless its publication has caused or is likely to cause substantial harm to”,

a person’s reputation. The committee was persuaded by the noble and learned Lord, Lord Mackay of Clashfern, that there were better words for the initial hurdle that had to be overcome and to include “serious harm”. The Bill now proposes what is hoped would be an even simpler and, equally, a slightly stricter test of,

“publication … likely to cause serious harm”,

on its own. I surmise that there may not be a great deal of difference in practice, but it seems to raise the barrier just a little to the bringing of actions. Only time will tell, but I welcome this formulation, and we will see.

This brings me to an important point of procedure for all pre-legislative committees. It is important that the proposers of a Bill make it clear, in a way that the courts can take into account, when that Bill is seeking to make changes of substance in the law and when it is simply proposing to codify the common law. That is a vital distinction. Such a course would have been a great help to the committee and perhaps to the courts. Having said that, I was perhaps more alarmed than my colleagues in foreseeing the possibility, if not the probability, of litigation on the meaning of some of the words in the Bill. Despite the care and consideration that has been shown in its drafting, I surmise that this is inevitable, at least in the earlier years after it becomes an Act. I suppose that that is the price of any purported reform of the law.

I bear the scars of having assisted in the introduction of the breathalyser Bill in 1967—another inherited Bill—and of becoming one of the architects of a small cottage industry of litigation for a few years. The overriding object of ensuring that people of all backgrounds have access to the legal system should they be seriously defamed is a worthy one. The aim of reducing costs, one hopes, will minimise the chilling effect of the present system, which is out of reach of many people. I welcome the creation of the defences of “truth” and “honest opinion” to replace the common law defences of justification and fair comment. I also welcome the creation of the new defence of:

“Responsible publication on matter of public interest”.

It is new in the sense that it abolishes the common law defence known as the Reynolds defence. We have heard the noble Lord, Lord Lester, today, and recent submissions have been made to many of us. I suspect that in Committee we will have to examine this very closely and see whether it has achieved what the Government had hoped it would. Noble Lords have to pause for only one moment to consider that some of the issues that I have raised may well be ripe fields for litigation.

Lastly, there is a brave attempt in Clause 15 to tackle some of the problems of the internet. In the department’s memorandum prepared for the Delegated Powers Committee of this House, it indicated that provisions for the new notice procedure are likely to,

“be lengthy, detailed and technical and are not considered suitable to be on the face of the Bill … The aim is to provide greater flexibility to adjust aspects of the new procedure in the light of experience”.

As we all know, this is a field of rapid developments, and primary legislation would not cope with what may be the needs of the future.

The committee spent a great deal of time as part of its emphasis on cost savings on early resolution and believed in the development of a culture in which expensive legal action is the last, rather than the first, resort. I cannot improve on the words of the committee dealing with a strict enforcement of the pre-action protocol. It referred to,

“a presumption that mediation or neutral evaluation will be the norm; voluntary arbitration; and, if the claim has not been settled, court determination of key issues using improved procedures”.

I hope that in our consideration, the committee has assisted the Government and the House in what is an important and worthy reform.

17:06

[Lord Black of Brentwood]

My Lords, I declare an interest in this subject as the executive director of the Telegraph Media Group and draw attention to my other media interests in the register.

This is a remarkably special day, for, although not quite as infrequent as the appearance of Halley’s Comet, sightings of defamation Bills are rare and equally moments of great awe and wonder. That there should have been a gap of only 16 years since the previous piece of legislation, a period of time in which there has been the most unprecedented change in the way in which people communicate, is cause for rejoicing. The Bill is long overdue and extremely welcome.

That we have got to this point is the result of a great deal of hard work by many people who have already been mentioned in the debate. I join others in noting that all those with an interest in free speech owe eternal thanks to the noble Lord, Lord Lester of Herne Hill, who has consistently championed the cause and never given up the fight. I am delighted to join everyone else in being a fully paid-up member of his fan club. I should also mention the role played by the editor of the Guardian, Alan Rusbridger, an indefatigable campaigner for reform, and by Britain’s regional and local press, which has often borne the brunt of the chilling aspects of the current legal framework, which the noble Viscount, Lord Colville of Culross, outlined so well.

I will inevitably speak about the Bill from the media perspective, but in doing so I am acutely aware that the media’s interest in this issue is but one small part of it. Defamation and freedom of speech are intimately bound together and freedom of speech is the birthright of every Briton. In the digital age, when the ability of a single citizen to publish views on a bewildering array of platforms has never been so great, the question of defamation is important for us all. While a century or more ago, it might famously have been the preserve of the Duke of Brunswick and his manservant, today everyone has a stake in it. The media might still provide the headline-grabbing cases, but never have individuals been so exposed to the threat of long drawn out legal action and the punitive costs that go with it. The changes in the Bill will clarify and simplify the law, which will be of great benefit to claimants as well as defendants.

The media are always likely to be at the sharp end of defamation because of their reach, especially in the digital era. It is the profound, breathtaking changes that have taken place in technology that must form the backdrop to the Bill. When the previous piece of legislation went on to the statute book in 1996, the media and many forms of communication in general existed in much the same form as they had for decades. Few newspapers had websites—the Telegraph was the first to launch one in 1994—and they were merely static replicas of printed products. Some 16 years later, that world is dead and a new one is in being. Today a media group such as the one I work for does not just have a 30-odd-page printed product, but a digital offering which in our case produced 408.5 million page views in August alone from across the globe, some 190 million of them from outside the UK. Even now, the manner in which people are accessing that information is changing by the month. In July 2011, 17% of page views on the Telegraph website were via an app. That figure now stands at 30% and is growing rapidly.

In many ways, this issue of technological change goes to the heart of this Bill. To stand the test of time, it must be flexible enough to accommodate rapid developments in technology, which are not just changing the face of the media but communications between citizens. We do not want the fate that befell earlier pieces of defamation legislation. A flurry of libel Acts in the 19th century were made redundant by the arrival of the mass media in the 1890s; the 1952 Act preceded the arrival of commercial broadcasting; and the 1996 Act coincided with the burgeoning of the internet.

We have a real chance in this Bill to produce something that is practical, flexible and above all durable. We must seize it. I believe that this admirable Bill goes a long way to achieving that, in particular with the introduction at long last of the test of serious harm, which is a sensible and proportionate initiative to stop trivial claims that waste the time of the courts. This is extremely welcome. Later I will suggest how it might be strengthened even further to deal with the scandal of libel tourism.

However, against the background of the changing world of communications that I have mentioned, perhaps the single most important part of this Bill is Clause 8, which introduces the single publication rule. This change is vital to the future development of the communication industries in particular, as it will protect them against the current indefinite liability arising from the application of 19th century case law in the 21st century age of tablets, smartphones, Google, Facebook and Twitter.

News no longer appears once a day or once a week, but is likely to be permanently available for updating and rereading in digital archives which are growing at an exponential rate. Indeed, consumers now expect to be able to find old news whenever and wherever they want it. Journalists prepare their work for publication accordingly, in information services disseminated across multiple media platforms, be it printed, blogged, tweeted, texted, accessed by app or mobile, broadcast or streamed, in text, sound or audio-visual media, or a combination of all of them.

It is therefore a vitally important step to ensure that there will be protection for subsequent publication of a statement,

“which is substantially the same”,

as that first published to the public. If there is one slight problem with the Bill, against the background I have mentioned, it is with Clause 8(4), which waters down this protection. Subsection (4) says that the rule does not apply,

“in relation to the subsequent publication if the manner of that publication is materially different from the manner of the first publication”.

That subsection takes no account of the fact that content is now published simultaneously on a range of different platforms; this means, arguably, that the manner of publication is almost inevitably different. To be effective, this clause needs to be crystal clear and at the moment it is not. I hope that my noble friend will look at this again in Committee to ensure that Clause 8 is genuinely fit for purpose in the digital age.

There are a number of other important issues to look at in Committee. The introduction of the responsible publication rule in Clause 4 is, in principle, very welcome; it seeks to import into statute the defences established in Reynolds. Those defences are of massive importance, not least to investigative journalism. Reynolds itself is an objective test. We need to ensure that this Bill neither undermines it nor, worse, neuters it by introducing a new set of defences which the courts may then spend another decade interpreting and the uncertainty of which could be profoundly damaging. I wholly agree with the points that my noble friend Lord Mawhinney made on this. Current case law makes clear that all the relevant factors can be taken into consideration by the court. Like the noble Lord, Lord Lester, I do not believe that there is a need for a tick-box checklist of factors. Setting them out in Clause 4(2) of the Bill is a high-risk strategy. I believe that to avoid potentially dangerous instability in this area, this list should be removed and the courts should be allowed to rely on and refer to the existing Reynolds criteria.

On one issue where I have concerns about the Bill, I will share the points made by the noble Viscount, Lord Colville of Culross. Clause 12 hands to the courts the power to order the publication of the summary of a judgment. This is potentially tantamout to giving judges the power to dictate the content of a newspaper or magazine front page or the running order of the 10 o’clock news, and is inimical to any basic concept of editorial and press freedom or indeed of an independent media. It is also a matter that is already covered by the appropriate media regulatory codes of the BBC Trust, Ofcom and the PCC successor body. There is no evidence that these have ever failed to produce a satisfactory publication of the summary of a judgment in a defamation case. The clause is both otiose and odious, and it should go.

I make a couple of general points in closing. I am concerned that the Bill does not do enough to tackle the issue of libel tourism. Clause 9 of the Bill does not deal satisfactorily with it because it is about claimants domiciled outside the EU, not defendants. It therefore does not address the problem of media companies in an age of global media being vulnerable to being sued in different jurisdictions under different laws for the same publication. I wonder whether the way to deal with this modern scourge might be to amend Clause 1 by making clear that publication is likely to cause serious harm to the reputation of a claimant only in England and Wales. I hope that the Minister will be able to look at that.

Like a number of others who have spoken, I must mention in passing the issue of high costs, which are still a problem in libel cases. I very much welcome the Government’s intention to bring in CFA reform in April, and indeed the work of the costs management pilot scheme dealing with defamation. For all this to be meaningful, though, the Bill needs to be complemented by changes to the rules of court to ensure that cost controls become the norm, not the exception, and that the new procedure is adopted to allow matters such as meaning, or whether something is comment, to be determined early. In the mean time, both claimants and defendants could be greatly assisted by the immediate removal of the practice direction that limits cost-capping to exceptional cases, as the Joint Committee on Privacy and Injunctions, of which I was a member, recommended. I urge speedy progress on this front.

In a recent lecture on this subject, Alan Rusbridger said, quite rightly:

“The truth is libel doesn’t exist in a vacuum”.

You cannot discuss one thing, he said, without looking at other issues that impact on freedom of speech, and that is absolutely right, a point also made with great clarity by the noble Lord, Lord Mawhinney.

This is a welcome, liberalising measure that, especially if amended under your Lordships’ eagle-eyed scrutiny, will have a positive impact, not just on investigative journalism but on every citizen’s rights to free expression. However, all that would be for naught if the current debate about press regulation led to the implementation of some form of statutory press controls, which would point very much in the opposite direction—it would be giving with one hand and taking away with the other. I know that the Minister will not be able to comment on that, but I hope that he will, with his customary cheeriness, simply note the point. The Bill is an enormous step forward, and one that every citizen should welcome.

17:18

[Baroness Bakewell]

My Lords, this is indeed a momentous and welcome Bill, which has long been needed. Our libel law is out of date and recognised by many to have a chilling effect on free speech, not merely in this country but around the world. It has encouraged the phenomenon known as libel tourism and prompted legislation in the United States to protect American citizens from being sued in the UK. The UN Human Rights Committee has warned that our libel law could have a negative impact on the right to freedom of expression worldwide. Libel actions against individual citizens, reputable scientists and writers have been used to silence comment and criticism that is clearly in the public interest.

All this is known and understood in the framing of this Bill, and there is broad political and public consensus for substantial reform. This is our opportunity to frame a sound and robust defence of matters of public interest. So much has been acknowledged by the debate in the House of Commons. I trust that the debate and amendments that we frame in this House will endorse and strengthen the path of travel already taken. I pay tribute, as has everyone else, to the noble Lord, Lord Lester of Herne Hill, and to the noble Lord, Lord Mawhinney, and his distinguished Joint Committee on the draft Bill for the distance that they have already come on this important enterprise. A number of important elements, such as the single publication rule, the defence of honest opinion, and the protection for scientific and academic publications, are already addressed in the Bill. All these are welcome. But there remain many areas where further muscle is needed to beef up the protection of free speech in our society.

We live in a world with an abundance of fact, opinion and speculation, and the technical means to distribute them instantly round the world. It is inevitable that tensions will arise that are unique to the present day. As millions use Facebook and Twitter and write personal blogs, the exposure of so many to the dangers of legal action has suddenly become acute.

Here I declare an interest. I am a broadcaster and journalist. I am also a friend and broadcasting colleague of Dr Simon Singh. I have followed closely the case brought against him by the British Chiropractic Association in 2010, and I have given vocal and financial support to the campaign to have the libel laws reformed. I am also a member of English PEN and a subscriber to Index on Censorship. I pay tribute to the continuing efforts of these institutions to defend the freedom of speech and published comment in this country. As a journalist, I am aware of the extent to which the threat of legal action can inhibit the exposure of facts that are important for citizens to know. As an individual, I am conscious that by using Twitter I am exposed to further risk. A groundswell for the law to be strengthened in this House is upon us—and in support of our amendments.

I want to highlight two matters in particular, Clause 4 and the responsible publication of matters of public interest. There is also the issue of costs, which has been mentioned several times, and the extent to which they inhibit the possibility of justice being done. I want to give an example of how fast things now move. As recently as last week events drew our attention to the way in which the threat of libel is being used to silence reasonable criticism, and to a need for the defence of public interest to be clearly and unequivocally endorsed. It also demonstrates the dilemma of conflicting views of what truth and honest opinion are. This is what happened. The magazine, What Doctors Don’t Tell You, is according to its editor Lynne McTaggart aimed at intelligent women between 35 and 55. I no longer belong to that target audience, but I cannot but be attracted by its October cover, which headlines “Sunbathe your diabetes away” and “I avoided my hysterectomy through diet”. Inside it carried more seriously an article about the HPV vaccine, calling it,

“dubious … ineffective, and a highly dangerous solution to the problems of cervical cancer”.

On Monday last week Dr Simon Singh went on Twitter to criticise the magazine. He maintains that it is promoting advice that could potentially harm readers. On Tuesday the editor, writing on Facebook, called on subscribers to,

“fight the action of bully boys trying to stop us”,

and who want to push the magazine off the newsstands. Here is a case of conflicting statements, both claiming ownership of the truth. By Wednesday Dr Singh was threatened with legal action by COMAG, distributor of the magazine, which declared in an e-mail to him that it was unwilling to discuss the matter further and had within three days already instructed legal counsel.

The magazine, What Doctors Don't Tell You, was also the subject of criticism by last week’s Radio 4 programme “Inside Health” in which a GP called it “ridiculously alarmist” and “frankly wrong”. BBC lawyers, who were consulted before transmission, advised that because the editor Lynne McTaggart also spoke on the programme, it was giving fair and balanced coverage of the issue. The fact remains that a single individual, Dr Singh, a person who incidentally had to remortgage his house to defend himself against the chiropractors, remained exposed to the threat of libel from COMAG, a distribution company half-owned by Condé Nast.

I relate this particular matter to address two issues that need addressing further in the Bill: the issue of time and the issue of cost. “The law’s delay” has been common currency in this country since Hamlet first used the phrase and has become laughably familiar ever since Jarndyce and Jarndyce was mocked by Dickens in Bleak House. Today with the social media’s potential to prompt inhibiting threats of libel there is ever-pressing need for such cases to be heard promptly and resolved with the least possible time lapse which, of course, brings me to the matter of costs. Any law of the land that does not provide for equal access to justice for all is a flawed law. It has become clear that individuals and small-scale institutions posting opinions on web forums can be sued for their opinions. Mumsnet, Legal Beagles, and Carer Watch have all been sued for posting an opinion. In a statement made in November 2011, Dr Peter Wilmhurst said that he had,

“spent almost all my free time for 4 years and much money defending 3 defamation claims brought in England by an American medical device corporation, NMT Medical”.

NMT used the law to silence important medical evidence-based opinion. The case consumed time and money. Such abuse of the libel laws calls for radical remedy. This is our opportunity, building on the sturdy work of the Joint Committee and the Defamation Bill itself, to make that remedy robust and enduring.

17:27

[Lord Marks of Henley-on-Thames]

My Lords, I, too, welcome this Bill and in doing so refer to my registered interests as a practising barrister and arbitrator. I had the privilege of serving on the Joint Committee of both Houses under the chairmanship of my noble friend Lord Mawhinney and, like others, I pay tribute to his excellent and courteous chairmanship. I also add my tribute to my noble friend Lord Lester of Herne Hill for all the work and learning he has devoted to this issue over many years, for his Bill and for the help he gave the Joint Committee.

The balance between reputation and freedom of speech is now wrong. It is tilted against freedom of speech. Libel cases and the threat of such cases, often unwarranted, have been used by the wealthy and their lawyers to stifle legitimate criticism and debate. So, as the noble Baroness, Lady Bakewell, has just pointed out, academics who question the safety of medical procedures or pharmaceutical products, or journalists who investigate a company’s employment practices, have been warned off and forced to back down rather than run the risk of ruin. That runs strongly counter to the public interest in legitimate debate. But it is not only defendants who are frightened off. Private citizens, irresponsibly defamed in the media, are also deterred from action to protect their reputations by the cost and complexity of seeking legal redress. This Bill rightly seeks to shift the balance in favour of freedom of speech and at the same time to simplify and modernise the law in what has become an arcane and complex area.

I turn to Clause 4 of the Bill, which rewrites the Reynolds defence. My noble friend Lord Lester has argued persuasively that it would be better to omit the list of factors on the question of responsible publication and instead to state the broad principles in the Bill, which he set out in his speech. He would then leave it to the courts to develop those principles case by case. My provisional view—and I only differ from my noble friend Lord Lester in detail and with great diffidence—is that a reasonably clear set of guidelines would be helpful. It must not be exhaustive and it must never become a checklist of hurdles. We must avoid the kind of nightmare for publishers and broadcasters of which the noble Viscount, Lord Colville, spoke. Clear guidelines would provide an easily understood code, which is one of the aims of the Bill, enabling an intelligent layman to look up the law on the internet and understand it without the need to search for the cases and read the judgments in them to try to discern how the law is likely to be interpreted.

Alongside a public interest defence, the law should provide a public remedy for those defamed by reports that are genuinely published in the public interest but that turn out to be inaccurate and cause harm. This, I suggest, can be achieved without trespassing on editorial independence, as the noble Lord, Lord Black, suggested that it might. When that happens, a prompt public retraction or clarification and an apology, prominently published, should at least be encouraged. I would like to see provision for the court to take into account a prompt offer of such redress when dealing with libel cases. This could be introduced as part of an early resolution procedure or it could be as an alternative to a Clause 4 defence. Either way such a provision would be a welcome development of the law and would go much further than an offer of amends under the 1996 Act.

The Bill does not restrict the right of corporations to sue for defamation. The Joint Committee wrestled long and hard with this issue. One the one hand, corporations are not natural persons and have no feelings. Large corporations can and do use their financial muscle to stifle legitimate debate by threatening to sue their financially weaker critics. Such corporations may have other ways of protecting their reputations without suing their critics for libel. On the other hand, not all non-natural persons are big and powerful. Defamatory statements can destroy legitimate businesses. Weighing these arguments, the Joint Committee recommended, as had the Bill proposed by my noble friend Lord Lester, that corporations should still be able to sue, but only if they could show at least a likelihood of substantial financial loss. The Bill contains no such restriction, because the Government’s response to the Joint Committee argued that the serious harm test filled the gap. I do not entirely accept the Government’s argument. Serious harm to reputation is not the same as serious financial damage. The chilling effect of allowing corporations to sue is severe. In my view, they should have to show that serious financial loss is likely in order to be entitled to sue. The Bill as drafted fails to address this issue.

The changes in the substantive law proposed in the Bill are not enough to transform the system. As has been said, the staggering costs and the procedural complexity of defamation proceedings are at least as much to blame as the substantive law for the present inadequacy of the system. We must accept that defamation cases will never be cheap, but we could make them simpler and quicker and therefore less expensive. To do so we need changes to the rules to dovetail with the changes in the Bill.

First, there should be a single early resolution appointment in every case to determine as many issues as possible. I give a few examples: whether the serious harm test is met; issues about meaning; whether a statement was a statement of opinion, and whether the basis of an opinion was sufficiently indicated; whether a statement was on a matter of public interest; whether a subsequent publication was materially different from an earlier publication. Such an early resolution appointment would clarify issues quickly and would, I suggest, often lead to settlement. Furthermore, any claim that did not meet the serious harm test would be struck out.

Secondly, there should be more active, court-led case management throughout the life of every case. Thirdly, courts should be far readier to stay proceedings to allow for mediation or other forms of alternative dispute resolution, with costs consequences for failure to co-operate. Fourthly, we need some realistic costs control, including, in the light of LASPO, protection for less well off claimants. Qualified one-way cost shifting in defamation cases would do much to assist. Fifthly, I suggest, as the Joint Committee proposed, at least to trial this: all but the most complex defamation cases should be heard in county courts, with designated judges to manage and hear them in trial centres around the country.

I welcome the letter from my noble friend the Minister yesterday to all Members of your Lordships’ House promising to bring forward such procedural changes, but the Government’s response to the Joint Committee on the timetable for procedural change lacked urgency. I will take up a point made by my noble friend Lord Mawhinney. While it is right, of course, that the rules are the responsibility of the Civil Procedure Rule Committee, I remind the House and my noble friend that the Lord Chancellor has the power, under Section 3A of the Civil Procedure Act 1997, to give notice requiring that committee to make rules for a specified purpose. If he does so, the committee must make such rules within a reasonable time. It seems to me that for your Lordships properly to consider how we achieve meaningful overall reform in this area we should see the proposed procedural changes at the same time as we consider the substantive provisions in the Bill even if there may subsequently be changes in the light of any recommendations of Lord Justice Leveson. At the moment we are legislating while seeing only half the picture. I therefore urge my noble friend the Minister to encourage the new Lord Chancellor to draw up a draft and publish it quickly so that we can see the entire picture in its frame.

17:38

[Lord Triesman]

My Lords, I want principally to focus on a limited but to me important set of arrangements set out in this Bill, and like other noble Lords I am eager to see the accompanying documents to make sure that I have understood it all. During the debate in 2010 on the proposals of the noble Lord, Lord Lester, I felt myself occasionally swimming against a strong tide. Like others, I admire the noble Lord’s tenacity, but on some issues I simply am not at all sure that the point of balance of rights that he prefers is the one that I prefer. Like many of the speakers in that debate in 2010 and like many of the correspondents who have kindly sent their analyses of the Bill to me in advance of today’s debate, it is clear that there are significant numbers in favour of clarifications to the current legislation, and so am I. Most are exasperated by the cost of litigation and by people carpetbagging between jurisdictions to find an advantageous setting for their defamation actions. A significant proportion of the correspondence was concerned to prevent people from being silenced by powerful and wealthy corporations in the context of academic publication.

Of course, as you would expect, there were many restatements of the centrality of reporting and the expression of opinion for the health and vitality of our democracy. That has been repeated in more or less all the correspondence since 2010 and, again, I am not surprised. It is argued that actions for defamation have the impact of censorship and that we live in a democracy that should not tolerate censorship. The public have a right to know. It is a key principle. The exposure of corruption, injustice, negligence and incompetence and preventing misleading and dishonest statements and behaviour should always be open to public scrutiny. It would be hard not to go along with all that.

I have awaited this debate with interest because I wanted to see where the balance might be struck between all these concerns—I am clear that I share them—and the rights of individuals to protect their reputations and their privacy when it is legitimate to do so, and at a cost that they can afford, which was in part the burden of the remarks of the noble Lord, Lord Marks.

The debates in another place considered this balance. I was heartened by the acceptance of the right to legitimate protection of reputation irrespective of one’s means: that is, less wealthy people should be able to protect themselves. That concept often appears much less important than it should in debates, including in this debate if I may say so. Justice for all has to mean exactly that—justice for all, not justice for the well heeled. This was at the centre of my concerns when we debated the proposals of the noble Lord, Lord Lester, and it remains so today. I am not disposed to say nothing about the issue because of the risk of being associated with the so-called “chilling effect”, a phrase much loved by the print media. I suppose that the hyperbolic impact of the phrase is intended to capture a profound truth, but actually it is simply expected to restrain anyone from probing rather more deeply into what a proposal might mean.

Perhaps it is best to start with the positive, which should make it easier in due course to deal with what I think is less helpful. The committee of the noble Lord, Lord Mawhinney, has certainly helped us to approach the positive factors in a positive spirit. Of course, I am strongly committed to the freedoms of speech and opinion that underpin modern democracy. I have said so and I do not need to repeat it at length. It is absolutely right that these figure not just in the Bill but in human rights legislation itself. I completely agree that abuse of the libel laws in the ways that the noble Baroness, Lady Bakewell, has described is also deeply alarming. I am a passionate advocate of academic freedoms.

I had the privilege of taking part in the drafting of the 1997 UNESCO normative protocol on academic freedoms to which the United Kingdom is a signatory. It is worth going back to that document, given some of the assertions that it makes about protections and freedoms. It demands that signatory nations protect and defend academic freedoms for all academic teachers and researchers, with a fairly broad definition of that, precisely because what they publish or say may well, and with good reason, be testing, provoking or unpopular. The noble Baroness, Lady O’Neill, was 100% right to say that this is also the source of much of the structure of the debates that drive the process of accumulating knowledge. The aim of the protocol was to ensure that neither states nor powerful corporations could silence lectures or conferences or prevent publication. The United Kingdom was among the first to adopt the protocol, which was signed for this country by my noble friend Lady Blackstone.

In my view it must follow that we should extend protection in the area of defamation to prevent powerful and well heeled bodies stopping research publication or even threatening litigation to stop publication. The inequality of arms should never be a basis for undermining the fundamental responsibility of all researchers and teachers that is set out in the United Nations protocol and which has been central to the history of higher education in the United Kingdom. For those reasons the provisions in Clause 7 are welcome.

If I have one reservation, alongside the slowness and somewhat ponderous process of peer review, which the noble Baroness, Lady O’Neill, also mentioned, it is that it is not certain to me that peer-reviewed journals are wholly future-proofed. There is a trend towards digital publication and the encouragement of open-source provision of all information in science by the world’s leading universities. I think that is a great advance. Digital publication does not necessarily finish peer review, but it could do so, and you can see how easily it could. Indeed, in some of the newly developing disciplines peer-reviewed journals have yet to appear as journals as there are advances in the disciplines ahead of advances in publication. Perhaps in Committee we can improve on these provisions. It would be good to do so.

I fully support the intentions to prevent libel tourism, and I am equally eager to see a proper restraint on costs. Some of my criticisms might be mitigated if there were some means of limiting costs and the provision of some resource to enable less wealthy litigants to respond to illegitimate and on occasion feral attacks from rich and powerful media outlets. In reality their challenge to citizens is, “Come on if you think you can afford it”. The Press Complaints Commission has become a refuge for many people precisely because they cannot afford to tackle this issue by any other route. However, as we all know, it has not been a particularly effective refuge for people in those circumstances.

On page 4 of its briefing, Justice asserts that it has “seen little evidence” that conditional fee agreements,

“increased access to justice in this area”.

Rather, Justice claims that the scheme was generally used by the,

“same private individuals and organisations who would have been able to bring a defamation claim in any event”.

I am considering here not the merits of CFAs, for which Justice provides none of the evidence that it says it has seen and is probably wrong about, but the underlying implication that people are not really put off by risks and costs. I think they have done very little justice to those who are unable to take on media giants, which can be massively threatening and whose commitment to ethical conduct has been seen in all its gory detail at the Leveson inquiry.

As with the reasoning on the defence of academic research and teaching when pitched against the corporations, this legislation has to deal with the inequality of arms. This is where I have the greatest difficulty with the Bill as it stands. Paul Farrelly MP and Robert Buckland MP looked seriously at this issue in the other place. Mr Buckland rightly said that,

“there is a fine balance to be struck between freedom of expression and the rights of individuals to protect not only their privacy, but their reputation”.—[Official Report, Commons, 12/6/2012; col. 214.]

It has become possible for the less well off to be libelled with impunity and without significant remedy. It may be right at later stages of the Bill to discuss the occasions when judges have themselves undermined the possibility of a remedy. I am with the noble Lord, Lord Mawhinney, in saying that a government view on the management of these kinds of issues would assist ordinary citizens and that we should not be afraid of assisting citizens.

This brings me to the main areas in which I see weaknesses which I hope, given the spirit in which the debate has been introduced today, the Government will be willing to address. They are weaknesses on which Lord Justice Leveson seems likely to report. I do not know how wise it is to pre-empt his report, but we are where we are. First, in an attempt to prevent trivial and vexatious claims, the Bill attempts, according to the Explanatory Notes, to codify a tougher threshold on the serious harm issue than exists now. I can see why this is necessary, but I am not at all clear that the text as it stands in the Bill is an advance.

At present, the law tests whether there is or is likely to be an adverse impact on reputation. The replacement seems to me to involve a very detailed examination of all kinds of matters which I understand people would wish to examine but where it seems certain that there will be a significant increase in costs to possibly relatively little advantage. The noble Viscount, Lord Colville, believes that this might help. However, I fear that the detail required may greatly increase the price of the provision beyond the means of most people to afford it. Indeed, what would count is itself likely to have to be tested by the creation of precedents, because I doubt that we will see the answer hit upon instantly.

Secondly, it must be wrong to conflate honest opinion and responsible publication. It lends credence to a dubious assertion that it is difficult to separate fact and opinion. It will complicate things to the point of confusion in the relationship between a publication and earlier original publications. It confuses defamatory opinion with inaccurate fact, and I do not accept that it is difficult to distinguish between the two or to create tests that would distinguish between the two. It provides no viable definition of the word “responsibility” in relation to an opinion expressed.

Thirdly, Clause 3, covering “Honest opinion”, seems to someone who thankfully confesses that he is not a lawyer to take a curious view about the way in which people think of their justifications for what they do. At present, as I understand it, a defendant must show that he or she was aware of the facts relied on when publishing. Now it appears that a defendant would not need to know or to have made much effort to ascertain the facts that would justify an honest individual from holding an honest opinion. It is hard to see how you can be honest without at least having made an honest endeavour to find out what the facts were. I am hard put to imagine this exercising any restraint on a number of the newspapers or journalists that I know. It is a further licence to trash people without providing any really intelligible facts as a basis for doing so. That is why I so strongly support many of the things that my noble friend Lord Sugar said.

Finally, the concept of public interest has advanced somewhat in this Bill. I am clear that whatever sells a newspaper is believed by its publishers to be in the public interest, and I can see that it is very hard to provide a tighter definition, but there must be real merit in requiring a publisher to show that a journalist source was credible and reliable. I do not think that is what happens uniformly now, but it seems such a minimal provision. The BBC definition is a credible position, the Ofcom code is a helpful provision, and the NUJ briefing, I thought, was broadly sensible on all this, but it certainly needs more work in the later stages of the Bill.

I completely accept that we need to review and improve defamation law and to do so while protecting democratic accountability, guaranteeing academic freedom and ensuring equality of resource when cases do come to the courts, as some inevitably will, but we are also living in a country that in my view is proud of the idea that is just as much enshrined in human rights law that it is wrong to defame people and wreck reputation without having a proper means of defence and without the victim having proper redress. However we strike the balance, there must be a balance, which is why I welcome the suggestion of the noble Lord, Lord McNally, that the discussions and the improvements will continue.

17:53

[Lord Phillips of Sudbury]

My Lords, to be the 13th speaker in this distinguished list is not the best of positions but I promise to try to avoid repeating what others have so eloquently said. I think I may be the only solicitor speaking in this Second Reading debate, which is perhaps surprising but it does give me a particular view of the issues in hand because for a number of years part of my practice was defamation work. Indeed, I am happy to report that I managed to sustain the reputation and the bank balances of four of my former leaders in the course of that time.

I absolutely take on board what a fiendishly difficult topic this is to deal with and how the great clash between the freedom of speech of the press on the one hand and the right of any man and woman to have his or her reputation reasonably sustained on the other is exceedingly difficult to resolve. I hope noble Lords will not mind my saying that many who have contributed their thoughts to this debate seem to me to have overstretched the first principle at the expense of the latter. For the life of me I cannot see how the freedom of the press can be exercised at the expense of the freedom of any man or woman to have his or her reputation maintained—if you like, at the expense of honest and responsible reporting and speech. Trying to bridge those two is, as we all know and are finding today, very difficult. But I, like others, support 90% of this Bill very strongly. I have a considerable number of detailed points but I will not burden the House with them tonight; I will raise them at the appropriate time in Committee.

I thank the many contributors, not just in this debate but the many outside organisations. There is a panel of libertarians called the Libel Reform Campaign which has done great and important work. The fact that I do not agree with all of its outcomes is neither here nor there. I also thank my noble friend Lord Lester, the Minister and the shadow Minister for the way in which they have dealt with this matter. It is a great credit to the House that we have in our ranks such an extraordinary array of extraordinary experience which will stand us in good stead as we go along. I declare an interest, as I have already said, as a solicitor. My firm, Bates, Wells & Braithwaite, still does a lot of libel law work, although I have not been in that field for 10 or 15 years. I will also say in the light of the remarks I am about to make that I was for 10 years a member of the Scott Trust and am wholly apprised of the difficulties the press face. I heard particularly what the noble Viscount, Lord Colville, said about the BBC and the way that it is inundated with futile but expensive claims.

There is a David and Goliath aspect in libel in my experience. I have mainly acted for individual claimants and theirs is an infinitely more frightening position than is that of the media outlet which they are suing or being sued by. Some of the contributors today have not really understood just how formidable it is to pursue a libel claim. I have to say from hard experience that the number of claims that I have seen dropped—good claims by good people against bad journalism—grieves my heart. One of the unresolved dilemmas for us all, which I do not think we have come near resolving because I do not know that there is a resolution for it, is the sheer cost factor. I happen to believe that the LASPO reforms were necessary to preserve the integrity of the process and the profession but I readily accept that this is the most expensive field in which to get engaged as a litigant on either side, and if we can come up with some thoughts on that I would be delighted. At the moment I do not see them, except the vital point made by a number of Peers in this debate about simplifying, speeding up and consensualising as far as possible the preliminary stages in libel claims. I believe that we can hope to achieve a much better resolution than we currently do under this extremely classic system which lumbers along at an extraordinarily steady amble at an amazingly high cost.

I want to say a few words before finishing on Clause 5 which deals with operators of websites. Quite a number of pressure groups and interest groups which contributed to all of us prior to this debate are anxious about the terms of Clause 5. Indeed, the website operators themselves are, not surprisingly, extremely miffed about some of its provisions. I happen to think that it is one of the most important provisions in the Bill because it gives the individual who has been defamed on a website a chance of getting some solace—some satisfaction. The clause requires the operator of a website to reveal to the claimant the identity of the person who posted the defamatory statement. That is an immensely important requirement. Without the internet operator being able to do that, he or she will lose the defence given them by Clause 5 against the claimant.

I have to tell noble Lords that I spoke last week with one of my colleagues in the office regarding the cost of getting from internet operators the particulars to enable the claimant who has been grotesquely libelled to get at the person who made the statement and obtain an apology, a retraction and, in certain circumstances, damages. The difficulties of doing that are almost impossible to exaggerate. It is not just a steeplechase; it is in some cases like climbing Everest. It takes years because, just as you obtain a court order that requires the internet service provider to reveal the particulars of the person who has made the defamatory comments, you find that the particulars given are not sufficient. You need a further court order and a further order. Spending £10,000 or £15,000 getting to the identity of the person is not uncommon. That is ludicrous and unfair.

I should like briefly to touch on two points in Clause 5, because it should be strengthened. First, Clause 5(2) states:

“It is a defence for the operator to show that it was not the operator who posted the statement”,

on the website. That is insufficiently sophisticated because it would be possible in some circumstances for the internet operator to be complicit with the person, who may be a foreign company, putting the libellous material on the web without being caught by subsection (3)(a). That needs to be changed.

The other thing that is plainly wrong, and to which my noble friend Lord Lester and the noble Lord, Lord Browne, referred, is that regulations under Clause 5, which are important and provide a lot of the pith and bone of this part of the Bill, are to be made by the negative annulment procedure. That is not adequate. I note, surprisingly and sadly, that our own Delegated Powers and Regulatory Reform Committee said that it thought that that procedure was all right because the clause is detailed, difficult and so on. The complexity and detail made it inappropriate for us to deal with under the positive procedure. That seems to me to be a good argument the other way. In any event, really important matters are left for regulations. For example, one of the elements of defence for the operator is that,

“the operator failed to respond to the notice of complaint in accordance with any provision contained in the regulations”.

Noble Lords can see there that what the regulations will allow is absolutely crucial to the nature and strength of the two parties who are arguing over whether or not the operator of the website is or is not liable for defamation.

Lastly, is it not odd that a local newspaper should be liable for libel in respect of a defamatory letter written to it, yet if someone posts an anonymous statement on a website that goes international, where the potential damage to an individual can be vast, that is said to be less important than your little local newspaper? There is a double standard at work. I understand that people like to keep the web free and open and so on, and no one stands up for free speech more than I, but we have to have a better balance than that. Given the grievous damage that can be done to an individual, which it is never entirely possible to erase, even if you obtain apologies and the rest, we have not only to stand by Clause 5 but to make it stronger.

18:05

[Lord Lloyd of Berwick]

My Lords, it is always a pleasure to follow the noble Lord, Lord Phillips of Sudbury. Like him, I welcome the Bill. I agree with almost all—indeed, I think I can say all—its main objectives. However, I should add that unlike the noble Lord I have never been an expert in the law of defamation. I will therefore say nothing about the important clauses, Clauses 4 and 6, which have been the subject of full discussion by the noble Lord, Lord Lester, the noble Baroness, Lady O’Neill, and many other noble Lords. Those are the important clauses.

However, I once gave the leading judgment in a decision of the Court of Appeal on the subject of fair comment, which is now to be renamed, under Clause 3, “Honest opinion”. That is my only reason for speaking tonight. It was the case of Telnikoff v Matusevitch, who were both Russian émigrés living in London. The great question was whether in a defence of fair comment it was for the defendant to prove that he had an honest belief in what he had written. We in the Court of Appeal held that it was not for him to make that proof. The question was whether an honest man could hold such a belief—the test that is proposed in Clause 3(4). In other words, the test should be objective and not subjective. The case went to the House of Lords and, I have to say, the Court of Appeal’s judgment on that point was unanimously upheld.

I mention that only because there was a later case in the Supreme Court on the subject of fair comment, Joseph v Spiller, in which exactly the same point arose. A lengthy judgment was given by the noble and learned Lord, Lord Phillips of Worth Matravers. Why is it that all judgments in the Supreme Court seem to get lengthier and lengthier—far longer than when I was giving judgments in the House of Lords—with every year that passes? At the end of that judgment, he made three suggestions: first, that it was high time to reform the law of defamation; secondly, that we should make a start by renaming fair comment as honest belief or opinion; and thirdly, that the test should be subjective and not objective. I agree with the noble and learned Lord’s first and second suggestions, which is why I support Clause 3, and indeed the Bill as a whole. However, with great respect, I do not agree with his third suggestion. I do not know whether this will become a live issue in Committee—I profoundly hope not. However, if it does, I remain of the view that the test should be objective, not subjective—in other words, the test as set out in Clause 3(4).

However, there was another point in the case of Telnikoff v Matusevitch. The defamatory words were contained in a letter written to a newspaper, in which the writer referred specifically to an article which had appeared in the same newspaper only a few days before. We held that this was sufficient to enable the defendant to rely on fair comment. However, we were reversed on that point by the House of Lords. It said that, since some people might have read the letter without having read the article, the facts contained in the article should have been set out in the letter. I always thought that the House of Lords was wrong about that and that the dissenting judgment of Lord Ackner, who many noble Lords will remember, was much to be preferred. I end by asking whether I am right in thinking that, if similar facts were to come before the court today, it could take a different view from that taken by the House of Lords in light of Clause 3(3) of the current Bill. If so, it will prove that Lord Ackner and the Court of Appeal were right all along.

18:11

[Lord Hunt of Chesterton]

My Lords, I was approached by two organisations to speak on this Bill. I have not followed the Bill, although I have had some dealings with my noble and learned friends as a technical expert. As a scientist, I generally support this Bill because of the importance of freedom of speech in science and, of course, for many organisations. Like many others, one feels very gratified that one has much greater freedom of speech in this country than in others—in the press, in Parliament and in the scientific world. However, even in parliamentary committees, civil servants are advised to be extremely careful about what they say about individuals; as I found myself when I was in front of the Public Accounts Committee in the Met Office.

The limitations of press freedom have been covered by other speakers and, as a scientist, I am very aware of the importance of freedom of speech for progress in science and its application. However, the importance of the internet has not been emphasised very much in this debate, which is included under Clause 5. The internet can greatly expand freedom but it can also create dangers, as the noble Lord, Lord Phillips, has just explained. I declare an interest as I chair an environmental software company. We put all the formulae that we use on the web—rather unusually—so that other companies and organisations can follow them. However, if more companies and organisations were more open, it might solve some of the problems that arise.

In the UK, there is of course a widespread practice of individuals and organisations suing, or threatening to sue, individuals who express opinions and produce data that affect the complainant. Scientists, universities and journals are now quite fearful of being sued, or threatened to be sued, because of the very high fees of lawyers. I have colleagues at University College London who receive vexatious threats of suing from organisations when they have simply repeated certain points on websites. Even if these opinions are not finally disproved in court, this can lead to considerable costs to these individuals—so much so that universities, journals and newspapers do not necessarily support their employees or their contributors. I know a young journalist in London who reported about certain Russians in London in a certain well known newspaper. When it started getting tricky, he went to the law firm of the noble Lord, Lord Phillips, and the problem was solved. However, there was a nasty withdrawing of support from the newspaper that had published his article. This aura of threat and so on has been a very nasty feature of the current situation. I was once threatened by a scientific colleague for a statement in the minutes of a meeting of the National Physical Laboratory; he said that he would sue me. I quickly changed the minutes as it was not worth the cost. He is now quite a good friend. I do not remind him of this very often but he is passionate sometimes.

When the Met Office became a trading fund, it had to consider whether to take out insurance against being sued for inaccurate weather forecasts. Noble Lords can imagine that many weather forecasting organisations have considered such an idea. However, we decided against it because there has been only one half-successful case about weather forecasting—noble Lords may tell me something else—which was in the United States about some dodgy data from a buoy off Newfoundland. We can be secure in this club of weather forecasting organisations.

The Bill has a very important public interest clause that should help to deal with some of these issues because it recognises the public interest in the defamation processes. However, other noble Lords have mentioned that there is nothing in this clause, or in the Explanatory Notes, about having much more inexpensive procedures for the assessment of defamation claims. The noble Lord, Lord Marks, quite rightly mentioned this. This will become increasingly needed with regard to claims and opinions expressed on the internet. Given the extraordinary powers of extracting and organising data now demonstrated by Google, and the popular involvement in the internet shown by Wikipedia and other sites, surely Clause 5 should now include the setting up of a defamation website by some independent body—for example, the Law Commission, the noble Lord, Lord Phillips, or whoever—in which claims and counterclaims on scientific and technical questions could be presented. There could be some editorialising as on Wikipedia. The clause might contain the provision of such a website. It could state that judges and courts should not consider claims on technical issues until there has been public debate on the internet for some defined period—for example, six months. During this period, there could be a completely open process whereby the complainant, the defendant, their friends and their enemies put material on the website. When the process finally arrived in a court, the court would see what had happened over these months on the internet. This is a very powerful method of seeing the evidence for and against.

I think that the point made by the noble Lord, Lord McNally, in opening this debate is that we must think to the future. There will be some new approaches and extraordinary new possibilities. The present clause is looking backwards slightly because this procedure happens in any small community. Someone makes a statement about somebody else, such as, “Did you see him do this? Did you see him do that? My God, his potatoes are terrible”, and so on. There is a community assessment and, after a time, people see Mr So-and-so selling bad potatoes, people hear about it and the community decides. It does not normally end up in blows. We might have a solution if we go back to primitive society and we go forward to the internet.

I quickly sent some e-mails this afternoon, having thought about this in the morning. I gather that there is a free online Canadian dispute resolution service at www.eQuibbly.com—I am sorry for my lawyer friends that it is free. Apparently, eBay tried to set up a similar site in the UK but we are obviously so full of lawyers that there were no takers for this free service. It now operates in the Netherlands, in Dutch—so I will not give you the website. If an independent body were to run such a defamation website, it would enable web organisations generally to operate more freely and would ensure a wider dissemination of data and opinions.

Finally, an important point made by noble Lords concerning the dangers of libel tourism is that it is having quite a chilling effect—a term used earlier—in Africa, where well-to-do people are threatening poorer people, communities and organisations with defamation cases in London. The inhibition of libel tourism in the Bill is a very important development and I support it.

18:20

[Lord Taverne]

My Lords, I shall be very brief. As I explained at the Second Reading of the Bill of my noble friend Lord Lester two years ago, I no longer regard myself as a lawyer because I ceased to practise in 1966 and, when I did practise, I knew nothing about libel law.

I want to make a brief point about safeguarding freedom of scientific publication in relation to Clause 4. The magazine Nature recently won a case in which it was sued by a man called El Nashi, the retired editor of a publication called Chaos, Solitons and Fractals. Nature reported criticisms of improper self-publication during his time as editor. In its defence, Nature pleaded truth and justification and also sought to rely on the Reynolds defence. It offered a right of reply, which was not taken up. The plaintiff unfortunately pursued his case in person, which greatly complicated the proceedings. The case took four years. It involved getting expert witnesses from different parts of the world and contacting staff who had moved on. It cost £1.5 million and took up a huge amount of management time.

I am advised that a new and effective public interest defence would have avoided that ordeal but that the Bill as it stands, with its new definition of the Reynolds defence, would not. Nor, I am told, would the Bill as it stands have benefited Ben Goldacre or Peter Wilmshurst, or Simon Singh in his dispute with chiropractors, in their ordeals. If the Minister, my noble friend Lord McNally, can show that this is wrong, I shall be delighted. If not, the Bill should be amended, and it seems that the Neill amendment, as mentioned by my noble friend Lord Lester, would be the answer.

18:22

[Lord Bew]

My Lords, I support the Bill. At this late stage, I do not wish to repeat many of the points that have been made so excellently in the House this afternoon, except in one respect. I want to repeat the thanks to the noble Lord, Lord McNally, for the letter that he sent earlier this week, for his introduction to the Bill and for his interest in this subject throughout. I also thank the noble Lord, Lord Mawhinney, who chaired 18 meetings of the Joint Committee with great skill and brought us to a set of very important and useful conclusions. I thank, too, the noble Lord, Lord Lester of Herne Hill, who has campaigned with such great subtlety on this matter for some years. On that point, recalling the debate that the noble Lord introduced in June 2010, it is very pleasant to note how we have moved on. Listening to the debates in the other place, it is clear that there is considerable cross-party consensus. I think that on an issue such as libel tourism there is now a consensus which did not exist in the summer of 2010.

The noble Lord, Lord Mawhinney, was kind enough to recall that in the Joint Committee I was very concerned about academic freedom, which is dealt with in Clause 6. I want to say how happy I am that we have faced up to this important matter in the Bill. The most important point is that within academe—the noble Lord, Lord Hunt, touched on this—there is not the freedom that many people outside academe believe exists. There are challenges to free speech. Those who edit academic journals and run university presses do so on a shoestring, so the possibility of any type of libel action immediately, quite understandably, produces a massive chilling effect, and we all suffer from the fact that in the current climate academics cannot say things which their research has driven them to believe to be true.

The noble Lord, Lord Sugar, made a very good point when he talked about the popular press being driven by money. I understand why he makes that point but it does not apply to academics—they are driven by many things, but not by money. It is very important for the health of our democratic society that we have freedom of expression and a zone of protection for research and the reaching of conclusions which may indeed be unpalatable to others. None the less, when we discussed this matter in the Joint Committee, we were often worried—this point was frequently raised by the noble and learned Lord, Lord Morris—about unintentionally creating cottage industries by advocating something which seemed to us banal at the time but which might open up a whole set of other legal problems down the road. I think that the drafting of Clause 6 is rather fine in principle because it avoids that issue. Although in general academics believe in the desirability of qualified privilege for statements in peer-reviewed journals, they also know that not all academic journals are as rigorously and well run as others. One possible way out of this problem is to have a list of the ones that are considered to be the well run academic journals. However, the method adopted in Clause 6 is better than that. It emphasises the correct procedures for running an academic journal and a peer review. That is the right way to go and it is a very happy piece of drafting.

Perhaps I may add one thing, and it is a minor caveat. I hope that the words “academic matter” in Clause 6 are not used in the way that sports commentators use them. When a team is losing 5-0 and somebody scores a goal two minutes from the end, the commentator always announces, “Well, they’ve just scored but that’s an academic matter”. I hope it is assumed in Clause 6 that an academic matter can sometimes be very serious. Assuming that the use of the term “academic matter” is not that of the sports commentator, I am very happy to endorse Clause 6.

I repeat my fundamental point: there needs to be a zone of qualified privilege because the quality of our democratic life suffers if academics driven by a research conclusion feel unable to state that conclusion.

18:27

[Baroness Hayter of Kentish Town]

My Lords, it is gratifying to reach this point in the debate—a debate referred to as one of “awe and wonder” by the noble Lord, Lord Black. I should certainly like to add my congratulations to the noble Lord, Lord Lester, on whose Bill I had the fortune to make my maiden speech back in July 2010.

I was also a member of the Joint Committee, chaired by the noble Lord, Lord Mawhinney, with the flair and understanding that we have witnessed today and indeed on occasion with humour and forbearance of my little misdemeanours. One of his major contributions was to the readability of that report. He was determined that it should be understandable to all because, as he said, defamation can affect everyone—the teacher, the social worker, the victim, the innocent and, particularly for the noble Lord, Lord Mawhinney, his beloved former constituents in Peterborough. He wanted all the people without recourse to a lawyer to be able to read and understand our report.

Of course, that is also one of the aims of the Bill: to bring together in one statute, without recourse to case law, the meaning and the limits of our law on defamation. That is a major aim that we should keep in mind as we consider the Bill. Does it truly consolidate, with clarity, the law on libel such that journalists know what they can write and the named can know whether they have a case against the writer or publication? More than that, we need a Bill which ends speculative cases aimed not at righting an injustice but at silencing the curious and those who criticise the rich and powerful, denying free speech. The chill factor hangs over campaigners as well as over journalists. We also want a Bill that reduces the costs of settling disputes.

As we have heard, there is consensus about the importance of this Bill, as expressed by the expert contributions of noble Lords today. That consensus has also been expressed over many years, especially by the noble Lord, Lord Lester of Herne Hill, and by my fellow Joint Committee members: the noble Lords, Lord Marks of Henley-on-Thames, Lord Bew, Lord Black, Lord Phillips, the noble and learned Lords, Lord Morris of Aberavon and Lord Lloyd of Berwick, the noble Baroness, Lady O'Neill of Bengarve, and my noble friends Lord Sugar, Lady Bakewell, Lord Hunt of Chesterton and Lord Triesman, to say nothing of my noble friend Lord Browne of Ladyton. That is a true roll call of experience and expertise.

As has been said today, part of our intrinsic democratic schema is to balance the safeguarding of our very precious freedom of speech while protecting against its misuse to denigrate others falsely, and ensuring that the law is not misused to stifle disclosure or criticism. We must permit truth to speak to power, even as we protect individuals from being trounced in the popular press or anonymously on the web.

Concern on this matter is not new. The Royal Commission on the Press, set up in 1947, acknowledged the central dilemma that a free press is essential to a democracy, but that a press driven by commercial interests is not really free. More recently, Stephen Sedley has written that:

“When the European Convention on Human Rights was … adopted in the early 1950s, few doubted that the chief threat to private life was the state—the informer, the watcher, the secret policeman. Today there is widespread agreement that segments of the press … pose a different but still real threat to private life”,

and that,

“the tabloids’ self-justification … mirrors that of the authoritarian state”.

I think that is what the noble Lord, Lord Sugar, said earlier in the debate. We need a Bill that enables serious and responsible journalists to expose misbehaviours, whether of the state, corporations, individuals or even your Lordships' House, but which protects the less powerful from an all powerful, well resourced tabloid press or scurrilous anonymous websites. They should not be given a licence to libel. As the noble Viscount, Lord Colville, has made clear, this issue of balance is key. In future we will work on this Bill to get that right.

The Opposition wants a new Bill on defamation enacted and, as many others have, we congratulate the noble Lord, Lord McNally, on ensuring a speedy and careful process, taking the Lester Bill through to a draft Bill, through the consultation, through the Commons and presenting it here today. We welcome key parts of the Bill, such as the removal of the presumption in favour of jury trials, which provides a major potential reduction in costs and allows earlier decisions and, we hope, earlier resolutions. There is the new defence for peer-reviewed material in academic—properly academic, in the words of the noble Lord, Lord Bew—journals, which was a key recommendation of the Joint Committee. That point particularly pleases my husband, who is a professor of physics and a frequent contributor to Nature and similar journals. I have now declared all my interests.

However, it could yet be a better Bill, as we have heard in this well informed debate. As the noble Lord, Lord Marks of Henley-on-Thames, has noted, the Bill fails to deal with the Joint Committee's recommendation to reduce substantially—others would say to abolish—the ability of corporations to threaten to take, or to take, individuals to court, often to intimidate them into silence. Why has that not appeared in the Bill? Is it because of pressure from business? I agree that, on the whole, this is not a party-political Bill but I sense the heavy hand of business behind that regrettable absence from the Bill. We know that companies use the threat of libel action to manage their brands and to close down criticisms of their products and behaviour. That is bullying and the Bill should prevent the misuse of the important law on libel.

In my maiden speech, I spoke about the extraordinary pressure on organisations, such as Which?, when they want to assess, on behalf of the public, the safety, value for money, effectiveness and reliability of goods or services. I ask the Minister: what in this Bill would enable Which? to expose poor-quality financial products, dangerous electrical goods, shoddy repair firms or lousy restaurants if it risks the threat of defamation and the thousands that it costs to defend such an action, no matter how weak the case?

More recently, I have been involved with Citizens Advice on the issue of civil recovery. That is a rather pernicious little device used by a number of high street retailers, such as Boots, Debenhams and Tesco, to extort money out of those accused—but not necessarily guilty—of shoplifting, via empty threats of civil court action. Citizens Advice has been hampered in exposing this racket by threats of defamation action. The organisation knows that they will never come to anything because it researches what it writes extremely carefully and makes sure that it is true. But even to answer such threats involves expensive legal time. Many of the cases quoted today, whether chiropractitioners or the magazine threatened by Nature, would have been stopped in their tracks had this hurdle against corporations being able to sue been in place.

I turn to costs, which has been raised by almost every speaker. Costs are the real killer. It is odd that one can settle party-wall issues, small claims, insolvency, even criminal cases locally at the magistrates’ court, or in the small claims court, or even in the bankruptcy court, but when it comes to libel, there are expensive lawyers—some of whom are threatening and probably in breach of their own code of conduct—vast bills, long delays and threats of costs. Those are the major determinants of whether one can pursue or defend a defamation claim. As the noble Lord, Lord Marks of Henley-on-Thames, has suggested, why are we not considering whether county courts might be suitable to deal with this?

The question of costs must be settled, or access to justice will be limited only to the most wealthy. Crucially, we must raise the bar against frivolous cases where no serious harm has taken place even if an untruth has been written. The Joint Committee recommended “serious and substantial” harm, as the noble Lord, Lord Mawhinney, has reminded us. It may be that those two words are not necessary, although I think they are different, but they would send a signal that the law should be used only in significant cases.

We also need some clarity on definitions so as to avoid more case law. We need greater certainty so that people can easily judge whether there has been defamation. Similarly, as recommended by the Joint Committee, we need clear authority for judges to strike out unnecessary actions at an early stage before costs mount up as a disease within the body, and there needs to be clear guidance for judges to exercise that authority. The consultation that preceded the Bill included an early resolution procedure which would help to lower costs by providing earlier determination of key issues, such as triviality, meaning, and questions of fact and opinion. Regrettably, the Bill contains no provisions to implement such a system, but surely it is a key requirement.

As my noble friend Lord Browne has made clear, we support the thrust of this Bill, but it could be a better Bill. In Committee, we will work with colleagues across the House to ensure that this welcome Bill is also a better one.

18:38

[Lord McNally]

My Lords, in opening the debate I said that I was looking for help in carrying the Bill forward. The tenor and content of the debate have lived up to my expectations. We also have the confidence of the other place, which knowingly passed us a good deal of work. Usually we complain that it does this without acknowledging it. At least this time it does and I hope that we can carry forward these discussions in Committee in a way that will produce the better Bill to which the noble Baroness, Lady Hayter, referred.

I acknowledge what the noble Baroness and others have said: that in many parts this is a consolidation Bill, aimed at clarifying the law and putting it into a place where people can clearly understand it. My intention has always been that, where necessary, we should take the law forward. In particular, as has been referred to, we are setting ourselves a pretty fierce challenge where the internet is concerned because of the speed of change. However, we should not duck away from it simply because we face rapidly changing technologies.

It is also good that there were voices in this debate that were not simply politically correct. It would have been very easy to say that we are all in favour of free speech and that it is very good, but the contributions of the noble Lords, Lord Sugar and Lord Triesman, and my noble friend Lord Phillips were important in saying that this Bill seeks a balance between the freedom of speech and the rights of journalists to pursue the truth and the rights of individuals to protect their reputation and in some circumstances their privacy. This debate had the necessary balance, which takes us forward to Committee.

On the question of defending the rights of business, the noble Baroness is right; this was raised in the Committee and I gave an opinion then. The Government’s considered view is that businesses have reputations that can be defamed and damaged and that they have a right to defend their reputations. There has been no great bullying by big business—the noble Baroness is getting into conspiracy theories. However, we can look at this in Committee. She also talks about the various organisations trying to hold business to account that can be bullied. Over the months that I have been working on this, I have heard enough hearsay evidence about the willingness to fire off lawyers’ letters and rack up costs or implied costs. I hope that some of the things that we are doing—the threshold and the reform of defence, particularly the public interest defence—address this.

Something that has also come up time and again in debates, which we will look at, is the cost issue and case management. I shall go back to the Ministry of Justice to find out how speedily we can respond, but I understand that when the House goes into Committee it will want information about some of the issues that we have said, quite rightly, that we want to manage by secondary legislation or by consultations with the judiciary. However, I also take the point that we need to give the House as early as possible the thinking and direction of travel in which we want to go in these areas. I take on board what the noble Lord, Lord Browne, asked me at the beginning: whether we would be able to publish some kind of timetable for bringing forward this further information. I will do my best.

When so much is to be discussed in Committee, I hope that colleagues will understand that summing up like this and dealing with the detail of some of the questions would probably run for about an hour. Here are the notes that my officials in the Box sent me to answer detailed questions. I also made 25 separate notes myself. I can try doing so if noble Lords want, but what I have taken out of this is that we have certainly got a number of things right, which people have welcomed. I notice the point that the noble Viscount, Lord Colville, made: that the Reynolds defence is too restrictive. That is partly why we have invited more comment. It is admitted that the clause that we have put forward will need further work. That is what I look to do in Committee, and I hope that this work will avoid the kind of back-street bullies that he described. We will also look at Clause 4, certainly in the light of the Flood judgment but also after a number of other comments made during the course of this debate.

There was interest during the debate—we shall probably discuss this further—about where to get satisfaction in these cases. A number of speakers referred to the wisdom of making sure that judges can order suitable corrections. Others warned us against putting judges in the editor’s seat. It is part of the nature of this debate that we have those differences. I was grateful for the kind comments of the noble Lord, Lord Mawhinney. I did not know that “serious and substantial” was the contribution of the noble and learned Lord, Lord Mackay. I always take very seriously anything suggested by the noble and learned Lord. A number of other people have given warnings. When we come to Clause 4 we shall look at this difference between those who want some guidance for those looking at the law and those who want to avoid a tick box. Again we can explore the best that we can get between ticking boxes and giving guidance.

A variety of people have commented on costs. I take them all on board. It was interesting that a number of speakers—the noble Lord, Lord Mawhinney, among them—referred to the case for putting arbitration and mediation into the process. This is a great desire, but how we do it, I am not quite sure. On some of this we may have to wait to hear what Lord Leveson is going to say. However, this Bill is not just newspaper-specific, of course, and I was very interested in the comments on the way in which arbitration is being offered on the internet. I take the point made by the noble Lord, Lord Lester, that we should not get blown off course by Leveson. We can deal with defamation without that being a cause for delay.

I am extremely grateful to the noble Baroness, Lady O’Neill, and indeed to all the scientists who contributed. One of my driving motivations has been to try to get something that would deal with the undoubted problems that scientists, academics and others face. The noble Baroness, Lady O’Neill, was realistic enough to realise that these are complex issues. As she said, this is the central piece in the jigsaw of legislation. I was pleased by the favourable comments of the noble Lord, Lord Bew. We are trying to provide legislation that gives genuine protection to the scientific community, and I look forward to working in Committee. If there are improvements that give that protection, we will certainly look at them.

The noble and learned Lord, Lord Morris, gave us the wise guidance again that, while protecting freedom of speech, we have to give adequate protection for reputation. He advised me to bring forward the promised regulations as soon as possible. I was interested as well that the general opinion was that we had got it right as far as jury trial was concerned. That is extremely welcome. The noble and learned Lord, Lord Morris, asked me whether there was any insidious read-across to criminal trials. Unless they are not telling me something, and unless he gets an urgent letter from me tomorrow morning, the noble and learned Lord can take this as an assurance from the Dispatch Box that there is no read-across to intentions about jury trials. The noble and learned Lord, Lord Morris, himself made the point that, with the internet, we must put flexibility into this legislation. I remember that when we debated the Communications Data Bill we kept on talking about “future-proofing”—much good that it did us. Future-proofing may be impossible in the modern technological age, but we can build in flexibility.

I much appreciated the contribution from the noble Lord, Lord Black, about the serious-harm test being good, and his comments that the Clause 8 single-publication rule is much needed but perhaps should be clarified.

I should perhaps say to the noble and learned Lord, Lord Lloyd, that I have conflicting advice on his point about Lord Ackner’s judgment. My officials have sent me a note saying that we will look at this and write to him, but the noble Lord, Lord Lester, passed me a note saying that of course we got it right. One of my great feelings of loss about this House is that Lord Ackner is not here, ready to tear whichever Minister happened to be at the Dispatch Box to small pieces with his analysis of the legislation. My view is that the noble Lord, Lord Lester, is probably right and that Lord Ackner got it right. We hope that we have got it right in this legislation.

The spirit of the debate, from the response of the noble Lord, Lord Browne, to the closing speech of the noble Baroness, Lady Hayter, reflects that we have been given a serious task to do and that this House will now set about that task. Once every so often—this time after 16 years—the House gets a chance to look at this very important area of law and we intend to do our job responsibly, seriously and with due pace.

I was not sure whether this had been agreed by the usual channels, but I think that the Bill has been moved to Grand Committee, which will be very useful for doing the work that we have set ourselves.

Bill read a second time and committed to a Grand Committee.

Britain’s Industrial Base

Tuesday 9th October 2012 Lords Chamber

Question for Short Debate

18:57

Tabled By

[Lord Adonis]

To ask Her Majesty’s Government what is their assessment of the strength of Britain’s industrial base.

[Earl Attlee]

My Lords, this is a time-limited debate and the time for all speakers, except for the noble Lord, Lord Adonis, at 10 minutes and my noble friend Lord Marland at 12 minutes, is limited to six minutes. I remind the House that this means that when the clock shows six minutes, it means that the speaker has already reached their permitted time.

[Lord Adonis]

My Lords, I first congratulate the noble Lord, Lord Marland, on his new post. He earned great respect for his work at DECC, and I know he will do the same at BIS.

I do not think that there is much dispute that Britain’s industrial base is too weak and too narrow. If that were not the case, we probably would not be in a double-dip recession and we would certainly not be in a crisis with 2.6 million unemployed, youth unemployment of more than 1 million and national income still significantly lower than before the 2008 crash. It is taking us longer to get out of this recession even than it did to get out of Great Depression of the 1930s.

Without a stronger industrial base, we face a bleak future, and I think we now all understand the need to be bold and explicit about this. Until recently, the words “industrial strategy” were unmentionable in polite society. They were regarded as a hangover—in all senses—from the disastrous 1970s and British Leyland. However, as Vince Cable put it in his Imperial College speech last month:

“We can have an industrial strategy by default or design. Ignoring this reality is not a policy—it is just negligence”.

He continued, and I agree with this too:

“But just as bad would be to approach all our possible interventions in an ad hoc way, subjecting every policy decision to a short term tactical decision. There is not a serious and successful major company in the world that would proceed in such an unplanned way”.

I agree, but that is precisely how we have been proceeding as a country for a generation, and it has to change.

In my experience, telling stories is more powerful than reciting statistics when painting a big picture. So I want to tell four brief stories. Yesterday, I went out on a boat to see the huge new Statoil wind farm off the Norfolk coast at Sheringham Shoal. When I was not being seasick, I was amazed at the size and scale of the turbines: 88 of them, across a huge stretch of sea, each rotor 350 feet in diameter, generating enough electricity for 220,000 homes. Sheringham Shoal is only the beginning: the plan for nearby Dogger Bank, which I previously knew only from weather forecasts, is for 3,000 of these giant turbines, with construction starting in 2015 if the finance can be put together by the development consortium.

This is green energy in action. By luck of geography, we have a greater opportunity to develop it than any European nation besides Germany and Denmark. It is a huge, growing industry in construction, design and maintenance, yet in industrial terms, we are seriously behind the curve. The Statoil project director told me that barely a fifth of the construction and assembly work for Sheringham Shoal was done by companies located in Britain. The turbines are made by Siemens and imported, and the foundations, the offshore cables, and a good deal of the work installing the turbines is done by overseas companies with little or no physical presence in the UK.

I was told by Statoil that infrastructure is another weakness, in particular the absence of superfast broadband on the Norfolk coast and terrible mobile phone reception. As for the huge Dogger Bank investment, uncertainty over long-term policy for renewable energy is a bigger issue. So we are in the midst of a green energy revolution yet new jobs and investment will be delayed and/or go abroad unless we get our act together as a country. This needs to start, crucially, by ensuring that Siemens builds its proposed £210 million turbine factory in Hull, the fate of which is now uncertain because of Government prevarication on wind energy.

Story two. Last week I visited Airbus at Filton near Bristol, part of the pan-European operation which has made Airbus so brilliant a rival to Boeing with its A320s, 330s, the soon to be 350s and the giant 380s. As well as its success in China, Airbus has taken the competition directly to the United States with a new factory in Alabama. The expertise in designing and making aircraft wings at Filton is second to none, just as the engine technology at next door Rolls-Royce is second to none.

Airbus itself is a fruit of industrial policy which dared not speak its name in the 1980s, when state loans made possible the A320, an investment which has been repaid many times over. Similar state industrial policy is now equally imperative in decisions surrounding the proposed BAE/EADS merger to create a military equivalent of Airbus. The Government cannot just leave it to the market. The Government are the market in this case. The critical requirements are that the UK should be an equal partner, not a subordinate one, and that the UK’s position at the heart of any military equipment consortium should be assured.

We discussed all this at Filton. But just as pressing to Airbus were its skills requirements. Last year the company had 1,500 applicants for 86 apprenticeships. Yet despite this number, it could not recruit enough school-leavers with B grades or better in A-level maths and physics required for its higher level apprenticeships. Partly to tackle this it is sponsoring the proposed Bristol University Technical College which will specialise in engineering for 14 to 18 year-olds, but far broader action is required to supply its skill needs.

It was the same story when I visited Jaguar Land Rover’s state-of-the-art facility at Gaydon near Warwick last month. Again, a brilliant success story both in technology and products, including the new Range Rover. JLR benefits from a deep partnership with the University of Warwick, which my noble friend Lord Bhattacharyya has done so much to forge over so many years. But again, real concerns over skill levels, too small a pool of engineering graduates from which to recruit—JLR told me that by its estimates the UK is producing only half the number of graduate engineers that it needs—and too few would-be apprentices with the right skills.

Another key issue for JLR is its supply chain, too little of which is local or even British. Yet British suppliers are finding it hard, if not impossible, to secure the patient finance they need to expand and the new inward investors likewise. The Society of Motor Manufacturers and Traders published a devastating report in June specifying how the growth of supply chain companies in Britain was being constrained by access to capital and lack of sectoral and regional expertise on the part of the banks.

My fourth story is from my experience as Secretary of State for Transport in the previous Government in awarding contracts for new trains. This is a big potential source of jobs and value to UK plc which will get steadily bigger as rail travel grows and HS2 is constructed in the next decade and beyond. The state is the procurer of these trains. To paraphrase Vince Cable, its contract decisions constitute an industrial strategy by default or by design, and if it is not by design then that is pure negligence. The issue is simple: because of past negligence, 21st century Britain—amazingly—no longer has a domestically owned rail manufacturer. There is only one international company, Bombardier, which even makes trains in Britain. So, as Transport Secretary, I decided to have an industrial policy by design in respect of the £4.5 billion contract to supply the successor trains to the Intercity 125s. To cut a long story short, this is what we did: Hitachi, the most experienced high-speed train manufacturer in the world, now into the seventh series of Japanese bullet trains, won the contract and agreed as part of the deal to build a factory in Newton Aycliffe in County Durham, not far from Nissan, another great Japanese inward investor in transport manufacturing. The present Government stuck with the contract, the factory is being built and there will be more than 700 new jobs.

Now I had hoped that this would be the beginning of a coherent industrial strategy to build up domestic rail manufacturing. Alas, the present Government awarded the next rail contract for the new Thameslink trains to Siemens without securing UK manufacturing. This was serious negligence. If Siemens can build a wind turbine factory in Hull, and can even be persuaded by the Russian government to build a train manufacturing plant in the Urals in order to get state contracts, it ought not to have been beyond the wit and ingenuity of Her Majesty’s Government to have secured a factory in return for the £1.4 billion Thameslink order. The failure to do so was a major failure of public policy which must not be repeated with the forthcoming order for Crossrail trains.

So, my Lords, four stories. What are the lessons for industrial strategy? It is that the fundamental planks of a modern industrial strategy are skills, technology, innovation, procurement, infrastructure, finance, and supply chains. We need a strong and dynamic private sector aided by a strong and dynamic state in all seven of these critical areas. The state needs to act strategically, not tactically. It needs to act overtly, not covertly. In short, we must end the negligence of the past and get real about building an industrial base capable of delivering the jobs and companies that Britain needs for the future.

19:07

[Lord Bates]

My Lords, it is a privilege to follow the noble Lord, Lord Adonis, who has great expertise in these areas, and his contribution was typically thoughtful and thought-provoking. As he was recounting the painful experience of awarding the Hitachi trains order, I could not help recalling that while he was Secretary of State he desperately wanted to make that order announcement before the last general election. However other forces were at play and therefore it was with enormous pleasure that this coalition Government actually made that announcement following the election, demonstrating their commitment to the trains and the industrial base.

Telling stories is a very powerful way of communicating essential truths, because in the north-east—which I know best—before the last election we suffered the body blow of mass redundancies announced at Nissan, the Hitachi order and then the closure of the TCP blast furnace on Teeside. That was the final blow for the process industry struggling in that part of the world. Since the election we have seen Nissan announcing new investment, taking on workers and expanding. We have seen the Hitachi order and even seen the blast furnace reopen. At a CBI dinner last week in Gateshead, someone reminded me that eight major process industries—there is a cluster around Teeside and they are often interdependent—had gone out of business and into receivership before 2010. Of those eight, four had now come out of receivership and were employing more people than they were before.

I tell these stories because I think that they are quite important in demonstrating that I cannot in any sense see that this Government have an industrial policy of default rather than design. It may not be the design that others would actually choose, but it is certainly a design. It says that we want to make the United Kingdom the most competitive economy in the world for setting up and running a business. That is the stated aim. It is backed up with policies of reducing the corporation tax to its most competitive level, reducing barriers and regulation on employment and actually providing incentives for people to employ, such as setting up enterprise zones, creating an enterprise culture and getting rid of other regulations. Noble Lords may not agree with that but, none the less, it is certainly a policy and is having some effect. As my noble friend, who I welcome again to his position, reminded us yesterday, we saw the fastest rate ever of new business start-ups in the UK last year, with 1 million new private sector jobs being added to the economy since the election. This is all evidence of something that is happening: the creation of an enterprise economy. These businesses may not be the great oaks but they are the small acorns from which the great oaks will come in the future—of that I have no doubt.

Looking at these stories, does that mean to say that we have got everything right? Far from it; we have a very long way to go. I bring another thought from the north-east, of the Alcan plant at Lynemouth, where 515 skilled jobs went just last year—a decision which was a body blow for that part of Northumberland. They went because of EU directives on carbon pricing, which are seeing the price that people have to pay per tonne for carbon in the energy-intensive industries that are key to industrial output and manufacturing go up from £7 per tonne to £16 per tonne next April. Then in 2020 they will rise to £30 per tonne. That kind of decision, which has been taken at a European level, is causing plants such as Alcan’s to be closed. Where does that industry go? Of course, some people sneer and imagine that it has probably gone on in the direction of Kazakhstan or China, or somewhere like that. No; it went to Canada, where they are building a plant that will put the emissions into the same atmosphere.

We need to get to grips with this whole area. Of course, we need to tackle the environment and there are massive numbers of jobs to be gained through green energy. However, we need to be sensible about how things are applied lest we undermine the means that we seek. In this respect, my noble friend Lord Marland has a particular role to play, not only as a businessman but—this is a critical element—in coming to his current brief within BIS from the Department for Energy and Climate Change. These are different pictures and there are different stories that we can tell, but they suggest that we are perhaps beginning to move in the right direction. Industrial output was up by 2.9% in June, its fastest rise for 25 years, while manufacturing output rose by 3.3% in June, its fastest rise for 10 years. To be sure, it does not mean that summer has arrived but it does perhaps mean that spring has started.

19:13

[Lord Hennessy of Nympsfield]

My Lords, may I add my welcome to the noble Lord, Lord Marland, on his new portfolio? I am sure that I was not alone this summer when tasting the special delights of the Olympics and Paralympics in wondering whether there were wider lessons to be drawn from the glories we were witnessing. Our Olympics summer was a shining advertisement for what can be done through careful planning and a fruitful public-private mix, plus the energising effect of a wide and sustained political consensus in creating a remarkable collective enterprise. For those six lustrous weeks we were, to borrow from Abraham Lincoln’s 1861 inaugural,

“touched … by the better angels of our nature”.

Such thoughts triggered in my mind a memory of 1985, when the one-off Select Committee of your Lordships’ House on overseas trade reported under the chairmanship of Lord Aldington—of which committee the noble Lord, Lord Selsdon, was a member, as was the noble Lord, Lord Stoddart of Swindon. I was a journalist at the time and was struck by the urgency of the report’s tone. It struck me even more forcibly when I reread it last month. The committee was appalled by the shrivelling of our industrial base, particularly by the decline of manufacturing as a proportion of our national wealth and by a growing overreliance on services. This is the sentence that left the deepest dent in my memory:

“A principal theme of the Committee's report is that of the national attitude towards trade and manufacturing and their principal recommendation is that it needs to change—and change radically—if we are to avoid a major social and economic crisis in our nation’s affairs in the foreseeable future”.

We did not and we have not. In 1985, manufacturing accounted for 25% of gross domestic product. In 1947-48, my first year of life, that figure stood at 36.6%. By 2010, it had fallen to 9%.

Much has been achieved in renewing our industries and services since the mid-1980s. I am not this evening deploying what Edward Thompson called,

“the enormous condescension of posterity”,

to the work of far better men and women than me in science, technology, industry and commerce, who have applied themselves in the past to this problem and given it their absolutely best shots—far from it. I am also hugely sympathetic to the coalition’s industrial strategy, which seems to avoid both the excessive state interventions of the 1960s and 1970s and the excessive loss of confidence in what the state could do as an enabler in the 1980s. I have great hopes, too, for the review of competitiveness by the noble Lord, Lord Heseltine, which is due later this month, not least because of my admiration for the powerful public-private mix that he brought to the regeneration of Merseyside 30 years ago. I share, too, the analysis of the noble Lord, Lord Baker of Dorking, about our missed opportunities for transforming technical education since the exemplary White Paper on technical education of 1956.

I am, however, struck by the continuing resonance of the Aldington committee’s analysis of 27 years ago, when its report laid out the interlocking and mutually reinforcing changes that the UK needed to redress the balance between manufacturing and services and to achieve an enduring breakthrough in exports. These included improvements in the levels of investment, education and training, research and development, competitiveness and the pursuit of a co-ordinated strategy for recovery resting on as high a level of political consensus as possible. Every one of these factors continues to merit acute attention and the urgency is even greater in 2012 than it was in 1985.

This is a post-Olympics task for our nation, which requires the better angels of our nature and much, much more. Would it help a little if here in your Lordships’ House we found a way of deploying the sustained analytical application, realism and candour needed to assist in the improvement of our economic performance? Might a standing Select Committee comparable to Lord Aldington’s one-off committee be the way? I offer this suggestion at the risk of adding to that self-congratulation of which our critics accuse us, but we have in this House as rich a mixture of industrialists, financiers, scientists, technologists and economists as, I venture, any legislative Chamber in the world. There is no element of the condition of Britain that merits our sharpest attention more than the well-being of our industrial base and the prospects for generations to come.

19:18

[The Lord Bishop of Blackburn]

My Lords, in my diocese of Blackburn, which covers most of Lancashire, nine years ago the claimant count for the subregion was 1.6%. As I prepare to leave office, I note that this figure has now nearly doubled to 3% of the working-age population. To put this figure into direct unemployment terms, it has increased from 4.7% to 7.8% in that time. Yet there still remains a dynamic and outward-looking world-class aerospace industry that develops, manufactures and exports products throughout the world. It employs some 20,000 people directly. At present, it accounts for 23.8% of Lancashire’s manufacturing jobs and has nearly one-third of the total employment in GB aerospace. I am sure that your Lordships will understand my concern at the talk of a merger between BAE Systems and EADS. The impact of such a merger could have serious implications, not just for BAE but for the large number of small and medium-sized enterprises that support them in their work. I would be particularly interested to hear of the possible impact of such a merger, especially in view of recent developments.

The subregion used to be recognised as one of the major drivers in the industrial landscape of the country. Sadly, that is no longer the case. Previous large employers have restructured and moved elsewhere, or closed altogether. They have done that, in part, because of a lack of investment in better transport—that is, public transport, of course. I am sure that that is one of the major reasons.

Sadly, the National Infrastructure Plan 2011, announcing £30 billion of spending, does not fill me with much hope for a rebalancing of the economy between the regions. The Institute for Public Policy Research has analysed the proposals contained in the plan and discovered that 11 of the 20 largest projects benefit London and the south-east. Of the transport infrastructure proposals, the effect is a spend of almost £3,000 per head for those living in London, compared with a spend of just £134 per head for those living in the north-west and, I understand, just £5 per head for those in the north-east. It would appear that the regional imbalances are set to continue for some time to come.

I hope that as most of that spending on infrastructure will take place after the next spending review—although it is interesting to note that 18 major transport infrastructure projects have already begun in London and the south-east, compared with just one in the north-west—there is still time to redress that imbalance. I believe that my diocese and the whole north-west has much to offer the country by way of expertise and application. However, if we are to assist in the development of a vibrant, diverse economy, we do not need to be shackled by lack of infrastructure. Sir Winston Churchill famously said, “Give us the tools to finish the job”. I ask the Minister to talk seriously to his Treasury colleagues so that areas such as Lancashire, and indeed the whole north-west, can be given the tools to encourage investors. Not only will we in the north-west finish the job, but once again we will be the beating heart of the economy.

19:23

[Lord Selsdon]

My Lords, I always have great regard for anyone who gets on the train and decides to go round to visit his patch. That is because my great-grandfather and grandfather were chairmen of railway companies and used to race each other to Scotland so that they could get into the siding for breakfast. Therefore, railways and transport have always appealed to me. The noble Lord, Lord Hennessy, referred me to the Aldington report. I have already mentioned in the House that that was rather frightening to be involved in because we asked, “What happens when oil runs out? What will the British economy be based on?”.

I do not want to waste your Lordships’ time, but being a member of the Information Committee, I have a duty to promote the Library. The Library has produced a most excellent briefing pack, which many of your Lordships will not have seen because the Library is not very good at marketing it. It covers most of the points that need to be raised. The first question we asked—because I am always among my intellectual superiors when I go into the Library—is: what do we mean by Britain’s industrial base? The CBI could not tell me. Nobody could tell me. Were we talking of a manufacturing base? Was industry manufacturing? What about the service industries? I therefore wondered what the term applied to.

I looked again and thought that if we are to develop, we must accept what our economy is based on at the moment, and a large chunk of it must be based on foreign trade. However, we have relatively small exports by manufacturers. We have a large export of services and we have a tremendous financial business that often follows—as people have said, the star.

I always remember from my days when I had to do Latin:

“Abstract nouns in ‘io’ call Feminina one and all. Masculin can only be things that you can touch or see”.

I like things and I do not like the internet—I do not like all these communications where you have no physical manifestation. I do not like picking up the phone and asking a question to be replied to by somebody in a call station in the Philippines. I wonder whether we are not moving too far away from the physical, on which our economy should be based.

Let us take transport. That is one area where we are good, and we are good at railways. I was very moved when I saw that great steam locomotive during the Queen’s Jubilee. I thought that perhaps we have not run out of the ability to do trains. One project I got involved in was the Chemin de Fer Transgabonais. When President Bongo came to London, what clinched it was our suggestion that he might like to have a locomotive named after him: “Le President Bongo”. He said yes, provided that he could have another one based on the iron maiden, La Vièrge de Fer, meaning my noble friend Lady Thatcher. That triggered our building a railway.

My noble friend on the Front Bench will know that the same thing happened in water and sewerage, which were areas where we had great expertise in tunnelling over the years. Often you would have to almost dig out of his grave the engineer who had done it. I would talk to people aged 80 or more who had been involved with the Crown Agents or one of the other development bodies that we had around the world.

If we are relying on foreign trade for a large part of our future economic growth, we should look at the energy sector worldwide and the maritime sector—the water and the sea. I have already mentioned in your Lordships’ House that, with the Commonwealth, we have the longest coastline in the world. The coastline of the United Kingdom is longer than the coastline of India. That leads to shellfish because of the ins and outs. If we then look at the dependent territories and others, and the economic exclusion zones that apply around the islands, we see that we cover the largest part of the sea under what you might call the British flag.

In looking at our future, I suggest that we must take certain sectors and realise that we must not look only at this market; we have to look worldwide. Here comes the intellectual property of the engineering brigade made up of those who were educated and trained here and who trained others. An engineer from India trained here will go back to India, recall all that and have a certain loyalty. More can be done by training our young people and people worldwide, sending them back and keeping the relationship going.

We look, too, at the energy sector, which I find fascinating, and which the noble Lord raised. There is not just the movement of tidal floods, there is also the application of heat. We should look at where around the world there are energy requirements and energy resources—not just fossil fuels.

It is beyond my pay grade to work out how this happens, but people have said to me, “Look at the heat generated in the deserts. Look at heat transfer. Look at the pumping system. Look also at desalination”. One thought that came to mind during the Gulf War was that if you wanted to bring a country to its knees, all you would have to do would be to let oil out into the Gulf and block up every desalination plant.

In an odd way, infrastructure around the world is one of our futures. We cannot afford to rebuild our own infrastructure without having large orders. I am enthusiastic about the future, but it must be technologically led.

19:30

[Lord Bhattacharyya]

My Lords, I would like to thank my noble friend Lord Adonis for securing this debate and join others in welcoming the Minister to his new role. I declare my interest as the chairman of Warwick Manufacturing Group at the University of Warwick.

I have argued many times for a greater emphasis on industrial and innovation policy in Britain. However, for 30 years, we did next to nothing. That was the demise of British industry. Why did no one act? It was because past failures—bailouts, walkouts and closures—haunted Governments of all parties. We had White Papers about knowledge-based economies and so on, but real support for industry was off the table. We now realise that without industrial growth, we will not create the long-term, well-paid jobs the nation needs.

However, we can do it. Since the financial crisis, Jaguar Land Rover has created several thousand new jobs and apprenticeships. This is the sort of “industrial renaissance” we need. It has happened; it has not taken a long time—it has happened over the last three years. The leader of my party has had the guts to make changing the structure of our economy his long-term priority. However, there are simple steps we can take together, immediately, that will make a real difference to our industrial future.

First, Parliament has been saying since 1867 that we have a skills gap, but it is still a significant issue today. One step forward would be to extend the university technical college programme, championed so ably by the noble Lord, Lord Baker, and my noble friend Lord Adonis. Currently some 30 colleges are being developed. What stands in the way of tripling that number?

Next, I welcome the Government’s aim to increase apprenticeships and my party’s proposal for giving funding control to businesses. Yet apprenticeships work best when business seeks out talent and offers quality training in return, not when government simply gives funds for a particular programme, or even when a business does. Young people can tell which apprenticeships have prospects from make-work schemes. Recently, GKN offered 30 apprenticeships and had over 500 applicants. Scottish Power had 1,600 applicants for 30 positions. We must help businesses to create more high-demand, long-term apprenticeships. To do so at low cost, why not extend the tuition loan scheme with student apprenticeship loans? We would create a pot of money that businesses could use to pay for college courses for their apprenticeships. The student would decide if the apprenticeship was worth while; the training budget would help the business to afford apprentices; and the task of providing transferable skills would lie with colleges and universities. This would also help to abolish the vocational academic divide, which we urgently need to do.

Next, we need to increase investment. For two years now I have been fighting for a business bank. I am delighted that the Business Secretary has announced such a bank. Yet the Government talk about a billion in assets. A British bank needs to be operating at £1 billion a year. Much of this could be found by combining ineffective, small programmes and leverage could be increased by focusing on reducing the risk of loans made by private banks.

Finally, we need to increase funding for innovation. Here, again, scale is the issue. I recently returned from China, where I had discussions with senior ministers about their industrial strategy; I was hoping to set up a big company there. China is so concerned that the growth rate is falling to a mere 7% a year that it plans to increase innovation spend by a third in the next five year plan. China is also spending $160 billion on infrastructure alone, which will drive innovation in transport and green energy.

We have high-speed rail, of course, but even here, we seem to be frightened to take decisions. We also have good innovation programmes, such as the “catapults”, but budgets are small. As money is tight, why not take an example from America? Could we not put a small internal tax on government procurement, and use the proceeds to fund small business innovation? Today, departments have to identify innovation needs first, then find funding. No one wants to cut their budget to fund innovation elsewhere, so not much happens. If the funding was set aside, this would create a “funding well” that everyone would go to. Public procurement is over £200 billion a year, so even a quarter of a per cent would give us real scale.

That is four simple steps to help industry grow for the long term by acting today. In the last three decades I have often felt like a voice in the wilderness on industrial policy. However, I have brought some of the biggest inward investors into this country. They are all succeeding, because we have a lot of talent, a large skills base at the upper end, and because our science and technology is second to none. Why is it that other companies can use these? Today the words “industrial policy” are on everyone’s lips, which is most welcome. But worthy talk means nothing without action. Now is the time to deliver.

19:35

[Lord Empey]

My Lords, like other Members I welcome the Minister to his new role. He comes to the Department at a very critical time. I also thank Lord Adonis for securing this debate, because if we listen to even today’s trade figures, we realise what a mountain this country has to climb.

Lord Adonis opened his remarks by telling a story about wind turbines. May I inform him that in my own home city of Belfast, Harland and Wolff shipyard now assembles wind turbines and works very closely with Siemens in building the transformers and power distribution systems that have to be at sea. We hope that that will be a source of considerable economic growth.

This country took a wrong turning in the 1960s and 1970s, when contempt began to emerge for our manufacturing sector. It was true that British industry was disfigured by widespread strikes and became a byword for how not to do things. Motor vehicles were the most obvious example of where things began to go wrong, poor quality being the most obvious flaw. But in Whitehall a view began to emerge that we could no longer make things that the world wanted to buy, so we should move over to the service side. Finance, insurance, tourism and, later, IT were among the growth sectors. It was believed that the service sector could make up the losses in manufacturing jobs that people would no longer need. Therefore they would no longer require apprenticeships but could be trained for the white-collar jobs emerging, including a big surge in the public sector. A by-product of this thinking was the redistribution of jobs from the north of the UK to the south-east, something which still haunts us today.

The massive increase in interest rates in the early 1980s extinguished large swathes of our manufacturing sector. People were paying up to 22.5%. While much of the sector was clearly uncompetitive, the rapid and uncontrolled demise of such a large part of industry was regrettable and we still live with many of the consequences. The belief that we could survive in the modern world without making things that people here and in other parts of the world wanted to buy has been shown to be wrong.

Traditionally, as an island nation, we have always been traders of manufactures. This was our lifeblood and we turn our back on this part of our history at our peril. The strength of any country’s industrial base comes from either the possession of large quantities of natural resources or from a highly skilled and motivated workforce with access to capital—or from a combination of both. There is a growing realisation that we have ignored manufacturing for too long and that our ability to pay for our public services is inextricably linked to our ability to export more goods and tradable services. Our trade deficit is running at about £40 billion a year—of which half is with China—and urgent action is necessary. We cannot permanently rely on borrowing to sustain our lifestyles.

People glibly say that the way out of our financial difficulties is to “grow the economy”. Who says that we are guaranteed a growing economy? What happens if the natural growth in world demand is met by emerging economies? What happens if we have to rely long-term on the current level of economic activity? The first thing that we must do is to ensure that we hold on to what we have and ensure that it is fit for purpose.

Ironically, as we speak, the future of our major defence company is on the line with the proposed merger between BAE Systems and EADS, as a number of noble Lords have mentioned. The UK is number two in the world in the aerospace sector, with approximately 17% of world markets. I fully understand that defence spending is under great pressure here, in the rest of Europe and in the United States, and the temptation to spread the load and the risk with this merger must be great, but this is one decision that we must get right. Like many, I feel most concerned that any defence supplier to Her Majesty’s forces should not be subject to any political pressure from any other Government, whether French, German or American.

We have seen examples in recent years of how Governments differ. In Libya last year, the German Government did not fire a shot in anger, and we recall that it was a French Exocet missile that created havoc for the Royal Navy during the Falklands dispute. What would happen if HMG took a different stance on a future conflict from either or both of those partners? How could we be sure that supplies of parts and spares would flow if those shareholders and HMG were on opposite camps? The Americans may have concerns over security of supply, but they also have commercial fish to fry; if they can find a way of pushing BAE out of the US market, there will be more to go around for US contractors. This is a very difficult decision, and I hope that we get an early chance to debate these issues before irrevocable decisions are taken.

As a nation, we must refocus on getting business the skills to train internationally, and I hope that the Chancellor will see to it that there are fiscal incentives to favour those companies and individuals that create wealth, rather than seeing them penalised for their entrepreneurship.

19:41

[Lord Giddens]

My Lords, I also welcome the noble Lord, Lord Marland, to his role, and I look forward to many interesting debates with him.

I have been a practising social scientist for several decades—a sign of a misspent life, one could say—and never before has the future of world society and the world economy seemed to me so opaque and imponderable as it does now. To me, this is not a recession like other recessions; it is an expression of much more deep-rooted forces that none of us at the moment fully understands. When we look at manufacture worldwide, it is a big mistake to suppose that the dominant force in the world economy is a simple transfer from west to east. That is happening, of course; in 2010 China became the world’s largest manufacturing country by output. Yet that simple statistic conceals complex changes whose consequences are not at all clear—at least not to me.

Manufacturing output has risen sharply over the past 30 years the world over, but the proportion of jobs created has actually gone into reverse. Worldwide, there has been a net reduction in manufacturing jobs since 1990 in spite of the rapid growth of manufacturing in China and other emerging economies. When we see areas in the UK, the US or the EU where unemployment is over 20%, this results as much from technological innovation as from a shift of manufacture eastwards. In other words, the advance of manufacture is very different from the creation of net new jobs. Moreover, much manufacture now takes place in global chains rather than in particular countries. As the FT journalist Peter Marsh points out, to be a star manufacturing company you do not need to make anything, and the biggest manufacturers in the world do not in fact make anything. Rather, what happens is that the company co-ordinates a diversity of businesses in different countries. This is radically different from the past.

We are currently experiencing what Marsh calls, in his book of the same name, a “new industrial revolution”. It is initiating an era of mass personalisation, much more decentred than old manufacturing processes. A good example is the firm Essilor, based in Paris. It is the leading maker of lenses for glasses in the world, making 100 million lenses, unique to each customer —amazing—that are sold to 400,000 opticians in 100 countries. In order to do this, the company has a network of 20,000 computers in Essilor offices around the world. This is a totally different pattern of manufacturing from the past, and we do not quite know—as social scientists, anyway—where it is leading us.

Against this backdrop, it certainly makes sense that we should build up and expand the UK’s manufacturing base, but we have to do so in terms of the trends that I have been describing and to be very sensitive to them. I have three brief points to make in working this through. First, although it is right to emphasise a return to industrial policy—the new wisdom, as it were—it will actually have to be totally different from the 1970s. It will not be a matter of picking industries or of simple investment in infrastructure; if it is going to work, it will have to be much more holistic and involve large chunks of the economy and of government, and at the same time be highly flexible. That is a great challenge. At the moment we do not really know how to do this and an awful lot of work will have to be done, so loose talk about industrial policy should be avoided.

My noble friend Lord Adonis mentioned renewables, but they are very unlikely to create new jobs. It is no good just saying that they create jobs; they have to create new net jobs, but jobs will be lost in the older fossil fuel industries as renewables come on track. New technology tends to destroy jobs rather than just create them, at least in terms of net jobs.

Secondly, we have to be very careful about borrowing naively from what appears to be current best practice—for example, “Let’s be more like Germany”, “We need more technical skills”, “We need more apprenticeships” and “Let’s create the equivalent of the Mittelstand”. It is only 10 years ago that Germany was regarded as the sick man of Europe, and its status as a manufacturing country gained enormously from its membership of the euro. A detailed study shows that if Germany exited the euro, it would lose probably 40% of its manufacturing capacity competitively in world markets. One should reflect on that.

Thirdly, we should not assume that current trends are unilinear. I do not understand why people in this country are not taking notice of the reindustrialisation debate in the United States, which I have mentioned in previous discussions. The Boston Consulting Group reckons that 3 million net new jobs in the US can be created by 2020, but these result from a reversal of the existing chain transfer from west to east. The price of oil, the need to protect patents and the rising costs of labour in China are likely to reverse some aspects of the current trend of movement of manufacture from west to east. These are likely to be not in high-tech industries but in low-tech ones. That debate should be pursued in detail in this country too.

19:48

[Lord Bilimoria]

My Lords, I welcome the noble Lord, Lord Marland, to his new ministerial role and look forward to many future interactions.

I thank the noble Lord, Lord Adonis, for securing this timely and indeed timeless debate. In fact, the word of the day with regard to British manufacturing is “decline”. I declare up front my interest as chairman of the Cobra Beer Partnership, a joint venture with Molson Coors, one of the world’s largest brewers. If you need evidence of Britain’s continuing strength in areas of manufacture, look no further than the brewing capital of the world, Burton-on-Trent, the largest brewer in Britain and one of the largest in Europe, where we brew Cobra beer.

I am relieved that the Government have finally woken up to the fact that we in Britain do not have a balanced economy; we have let things slip. Agriculture is now barely 1% of GDP. In 1978, as we have heard, manufacturing was 26% of GDP; today it is 12%. In 1970, services accounted for 54% of GDA and manufacturing 40%; by 2009 services had increased to 78% while manufacturing had declined to 17%. Does the Minister agree that the Government need to encourage manufacturing?

We have not lost the ability to be the best of the best manufacturers in the world, particularly in advanced engineering and design. I visited the Rolls-Royce Motor Cars factory in Goodwood and was inspired. I visited the Rolls-Royce factory in Bristol and saw the engines of the Typhoon being built, and was inspired. Cobra is first and foremost a multiple award-winning manufacturer and I am proud of it—I am sorry to boast. Will the Minister admit that the Government are not doing enough to encourage innovation? First, we have had a short-sighted cut of up to 80% of teaching funding in higher education. We have the finest universities in the world along with the United States. Higher education is one of the jewels in our crown. How short-sighted is this eroding of our competitiveness as an industrial base?

Does the Minister agree that the UK Government are hugely underfunding and undersupporting R and D? The UK’s investment in research and development is well below that of other advanced economies. Sweden spends 3.5% of its GDP on it, Finland and Japan around 3.4%, Germany 2.5%, the United States around 2.7% and the United Kingdom only 1.8%. Furthermore, according to the World Economic Forum, in skills development, about which the noble Lord, Lord Adonis, spoke, the UK workforce is 18th in the world behind Germany, Japan, Sweden and the Netherlands, to name just a few. Yet I was privileged to write the foreword for Big Ideas for the Future, published by Universities UK and Research Councils UK, and I was proud to see that despite this relative underfunding and underinvestment, British universities continue to punch well above their weight. This publication highlights 200 world-beating, world-changing innovations coming out of British universities throughout Britain, and not just Oxford and Cambridge.

Are we doing enough to encourage students at school to take up science and engineering? In 1949 an Eton biology master wrote in one of his pupil’s reports that he believed that he had,

“ideas about becoming a scientist; on his present showing this is quite ridiculous … he would have no chance of doing the work of a specialist, and it would be a sheer waste of time, both on his part and of those who would have to teach him”.

I was delighted and proud today to see that at my old university, Cambridge, yet another Nobel Prize was won by that same Eton schoolboy, Professor Sir John Gurdon, still middle-aged at 79. In my book old age is 80 onwards.

Having been born and brought up in India, and as the founding chairman of the UK India Business Council, I have seen the enthusiasm with which Indian students pursue engineering. The Indian institutes of technology are more difficult to get into than Oxford, Cambridge, Harvard, Yale, Stanford and MIT combined and multiplied by 10. There is the whole issue of funding in British industry. The irony is that we have bailed out the banks, but the banks are not lending to business, particularly to SMEs. I pointed this out to the Minister yesterday in the House and I remain unsatisfied that the Government are doing enough to make the banks lend to start-ups and SMEs. The Government need to encourage entrepreneurship and SMEs, and could institute so many more tax breaks and incentives for new business and businesses taking on new employees, such as cuts to employers’ national insurance and NI holidays. Will the Government consider this?

We are very lucky to be outside the euro, and to be one of the most open and welcoming economies in the world. I was delighted today to read that in a recent survey, British companies felt less affected by red tape than those in other countries featured in the survey. This is great news. However, in spite of our corporation taxes coming down, our tax burden overall is still too high and unattractive to inward investment and to the brightest talent.

The Government’s madcap immigration cap is sending out the wrong signals, not least by including student numbers in the overall permanent immigration figures, deterring foreign students. Does the Minister agree? I know that applications from India have been plummeting and that students there are asking, “Does Britain want us?”. We need to attract the brightest and the best foreign students, let alone the £8 billion that they bring into the economy and the generation-long links that they build with their countries, which can only help our global business reach. Foreigners make up 30% of Oxford and Cambridge academics, and the immigration rules are affecting them. Does the Minister not agree that this is madness and short-sighted?

We have so much going for us in this country. We have an industrial base that is still the best of the best and that has the potential to grow if we make it a priority. I am delighted that the Government have finally woken up to this and I urge them to set a target that manufacturing grows as a percentage of GDP. It is manufacturing and business that pay the taxes that create the jobs that pay the taxes that pay for our public services. It is our world-beating manufacturing that is crucial to keeping Britain’s competitive position at the top table of the world.

19:54

[Lord Haskel]

My Lords, I welcome the Minister to his new job and also congratulate my noble friend on moving this Motion about industrial policy. In recent years so much of our industrial policy has been a debate about devaluation and copying others. Our industrial base must be built on our own strengths. We have to correct our own weaknesses.

John Kay’s report of 23 July points to our first weakness. His diagnosis tells us that the financial markets in this country serve the business creators poorly. It is the agents and the middle men who are served best. He also says that the structure of the markets militates against long-term decision making. An industrial base is certainly a long-term project. An early task is to change the rules of the financial markets so that stewardship becomes the business culture of our industrial base.

Let me turn to manufacturing. As the noble Lords, Lord Hennessy and Lord Empey, explained, manufacturing has to be part of our industrial base. We have strengths in manufacturing. We have some wonderful companies in the motor industry and aeronautics, and I am sure that the Minister will join me in singing their praises, but are they part of Britain’s industrial base? The majority are foreign-owned—owned by global enterprises that are part of the global industrial base. They are of course committed to the UK, but their concerns are global.

We must now see our British industrial base as part of the global industrial base. Globalisation matters. These companies also see themselves as part of the single-market industrial base. That is why the EU also matters. But manufacturing itself is changing. New manufacturing techniques and biological processes make customised and small-scale local production viable, as my noble friend Lord Giddens explained. New materials are making products with new processes, and new technology is raising productivity to make existing processes faster. This new technology and these new ways of looking at business are turning economies of scale on their head. All this has to be considered in assessing our industrial base. We have a strength, with the Technology Strategy Board providing help, without undue commercial pressure, to find our way through these changes. The ability of the public and private sectors to work together to convert ideas into products and services must be part of our industrial base, as my noble friend Lord Adonis explained. Hand in hand with this is the strength of our science base. The Government tell us that expenditure on our science base is justified and will be maintained. This must be a strength, but is it true?

We now learn that Government departments have cut their R & D budgets, and the details are in today’s Financial Times. I am sure that the Minister has seen them. Perhaps he can explain what is happening and what the truth is. For a modern industrial base dynamics are important: business has to work in concert with science. Cluster dynamics, or knowledge and innovation communities as the commission calls them, are an important part of our modern industrial base. This is where a lot of the innovation comes from. You get a double benefit. If you create an innovative piece of medical equipment the whole nation’s health benefits from this medical innovation enabled by this piece of machinery. This double effect is one of the real benefits of having a modern industrial base built in this way.

The most important part of our industrial base must be our people, our human capital. In the modern industrial base, so much of the so-called brain work is increasingly undertaken by algorithms and artificial intelligence, much of it to raise productivity. Our strength will be to accommodate this and not fight it, as described by my noble friend Lord Bhattacharyya. Skills training will have to take a quantum leap. It is the quality and the standard, not just the quantity, that will be relevant. This improvement must be continuous. If this is true, then our best and brightest will have to become our teachers. Our Teach First scheme is a start, but we will have to move into a higher gear. This uplift in skills will have to apply to everybody, not just to an elite, because, as my noble friend Lord Giddens said, modern technology can destroy jobs as well as create them. Therefore, our industrial base must be based on an equal society, on one nation, because without a fair and equal social base, our industrial base will be built on sand.

20:00

[Lord Hunt of Chesterton]

My Lords, I welcome this debate and thank my noble friend Lord Adonis for introducing it. I also welcome the noble Lord, Lord Marland, to his new role. He made a tremendous commitment to nuclear energy and I hope he has passed on the message to his successor at DECC. You cannot have all sweet—a little sour is necessary—so I have to remind him of when he got rather agitated at an all-party meeting on energy-intensive industry and suddenly loosed off. He said, “The UK should become the corner shop of the world”. We wondered about that as it was an unusual ambition, and one hopes he meant the laboratory and workshop of the world. That is what I want to refer to.

Following the focus of the noble Lord, Lord Selsdon, on national laboratories and technological centres, all countries of the world have hitherto regarded them as an essential part of a technological economy, but not the UK. I worked in an industrial lab in the 1960s. At that time, we had fantastic, world-leading laboratories in electricity, gas, water resources, railways and hydraulics. They are all gone. Since the 1990s, we have lost the Royal Radar Establishment, the Royal Aircraft Establishment and the United Kingdom Atomic Energy Authority. They all played an essential role in providing advice and development, in testing new technology and in stimulating thousands of small companies. A few national centres have survived, such as the National Physical Laboratory, the Laboratory of the Government Chemist, Cefas, the Building Research establishment, the Culham laboratories and, I am glad to say, the Met Office. You can read about why the Met Office survived and about its history in the House of Lords Library.

However, a similar story also took place in the major industrial laboratories, which were world leading. We had two major oil company laboratories, one in Cheshire and one in Surrey. I am glad to hear that BP has now reversed its policy and is expanding its strength. We had amazing electrical engineering laboratories in Leicester, Stafford and Essex. I remember an advertisement in the 1960s for English Electric laboratories. It said, “Come and solve the Navier-Stokes equation and the problems of fluid mechanics”. That does not happen now. As other noble Lords have emphasised—but not very many—we still have the world-class Rolls Royce centre and its remarkable network of university laboratories. Its approach was very different from elsewhere, and other countries have copied it. It is true that university research has expanded greatly in the UK, as in other countries, and we have new high-tech companies—in which I declare an interest as chairman of a small high-tech company—but these institutions are not the same as the technological base. The exception, perhaps, is Warwick’s engineering centre, which has the roles of national technology base and university.

What is the future of our technological industrial base? There is no plan or even principle that one can discern, and one asks whether the UK will become a major technological economy again. The evidence is that the greatest success comes through international collaboration. We are, in fact, part of Europe and some of our major laboratories are now collaborations. One way of looking to the future is by looking at the market opportunities, such as aviation, in which we have Rolls Royce and Airbus. One of the interesting points about the 1960s—and I refer to the noble Lord, Lord Hennessy—is that there is a general statement that there were great mistakes about electronics and aviation. The French say that building Concorde was the essential breakthrough to persuade the Americans that Europe could produce an aeroplane that flew regularly and safely to America, and that without Concorde we would never have had Airbus. In Britain, Concorde is often regarded as an industrial mistake, but in France it was regarded as the way to enter the market. High technology enables you to enter markets.

The other point of the House of Lords Committee concerned why we have a very good software industry. The answer is Harold Wilson because he said that we not only had the white heat of technology but that we wanted to have transputers. Nobody had ever heard of them in the 1960s, but that was the basis of our extraordinary software industry. That is the reason why governmental and department initiatives are important, as well as research centres.

The other important point, which other noble Lords have mentioned, is that we must look forward to the long-term needs which will have strong technology input. My noble friend Lord Adonis referred to infrastructure for dykes, roads and buildings. The extraordinary thing about the Netherlands is that they put them together and put windmills on their dykes, which saves 40% of the cost of the windmills. We need energy, whether wind or nuclear. This Government have been very strong in advocating space. We now essentially have a government lab—it is a European government lab in Harwell—for making use of space. Looking forward, are we simply to rely upon industry and universities to provide the technological base, or should we reconsider establishing a new technological base, making use of them but, in addition, making use of government resources?

Finally, I emphasise the importance of good graduate engineers, which other noble Lords have mentioned. I was talking to colleagues this morning. The difficulty in the UK is that we have some universities with an extremely demanding curriculum producing extremely good engineers, but too many schools and universities do not have such a demanding level and German companies say that they do not correspond to the standards in Germany. In Germany, engineers are paid almost as much as lawyers. In Britain, engineers are paid half the salary of lawyers. Lawyers work extremely hard at university because of the high pay at the end of it. How are we going to solve that? I do not know. I leave that to the Minister.

20:00

[Lord Young of Norwood Green]

My Lords, I, too, congratulate my noble friend Lord Adonis on creating the opportunity for this debate. Given the complexity of the subject, it is a short period to try to deal with it. I congratulate the noble Lord, Lord Marland, on his appointment. I do not envy him trying to sum up this debate given the varying strands and the different advice that he has been given. Given the time available, I am going to focus on only one or two issues.

Skills are a key part of our industrial base and I want to draw attention to the importance of STEM subjects. My noble friend Lord Haskel mentioned the quality of teaching in engineering, maths and physics. My noble friend Lord Adonis was one of the promoters of Teach First. In trying to convince young people that engineering is an area worth entering, we need to focus on the quality of teaching.

There was lots of talk about infrastructure. I want to concentrate on our broadband network, investing in it and making sure that investment delivers and delivers on time, given the importance of broadband investment in R & D and in all our industries. My noble friend Lord Adonis talked about the poor quality of the mobile network. Why is it taking us so long to introduce 4G? By the time we get round to introducing it, 5G, which is on the horizon, will already be with us.

Given my interest in skills and apprenticeship, I want also to focus on apprenticeships. A variety of advice is coming to us on apprenticeships. I am not sure that I completely agree with my noble friend Lord Bhattacharyya on how we should fund them, but their importance should not be underestimated. My noble friend Lord Adonis told us of his experience of companies saying to him, “We were looking for 86 apprentices out of 1,500 and we could not get them”. That comes back to the quality of teaching and ensuring that our best young people understand that it is worth going into engineering. That is fundamentally important. My noble friend Lord Bhattacharyya reminded us that the number of applications for apprenticeships vastly exceeds those available. Demand exceeds supply enormously. My noble friend gave his example and the example that I normally give is British Telecom. It has some 300 apprenticeships and it gets something like 25,000 applications.

The number of companies offering apprenticeships is still pitifully small—only a third of the FTSE 100 companies. Somewhere between 4% and 8% of companies are actually offering apprenticeships. They are a good deal, so how do we encourage the creation of apprenticeships? I hope the noble Lord will address in his reply why the Government are not demonstrating by example and by their own leadership. When they offer government contracts, they should ensure that apprenticeships and training are a key part of those contracts. We did that in the previous Government, and it is interesting that the noble Lord, Lord Hennessy, in his contribution referred to the Olympics—I cannot remember the wonderful quote from Abraham Lincoln. It was not by chance that we got nearly 400 apprentices out of the Olympics; we got them because there was a demand on the companies. Similarly with Crossrail, we ensured that some 400 apprentices would emerge from that. I cannot for the life of me understand why the Government do not understand the importance of demonstrating through their own contracts the creation of apprenticeships. It is an area that the Government have to tackle.

There is another way the Government could encourage apprenticeships. If they want more SMEs to participate in apprenticeships, one of the key ways is through more group training associations, the hubs that encourage SMEs to recognise that if some of the administrative and training burden is concentrated centrally, it becomes much more attractive to those companies to participate in apprenticeships.

I am conscious of the clock, so I will wind up my speech. I think it was my noble friend Lord Giddens who gave us the global perspective, if you like. I did not know whether to feel cheered or gloomy at the end of it, although he gave us some sage advice about the great challenge of trying to create net jobs. I hope that when the Minister gives his reply, he will focus on how we are going to create more apprenticeships.

20:13

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

My Lords, my wife said to me in the car as we came down from Birmingham that this was going to be a very interesting, high-quality debate. As always, my wife is right. I am very grateful for the support of my noble friends Lady Garden and Lord Gardiner, who are obviously showing their trade at skills very early on.

[Lord Giddens]

I thank the Minister for allowing me to speak. I find it interesting that there are no women taking part in this debate. Perhaps one thing we might do is encourage more female entrepreneurs—viz, your wife.

[Lord Marland]

My wife does not need any encouragement, but I am sure she will be very grateful.

I thank the noble Lord, Lord Adonis, for making this debate available because this is a massive challenge for the country, for the Government, and for those of us who have to set about the challenge. What came through to me about this debate was how passionate we all feel about the future of British industry, British manufacturing and Britain plc. We have a lot to do and we can all play our part. If we have passionate people who want to be involved, that is very good.

The noble Lord, Lord Adonis, summed it up by saying that we have been negligent in the past. That is true, and it is not just the previous Government but the Government before that. As has been referenced by the noble Lord, Lord Bilimoria, the present Government have inherited a reduction of manufacturing output from 22% down to 11% in the past 20 years. Why has that happened? It is because there has been a lack of investment, as has been referenced, and a lack of competitiveness, which we need to reverse.

However, it is not the end of the world. Years ago, as the noble Lord, Lord Hennessy of Nympsfield, reminded us, 92% of the activity in this country was in agriculture. The right reverend Prelate mentioned the industrial output in Blackburn. My family on both sides were involved in Ashton-under-Lyne, of all places, and further south in Manchester in the cotton manufacturing industry, in Lancashire Cotton. Now look at that industry; it has changed out of all recognition. As has been referenced by many noble Lords, including the noble Lord, Lord Haskel, we live in a global world with fast-changing global dynamics, where Britain has been at the forefront of moving with those dynamics and changing our economy into a diversified economy, which, of late, has become overdependent on the financial sector, and we are licking our wounds from that overdependence.

We have also failed to store the benefits of our prosperity for a rainy day. So many other countries do so, such as Norway, which has a marvellous sovereign oil fund and so much of its oil profits have gone into those oil funds.

We have to redress the mess and we intend to do so. It will not happen overnight. Nothing does happen overnight. This is a big country where we need to change things. People have got used to a way of life that has revolved round a very munificent European purchasing economy and that is now changing as that economy goes into the doldrums. The Government are at odds with the noble Lord, Lord Bilimoria, in the sense that we believe businesses do better when government does less. We also believe that people do better when government does less. That is why it is important for government to set a framework for business and allow business to take things forward with the right initiatives and incentives, which I shall come to later. However, we cannot hold the hand of business. We can take it to the trough but we cannot make it drink.

The corporation tax plan that the Chancellor has outlined, which takes corporation tax down to 22% by 2014, which will make it the lowest in the G20, is a real incentive for business. Our Red Tape Challenge is being looked at very closely by this Government with a view to reducing 1,200 red tape regulations. We have revolutionised our UK trade and industry department with a very outward looking, purposeful export drive. Export is the key to our growth recovery. That is why, as I referenced earlier, I have done 25 country visits in the past 10 to 12 months. The noble Lord, Lord Green, has carried out some 43 such visits. The Prime Minister always takes a large delegation with him when he goes on overseas visits because without an export drive we will not get growth.

Time does not allow me to go through all the various schemes that we have put together. However, noble Lords will know that we have the regional growth fund, the Plan for Growth, mentoring schemes and schemes to develop education and skills, a lot of which I mentioned at Question Time yesterday. In manufacturing alone we have the Advanced Manufacturing Supply Chain, the Manufacturing Advisory Service and the High Value Manufacturing Catapult centre. I applaud the excellent work of our colleague, the noble Lord, Lord Bhattacharyya, who has been at the forefront of that as he has been at the forefront of the excellent Tata company, for which we are very grateful.

As the noble Lord, Lord Adonis, put it, we can all go round the country finding examples of good news and bad news, and he gave eloquent examples of each. The most important thing is to support the bad news stories and turn them into good news stories and that is the job of government. I am grateful to my noble friend Lord Bates for pointing out that all is not lost. We have 1 million new jobs in the public sector and 450,000 businesses have registered with Companies House in the past 12 months—the highest figure since records began, so there is a platform for starting this change of emphasis. Both the noble Lord, Lord Adonis, and my noble friend Lord Bates mentioned—

[Lord Giddens]

I thank the noble Lord for giving way. Could he also give an analysis of the businesses that have closed down?

[Lord Marland]

I cannot take too many questions as I shall never get through my speech in the 12 minutes which have been allocated, but I think the figure is about 290. However, we can give the noble Lord exact figures later.

The noble Lord, Lord Hennessy, talked about having a business Select Committee. That is a very good idea. There is, in fact, a BIS Select Committee and a Lords inquiry into SMEs. One of the initiatives that I have undertaken is a trade representatives programme appointing specific trade representatives for specific countries. This will be announced by the Prime Minister in the not-too-distant future. We need to look at initiatives as regards how we can review trade. I am very grateful for that suggestion.

The right reverend Prelate referred to the British Aerospace and EADS merger. We think that we will know more about that tomorrow evening. Therefore, I think he would not expect me to talk about that at this point. We regret hearing that he will not be with us for much longer. We wish him every success. His contribution was extremely beneficial.

The noble Lord, Lord Selsdon, talked about energy and the rail infrastructure as being key areas of development and I cannot but agree with him. I have already mentioned the noble Lord, Lord Bhattacharyya, who has so much experience and knowledge of this area and feels deeply about the need to enhance our skills to provide a platform from which we can emerge into growth.

The noble Lord, Lord Empey, talked about trade and manufacture. He talked very interestingly about Northern Ireland, of which he has great knowledge. I take on board everything he says. The speech that the noble Lord, Lord Giddens, made was an immense tour de force. I compliment him on it and I totally agree that the holistic view has to be taken and that we need to consider globalisation. I am not going to be able to deal with all the questions the noble Lord, Lord Bilimoria, raised. I make the offer to him and to all noble Lords that I will be happy to discuss any of this at a later stage or at further debates. The noble Lord, Lord Haskel, again talked about globalisation and he is absolutely right. The noble Lord, Lord Hunt of Chesterton, reminded me of the need for laboratories but, again, all is not lost as Sir John Gurdon has been rewarded for his expertise.

The noble Lord, Lord Young of Norwood Green, talked about broadband. Broadband is fundamental; I was discussing it with the Minister responsible today and urging him that we should move on further. As a Government we took the initiative to sell 4G, which we are in the process of doing. It takes a while but it was an initiative I am proud to say our Government took part in.

We have a world-class country. All of the countries I travel to want to do business with Britain. We are in the top three of any countries in the world that countries want to deal with. We have design and technology of the highest quality, architecture, accounting, agriculture, oil, defence, aerospace, digital music, motor cars. For the first time in many years we are exporting more cars than we are importing. We have insurance, strategic planning, medical, education, et cetera. We are a world-class country which is looked upon with huge favour by the world. I invite all Peers who feel as passionately as I do to support and champion business as we try to get ourselves out of the economic problems that noble Lords have all very kindly addressed. With that I thank all noble Lords for their contribution.

House adjourned at 8.26 pm.