House of Commons

Wednesday 17th October 2012 Commons Chamber

Wednesday 17 October 2012

The House met at half-past Eleven o’clock

Prayers

Wednesday 17th October 2012 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 17th October 2012 Commons Chamber

The Secretary of State was asked—

[Jessica Morden (Newport East) (Lab)]

1. What recent discussions he has had with the Secretary of State for the Home Department on preparations for elected police and crime commissioners in Wales.

[The Secretary of State for Wales (Mr David Jones)]

With permission, Mr Speaker, I would like to take this opportunity to pay tribute to the dedication and professionalism of Dyfed-Powys police and all the other agencies involved in the search for April Jones, who went missing on 1 October. I am sure that the whole House will join me in praising them for their continued work to find April and in praising the support shown by so many of the people of Machynlleth for her family.

The Wales Office and the Home Office have been working closely with the Welsh Government and partners to make the police and crime commissioner reforms a success in Wales. Considerable progress has been achieved through the Wales Transition Board.

[Jessica Morden]

I welcome the Secretary of State to his new job. Will he let us know how much printing the second set of ballot papers for the police commissioner elections in Wales will cost the Home Office?

[Mr Jones]

I am grateful to the hon. Lady for her welcome. As the House will know, the order for the bilingual version of the forms was laid on 15 October, and it is hoped that the process will be completed by 30 October. On the question of cost, I shall write to her.

[Glyn Davies (Montgomeryshire) (Con)]

A serious potential problem has been averted over the preparation of voting papers in the Welsh language. Will the Secretary of State engage with the Welsh Language Commissioner to ensure that the commitment to bilingualism in Wales is fully respected in all non-devolved areas, where the problem arose?

[Mr Jones]

Yes, the Wales Office is committed fully to the Welsh language and its support, not only in the devolved areas but in the un-devolved ones. I am pleased to report that my office is working closely with the Welsh Language Commissioner, and indeed it is proposed that an official of the commissioner will be embedded in the Wales Office.

[Mrs Siân C. James (Swansea East) (Lab)]

I know that the right hon. Gentleman is a great proponent of the Welsh language, but I urge him to ensure that in all aspects and in all avenues of work within the Palace of Westminster the Welsh language is given the respect it so rightly deserves. I hope that this type of thing is not going to happen again.

[Mr Jones]

The hon. Lady has identified a problem that needs to be resolved, in that the Welsh Language Commissioner is, of course, a position that was created by the Welsh Assembly. It is important that in the non-devolved areas sufficient support should be given to the Welsh language, and I am pleased to report that my office is prepared and anxious to undertake that duty.

[Dr Hywel Francis (Aberavon) (Lab)]

2. What recent discussions he has had on the future of the steel industry in Wales.

[The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)]

I have had regular discussions with ministerial colleagues on issues that affect Wales, including the future of the steel industry.

[Dr Francis]

I thank the Minister for his reply. May I warmly congratulate him and his colleague on their new positions, which I believe were as a consequence of their apprenticeships on the Welsh Affairs Committee?

Tata Steel is a major investor and employer in my constituency. Nearly £250 million has been invested recently in the steel plant at Port Talbot, which is strongly supported by the Welsh Government, the local council, the local trade unions and the local management. This is a strong regional partnership, so what will the Wales Office do to assist the steel industry in these challenging times? Will the Secretary of State speak to the Business Secretary, his Cabinet colleague, to address the issue of a level playing field in energy costs? Will he visit the steelworks in my constituency at the earliest opportunity?

[Stephen Crabb]

I thank the hon. Gentleman for his question and for his kind remarks. One of the most enjoyable parts of my first term in Parliament was serving under his chairmanship on the Welsh Affairs Committee.

The Government absolutely recognise the strategic importance of Tata Steel as an inward investor into Wales, and the Wales Office has close links with the company. I will certainly speak to the Business Secretary about what more we can do to support Tata’s inward investment. We do recognise that particular issue associated with energy costs. That is why we have made £250 million available for intensive energy users, and I hope that the hon. Gentleman and industries in Wales will be making representations about how they can benefit from that money.

[Michael Fabricant (Lichfield) (Con)]

As my mother comes from Aberavon, I understand only too well the importance of the steel industry and I congratulate the hon. Member for Aberavon (Dr Francis) on asking his question. Does my hon. Friend the Minister agree, however, that the great news we have received today that employment in Wales is up by 40,000 and unemployment down by 7,000 is a good start?

[Stephen Crabb]

The labour market statistics for Wales were particularly good today. Unemployment and worklessness are down and overall employment levels are up. There are great reasons for optimism, but there is no reason to be complacent.

[Kevin Brennan (Cardiff West) (Lab)]

3. What steps he plans to take to promote the Prime Minister’s respect agenda in dealings between the UK Government and the Welsh Government.

[The Secretary of State for Wales (Mr David Jones)]

I am committed to working with the Welsh Government to deliver economic growth in Wales. I do not intend that political differences should stand in the way of such co-operative working in the interests of Wales.

[Kevin Brennan]

I congratulate the Secretary of State and his hon. Friend the Minister—llongyfarchiadau, as we say in Wales. When the Prime Minister promised a respect agenda, did he mean trying to block Welsh Assembly legislation, unilaterally abolishing wage protection for agricultural workers in Wales and tearing up a cross-border GCSE exam system without consultation? If that is the case, can he even spell the word respect? It is R. E. S. P. E. C. T., by the way.

[Mr Jones]

As we say in Wales, diolch am y llongyfarchiadau. I can assure the hon. Gentleman that this Government are fully committed to the respect agenda. We are working closely with the Welsh Government and I am very pleased with the relationship I am cultivating with Carwyn Jones, the First Minister.

[David T. C. Davies (Monmouth) (Con)]

Would both Ministers, whom I warmly congratulate, agree with me that parch, as we say in Monmouthshire, is something that works in both directions, and that the refusal of Welsh Assembly Ministers to appear before Select Committees shows a disgraceful lack of respect not only to this House but to those of us who were put in it by the people of Wales?

[Mr Jones]

The word “parch” means respect and I agree that parch is a process that works in two directions. I am very hopeful that a new relationship will be cultivated not only between the two Governments but between Parliament and the Assembly.

[Mr Peter Hain (Neath) (Lab)]

I welcome the Secretary of State to the job and although I wish his predecessor all the best, may I say how good it is to have a Welsh MP as Secretary of State for Wales again, but why on earth is he referring the first two laws passed by the Welsh Assembly under the Government of Wales Act 2006 to the Attorney-General? The provision I included in that Act was not to allow the Secretary of State to block Welsh legislation but primarily to deal with any cross-border issues, which I cannot see apply in these cases. Why is he interfering in this anti-devolution manner?

[Mr Jones]

I echo the tribute the right hon. Gentleman pays to my predecessor, who was an excellent Secretary of State. As for the references to the Supreme Court, as he knows these matters are set out in the Government of Wales Act, for which he was responsible. The reference of the first Welsh Bill—that is, the Local Government Byelaws (Wales) Bill—to the Supreme Court should not be regarded as disrespectful or hostile in any sense. It is simply an administrative procedure to clear up the issue of competence and that is it.

[Owen Smith (Pontypridd) (Lab)]

I add my words of support to those of the Secretary of State for Dyfed-Powys police and the community of Machynlleth as they live through the awful events of recent weeks. I also warmly congratulate the Secretary of State and his deputy and welcome them to their new role. The Opposition are thrilled that the Prime Minister finally found a Welsh MP to take on the post.

In fairness, the Secretary of State’s predecessor, with whom I did not always agree, has found a new spirit of candour in recent weeks since she left the job and has admitted, for example, that his Government have lost all reputation for competence. On this question of respect, will he continue in this spirit of openness and clear up the question of his attitude to devolution? Will he tell us straightforwardly—does he think that devolution has been good for Wales?

[Mr Jones]

I do not think I can carry on accepting all these welcomes; it is far too much for me—[Interruption.] I am sure they will soon come to an end. I feel strongly that devolution is developing, and that as the Assembly and the Assembly Government mature as institutions they could be very good for Wales indeed. That is why I and my office are determined to work closely with them to assist in doing our best for Wales with them.

[Owen Smith]

Mr Speaker, you will forgive me if I think that the Secretary of State’s view that the Assembly “could” be good for Wales is hardly a ringing endorsement of the devolution settlement that was so decisively supported by the Welsh people. Are not his view that the devolution settlement has “damaged our constitution” and his deputy’s view that it is “constitutional vandalism” what they really think and where they really have disrespect for devolution? Is not the truth that the right hon. Gentleman cannot speak for modern Wales—devolved Wales—but we on this side of the House can and will?

[Mr Jones]

When I used the word “could”, my intention was to point out that under the Labour Assembly Government, coupled with 10 years-plus of Labour Government here in London, Wales has been the poorest part of the United Kingdom. I believe that a lot more could be done to make Wales a happier place to live, and for that purpose it is necessary for us in the Wales Office to work closely with the Welsh Assembly Government. I am willing to do that; I hope that the hon. Gentleman will support me.

[Andrew Selous (South West Bedfordshire) (Con)]

4. What steps he is taking to promote enterprise zones in Wales.

[The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)]

I am strongly committed to working with the Welsh Government to encourage private sector investment and growth in Wales, including promoting enterprise zones in Wales.

[Andrew Selous]

Is it not important to have a much closer working relationship between the Governments in London and in Cardiff in respect of enterprise zones, so that we can make faster progress in creating jobs and wealth in Wales?

[Stephen Crabb]

My hon. Friend is exactly right: it is vital that the two Governments—the UK Government and the Welsh Government in Cardiff—work together on a range of issues, not least the success of enterprise zones. I am committed to doing that, and I look forward very much to my first meeting with the Welsh business Minister, Edwina Hart, which is to take place shortly.

[Geraint Davies (Swansea West) (Lab/Co-op)]

The Minister will be aware that having the Bristol enterprise zone alongside the tolls on the gateway to the south Wales economy is a major impediment to inward investment and growth. Will he therefore ask Treasury colleagues to commission a study to see whether a reduction in the tolls would be more than compensated for by an increase in income tax resulting from new jobs created by inward investment?

[Stephen Crabb]

My right hon. Friend the Secretary of State is to discuss tolls on the Severn bridge with our right hon. Friend the Secretary of State for Transport this afternoon. No decisions have been made beyond 2018, when the current concession ends. Clearly there is a lot to discuss in relation to how we maximise the benefits of inward investment in Wales.

[Jonathan Evans (Cardiff North) (Con)]

Does my hon. Friend agree that the objectives of the Cardiff Central enterprise zone are much more likely to be realised now that the coalition Government have granted £11 million to the city of Cardiff to make it one of the most digitally connected cities in the world?

[Stephen Crabb]

My hon. Friend is exactly right: the £11.7 million that we have made available to Cardiff to support its development as a superconnected city will make it one of the most digitally advanced cities in the United Kingdom, and we look forward to that helping to leverage new business investment into the city.

[Nia Griffith (Llanelli) (Lab)]

I very much welcome the Minister’s positive words about the Welsh Assembly Government’s work with enterprise zones and, indeed, full co-operation on measures to help the economy, but will he join me in congratulating Welsh Assembly Government Ministers on creating 1,700 youth jobs in the past six months, in an effort to tackle the scourge of underlying youth unemployment in Wales? Will he tell his Cabinet and Front-Bench colleagues how Wales is leading the way in this and that they should never have got rid of the future jobs fund?

[Stephen Crabb]

I thank the shadow Minister for that question. I welcome any new jobs being created that will tackle long-term youth unemployment in Wales. I am just disappointed that she has not welcomed today’s news that unemployment has fallen in Wales, employment is up and worklessness is down.

[Alun Cairns (Vale of Glamorgan) (Con)]

12. Enterprise zones are a fantastic success in England, but their success in Wales has been somewhat limited. Enhanced capital allowances can play a significant part in attracting inward investment to enterprise zones, so is my hon. Friend somewhat disappointed and dismayed that the Welsh Government have not sought to communicate with the Treasury about where they would like to bring this tax advantage in Wales?

[Stephen Crabb]

The discussions about the use of enhanced capital allowances in conjunction with other forms of regional aid are continuing with colleagues in the Treasury, but we look forward very much to seeing specific proposals from Welsh Ministers on how they envisage enterprise zones developing in Wales.

[Mrs Madeleine Moon (Bridgend) (Lab)]

The most enterprising company in my constituency, Biotec Services International, is being prevented from developing because it cannot get export licences for growth hormones from the Home Office. I have written to the Home Office. Will the Minister take an interest in this matter so that this unique Welsh company does not lose its opportunity to grow and develop for Wales?

[Stephen Crabb]

I am concerned to hear that from the hon. Lady. I note that she has written to the relevant Minister, but if she would like to write to me as well, I will certainly look into the matter and see that she gets all her questions answered.

[Karen Lumley (Redditch) (Con)]

5. What steps his Department is taking to increase the level of inward investment into Wales.

[The Secretary of State for Wales (Mr David Jones)]

I am working with UK Trade and Investment, ministerial colleagues and the Welsh Government to improve levels of inward investment into Wales. In fact, I am meeting the chief executive of UKTI later today.

[Karen Lumley]

Does my right hon. Friend agree that the scrapping of the Welsh Development Agency has had a negative effect on inward investment into Wales, as highlighted recently by the Welsh Affairs Committee?

[Mr Jones]

It is true that under the Welsh Development Agency, Wales was regularly the most important destination for inward investment, but I support both Governments working closely together to continue to attract inward investment into Wales.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

I warmly associate myself and my colleagues with the right hon. Gentleman’s remarks regarding Dyfed-Powys police and all the emergency services which are looking for little April Jones. I also congratulate the Secretary of State and the Under-Secretary on their appointments.

What assessment has the right hon. Gentleman made of the loss to Wales of inward investment since the disappearance of the Welsh Development Agency brand? Who has the last word on inward investment—this Government or the Government in Wales?

[Mr Jones]

It is clear, as the right hon. Gentleman says, that Wales needs a strong brand in order to promote itself around the world. It is clear also that although economic development is devolved to the Assembly Government, it needs to have the leverage that it will get from UKTI. That is why I am encouraging the Welsh Government to work closely with UKTI.

[Mr Llwyd]

What discussions have the UK Government had with the Welsh Government about the establishment of a dedicated trade promotion agency, either sitting within the Welsh Government or as a private sector vehicle, as recommended by the Welsh Affairs Committee back in February?

[Mr Jones]

I have regular discussions with the Welsh Government about inward investment, and I hope the Welsh Minister for Business is giving consideration to that.

[Mr Mark Williams (Ceredigion) (LD)]

Academic research and development and its commercialisation are key ingredients in inward investment. I am heartened that the Secretary of State is meeting UKTI later today. Will he impress on it at that meeting the excellent work that is being undertaken in Bangor, Glyndwr university, Aberystwyth and Swansea? We have a good message to sell and we need UKTI to help us to sell it.

[Mr Jones]

My hon. Friend is absolutely right: Welsh universities do have a good tale to tell. I would like to single out Swansea university and its science campus, which it is developing closely with British and international industry.

[Ian Lucas (Wrexham) (Lab)]

Disability Employment Ltd of Stoke wants to inwardly invest in Wrexham to put disabled workers sacked by this Government back to work. Will the Secretary of State come to Wrexham a week on Friday to meet disabled workers from Remploy to explain to them why the Government will not support that company?

[Mr Jones]

As the hon. Gentleman knows, the Government’s policy on Remploy is to provide supported jobs in mainstream employment. I have had discussions with him previously about the issue. I am entirely happy to have further discussions with him if he requires. As to Friday, I cannot make any commitments as I do not have my diary. [Interruption.]

[Mr Speaker]

Order. There are far too many noisy private conversations taking place in the Chamber. Let’s have a bit of order for Karl MᶜCartney.

[Karl MᶜCartney (Lincoln) (Con)]

6. What discussions he has had with the Secretary of State for Education and others on the role of Ofqual in Wales.

[The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)]

My right hon. Friend the Secretary of State for Wales has regular discussions with the Secretary of State for Education. For clarity, Ofqual is the independent regulator of qualifications in England. It is the Welsh Government who regulate qualifications in Wales.

[Karl MᶜCartney]

Does the Minister share my concern that a dangerous precedent is set when Ministers take it upon themselves to mark exam papers?

[Stephen Crabb]

My hon. Friend makes his point. Much has been said about that and I do not want to add to it today, other than to say that it was unfortunate that the Welsh Government acted unilaterally on the matter. The key point is the ongoing review of qualifications in Wales and the proposals from my right hon. Friend the Secretary of State for Education for new qualifications at 16 in England. It is important that parents and pupils in Wales have confidence that their qualifications will be respected and robust, and that they will be able to take them to institutions and employers in England, where they will be respected.

[Mr Shailesh Vara (North West Cambridgeshire) (Con)]

7. What discussions he has had with ministerial colleagues and others about foreign direct investment in Wales.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

9. What discussions he has had with ministerial colleagues and others about foreign direct investment in Wales.

[The Secretary of State for Wales (Mr David Jones)]

I have regular discussions with ministerial colleagues about attracting foreign direct investment to Wales. I was delighted that my right hon. Friend the Deputy Prime Minister, during his visit to Turkey earlier this month, announced that a Turkish steel company is to open a new factory in Cardiff.

[Mr Vara]

I am grateful to my right hon. Friend for those comments. Does he agree that UK Trade and Investment’s global presence through our embassies and high commissions provides a huge opportunity to ensure direct foreign investment in Wales?

[Mr Jones]

UKTI has global reach, with its officials embedded in every British mission around the world, and I am delighted that it is seconding two officials to the Welsh Government.

[Simon Hart]

The Secretary of State will know that one reason foreign companies do not invest in west Wales is the over-burdensome planning restrictions. Will he use his influence in the Welsh Assembly to sweep away those obstacles?

[Mr Jones]

I am sure that my hon. Friend was pleased to hear that the Welsh Government have designated an enterprise zone in Milford Haven. Planning is indeed extremely important for the development of enterprise zones. It is being streamlined in England and I very much hope that the Welsh Government will follow suit.

[Albert Owen (Ynys Môn) (Lab)]

I welcome the Secretary of State to his new post—perhaps he is overwhelmed by the welcome he has had thus far. Will he encourage Ministers to look at improving infrastructure in Wales, particularly port infrastructure, on which enterprise zones such as the one in Anglesey rely? He has passed the buck to the Welsh Assembly in the past. Will he now fight within Government so that we have a level playing field with English ports?

[Mr Jones]

Ports are an undevolved area. I am pleased to tell the hon. Gentleman that I regard Holyhead port as an important anchor of Anglesey’s economy and hope shortly to visit Captain Wyn Parry there.

[Nick Smith (Blaenau Gwent) (Lab)]

The proposed motor sport investment in Ebbw Vale could be an employment game-changer for Blaenau Gwent. Variable investment allowances are being sought by the international development. I urge the Secretary of State to get the Treasury on board now for a fair tax treatment to help deliver the project.

[Mr Jones]

Enhanced capital allowances are an extremely important element of enterprise zones. They have already been granted in the case of the Deeside enterprise zone and we are urging the Welsh Government to make appropriate representations to HM Treasury so that they can be extended to other enterprise zones, such as the one in the hon. Gentleman’s constituency.

[Chris Evans (Islwyn) (Lab/Co-op)]

8. What assessment he has made of the potential effects of reductions in housing benefit in Wales.

[The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)]

Information on the expected impact in Wales and across Great Britain of our housing benefit reforms is set out in the impact assessments. We are taking urgent steps to manage housing benefit expenditure, providing a fairer and more sustainable scheme by ensuring people who receive it have to make the same choices about housing as people who do not.

[Chris Evans]

Will the Minister please explain why 17-year-old Shanika Roberts, who faces being made homeless because of this Government’s cuts to housing benefit, should move in with her friend?

[Stephen Crabb]

Some £21 billion is currently spent on housing benefit, and the figure will go up without the reforms we are putting in place. I ask the hon. Gentleman this: what is fair about 100,000 people in Wales languishing on waiting lists, often in cramped accommodation, while others live in houses with empty rooms that are larger than they need?

[Mr David Nuttall (Bury North) (Con)]

In view of the fact that £8.7 billion is spent on benefits in Wales every year, and nearly £1 in every £8 of that—£1 billion—is spent on housing benefit alone, is the taxpayer not entitled to expect value for money?

[Stephen Crabb]

The taxpayer is absolutely entitled to expect value for money, and I hope that my hon. Friend will appreciate the fruits of our welfare reforms coming through in Wales, as borne out by today’s labour market statistics.

[Guto Bebb (Aberconwy) (Con)]

10. What discussions he has had with the Secretary of State for Transport on capital investment in rail infrastructure in Wales; and if he will make a statement.

[The Secretary of State for Wales (Mr David Jones)]

I have regular discussions with my right hon. Friend the Secretary of State for Transport about a range of transport issues that affect Wales, including the importance of investing in rail infrastructure in Wales.

[Guto Bebb]

I thank the Secretary of State for his answer and warmly congratulate him on his new position. I also congratulate him and his predecessor on the electrification of the south Wales railway network, which the Labour party failed to achieve in 13 years. Will he join me in calling on the Department for Transport to look at the possibilities for new signalling on the north Wales main line?

[Mr Jones]

I met representatives of Network Rail earlier this month to discuss their plans for the rail network in Wales, including the re-signalling programme. The north Wales main line is due to be re-signalled commencing in 2015 as part of the Wales route modernisation programme.

[Hywel Williams (Arfon) (PC)]

14. How much of the £9.4 billion that is going to be spent on rail infrastructure to 2019 will be spent in north Wales?

[Mr Jones]

I am sure that the hon. Gentleman will be pleased to hear that I am already holding discussions with the Welsh Government and local authorities in north Wales with a view to exploring the possibility of electrifying the north Wales railway line—105 miles, and an enormous economic benefit for north Wales.

[Roger Williams (Brecon and Radnorshire) (LD)]

I welcome the announcement of extra capital expenditure, but will the Secretary of State work with the Welsh Assembly to make sure that Welsh civil engineering companies help in competing for contracts for this work?

[Mr Jones]

Yes; this is an issue that has been identified recently. I am sure that the Welsh Government are aware of the problem and that they will address it.

The Prime Minister was asked—

[Mr William Bain (Glasgow North East) (Lab)]

Q1. If he will list his official engagements for Wednesday 17 October.

[The Prime Minister (Mr David Cameron)]

I am sure that the whole House will wish to join me in paying tribute to the servicemen who have tragically fallen since we last met for Prime Minister’s questions: Lance Corporal Duane Groom of 1st Battalion Grenadier Guards; Sergeant Gareth Thursby and Private Thomas Wroe of 3rd Battalion the Yorkshire Regiment; Sergeant Jonathan Kups of the Royal Electrical and Mechanical Engineers; Captain James Townley of the Royal Engineers; and Captain Carl Manley of the Royal Marines. Once again we are reminded of the immense danger our armed forces operate in to uphold our safety and our security. Their families and the whole country should rightly be proud of their heroic service, and we will always remember them.

I am sure that the House will also wish to join me in paying tribute to PC Fiona Bone and PC Nicola Hughes, who were killed—brutally murdered—in the line of duty on 18 September. The whole country has been deeply shocked and saddened by the loss of these two young, dedicated, exceptional officers. Our thoughts are with their families and with their colleagues at what must be a very, very difficult time.

I also know that the House would wish to join me in sending our heartfelt condolences to the family of Malcolm Wicks, who sadly passed away on 29 September. Those in all parts of this House will remember Malcolm as a real gentleman—a man of great integrity and compassion who put his constituents first, who worked across party lines, and who was a thoroughly decent man. He served the House with great distinction for 20 years, and I know he will be missed by all who knew him.

We must also pay tribute to another of Parliament’s great characters—it is hard to believe that he is not sitting right there in front of me—Sir Stuart Bell. Sir Stuart was hugely popular across the House and was honoured for his services to Parliament. We will always remember him as a passionate, dedicated Member of the House whose kindness, again, transcended the political divide. We send our sincere sympathies to his wife and family at this difficult time.

This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House I shall have further such meetings later today.

[Mr Bain]

May I associate all right hon. and hon. Members with the Prime Minister’s tribute to the members of the armed forces and the police who died in the service of our country, and to their families; and also say how much we in this House, and the people of Middlesbrough and Croydon North, will miss Sir Stuart Bell and Malcolm Wicks?

Last week the Prime Minister promised that work would always pay, but this morning Baroness Grey-Thompson and the Children’s Society have revealed that his current plans for universal credit next year will mean that up to 116,000 disabled people in work could lose as much as £40 a week. Does not that say everything about how this divisive Prime Minister always stands up for the wrong people? At the same time as handing huge tax cuts to 8,000 people earning over £1 million a year he is going to penalise some of the bravest strivers in our country.

[The Prime Minister]

The hon. Gentleman raises an extremely serious issue; let me try to deal with it as fully as I can. The money that is going into disability benefit will not go down under universal credit; it will go up. The overall amount of money will go from £1.35 billion last year to £1.45 billion in 2015. Under the plans, no recipients will lose out, unless their circumstances change. All current recipients are fully cash-protected by a transitional scheme. On future recipients, we have made an important decision and choice to increase the amount that we give to the most severely disabled children, and there will be a new lower amount for less disabled people. That is a choice that we are making. As I have said, we are increasing the overall amount of money and focusing on the most disabled. That shows the right values and the right approach.

[Andrew George (St Ives) (LD)]

Q2. I congratulate the Government on the early introduction of the Groceries Code Adjudicator Bill. Farmers and third-world, developing-country producers desperately need protection from what the Competition Commission has described as the “bully-boy tactics” of some of the supermarket buyers. The Bill is welcome, but how quickly will the Government introduce this vital measure?

[The Prime Minister]

We are making progress with introducing the measure, which, as my hon. Friend says, is important. It is very important that we stand up for farmers and that they get a fair deal from supermarkets. On occasion, there have been unfair practices, such as the in-year retrospective discounts that have sometimes been proposed. I think that the Bill will be a major step forward.

[Edward Miliband (Doncaster North) (Lab)]

I join the Prime Minister in paying tribute to the six servicemen who have died since the House last met: Lance Corporal Duane Groom of 1st Battalion Grenadier Guards; Sergeant Gareth Thursby and Private Thomas Wroe of 3rd Battalion the Yorkshire Regiment; Sergeant Jonathan Kups of the Royal Electrical and Mechanical Engineers; Captain James Tanley of the Corps of Royal Engineers; and Captain Carl Manley of the Royal Marines. They all died heroically serving our country and showed the upmost bravery and sacrifice, and our condolences go to their families and friends.

I also join the Prime Minister in paying tribute to PCs Fiona Bone and Nicola Hughes. They remind us of the dangerous work that our police officers do day in, day out in the line of duty. Their death is a great loss to the Greater Manchester police, the communities they served and, most of all, of course, their families.

I also thank the Prime Minister for his very generous comments about the two Labour colleagues whom we have lost since we last met. Stuart Bell was the son of a miner and a long-standing Member of this House. He was passionate about European issues and served with distinction as a Church Commissioner. His death was incredibly sudden: his illness was diagnosed just a matter of days before he died. The condolences of Labour Members and, I know, the whole House go to his family.

Malcolm Wicks was one of the deepest thinkers in this House. He was a brilliant Minister. I know from my time as the Energy Secretary what a brilliant Energy Minister he was. He faced his illness with the utmost bravery. He knew what was going to happen to him, but he carried on writing, thinking, talking and, indeed, engaging with the work of this House. My last conversation with him was just before our party conference and he talked passionately about politics, as he always did. Our condolences go to his whole family.

Today’s unemployment figures are welcome, particularly the fall in youth unemployment. I am sure that we will all agree that too many people are still looking for work. The number of people out of work for a long period—over a year—remains stubbornly high. Will the Prime Minister tell us why he believes that the fall this quarter in unemployment is not yet being matched by the figures for long-term unemployment?

[The Prime Minister]

First, I thank the right hon. Gentleman for his generous remarks about those who have fallen, the brave police officers and the colleagues that we in the House have lost.

The unemployment figures are a good piece of news that should be properly welcomed and looked at, because a number of different things are happening: employment is up by 212,000 this quarter; unemployment is down by 50,000 this quarter; the claimant count has actually fallen by 4,000; and what that means is that since the election some 170,000 fewer people are on out-of-work benefits. What is remarkable about the figures is that they show that there are more women in work than at any time in our history and that the overall level of employment is now above where it was before the crash in 2008. We still have huge economic challenges to meet, we are in a global race, and we need to make a whole set of reforms in our country to education and welfare and to help grow the private sector, but this is positive news today.

Long-term unemployment is still too high. That is partly because of the big increase in unemployment at the time of the crash. We need to do more to deal with long-term unemployment. That is why the Work programme has helped 693,000 people already. We are prepared to spend up to £14,000 on an individual long-term unemployed person to get them back into work. We do have the measures in place to tackle this scourge.

[Edward Miliband]

Notwithstanding that, unemployment, youth unemployment, long-term unemployment and long-term youth unemployment are all higher than when the Prime Minister came to office. I do not think that he can attribute the issue with long-term youth unemployment to the crash that happened four years ago, because it has been rising steadily over the past year or 18 months, and it remains a big concern. The number of people out of work for more than a year is continuing to rise. Does he agree that the longer young people remain out of work, the greater the damage not just now, but to their long-term prospects and to our economy?

[The Prime Minister]

Of course the right hon. Gentleman is right. The longer that people are out of work, the worse it is for them and for our economy. That is why we have the youth contract and the Work programme, which is the biggest back-to-work programme since the war. He mentions the problem of long-term unemployment. I just remind him that in the last two years of the Labour Government, long-term unemployment almost doubled. We should hear about that before we get a lecture. On helping young people, it is noticeable that under this Government, 900,000 people have started apprenticeships. We are backing apprenticeship schemes and reforming our schools and welfare system, so that it pays for people to get jobs.

We face enormous economic challenges in this country. Nobody doubts that. We have to rebalance our economy because the state sector was too big and the private sector was too small. Since the election, there have been 1 million new private sector jobs, which more than make up for the inevitable loss of jobs in the state sector. We have a huge amount more to do, but reform welfare, reform our schools, boost our private sector, and Britain can be a winner in the global race.

[Edward Miliband]

On long-term unemployment, I just say to the Prime Minister that there are more people out of work for longer than at any time for two decades. That is happening on his watch.

I want to turn to one group in particular who are losing their jobs directly as a result of the Government’s policy. A year ago, the Prime Minister told me at the Dispatch Box:

“There is no reason for there to be fewer front-line officers.”—[Official Report, 30 March 2011; Vol. 526, c. 335.]

Will he tell the House how many front-line police officers have lost their jobs since the election?

[The Prime Minister]

The percentage of police officers on front-line duties has gone up. That is the key. Frankly, whoever won the last election would have had to reduce police budgets. Labour was committed to reducing police budgets and we had to reduce police budgets. We have been able to increase the percentage because we have cut the paperwork and taken difficult decisions about pay and allowances. What is remarkable is that while the percentage of officers on the front line is up, crime is down.

[Edward Miliband]

I had really hoped that, just for once, we would get a straight answer to a straight question. All the Prime Minister needs to do—Government Members will like this—is to take a leaf out of the police Minister’s book, because on Monday he told the House the truth. He said that there are 6,778 fewer front-line police officers than when they came to power. Why not just admit—[Interruption.] I do not think that the part-time Chancellor is going to help, but perhaps he is taking over the Home Office. This is another promise broken.

The Government are not just breaking their promises; it is their conduct as well. This is what the Mayor of London said—[Interruption.]

[Mr Speaker]

Order. It will just take longer to get in the Back Benchers who wish to participate, as opposed to shouting and screaming in a juvenile fashion, because I will have to extend the session. The Leader of the Opposition will be heard and the Prime Minister will be heard. That is the end of it.

[Edward Miliband]

This is what the Mayor of London, the Prime Minister’s new best mate, said last year at the Conservative party conference:

“I reckon we need to…make it clear that if people swear at the police then they must expect to be arrested.”—[Interruption.]

The Chief Whip from a sedentary position says that he did not. Maybe he will tell us what he actually did say, which he has failed to do.

Yet according to the official police report,

“a man claiming to be the Chief Whip”

called the police “plebs”, told them they should know their place and used other abusive language. Can the Prime Minister now tell us: did the Chief Whip use those words?

[The Prime Minister]

What the Chief Whip did and what the Chief Whip said were wrong. I am absolutely clear about that, and I have been clear throughout. That is why it is important that the Chief Whip apologised. That apology has been accepted by the officer—[Interruption.]

[Mr Speaker]

Order. I said a moment ago that the Leader of the Opposition must and would be heard. The same goes for the Prime Minister. He must and will be heard.

[The Prime Minister]

What the Chief Whip did and said was wrong, and that is why it is important that he apologised, and apologised properly. That apology has been accepted by the officer concerned, and it has been accepted by the head of the Metropolitan police. That is why this Government will get on with the big issues of helping Britain compete and succeed in the world.

[Edward Miliband]

No straight answers on police numbers, and no straight answers on the Chief Whip. [Interruption.] The Under-Secretary of State for Wales says that we need real issues, but I think abusing police officers is a real issue. Just because a police officer has better manners than the Chief Whip, it does not mean that the Chief Whip should keep his job.

If a yob in a city centre on a Saturday night abused a police officer, ranting and raving, the chances are that they would be arrested and placed in the back of a police van, and rightly so. The Prime Minister would be the first in the queue to say that it was right. But while it is a night in the cell for the yobs, it is a night at the Carlton club for the Chief Whip. Is that not the clearest case there could be of total double standards?

[The Prime Minister]

This apology has been accepted by the police officer, and it has been accepted by the head of the Metropolitan police. It is clearly not going to be accepted by the Leader of the Opposition, who does not want to talk about what we need to do in this country to get our deficit down because he has got no plans. He does not want to talk about how we build on our record in employment, because he has got no plans. He does not want to talk about how we reform welfare, because he is opposed to welfare caps. That is the truth—he wants to discuss these issues because he has nothing serious to say about the country.

[Edward Miliband]

Here is the most extraordinary thing: the Government say that I practise class war, and they go around calling people plebs. Can you believe it? I have to say, it is good to see the Cabinet in their place supporting the Chief Whip in public, but from the newspapers, what are they saying in private? That he is “completely undermined” and that his position is untenable. In other words, he’s toast. That is the reality. Here is the truth about this Government: while everybody else loses their jobs, the Chief Whip keeps his. If you are a millionaire you get a tax cut, if you are everybody else you get a tax rise. [Interruption.]

[Mr Speaker]

Order. Mr Kawczynski, I am very worried about your health. You are shouting in a bizarre manner. Calm yourself, man, and get a grip.

[Edward Miliband]

Maybe he will tell us whether he is getting the tax cut.

The Government are totally out of touch. With this Government, it is one rule for those at the top, another rule for everybody else.

[The Prime Minister]

Now we know that the right hon. Gentleman wrote those questions yesterday, before unemployment fell. Because he obviously was not listening earlier, let me remind him that employment is up by 212,000—that is a success. Unemployment is down 50,000 this quarter—that is a success. The claimant count is down 4,000—that is a success. Typical! He comes to this House and he has written out his clever political questions, but he does not care what is really happening in our economy.

[Glyn Davies (Montgomeryshire) (Con)]

Over two weeks ago, April Jones, a five-year-old little girl, was abducted when playing with her friends in Machynlleth in my constituency, a very quiet, always well-behaved town. Will my right hon. Friend the Prime Minister join me in paying tribute to the truly amazing way in which the people of Machynlleth, the Dyfed-Powys police and the mountain rescue teams have come together and committed to the ongoing search for April?

[The Prime Minister]

I will certainly join my hon. Friend in doing that. I think the whole country has not only been shocked by these appalling events, but that frankly it has been lifted and incredibly impressed by the response of the community in Machynlleth, and everything that everybody has done to help the police and the emergency services. We have seen a whole community come together, not just in grief but in action to help this family, and it is a huge credit to everyone involved.

[Chris Williamson (Derby North) (Lab)]

Q3. At the Prime Minister’s energy summit last year, he promised faithfully that he would take action to help people reduce their energy bills. Will he tell the House and the country: how is it going?

[The Prime Minister]

We have encouraged people to switch, which is one of the best ways to get energy bills down. I can announce, which I am sure the hon. Gentleman will welcome, that we will be legislating so that energy companies have to give the lowest tariff to their customers—something that Labour did not do in 13 years, even though the Leader of the Labour party could have done it because he had the job.

[Several hon. Members]

rose—

[Mr Speaker]

Question 4 is a closed question.

[Dr Julian Lewis (New Forest East) (Con)]

Q4. Whether he remains committed to the continuation of the UK’s Trident nuclear deterrent after the Vanguard submarines are withdrawn from service.

[The Prime Minister]

My hon. Friend will be delighted to know that the answer is yes, we are committed to retaining an independent nuclear deterrent based on the Trident missile system. That is why we have continued with the programme to replace the Vanguard class submarines, including placing initial design contracts with BAE Systems.

[Dr Lewis]

That is indeed an excellent answer. Given that a part-time nuclear deterrent would be dangerously destabilising, will the Prime Minister confirm that the British Trident successor submarines must and will operate on the basis of continuous at-sea deterrence?

[The Prime Minister]

My hon. Friend is absolutely right to raise this issue. One of the key elements of the credibility of our deterrent has been that it is continuously at sea, and the Royal Navy takes immense pride in having been able to deliver that without a break over so many years. I have met some of the crews and visited some of the submarines. What they do is incredibly impressive and I pay tribute to them for the service that they provide. Yes, being continuously at sea is a key part of our deterrent.

[Kevin Brennan (Cardiff West) (Lab)]

Q5. In a parliamentary answer to my hon. Friend the Member for Wrexham (Ian Lucas) yesterday, the Government said: “we remain very concerned by continuing reports of Rwandan support for the M23 rebels”—[Official Report, 15 October 2012; Vol. 551, c. 74W.]who are killing, maiming and raping in eastern Congo. Why then did the Government Chief Whip authorise the payment of £16 million of British taxpayers’ money to Rwanda, as his parting shot on his last day as International Development Secretary?

[The Prime Minister]

First, may I wish the hon. Gentleman happy birthday for yesterday? He was seen celebrating it, and I would like to join in that— [Interruption.] I am sorry I was not invited.

The hon. Gentleman raises a very important point. I am clear: Rwanda has been, and continues to be, a success story of a country that has gone from genocide and disaster to being a role model for development and lifting people out of poverty in Africa. I am proud of the fact that the last Government, and this Government, have continued to invest in that success. But I am equally clear that we should be very frank and firm with President Kagame and the Rwandan regime that we do not accept that they should be supporting militias in the Congo or elsewhere. I have raised that issue personally with the President, but I continue to believe that investing in Rwanda’s success, as one of those countries in Africa that is showing that the cycle of poverty can be broken and that conditions for its people can be improved, is something we are right to do.

[John Glen (Salisbury) (Con)]

Q6. Today, unemployment figures show a reduction of 62,000 in the number of 16 to 24-year-olds who were out of work in the three months to August, and that employment is now at its highest level since records began in 1971. I am sure the Prime Minister will want to commend this Government’s economic policies to the whole House, rather than having more borrowing and spending from the Opposition.

[The Prime Minister]

My hon. Friend makes an important point. What we need is a rebalancing of the economy. We need growth in our private sector, and it is notable that we have a million new private sector jobs since the last election. That has more than made up for the job losses in the public sector. There is more we need to do to tackle youth and long-term unemployment, but today’s figures should be welcomed.

[Julie Hilling (Bolton West) (Lab)]

Q7. My constituent Aaron Moon lost his leg in Afghanistan. He then lost his disability living allowance. The Prime Minister promised to look after ex-servicemen and women. What has happened?

[The Prime Minister]

I have insisted on a specific carve-out from the new personal independence payment for limbless ex-servicemen, and they will be separately looked after through the Ministry of Defence.

[Andrew Bridgen (North West Leicestershire) (Con)]

Q8. The House agrees that negative campaigning deliberately designed to scare vulnerable people demeans politics. A campaign to “Save Our Hospital” when the hospital is not closing is possibly the worst example that I have ever seen. Does my right hon. Friend agree that Labour’s campaign in Corby and east Northamptonshire is an absolute disgrace?

[The Prime Minister]

My hon. Friend is entirely right. Labour MP after Labour MP is trooping up to Corby and claiming that the hospital is not safe when they know that that it is simply not true. The local newspaper is now backing up the fact that the hospital is being invested in by this Government, because unlike the party opposite—[Interruption.] Yes, the right hon. Member for Morley and Outwood (Ed Balls) is over there on the Opposition Benches. You know what? He is going to stay there for a very, very long time. The reason he will stay there is the reason why this country is in a mess—it is because of the borrowing, the spending and the debt that he delivered. His answer is more borrowing, more spending and more debt, so he should get himself comfortable.

[Chris Bryant (Rhondda) (Lab)]

Q9. Why will the Prime Minister not—[Interruption.] I am over here. Why will the Prime Minister not publish all the texts, e-mails and other forms of correspondence between himself and his office and Rebekah Brooks, Andy Coulson and News International, so that we can judge whether they are relevant? Is it because they are too salacious and embarrassing for the Prime Minister? [Interruption.] I would not smile if I was him; when the truth comes out, he will not be smiling. Or will he not publish the correspondence because there is one rule for him and another for the rest of us?

[The Prime Minister]

Mr Speaker, before answering this question, I would like hon. Members to recall that the hon. Gentleman stood up in the House and read out a whole lot of Leveson information that was under embargo and that he was not meant to read out, much of which about me turned out to be untrue, and he has never apologised. Do you know what? Until he apologises, I am not going to answer his questions—[Interruption.]

[Mr Speaker]

Order. I hope the House will have the self-restraint and courtesy to hear Mr Bebb.

[Guto Bebb (Aberconwy) (Con)]

Q10. Thank you, Mr Speaker. Employment levels in Wales have increased by 40,000 in the last quarter, not least because of the contribution of self-employment. Will the Prime Minister therefore join me in welcoming the extension of the new enterprise allowance, which has already resulted in the creation of more than 8,000 new businesses?

[The Prime Minister]

I will certainly join my hon. Friend in that. This is an important announcement, because the new enterprise allowance gives people who become unemployed the chance to set up their own business and enterprise. Under the current rules, people must wait three months before being able to access that programme, but under our plans, they will be able to access it from day one of becoming unemployed. I want to see many more new businesses started up in our country to build on the record of last year, when more businesses were established in Britain than in any year in our recent history.

[Chris Ruane (Vale of Clwyd) (Lab)]

Q11. When in opposition, the Prime Minister said:“all too often, when you put the questions to the Minister, the answer is pretty much a ‘not me guv’ shrug of the shoulders…There is a serious accountability problem with our political system.”Which of his Cabinet Ministers will take responsibility for the fiasco of the west coast main line?

[The Prime Minister]

The Transport Secretary came to the House and made a full statement and gave a full apology for what had happened. I must ask the House this: can we remember a Labour Minister ever apologising for anything? Anyone? None! [Interruption.]

[Mr Speaker]

Order. I call Sir Nick Harvey.

[Sir Nick Harvey (North Devon) (LD)]

Returning to the Trident issue, has the Prime Minister looked at the severe cost pressures facing defence at the very moment the Trident replacement has to be paid for? Joint strike fighter airplanes, Type 26 frigates, unmanned aircraft and Army vehicles all need paying for at much the same time. This has to come out of the defence budget, and austerity will be with us for some time yet, so will he keep an open mind about how exactly to replace our nuclear deterrent?

[The Prime Minister]

All the things that my hon. Friend lists are programmes that are fully funded and will be properly invested in, because, as he well knows—because he played a major role in it—the Government have sorted out the defence budget. Having carefully considered the issue of the nuclear deterrent, I do not believe that we would save money by adopting an alternative nuclear deterrent posture. Also, if we are to have a nuclear deterrent, it makes sense to ensure we have something that is credible and believable; otherwise there is no point in having one at all.

[Ian Paisley (North Antrim) (DUP)]

Q12. There are record levels of support for the British Union. The Prime Minister will know that according to a recent poll only 7% of the populace of Northern Ireland want a united Ireland, and that only rises to 32% in 20 years, if the question is asked then. Does he agree that, following the agreement he signed up to this week to ensure that a single, decisive question is asked on the Scottish and British Union, it is now up to him and the House to unite in a campaign to maintain, sustain and support the Union, and keep MacNeil and Wishart with us forever?

[The Prime Minister]

I am delighted to answer the hon. Gentleman’s question in the most positive way I can. I am pleased that we have reached an agreement with the Scottish Government to have a single, simple question in a referendum that must be held before the end of 2014, so that we can put beyond doubt the future of the United Kingdom. I hope that everyone will vote to keep the UK together. I know that it will have cross-party support, and I hope that politicians of all parties will agree to share platforms. I have always wanted to share a platform with Ian Paisley. Maybe I will get my chance.

[Nadine Dorries (Mid Bedfordshire) (Con)]

Recently, a lap-dancing club in Ampthill, a rural market town in my constituency, has been granted a licence. The one thing that residents of Mid Bedfordshire have learned is that it does not matter whether it is a Wembley-sized incinerator or a lap-dancing club in a beautiful market town, the wishes of local people have absolutely no weight in planning law. Does the Prime Minister agree that it is time we amended planning law, so that, when catastrophic applications come forward that blight the environment people live in and which greatly distress them, their views and voice are heard?

[The Prime Minister]

My hon. Friend speaks for many people about the frustration that the planning system can sometimes deliver. I would make two points about where we are making progress. First, we have changed the licensing laws to give the planners greater power to alter licences, and I believe that that can apply to the sorts of premises to which she refers. Secondly, of course, under our plans, people can write neighbourhood plans, which give far greater control to residents over the shape of their future community. I encourage her, however, to take up the specific issue with the Department for Communities and Local Government, to see whether there is more that we can do.

[Tony Lloyd (Manchester Central) (Lab)]

Q13. I thank both Front Benches for their tributes to Fiona Bone and Nicola Hughes, who were murdered in Greater Manchester recently. On the theme of policing, as the House has heard, the Home Office admits that nearly 7,000 front-line police personnel have now disappeared from our system. The Prime Minister promised that that would not be the case, and the public do not want it, so will he give a straightforward answer to what I think will be my last question to him in the House and give a commitment that there will be no more cuts to policing in England and Wales, whatever happens in the budgetary process?

[The Prime Minister]

Of course, no one wants to prejudge the wisdom of the Greater Manchester electorate, but I wish the hon. Gentleman well, if he is successful. I make to him the point that I hope the chief constable of his own force will make to him. It was made very effectively when Chief Constable Fahy of Greater Manchester police said that

“the effectiveness of policing cannot be measured by the number of officers…but by reductions in crime”.

Crime in Greater Manchester is down 12%. We need to recognise that there are difficult decisions. Frankly, the Labour party was committed to even greater cuts in police budgets than we have delivered. The key is this: can we crack down on paperwork, can we help get the police out on the beat, can we help them do the job they do and can we cut crime? The answer, in this case, is, “Yes, we can.”

[Gavin Barwell (Croydon Central) (Con)]

Q14. May I join the Prime Minister and the Leader of the Opposition in paying tribute to Malcolm Wicks, whose memorial service is at Croydon minster this Friday? He was an outstanding local MP, a thoughtful, decent man and a good friend. Is not one way in which we can honour his memory to continue to improve our national health service, so that more and more people beat cancer and do not have their lives so tragically cut short?

[The Prime Minister]

My hon. Friend speaks for the whole House in what he says about Malcolm Wicks. I understand that he often used to drive Malcolm home to Croydon after the vote—I think Malcolm referred to his car as “the cab”. The fare apparently was a bottle of wine at Christmas time—we will make sure the Inland Revenue lays off that, but it was a very good arrangement between Members.

My hon. Friend is absolutely right: one of the greatest things we can do to remember Malcolm is to ensure the continued success of the cancer drugs fund, which has helped over 20,000 people, and make sure that people can get urgent treatments, as well as urgent drugs.

[Natascha Engel (North East Derbyshire) (Lab)]

The Secretary of State for Education said this weekend that if there were a referendum on Britain’s continued membership of the EU, he would vote to leave. A third of the Cabinet agree with him. How would the Prime Minister vote?

[The Prime Minister]

As I said, I do not want an in/out referendum, because I am not happy with our leaving the European Union, but I am not happy with the status quo either. I think what the vast majority of this country wants is a new settlement with Europe and then that settlement being put to fresh consent. That is what will be going in our manifesto, and I think it will get a ringing endorsement from the British people.

[Mr Speaker]

Last but not least, Sir Tony Baldry.

[Sir Tony Baldry (Banbury) (Con)]

Q15. Does my right hon. Friend agree that there was no structural deficit at the top of the boom, as claimed by the shadow Chancellor?

[The Prime Minister]

My hon. Friend makes an important point, which is this. The IMF report out this week shows that the structural deficit in 2007, at the height of the boom, was 5% of our GDP, or £73 billion. The shadow Chancellor said there was no structural deficit. I think this really demonstrates just how little Labour has learnt. We have talked about our plans for the British economy—how we are going to help it compete and succeed. We know Labour’s plans for this weekend: to go on a giant march with its trade union paymasters. That is how the Leader of the Opposition is going to be spending his weekend—on the most lucrative sponsored walk in history.

Closure of HSBC in Shildon, County Durham

Wednesday 17th October 2012 Commons Chamber

Helen Goodman (Bishop Auckland) (Lab)

- Hansard - - Excerpts

I wish to present a petition from the people of Shildon against the closure of the HSBC bank in Shildon. HSBC is closing 60 branches across the country. It says it wants to rebuild trust, but it is abandoning 10,000 people, leaving them without a bank, and 800 local businesses. I am today writing to HSBC to ask it to put in £10,000 to extend the local credit union and provide at least some facilities for local people.

Following is the full text of the petition:

[The Petition of residents of Shildon, County Durham,

Declares that the Petitioners support the proposal to keep the HSBC branch in Shildon open; that it is a vital service for local businesses, residents and visitors to this busy town; further that there are over 10,000 residents in Shildon, and if HSBC were to close, we would be left with no banking facilities, causing problems for local businesses and residents who are unable to make the 3 mile journey to the next nearest HSBC branch.

The Petitioners therefore request that the House of Commons urges the Treasury to encourage HSBC to keep their Shildon branch open.

And the Petitioners remain, etc.]

[P001122]

Working Tax Credits

Wednesday 17th October 2012 Commons Chamber

Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)

- Hansard - - Excerpts

The petition states:

The Petition of residents of Middlesbrough and Redcar and Cleveland,

Declares that changes to tax credits will plunge thousands of working families into poverty.

The Petitioners therefore request that the House of Commons urges the Government to reverse these changes; to provide real incentives for people to work; introduces measures to clamp down on tax avoidances; and ensures that the Government honours its commitment to end child poverty in accordance with the Child Poverty Act 2010.

And the Petitioners remain, etc.

[P001124]

Points of Order

Wednesday 17th October 2012 Commons Chamber

12:37

[Dr Julian Lewis (New Forest East) (Con)]

On a point of order, Mr Speaker. You will remember the extensive—[Interruption.]

[Mr Speaker]

Order. I am sorry, but before the hon. Gentleman proceeds with his point of order, may I ask Members who are—perhaps unaccountably—leaving the Chamber to do so quickly and quietly, affording the same courtesy to the hon. Gentleman that they would wish to be extended to them under comparable circumstances?

[Dr Lewis]

Thank you, as always, Mr Speaker. You will remember the long campaign, successfully waged three years ago, to change the law so that the home addresses of Members of Parliament would never be disclosed as a result of freedom of information requests. A number of colleagues from both sides of the House have approached me about a freedom of information request that those colleagues who, unlike me, rent their homes should have their landlords’ names disclosed. There is concern that this could breach the security of MPs’ home addresses. Can you tell us what action you propose to take in this matter?

[Mr Speaker]

I am extremely grateful to the hon. Gentleman. I well remember the events of three years ago and more, in which he was closely involved. I note the point of order that he has raised. He will be aware that we do not discuss security matters on the Floor of the House. That said, I am very conscious of this current issue, to which he has drawn attention. It might be helpful to him and the House to know that I share some of the very real concerns that have been expressed across the House by Members, and I wrote—in, I hope, courteous but explicit terms—on this matter yesterday to the chairman of the Independent Parliamentary Standards Authority. If Members wish to see my letter, they are most welcome to do so; a copy might usefully be placed in the Library of the House. I will keep my eye on the situation on behalf of Members.

[Jim McGovern (Dundee West) (Lab)]

On a point of order, Mr Speaker. The Prime Minister comes to the Chamber at 12 noon each Wednesday to answer Prime Minister’s questions. Is it in order to for him to say that he refuses to answer a question?

[Mr Speaker]

It is entirely up to Ministers how they respond to the questions posed. I understand the concern and frustration that underlies the hon. Gentleman’s point of order, but the responsibilities and powers of the Chair are not engaged in the matter. The House can make its own assessment, and everyone else can do so as well.

Relationship, Drug and Alcohol Education (Curriculum)

Wednesday 17th October 2012 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

12:40

[Diana Johnson (Kingston upon Hull North) (Lab)]

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to make provision to include relationship, drug and alcohol education in the national curriculum; and for connected purposes.

Growing up today is full of wonderful opportunities and freedoms for our young people, but it is also probably the most challenging time ever to be a young person faced with questions such as, “My mates are drinking; should I drink and, if so, how much?”, “What are legal highs, and are they safe just because they are legal?” and “What does a healthy relationship look like?”

Like many hon. Members, I believe that the role of education involves much more than simply teaching a limited range of academic subjects. It has a powerful role in preparing and equipping young people for life by giving them the knowledge and skills to deal with the complexities of living in a modern, fast-changing world. We need to recognise that, along with support from parents and families, schools have a vital part to play in producing confident, well-informed young people.

I am pleased to bring forward this Bill, with its focus on relationship, drug and alcohol education, as I believe that these are key areas for all our young people growing up. We can show that well-planned, coherent and effective education programmes on drugs, alcohol and relationships can work. There is evidence that specific programmes can have a measurable impact on young people’s behaviour, in regard to the use of alcohol, tobacco and cannabis. Programmes such as “Relationships without fear”—a school-based intervention programme on developing healthy relationships and challenging domestic violence—can be shown to prevent domestic abuse by giving young people the knowledge, skills and advice to enable them to deal with abusive relationships.

We also know, however, that fear-based approaches that just give information without addressing the social context of drugs, for example, are not effective. Young people need the opportunity to consider, reflect on, evaluate, discuss and reach conclusions about drugs, alcohol and relationships in a safe, educational environment. We came close to making those subjects compulsory in the Children, Schools and Families Act 2010 under the previous Labour Government, but the Conservatives blocked the introduction of those provisions in the wash-up before the 2010 general election. When the coalition came into government, it instigated a review of personal, social and health education, but the review concluded nearly a year ago and the Government have still produced no proposals. Indeed, in the Government’s recent guidance on drugs and alcohol, they have specifically removed advice to schools about drug and alcohol education.

Why do I want to make these subjects compulsory? The main reason is to ensure that training will be made available for teachers and that resources will be allocated. For too long, many PSHE teachers have been talked into teaching this subject as an add-on to their main subject area, without having any specialist training or knowledge. We know that there is a mixed picture across the country, with some good practice and some that is not so good, but all our pupils deserve access to good quality PSHE.

The Bill would ensure that all children had access to good quality, age-appropriate education in relationships, drugs and alcohol throughout their education. Such topics would no longer be treated as trivial or as an add-on. Experts say that good quality education in this area can be achieved by one hour a week of the curriculum being devoted to the subject, and I believe that it could be incorporated in the curriculum fairly easily.

Turning to the specific issue of drugs and alcohol, we know that 60% of drugs education involves less than one hour per pupil a year. It is often of poor quality, incomplete or, at worst, totally irrelevant. The charity Mentor has reported that some 16-year-olds are getting the same lessons as 11-year-olds. In the week that the UK Drug Policy Commission published its report after six years of research, one of the key recommendations made was the need for prevention work through good drugs education in schools, best delivered through evidence-based life skills programmes.

I want to mention particularly the need for education about new drugs—often known as legal highs or club drugs. Twenty-eight new legal highs were identified in the first five months of 2012. How many hon. Members would know what to say if they were asked about “meow meow” and how it affects people? Most people do not know about club drugs and their effects, or, more importantly, their effects if taken with alcohol.

Yesterday morning, I attended the launch of the Angelus Foundation’s “Find out” campaign. The Angelus Foundation was set up after the death of Hester Stewart, who took a legal high, GBL. The foundation’s aim is to raise awareness of the risks of using legal highs and club drugs, working alongside the Amy Winehouse Foundation. In a poll conducted by the Angelus Foundation, it was found that 45% of 16 to 24-year-olds admitted to having been offered legal highs and 67% did not feel well informed about the risks, while 86% of parents lacked the knowledge to warn their children about legal highs.

At yesterday’s launch, Maryon Stewart, the founder of the Angelus Foundation, and Mitch Winehouse both spoke passionately of the need for our schools to educate our young people about drugs and legal highs, and particularly about the new drugs and the club drugs. Families and parents do not have the information to give to young people, while young people themselves are desperate to know more. A year 8 pupil, when asked what he would like to be taught about drugs, told Mentor, “Everything,” as “barely anything is taught.”

As for alcohol, an Ofsted report of 2010 said that students’ knowledge about its social and physical effects was rudimentary in about half of the secondary schools Ofsted had visited, yet the Government’s own alcohol strategy refers to the importance of teaching PSHE—personal, social, health and economic education—to help them in their aim to reduce alcohol consumption amongst young people. It is worrying to note that in the new, revised science national curriculum, all reference to alcohol, drugs and tobacco has been removed.

Finally, on relationship education, the only compulsory education our young people receive in terms of sex and relationships is currently within the science curriculum, and it relates to reproduction, anatomy and the spread of infections. For many years, parents have asked for relationship education to be included alongside the science. A recent mumsnet poll showed that 90% of respondents want relationships and sex education made compulsory in secondary schools. Some schools have provided very good relationships education, working together with parents. The best example I have seen was in a Roman Catholic primary school in inner London, teaching children about healthy relationships, building up children’s confidence and self-esteem in an age-appropriate way.

Just to challenge the myths, let me say that we know high-quality sex and relationships education does not encourage young people to become sexually active. We know through international research that good relationships education will delay the age at which a young person starts a sexual relationship. Particularly importantly, in the light of the horrific stories we have heard in recent weeks of children being abused in the Jimmy Savile scandal, we know that SRE can equip children and young people with the language and skills to understand appropriate and inappropriate behaviour and relationships, to be able to resist pressure and to know who to talk to and how to access help and support when they need it.

I also want to refer to the shocking statistic from the National Society for the Prevention of Cruelty to Children that one in three young women in a relationship have suffered abuse. We need to instil confidence in our young people, and especially young women, about what a healthy relationship looks like. The End Violence Against Women Coalition has launched the excellent campaign “schoolsafe4girls”. It recognises that harassment and abuse of women and girls is widespread and that schools have a unique and critical role to play in addressing harmful attitudes and abusive behaviour. The coalition is calling for schools, parents, students and the Government to work together to ensure that all girls are safe.

This Bill has cross-party support and support from many leading charities and organisations, including Brook, the Family Planning Association, Adfam, the Angelus Foundation, the End Violence Against Women Coalition, Mentor, Alchol Concern, Turning Point and many others. Those organisations recognise the importance to society of educating our young people, which can have a huge impact in preventing social problems from developing.

I am pleased to see that the new Under-Secretary of State for Education, the hon. Member for South West Norfolk (Elizabeth Truss), is present. I am sure that she will take particular account of the fact that although we cannot protect young people from every danger, we can equip them better at school and tilt the odds in their favour.

This is a sensible Bill. It is evidence-based, and I believe that it will have a real, positive effect on young people’s lives and on society in general.

Question put and agreed to.

Ordered,

That Diana Johnson, Mrs Sharon Hodgson, Chris Bryant, Barbara Keeley, Roberta Blackman-Woods, Kate Green, Andrew Percy, Annette Brooke, Lyn Brown and Nic Dakin present the Bill.

Diana Johnson accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 9 November and to be printed (Bill 73).

Enterprise and Regulatory Reform Bill

Wednesday 17th October 2012 Commons Chamber

[2nd Allocated Day]

Further consideration of Bill, as amended in the Public Bill Committee.

New Clause 8

Tribunal procedure: miscellaneous

‘(1) The Employment Tribunals Act 1996 is amended as follows.

(2) In section 9 (pre-hearing reviews and preliminary matters), in subsection (2) (deposit orders), in paragraph (a)—

(a) omit “, if he wishes to continue to participate in those proceedings,”;

(b) after “an amount not exceeding £1,000” insert “as a condition of—

(i) continuing to participate in those proceedings, or

(ii) pursuing any specified allegations or arguments”.

(3) In section 13A (payments in respect of preparation time)—

(a) in subsection (3), after “shall also” insert “, subject to subsection (4),”;

(b) after subsection (3) insert—

“(4) Subsection (3) does not require the regulations to include provision to prevent an employment tribunal from making—

(a) an order of the kind mentioned in subsection (1), and

(b) an award of the kind mentioned in section 13(1)(a) that is limited to witnesses’ expenses.”

(4) In section 42 (interpretation), in subsection (1), after the definition of “employment tribunal procedure regulations” insert—

““representative” shall be construed in accordance with section 6(1) (in Part 1) or section 29(1) (in Part 2),”.’.—(Jo Swinson.)

Brought up, and read the First time.

12:52

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

New clause 1—Removal of requirement for protected disclosures to be made in good faith—

‘The Employment Rights Act 1996 is amended as follows:

‘(1) Omit “in good faith”—

(a) in section 43C (Disclosures qualifying for protection), in subsection (1),

(b) in section 43E (Disclosure to Minister of the Crown), in paragraph (b), and

(c) in section 43F (Disclosure to prescribed person), in subsection (1)(a).

(2) Omit “makes the disclosure in good faith,

(b) he”—

(a) in section 43G (Disclosure in other cases), in subsection (1), and

(b) in section 43H (Disclosure of exceptionally serious failure), in subsection (1).’.

New clause 2—Duty on employers to prevent detriment caused by others to workers who have made protected disclosures—

‘(1) The Secretary of State shall make regulations requiring an employer, where a worker has made a protected disclosure under section 43A of the Employment Rights Act 1996, to take reasonable steps to ensure that the worker is not subjected to any detriment by any act, or any deliberate failure to act, by a person other than his employer done on the ground that worker has made the disclosure.

(2) Regulations under this section—

(a) are to be made by statutory instrument, and

(b) are not to be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.’.

Amendment 80, in clause 7, page 4, line 13, at end insert—

‘(1) Prior to the commencement of this section, the Secretary of State shall carry out an impact assessment into the effect of the introduction of proposed fees for the employment tribunal system and the impact this will have on the effectiveness of ACAS conciliation proceedings.’.

Government amendments 6 and 7.

Amendment 51, page 5, line 43, at end insert—

‘(e) preventing an employer or ex-employer of a prospective Claimant from applying for costs against the prospective Claimant under the Employment Tribunal Rules or other measures to provide an incentive to employers or ex-employers to take part in the conciliation process.’.

Amendment 52, in clause 11, page 7, line 27, after (2) insert

‘With the consent of the parties but not otherwise.’.

Amendment 53, page 7, leave out lines 29 to 38.

Amendment 54, page 8, leave out lines 1 to 10.

Amendment 81, leave out clause 12.

Government amendments 8 to 10.

Amendment 82, leave out clause 13.

Government amendments 11 to 13.

Amendment 70, in clause 13, page 9, leave out line 15.

Government amendment 14.

Amendment 71, page 9, line 32, leave out

‘in whatever way the Secretary of State thinks fit’

and insert

‘by the Secretary of State following consultation with the TUC and CBI’.

Government amendment 15.

Amendment 58, leave out clause 14.

Amendment 59, in clause 14, page 10, line 11, at end insert—

‘(c) and where the employer employs in excess of 10 employees at the time of the claim first being submitted to ACAS as per section 18A of this Act,’.

Amendment 92, page 10, line 14, at end insert—

‘(1A) The Secretary of State shall by regulations provide for an employer to pay a penalty to the Secretary of State for each period of time (as specified in those regulations) that passes during which an award of compensation under Part X of the Employment Rights Act 1996 has not yet been paid by the employer.’.

Amendment 72, page 10, line 17, leave out from ‘£5,000’ until end of line 4 on page 11.

Amendment 83, page 10, leave out lines 20 to 25.

Amendment 73, page 11, line 47, after ‘Fund’, insert

‘to be spent with the objective of promoting awareness of employment rights and promoting training for employment.’.

Amendment 94, in clause 15, page 12, line 4, leave out from ‘(protection),’ to end of line 5, and insert ‘after subsection (2), insert—

‘(2A) The disclosure of information relating to a private contractual matter to which the person making the disclosure is party is not a qualifying disclosure unless the worker making the disclosure reasonably believes it to be made in the public interest.”.’.

Government amendments 16, 17 and 31.

Amendment 57, in schedule 2, page 65, line 22, leave out ‘one month’ and insert ‘six months’.

[Jo Swinson]

New clause 8 will introduce sensible changes to the employment tribunal rules of procedure recommended by Mr Justice Underhill. I shall say more about the effect of those changes shortly. A number of other new clauses and amendments have been tabled both by the Government and by other Members, and I shall attempt to address them—as well as new clause 8—as comprehensively but as succinctly as possible. As Members will know, part 2 was subjected to thorough scrutiny by the hon. Member for Edinburgh South (Ian Murray) and his Committee colleagues, and all the clauses were accepted unamended.

Contrary to some of the views expressed in Committee, these measures do nothing to affect an individual’s employment rights. Instead, they deliver on the Government’s commitment to giving businesses more confidence to take on new staff and grow. We know that employment tribunals are a continuing cause of concern for businesses and, indeed, employees, and I should be surprised if Opposition Front-Benchers tried to argue that all is working swimmingly at present. The measures in part 2 are designed to alleviate the fears and problems by encouraging the earliest possible resolution of disputes, facilitating settlement agreements to help businesses to manage their staff more effectively, and ensuring that the tribunal system itself operates efficiently for all users.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Will the Minister give way?

[Jo Swinson]

I will in due course, but I want to make a bit of progress first.

I welcome this opportunity to set out the changes that we have proposed and respond to those made by others, continuing the work of my predecessor to bring reform to the employment tribunal system. Let me begin by explaining the amendments that we are making through new clause 8, which will amend existing provisions in the Employment Tribunals Act 1996.

Following his fundamental review of the rules of procedure for employment tribunals, Mr Justice Underhill made a number of recommendations about how the rules might be improved. In some instances, he felt that the primary legislation would need to be amended before desirable changes in the procedural rules could be made. These changes will help to achieve more effective and targeted case management which will benefit all tribunal users.

The first change involves deposit orders. Tribunals can currently require a party to pay a deposit of up to £1,000 as a condition of continuing to proceed with a weak claim. However, a judge cannot currently use a deposit order to weed out the weak elements of a particular claim, and must instead attach a deposit order to the entire claim as a condition of proceeding. That lack of flexibility does not aid effective case management. Enabling judges to make better-targeted deposit orders will give both parties a clear sense of where they should focus their efforts, encouraging a more realistic approach to settlement, and I believe that it will also lead to greater use of such orders.

The second change relates to the recoverability of witness expenses for people who choose to represent themselves at tribunals and seek a preparation time order in respect of their work on the case. An oddity in the current costs regime places people who represent themselves at tribunals at a disadvantage, as a tribunal cannot make a costs order for witness expenses and a preparation time order in respect of the same party. We are amending the Employment Tribunals Act 1996 to remove that unnecessary restriction.

The final change deals with the recoverability of lay representatives’ costs. Mr Justice Underhill considered that those who chose to be represented by a non-lawyer, and who had paid for that service and advice, should not be put at a disadvantage when a tribunal concluded that the other party’s conduct meant that a costs order was warranted. I agree that those who choose to engage lay representatives rather than lawyers should not be disadvantaged when it comes to the award of costs, and I intend to use the existing powers in section 13 of the Employment Tribunals Act to change the rules of procedure in order to allow for such costs orders. The new clause helps to clarify the scope of section 13 by introducing a definition of the word “representative”.

Let me now deal with new clauses 1 and 2, tabled by the hon. Member for North Ayrshire and Arran (Katy Clark), which amend clause 15. Along with the organisation Public Concern at Work, she has been a powerful advocate on this subject, and we discussed it recently during a Westminster Hall debate that she had initiated.

I think we can all agree that, in an ideal world, legislation for whistleblowing would not be needed at all. In such a world, all employers would be open and receptive when an issue was raised, and would not seek to silence or drive out a person who brought important matters to their attention. However, as we know, such enlightened approaches to whistleblowing are not universal, so legal protection is required. We are equally keen to ensure that the protection offered by the public interest disclosure legislation is not abused by those who seek to rely on it for purely self-interested reasons. Clause 15, which has already been debated in Committee, will ensure that the whistleblowing provisions cannot be used to advance purely personal interests.

New clause 1 addresses a different aspect of the public interest disclosure legislation. It proposes the removal of the good faith test, which has been in place since the legislation was introduced. That would mean that individual whistleblowers would retain the benefit of employment protection even if their reasons for blowing the whistle were malicious, if they deliberately set out to cause commercial damage, or if they acted out of a desire for personal revenge.

There is clearly a balance to be struck. We are conscious of the recommendations of Dame Janet Smith’s inquiry into the tragic circumstances of the Shipman case. She suggested that the good faith test be removed to encourage more whistleblowers to come forward. We also recognise that the motivations of whistleblowers are not always clear-cut. Personal feelings, particularly when a relationship has broken down, sometimes make it difficult to understand the intentions of the person who is making a disclosure. Having said that, I should add that, as we have already made clear, we believe that the legislation is working well overall, and that the good faith test serves an important purpose.

We are also keen to avoid making a change that could allow individuals access to an uncapped award when their motives for blowing the whistle were malicious, and I therefore do not believe that there is a clear-cut case for removing the good faith test. However, I recognise that the hon. Lady has raised an important issue relating to this specific element of the public interest disclosure regime, and we will continue to look closely at the policy aims of the test to ensure that they are still being achieved.

[Julian Smith (Skipton and Ripon) (Con)]

Does the Minister agree that there is much more scope for whistleblowing in this country, given the number of whistleblowers in America and the incentives that they are given to come forward? Does she agree that there may be more work for the Government to do in future months?

[Jo Swinson]

I thank my hon. Friend for his intervention. It is a positive thing that we have an environment where people, rightly, feel able to come forward and blow the whistle. The legislation that was enacted was important and is generally working well. We are proposing small changes to it in this Bill, but it is absolutely important. For the reasons that I outlined, that legal protection is necessary and we should be proud of the fact that we have such legislation.

13:00

The second proposal by the hon. Member for North Ayrshire and Arran, new clause 2, seeks to put in place a remedy for a whistleblower who has suffered some sort of detriment, even where that has not been directly caused by the employer. As it stands, the wording of the new clause suggests that an employer could be responsible for the actions of any person who has caused detriment to a whistleblower, including people who have no connection to the employer. Yesterday, we discussed the vicarious liability provisions in the Equality Act 2010 that are being repealed through this Bill, and the reasoning that causes us to consider those unnecessary applies to this provision, too. It would therefore be inconsistent to make these changes to the public interest disclosure regime. As the hon. Lady knows, we had a good discussion on this matter in the Westminster Hall debate.

It is important to note that a whistleblower does have protection and remedy in those circumstances. First, where the employer incites or encourages co-workers to engage in harassment it is likely that they will be liable, even if they do not carry out that activity themselves. Secondly, employers have a duty of care to their workers to provide a workplace that is one of trust and confidence, and that is safe. Thirdly, where the abuse is particularly grave or oppressive the employer can be found to be vicariously liable under the Protection from Harassment Act 1997.

Finally, the law already provides a level of protection for those who argue that their employer has acted to destroy the relationship of mutual trust and confidence. In such cases, an employee could bring a claim for constructive dismissal. Taken as a whole, the Government believe that those protections strike the right balance in protecting whistleblowers without imposing unreasonable and unworkable demands on employers.

Let me now deal with the amendments to clause 7. The early conciliation regime that we are introducing will require prospective claimants to transmit details of their claim to ACAS in the prescribed manner. Where information is missing from an early conciliation form submitted by a prospective claimant, we think that there may be merit in allowing ACAS to obtain the relevant details via the telephone. Our amendments 6 and 7 therefore propose the replacement of the words “send” and “sending” with “provide” and “providing” to give the flexibility needed to implement the best process for all parties. They are minor amendments and have no other effect on the early conciliation process debated in Committee, of which Opposition Members were supportive.

[Julian Smith]

I am heartened by these amendments, because one of my concerns in Committee was that this process with ACAS could become far too formal. It is really important that as this early conciliation develops we make it as informal as possible.

[Jo Swinson]

I thank my hon. Friend for that intervention. He rightly says that we want that process to be a success, and enabling the technology of the telephone to be used in it is a helpful, albeit minor, amendment.

Opposition Members have tabled a number of amendments on the early conciliation process. Amendment 80 seeks to require the Secretary of State to consult on, and undertake an assessment of, the impact of the introduction of fee charging in employment tribunals on the effectiveness of early conciliation before commencing these provisions. Hon. Members will know that the power to charge fees in tribunals is one that already existed; we announced our intention to introduce fees in employment tribunals in January 2011, and subsequently consulted on the appropriate charging points and fee levels in December 2011.

We recognise that the introduction of fees to bring an employment tribunal claim may affect the behaviours of both claimants and respondents, and that there may therefore be an impact on how parties elect to engage with early conciliation. We considered the possible impact as part of the assessment that accompanied the announcement in November 2011 of our intention to introduce early conciliation—copies are in the Library of the House. As part of the implementation planning, we will publish further impact assessments. The proposed amendment would simply require us to replicate work that we have already done and will continue to do, so I am unable to support it. The amendment is unnecessary, but I can give the assurance that we are, of course, continuing to take into account the impact that our approach will have.

[Ian Murray (Edinburgh South) (Lab)]

I wonder how the Minister would deal with an issue that has been raised by the chair of ACAS, Ed Sweeney. He said that the introduction of the fee structure could have an impact on the effectiveness of conciliation at ACAS.

[Jo Swinson]

As the hon. Gentleman will find if he checks Hansard, I have just said that we recognise that our approach could have an impact; it may affect the behaviours of both claimants and respondents. We have already published an impact assessment, but we will keep this matter under review. Of course, if at a future point a further change is necessary as a result, we will come back with it. The Bill does not need to provide for that consultation process, given that it is already ongoing.

[John Cryer (Leyton and Wanstead) (Lab)]

We also need to address the question of ACAS’s capacity to deal with the extra cases—no matter how the process is run, their number will increase. Is there not an implication in terms of extra resources, for ACAS to deal with what could be an extra 100,000 cases a year?

[Jo Swinson]

I thank the hon. Gentleman for his intervention, which highlights the crucial role of ACAS in this area. My predecessor gave reassurances in Committee, but I say again that ACAS will be adequately resourced. It is absolutely essential that that is the case in order to deliver early conciliation. Indeed, I remind hon. Members that in his evidence to the Committee, the chair of ACAS, Ed Sweeney, said that he was confident that the Government would make sure that ACAS will be adequately resourced. I am glad to be able to give that reassurance to the House.

Amendment 51 would add a power to make regulations which would prevent an employer from seeking costs against an employee at tribunal, or to take any other measures that would incentivise employers to take part in the conciliation process. Amendment 57 would have the effect of providing those individuals bringing claims under a particular Act, whose limitation period would otherwise expire during the period of early conciliation or within one month of the conciliation process ending, with an additional six months in which to lodge their claim with the tribunal.

I recognise the intent behind the amendments tabled by Opposition Members; they clearly share our belief that resolving disputes is best done between the parties, rather than at an employment tribunal—as, I believe, do those involved in the process. There has been broad support for the introduction of early conciliation, both in the House and from employers and employees, who recognise the benefits that it offers. It is the benefits—savings in time and cost, and in the considerable stress of the tribunal process—that will encourage parties to engage in conciliation, rather than a change in the rules to prevent respondents from seeking a costs order.

The rules on costs orders are clear: costs may be ordered by a tribunal where a party has acted vexatiously, abusively, disruptively or otherwise unreasonably in bringing or conducting proceedings. However, it is rare that parties act in such a manner; the vast majority of cases are where there is a genuine disagreement between the parties, which is why only 1,311 of these awards were made in 2011-12.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Do the Government recognise that the reason behind the amendments is the concern that many hon. Members have that the Government’s plans will reduce access to justice?

[Jo Swinson]

I do recognise that there is genuine concern, particularly in respect of the new fee regime. It is important that a remission regime is in place as well; it is important to point that out. However, the amendments would provide protection for people who are behaving in a vexatious and abusive manner. No matter which side of the dispute that occurs on, we should not be encouraging it. Where a claimant is behaving unreasonably—this is at the discretion of the tribunal—it would be inappropriate for employers to be prevented from seeking a costs order if the tribunal considers that the claimant’s behaviour justifies such an order.

[Mr Chuka Umunna (Streatham) (Lab)]

If the Minister accepts that there are serious concerns about the introduction of fees and its impact on access to justice, why does she not look at the case management powers in the interlocutory stage of case proceedings and perhaps expand deposit powers to act as a disincentive for vexatious claimants? That would not have an impact on access to justice as her Government’s proposals are having.

[Jo Swinson]

A range of measures in the Bill will help to improve access to justice. Of course, the most important thing is to make sure that fewer people end up going to employment tribunals in the first place. [Interruption.] I have just discussed the measures on early conciliation, which is a much better way of resolving disputes. We also have measures on rapid resolution, which I will come on to deal with and which have been discussed in Committee. Those are the ways of ensuring that people are able to get the best resolution to their disputes. Obviously there will still be a role for employment tribunals and there will be cases that, for whatever reason, cannot be managed through those other, better options for resolving them. In imposing a fee, there will still be access to justice through the remission regime for those who are otherwise unable to afford it.

[John McDonnell (Hayes and Harlington) (Lab)]

My amendment 51 seeks to prevent employers from applying for costs and using the provisions as an incentive to take part in conciliation. Is the Minister saying that such a power already exists in law and that she does not feel it should be codified? Or is she simply opposed to codifying it?

[Jo Swinson]

As far as I am aware—I am sure that inspiration will reach me if this is not the case—tribunals already have the power to impose costs, but the amendment would seek to limit the circumstances. Where proceedings have been brought or conducted in a vexatious, abusive, disruptive or otherwise unreasonable manner, it is important that the tribunal route retains the discretion to award costs. That happens in a tiny number of cases, because even when a case reaches tribunal most people engage with it in a spirit of genuine concern and with a genuine problem, but there will be some cases in which a relationship is vexatious or in which someone seeks to settle scores. If that is the case, it is appropriate for costs to be ordered in such a way.

Let me turn now to amendment 57, the proposal to amend the period for lodging a claim from one to six months for those whose limitation period would otherwise expire during the early conciliation period or within one month of the early conciliation process ending. The amendment would affect only a small number of individuals: those whose claim was brought under the Trade Union and Labour Relations (Consolidation) Act 1992 and who had sent their claim to ACAS towards the very end of the limitation period.

We want all claimants to have the confidence to engage meaningfully in early conciliation without the fear of running out of time to bring a claim. That is why we have provided for all claimants to have a minimum of a month following the end of the early conciliation period in which to lodge a claim, regardless of its nature. It is difficult to see why individuals should require longer than a month to prepare and submit the necessary form to the tribunal, bearing in mind that they will already have gone through the early conciliation process and have been considering the matter for some time, and it is even more difficult to see why such a lengthy extension should apply to such a narrow range of claims. We want all people to be able to engage in early conciliation and to have the confidence to do so and, if it does not work, to pursue other options. I am therefore unable to support amendments 80, 51 and 57.

Opposition Members have proposed three amendments to clause 11, amendments 52, 53 and 54, which relate to the composition of the Employment Appeal Tribunal. As my predecessor, my hon. Friend the Member for North Norfolk (Norman Lamb), explained in Committee when a similar amendment was voted down, we believe it is right that when the issue under consideration is related solely to a point of law the matter should ordinarily be heard by a judge sitting alone. That is always the case in the EAT, of course. However, when the judge considers that there is merit in sitting with a panel, they will be able to do that, and the Lord Chancellor can also order it for specific proceedings. I am therefore unable to support the proposed amendments.

Government amendments 8, 9 and 10, to clause 12, provide for confidentiality of negotiations before the termination of employment. Since the introduction of the clause in Committee, my Department has sought and received feedback from a number of key stakeholders. Some, including the Employment Lawyers Association and some business representative groups, told us that the original wording of subsection (1), which stated that employment tribunals should not take account of offers of settlement in their deliberations, could be open to misconception and misunderstanding. Although the Government believe that the original drafting of the clause would have the desired effect—namely putting an offer of settlement outside the deliberations of the employment tribunal in unfair dismissal cases—we wish to allay those fears and are amending the drafting of subsection (1) for the purposes of clarity and the avoidance of doubt. Subsection (5) is rendered unnecessary by that redrafting, so amendment 10 is a consequential amendment to remove it. In the proposed amended clause, just as in the original, employment tribunals will remain able to consider an offer of settlement in claims being brought on other grounds.

Amendment 9 does nothing more than reflect the difference in terminology between tribunals in Scotland, where the term “expenses” is used in employment tribunal proceedings, and those in England and Wales, where the term “costs” is used. Clause 12 was debated at some length in Committee—I have no doubt that Opposition Members have fond memories of that—and none of the amendments changes the purpose or effect of the clause, which were accepted then.

Opposition amendment 81 would remove clause 12 in its entirety. It is worth going back to consider the original aim of the clause. It is aimed at helping employers and employees come to a consensual end to employment relationships that are just not working out by facilitating the use of settlement agreements. A settlement agreement offers potential benefits to employers and employees, including a much quicker resolution than that offered by the tribunal, where the average time taken to resolve a claim is 24 weeks. Employers have the security that they will not face a tribunal case that would distract them and other workers from their business activities, and employees end up with the certainty of a cash payment, avoid the time and stress of tribunal, and leave with their head held high and possibly a reference. We want to encourage more businesses and individuals to consider the use of settlement agreements as a viable and potentially preferable means of parting ways than an emotionally draining performance management or misconduct route or a costly and stressful employment tribunal.

13:15

The removal of clause 12 would maintain the current legislative regime. Some might say that is no problem, as settlement agreements will continue to be used by some businesses, but it would demonstrate that we are not listening to what businesses say about what they want and need to increase their confidence to take on new staff. We have heard many times through formal and informal consultation that finding ways to make it easier to end employment relationships that are not working out would remove the fear factor of hiring. The removal of clause 12 would mean that, although we have been given a practical example of a measure that would support business and support growth, we have chosen not to take it. As a Minister at the Department for Business, Innovation and Skills, it is my role to support growth, not hinder it.

[Julian Smith]

I am heartened that the Minister is not seeking to make any changes to the clause. Is she surprised that the Opposition are so unenthusiastic about helping the 4.5 million small businesses that will benefit from the clause?

[Jo Swinson]

It is intriguing, given the experience of Opposition Front Benchers as employment lawyers. It is worth bearing in mind that compromise agreements already exist and existed for 13 years under the previous Government. They have a lot of merit, but tend to be used by large firms in particular—large firms, which can afford to employ expensive employment lawyers. Small and medium-sized companies often feel very afraid of taking on such conversations and that is what we are seeking to address.

I recognise that there are concerns about how the clause might work in practice and what safeguards there may be for individuals, many of which my colleague, my hon. Friend the Member for North Norfolk, addressed in some detail in Committee. I strongly believe that in clause 12 we have found the right balance between protecting individuals and giving employers the flexibility and confidence they need to manage their businesses effectively. It is about balance. The settlement agreements measure provides a mutually beneficial solution for employers and employees as regards ending the employment relationship. Let us be clear that this is not, as some have suggested—and as Opposition Members have been suggesting from a sedentary position—the first step to no-fault dismissal or Beecroft-lite. We have made it abundantly clear that we will not go down that path.

[John Cryer]

Will the Minister give way?

[Jo Swinson]

I will give way shortly.

We believe our approach to settlement agreements is a more effective way of dealing with workplace problems, as it offers a positive outcome for all parties. Settlement agreements are by definition voluntary and consensual. Individuals will still need to get independent legal advice before signing an agreement and can decline it if they want to do so. That approach has the benefit that an agreed settlement gives an employer surety that they will not face a tribunal case on any grounds covered by the settlement agreement, which a no-fault dismissal regime would not provide. Employees are at liberty to reject an offer when it is not right for them and our approach does not remove an employer’s obligations not to discriminate or prevent an individual from bringing other evidence to support a case of unfair dismissal.

[Ian Murray]

rose—

[Jo Swinson]

I shall give way first to the hon. Member for Leyton and Wanstead (John Cryer).

[John Cryer]

Earlier, the Minister mentioned the possibility of no-fault dismissal. That is exactly what the Opposition are suggesting. It will be illegal to quote protected conversations later, so no-fault dismissal by the back door will be introduced. What mechanism will she use to monitor the workings of this clause so that that does not happen?

[Jo Swinson]

I cannot make it clear enough that this is not no-fault dismissal. The proposals in the Beecroft report would have removed at a stroke the employment rights of 30 million individuals, whereas what we propose is a voluntary and mutually beneficial process that will end the employment relationship only if the employee agrees to it. That is entirely different. The suggestions that are being made are not founded in fact. The hon. Gentleman says that we should consider how things proceed, and compromise agreements have been on the statute book for some time.

[Debbie Abrahams]

Will the Minister give way?

[Jo Swinson]

I will finish answering this intervention and take the intervention from the hon. Member for Edinburgh South, and then I will be happy to take an intervention from the hon. Lady.

Over the past year—at least over several months—the Government have considered how the process could be improved and have come forward with our proposals. The consultation on exactly how the agreements should take place is running and is open until 23 November. The hon. Member for Leyton and Wanstead is free to input his views and I encourage him to do so. Just as we have considered the current scheme, I am sure that if the scheme is found not to work in future years, any Government would be happy to reconsider it.

[Ian Murray]

The Minister is being incredibly generous in taking our interventions. Does she not accept that settlement agreements, while they can be used where there is no dispute, are likely to create dispute?

[Jo Swinson]

I do not think so. Clearly it is important that the conversation is conducted in a mature and respectful way, and the guidance, on which we are consulting and which will include things such as guideline letters and templates, is expressly designed to make that easier for employers. The problem the hon. Gentleman raises is precisely the opposite of what the proposals will address, because now, where protected conversations can happen if there is a dispute, that creates a perverse incentive to employers to try to manufacture a dispute. Hopefully, the proposed measures will make it much easier for people to have that conversation without having to pretend that there is a dispute where none exists.

[Debbie Abrahams]

I am grateful to the Minister for giving way—eventually. I fear that this is another example of poor legislation from this Government. As I understand it, the provisions regarding protected conversations will not apply in certain conditions, including where an employer is deemed to have behaved in an improper way, yet there is no definition of “improper” in legislation. Will the hon. Lady comment on that?

While I have the chance, I will make the intervention I wanted to make earlier. We know from the OECD that the UK is one of the most lightly regulated countries in the world, next to the United States and Canada. Exactly what evidence does the Minister have to draw on that the measures will improve growth?

[Jo Swinson]

The hon. Lady is being slightly uncharitable in saying that I gave way “eventually”. I took her intervention immediately on finishing my response to her hon. Friends. My approach is to take interventions because the function of Report stage is to ensure that amendments receive proper scrutiny, and I am determined to make sure that hon. Members can have those discussions and receive reassurances where there are concerns.

On the question about settlement agreements and the protections that remain, obviously the agreements should not be used in a way that results in an employee feeling under pressure or that they have to take the agreement. If there is any bullying behaviour or suggestion of discrimination, of course there would be no protection for that conversation. The hon. Lady asks about the definition of “improper”. The consultation on that is under way, and I encourage her to make her views known to it. In general terms, our aim is to reflect, without prejudice, unambiguous impropriety, which would include cases of discrimination and bullying, where there would be no protection for the employer.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The Minister is being very generous. Does she accept that, under the proposed arrangement, the conversation could come out of the blue for employees, with no warning that their performance may not be up to the standard or that they may not be performing in the manner that the employer requires; and that that will itself generate massive insecurity among the UK work force, which will serve to undermine growth, not aid it? No one will feel confident in buying a car or even a fridge if they think that the next day, out of the blue, they might have a conversation about their performance and be offered a settlement agreement which they feel they have no choice but to accept.

[Jo Swinson]

I recognise that the hon. Lady is genuine in raising her concern, but I think it is misplaced. Employees will not be forced to accept a settlement agreement; it is purely voluntary. She says the conversation will come out of the blue, but clearly we want employers to behave responsibly, with good employment relations and good human resource management. As I mentioned, we are taking steps to produce guidance to make it easier for employers to act in a proper way. The risk that an employee will go into work and their manager will say that they have issues with some aspect of the employee’s performance exists now. Employers and employees having confidence that they can have these conversations at an early point is better than their fearing the conversations, which allows problems to fester and grow.

[Catherine McKinnell]

The Minister talks about encouraging good and positive behaviour, but I am concerned that the measure encourages precisely the opposite sort of behaviour—that it will encourage an employer to approach an employee for the very first time about their performance with an offer to terminate their employment, rather than help them to improve it. There can be no doubt that there is inequality of arms in that conversation for a vulnerable individual who may be facing unemployment. Has the Minister properly considered that?

[Jo Swinson]

It has properly been considered. It is important to repeat that the protection is for conversations relating to a settlement agreement. A settlement agreement, by definition, is a negotiation, so it is unlikely to be a case of take it or leave it. The measure is about starting that conversation and enabling people to say, “We think this is an issue. Is this working out?” I think that enabling employers and employees to have those conversations without the fear described by many within the business community will improve management and not lead to the consequences the hon. Lady fears.

[Stewart Hosie (Dundee East) (SNP)]

I understand what the Minister is saying but I think a little honesty here would be helpful. If an employee behaves badly, they can be sacked. If a business is in trouble, an employee can be made redundant. It is no-fault dismissal by the back door when the conversation and what she describes as a negotiation, with such an imbalance of arms, means that contractual terms of redundancy can be diminished by an offered settlement to go with no fault. That is what this is really about.

[Jo Swinson]

I do not appreciate the hon. Gentleman’s implication. The provision is about making sure that those conversations can take place. Legal advice will have to be sought and given to the employee at that point, before any agreement is reached. Guidance will be given—as I said, we are consulting on that. We are building on and improving the existing procedure for compromise agreements, which have worked well in many cases. We are taking a provision that has been in employment law for many years and improving it.

[Julian Smith]

We are hearing a load of bluster and rubbish from Opposition Members. This is a balanced measure that puts a bit more power in the hands of those who will create new jobs in this country. The shadow Minister was an employment lawyer; every member of the Opposition Front-Bench team was a business owner. They are being hypocrites about the clause.

[Mr Speaker]

Order. The hon. Gentleman must withdraw his use of the word “hypocrites” in relation to Members of the House. Perhaps he will be good enough to withdraw the remark and apologise.

[Julian Smith]

I do withdraw it and apologise, Mr Speaker.

[Mr Speaker]

Thank you. I am grateful.

[Jo Swinson]

Thank you, Mr Speaker. I think it is fair of my hon. Friend the Member for Skipton and Ripon (Julian Smith) to point out that many business owners are genuinely concerned about how employment law currently works.

[Mr Umunna]

The Minister has indeed been incredibly generous about giving way. For the record, Mr Speaker, I think it is of assistance to have a range of experience in this House. We have lawyers and many business owners in the shadow BIS team and we speak with the benefit of professional experience.

Does the Minister not acknowledge that employers can have these conversations with employees, as long as they follow fair procedures? That is all we are asking for.

[Jo Swinson]

The procedures are far more likely to be used by large companies, and many business people, particularly those in small and medium-sized enterprises, fear to take them up. That was borne out by much of our consultation, both formal and informal. I do not know whether Opposition Members genuinely believe that there is no concern among business about tribunals and employment law—

[Mr Umunna]

indicated dissent.

[Jo Swinson]

Well, people watching this debate or reading it in Hansard will see that that concern among businesses exists and is not being taken seriously by the Opposition, but I shall be happy to be corrected.

[Mr Umunna]

The Minister knows full well that, for example, we welcomed the setting up of the Underhill review, because we acknowledge that there are issues, but it is really a question of degree. Of course we have to take into account the concerns of business, but our job as politicians is to take into account the concerns of society as a whole and to balance the different interests, and that is what she has got wrong.

[Jo Swinson]

I agree that the job of politicians is to balance those interests, but I disagree with the hon. Gentleman that we do not have the right balance. As hon. Members have pointed out, very different proposals emerged from some quarters, but the Government have said firmly that we will not go ahead with the no-fault dismissal plans that were put forward. That shows that we are taking a balanced approach.

[Catherine McKinnell]

I thank the Minister for giving way again. She has talked a lot about fear. It may well be the case that some businesses fear an employment tribunal, but what about evidence? My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) asked where the evidence was for the view that the measure would aid economic growth and the creation of jobs. I, for one, have yet to see any evidence. I hear only rhetorical references to fear.

13:30

[Jo Swinson]

I encourage the hon. Lady to speak to employers in her constituency about the issue, which is raised frequently. As to evidence of employers’ fears of employment tribunals, let us look at the previous Government’s record in office. The fear of employment tribunals can put people off employing staff. If people are more likely to employ staff, they are more likely to grow their businesses and create wealth for this country. But let us look at the record of the Opposition. In 1998 there were 90,000 claims going to employment tribunals. By 2010, despite the measures that the Labour Government apparently took to try to improve that situation, the figure was 236,000—a huge jump in the number of tribunals, which of course has created a concern for businesses.

[Catherine McKinnell]

I would be interested to hear the Minister’s analysis of how many of those employment tribunal cases were equal pay claims that were rightly going through the tribunal system. On the evidence, or the apparent lack of evidence, about the genuine fear of employment tribunals, I wonder whether the hon. Lady is in fact making a case for better business support, rather than legislating to make it easier to sack people, which seems a little counter-productive to growth.

[Jo Swinson]

This is not about making it easier to sack people. This is about making it easier for people to come to a mutual agreement, which is, by definition, not sacking.

[Richard Fuller (Bedford) (Con)]

May I offer my hon. Friend some reassurance that she is charting a middle course? She has heard the concerns of the lawyers on the Opposition Benches who, instead of recognising that our business leaders are going out every day to do the best they can for their employees, assume that they need to be corralled and controlled. There are Members of the House who would like to see the Minister go further in her measures in the Bill to make it easier for business leaders to hire more people so that the current recession becomes a job-filled rather than a jobless recession.

[Jo Swinson]

I think I thank my hon. Friend for his intervention. The fact that there is criticism from both sides shows that a balanced approach is being taken. I shall make progress as I know that other Members want to speak.

[Ian Murray]

I am grateful to the Minister for allowing me to intervene. Let us nail once and for all the myth about employment tribunal claims. The Government used this as the supposed evidence for changing a range of workers’ rights. The massive increase in employment tribunal claims arises from multiple claims, which have risen substantially, but the individual number of multiple claims has stayed exactly the same for the past three or four years. Indeed, employment tribunal claims are dropping.

[Jo Swinson]

The fact remains that there is a massive backlog of employment tribunal claims, there are massive problems with the way the system is working, and there is significant concern in the business community, which has been expressed in the House and in Committee. I shall move on to the other amendments before allowing other Members to have their say.

Government amendments 11 to 15 to clause 13 will ensure that the power in the Bill to amend the unfair dismissal cap cannot be used to introduce a cap based on an individual’s pay without there also being a specified upper limit. My hon. Friend the Member for North West Leicestershire (Andrew Bridgen) raised a concern in Committee that, as it stands, the power in clause 13 could be used to introduce a pay-based cap with no upper limit. Clearly, such a step would increase potential compensation for the very highly paid and could thereby increase risks and uncertainty for employers. As my hon. Friend the Member for North Norfolk who is now the Minister of State, Department of Health, made clear at the time, this is not the Government’s intention. On the contrary, we are seeking to give employers greater confidence in dealing with disputes and to ensure greater realism about the level of awards in order to encourage settlement.

We launched a consultation on proposals to change the cap on compensation for unfair dismissal on 14 September, alongside our consultation on settlement agreements. The consultation includes looking at the overall level of the cap and also the option of introducing a pay-based cap alongside a specified upper limit. We therefore seek to make these amendments to ensure that the power in clause 13 reflects the Government’s policy intentions.

Opposition Members have proposed three amendments to this clause, the first of which, amendment 82, would delete the clause in its entirety. It has been a matter of common agreement for many years that the compensatory award should be subject to an upper limit. What that limit should be is the issue in question. This clause recognises the agreement that exists about the need for an upper limit, but provides a power for the Secretary of State to vary that limit subject to specific considerations. As I have said, we are consulting on what the appropriate limit should be. I am therefore unable to accept the amendment.

Amendment 70, tabled by the hon. Member for Hayes and Harlington (John McDonnell), seeks to remove the upper limit of three times median salary. The effect of this would be to allow the cap to be set at any amount. This would clearly run counter to the objectives that I set out a moment ago of greater confidence for business and greater realism for claimants. The hon. Gentleman tabled a further amendment to the clause, amendment 71, which would require the Secretary of State to consult the TUC and the CBI before deciding on a figure for median annual earnings where the figure published by the Statistics Board is more than two years old. I cannot envisage a situation in which such information would not be produced by the ONS in any two-year period but, should such an eventuality ever arise, the Secretary of State will be under a duty to act reasonably and rely upon relevant information. The Secretary of State and other Ministers meet the TUC and CBI regularly to discuss a range of matters, so there is little to be gained from placing a requirement to consult the TUC and the CBI on the face of the Bill. I am therefore unable to support either of the hon. Gentleman’s amendments.

I turn now to the amendments to clause 14 tabled by my hon. Friend the Member for Bedford (Richard Fuller). Amendment 58 would delete clause 14 in its entirety. Amendment 59 seeks to restrict the imposition of a financial penalty to those businesses employing more than 10 people—that is, to exempt micro-businesses. I want to make it clear, as did my predecessor in Committee, that the introduction of this discretionary power for tribunals is not intended to penalise employers indiscriminately. It will be used only when an employer has breached an individual’s employment rights, and when that breach has been accompanied by aggravating features—for example, where there has been a deliberate decision to act in a way that breaches the employee’s rights, or where the same employer repeatedly acts in an unlawful manner.

When we first proposed the introduction of financial penalties, we had thought to make the imposition of the penalty automatic when there was a finding in favour of the claimant, but we listened to the concerns expressed by business during the resolving workplace disputes consultation last year and revised our proposals to give the tribunal discretion to decide when a penalty was appropriate. Good employers—those who try to do right by their employees—have nothing to fear, regardless of their size. A genuine mistake will not be grounds for the imposition of a penalty. However, those businesses which the tribunal considers have acted deliberately or maliciously will rightly, I believe, face the prospect of a financial penalty. They will no longer be able to gain a competitive advantage over businesses that abide by their obligations.

I cannot stand here and defend bad employers. I recognise the good work that my hon. Friend the Member for Bedford has done to support the interests of small businesses, and I am sure he does not want to defend bad employers either. I hope he will not press his amendments, as the Government are unable to support them.

[Richard Fuller]

Of course I do not wish to defend bad employers but as the Minister knows, almost all employers are good employers who do the right thing. Will she address the general principle, which is not so much about the points that she mentioned? Why are the Government trying to get in on the financial action? This is about money that will go to the Government. It is nothing to do with the relationship between the employer and the employee. The money will not go to the employee. Why is it so important that the Government get their take?

[Jo Swinson]

My hon. Friend is right to point out that the majority of employers are good employers. I am sure hon. Members in all parts of the House find that to be so when they visit local businesses in their constituencies. Even in the case of good employers, a mistake will occasionally be made and they will end up at a tribunal. That is why, in response to the consultation, we removed the automatic imposition of a penalty. Any penalty will be based on the circumstances of the case and will be imposed by the people who have heard all the facts—the tribunal. It will be imposed only on employers who have deliberately flouted the law or done so in a malicious or aggravated way.

On the point about financial penalties, this is not some kind of revenue-raising scheme; it is about ensuring that the right incentive structure is in place by creating a further penalty for businesses that deliberately flout the law. That will incentivise the right kind of behaviour. For the reasons I have just outlined, that will be fairer on the vast majority of businesses that are good employers and that should not lose out to those employers that gain some kind of advantage by treating their employees badly.

[Richard Fuller]

The Minister again mentions an additional penalty for those employers. Is she aware that the Law Society has stated:

“Uplifts on compensation of up to 25% are already available in cases of unreasonable breach of the Acas Code on Disciplinary and Grievance Procedures”?

Is that not a sufficient additional penalty?

[Jo Swinson]

I do not believe that what we have at present is sufficient. Although they make up a small portion, there are clearly too many employers who do not comply properly with their obligations. I think that it is quite right that we send a clear signal and make it clear that those employers can expect to face a bigger consequence at a tribunal than those well-intentioned employers who try to do the right thing but fall foul of the law because of an error—after all, we are all human.

Opposition Members also seek to amend clause 14. Amendment 92 seeks to address the issue of non-payment of employment tribunal awards by proposing that an employer should pay a penalty for each period that an award made in an unfair dismissal case goes unpaid. I recognise, and indeed sympathise with, the amendment’s aims, but I am afraid that it would not have the intended effect. When I took over this brief, I was genuinely shocked by the level of employment tribunal awards that are unpaid. The figures for 2009 show that six months after an employment tribunal makes an award as many as 40% of claimants had not received the money they were rightly due, which is clearly unacceptable.

Whatever people’s views on the rights and wrongs of the employment tribunal process and how it could be improved, when an employment tribunal grants an award and the case has been heard properly, the claimant should be able to get their money. Like my predecessor, I am very concerned at the figures for non-payment. When a tribunal finds in favour of a claimant, it cannot be right that they are unable to get the money they are owed.

We are consulting on two changes that I believe might have some effect on the number of awards paid promptly. They include proposals to put a date on a tribunal’s judgment specifying when payment should be made and to charge interest from the date of judgment where an award is unpaid after 14 days. These charges will apply to all cases, not just to unfair dismissal cases. Importantly, in that scenario the interest will be added to the award and paid to the claimant. That consultation closes on 23 November and I encourage the hon. Members who have tabled amendments to take part and feed in their views.

I want to consider what more we can do on this issue. I have already discussed it with my colleague and fellow Minister for Equalities, the Under-Secretary of State for Justice, my hon. Friend the Member for Maidstone and The Weald (Mrs Grant). We are both clear that action is necessary, but we cannot take action without first understanding the underlying problem properly. The previous Government attempted to resolve the problem by introducing a fast-track enforcement process, but it still persists. The process had some success, but not enough people have been accessing it and, even for those who have, it has not been successful in all cases.

I have therefore commissioned research from the Department on the reasons why so many awards go unpaid. Once we have that information, which I anticipate will be early next year, we will be able to take whatever steps we can to ensure that claimants receive the award they are entitled to. Therefore, I ask my hon. Friend not to press the amendment and I commit to taking the proposal away and considering it further to see what we could do in the light of the research findings.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

I raised with the Minister’s predecessor the case of a constituent who found herself in that situation. She was, in effect, dismissed for being pregnant and was awarded £24,000 by a tribunal but to this day has still not received any of it. In the issues the Minister is considering, in the consultation and in the wider concern she has expressed about how we can best address this, will she also seek to work with colleagues across the Government to look at companies that change their status in order to avoid paying out awards when cases are brought against them?

[Jo Swinson]

I do not know the details of the case the hon. Gentleman describes, but I am more than happy to look into it. Given that he was in contact with my predecessor, I am sure that the information will be available in the Department. I think that we need to look at the whole range of issues. There is clearly a range of reasons why an award would not be paid, and they might all require different solutions. If a company has become insolvent, for example, there is a different set of problems than if companies are simply choosing not to pay. Trying to understand where exactly the problem lies is the first step towards ensuring that we can tackle it properly, because I agree that cases such as the one he outlines are unacceptable.

13:44

Amendments 72 and 83 seek to remove the limitations we have proposed for any penalty. Amendment 72 would remove both the upper limit of £5,000 and the requirement that the penalty should be equal to 50% of the award, effectively allowing the tribunal to impose a penalty of any amount above £100. As we have made clear, the objective of the financial penalty regime is to encourage employers to have greater regard to their employment obligations without introducing an additional burden that would undermine their confidence to take on staff. Employers facing an unlimited fine are more likely to feel compelled to settle claims that they might otherwise have defended and won, which is not necessarily in the interests of justice. The amendment would also allow the tribunal to impose a penalty where it subsequently awards compensation for a failure to comply with an earlier order or recommendation, opening up the possibility of employers being fined twice for the same breach.

Amendment 83 would preserve the upper limit of £5,000 but seeks to remove the cap that restricts the penalty to 50% of the award, thereby allowing the tribunal to impose a penalty of any amount between £100 and £5,000, the minimum and the maximum. Removing the 50% cap would remove some of the certainty that businesses have over potential liability if the matter goes to a hearing and, as a consequence, might affect their decision to defend a claim. This is a new measure that the previous Government did not think to try. We believe that it will have a positive impact, but we of course need to see how it works in practice. If the amount of the fine proves insufficient to encourage greater compliance, or indeed if it has a detrimental effect on businesses defending a claim, we have the power to vary the limit by secondary legislation and we will use it.

[Debbie Abrahams]

Will the Minister tell us what the evidence is for those caps?

[Jo Swinson]

As I have said, this is a new measure and these are the figures we have put in place. I do not know what figures the hon. Lady thinks should be set. It is important that there is some certainty for businesses and so, after progressing with this measure and putting it in place, we can then review it and see how it works. By ensuring that the specific amount is not set in primary legislation, we will have the ability to amend it through secondary legislation, which will give the required flexibility. Amendments 72 and 83 would undermine the objectives of the financial penalty regime and so I am unable to accept them.

The final amendment to clause 14, amendment 73, tabled by the hon. Member for Hayes and Harlington, seeks to specify the purpose for which any moneys accruing to the Exchequer from the imposition of financial penalties should be used. Hon. Members will know that the Government already fund the activities to which the amendment refers through ACAS, with an annual grant in aid allocation of about £45 million a year. As my predecessor made clear in Committee, the purpose of the financial penalty is not to raise revenue for the Exchequer. It would not be appropriate to expect ACAS to function with some element of its annual funding being dependent on what is ultimately a discretionary decision by a tribunal. The existing mechanism for funding ACAS is the right one, so I am unable to accept the amendment.

Amendment 94 seeks to address a point we covered in Committee. I understand that its aim is to prevent a disclosure relating to a breach of a private contract from being a qualifying disclosure for the purposes of a whistleblowing claim, unless it is clearly in the public interest. My predecessor, my hon. Friend the Member for North Norfolk, explained in Committee our reasons for not wanting to take that route. We believe that such an approach would have the potential for unintended consequences and would not in itself address the concerns raised by the Parkins v. Sodexho decision. For example, the issue in that case could have been reframed as a health and safety issue, with similar issues then arising in relation to the disclosures of minor breaches of health and safety legislation, which are of no interest to the wider public. Not only are we closing the loophole identified in the Parkins v. Sodexho case, but by introducing the public interest test we are removing the potential for the opportunistic use of the protection. That will prevent any cases similar to the Parkins v. Sodexho case in the areas that would otherwise be uncovered by the amendment.

[Ian Murray]

I am grateful to the Minister, who is being incredibly generous in giving way. What would she say to the Law Society, which says that the clause will not do what the Government intend it to do?

[Jo Swinson]

I think that it will do what the Government intend it to do—basically what it says on the tin. It is about making sure that the public interest disclosure regime has to have a public interest test. That is what was meant when the legislation was initially framed and formed. The case law that has come up since then has showed that there was a loophole, and I think, to be fair, that the Opposition have accepted that it needs to be closed.

Following my discussions with the hon. Member for North Ayrshire and Arran, the House may wish to be aware of the steps that the Government are taking in the NHS to encourage whistleblowers. As I said during the recent debate on the issue, the Government fully support the rights of NHS staff to raise concerns in the public interest. That right has been enshrined in the NHS constitution and further strengthened through changes made to the constitution and the handbook in March this year. The Department of Health is continuing to build on the rights set out in the Public Interest Disclosure Act 1998 further to highlight the statutory protections available for those who raise concerns. I want to stress that the Government fully support genuine whistleblowers and want to encourage individuals to bring issues to light, but we need to ensure that the balance of protection for employers and individuals is correct. We believe that the current clause achieves this, and I am therefore unable to support the hon. Lady’s amendment. However, I welcome the constructive work that she, among others, has been doing on the issue.

The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) asked about the level of £5,000 and penalties. The provision is intended to mirror the national minimum wage compliance regime, so there is method behind it, but it will be possible to amend it if necessary.

I turn now to our amendments 16, 17 and 31 to clause 17. Members who followed the progress of the Bill through Committee will recall that the original clause, then clause 16, was accepted into the Bill without debate. The purpose of the clause then, as now, was to amend specified primary legislation to replace all references to “compromise agreements”, “compromise contracts” and “compromises”, where they occur in an employment context, with the terms “settlement agreement” or “settlement”. By renaming compromise agreements, we are addressing any conscious or sub-conscious reluctance by a party to use these agreements arising from the perception that they are conceding or “giving in” on some or all of their arguments. The original drafting of the clause—with the agreement of the Under-Secretary of State for Skills, the hon. Member for West Suffolk (Matthew Hancock)—extended the change of name to Northern Ireland in so far as it related to the National Minimum Wage Act 1998. Having since considered matters further, my Northern Ireland colleagues have concluded that such a change should not be made in isolation and should form part of the wider review of employment law that they have recently launched. As a consequence, it is necessary make minor amendments to restrict the effect of the name change to England, Scotland and Wales in only that Act.

I commend the Government amendments to the House and hope that I have fully explained why we are unable to support the other amendments in the group.

[Mr Speaker]

Before I call Mr Murray to speak to the new clause from the Opposition Front Bench, I have a short statement to make. Nominations for the Chair of the Procedure Committee closed yesterday, and an election was held by secret ballot earlier today. The following candidate was elected: Mr Charles Walker. The full breakdown of voting is set out in a paper which will be available from the Vote Office. I congratulate the hon. Gentleman on his election.

[Mr James Gray (North Wiltshire) (Con)]

On a point of order, Mr Speaker. I would be most grateful if you could point me to the procedurally correct way of congratulating my hon. Friend the Member for Broxbourne (Mr Walker) on an outstanding victory, wishing him well in chairing an extremely important Committee of this House, and committing myself to serving under him loyally as an ordinary member of the Committee in future.

[Hon. Members]

Hear, hear.

[Mr Speaker]

I am extremely grateful to the hon. Gentleman for his point of order, and the reaction of the House shows that Members as a whole are as well. I thank him for what he said and for his participation in the election.

[Ian Murray]

I congratulate the hon. Member for Broxbourne (Mr Walker) on his election to the Procedure Committee.

Let me, too, start with an affair of state by saying happy birthday to the shadow Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Streatham (Mr Umunna). I will not lead the House in a chorus of “Happy Birthday”, but we wish him many happy returns.

While I warmly welcome the new Minister to her place, I have to say, with a tinge of disappointment, that I will miss her predecessor, the hon. Member for North Norfolk (Norman Lamb), for two reasons. First, we incessantly used his book, “How to maximise compensation at an employment tribunal”, in Committee. [Interruption.] For the information of the hon. Member for Skipton and Ripon (Julian Smith), the then Minister was formerly an employment lawyer. Secondly, at the end of Committee proceedings we bought him a small gift, “Fifty Shades of Grey”, relating to his other passion in life, and I was looking forward to questioning him on that. I hope that the hon. Lady has read the book, because then some of the references in my speech might make more sense.

It is an indictment of how uncomfortable the Minister is with this part of the Bill that the Government have restricted the time available on Report to deal with the complicated issues within it. Let me be clear from the outset. It does not matter how much the Secretary of State stamps his feet or the Liberal Democrat Minister denies it, this Bill is delivering Beecroft by the back door. It is not just Labour Members who are saying that. I am delighted that the hon. Member for Skipton and Ripon is in his place, because he said the same in Committee, much to the disdain of the former Minister. As is consistent with most of the clauses in this hotch-potch of an enterprise Bill, these changes to rights at work are not about enterprise and are not a panacea for a Government with no strategy for growth.

I cannot emphasise enough that the hard-fought-for rights of employees up and down this country are not the reason we are in a double-dip recession; the failed economic policies of this Government are the reason.

[Julian Smith]

rose—

[Ian Murray]

Let me make some progress, and then I will give way.

To start with the positives, I welcome new clause 8, which is derived from the report by Mr Justice Underhill and his esteemed team. We have always recognised the need to review the procedures of the employment tribunal system to make it work better for employees and employers, but with these proposals we have particular concerns about the increased use of deposit orders. We support the premise of deposit orders in deterring claims which may be unmeritorious, but we fear that their increased use, combined with the introduction of the fees regime, may restrict access to justice. This has the potential not only to restrict justice but to do so for the most vulnerable employees in the employment tribunal system. Will the Minister assess the impact of the changes on deposit orders? I appreciate her giving the commitment that if there were an impact she would return to the issue, but it is strange that these proposals have been introduced. Several of my hon. Friends have been asking about the evidence for doing so. Despite repeated pleas in Committee to produce a proper impact assessment on the insertion of fees into the process, that has not happened.

I welcome the provisions to allow for costs for lay representatives. We agree with Mr Justice Underhill when he said:

“We can see no reason why the claimant should not be able to recover those charges when he would have been able to if he had instructed a legal representative.”

We will not oppose these changes in new clause 8, as they have been properly evidenced, but I could not say that about the rest of part 2, where the Government have absolutely no evidence for any of their proposed changes. Indeed, their own impact assessments, and business surveys, show that there is little appetite for them in the business community. Businesses tell me and other Members that their main concerns are not employee regulations but lack of finance and the general state of the economy.

The reality is that the previous Labour Government created nearly 2 million jobs and 1 million businesses within the current system of employment rights. Mr Beecroft himself agreed, in effect, when he said in Committee that he had no empirical evidence but was basing these recommendations on experience and from talking to people in the pub. In Committee, we had a perfect 10 from Government Members in terms of anecdotes. I am sure that at one point we even heard a direct quote from the managing director of “Anecdotes R Us”. The evidence, particularly from the OECD, shows that the United Kingdom has the third most liberal employment rights regime in the western world.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

Does my hon. Friend agree that taking advice on employment rights from somebody who profits from legal loan sharks is perhaps not the right way forward when looking for effective guidelines and regulation?

[Ian Murray]

I am grateful for my hon. Friend’s intervention. I think that people can make up their own minds about the ideology and ethos of the report.

Amendment 80 deals with fees and their impact on ACAS early conciliation. In Committee we pressed amendments to assist applicants and to ensure that ACAS was properly resourced. The amendment covers a similar concern that we have about the new deposit orders. We welcome the new role for compulsory early conciliation by ACAS, but we are concerned that the insertion of the fees system after the ACAS conciliation process will dilute the effectiveness of conciliation and put employees in the untenable position of having to settle their dispute or find the necessary £1,200 to take it beyond the ACAS system.

Ed Sweeney, the chair of ACAS—I have mentioned this already—said during his evidence to the Committee that

“we do not know whether charging for tribunals would have an adverse effect on either employers or employees…Will there be less, from an employer’s point of view, of engaging in conciliation”?––[Official Report, Enterprise and Regulatory Reform Public Bill Committee, 19 June 2012; c. 68, Q146.]

The Minister herself has admitted that there could be an issue and will deal with that after the system is up and running. Despite being pressed time and again on this issue in Committee, no Minister has produced an impact assessment on the impact of ACAS conciliation when low-paid and vulnerable workers will have to find a fee to enter the employment tribunal system.

14:00

Amendment 81 merely asks the Government to delete clause 12, because it is an ill-thought-out clause on settlement agreements, which are the key dividing point between us. The Government are trying to mix protected conversations with the current without prejudice rules, while adding a touch of Beecroft no-fault dismissal. Let me be totally clear: the reason why Opposition Members are against the clause is that it is bad for business.

Current compromise agreements can be used when there is a dispute between employee and employer. Indeed, they are already widely used—Thompsons Solicitors alone used nearly 6,000 of them last year. Under the new rules, employers will be able to offer an employee a sum of money if they agree to leave employment and sign a new settlement agreement. Any conversations or offers made with a view to terminating employment by agreement will be treated as confidential and will not be able to be considered by an employment tribunal in an unfair dismissal case, unless the employer has behaved improperly. The amount of satellite litigation in the potential attempts to define what improper behaviour is will grind the employment tribunal to a halt.

This also applies to cases involving impropriety with regards to discrimination. If someone who wants to have an honest and open conversation about age uses a settlement agreement, they will end up in an employment tribunal as a result of age discrimination legislation. Essentially, the Government will allow employers to make minimal offers to workers to leave, then gag those very same workers from even mentioning that at an employment tribunal.

The new process may even undermine this country’s redundancy regime. At present, employers must follow a proper procedure in order to dismiss under-performing workers. To challenge the hon. Member for Skipton and Ripon, I have run my own business and have dismissed employees, but every single working day I left my house to go to work to look after the biggest assets in my business, namely the employees. The new process will encourage bad practices. It will send a signal to employers that there is no longer a need to follow a formal disciplinary process and that they can try to push people out of the organisation by offering them a sum of money. That sounds like Adrian Beecroft’s report by the back door.

Teresa Pearce (Erith and Thamesmead) (Lab): Can my hon. Friend clarify something for me? The Minister said that, by definition, a settlement agreement would not amount to sacking an employee. Under the new sanctions regime for jobseeker’s allowance, if someone leaves their job voluntarily they cannot claim JSA for 13 weeks. Would a settlement agreement amount to them leaving their job voluntarily?

[Ian Murray]

My hon. Friend asks an exceptionally good question. I think that it would amount to a voluntary leaving of work, because the employee will not have been sacked—they will have come to an agreement with their employer that they will leave. They will not have been made redundant. I hope that the Minister will address that issue, because it could have significant consequences.

[Julian Smith]

It is incredible that the hon. Gentleman is unable to understand the frustration of many businesses on the issue of coming to the end of an employment relationship. Does he not understand how frustrating it is for many entrepreneurs throughout the country to finish a relationship with an employee that is not working out?

[Ian Murray]

The hon. Gentleman makes a tremendous intervention, because he is actually arguing our point: the proposals are bad for business. We would accept the Underhill review’s proposal to make the employment tribunal better and we would accept, with minor amendments, the ACAS proposal for early conciliation, but to put in place a compensated, no-fault-dismissal-cum-protected-conversation system would be bad for business. The hon. Gentleman must also realise that the Business Department’s own small business survey showed that only 6% of businesses listed regulation as a concern. That included all regulation, so employment regulation was only a minor part of it. He can shake his head, but that is what BIS’s own impact assessment says.

[Catherine McKinnell]

The shadow Minister is making a powerful case as to why the measures are bad for business. To follow on from the important point made by my hon. Friend the Member for Sunderland Central (Julie Elliott), people who rely on mortgage protection insurance are also likely to be adversely affected if they enter into a settlement agreement. Have the Government considered whether that protection could be invoked if those affected enter into a voluntary agreement to leave their employment?

[Ian Murray]

My hon. Friend makes a fantastic point. I do not have the answer, because the Government have not told us, but it seems that if an insurance company can do anything to get out of paying a particular insurance policy, it will do so. Perhaps the Minister will address that.

Citizens Advice has said clearly—I think it has sent this briefing to all Members—that

“this looks less like an attempt to encourage more use of compromise agreements, than a further erosion of the legal protection against unfair dismissal.”

The Minister has been challenged to say exactly what the settlement agreement represents and to come clean. If she did so, this would be a far easier debate to deal with.

The current system allows for the use of compromise agreements when there is a dispute. The new settlement agreements can be used at any time, but it is clear that they are likely to create a dispute. The reality is that the mere fact of instigating discussions without prior process is likely to cause the end of the employment relationship, which is exactly what the employer will want. It is the equivalent of one party in a personal relationship saying to the other party, completely out of the blue, “I don’t love you anymore.” Who would hang around after that? [Interruption.] My hon. Friend the Member for Hartlepool (Mr Wright) suggests that I am speaking from personal experience, but I could not possibly comment. We propose to delete the Beecroft clause, because it is bad for business and equally bad for employees.

[Julian Smith]

Will the hon. Gentleman confirm that Labour does not believe that regulation is a big issue for business?

[Ian Murray]

The hon. Gentleman spent a lot of time in Committee posing such questions, but the Federation of Small Businesses, the Engineering Employers Federation, Citizens Advice and many of the top groups that deal with employers and employees tell us that a compensated, no-fault dismissal is bad for business, and BIS’s own impact assessment says exactly the same. Until the Government can produce empirical evidence that underpins some of the Beecroft reforms, I am unwilling to believe what the hon. Gentleman says.

I hope that the Minister has listened to my comments on amendment 81 and I will test the opinion of the House on it at the appropriate time.

Amendment 82 would remove clause 13 and its provision on compensatory awards. The clause gives the Secretary of State the power to alter the amount of compensation paid to an employee who is found by a judge to have been unfairly dismissed. Every Government member of the Committee indicated that they want the amount to be drastically reduced, despite the fact that the Bill gives the Secretary of State the potential to increase it from its current level of £72,000. The Secretary of State has indicated that his cap would be a maximum of either an annual salary or median earnings, whichever is the lower, potentially limiting all claims to about £26,000, the effect of which would be to hit anyone who earns more than average earnings. This Government have hit middle earners time and again and these proposals have the potential to hit them hardest when they will have actually won a claim at an employment tribunal. It should be up to the employment tribunal judge to decide what an adequate compensatory award is, not the Secretary of State.

I will give the House an anonymised example. A claimant was dismissed at the age of 58. He was earning as little as £26,020 net per year, but owing to dismissal will not attain that level of earnings before he retires at 65. After eight months of unemployment, the claimant got a job on £20,020 net per year. His loss was calculated by a judge at an employment tribunal to be £124,200. Under the current regime, he would receive 62% of that claim. Under the Secretary of State’s regime, he would receive less than 20% of it. That is somebody on fairly average earnings of about £26,000 a year. Citizens Advice has stated:

“The idea that this could have a measurable effect on the behaviour of workers and employers is not credible”.

It proposes the deletion of clause 13 on that basis. That is why I would like to test the opinion of the House later this afternoon.

The critical point is that the combined impact of settlement agreements, ACAS early conciliation, fees and the lowering of the cap on compensatory awards will deliver the very compensated no-fault dismissal that was in the Beecroft report. Let me demonstrate why. If an employer decides that he no longer likes an employee, he might offer them a sum of money to leave his employment in a settlement agreement. The employer could say that the amount offered will be reduced each day that the settlement agreement is not accepted. The employee will feel pressured into accepting an offer for fear of victimisation, for fear that the offer will be withdrawn or reduced over time, or because of the spectre of having to take an unfair dismissal claim with the associated fee structure. Even if the employee were to win the tribunal case, the compensation cap proposed by the Secretary of State would be considerably lower than the losses that they had encountered.

This is a rogues charter that will result in poorly compensated employees who feel that the system is too complicated and expensive to make a rightful claim for justice. This is compensated no-fault dismissal in action. Let us not mention the ludicrous announcement by the Chancellor at the Conservative party conference that people could give up their workplace rights for a few company shares.

I will quickly run through amendments 92 and 83. In Committee, we pressed the then Minister, the hon. Member for North Norfolk, to introduce a better system for the enforcement of employment tribunal awards. He committed to look at that, but nothing has come forward. As the Minister has said today, some 40% of people who have been found by a judge at an employment tribunal to have been unfairly dismissed never receive their award. I am glad that the Minister is as shocked as we are by those figures and is looking at the matter. I will support her if there is a genuine attempt to make the system better.

Amendment 92 would essentially add to the powers of the employment tribunal to impose a penalty on an employer who does not settle the award within the time specified by the judge. It seems strange that the Government are proposing to fine an employer for aggravated circumstances in order to boost the coffers of the Treasury, while the employee has to wait or gets nothing at all. I am sure that many Members have constituents who have not been paid their compensatory awards.

Amendment 83 would merely remove the provision that introduces a parking ticket-style discount to employers if they pay their fine to the Treasury within the set period of time. That could have the unintended consequence of the penalty being prioritised over the awards due to the employee.

I will move on to amendment 94 and the new clauses tabled by my hon. Friend the Member for North Ayrshire and Arran (Katy Clark). Amendment 94 relates to clause 15, in which the Government attempt to limit the definition of a protected disclosure, which is the basis of whistleblowing claims. Whistleblowing is a day-one right that has the potential for unlimited compensation. The Opposition agree with the Government that this should not be used for an individual’s own employment contract, but we disagree that inserting a public interest test into the legislation will assist in the matter.

The Law Society agrees with us. It has said that the provision should state that a breach of a legal obligation requires something more than a breach of the individual contract of employment, so as to satisfy the public interest test. At present, the provision means that allegations about matters other than a simple breach of a legal obligation must fall within a test of public interest. A disclosure that a criminal offence has been committed would therefore also have to satisfy the public interest test.

We propose that the legislation be altered to omit an individual’s employment contract from whistleblowing claims, unless it satisfies the public interest test. One reason why the Government have got it wrong on this matter is that there has been no consultation with the relevant parties and stakeholders on how best to achieve the goals that we want to achieve.

14:15

The Government are trying to make it easier to fire, rather than hire, employees. They have no empirical evidence that the changes will improve the system. Indeed, the potential unintended consequences of an explosion in satellite litigation have been raised by many stakeholders and by many Members this afternoon. The impact will be felt by the lowest-paid and the most vulnerable. Although many Government Members are using the Bill as a way to attack the trade union movement, the changes will affect those who are not in a trade union the most, because they do not have the same representation.

Yesterday, we heard that the Government were legislating to try to change perceptions of health and safety. Today, they are doing the same with the perceptions of employees’ rights at work, rather than dealing with those perceptions. An eminent employment lawyer with over 30 years’ experience, Joy Drummond from Simpson Millar, emphasised that in Committee:

“Isn’t it more responsible for a Government to educate…employers and publicise the traps and how they should behave, rather than to legislate on the basis of a myth which, in itself, will, through implementation in such a way, cause more problems for everybody?”—[Official Report, Enterprise and Regulatory Reform Public Bill Committee, 21 June 2012; c. 97, Q212.]

That is why the measures that we are putting forward would be good for business.

Most shockingly, these reforms will impact on consumer confidence by damaging job security. These reforms purport to assist business, but they might have the opposite effect on the economy. Do not take that from me. The Minister’s predecessor, the hon. Member for North Norfolk, said of the Beecroft report before he was appointed to the Business, Innovation and Skills team:

“I think it would be madness to throw away all employment protection in the way that’s proposed, and it could be very damaging to consumer confidence.”

He went on to say, “It’s crazy”. The Bill has the potential to choke off access to justice for people who have been wronged in the workplace and deserve justice. It also has the potential to damage growth. I challenge the Minister and the Government to prove once and for all that this is not Beecroft by the back door by joining us in the Lobby this afternoon.

[Richard Fuller]

I will speak in favour of the two amendments relating to clause 14 that stand in my name. We have heard many legal arguments today. I am not a lawyer by training, so I have listened as intently as I can. My background is in business, and I draw the House’s attention to my continuing interests.

The Minister did an excellent job of portraying the middle path that she is taking with the legislation. I intervened on her to say that many business people feel that Parliament and politicians are out of touch with the realities of their day-to-day business. In some cases, their voice is not heard loudly enough. My amendments deal with one area where there is further that the Minister could go.

[Julian Smith]

My hon. Friend says that the public feel that this place is sometimes out of touch. From what he has heard from Opposition Members, would he say that Labour is anti-business and completely out of touch with entrepreneurs?

[Richard Fuller]

My hon. Friend makes an excellent point. All of us are aware that the Labour party has trouble understanding aspiration and even more trouble in rewarding aspiration. I am sure that Opposition Members will reflect deeply on the point that he has made.

[Mr Iain Wright (Hartlepool) (Lab)]

indicated dissent.

[Richard Fuller]

The shadow Minister does not agree with me, but let me point out to him the way in which the hon. Members for Walthamstow (Stella Creasy) and for Edinburgh South (Ian Murray) have spoken about Mr Beecroft. Somehow, a person becomes a word, which becomes something to be thrown around and handled in the most insulting of ways. There is no understanding of what Adrian Beecroft has done.

[John Cryer]

Did the hon. Gentleman read the evidence that Mr Beecroft gave to the Public Bill Committee? When he was asked, repeatedly, what the basis of his assertions was on a whole range of subjects, and what evidence he was bringing to bear, he more or less said, “Well, it’s something I’ve just dreamed up.” He did not present any particular evidence that I can pinpoint in the Hansard report.

[Richard Fuller]

The hon. Gentleman makes a good point, but—[Interruption.] I am serious, and this is a serious point. I do not know much about football, but I understand that the idea is to play the ball, not the man. That is also important in debates, which was why I did not feel it was correct when the Secretary of State dismissed Adrian Beecroft’s proposals out of hand and called them “bonkers” on Second Reading. It is important that we should debate those proposals. If, as the hon. Gentleman says, there is not sufficient evidence for them, let us look forward and move on to other issues.

My point is that Opposition Members too often harangue business people or try to portray them in a particular light. I refer particularly to the comments of the hon. Member for Walthamstow, who I believe discussed how Mr Beecroft made his money. I gently urge her to recognise that Mr Beecroft’s boss at the time—they were in the same company, making the same money—was an adviser to the former Prime Minister, and that the Labour party received millions of pounds in donations from that gentleman. If she wishes to make such points about one individual, I look forward to being copied in on her letter to the Leader of the Opposition suggesting that the Labour party should return that money.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

The hon. Gentleman has mentioned some adjectives used about Beecroft that he thinks were less than precise. Surely a simpler way to put it is that the plural of “anecdote” is not “evidence”. Beecroft presented a series of anecdotes about business that he could not back up with any facts. I know the hon. Gentleman well enough to know that he is in the facts business, so surely he will reflect on that when considering Mr Beecroft’s report.

[Richard Fuller]

The hon. Gentleman, too, makes a good point. I have read the evidence given to the Public Bill Committee, and it was not sufficiently evidentiary to move Mr Beecroft’s point forward. However, the hon. Gentleman will know that developed economies are currently having trouble with how to increase employment as they come out of recession. In the United States and the United Kingdom, it is taking us longer to create jobs as the economy recovers. It is therefore imperative that we look at the evidence, to see whether we wish to promote the Beecroft proposals. That is why we need a deeper and more serious debate than just talking about poor evidence in a Public Bill Committee or anecdotal evidence somewhere else, and one without name-calling.

[Mr David Anderson (Blaydon) (Lab)]

The hon. Gentleman makes the exact point that we constantly made in the Public Bill Committee. Given what he is saying, surely we should stop this debate and then take a view one way or another when we have got the evidence. At the moment, everything that the Government are doing is based on views that are not evidence-based.

[Richard Fuller]

I appreciate the hon. Gentleman’s perspective, but the Minister made quite clear her belief that there is sufficient evidence and support for the Government’s measures. Many of us think that they will go quite some way towards providing what businesses and employees would see as a reasonable and fair way to make efficient changes in the procedures for dismissal, dealing with unfair dismissal and tribunals.

I wish to focus on clause 14 and my amendments to it. Amendment 58 would delete the clause entirely, and amendment 59 would apply its principles only to businesses outside the micro-business sector—those that have more than 10 employees. The shadow Minister, the hon. Member for Edinburgh South, has given a number of the justifications for doing that both in Committee and today. First, there is the principle that involving the Government in a dispute between an employer and an employee may complicate the achievement of a settlement between those two parties. It is difficult to understand the a priori reason why a Government should try to achieve a take, because as he made clear, we should be trying to ensure that employers pay the amount for which they are responsible to an employee who has been aggrieved by a dismissal. I listened to the Minister’s comments, but my concern is that the clause will provide additional complexity in the process.

As the Minister indicated, the clause will also create an imbalance between the employee and the employer, and we are not sure how that will play out under the new regime. I hope that if the Minister will not accept my amendments today, she will at least agree to examine how the changes play out, and perhaps consider whether the issue of financial penalties should be reviewed in future.

[Julian Smith]

It is worth recording that every business representative group in Britain is concerned about the clause, for many of the reasons that my hon. Friend has given.

[Richard Fuller]

I thank my hon. Friend very much for that intervention.

[Julie Hilling (Bolton West) (Lab)]

I can understand why businesses do not want to face the reality of their actions, but we know that many businesses flout employment law, whether deliberately or innocently. If anybody breaks the law in any other walk of life, whether through a driving offence, robbing a shop or whatever, there is a penalty to be paid. Clause 14 is not about innocent omissions; it is about employers doing something deliberately. From many years of representing people, I know that employers often deliberately go against what is written in legislation. Surely they should have to pay some penalty for doing that, just as anybody would in any other walk of life. If someone breaks the law, they pay a cost.

[Richard Fuller]

The hon. Lady makes some good points from her experience, but my view is that we should focus our attention on ensuring that the aggrieved employee is in the best possible position to receive the maximum amount of the settlement that has been made in their favour. As was shown in evidence to the Public Bill Committee, in a large proportion of cases the employee does not get that amount. I do not see how it will help to add an additional burden on top of that, with the Government trying to take money as well. There seems to be a discord between that and our trying to do the best by employees. That is why I would rather the clause be completely removed.

I believe the shadow Minister said in the Public Bill Committee that in 59% of cases, employees do not receive the full settlement, and I would like the Government’s focus to be on reducing that figure. I believe that the clause is unhelpful, and as my hon. Friend the Member for Skipton and Ripon (Julian Smith) said, business representatives also believe that.

[Julie Hilling]

What, then, do we do with employers who continue to flout the law? I absolutely agree that the claimant should get the compensation to which they are entitled, but some employers continuously flout the law and just pay a small amount. Often, employees get a small award at tribunal anyway, depending on their age, length of service and income. What do we do with those employers?

[Richard Fuller]

That is an interesting question. My amateur response is that there are better ways to solve the problem than the method in clause 14. Imposing an additional burden in the form of money going to a different party, the Government, is not the optimum path to reach the resolution and outcome that both the hon. Lady and I would like to see when an employer has acted inappropriately and is not paying the bill that he or she should to the aggrieved employee. In general, as I have said a number of times, I would rather have the law presume that the employer is doing the right thing and will make the right payments. If he or she does not, there should be other measures, which perhaps the Minister can mention in her response.

As we have heard from my hon. Friend the Member for Skipton and Ripon, both the Federation of Small Businesses and the Institute of Directors have made representations to the Government that it would be better to remove the penalty on businesses imposed by clause 14. I have mentioned some of the representations made to the Government by the Law Society—that the benefits of imposing financial penalties on employers are not convincing—and, perhaps for slightly different reasons, from Opposition Members we have heard why the clause may not be good. I would rather leave those comments for the Minister to reflect on than push the amendments to a vote. I appreciate the hearing from the House.

14:30

[Katy Clark (North Ayrshire and Arran) (Lab)]

I will speak to new clauses 1 and 2, which relate to different aspects of whistleblowing. The current provisions on whistleblowing are in the Public Interest Disclosure Act 1998, a landmark piece of legislation introduced by the previous Labour Government. That legislation was fought for by many people over many years, and came about as a result of decades of campaigning by many across the political divide. I am therefore pleased to see that the hon. Member for Aldridge-Brownhills (Mr Shepherd) is listening to the debate, as he was one of those who campaigned on this matter during the previous Conservative Government.

Clause 15 introduces a public interest test into the whistleblowing legislation, and future claims will be successful only if the worker believed that the disclosure was made in the public interest and—in the case of wider disclosures—can demonstrate that that belief was reasonable under the circumstances. The clause will make it more difficult for people to rely on the 1998 Act, as it creates yet another legal test in what is already a complex legal area, and means that those who may be considering whistleblowing will face yet another hurdle to obtain the protection of the legislation. New clause 1 would remove one of the other legal tests—the good faith test—from the legislation.

There is no doubt that lives have been saved as a result of public interest disclosure legislation. However, as the Minister indicated, Dame Janet Smith stated in the Shipman inquiry that the good faith test was a barrier to whistleblowers, and that is borne out in reports from the ongoing Mid Staffordshire and Leveson inquiries. Given that another test is being added for a protected disclosure to be met, we must consider whether the proposed legislation will make it more difficult for someone to get the protection of the law.

I believe that Parliament and politicians should want individuals to whistleblow when that is in the public interest. Indeed, at almost any point in history, there have been situations in which it was—and should have been—appropriate for an individual to bring information to the attention of the relevant authorities or, where appropriate, the public, irrespective of whether they could prove that they were acting in good faith.

[Julian Smith]

I pay tribute to the work done by the hon. Lady on this important issue. Does she think that the time has come to consider the American model in which society starts to give incentives to whistleblowers, and will she comment on that?

[Katy Clark]

I would not necessarily say there should be incentives, but people should not be punished for whistleblowing. It is currently very difficult to get the protection of the law, and we need to look at that. That is why I, together with others, have called on the Government to look at the entire area. It is now more than a decade since the 1998 Act was introduced, and we need a thorough review and full public consultation on all issues associated with whistleblowing.

Current topical examples of where I believe it should not be necessary for someone to show that they are acting in good faith include the allegations that are coming to light about Jimmy Savile, and the cover-up that we have seen over many years following the Hillsborough disaster. There will be many other examples central to the political debate where politicians would welcome whistleblowers taking action.

[Julie Hilling]

Briefly, I would like to give another example. At Network Rail, women were consistently getting compromise agreements and therefore being gagged from speaking about things that were taking place. They were all women, so one can imagine the sorts of situations involved. The proposed legislation would make life much harder for people in such situations.

[Katy Clark]

My hon. Friend is absolutely correct. There must be mechanisms by which people can bring problems of that nature to the attention of the appropriate authorities.

By going ahead with this legislation and creating new hurdles, the Government will make it more difficult to rely on whistleblowing legislation. There is a strong argument that the motives of the claimant are irrelevant if bringing forward such information is in the public interest. As they stand, the Government’s proposals will significantly water down whistleblowing legislation in this country, but that balance would be significantly restored if new clause 1 were accepted.

New clause 2 deals with vicarious liability and addresses a loophole that has arisen as a result of the case of NHS Manchester v. Fecitt and others, of which the Minister will be aware. Three nurses from Manchester raised a concern about a colleague lying about his qualifications, but they were unable to rely on the protection of the law. Will the Minister seriously consider accepting new clause 2, as that would allow that loophole to be closed?

[Mr Richard Shepherd (Aldridge-Brownhills) (Con)]

I apologise for not having heard the opening remarks by the hon. Member for North Ayrshire and Arran (Katy Clark). I can see, however, that she was doing a bonny job, and these are important issues that, in a sense, have been imported into the Bill because of what she describes.

I am a passionate believer in whistleblowing, and I stand in the shadow of some giants from the time just after the election of the previous Labour Government. Tony Wright came up with the idea that people who make disclosures in the public interest should be protected by law, and that surprising proposition met with approval across the House. Other people were involved. Sir Ian McCartney, then a distinguished Member of this House, fought within his Department to see this process advanced, and the Liberal Democrats supported it with interest and vigour. From my party, the Secretary of State for Work and Pensions, then Leader of the Opposition, supported the legislation and served on its Committee. Nor should I forget Lord Borrie, who did sterling work in the House of Lords.

Tony Wright’s original idea that something could—and should—be done, set in train a motion that found supporters from across the House and among their lordships, and from the then new Labour Government. I was fortunate enough—or merely the vessel, depending on how one looks at it—to deliver the idea through a private Member’s Bill. I am, therefore, delighted to hear a newish Labour Member standing up for something that reaches across the parties and has an important principle behind it.

The confusion identified by Public Concern at Work seems to many to cut across what the Government are trying to do. Hon. Members are sympathetic to the Government’s attempt to bring clarity, and many of us are mindful of bullying in public places or the workplace. Nothing should harm the feeling that an individual should be able to come forward and argue that they are making a disclosure, because that is in the interest of society as a whole and of corporate government.

I am cheered by comments from some of my colleagues, who clearly want to make this legislation a working part of ensuring that fraud and criminal activities, as well as all the other matters that have been raised by Public Concern at Work and that are in the public interest, do not take place. After all, the legislation is entitled the Public Interest Disclosure Act 1998. I urge the Government please to enter into negotiations with wider society, and particularly organisations such as Public Concern at Work. The Bill must go to the House of Lords, and I have no doubt that the legal differentiation between terms will be closely scrutinised. I advocate that the bonny Minister raises the flag and fights for a change to the formulation of words, as proposed in new clauses 1 and 2.

[John McDonnell]

We have extremely limited time to debate this group of proposals if we are to debate the green investment bank. I absolutely abhor the programme motion, and the Minister took up nearly a third of the time for debate. Report is the only stage at which someone not on the Committee can table and debate amendments, and I have only around five minutes to speak to mine.

We naively debate the detail of legislation and Bills without understanding their political context. The political context of the Bill is the statements made at the Conservative party conference. This is the first stage in a legislative process under this Government of giving employers the licence to sack at will. That is what this legislation is about.

When the Minister spoke, it was like having a delegate from the Institute of Directors in the Chamber. The measure is like the first stage of the IOD programme for reforming employment law.

[Julian Smith]

Will the hon. Gentleman give way?

[John McDonnell]

No, I will not, because we do not have time and, to be honest, the hon. Gentleman is becoming monotonously boring.

When the Prime Minister spoke at the Conservative party conference, he said that he was on the side of the strivers. He makes it clear in the Bill that he is on the side of employers who want to sack people—without adequate compensation or adequate protection in law.

I have tabled a number of simple, basic amendments to ameliorate the proposed legislation, all of which have been rejected. I suggested that there should be a sanction against employers who do not participate in conciliation. We are told that such a sanction already exists, so my proposal would simply codify what the Minister has said happens in practice. It is important that we include that in the Bill.

I have made a simple attempt to amend the time scales in which claimants can prepare their case. A month is not enough for them—they must collect information and seek legal advice, and individuals often draft legal papers themselves. A six-month time scale would reflect that reality.

Another proposal would ensure that the processes being introduced by the Government have the confidence of all sides. It is unacceptable for the judge to determine who is on the Employment Appeal Tribunal, because it removes the experience of both sides of industry, who could advise the judge. My proposal is simply that consensus should be achieved and that the decision should be made with the approval of both the employee and employer representatives—all parties concerned. Even that proposal has been rejected.

People are not currently adequately compensated, which is why the cap is unacceptable. In no other area of law does a judge make an assessment that someone has lost and determine compensation, only for a cap to prevent full compensation. That is why there should be no cap, and yet the Government are keen on caps—they have introduced a £5,000 cap on fines against employers. What is £5,000 to companies such as Virgin or Starbucks, which we heard about yesterday? They are billion-pound companies. What is a £5,000 fine to them? It is meaningless.

[Nick de Bois (Enfield North) (Con)]

Will the hon. Gentleman give way?

[John McDonnell]

No, because the hon. Gentleman came late to the debate.

[Nick de Bois]

I am not boring!

[John McDonnell]

I might allow the hon. Gentleman to intervene if he came to the Chamber occasionally.

The point of my proposals is to ensure a balance of fairness in the regime that is being introduced. There is currently no balance whatever. The Bill is Beecroft. It is based on no evidence and on prejudice, and is the first stage of the Government’s plans to undermine employment law. This is the first stage of undermining the protections that workers have. People outside the Chamber will realise what is happening in the coming months under this Government. Jobs will be shredded and people will have no protection whatever as a result of the Bill and what will follow. On that basis, I wholeheartedly support Opposition Front Benchers in attempting to remove those clauses.

14:45

[Jo Swinson]

I thank hon. Members who have taken part in this debate. I note the point made by the hon. Member for Hayes and Harlington (John McDonnell) that I spoke at length at the beginning of the debate. I wanted to ensure that I covered all the issues raised and to be fair to Members in taking all interventions offered, which is the spirit in which I have approached the debate. That obviously meant that my remarks were rather lengthy.

I want to respond to the points raised in the debate, because hon. Members are keen to get to the next business. The hon. Member for Edinburgh South (Ian Murray)—the shadow Minister—queried clause 13 and said that it would hit middle earners, but I fear that his analysis of the situation reinforces unrealistic expectations. The average award at an employment tribunal is less than £5,000. In reality, only 0.3% of unfair dismissal claimants are awarded more than the annual salary. The purpose of the measure is to provide additional certainty and to help challenge those unrealistic expectations, but he has not characterised it entirely fairly.

[Gregg McClymont]

Will the Minister give way?

[Jo Swinson]

I will give way to the hon. Gentleman, but I remind him that Labour Members are also keen to get to the next business.

[Gregg McClymont]

If the average award is around £5,000, why is there a rush to get rid of the system?

[Jo Swinson]

As I was saying, the measure provides additional certainty and encourages both employers and employees to recognise that high awards are unlikely. Because of the current cap, some people can be misled into believing that high awards are likely, and end up pursuing that route when they could be better served by early conciliation and the other approaches outlined in the Bill.

I welcome the shadow Minister’s offer to work constructively on solving the problem of unpaid tribunal awards.

[Tom Greatrex]

Will the Minister give way?

[Jo Swinson]

I will give way, but I encourage hon. Members not to intervene to raise points that have already been debated—we have gone over a lot of the ground already. This will hopefully be something new.

[Tom Greatrex]

I was unable to make a speech because of the length of the Minister’s contribution, but I would like to raise a specific point on unpaid awards. I have raised a case from my constituency previously but did not get to give the full details. Will the Minister meet me and my constituent to go through some of the circumstances? The problem cuts across the Government, and involves not just the Department for Business, Innovation and Skills. Sometimes companies avoid paying the awards they should be paying, which challenges some of the points made by Government Members about who has confidence in the system.

[Jo Swinson]

I would be happy to meet the hon. Gentleman and his constituent, who, I am sure, is very grateful for the work he has done on this case. It is important to constituents to have the support of their MPs on such issues.

In response to my hon. Friend the Member for Bedford (Richard Fuller), I point out that representations from business suggested we should not proceed with financial penalties, but the ability of a tribunal to impose a penalty when it believes an employer has acted wholly inappropriately is right. I reinforce the point that good employers have nothing to fear, and I welcome the fact that he will not press the amendments to a Division.

I took a lot of interventions on clause 12, but I want to respond to some of the specific points made in the debate. The issue of jobseeker’s allowance was raised. The rules and decisions that currently apply to the regime of compromise agreements will apply to settlement agreements. When assessing claims, jobcentre staff could take into account the facts of the case, how the agreement was instigated and what the reasons for it were. We are also in discussions with the Department for Work and Pensions to ensure that those rules are applied appropriately. Obviously, because it is a voluntary agreement, it will not be a sacking if the employee does not wish it to be, but equally it could be negotiated in such an agreement that the reason for leaving could be deemed to be dismissal. That could help individuals by providing them with additional clarity around jobseeker’s allowance and insurance protection, although I add the caveat, of course, that people would need to look at their specific insurance policies and that those policies would vary from case to case. As I said, however, the wording in the final agreement could assist in such cases.

The shadow Minister suggested that there would be a problem with tribunals grinding to a halt when trying to define the word “improper”. That is not expected to be the case. Tribunals already play a valuable role in interpreting legislation. At the moment, they interpret what “reasonable” means in unfair dismissal cases, and we expect them to consider the meaning of “unambiguous impropriety”, as already happens in the civil courts and case law, in their deliberations on this test. He gave the example of a scenario in which an employer offers a settlement agreement but says that the amount will reduce each day until it is accepted. As my predecessor said in Committee, we would consider that the type of improper behaviour to which the protection would not apply. As I said, however, that consultation is ongoing.

On clause 12, the shadow Minister gave the analogy of somebody in a relationship suddenly saying, “I don’t love you anymore.” That is not a fair analogy. The appropriate analogy would be: “We need to talk.” When something is not working out, encouraging early dialogue is a good thing. That is the spirit behind all these changes, whether on early conciliation, rapid resolution or streamlining and improving the employment tribunal system. Ultimately, our aim is to have fewer tribunals taking place. That would be good for employees and employers, and I commend the Government amendments and new clause to the House.

Question put and agreed to.

New clause 8 accordingly read a Second time, and added to the Bill.



Clause 7

Conciliation before institution of proceedings

Amendments made: 6, page 4, line 18, leave out ‘send’ and insert ‘provide’.

Amendment 7, page 5, line 33, leave out ‘sending’ and insert ‘providing’.—(Jo Swinson.)

Clause 12

Confidentiality of negotiations before termination of employment

Amendment proposed: 81, page 8, line 19, leave out Clause 12.—(Ian Murray.)

Question put, That the amendment be made.

14:53

Division 76

Ayes: 224

---

Labour: 206
Democratic Unionist Party: 6
Scottish National Party: 5
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Independent: 2
Alliance: 1
Green Party: 1

Noes: 279

---

Conservative: 237
Liberal Democrat: 42

Amendments made: 8, page 8, leave out lines 22 to 27 and insert—

‘(1) Evidence of pre-termination negotiations is inadmissible in any proceedings on a complaint under section 111.

This is subject to subsections (2) to (4).

(1A) In subsection (1) “pre-termination negotiations” means any offer made or discussions held, before the termination of the employment in question, with a view to it being terminated on terms agreed between the employer and the employee.’.

Amendment 9, page 8, line 36, leave out from beginning to second ‘to’ in line 37 and insert

‘Subsection (1) does not affect the admissibility, on any question as to costs or expenses, of evidence relating’.

Amendment 10, page 8, leave out lines 40 to 43.—(Jo Swinson.)

Clause 13

Power by order to increase or decrease limit of compensatory award

Amendment proposed: 82, page 9, line 1, leave out clause 13.

Question put, That the amendment be made.

15:09

Division 77

Ayes: 223

---

Labour: 210
Scottish National Party: 5
Social Democratic & Labour Party: 3
Plaid Cymru: 3
Independent: 2
Alliance: 1
Green Party: 1
Democratic Unionist Party: 1

Noes: 290

---

Conservative: 242
Liberal Democrat: 42
Democratic Unionist Party: 6

Amendments made: 11, page 9, leave out lines 8 to 10 and insert—

‘(b) the lower of—

(i) a specified amount, and

(ii) a specified number multiplied by a week’s pay of the individual concerned.’.

Amendment 12, page 9, line 11, after ‘(2)(a)’ insert ‘or (b)(i)’.

Amendment 13, page 9, line 13, after ‘(2)(a)’ insert ‘or (b)(i)’.

Amendment 14, page 9, line 16, after ‘(2)(b)’ insert ‘(ii)’.

Amendment 15, page 9, line 38, after ‘13(2)(b)’ insert ‘(ii)’.—(Jo Swinson.)

Clause 17

Renaming of “compromise agreements”, “compromise contracts” and “compromises”

Amendments made: 16, page 12, line 23, leave out paragraph (c).

Amendment 17, page 12, line 35, at end insert—

‘(2A) In section 49 of the National Minimum Wage Act 1998 (restrictions on contracting out)—

(a) in subsections (3) and (4), for “compromise” (in each place where it occurs) substitute “settlement”;

(b) after subsection (8) insert—

(8A) In the application of this section in relation to Northern Ireland, subsections (3) and (4) above shall have effect as if for “settlement agreements” (in each place) there were substituted “compromise agreements.”’.—(Jo Swinson.)

New Clause 22

Interpretation of the green purposes: duty to assess impact on the Climate Change Act 2008

‘(1) In interpreting the purposes in section 1(1)(a) to (e), it is the duty of the UK Green Investment Bank to assess whether the implementation of its investment strategy, or similar document outlining or amending the proposed investment portfolio of the UK Green Investment Bank will, as a whole, increase the likelihood of achieving carbon budgets and greenhouse reduction targets as set out under the Climate Change Act 2008.

(2) In subsection (1), whether or not an investment strategy will increase the likelihood of achieving carbon budgets and greenhouse gas reduction targets shall be assessed compared to a scenario where identified investments or investment categories did not proceed.

(3) In undertaking the assessment required under subsection (1), it is the duty of the UK Green Investment Bank to have regard to the advice and reports of the Committee on Climate Change required under sections 34, 36 and 38 of the Climate Change Act 2008.

(4) The Board must make a decision to adopt or amend its investment strategy or similar document described in subsection (1), unless it is satisfied, as a result of the assessment in subsection (1), that the proposed investment portfolio will, as a whole, increase the likelihood of achieving carbon budgets and greenhouse gas reduction targets under the Climate Change Act 2008.’.—(Mr Iain Wright.)

Brought up, and read the First time.

[Mr Iain Wright]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

New clause 25—The UK Green Investment Bank: prohibition on investment in nuclear power or the nuclear industry—

‘The UK Green Investment Bank may not engage in activities that involve facilitating or encouraging investment in nuclear power or the nuclear industry.’.

Amendment 77, page 1, line 11, clause 1, at end add—

‘(3) In undertaking investments in accordance with the green purposes outlined in subsection (1), the UK Green Investment Bank will identify opportunities in which small and medium-sized enterprises can be awarded contracts.’.

Government amendments 1 to 3.

Amendment 76, page 3, line 24, clause 4, at end add—

‘(7) Subject to the approval by the European Commission of the State aid notification concerning the establishment of the UK Green Investment Bank, the Secretary of State shall provide the European Commission with State aid notification concerning the intention to allow the Bank to borrow, including borrowing from the capital markets.

(8) The duty in subsection (7) must be fulfilled no later than 31 December 2013.

(9) It is the duty of HM Treasury and the Secretary of State to either—

(a) permit the UK Green Investment Bank to begin borrowing from the capital markets by April 2015, or

(b) to present to Parliament a report within one month of the passage of this Act giving a clear, certain, alternative date for the UK Green Investment Bank to begin borrowing, based on Office for Budget Responsibility forecasts for the public finances and advice from the Green Investment Bank on its need for borrowing powers,

both subject to the European Commission approving the State aid notification concerning borrowing.’.

Amendment 89, page 3, line 24, clause 4, at end add—

‘( ) Subject to approval by the European Commission of the State aid notification concerning the establishment of the UK Green Investment Bank, it is the duty of the Secretary of State to provide the European Commission with State aid notification concerning the intention to allow the Bank to borrow, including borrowing from the capital markets.

( ) The duty in the above subsection must be fulfilled no later than 31 December 2013.

( ) In the event the European Commission approves the State aid notification concerning borrowing, it is the duty of the Treasury and of the Secretary of State to permit the Green Investment Bank to begin borrowing from the capital markets no later than 30 June 2015, or, if State aid approval has not been received by that date, no later than one month from the date of approval.’.

Government amendments 4 and 5.

Amendment 78, page 4, line 9, clause 6, at end add—

‘(5) The Secretary of State will be required to receive independent expert review of the performance of the UK Green Investment Bank.

(6) The Secretary of State will be required to receive such a review no less than every five years.

(7) An interim review no less frequently than every two and half years.

(8) The independent expert review in subsection (5) must, in particular, include or contain information relating to—

(a) an assessment of the UK Green Investment Bank’s environmental performance in fulfilling the green purposes as set out in section 1.

(b) an analysis of the main trends and factors likely to affect the future development, performance and investments of the UK Green Investment bank,

(c) macroeconomic analysis, including assessments of demand in the UK economy and international factors likely to affect green investment and skills within the relevant industries,

(d) assessment of the competitiveness of the UK Green Investment Bank in securing competitive advantage for the UK in green and low carbon economies relative to other countries, and

(e) recommendations to improve the UK Green Investment Bank’s impact in fulfilling its green purposes in section 1.

(9) Prior to the commencement of a review in relation to subsection (5), the Secretary of State must request the views of—

(a) The Secretary of State for Energy and Climate Change,

(b) The Secretary of State for Environment, Food and Rural Affairs,

(c) The Committee on Climate Change,

(d) Ministers from the devolved administrations,

(e) investors and interested parties, and

(f) members of the public,

and provide a copy of the results of the consultations to the person or persons undertaking the independent review.

(10) The Secretary of State, in the capacity of shareholder, must provide such information as he considers reasonable to enable the person or body undertaking the review to fulfil the requirements of this subsection.

(11) A review made in relation to subsection (5) must be published and laid before both Houses of Parliament.’.

[Mr Wright]

Those hon. Members who served on the Committee will recall that we spent a great deal of time considering whether the green purposes of the green investment bank, as set out in clause 1, were appropriate—namely, whether they were too restrictive or limiting to prevent long-term investment in innovative low-carbon technologies or too wide or broad as to mean that high-carbon investments could not be considered by the bank. As I said, we deliberated over this issue in Committee at length.

Of the five criteria, only one needs to be met to justify the appropriateness of investment by the bank. Was clause 1(1)(b), which refers to

“the advancement of efficiency in the use of natural resources”,

sufficiently tight and robust to deal with the need to ensure that the green economy and the transition to a low-carbon economy are put into effect? In Committee, I used the example of a gas-fired power station that might be marginally more efficient in its use of the earth’s natural resources given 2012 levels, but might well be seen as hopelessly dirty and inefficient by 2030.

That is the purpose of new clause 22—to deal with concerns that investments by the bank might not be in keeping with its green purposes, or at least the spirit behind those purposes. That is why we thought that making an explicit link with the Climate Change Act 2008 would be the best way for an appropriate balance to be struck between giving the bank the flexibility to consider its investment portfolio and ensuring that it cannot and does not decide to fund high-carbon investments. New clause 22 therefore proposes that the green investment bank assesses whether its investment portfolio helps the achievement of carbon budget and greenhouse reduction targets as set out under the 2008 legislation.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Do the criteria that the hon. Gentleman has noted extend to nuclear energy?

[Mr Wright]

We can consider that when hon. Members debate new clause 25. We had considerable debate about it in Committee. The question now is: what is the purpose of the green investment bank? Is it to ensure that we can kick-start innovative technologies that cannot have market buy-in, or is it a question of ensuring that the targets set out in the 2008 Act are met? There is a conflict there, which we considered in Committee at some length. I think that there is potential to consider nuclear, certainly in respect of the nuclear supply chain and ensuring that we can achieve these objectives. I am keen to hear the debate on this matter in the next few moments. It is important to probe the Government on whether this is an appropriate avenue for the bank to invest in.

[Neil Carmichael (Stroud) (Con)]

rose—

[David Mowat (Warrington South) (Con)]

rose—

[Mr Wright]

I shall give way to two eminent members of the Public Bill Committee, but I must bear in mind the fact that we do not have time to debate these issues at length.

[Neil Carmichael]

I thank the hon. Gentleman for that generous introduction. I am glad I stood up when I did. The danger of the shadow Minister’s speech so far is that he is focusing on energy, where, of course, a green investment bank should be considering many other technologies and many issues other than energy. That is one of the problems with new clause 22.

[Mr Wright]

I understand that. The hon. Gentleman will recall that I posed a number of questions in Committee: could the green investment bank invest in forests or in the supply chain for the automotive industry to ensure that we have low-carbon engines? There was a whole range of different debates in Committee, which I thought were useful. As I said, there is a balance to be struck, and that is what new clause 22 is about. Is the aim to achieve what we all want to achieve—igniting, for want of a better term, the green economy—or is the provision too prescriptive? There is a balance between being too broad and too narrow.

[David Mowat]

I thank the shadow Minister, but I am a bit disappointed by the tone of his remarks. I want to get clarity about the point that was raised a few moments ago about nuclear, so that I can understand the position of those on the Opposition Front Bench. Would Sheffield Forgemasters, for example, which is a nuclear supply chain company, be eligible for assistance from the bank?

[Mr Wright]

The hon. Gentleman will recall that I mentioned this issue at length in Committee, when he quite rightly probed me on it. I reiterate my answer to the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) a few moments ago. There is a conflict here. What is the purpose of the green investment bank: is it to ensure that we have innovative technologies where there is current market failure making it difficult to get investment, or is it to ensure that we do as much as possible to tackle carbon emissions, meet low-carbon targets and so forth? Within that, nuclear could be a source of investment.

[Caroline Lucas (Brighton, Pavilion) (Green)]

rose—

[Mr Wright]

Before I give way, I should declare an interest in that I have a nuclear power station in my constituency. I would quite like another one, and I think that part of that supply chain could be considered by the green investment bank. I would certainly like more clarity on this from the Government.

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

rose—

[Mr Wright]

I shall give way to the hon. Member for Brighton, Pavilion (Caroline Lucas) first, and then to the Minister.

[Caroline Lucas]

To be honest, I do not see this contradiction. Given that nuclear takes so long to get up and running, it is not going to help us to meet our carbon targets fast enough. It also requires Government subsidy, which is why the whole of the EMR—electricity market reform—is being rigged to deal with that. Also, the jobs that we hope the green investment bank will create will surely be jobs that we would like to see here in the UK. If we use the bank to subsidise nuclear, what we are doing is basically subsidising jobs in places like Russia, China and France.

[Mr Wright]

I shall come on to this in a few moments. Because of a huge lack of clarity in the Government’s energy policy—anywhere, but particularly in respect of the renewable energy component—many foreign investors will not view the UK as the destination of choice for investment in any case. We have huge potential to be the market leader for renewable and low-carbon technologies, but I think we are missing a trick when it comes to the scale of ambition and the time scale of the green investment bank. The purpose of the new clause is to probe and challenge the Government to ensure that we make this part of a growth strategy rather than to allow it to happen somewhere in the future in a way that makes it virtually meaningless.

[Matthew Hancock]

Given the shortage of time, it may be helpful if I deal with two points now. I can confirm first that the European Commission has granted state aid approval to the green investment bank, and secondly that the Commission strongly discouraged the inclusion of nuclear in our application for state aid. Its inclusion would have delayed approval, and nuclear projects are therefore not in scope in respect of the current application.

[Mr Wright]

I thank the Minister for his clarification. It is somewhat at odds with what was said in Committee by the then Minister, the hon. Member for North Norfolk (Norman Lamb), but we are where we are—and I am very grateful to the Minister for his announcement about the state aid application, because it gets rid of at least a paragraph of my speech.

Let me now deal with amendment 76, which makes an important point about what the green investment bank should be doing in the light of its potential, the huge opportunities that it provides, and the equally huge scale of the challenge presented by the need for us to decarbonise our economy. If we are to achieve what we want to achieve, we need active government. Working with business, the Government must assess our present comparative advantage in this sector, and work out how we can maintain or enhance that advantage in the future.

15:30

There is a huge, pressing need for policy certainty for investors in the green economy, but so far the Government have not been able to provide it, to the detriment of the country’s chances—this is relevant to what was said by the hon. Member for Brighton, Pavilion—and the chances for jobs and growth.

Only last week, seven of the world’s largest energy and engineering firms wrote to the Chancellor asking for greater certainty in energy policy to kick-start green manufacturing investment. The Times reported that such companies as Siemens, Alstom UK, Mitsubishi Power Systems, Areva, Doosan, Gamesa and Vestas had warned that while they saw

“potential for significant further investment to support the UK’s move to low carbon generation”,

that investment would fail to materialise if the Chancellor and the Government did not take steps to address the high levels of uncertainty and political risk that were afflicting the sector.

[David Mowat]

Will the hon. Gentleman give way?

[Mr Wright]

I know that the hon. Gentleman is a keen advocate of manufacturing in this country, but we require policy certainty. I hope that he will address the point made in an excellent article by Camilla Cavendish that appeared in The Times last month. She wrote that

“instead of building the equipment in England”,

companies were building offshore wind turbines elsewhere:

“These companies remain uncertain about investing in the UK… the impression that the coalition is split has spooked companies whose boards need to commit capital for 20, 30, 50 years, whether in wind or nuclear power, biomass or solar.”

Is not the lack of the long-term certainty that is so necessary undermining the chances of jobs and growth in this crucial area?

[David Mowat]

I thank the shadow Minister for telling me what I should say in my intervention. What I was going to say was that, although I did not catch the name of every company in the list that he read out, I am pretty sure that the headquarters of all of them are outside the UK—as, by the way, are those of the major manufacturers of offshore wind. And, yes, it is a problem.

[Mr Wright]

That is why I am pleased that the hon. Gentleman will be supporting our amendment 77—which is intended to promote the growth of small and medium-sized enterprises in the supply chain and to ensure that we can realise the great potential of the green economy—and will object to the Government’s amendments 1 and 3, which state that investment can take place not in the UK but elsewhere. As someone who wants to support manufacturing in the UK and the ability of home-grown businesses to provide jobs, growth and export potential for our companies, he will doubtless be supporting us in the Lobbies.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

Time will be limited for later speeches, so let me say this now. My hon. Friend read out a list of companies that had expressed concern about the mixed messages coming from the Government. I know from private discussions that I have had with people in some of those companies that they are very worried about where the Government are going, and want more clarity. The amendment provides a good way of clearing up the confusion created by the Government, and making their commitment stronger again.

[Mr Wright]

I agree. The same point was made by the CBI, which concluded in a report produced this summer entitled “The Colour of Growth: Maximising the potential of green business”:

“while business wants to keep up the pace, they are equally clear that the government’s current approach is missing the mark, with policy uncertainty, complexity and the lack of a holistic strategy damaging investment prospects.”

The Government and the Minister—when he is listening—must respond to that. They must provide policy certainty so that investment can be made in the UK.

In Committee, when we discussed the green investment bank and its borrowing powers, I said that we had thought long and hard about the issue. At the time the then Minister, the hon. Member for North Norfolk, said:

“The Government have also committed that the Bank will borrow from April 2015”,

although he then qualified that by using the stock phrase

“subject to public sector net debt falling as a percentage of GDP.”—[Official Report, 12 July 2012; Vol. 548, c. 793W.]

However, given the Government’s failures in relation to its own borrowing targets, that commitment is so far from being achieved as to be virtually meaningless. I would contend that a deficit reduction plan without an accompanying growth and employment programme is no deficit reduction plan at all.

Ours is one of only two G20 countries in recession. In March, the Office for Budget Responsibility reported that the Government might meet their debt target by the skin of their teeth, but since then borrowing figures have been significantly higher than forecast. The deficit is now going up—borrowing is now going up; it has increased by 22% so far this year, as a direct result of this Government’s policies. Citigroup forecasts that the Treasury may have to borrow £48 billion more than it originally forecast by 2015-16, meaning that the Chancellor’s key fiscal target of having public sector net debt falling as a proportion of GDP by 2015 will not be reached. It is widely anticipated that the Chancellor, in his autumn statement to be held in winter, will have to carry out a humiliating climbdown from that important target of his, based largely on his misguided economic policies.

Where does that leave the green investment bank? At a time when our potential as a leading market for green business is under threat, both from intense overseas competition and from uncertainty from this Government, what impact does this failure of fiscal policy by the Chancellor have on this growth area? That is the context behind our amendment 76. We want the green investment bank to be able to provide a stimulus for growth in our economy as soon as possible, but we are equally mindful of the double-dip recession that the Chancellor’s policies have inflicted on the country. Our amendment would ensure that state aid approval on the green investment bank’s borrowing power would be sought and achieved no later than 31 December 2013. What the Minister has said about that is certainly welcome, but what impact will it have? Does it mean that borrowing will take place earlier than 2015? When does he imagine borrowing from the capital markets will be permitted?

Our amendment proposes that the bank must be able to begin borrowing by April 2015 or, if that is not achievable, Parliament must be provided with a clear and alternative date as to when such borrowing may be permitted, based both on OBR forecasts regarding the state of the public finances and on advice from the green investment bank on the need for borrowing powers to achieve its objectives.

[Caroline Lucas]

I wonder why the hon. Gentleman is insisting on that caveat, as the position shared by his Front-Bench colleagues not that long ago was unequivocal in saying that as of June 2015 the bank should be permitted to borrow. The Opposition are now moving away from that position and I simply do not understand why. They are watering down what was there before and is contained in my amendment 89.

[Mr Wright]

My firm policy commitment is to ensure that we have the green investment bank borrowing as soon as possible, as a stimulus to growth. We were mindful of amendments that we tabled in Committee about that, but we also have to consider the appalling financial mess that the Government are dealing with in respect of increased borrowing. Borrowing was going down prior to the general election, but now it is going up. We do not know what the circumstances will be in 2015, so we need to ensure that there can be certainty, based on the imperative to have the green investment bank borrowing from the capital markets as soon as possible while being mindful of the need for rigour and discipline in the public finances.

[Neil Carmichael]

Is it not possible that the green investment bank can encourage other private organisations and banks to step in and start contributing to the green economy, as that is really what this is all about? It is about providing the right confidence, on the basis of a framework of some certainty, which the Minister has asked for and the Government are giving.

[Mr Wright]

Absolutely, and that is why the hon. Gentleman will be supporting our amendment 77 and rejecting Government amendments 1 and 3.

If our economy has sectoral strengths, it is right, in an active industrial strategy, for the Government to be looking to maximise those strengths. They also need to seek to develop further capabilities, as the hon. Gentleman rightly said, that could lead to greater investment, growth and employment opportunities here in the UK and, we hope, to the exporting, for commercial gain, of some of the work, expertise and capability here. We want economic benefits to flow to companies within the United Kingdom. That is not to defend protectionism, or to deny the need for competition and foreign direct investment, but to ensure that the Government, as part of a fundamental, active, industrial strategy, work with business to see how this country can gain and maintain market advantage.

[Neil Carmichael]

rose—

[Mr Wright]

I cannot resist giving way to the hon. Gentleman again, even though I am conscious of the time, because the manner in which he puts his hand up as if he needs to go to the toilet is so endearing.

[Neil Carmichael]

I thank the hon. Gentleman for that. It is important to understand the length and complexity of supply chains and that we do not tie ourselves down to thinking that the supply chain is just within Britain, as it goes further than that. We need appropriate co-operation from the supply chain in big operations. The Government are rightly focusing on supply chains more generally, but we need to bear that in mind.

[Mr Wright]

Absolutely. I think the hon. Gentleman can go to the toilet now. Recent research has concluded that capital expenditure costs for something as important and significant as offshore wind projects, in which my constituency could play a leading part, could fall by a third in the next decade if a greater proportion of the parts were made in the UK. We need to be mindful of that and the Government must work with business to enhance the supply chain possibilities, opportunities and capabilities in the UK. I suggest to the hon. Gentleman, with the greatest of respect, that that is not happening, largely because of policy uncertainty. That is what amendment 77 is designed to address.

[Caroline Lucas]

The hon. Gentleman is talking passionately about policy certainty, yet his amendment 76 reintroduces uncertainty. I cannot emphasise enough that it is amendment 89 that would ensure that the bank would be able to borrow from 2015. It is actually what the Liberal Democrats agreed at their party conference only a few weeks ago. If the hon. Gentleman wants policy certainty, why will he not support amendment 89?

[Mr Wright]

I know that the Liberal Democrats have such power and significance in the coalition that they will be able to advance that proposal. If it is one of their manifesto or conference commitments, it will certainly happen. That might not look as sarcastic as it should do in Hansard, Mr Deputy Speaker.

The serious and important point at the heart of amendment 76 and amendment 89, tabled by the hon. Member for Brighton, Pavilion, is the question of the extent to which we can have the green investment bank operating at scale as quickly as possible, ensuring that it can borrow from the capital markets as quickly as possible and be a major ingredient in the stimulus for growth while at the same time being mindful of the deterioration in the public finances that has largely been caused by the Government’s economic policies. The emphasis on austerity means that tax receipts are going down and benefit payments are going up, so borrowing figures have had to rise by more than a fifth in the past year alone.

Let me go back to the point made by the hon. Member for Stroud (Neil Carmichael). I mentioned Government amendments 1 and 3 and I find it baffling that the amendments state that investments can be considered

“whether in the United Kingdom or elsewhere”.

I fully appreciate and support the need to tackle climate change and the transition to a low-carbon economy on an international and multilateral level. The hon. Gentleman was quite right to say that supply chains are somewhat more complex than they would be if they were solely domesticated. How on earth, however, do these Government amendments to an enterprise Bill that was supposedly designed to improve the competitiveness of the UK economy help to stimulate enterprise and economic activity in this sector in Britain? Is there not a huge risk that Britain’s potential as a world leader in this field will be lost as a direct result of the Government’s amendments? I ask the Minister to think again and to reflect on the amendments we have tabled and on the new clause.

As we have only 17 minutes left to debate this subject, which is incredibly important for the future of this country, I shall now take my seat.

[Matthew Hancock]

I shall try to answer all the questions that have been asked and then leave some time for further comments from other Members who have tabled amendments and new clauses or who wish to speak.

The green investment bank will play a powerful role in promoting the green economy. What we heard from the Opposition suggested that they had introduced such a measure themselves, but this is a coalition measure that is testament to the coalition. It is widely and strongly supported by Liberal Democrats and Conservatives alike and will, I think, help the UK to make a successful transition to a low-carbon economy. I am pleased to have been able to confirm that the European Commission has allowed the bank to make commercial investments in a wide range of sectors. We are therefore fully on track for the bank to be operational within a matter of weeks.

14:09

[David Mowat]

I believe the Minister said that the European permission excludes nuclear power, which forms by far the largest part of low-carbon electricity in this country and is likely to continue to do so. Given that, will he amend the purpose stated in clause 1(1)(a), as it is no longer accurate?

[Matthew Hancock]

The application, which has just succeeded, did not include nuclear. We do not plan to amend that purpose, not least because the Bill provides that the bank can, in time and if appropriate, be moved from the public sector into the private sector using secondary legislation, without changes having to be made to primary legislation.

[Chris Huhne (Eastleigh) (LD)]

Will the Minister assure the House that when he talks about a powerful institution to support the transition to a green economy, he is talking about a bank that will be able to borrow? I regret that the Bill contains no commitment to that borrowing. If the bank were able to use the public spending allocated as a capital base, it would be able to borrow, and if it were in line with, for example, the Bank Nederlandse Gemeenten in the Netherlands, it would be able to make approximately £150 billion of extensive loans. That would give far greater and more powerful support to the green economy than the funding currently allocated to it.

[Matthew Hancock]

The Government have already made a clear commitment that the bank will be able to borrow from April 2015, subject to public sector net debt falling as a percentage of GDP, and the borrowing could take several forms, including from the capital markets. I reiterate that commitment today. Nothing in the Bill prevents that from taking place.

As the Bill stands, the bank is allowed to invest only in activities it considers likely to contribute to the achievement of one or more of the green purposes in the UK. Government amendments 1 and 3 would allow the bank to invest in activities it considers likely to contribute to one or more of the green purposes, whether in the UK or elsewhere. The point about global supply chains has already been made powerfully. The amendments will provide important flexibility in the bank’s future activities. We believe that, for the foreseeable future, the bank’s activities should continue to be in the UK, and the Government and the Secretary of State, as shareholders in the bank, will be able to ensure that that is the case.

[Mr Mike Weir (Angus) (SNP)]

As I understand it, under the Bill in its current form, the bank would not be able to invest in a project that crossed borders—for example, a cable from the Republic of Ireland to the UK or a North sea supergrid. Am I correct, or will the amendment allow investment in such projects?

[Matthew Hancock]

The amendment will allow the bank in future to invest in the UK or elsewhere, but we have amended the bank’s statement of objects in its articles of association so that the bank’s activities are limited to those the board considers will, or are reasonably likely to, contribute in the UK to one of the green purposes. I hope that that answers both questions and addresses the reasonable point made by the Opposition that UK public spending should have a UK focus. We think this is the way to deliver the best of both worlds. The bank’s directors will be required to act in accordance with the company’s constitution to ensure that the bank contributes to the United Kingdom, and there will be flexibility for the future without the need for future primary legislation.

[Mr Iain Wright]

Will the Minister talk us through a scenario in which an investment decision might be made, say, for offshore wind capability, where prices may be cheaper in, say, Germany than in the United Kingdom? Will cost or the achievement of the bank’s purposes be the key consideration? What conflict and tension exist between cost, value for money and the supply chain capability here in the UK?

[Matthew Hancock]

Clearly, one reason for establishing a green investment bank is to ensure that it delivers against the green purposes. Of course cost is vital. That is why we are setting up the bank so that it will act on a commercial basis. The crucial point is that it must act in accordance with one or more of the green purposes; otherwise there would be no point in it being a green investment bank.

[David Mowat]

For clarity on the point that was made from the Opposition Benches, there is a proposal for a very large wind farm in the Republic of Ireland, whose output would come over to the UK through an interconnector and would therefore hit our green purposes. Could we invest in that scheme in the Republic of Ireland under the Bill?

[Matthew Hancock]

I would want to look at the details of the scheme. However, the amendments that we have made to the articles of association refer to the bank contributing in the UK. I would expect, though I cannot formally confirm, that an interconnector would have an impact in the UK as well as on the other side of the Irish sea. I will write to my hon. Friend with more details.

Amendment 2 was tabled in response to a suggestion from the hon. Member for Hartlepool (Mr Wright) that the designation of the bank should be subject to an affirmative resolution of Parliament. We made it clear in Committee that we are looking towards that. We want to ensure that Parliament has the full ability to scrutinise these issues and I hope the Opposition will support that change in arrangements.

Amendments 4 and 5 deal with directors’ pay. The Government have repeatedly demonstrated their commitment to ensuring that UK companies apply the highest standards of corporate governance. We have already introduced measures under the Bill to require quoted companies to seek shareholder approval for the directors’ remuneration policy. This change ensures that the bank will abide by these new commitments so that it is treated as a quoted company for the purposes of chapters 4 and 4A of part 10 of the Companies Act 2006, and so that the company is required to seek shareholder approval for the directors’ remuneration policy. This requirement would continue if the bank were one day moved into the private sector. I am sure hon. Members on both sides of the House will support the Government’s commitment to the very highest standards of corporate governance.

Opposition amendments 76 and 89 deal with the bank’s ability to borrow. As I said, the Government committed in Budget 2011 to fund the green investment bank with £3 billion to 2015. This is a serious demonstration of the Government’s green credentials and it is an appropriate level of funding for a new financial institution so that it can build market confidence and show a positive commercial return, while mobilising additional capital for green infrastructure projects in accordance with its green purposes. It is a major injection of capital which underlines our strong commitment to the bank.

We have also already given a clear commitment that the bank will be able to borrow, including from the capital markets. It may help if I explain the legal position in respect of borrowing by the bank. As a company formed under the Companies Act, the bank already has the power to borrow. The bank’s constitution provides, understandably, that the company will not incur borrowing without Government consent. This restriction is imposed by the Secretary of State as shareholder and does not affect the underlying position under company law that the company, as a legal person, has the ability to borrow.

I want to be clear that we are considering carefully the case for the bank borrowing from the capital markets from 2015-16, subject to the caveats I have mentioned. It is too early to make commitments about the level or type of funding. The views of the bank’s board will be an important factor, so we will have to discuss with it the appropriate level and source of future borrowing. We made a firm commitment in Committee to seek state aid approval from the Commission in respect of borrowing before the end of this Parliament. However, we cannot move to seek that approval before we know the mechanism for and quantum of borrowing. The bank’s borrowing will clearly be scored against national debt totals, so it is entirely reasonable for the Government to take that into account as part of our future spending and fiscal plans.

In summary, the Government agree with hon. Members about the importance of the issues relating to the bank’s funding, and their role in highlighting those here is welcome, as the Government want no one to be in any doubt about our serious ambitions for the bank and the green economy. These considerations will clearly be critical to the bank’s future and we will consider carefully how to provide clarity, either through the company’s constitution or by other means, about the legal position with regard to the bank’s borrowing.

[Chris Huhne]

On the other means, will the Minister commit to looking carefully at introducing an amendment in the other place to put that on the face of the Bill?

[Matthew Hancock]

We have been very clear about our commitment to allow borrowing and will look at how best to bring that clarity, which I am sure will include discussions with my right hon. Friend and others.

On the amendment relating to small and medium-sized enterprises, we are strongly committed to supporting SMEs and, indeed, are already providing major help to them through, for example, the business growth fund and the regional growth fund. I must declare an interest: a family business with which I am not directly connected is involved in energy efficiency matters. I expect the green investment bank already to benefit SMEs in a number of ways. For instance, some of the smaller funds that have already been set up are likely to generate investments for SMEs, provided that their targeted project size is under £30 million. However, I do not think that introducing a statutory basis would help, not least because it would increase the complexity of decision making in the bank, increase uncertainly and could increase the likelihood of judicial review. Therefore, we cannot support the amendment.

With regard to amendment 78, on the question of independent review, we think that parliamentary scrutiny and the normal corporate law requirements will be important. First, Parliament has a vital role in ensuring that the bank remains green. Secondly, Parliament will oversee the Secretary of State. Thirdly, I have no doubt that the Select Committee and the Environmental Audit Committee will look at the bank, and its accounts and reports will be placed before Parliament. However, it is important to be clear that the bank is a Companies Act company and, as such, directors owe duties to the company rather than directly to Parliament. We dealt with new clause 25 earlier in the debate on nuclear power.

Finally, the green purposes are clearly important as they relate to the essence of the green investment bank and to the company’s green objectives. Our goal is to have a broad definition of what is green. We agree that the reduction of greenhouse gas emissions is a vital objective, which is why four of the five priority sectors relate directly to it. The bank will be required to report on greenhouse gas emissions associated with its own activities and the board has agreed that the bank will also report on the greenhouse gas impacts of its own investments.

[Caroline Lucas]

I am grateful to the Minister for giving way, because although we have nearly run out of time—we knew we would when the Government voted for the programme motion—I want to put clearly on the record the fact that unless the bank’s ability to borrow is included in the Bill it risks being nothing more than a fund, which would be a tragedy. I say again that if the Liberal Democrats want to vote in line with their own manifesto and their party policy, agreed scarcely a few weeks ago in Brighton, they should support amendment 89, which I would have loved to push to a vote.

[Matthew Hancock]

The Liberal Democrats and, indeed, the Conservatives are supporting this with £3 billion of Government and taxpayers’ money, and that demonstrates their commitment. However, we need a balance. The new clause would increase again the chance of judicial review. Nevertheless, while we are clear that the overall goal must be carbon emissions, we do not want to rule out other investments, some of which were mentioned by the shadow Minister, and support for wider green measures. We will therefore consider tabling a further Government amendment in the other place to clarify the point that is raised in the new clause.

16:00

Debate interrupted (Programme Order, 16 October).

The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the clause be read a Second time.

The House divided: Ayes 220, Noes 292.

16:00

Division 78

Ayes: 0

---

Labour: 206
Scottish National Party: 5
Plaid Cymru: 2
Conservative: 2
Independent: 2
Social Democratic & Labour Party: 1
Alliance: 1
Green Party: 1
Democratic Unionist Party: 1

Noes: 0

---

Conservative: 243
Liberal Democrat: 45
Democratic Unionist Party: 4

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I now have to announce the result of the deferred Division on the question relating to the order on the abolition of the Commission for Rural Communities. The Ayes were 301 and the Noes were 211, so the Ayes have it. I also have to announce the result of the deferred Division on the question relating to sulphur contents and marine fuels. The Ayes were 479 and the Noes were 33, so the Ayes have it.

[The Division list is published at the end of today’s debates.]



The Deputy Speaker then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

Clause 2

Designation of the UK Green Investment Bank

Amendments made: 1, page 2, line 8, leave out ‘in the United Kingdom’ and insert

‘(whether in the United Kingdom or elsewhere)’.

Amendment 2, page 2, line 18, leave out from ‘section’ to end of line 19 and insert ‘—

(a) is to be made by statutory instrument, and

(b) is not to be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.’.—(Matthew Hancock.)

Clause 3

Alteration of the objects of the UK Green Investment Bank

Amendment made: 3, page 2, line 37, leave out ‘in the United Kingdom’ and insert

‘(whether in the United Kingdom or elsewhere)’.—(Matthew Hancock.)

Clause 4

The UK Green Investment Bank: financial assistance

Amendment proposed: 76, page 3, line 24, at end add—

‘(7) Subject to the approval by the European Commission of the State aid notification concerning the establishment of the UK Green Investment Bank, the Secretary of State shall provide the European Commission with State aid notification concerning the intention to allow the Bank to borrow, including borrowing from the capital markets.

(8) The duty in subsection (7) must be fulfilled no later than 31 December 2013.

(9) It is the duty of HM Treasury and the Secretary of State to either—

(a) permit the UK Green Investment Bank to begin borrowing from the capital markets by April 2015, or

(b) to present to Parliament a report within one month of the passage of this Act giving a clear, certain, alternative date for the UK Green Investment Bank to begin borrowing, based on Office for Budget Responsibility forecasts for the public finances and advice from the Green Investment Bank on its need for borrowing powers,

both subject to the European Commission approving the State aid notification concerning borrowing.’.—(Mr Iain Wright.)

Question put, That the amendment be made.

16:14

Division 79

Ayes: 222

---

Labour: 208
Scottish National Party: 6
Social Democratic & Labour Party: 2
Plaid Cymru: 2
Independent: 2
Conservative: 1
Alliance: 1
Green Party: 1
Democratic Unionist Party: 1

Noes: 285

---

Conservative: 236
Liberal Democrat: 45
Democratic Unionist Party: 4

Clause 5

The UK Green Investment Bank: accounts and reports

Amendments made: 4, page 3, line 27, leave out from ‘treated’ to ‘as’ in line 28.

Amendment 5, page 3, line 29, leave out ‘that Act’ and insert

‘the Companies Act 2006 for the purposes of the application to it of—

(a) Chapters 4 and 4A of Part 10 of that Act, and

(b) Parts 15 and 16 of that Act (in respect of a financial year).’.—(Jo Swinson.)

Clause 61

Members’ approval of directors’ remuneration policy

[Mr Iain Wright]

I beg to move amendment 93, page 51, line 23, at end insert—

‘(1A) A representative of the company’s employees must be consulted in the preparation of any such revision.’.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

Amendment 95, page 52, line 5, leave out ‘ordinary’ and insert ‘special’.

Government amendment 25.

Amendment 86, page 52, line 11, leave out subsection (b) and insert ‘(b) and annually thereafter.’.

Amendment 96, page 52, line 17, leave out ‘ordinary’ and insert ‘special’.

Government amendments 26 to 30.

New clause 27—Information about payments to recruitment and remuneration consultants in respect of directors’ remuneration—

‘After section 413 of the Companies Act 2006 (Information about directors’ benefits: advances, credit and guarantees) insert—

“413A Information about payments to recruitment and remuneration consultants

The Secretary of State may make provision by regulations requiring information to be given in notes to a company’s annual accounts about payments made in the relevant accounting period in respect of recruitment and remuneration advice relating to directors, including information specifying any fees that have been paid in proportion to the remuneration agreed for a director.”.’.

[Mr Wright]

Amendment 93 is in my name and those of my hon. Friends. This important part of the Bill deals with directors’ pay. We rightly spent time in Committee dealing with this, and I do not want unduly to inconvenience the House by repeating the same points, but at the heart of the debate is a disconnect between executive pay and average earnings, and between executive remuneration and the performance of the companies they lead.

As I mentioned in Committee, in 1980 the median pay of the highest-paid directors in FTSE 100 companies was £63,000, and median wages were £5,400. By 2010, the median pay of FTSE 100 directors was £2.99 million, while median wages had risen to £25,900. The ratio of directors’ and employees’ median pay had risen from 11:1 to 116:1. That trend is not confined to the UK, but has been seen throughout the developed world, most notably in the US, where, by 2008, executive pay was 200 times the median household income. Despite the difficult economic times and financial misery faced by millions, average compensation for an FTSE 100 chief executive rose by 12% in 2011, while average wages rose by only 1.4%.

In that environment of growing pay, there is no meaningful correlation between high pay and high corporate performance. Empirical evidence from research carried out in 2009 concluded that companies that pay their chief executive officer in the top 10% of remuneration earn negative results of -13% in terms of both profits and share price in the next five years.

Opposition Members support some of the Government’s reforms—in the interests of cross-party agreement, I should say that they build on work done by the previous Labour Government. However, as we said in Committee, the Government could go further and be slightly bolder. That is the basis of amendment 93, which would ensure that

“a representative of the company’s employees must be consulted in the preparation of any such revision”

to a director’s remuneration package. We anticipate this ensuring that an employee representative could sit on a firm’s remuneration committee in an advisory capacity.

16:30

Amendment 93 is a development of the argument that we pursued in Committee in which we pressed for a representative from the work force to be an active and full member of the company’s remuneration committee. In response to our amendments in Committee, the then Minister, the hon. Member for North Norfolk (Norman Lamb), stated that the Government did not believe in mandating that all companies must have employees on boards. Crucially for his argument—we reflected on this over the summer—he then said that the UK system of corporate governance involved a unitary board, whereas the likes of Germany and Sweden routinely had worker representation on boards. As he pointed out, however, that can happen there in a way that it cannot happen here, because they have a two-tier system of corporate governance, with an additional advisory board on which employees can play a part. As he also said, in the UK corporate governance system,

“we do not distinguish in law between types of director. They all have the same duties.”––[Official Report, Enterprise and Regulatory Reform Public Bill Committee, 17 July 2012; c. 691.]

That is an accurate reflection of the current situation, and as I said, we have reflected on the then Minister’s comments, which is why we have tabled amendment 93.

We have also been seduced—if that is not too strong a word—by the writing skills, positively Churchillian or Disraelian, of the new Minister, the Under-Secretary of State for Skills, the hon. Member for West Suffolk (Matthew Hancock). In an article written for The Sunday Times in November 2011, he wrote:

“Finally, corporate remuneration committees should be made more independent. For all the controversy the suggestion has attracted, why shouldn’t that include leaving a place on the committee for an employee representative, in an advisory capacity, if only to offer a different perspective?”

We fully agree with his sentiment. I have been seduced by those rhetorical flourishes from his Pitt-esque fountain pen, so we look forward to his supporting us through the Division Lobby.

Amendments 95 and 96 would effectively require a 75% shareholder vote. We mentioned this issue in Committee, and I reiterate the powerful arguments put forward by Dominic Rossi, the chief investment officer of equities for Fidelity Worldwide Investment, who has argued that directors’ pay is over-generous and over-complex.

[Richard Fuller]

The hon. Gentleman is arguing for things he would like to see, but as he is well aware, it is already within the purview of corporations to put an employee on their boards, and shareholder votes can already be held on compensation and can influence that compensation even if they fall short of the 50% hurdle. What compels him to want to make it a legal requirement, rather than to use the market to make these decisions itself?

[Mr Wright]

It is because, as I tried to explain in my opening remarks, over the past 30 years we have seen market failure and a huge disconnect in the level of remuneration paid to top executives, but that has not ensured commensurate performance among the companies they lead, which is what we need. I think that the Government are onside on this. The shareholder spring and activism that we have seen, including at Trinity Mirror, has largely been the result of initiatives put in place by the previous Labour Government on annual advisory votes on directors’ pay and so on. I know that the hon. Gentleman is very familiar with these issues and will support us in ensuring that shareholders—the people who own these companies—have a proper say.

[Richard Fuller]

I appreciate the shadow Minister’s point, but unfortunately, as is often the case, the Opposition are like the ambulance that turns up two days too late and to the wrong address. The market is already responding to these issues, and measures are being taken to change how compensation is made, as he said. The Opposition always rush to legislate restrictive control and put a hand down on aspiration, when the market itself will solve, and is solving, these problems. I fully accept that there is an issue about employee representation in companies and about the historical lack of alignment between compensation on boards, but he is going the wrong way about resolving it.

[Mr Wright]

The purpose of the amendments, which have buy-in from Mr Rossi, Fidelity and elsewhere, is not to seek the death of aspiration, but to encourage, incentivise and try to ensure that companies achieve as much consensus as possible on directors’ pay policy—that was also the position of the Secretary of State earlier in the year—ensuring that companies start early in the process and avoid the use of what is a somewhat blunt and brittle tool, whereby the issue is discussed only at the annual general meeting or what-have-you, which can cause tension. Getting in early and talking to shareholders means that the owners and managers of a business can reach some sort of consensus. That is the purpose that amendments 95 and 96 seek to achieve. I quoted Mr Rossi in Committee, and I will do so again:

“Companies have nothing to fear if what they propose is fair and reasonable and clearly aligned to what is good for long-term shareholders.”

The hon. Member for Bedford (Richard Fuller) is a strong and experienced Member of this House and a good champion of businesses. I disagree with what he says about regulation and employment legislation, but he will recognise that getting good consensus on directors’ pay and ensuring that shareholders have the tools at their disposal to hold managers to account is in all our interests.

Amendment 86 would have the effect of creating an annual binding vote on pay policy, an issue that, again, was much deliberated in Committee. I still firmly believe that an annual vote is hardly disproportionately onerous or somehow unduly bureaucratic. Shareholders are used to, and expect, annual corporate reporting on matters such as the annual accounts—whether they are a true and fair view—and the reappointment of auditors. I reiterate the point that I mentioned in Committee and throughout the passage of the Bill: I fail to see how such a proposal can be seen as onerous. In Committee I had a well-thumbed Financial Times editorial from June 2012, which said that

“the business secretary has missed a trick in not going for annual pay votes…His worthy hope is that this might encourage more medium-term thinking about pay. But an obvious worry is that such votes may degenerate into another exercise in box-ticking, with shareholders voting on boilerplate policies rather than specific deals.”

It went on:

“Executives will restrain their demands only when they perceive a real risk in flouting social norms on pay. Fund managers, who naturally shy from conflict with companies, still need to be encouraged to challenge bosses more—especially on this sensitive topic. Annual votes would at least put them firmly on the spot. Mr Cable’s triennial polls, however well-meaning and thoughtful, may not.”

That point was echoed by the head of the High Pay Commission, Deborah Hargreaves, who stated in evidence to the Committee:

“If you vote every three years on pay policy, it is important that that policy is detailed enough for you to have an effect. The danger is that it could turn into a box-ticking exercise, where you vote on general boilerplate policy recommendations, rather than nitty-gritty details and figures. I felt that an annual vote would include more figures and more detail, and give shareholders more power to make informed decisions about what is going on in relation to pay at the company. If it happened every three years, the fear is that they may be voting on something vaguer and more bland.”––[Official Report, Enterprise and Regulatory Reform Public Bill Committee, 21 June 2012; c. 137, Q294.]

Again, I cannot see how our proposal would be onerous, and I think Ministers should think again.

The final amendment in this group is new clause 27, the purpose of which is to improve transparency in the disclosure of information relating to remuneration consultants and the manner in which they are paid by companies. Evidence suggests that remuneration consultants have played a key part in hiking up directors’ pay. Work undertaken by Professor Martin Conyon found a direct correlation between higher-than-average directors’ remuneration and the use of remuneration consultants. Further studies have shown that, on average, pay for chief executive officers is 26% higher in companies that use remuneration consultants. As I mentioned in Committee, across the Atlantic the Congress inquiry led by chairman Henry Waxman concluded that remuneration consultants to Fortune 250 companies were paid almost 11 times as much for providing other services to those companies.

[Richard Fuller]

The shadow Minister is making some good points. Does he believe that the Government should provide guidelines to remuneration committees on how they should set directors’ pay, and on how they should ensure that the correlation with average earnings and with shareholder value growth is maintained?

[Mr Wright]

That is a fair point. There are already guidelines in place, including discretionary guidance from the industry. We also have the combined code on corporate governance, which provides a degree of guidance. We need to determine whether the issue is sufficiently serious that it requires legislation to provide firm guidance. I shall be interested to hear the Minister’s view on that, given that there is agreement across the House on the disconnect between pay and performance, and the link—which acts almost as a catalyst—between remuneration consultants.

Speaking as a chartered accountant who used to work for a “big four” accounting firm, I see a close correlation between these problems and the crisis in the auditing profession a decade ago. That led to the disclosure of fees and to greater transparency on the audit services and non-audit services provided by the accounting firms. The perception was that in corporate scandals involving firms such as Enron, the thoroughness and accuracy of the auditors’ opinion was called into question when audit firms secured additional, often more lucrative, work away from the statutory audit.

New clause 27 would therefore increase disclosure of information relating to payments to remuneration consultants, ensuring that the Secretary of State should make a provision by regulation of notes to a company’s accounts about payments made to the consultants, including information specifying fees that have been paid as a proportion of the total remuneration package of a director. My concern is that, if a contract is so designed, a consultant has an inherent desire to inflate the package to secure a larger fee. If that is the case, shareholders should be made fully aware of it via a disclosure in the annual accounts. As I have said, we applaud the Government’s general direction of travel, but we believe that they could go further, and I will be interested to hear what the Minister has to say about this.

[Jo Swinson]

Directors’ pay has been very much in the news recently, for reasons that the hon. Member for Hartlepool (Mr Wright) has outlined. Between 1998 and 2000, the average total remuneration of FTSE 100 chief executive officers increased fourfold, which was much faster than the increase in prices or in average remuneration levels across other employers. It was also much faster than the increase in the FTSE 100 itself. There was clearly an issue to be addressed, and the Government opened up the debate on directors’ pay a year ago. We drew attention to the fact that top pay in large public companies had grown rapidly without any clear connection to performance, and we asked what could be done about it. We encouraged business and investors to face up to this difficult issue.

In January, the Prime Minister and the Secretary of State committed to taking action, and in June we introduced bold measures into this Bill. I know that the Bill Committee enjoyed a thorough and engaging debate on this issue before the summer break, and I am pleased that our reforms have received such wide support inside and outside Parliament. Investors agree that this comprehensive package of reforms will help them to tackle excessive pay and to restore a clearer link between pay and long-term performance.

We have tabled six minor and technical amendments to the clauses on directors’ remuneration, which I will outline before I speak briefly in response to the other amendments that have been tabled. The technical amendments will tighten up the legislation and ensure that it is as robust and clear as possible. Business and investors support those amendments. Amendments 25 and 30 correct a technical drafting oversight. They clarify that, for the purpose of identifying when companies will be affected by the new provisions, the relevant financial year is the one beginning on or after the day on which the provisions come into force. That is to ensure that companies whose year starts on 1 October are subject to the provisions.

Amendments 26 and 29 make it clear that the definition of “quoted company” shall be the same as that which already appears in the Companies Act 2006. Amendment 27 broadens the definition of what is meant by a remuneration payment so that remuneration paid to a director in his or her capacity as an executive manager of the company or its subsidiary is also captured. Importantly, that will mean that companies cannot circumvent the new restrictions by paying someone a small fee for being a director and a large salary for being a manager.

Amendment 28 tightens up the provisions relating to payments made to former directors. This will ensure that, where former directors are allowed to benefit from long-term pay schemes that mature after they have left, the payments must be consistent with the company’s remuneration policy—and if not, approved by a separate shareholder resolution. I am sure the House will agree that these minor and technical amendments will strengthen and improve the legislation, and I hope all Members will join me in supporting them.

16:45

Opposition Members have suggested a number of areas where they would like the legislation to go further, but for the reasons that my predecessor, my hon. Friend the Member for North Norfolk (Norman Lamb) made clear in Committee, the Government do not agree that the amendments are necessary. I shall explain why.

Amendment 86 proposes that the binding vote on remuneration policy occurs annually, even if a company’s policy has not changed. The hon. Member for Hartlepool set out various objections to the provisions, saying that they were too onerous and inappropriate. We went for a three-year pay policy and, to be fair, this had nothing to do with being onerous; it was about what investors said would work. The attraction of a three-year policy is that it encourages more long-term thinking and discourages the kind of unnecessary annual tinkering that invariably leads to pay going up and getting ever more complex. That approach is backed by major investors and investor bodies such as the Association of British Insurers. Of course, there is nothing to stop companies having an annual vote on pay policy—they have the flexibility to do so—and there is the safety net of a trigger mechanism to protect shareholders. If they are unhappy with how the pay policy is working out and they reject the annual advisory vote, a binding vote on policy at the next annual general meeting will be triggered.

The hon. Member for Hartlepool asked whether the policy will be too vague and too high-level, but the regulations that inform what happens will clearly and succinctly set out to which types of payments directors are entitled, how the pay links to company strategy, how performance will be assessed and how it will translate into awards under different scenarios. Parliament will have a chance separately to debate the regulations at a later stage. If there were any outstanding concerns, they could be put forward then.

Amendments 95 and 96 would make the vote on remuneration a special resolution, requiring 75% shareholder support to pass. Investors have made it very clear that they want an ordinary resolution, subject to a simple majority. It is important to note that we have seen this year that it is absolutely possible for the majority of shareholders to vote against pay proposals. So far this year, seven companies have lost their pay votes—real evidence that the process can work.

Amendment 93 would require companies to consult an employee representative whenever they wish to propose a revised remuneration policy. I am sympathetic to the intention of encouraging employees to be involved and consulted. We share the view that it is helpful for remuneration committees to seek employees’ views on pay—indeed, some already do—and we are encouraging them to report on how they have taken employee views and employee pay into account. I do not believe that the statutory approach set out in the amendment is the right way forward. It is worth reminding the House of the consultation that closed in September, as the Government will shortly come forward with their response. We proposed that companies should report on whether they sought the views of the work force in setting pay. There are also existing tools such as information and consultation arrangements, which can be used to make sure that employees are engaged. The Government definitely sympathise with the spirit of that intention, but we do not think that the statutory approach provides the right way forward.

Finally, the Opposition’s new clause 27 would allow the Secretary of State to make new regulations requiring companies to disclose how remuneration and recruitment consultants are paid. We do not accept the provision because the Secretary of State already has the power to require that to be part of the director’s remuneration report. We have already published draft regulations to implement that, whereby companies will have to explain how consultants have been appointed, used and remunerated.

I hope that I have provided some assurance on these matters. I thank hon. Members for engaging in the issues, but maintain that the proposed amendments—other than the Government amendments—are unnecessary, so we shall not support them.

Question put, That the amendment be made:

16:49

Division 80

Ayes: 219

---

Labour: 205
Scottish National Party: 5
Democratic Unionist Party: 4
Social Democratic & Labour Party: 2
Plaid Cymru: 2
Independent: 1
Alliance: 1
Green Party: 1

Noes: 277

---

Conservative: 235
Liberal Democrat: 42

16:59

Amendment made: 25, page 52, line 8, leave out from ‘begins’ to ‘or’ in line 9 and insert

‘on or after the day on which section 61 of the Enterprise and Regulatory Reform Act 2012 comes into force’.—(Matthew Hancock.)

Clause 62

Restrictions on payments to directors

Amendments made: 26, page 53, line 19, at end insert—

‘ “quoted company” has the same meaning as in Part 15 of this Act;’.

Amendment 27, page 53, line 22, leave out from ‘person’ to ‘other’ in line 23 and insert ‘—

(a) holding, agreeing to hold or having held office as director of a company, or

(b) holding, agreeing to hold or having held, during a period when the person is or was such a director—

(i) any other office or employment in connection with the management of the affairs of the company, or

(ii) any office (as director or otherwise) or employment in connection with the management of the affairs of any subsidiary undertaking of the company,’.

Amendment 28, page 54, line 27, after ‘be’ insert ‘or has been’.—(Matthew Hancock.)

Clause 63

Payments to directors: minor and consequential amendments

Amendment made: 29, page 58, line 4, at end insert—

‘(12) In that Schedule, in the first column, after “quoted company”, insert—

“in Chapter 4A of Part 10 section 226A(1)”.’.

Clause 64

Payments to directors: transitional provision

Amendment made: 30, page 58, line 13, leave out from ‘begin’ to ‘, and’ in line 14 and insert

‘on or after the day on which that section of this Act comes into force’.—(Matthew Hancock.)

Clause 57

Power to change exceptions: copyright and rights in performances

[Matthew Hancock]

I beg to move amendment 23,  page 47, line 17, at end insert—

“( ) But regulations under this section may make only such provision as may be made under subsection (2) of section 2 of the European Communities Act 1972 or such provision as could be made under that subsection if paragraph 1(1)(d) of Schedule 2 to that Act did not apply.’.

[Mr Deputy Speaker (Mr Nigel Evans)]

With this it will be convenient to discuss the following:

Government amendment 24.

Amendment 75, in clause 59, page 49, line 19, at end insert—

‘(7) The Secretary of State must have regard to any feasibility study commissioned on the licensing of orphan works in advance of the regulations being laid before Parliament.’.

[Matthew Hancock]

In Committee, a number of questions were asked about the scope of what was then clause 56—now clause 57—on copyright. The hon. Member for North Norfolk (Norman Lamb), who was a Minister in the Department at the time,agreed to reflect on the clause and we have also had further discussions with interested parties.

The Government have considered this point carefully and think that amendments to clause 57 are the best way to address the concerns expressed by Committee members and industry stakeholders. I reassure hon. Members that the policy intent behind the clause remains unchanged. The clause was never intended to give the Government the ability to change copyright exceptions in ways that we cannot already change them and I hope that the amendments now make that abundantly clear.

Changes to copyright exceptions are subject to a tightly prescribed list set out in the EU information society directive. The European Communities Act 1972 provide the mechanism by which EU law is applied at a national level—in this case on copyright exceptions. The clause will permit the Secretary of State to make any changes that remove or narrow an exception without affecting the maximum criminal penalties that Parliament has set. Without the amendment, the criminal penalties might have had to be reduced and I do not think that is the aim of the Bill.

The stakeholders who had raised concerns about the clause, including the British Copyright Council, UK Music, the Publishers Association, the Creators’ Rights Alliance and the Premier League, have written to the Secretary of State confirming their support for the Government’s amendments.

[Jim Dowd (Lewisham West and Penge) (Lab)]

The Minister mentioned the enormous concern across the creative sector about the clause and, more particularly, its purpose when it was first introduced. His reference to the fact that all it does is endorse existing law will have confused many people, as they will have wondered why, if that was so, the clause was needed at all. If it is needed, and if the amendments we are discussing go some way to addressing the problem, can he give us an assurance that any exception arising from Hargreaves, the Intellectual Property Office or any other source will be treated as primary legislation? If he cannot do that, will he undertake that every piece of secondary legislation will be introduced individually and will include a comprehensive impact assessment before it is brought to this House?

[Matthew Hancock]

I can assure the hon. Gentleman that any proposed exceptions will be the subject of secondary legislation and will therefore be debated. Each separate element of a statutory instrument can be debated—that is the function of the secondary legislation procedure.

Amendment 75 would require the Secretary of State to take into account any feasibility study undertaken of which organisation is best placed to issue licences authorising the use of orphan works.

[Kevin Brennan (Cardiff West) (Lab)]

Will the Minister give way?

[Matthew Hancock]

On this point?

[Kevin Brennan]

On the point being debated, yes.

[Matthew Hancock]

I give way.

[Kevin Brennan]

It is usual to give way during this stage. What does the Minister think is the maximum number of exceptions that ought to be included within one statutory instrument, given that he has been unable to give the assurance sought by my hon. Friend the Member for Lewisham West and Penge (Jim Dowd) that each exception will be treated separately if secondary legislation is used? Also, will he confirm that in all cases the affirmative procedure will be used?

[Matthew Hancock]

I give the assurance on the second point: the normal procedures will be used. The normal procedures will govern what goes into one statutory instrument and then, as we all know, debate on a statutory instrument covers all elements of the instrument. That is the procedure for a statutory instrument that is debated.

Amendment 75 proposes that account be taken of any feasibility study before the Government lay regulations on the orphan works scheme—that is, I think, the essence of the amendment. In principle, we understand the need for studies and consideration of such important questions, but we do not think that such a requirement is appropriate in primary legislation. If the proposal is that the conclusions of a feasibility study should automatically and immediately have legislative effect, we have to ask what would happen if the recommendations of a commissioned study could not, for good and legitimate reasons, be accepted. However, I can assure the House that the Government will carefully consider which bodies or body should be responsible for licensing orphan works, including whether they have the necessary independence, expertise, resources and processes.

Although there is some work still to do on deciding which organisation should be responsible, it is unlikely to be a new body. We looked at the arrangements in other jurisdictions: in Canada, the copyright board has that responsibility; in Hungary, the intellectual property office has it. Jurisdictions overseas locate the role in different parts of Government, according to where the appropriate expertise is found. There could be a role for collecting societies to license orphan works of a type where a collecting society already operates in that sector, but many of the orphan works held by museums and archives, for example, are not of types that are currently collectively licensed; such works include unpublished diaries, old photographs and oral history recordings.

In the light of those reassurances and given that the regulations cannot be laid until the work is completed, I ask the hon. Member for Hartlepool (Mr Wright) not to press amendment 75 and the House to support Government amendments 23 and 24.

[Mr Iain Wright]

I was broadly reassured until the Minister made his comments, but now I am as uncertain as ever. The Public Bill Committee spent significant time debating copyright, and rightly so, as the legislative framework—not regulation, but a legislative framework—governing copyright has been a crucial ingredient in allowing Britain to be at the heart of the global creative and cultural industry.

We lead the world in many parts of that cultural and creative sector, from publishing—as we heard, in Committee the then Minister was keen to talk in vivid and animated terms about “Fifty Shades of Grey”—to the video gaming industry, where we lead the world, to music, and I was particularly keen to talk about the Stone Roses, which was fantastic. The Minister does not strike me as being a Stone Roses man; he strikes me more as a JLS-One Direction man. I imagine that he would be keen on that. One Direction seems appropriate, given his closeness to the Chancellor.

We lead the world in different parts of the sector. With a rise in the global middle class, which wants to be entertained, it is important that we continue to lead the world. There are many reasons for our pre-eminence in the industry, not least the solid legislative framework governing copyright and intellectual property. We lose that at our peril.

As I mentioned in previous debates throughout the passage of the Bill, a partnership approach is needed, with Government identifying the competitive sectors in which Britain can lead the world and working closely with business and with those sectors to ensure growth and potential opportunities. We have not yet seen such a partnership approach. It did not seem to exist in the Government’s original drafting of the clause on copyright. The unilateral approach taken by Ministers, without consultation with the industry and—surprise, surprise—without empirical evidence or an impact assessment—where have we heard that before?—caused alarm and uncertainty among stakeholders in the industry and threatened significant and long-term investment decisions for this country.

I quoted in Committee, and it is worth repeating to the House, the submission from UK Music, which said:

“The inclusion of copyright clauses in this Bill came as a surprise to many copyright stakeholders. We widely anticipated copyright legislation, but we did not anticipate that the copyright legislation would be attached to this particular Bill. This ‘surprise’ generated a degree of confusion and alarm amongst our community. This was needless. Better communication between the Government and its key stakeholders would have prevented this.”

Opposition Members entirely agree with those sentiments.

The clause as originally drafted would have given the Secretary of State order-making powers to allow amendment of any exceptions via secondary legislation. This power was considered necessary to deal with the situation where, under the EuropeanCommunities Act 1972, the Government are able to amend exceptions to copyright and performance rights which may, so the Government stated, restrict the maximum statutory penalties. We argued in Committee and tabled amendments to the effect that the wording of the clause was too loose, lacked clarity and provided the Secretary of State with too wide a power to deal with this issue.

In Committee the Government stated that this was not so and that there was no case for our amendment. I therefore welcome the fact, although I am surprised, that the Government tabled amendments 23 and 24, which specify that regulations under this section may make only such provision as may be made under section 2(2) of the 1972 Act. I do not want to be churlish on this point and I am pleased that the Government have listened, albeit somewhat late in the process, to us and, more importantly, to stakeholders.

However, as we have hinted in interventions, there is not complete unanimity throughout the industry when it comes to Government amendments 23 and 24. Some stakeholders, who are looking to invest in the UK, such as British Pathé, are still concerned that the Government have misinterpreted section 2(2) of the 1972 Act. They argue that if that part of the 1972 Act gives the Government powers to change copyright exceptions by statutory instrument, the Government have that right. Nothing in the Bill would change that. There is therefore no need to clarify the point in the Bill, because the power already exists. The only reason for writing the power into the Bill in clause 57 would be if it did not exist. The managing director of British Pathé said to me in an e-mail last night that “the statement is redundant” unless that is the case.

There remains a concern among some stakeholders that clause 57 merely allows extensions to criminal penalties relating to exceptions. However, it has been noted that nearly all copyright infringements relate not to exceptions, but to matters such as piracy and theft, which are neither covered in clause 57, nor addressed by the Government’s amendments. Therefore, given the Minister’s move in this regard, which has been welcomed by much of the industry, will he respond to the specific concerns of companies, such as British Pathé and ITN, that remain despite the Government’s amendments? Will he reassure me on that point?

17:15

[Kevin Brennan]

Will my hon. Friend also seek an assurance from the Minister that, when in future he considers any piece of legislation containing clauses relating to copyright, never again will the umbrella body for the UK music industry be given absolutely no prior knowledge of it? Perhaps the Minister could give the House that assurance when he responds.

[Mr Wright]

I absolutely agree. I will take this opportunity to wish my hon. Friend a happy birthday for yesterday—a birthday he shares with several other Members, not least the eminent Chair of the Culture, Media and Sport Committee, the hon. Member for Maldon (Mr Whittingdale). My hon. Friend made two important interventions. When he intervened on me he mentioned the lack of consultation and the surprise of important stakeholders, such as UK Music, about these provisions. That is not the way to have clarity about Government policy on something as important as the creative and cultural sectors. I hope that that is a wake-up call, because we have seen the Government do the same elsewhere, for example with the feed-in tariffs and the oil and gas tax charges. To move without any concern for what stakeholders are thinking is not in the best interests of the British economy and industry.

The second point that my hon. Friend made, when he intervened on the Minister, relates to the use of statutory instruments. I rose to say that I felt more confused as a result of the Minister’s comments than I did when I entered the Chamber today. Part of our discussions in Committee was about the fear of bundling some of these points into a single statutory instrument. The Minister must have served on a delegated legislation Committee during his time in the House and will know that the only way the House can express a view on such instruments is by voting in favour or against; there is no way we can express a view on individual provisions. Therefore, will he clarify to what extent he will be able to bundle points relating to copyright exceptions into single SIs, which would not allow the House to express our views?

I now to turn to our amendment 75, which proposes that the Secretary of State

“must have regard to any feasibility study commissioned on the licensing of orphan works in advance of the regulations being laid before Parliament.”

We are not against the concept of orphan works, as I mentioned in Committee, provided that safeguards are in place to ensure that the party that wants to use the work has undertaken a diligent search. I recognise—the Minister alluded to this—the huge benefits that could be unlocked as a result of orphan works licensing. For example, I can anticipate SMEs building new platforms and applications for the re-use of digitised content, with innovation and new business models coming forward to use the content commercially so that Britain can lead the world, enriching the research and cultural environment and thereby consolidating the UK’s position as the destination of choice, whether literally or online, in the 21st century as the place for education and research, particularly in the cultural sector.

The Bill provides the legislative framework for orphan works licensing but is, as is probably inevitable and desirable in primary legislation, high-level and somewhat vague in detail. The crucial details that stakeholders will be looking for have yet to be determined and will be available via regulations. However, it would be useful to get on the record as much certainty and clarity as possible about the Government’s intended direction of travel in order to allow the industry, including existing players and potential new entrants to the market, to start gearing up to use the licences commercially. The purpose of our amendment is to probe the Minister on his intended direction of travel and ensure that a feasibility study considers certain aspects of the policy and that the Government take these findings into account, not in a completely solid way but making sure that these matters are addressed.

Will the Minister indicate the identity of the authorising body or bodies? He mentioned it briefly in his opening remarks, but it would be useful to put a little bit more meat on the bones. What sort of time scale is he working towards? When does he anticipate that the introduction of such schemes, and the laying down of regulations as a preliminary step, will take place? What will be the scope of the orphan work licensing schemes? Will this be done on a sector-by-sector basis? Will it be based on a “specific types of work” approach, or will there be a big bang in which all possible orphan work schemes will be incorporated from day 1?

Will the Minister outline how he anticipates that any diligent search on a work-by-work basis will move forward? I am fairly sure that every such search will have to be done on an individual work basis rather than by batching works together. Am I right in that thinking, or is he considering any change in the individual works versus batch approach? Could diligent searches be re-used within a certain time period? How will the Minister—again, this is part of the feasibility study leading into the regulations—strike the balance between the rights of the licensee, allowing the licence holder to commercially use the rights arising from that licence, and the rights of the relevant rights holder? What will happen in the event that the parent comes forward? How will remuneration be worked out in such an event? Will a certain amount of time be stipulated in regulations following the awarding of an orphan works licence?

We lead the world in the cultural and creative industries, and many people will want to take that away from us for a variety of reasons. We need to make sure that we can maintain our competitive advantage. That requires close co-operation, with an active industrial sector strategy between the industry and Government. Sadly, during the passage of the Bill, that has been lacking in the provisions on copyright. I hope that the Minister has learned his lesson and look forward to his comments.

[Mr John Whittingdale (Maldon) (Con)]

We do not have a lot of time, and I do not want to detain the House unduly. However, although it is recognised that this matter forms only a small part of the Bill, the importance of the creative industries to our national economy, and the contribution that they are making to growth, is so essential that we need to look very carefully at anything that affects the livelihoods of those working there—and the creative industries rest on the protection of intellectual property rights.

On Second Reading, I suggested to the Secretary of State that clause 57—then clause 56—could be used to make substantial changes to copyright law through statutory instruments. I am grateful to him for meeting representatives of a wide range of creative industries to discuss those concerns. That has led, to some extent, to the amendment that the Government have tabled. As the Minister said, several representatives of the creative industries, such as UK Music, the British Copyright Council, the Publishers Association and the Premier League, have said that they are now satisfied.

However, as the hon. Member for Hartlepool (Mr Wright) said, that is not a unanimous view across the industry. The Minister has assured us that this is about enforcing penalties but, despite the Government’s amendment, the clause does not mention penalties. I am therefore still not clear as to why the Government did not accept the suggestion that they make it absolutely explicit in the Bill that it is all about penalties. Instead, it talks about exceptions, and it still allows changes to be made to copyright law by statutory instrument. Following the Hargreaves report, there is still great suspicion on the part of many of those in the creative industries that there is an intention to try to dilute intellectual property rights. They fear that the clause could be used—perhaps not by this Government but by a future Government—to bring forward changes to copyright law.

Those fears have been expressed, as the hon. Member for Hartlepool said, by a wide range of organisations, including Associated Press, ITN, Getty Images, the Press Association, British Pathé, Agence France Presse and Deutsche Presse-Agentur. I will quote one sentence from the letter they have sent that sums up the problem that the Government face:

“It therefore remains our concern that…the true purpose of Clause 57…as drafted”

is that

“it will be used as a vehicle to push through a number of changes to copyright exceptions recommended by the Hargreaves Review, which we discussed with you at our meeting because of the detrimental impact to business and the creative industries as well as…ultimately…to the UK’s future economic growth.”

I welcome the Minister’s assurance that that is not the Government’s intention, but it must be of concern that a number of organisations that are important to this country retain that suspicion. Anything that the Government can say or do now to allay that suspicion and make it clear that they do not intend to implement the Hargreaves recommendations in a bundle, via a statutory instrument, would be extremely welcome and would reinforce the point that the provision is not about that, but about criminal penalties.

[Pete Wishart (Perth and North Perthshire) (SNP)]

I do not know whether I should break out into song and wish a belated happy birthday to the hon. Members for Cardiff West (Kevin Brennan) and for Maldon (Mr Whittingdale), or declare my favourite band. Whenever the hon. Member for Cardiff West and I appear in the Chamber together, I always try to plug MP4, because we comprise half the band. We will conclude our world tour of UK party conferences this Saturday, which is worth noting as a landmark occasion.

I agree with and endorse what the Chair of the Culture, Media and Sport Committee said about the value of copyright to our creative industries. It is the very essence of what underpins our success and probably makes the UK the leader in so many sectors throughout the world, from music, drama and film to Premier League football. It is the one thing that makes sure that we can continue to deliver that immense conveyor belt of talent that excels right around the world.

We muck about with copyright at our peril and must tread carefully with regard to copyright exceptions. We have to know exactly what we are doing, which is why impact assessments are vital and why the Minister’s confused response alarms me and is of concern. We have to know what the exact impact will be on all the sectors and everybody involved in the creative industries, and listen carefully to what they have to say.

I welcome the amendment, but only half-heartedly. For once, the Government have listened to representatives from the creative industries, who have not received a particularly good welcome from them over the past few years. They feel undervalued and sense that their concerns, which they make eloquently to the Government, are ignored and that, if they are listened to, it is in a half-hearted way.

The issue of copyright exceptions is important. We have had the Hargreaves report, the Government’s response to it and the Intellectual Property Office’s examination of how the report’s recommendations could be implemented. I am sure that the Minister will be thrilled to know that he is about to receive the report by the all-party group on intellectual property, of which I and the hon. Members for Maldon and for Lewisham West and Penge (Jim Dowd) are members. It will suggest various ways in which IP policy could be better formulated across Government and across Departments, and suggest the need for a real champion of IP copyright, because that is what is missing.

We need a proper investigation and an impact assessment. The assumptions that underpin a number of the Hargreaves recommendations are nonsense. The examples that caught our eye related to copyright exceptions, such as the assertion that an exception for format shifting would be worth £2 billion to the UK economy. The funniest assumption was the claim that an exception for parody of intellectual property could increase the UK economy by £600,000. Those assumptions were challenged, but they were asserted by the IPO without any real foundation. That is why this House has properly to consider copyright exceptions. If we do not, we will be left with that sort of nonsense. We have to make sure that that does not happen again.

I join others in calling on the Minister to listen to the concerns that the creative industries still have about the potential bundling together of proposals in secondary legislation. The Rolls-Royce model is primary legislation, whereby Members of Parliament can come to the House to have a proper debate and kickabout on proposals for copyright exceptions. If that is not to happen, the Minister must provide a better assurance that there will be separate pieces of secondary, delegated legislation, with full impact assessments, so that we can understand the impact that any further copyright exceptions will have on all the relevant sectors.

[Jim Dowd]

To reinforce that point, the wooliness of the Minister’s response, if it is left like that this evening, will have created an awful lot of work for his colleagues at the other end of the building. There are people down there who know better than most Members of this House precisely what the Government’s lack of decision—or else their attempt to hide what they are doing—really means.

17:30

[Pete Wishart]

I am grateful to the hon. Gentleman because he is spot on. The other House has people who have looked at these issues over a long career, who know the dangers and who understand that we have to tread sensitively and carefully when we look at copyright exceptions.

I hope that the Minister listens to the concerns that have been raised not only by the creative industries, but by hon. Members who have an interest in copyright issues. I hope he will give us the assurance that there will be no bundling of copyright exceptions in secondary legislation and that we will have full impact assessments if there are further copyright exceptions. He must also do something to convince those of us in the House and those in the creative industries who still have major concerns about what is being proposed.

I will touch briefly on the Labour amendment. I support it and think that it is sensible to ensure that we have a proper assessment before we move on to the licensing of orphan works. Orphan works have been hotly debated a number of times in the House, particularly when discussing Hargreaves. The matter has caused great anxiety and unhappiness, particularly among photographers, who have massive concerns about how their industry is threatened by the Hargreaves exceptions on orphan works. It is entirely sensible to have a proper assessment before we proceed with the licensing of orphan works. I heard the Minister’s response to the plea from the Labour spokesman for the assessment. I hope that the proposal will be considered properly. We need to hear more about what the Minister intends to do to ensure that we do not do anything wrong in the licensing of orphan works.

Most importantly, we must hear from the Minister that he will do the right thing by the creative industries, that there will be no bundling of legislation, and that Members of this House will have a proper opportunity to scrutinise and debate such measures.

[Sir Malcolm Bruce (Gordon) (LD)]

I defer entirely to the Members who have engaged in the debate hitherto, but I have been alerted this week to outstanding concerns among those involved in intellectual property that the Government have not fully taken account of their concerns and reservations. I heard what the Minister had to say, including his assurance that the Government amendments are designed to achieve that. I have also spoken to the Secretary of State and passed him the detailed reservations that have been communicated to me.

Nevertheless, I have been advised that the uncertainty that the creative industry or intellectual property sector feels may be having a negative effect on commercial decisions. It has been reported to me that some business interests are actively considering relocating out of the UK because of their concerns about the uncertainty. The Minister has made it clear that that is not the Government’s wish or intention. I accept that that is said in good faith. However, I ask him to consider the representations that are being made and to reflect on whether the Government amendments will allay the practical concerns. I appreciate that our consideration is at a late stage, but, as has been mentioned, the legislation will go to another place. Those who are in that place will no doubt want to bring forward more detailed proposals if they are required.

The concern, which has been articulated much more eloquently by others, is that we could lose intellectual property rights in a bundle of legislation that goes through in a Committee Room, without adequate debate or amendment. That could have far-reaching and negative commercial consequences. In recognition of the Government’s dilemma, I would say that we need to strike a balance. It is understood that excessive protection of intellectual property rights can be contrary to free trade. Of course, it is important that we get the balance right. Equally, those who are creative in any sector have the right to know that they will not suddenly find their intellectual property taken away from them at short notice. Protection against that must not be weaker in the UK than elsewhere in the EU or in the rest of the world.

The importance of this matter has been communicated to me by people who know better than I do. They are still concerned that what the Government are doing will threaten the commercial viability of UK investments, and I am sure that is not the Government’s intention.

[Matthew Hancock]

I welcome the Opposition Front Benchers’ support for the two Government amendments in this group. I want to reiterate the value of intellectual property, which is underpinned by our copyright regime, to the UK economy not only in the past but, I imagine, increasingly in the future. A strong IP regime is vital to the creative industries, in which we thrive and are hugely successfully. Ensuring that that regime is right and strong is a crucial part of having a strong economic future. The Digital Economy Act 2010, which strengthened many areas of law, and the extension of the length of copyright in music indicate the Government’s commitment to a strong and supportive intellectual property regime.

I will go through the points that Members have made. It is simply not correct to suggest that these proposals have not been widely consulted on. Indeed, they are based on recommendations in the Hargreaves review, which itself drew on extensive evidence. The response to that review was followed by a formal consultation, which received almost 500 written responses. There has been extensive work with interested parties following that. I reiterate the Government’s willingness to engage with stakeholders including Members, many of whom have a long-standing interest in the subject. Members throughout the House share not just birthdays but interests, and their engagement must and will continue.

The Government will announce their policy intent with regard to the exceptions recommended in Hargreaves this autumn. Exceptions can be introduced, extended and updated using the existing provisions of section 2(2) of the European Communities Act 1972. The proposed way forward represents no change to how exceptions can be introduced and updated under the existing provisions. The problem is that the criminal penalties available in statute brought in under that Act carry a maximum penalty of two years’ imprisonment. In the case of many of the offences that we are discussing, penalties are longer than two years and can be up to 10 years. It is in the interest of those who want to ensure that their copyrights are protected to make sure that criminal penalties are that high. We do not want to have to bring them down to two years, in order to use the 1972 Act. Clause 57 is not needed to implement Hargreaves, but it allows us to do so in a way consistent with the existing, stronger criminal penalties, which I know the industry and many stakeholders support. Having received that reassurance, the British Copyright Council, UK Music, the Publishers Association and the Premier League are happy to support the Government amendments.

[Jim Dowd]

On that point, why does the Minister not do what was suggested by the hon. Member for Maldon (Mr Whittingdale) and simply put in a tightened disciplinary regime and nothing else? Why is that so difficult for the Government to accept, if that is the sole purpose of the clause?

[Matthew Hancock]

Because we want to ensure, as and when technical amendments are considered, that we do not have to water down criminal penalties because of the way that the measures are introduced.

We are not in a position to announce a precise timetable for work on orphan works, but we expect it to be concluded during 2013 and certainly before any regulations are made. I commit the Government to discussing the details with Opposition Front-Bench Members, and others, during that process.

The Government amendments have been tabled with strong support for the IP regime on which much of our industry is based, and although the Government recognise the probing nature of the Opposition amendments, and commit to continued analysis of and engagement on those issues, we do not think that they should be included in the Bill.

Amendment 23 agreed to.

Clause 57

Power to change exceptions: copyright and rights in performances

Amendment made: 24, page 47, line 33, at end insert—

“( ) But regulations under this section may make only such provision as may be made under subsection (2) of section 2 of the European Communities Act 1972 or such provision as could be made under that subsection if paragraph 1(1)(d) of Schedule 2 to that Act did not apply.’.—(Matthew Hancock.)

Clause 68

Extent

Amendments made: 31, page 59, line 34, leave out ‘17(1)(c)’ and insert ‘17(2A)’.

Amendment 32, page 60, line 14, after ‘50,’ insert ‘[Osborne estate],’.

Amendment 33, page 60, line 14, after ‘54’ insert ‘and [Estate agency work]’.

Amendment 34, page 60, line 15, at end insert—

‘() section [Civil liability for breach of health and safety duties] extends only to England and Wales and Scotland except that it also extends to Northern Ireland so far as Parts 1 and 4 of the Health and Safety at Work etc. Act 1974 extend there,’.

Amendment 35, page 60, line 16, leave out ‘section’ and insert ‘sections’.

Amendment 36, page 60, line 16, after ‘52’ insert

‘, [Equality Act 2010: third party harassment of employees and applicants] and [Equality Act 2010: obtaining information for proceedings]’.

Amendment 37, page 60, line 16, leave out ‘extends’ and insert

‘and paragraphs 1, 52 to 54, 56 and 61 of Schedule [Adjudicators: minor and consequential amendments] extend’.

Amendment 38, page 60, line 17, leave out ‘section’ and insert ‘sections’.

Amendment 39, page 60, line 17, before ‘51’ insert

‘[Listed buildings in England: agreements and orders granting listed building consent],’.

Amendment 40, page 60, line 17, before ‘51’ insert

‘[Listed buildings in England: certificates of lawfulness],’.

Amendment 41, page 60, line 17, after ‘51’ insert ‘ and [Adjudicators]’.

Amendment 42, page 60, line 17, leave out first ‘Schedule’ and insert ‘Schedules’.

Amendment 43, page 60, line 17, before ‘16’ insert

‘and [Local listed building consent orders: procedure]’.

Amendment 44, page 60, line 17, after ‘17’ insert

‘, Schedule [Adjudicators: bankruptcy applications by debtors and bankruptcy orders] and paragraphs 2 to 51, 55, 57 to 60 and 62 of Schedule [Adjudicators: minor and consequential amendments]’.

Amendment 45, page 60, line 22, at end insert

‘except that section [Power to provide for equal pay audits] extends only to England and Wales and Scotland’.—(Matthew Hancock.)



Clause 69

Commencement

Amendments made: 46, page 60, line 26, at end insert—

‘() section [Osborne estate];’.

Amendment 47, page 60, line 26, at end insert—

‘() section [Power to provide for equal pay audits];’.—(Matthew Hancock.)

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

I beg to move amendment 69, page 60, line 30, at end insert—

‘(d) Sections [Local authorities: powers relating to deemed consent] and [Restriction of advertisements relating to property letting].’.

[Mr Speaker]

With this it will be convenient to discuss the following:

New clause 4—Town and country planning: Amendment of the Town and Country Planning (Control of Advertisements) (England) Regulations 2007—

‘(1) Class 3 of Schedule 3 to the Town and Country Planning (Control of Advertisements) (England) Regulations 2007, (Classes of advertisements for which deemed consent is granted) is amended as follows.

(2) In item 3A, after “sale”, leave out “or letting”.

(3) In item 3A(2), after both uses of “sold”, leave out “or let”.

(4) In item 3A(2), after “sale”, leave out “or letting”.

(5) In item 3A(8), after “sale”, leave out “or letting”.’.

New clause 5—Town and country planning: responsibilities of housing authorities—

‘(1) Local authorities in England which enjoy day-to-day responsibility for housing policy within their local authority area may make by-laws regulating for all or part of the authority the display of external advertisements concerning property lettings.

(2) If a housing authority has not specifically provided for the display of external notices advertising a property to let then such a notice is not permitted.’.

New clause 6—Town and country planning: offences—

‘(1) It shall be an offence to display an external notice prohibited by subsection (2) of section (Town and country planning: responsibilities of housing authorities).

(2) A person guilty of an offence under subsection (1) is liable, on summary conviction, to a fine not exceeding level 4 on the standard scale.

(3) A person guilty of a second or subsequent offence under subsection (1) is liable, on summary conviction, to a fine not exceeding level 5 on the standard for each seperate such offence.’.

New clause 7—Town and country planning: commencement and extent—

‘(1) Sections (Town and country planning: Amendment of the Town and Country Planning (Control of Advertisements) (England) Regulations 2007, Town and country planning: responsibilities of housing authorities, and Town and country planning: offences) come into force two months after the day on which this Act is passed.

(2) Sections (Town and country planning: Amendment of the Town and Country Planning (Control of Advertisements) (England) Regulations 2007, Town and country planning: responsibilities of housing authorities, and Town and country planning: offences) extend to England only.’.

New clause 20—Local authorities: powers relating to deemed consent—

‘(1) Part 2 Regulation 7 of the Town and Country Planning (Control of Advertisements) (England) Regulations 2007 is amended as follows.

(2) In item (1) delete “Secretary of State” and insert “local authority”.

(3) In item (1) delete “upon a proposal made to her by the local planning authority”.

(4) In item (1) delete “she” and insert “the local authority”.

(5) In item (2) delete “ Secretary of State” and insert “local authority”.

(6) In item (2b) delete “her” and insert “the local authority’s”.

(7) In item (3) delete “Secretary of State” and insert “local authority”.

(8) In item (4) delete “Secretary of State” and insert “local authority”.

(9) In item (5) delete “ Secretary of State” and insert “local authority”.

(10) In item (5b) delete “the local planning authority and to any other” and insert “any”.

(11) In item (5) delete part (c).

(12) In item (5b) delete “her” and insert “the local authority”.

(13) In item (5c(i)) delete “she” and insert “the local authority”.

(14) In item (5c(i)) delete “her” and insert “the local authority’s”.

(15) In item (6) delete from “Where” to end and insert “Where the local authority makes a direction it shall send a copy of its reasons to every person who has made a paragraph (3) representation.”.

(16) In item (7) delete “unless the Secretary of State otherwise directs”.

New clause 21—Restriction of advertisement relating to property lettings—

‘(1) Local authorities in England which enjoy day-to-day responsibility for housing policy within their local authority area may make by-laws restricting for all or part of the authority the display of external advertisements concerning property lettings.

(2) It shall be an offence to display an external advertisement concerning property letting in areas or cases where the Local Planning Authority has, under subsection (1), passed a by-law prohibiting external advertisements concerning property letting.

(3) A person found guilty of an offence under subsection (2) is liable, on summary conviction, to a fine not exceeding level 4 on the standard scale.

(4) A person found guilty of a second or subsequent offence under subsection (2) is liable, on summary conviction, to a fine not exceeding level 5 on the standard scale for each such offence.’.

Amendment 91, line 7 after ‘directors;’, insert

‘to make provision about advertisements concerning property lettings;’.

[Mr Brown]

New clause 21 is subsidiary to new clause 20, as are amendments 91 and 69. I will not speak to new clauses 4 to 7, which offer an alternative way of dealing with the same problem. I believe that new clause 20 offers the better of the two routes forward, and I am grateful to my right hon. Friend the Member for Leeds Central (Hilary Benn), the Front-Bench spokesman on these matters for the parliamentary Labour party, for suggesting it to me. New clause 21 sets out the offences; amendment 69 sets the date of enactment, which will be the same as for the rest of the Bill. I have been advised by the Public Bill Office that amendment 91 is a technical necessity for my principal proposal.

I wish to amend regulation 7 of the Town and Country Planning (Control of Advertisements) (England) Regulations 2007, so that matters relating to the control of estate agents’ “To let” signs are under the control of the local authorities that make byelaws about such matters, rather than being governed by primary legislation and the central regulation that currently applies. The proposals do not abolish the central regulation of the original enactment; they merely give local government the right and ability to supplement it. That could mean extending the use of “To let” signs, but it is far more likely to mean restricting it.

This is a moderate proposition, and when I introduced a ten-minute rule Bill on the subject it had all-party support and its First Reading was not opposed. The problem is that the “To let” sign regime is widely abused in urban areas, and properties with short-term leases find that the signs are left up all year round. Why would an estate agent or landlord want to do that? Because the sign serves as a form of advertisement for the lettings agent. In the modern era, the signs do not facilitate the search for flats; they just advertise the estate agent.

17:45

Local authorities want to deal with the matter, but the available route involves a long and complicated procedure between the local authority and the Department. My local authority in Newcastle upon Tyne has been trying to introduce a licensing regime for five years now, but has not yet done so—not for want of trying on its part. I understand from speaking to my right hon. Friend the Member for Leeds Central that it took Leeds city council, which got a head start on Newcastle in that respect, six years to introduce the regime, but it works well.

If the Government believe in cutting bureaucracy and in a doctrine of subsidiarity—in other words, that a decision is best taken at the lowest appropriate level of government—surely they believe that the regulation of “To let” signs is a matter for local government, and not a matter that the Secretary of State and his Ministers, who have a lot of other important things to do, should concern themselves with detail by detail, local authority by local authority.

Different local authorities may make different decisions on the matter. I say let them. Set the people free!

[Matthew Hancock]

I commend the right hon. Member for Newcastle upon Tyne East (Mr Brown) for his assiduous and long-standing opposition to “To let” signs. I wonder what has driven him to this position, but I recognise and celebrate his tenacity in finding occasions on which to make such proposals in the House—[Interruption.] I might have a little bit of good news for him, if Opposition Members would care to listen.

I appreciate that the proliferation of “To let” signs can be a serious problem, but new clause 21 is slightly disproportionate. The right hon. Gentleman pointed out deficiencies in the current remedy for the local planning authority—seeking a direction under regulation 7 of the Town and Country Planning (Control of Advertisements) (England) Regulations 2007—but his solution is to ban “To let” boards unless a local authority makes byelaws to allow them.

[Mr Brown]

That was my alternative proposal, which I have not moved. My more moderate proposal would allow the local authority to supplement the statutory regulations rather than replace them.

[Matthew Hancock]

I agree with the right hon. Gentleman on allowing local authorities to have the power to change the situation on the ground with regard to “To let” signs. The powers exist, but there are very few applications for them—there have been only 10 in the past six years—which indicates that the problem is not hugely widespread, although it is a serious issue in some areas.

The directions tend to fall into two groups. The first is where there are large houses in sensitive architectural areas, such as Kensington and Chelsea in London, or Brighton and Hove. The second group is where there is a large concentration of student houses, such as in Leeds, Loughborough, Nottingham or Newcastle. Authorities in such areas have already successfully obtained directions and are exercising the necessary control. Therefore, the ability to take control is in law.

The right hon. Gentleman’s solution is to ensure that, instead of being able to apply, more often the power would need to be put in place, but that would be an extra burden. I understand the concern, however, and agree that the Secretary of State has more important things to do. New clause 20 proposes to take the Secretary of State out of the decision-making process. I shall take that point away and discuss it with ministerial colleagues, including in the Department for Communities and Local Government, and with him. I hope that he can take that assurance and that we can take things forward from there.

[Mr Nicholas Brown]

I am grateful for the Minister’s assurance. I wrote to the Department at the time of my ten-minute rule Bill on this subject offering to co-operate with the Government by putting it into Committee and accepting their amendments and any tidying up they wanted, if they agreed to facilitate the Bill’s progress through the House, which, as he will know, is in their gift—without it, I would have had to overcome many more hurdles. I am grateful for his assurance, then, and I hope that he stays in office long enough to implement it, because the previous Ministers did not even have time to answer my letter before being dispatched elsewhere—or, in the case of one of them, just dispatched! I look forward to working with him, and, given his assurance, I will not press my amendment to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 50

Sunset and review provisions

[Matthew Hancock]

I beg to move amendment 21, page 42, line 38, leave out ‘, other than the Scottish Ministers,’.

[Mr Speaker]

With this it will be convenient to discuss the following: Government amendment 22.

Amendment 63, page 43, line 1, leave out ‘may’ and insert ‘must’.

Amendment 64, page 43, line 4, after ‘specified period’, insert ‘, or’.

Amendment 65, page 43, line 6, after ‘specified period’, insert ‘, or’.

Amendment 66, page 43, line 10, leave out line 10 and insert ‘If the provision is made by virtue of subsection (2)(a), it includes’.

Amendment 67, page 43, line 19, leave out ‘may’ and insert ‘must if necessary’.

New clause 26—Review of legislation relating to health and safety at work and application of sunset and review provisions to this legislation—

‘(1) The Secretary of State must—

(a) carry out a review of the effectiveness of all existing legislation relating to health and safety at work, and

(b) prepare and publish a report setting out the conclusions of the review.

(2) The review and report must quantify, in particular—

(a) the effectiveness of the legislation in terms of reducing deaths, injuries and sickness in the workplace,

(b) the human cost, and full societal costs of work-related injuries, deaths and ill-health in terms of pain and suffering, injuries, sickness and years of life lost, and

(c) the full societal costs of the impact of the legislation including those costs resulting from welfare and healthcare spending, and resulting from the number of days lost in the workplace due to ill-health.

(3) Subordinate legislation under section 14A of the Interpretation Act 1978 in respect of any provision relating to health and safety at work may not be made until after the report has been published.’.

[Matthew Hancock]

Amendments 21 and 22 are technical amendments, the effect of which I hope will be straightforward and non-controversial. The changes proposed in Clause 50 will support the implementation of the Government’s policy on reducing the burden of regulation by allowing a sunset and review provision to be included in any future secondary legislation. They will enable the Government to put in place a robust and enduring system for tackling obsolete, burdensome or ineffective regulation, in line with the principles set out in the sunsetting guidance first published in March 2011.

I am pleased to say that those principles and the proposed change in the clause are widely supported and received detailed scrutiny in Committee before the summer. The changes proposed in clause 50 are permissive, broad in scope—intentionally so—and apply to powers to make subordinate legislation falling within the scope of the Interpretation Act 1978. Without qualification, this would include powers in a UK Act of Parliament exercisable by Scottish Ministers, whether in relation to matters devolved to the Scottish Parliament or in relation to matters reserved to Westminster.

Following earlier consultation with Scottish Ministers, however, agreement was reached to exclude powers exercised by Scottish Ministers from the effect of the changes. Among other things, that is consistent with the convention, under the present devolution settlement, which has cross-party support, that the Westminster Parliament will not normally legislate on matters devolved to the Scottish Parliament, without the consent of the Scottish Parliament. That seems reasonable to me.

Following further consultation with interested parties, it has become apparent that a further change is required to address the related issue of the powers of non-ministerial Scottish bodies and other persons under UK legislation. For example, the Registration of Births, Deaths and Marriages (Scotland) Act 1965 provides the registrar with various powers to make subordinate legislation in areas of devolved competence. Equally, the Court of Session has powers under successive UK Acts, most recently the Court of Session Act 1988. Because these are powers to make subordinate legislation within the meaning of the Interpretation Act 1978, they would also be in the scope of the changes proposed in clause 50. The effect of the Government’s amendments is to ensure that the powers exercised by non-ministerial Scottish bodies and other persons that fall within areas of devolved competence are excluded.

[Richard Fuller]

I appreciate the Minister’s giving way. I am enthralled to learn about births, deaths and marriages in Scotland—all things Scottish are important at the moment—but for businesses in my constituency of Bedford, the key question on the sunset provisions is why the Government have proposed only a “may” rather than a “must”. What business leaders in my constituency want to see is a clear indication from the Government that they intend to seek a requirement to sunset all new legislation, rather than this “maybe, maybe not.” In the remaining time, will the Minister please address the question of why he has chosen “may” rather than “must”?

[Matthew Hancock]

One reason is that it would be unreasonable to include a requirement to sunset all legislation, including primary legislation, when some of it is intended to set a long-term framework. For instance, when we set the structures in which our energy market operates, it is important to show clarity and long-term decision making, and we can deliver that, especially where there is cross-party consent. Therefore, although we want to ensure that sunsetting is the norm, especially in secondary legislation, there is a purpose in not doing so for primary legislation where businesses want the certainty of a long-term legislative proposal, rather than having a requirement that all legislation of this House—including, for instance, constitutional legislation—be sunsetted after a period of time. Notwithstanding the fact that income tax remains sunsetted every year, requiring a Finance Bill, it would not be appropriate to have a sunset on every single piece of legislation.

[Richard Fuller]

I appreciate the Minister’s giving way again. I know that in his solid free-market hands businesses should have no fears about the way in which legislation will be imposed further upon them, but he will know, just as I do, that eventually, in the long-distant future, there may be a change of Government—[Hon. Members: “Hear, hear.”]—although maybe not in my lifetime. Does he not agree that, just as night follows day, so sunsets should be applied to all clauses?

[Matthew Hancock]

I think that businesses would hope that legislation put in place for the long term will remain for the long term. The sunsetting in this Bill—as amended by the technical amendments that we are debating—is a major step forward, and the way in which it will be implemented is the right way forward. We are taking an ambitious and strong approach to secondary legislation that will ensure that Ministers and the Government have to check that legislation is working in the way it ought to. Therefore, I would resist the Opposition and non-Government amendments in the group, and I hope we have cross-party support for amendments 21 and 22.

[Mr Iain Wright]

I rise briefly to support the Government in this debate. As far as I am aware we have not tabled any Opposition Front-Bench amendments in this group. As I said in Committee repeatedly, we agree with the approach taken to sunset and review provisions, which are an important part of clause 50. We also set in train the primary authority schemes, which will be extended by clause 53. As for what the Minister said about permissive legislation—I think we are back to “Fifty Shades of Grey” again—and a deregulatory approach to free up business from unduly disproportionate and unnecessary regulation, that is something that we on this side of the House certainly agree with too.

Amendment 21 agreed to.

Amendment made: 22, page 42, line 39, at end insert—

‘except to the extent that—

(a) the power or duty is exercisable by the Scottish Ministers, or

(b) the power or duty is exercisable by any other person within devolved competence (within the meaning of the Scotland Act 1998).’.—(Matthew Hancock.)

18:00

Proceedings interrupted (Programme Order, 16 October).

The Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

Clause 52

Commission for Equality and Human Rights

Amendment proposed: 56, page 43, line 27, leave out clause 52.—(John McDonnell.)

Question put, That the amendment be made.

18:00

Division 81

Ayes: 230

---

Labour: 214
Scottish National Party: 6
Democratic Unionist Party: 5
Plaid Cymru: 2
Social Democratic & Labour Party: 1
Independent: 1
Alliance: 1
Green Party: 1

Noes: 299

---

Conservative: 249
Liberal Democrat: 49

[Chris Bryant (Rhondda) (Lab)]

On a point of order, Mr. Speaker.

[Mr Speaker]

We will come to the hon. Gentleman’s point of order. I am saving him up. It would be a pity to waste him prematurely.

Clause 40

Cartel Offence

Amendments made: 18, page 37, line 20, at end insert—

‘(6) After section 188A (as inserted by subsection (5) above) insert—

“188B Defences to commission of cartel offence

(1) In a case where the arrangements would (operating as the parties intend) affect the supply in the United Kingdom of a product or service, it is a defence for an individual charged with an offence under section 188(1) to show that, at the time of the making of the agreement, he or she did not intend that the nature of the arrangements would be concealed from customers at all times before they enter into agreements for the supply to them of the product or service.

(2) It is a defence for an individual charged with an offence under section 188(1) to show that, at the time of the making of the agreement, he or she did not intend that the nature of the arrangements would be concealed from the CMA.

(3) It is a defence for an individual charged with an offence under section 188(1) to show that, before the making of the agreement, he or she took reasonable steps to ensure that the nature of the arrangements would be disclosed to professional legal advisers for the purposes of obtaining advice about them before their making or (as the case may be) their implementation.”’.

Amendment 19, page 37, line 20, at end insert—

‘( ) After section 190 of the 2002 Act insert—

“190A Cartel offence: prosecution guidance

(1) The CMA must prepare and publish guidance on the principles to be applied in determining, in any case, whether proceedings for an offence under section 188(1) should be instituted.

(2) The CMA may at any time issue revised or new guidance.

(3) Guidance published by the CMA under this section is to be published in such manner as it considers appropriate.

(4) In preparing guidance under this section the CMA must consult—

(a) the Director of the Serious Fraud Office;

(b) the Lord Advocate; and

(c) such other persons as it considers appropriate.”’.

Amendment 20, page 37, line 21, leave out ‘this section’ and insert ‘subsections (1) to (6)’.—(Jo Swinson.)

[Chris Bryant]

On a point of order, Mr Speaker. I am not sure how to describe my relationship with the Prime Minister, but it is quite on and off. On 25 June, he said that he was going to refuse to answer any of my questions until I apologised to the House—even though I had already apologised to the House. On 27 June, just two days later, he did reply to a question, and he did the same in September, but today he is back to not replying to questions.

I fully understand the ruling that you gave this afternoon, Mr Speaker, as you are not in charge of the quality of answers, but I do not think that there has ever in the history of the House been an occasion when a Prime Minister has said that he or she would—full stop—not reply to any question. I think you have ruled, and previous Speakers have ruled on many occasions previously, that when a Minister refuses to reply to a written question, they must answer it, not least because the ministerial code, written by the Prime Minister, says:

“Ministers should be as open as possible with Parliament and the public, refusing to provide information only when disclosure would not be in the public interest”.

That, of course, is incorporated in a motion of the House, resolved on 19 March 1997. I would have thought that expressly saying that one will not reply to an individual Member of the House is an affront to the House; in particular, it is an affront to my constituents. It should not be countenanced, surely.

[Mr Speaker]

I am very grateful to the hon. Gentleman for his point of order, to which I make two points in response. First, with reference to the ministerial code, I simply remind the House that responsibility for it rests with the Prime Minister, and it seems unlikely that the Prime Minister will be minded to investigate himself. I say that not in a spirit of levity, but because I think it is a pertinent observation in practical terms. Secondly, I am sorry to disappoint the hon. Gentleman, and I do not intend any discourtesy to him, as I take the hon. Gentleman very seriously—almost as seriously as he takes himself. [Laughter.] I do take him extremely seriously and I have a very high respect for him, as he knows. What I would say at this stage is that this is clearly a highly controversial matter, on which I do not feel I can rule off the cuff now. That is not to duck it; I will reflect on the very important point that he has made and I will come back to him and, if appropriate, to the House. I hope that that is helpful.

Third Reading

Queen’s consent signified.

18:17

[Jo Swinson]

I beg to move, That the Bill be now read the Third time.

We have spent the past two days carefully scrutinising this Bill. Right hon. and hon. Members have clearly invested a lot of time examining the detail, and rightly so. We used all of our time on the first day debating the proposed new measures, and I thank the Opposition for ensuring that they received thorough scrutiny.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

rose—

[Jo Swinson]

I give way to my Scottish colleague.

[Thomas Docherty]

It is my understanding that it is custom and practice for the Secretary of State to move Third Reading. Where is he today?

[Jo Swinson]

I am sure that my colleague the Secretary of State has a very busy diary, but he may well be making an appearance—

[Chris Ruane (Vale of Clwyd) (Lab)]

Parliament is not important enough—

[Jo Swinson]

Parliament is certainly important enough. I hope not to disappoint the hon. Member for Dunfermline and West Fife (Thomas Docherty) in my speaking on Third Reading. As he will know, my right hon. Friend the Secretary of State spoke on Second Reading and has been very involved in this Bill, so I am sure that I will be able to deal with the issues raised.

[Mr William Cash (Stone) (Con)]

In view of the fact that the sunset provisions have not been discussed because of the programme motion—[Interruption.] They may have been discussed in the past, but amendments tabled by my hon. Friend the Member for Bedford (Richard Fuller) were not reached. That is the position. In that context, will the Minister be good enough to explain how it will be possible to bypass European legislation under these arrangements?

[Jo Swinson]

I am sorry to disappoint my hon. Friend by correcting him, but these issues were discussed—

[Mr Cash]

Not this afternoon.

[Jo Swinson]

Yes, they were. In fact, the hon. Member for Bedford (Richard Fuller) intervened on my hon. Friend the Under-Secretary of State for Skills when that discussion was taking place—[Interruption.] I suggest to the hon. Member for Stone (Mr Cash) that had he wanted to raise those points, he could have been present for the debate on Report.

I thank the Opposition for ensuring that the measures that we have added to the Bill have received thorough scrutiny. That detailed consideration follows earlier scrutiny in the Public Bill Committee and I extend particular thanks to its members, led for the Opposition by the hon. Members for Hartlepool (Mr Wright), for Edinburgh South (Ian Murray) and for Newcastle upon Tyne Central (Chi Onwurah).

[Mr John Redwood (Wokingham) (Con)]

When does the Minister think the first loans will be made by the green investment bank under this legislation?

[Jo Swinson]

As my right hon. Friend will know, the Government have made £3 billion available through the green investment bank, which has already started to allocate that money. Some £200 million has been allocated and the first money has been not just allocated but spent. We know that that institution will certainly be a great success.

At the end of our proceedings in Committee, the hon. Member for Hartlepool observed:

“The Committee has been serious about the need to scrutinise an important Bill and about the manner of its deliberations and questioning”.––[Official Report, Enterprise and Regulatory Reform Public Bill Committee, 17 July 2012; c. 728.]

The Bill is important. It is also part of a wider Government strategy to promote growth, support business and create jobs. Legislation alone cannot guarantee and generate economic activity, but it can help to provide the right conditions for growth and that is what this Bill does. It contains a suite of measures that will lift unnecessary burdens from business and ensure that markets are fair and dynamic to inspire the confidence of business and consumers alike.

The move to a low-carbon economy is a big challenge and, indeed, a big opportunity for this country. Some analysis suggests a demand for more than £200 billion of investment in the next decade to develop the necessary innovative technologies. The challenge is even greater given how new those markets are and the long-term nature of returns on green infrastructure investment, which may deter private sector investors. The coalition Government are meeting that challenge squarely by establishing the world’s first green investment bank and we have made significant progress.

As we were able to announce earlier this afternoon, we have today made an important step forward in the UK’s transition to a green economy with confirmation of the state aid approval that will allow the bank to make commercial investments. That is a significant achievement and means that the bank is firmly on track to be fully operational in the next few weeks.

The Government are deeply aware of the need to do all we can to support business expansion and job creation. The Public Bill Committee heard from business representatives that reform of the employment tribunal system remains a top priority for their members and that the measures in the Bill will increase the confidence of business to recruit. Our reforms will encourage parties to work together to resolve their disputes outside the adversarial, stressful and often costly tribunal system, which will mean that employers will have the confidence to take on and manage staff.

Good leadership and governance of companies is crucial and there should be no reward for failure. Our reforms to directors’ pay, which are supported by both business and investors, will mean greater transparency and more power for shareholders to hold companies to account while allowing genuine success to be rewarded. A free and open market place is key to a growing economy. Pressure from competitive markets helps businesses to boost productivity and that benefits consumers. The Government are helping by setting up the new competition and markets authority to provide a single, strong voice in this area. It will have a duty to promote competition for the benefit of consumers.

The Bill will also strengthen powers to tackle cartels. Cartels damage the interests of business and consumers alike and I am very grateful to the Public Bill Committee—again, I thank its members—for its considered debate on the issue. As a result of the amendments tabled in Committee by Opposition Members, the then Minister, my hon. Friend the Member for North Norfolk (Norman Lamb), made it clear that we would reflect on the points made with a view to improving the provisions. As a result, we have refined how we propose to tackle the problem of cartels, but in a way that still delivers the key objective of ensuring that we have effective powers against them.

Unnecessary regulation stifles growth and strangles innovation. In our red tape challenge, we are examining swathes of regulation and scrapping those that are no longer needed. The Bill supports that work by ensuring that any new secondary legislation can be time-limited. The CBI hailed that step as the "big prize for business". We are making specific reforms, including removing the right to claim compensation from employers for breach of most statutory health and safety duties unless employers have been negligent. We are also streamlining the duties of the Equality and Human Rights Commission. Let me state again for the record that we greatly value the work that the commission does and that the streamlining will in no way reduce its impact. The Government are committed to tackling the barriers to equal opportunity and to promoting economic growth. Unnecessary and complicated regulation restricts our ability to achieve that aim. The repeals in the Bill play a part in tackling the red tape and bureaucracy that holds businesses back.

Ensuring that our copyright laws are fit for the modern age is critical to the growth of the UK's creative industries—one of our most successful export sectors. It is also important for those industries that can make use of materials that may be in digital or other form. We have worked closely with stakeholders on those provisions and will continue to do so. The Bill will help to ensure that we strike the right balance on rewards for creative endeavour, sanctions for unlawful use and greater freedoms when an originator cannot be identified.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

I congratulate Ministers on their painstaking work to identify barriers to growth and enterprise. Is the Minister as disappointed as I am that the Front-Bench spokesmen for the Labour party, whose policies contributed so much to our present position, have learned nothing and still oppose sensible, practical measures to get the economy going, add jobs and ensure that we get people out of the despair of unemployment and into the sunlit uplands of well-paid jobs?

[Jo Swinson]

In the spirit of consensus, I will say that, on some issues, Opposition Front Benchers have said that they will work with the Government, but I am disappointed that, on others, they have not done so or recognised what we are doing in the Bill. The Bill is good for business and good for consumers, and therefore good for the UK economy. I commend it to the House.

00:00

[Mr Umunna]

Let me say first, meaning no disrespect to the Minister, with whom I have enjoyed debating during the Bill’s passage, that I find it quite extraordinary that for this—the Department’s flagship Bill—the Secretary of State is not present.

On Second Reading, the Opposition tabled a reasoned amendment stating that the Bill was a missed opportunity to provide a strategy for economic growth and that it contained inadequate measures to improve business confidence, investment and competiveness. That remains our view on Third Reading. In Committee, as a constructive Opposition, we tabled amendments designed to support business, including measures to ensure that the green investment bank can be a strong and transparent catalyst for green growth; to improve the competition framework; and better to empower shareholders in relation to directors’ remuneration. Throughout that process, we drew on our discussions with business organisations and other stakeholders, as well as the evidence given by witnesses during the evidence sessions.

At this point, I add my thanks to my hon. Friends the Members for Hartlepool (Mr Wright), for Newcastle upon Tyne Central (Chi Onwurah), and for Edinburgh South (Ian Murray) and all the Opposition Members who served on the Bill Committee for their hard work. The Committee stage was something of a marathon, given the rag-bag of often very different measures contained in the Bill, but although we have not always agreed with the Government, it was good to hear the Minister agree that Opposition Members have thoroughly scrutinised the Bill and done so in good spirit and with some humour, too—I understand that “Fifty Shades of Grey”, One Direction and the Stone Roses have all been mentioned during consideration. Despite all the good work, however, Ministers did not accept any of our amendments in Committee, or pledge to return on Report with acceptable alternatives.

In the hope that we might be able to reach agreement on Report, I wrote to the Secretary of State at the end of last month setting out our position, highlighting the parts of the Bill we agree with and those we disagree with. The Secretary of State—I shall quote, as he is not here—replied saying:

“I believe that we support the same goals of promoting growth and reducing unnecessary burdens on business and I note that you are supportive in principle of a number of measures in the Bill.”

Indeed, it is true. We support in principle a number of measures in the Bill, such as those relating to the green investment bank, improving the competition regime and extending the primary authority scheme that we established in Government. There is no doubt about that.

The Secretary of State also referred in his letter to the changes that he has since made to his original proposals contained in the Bill on copyright. I am pleased that he has listened to what we had to say on that and that in some respects he has U-turned, although I understand that several stakeholders remain concerned.

Although we think the Government should go further in their reforms relating to directors’ remuneration, in principle we do not object to what they have done so far. However, despite our best efforts, we have not been able to reach agreement on the other aspects of the Bill to which we strongly object and which the Government refuse to remove from it.

There are certain red lines that the Bill crosses that the Labour party is not prepared to cross. We want to see enterprise flourish, but in a society where people’s rights are respected. We want to see our economy grow, and I hope and expect the next quarter’s GDP figure, which will be released next week, to be a positive number after three quarters of contraction, but growth cannot be at the expense of the basic protections that people enjoy in this country. In the name of growth, part 2 of the Bill will drastically reduce people’s rights at work and part 5, along with other Government measures, takes us along the slippery slope to the abolition of the Equality and Human Rights Commission. This is wrong.

Many of the measures in part 2 find their inspiration in the report of the Prime Minister’s employment law adviser, Adrian Beecroft. By his own admission in the public evidence sessions on the Bill, Mr Beecroft said that his findings were based on conversations and not on a statistically valid sample of people. Of course, the Government are implementing many of his measures. For example, having already increased the service requirement to claim for unfair dismissal in the employment tribunal, by reducing compensatory awards for unfair dismissal the Government seek in the Bill to water down further the rights of all employees in this country, as we heard today, most of whom are not members of a trade union.

As I said on Second Reading, reducing compensatory awards for unfair dismissal in particular will impact on those in middle income occupations. They, like others in lower income occupations, are already facing the biggest squeeze on their living standards in a generation under this Government, and weakening their rights at work will only add to the worry and stress that working people are under. Mr Beecroft, I read, suggested that the Secretary of State, who is not here, is a socialist. Well, I can tell him that the Secretary of State has done his best to prove otherwise in the Bill.

[Mr Graham Stuart]

I am grateful to the hon. Gentleman, who is being most generous. Does he feel that the compensation currently available is exactly right or does he think it should be increased further? He must recognise that there is a balance to be struck between looking after the interests of employees and not causing employers to avoid taking people on for fear of the costs. That balance must be struck and the hon. Gentleman obviously thinks the figure should be at the upper end. Does he want to increase the current levels?

[Mr Umunna]

With respect, I observe for the record that the hon. Gentleman has not been present for most of the debate on the Bill today, yesterday or at any time. If he had been here earlier, he would have heard me make much the same observation as he has just made—that there is a balance to be struck. We disagree with changing the current regime in relation to the compensatory award. I would not say that any system is perfect. For example, in relation to the unfair dismissal regime and the way that it interacts with the tribunals, yes, we have entertained the Government’s Underhill review because we understand that there are some issues. I am not sure that any system would be perfect, but we disagree with what is proposed in the Bill and the way in which it will change the balance. There is obviously a disagreement on that.

With regard to part 5, which relates to the Equality and Human Rights Commission, and the new clauses relating to the Equality Act 2010, the Secretary of State on Second Reading referred to the measures relating to the commission as “legislative tidying-up.” They are nothing of the sort, as I think he knows. He likes to pose as the opposition within on so many matters but waves through the more extreme impulses of his coalition partners.

To compound matters, last week the Government tabled an amendment to the Bill providing for the repeal of the provisions in the 2010 Act relating to liability for third-party harassment of employees, which was one of Adrian Beecroft’s proposals. It was a classic example of the Secretary of State trying to face both ways at once. When questioned on Second Reading about the Government’s intentions by my hon. Friend the Member for Stretford and Urmston (Kate Green), he assured the House that he had no intention of implementing that Beecroft proposal. Then, out of the blue and at the last minute, he presents us with a new clause seeking to do just that.

Samantha Mangwana, a senior employment lawyer at the respected law firm Russell, Jones and Walker Solicitors, asked in today’s Financial Times what signal that sends out. She said

“this is not some meaningless bureaucratic red tape, but the very protections that are in place to protect staff from predatory sexual advances by third parties.”

In conclusion, the unemployment figures released today are very welcome, but more than 2.5 million people are still out of work. In my constituency more than 11 people are chasing every Jobcentre Plus vacancy. Long-term unemployment has risen and the number of young people out of work and claiming benefits for more than a year has gone up yet again, and we are still in a double-dip recession, one of only two G20 countries in that position. That situation will not be resolved by taking away people’s fundamental rights; it will be resolved by getting demand back into the economy. That is what creates jobs, and that should have been the sole focus of an enterprise Bill. It is a shame that that is not the case with this Bill. Instead, we have seen today not the focus on kick-starting the recovery and laying a platform for long-term and sustainable growth, but the final nail in the coffin of any claim the Government could make to marrying competence with compassion. That is why we will vote against the Bill tonight.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I point out that at least six Members wish to speak in the debate.

18:39

[Mr Andrew Turner (Isle of Wight) (Con)]

I want to mention the Osborne estate, since no amendment was tabled until the Bill was on Report. Osborne house was of course built by Prince Albert and lived in by Queen Victoria until 1901. Before I was elected in 2001, its long-standing use as a convalescent home had already come to an end, but better accommodation, more modern individual rooms and higher quality facilities were all needed and they were all too costly. Although the King Edward VII convalescent home was much loved by the people of East Cowes, those who worked there and many people on the island and further afield knew that its days had been numbered for some time.

The part of Osborne house that was used as a convalescent home was restricted by dint of the Osborne Estate Acts of 1902 and 1914 and was to be used for the benefit of service people, their families and senior civil servants. That severely limited the chances of attracting those who could make use of the home. When the current Government were elected in 2010, I knew that we would have an opportunity to bring unused parts of that beautiful and historic building into service once again.

English Heritage has been working hard to find new and innovative uses for the buildings, and I have worked with it to obtain the support of local people. We have held two public meetings, one within the house itself and, subsequently, one in East Cowes town hall, which between 40 and 50 people attended. Although no firm plans were put forward, it was clear that most people want the Osborne estate to be regenerated and think that it is a waste that large parts of it remain unused. The limitations on the use of the former convalescent home will be lifted to a certain extent by the new clause 11, and I welcome that.

I am grateful for the work done by English Heritage—in particular, Mark Pemberton, who has worked with me over many years—and my hon. Friend the Member for Weston-super-Mare (John Penrose), who has visited the house and grounds to see for himself the challenges and opportunities offered there. I am grateful to the people of the island, who have worked so hard and assiduously to ensure that Osborne house, the jewel in the island’s crown—indeed, the jewel in the nation’s crown—will have a suitable role that recognises its historic past and looks forward to a unique and exciting future. I have been pleased to support the amendment and I am now happy to support the Bill’s Third Reading.

18:40

[John McDonnell]

It is important when we pass legislation in this House that we take into account our duty as employers of the staff who will be implementing the legislation. This legislation will abolish the Office of Fair Trading and the Competition Commission, which will be brought together in one body. In the past, legislation—TUPE—has been introduced to ensure that those staff are protected, but TUPE applies only to those staff who are transferred from the public sector into the private sector. Therefore, to cover the situation where there are transfers within the public sector, there was an agreement under the previous Government—a Cabinet Office agreement of principles that was inherited, and supported, by this Government—that recommended that where there were transfers between public sector bodies there would be placed in legislation a commitment that TUPE would be applied. That has not been included in this Bill. It contains a reference to similar conditions to TUPE, but that does not give the guarantees that the staff are expecting; in fact, it jeopardises some of the benefits that have accrued to them over a period of time.

I send the message to the other place that Members of this House and of the other place have a responsibility for the staff whom we employ to implement legislation. Their views should be regarded—their trade unions have made this point to Government and it has been ignored—and they should be protected. I hope that an amendment will be tabled in the other House that gives this protection to the staff.

This is an extremely significant Bill. It undermines our health and safety regime and undermines the employment rights that have been built up over generations, and it means that bad employers will be able to sack, pressurise, bully and victimise staff with impunity.

The Equalities and Human Rights Commission, and the legislation that we enacted in 2006 to ensure that it was effective, have had cross-party support, and I thought that that would be maintained even by this Government. However, this Bill, in addition to the 60% cuts in its budget and the 70% cut in staff, now undermines the commission’s legal foundations. In effect, as my hon. Friend the Member for Streatham (Mr Umunna) said, this is leading towards the abolition of the body and therefore undermining equalities work in this country. What really sticks in my craw is the removal of the duty placed on the commission to promote equality for people with disabilities and to prevent discrimination against them. It reflects badly on the Government if this is the direction in which they are going.

The Bill also demonstrates the Government’s absolute incompetence. We are now in a situation where copyright law is in complete confusion. They cannot even legislate effectively to control estate agents. That is the stage that we have reached with this Bill, and that is why I will oppose it.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I ask for contributions to be short and sweet.

17:41

[Julian Smith]

I support the Bill, which backs risk-takers across Britain—the 4 million businesses with fewer than 10 employees, accounting for 7 million jobs. Most of these businesses are run by people earning less than the average wage.

Despite what Labour says about regulation, it is causing those business owners and entrepreneurs a problem. To continue to get job results like today’s, we have to do more to give those owners confidence to take on more staff. The Bill’s measures—tribunal fees, reducing compensation for unfair dismissal, settlement agreements and the slight rebalancing from employee to employer—will give many entrepreneurs the power and the confidence to take on new staff. The Bill also has measures that will be difficult and challenging for business, such as equal pay orders and board votes, which demonstrates that this Government will not accept bad business behaviour.

Under Labour, business in Britain was being hit by six new regulations every day. There was a relentless focus on job protection rather than job creation; poor oversight of the pay of business boards; and appalling comparative performance on board diversity and on equal pay issues. This Government back the risk-takers, are on the side of the entrepreneur while protecting rights, and are challenging the worst excesses of business that went unchecked for 13 years. Labour is for excessive job protection; we are for job creation. I pay tribute to the excellent two new Ministers and I am sure that their work will ensure that our job figures continue to get better for months and years to come.

17:41

[Mr Anderson]

I had the privilege of serving on the Committee and I have been present during the House’s consideration of the Bill over the past two days. Nothing that we have heard has been evidence-based. We have heard anecdotes, impressions, perceptions, feelings and conversations. During a Committee evidence session, I asked Adrian Beecroft where his empirical evidence was, and his answer—this is in the Official Report— was, “Um.” That is how little evidence he has.

There has been nothing new in the past few days to change that perception, and why is that? Because the Chancellor’s fingerprints are all over this Bill. The part-time Chancellor, part-time political strategist has told people to sell their rights to get shares, and employers are now able to tell people to sell their rights so that they can sack them without any worries. But there are worries and we have heard them today. When asked whether people who volunteer to go would be able to claim jobseeker’s allowance and whether those with mortgage protection would be affected, the Government’s Front-Bench representatives had not even thought of it. They had to run to the officials’ Box to get an answer, because they do not live in the real world. We also heard some crass comments about health and safety yesterday. There were anecdotes about a bottle of bleach in a cupboard and the Minister made comments about school trips and health and safety. They have absolutely no idea what it is like in the real world.

The Secretary of Sate should be present. I think that the reason why he is not is that he is ashamed of this Bill, because he does not agree with what is being done in his name. He has gone from being the sage of Twickenham to being the stooge of Westminster. He is the invisible man in this place—we do not know where he is.

Members should read today’s Daily Mirror, which includes a quote from Jimmy Savile’s assistant, who worked for him for 32 years. When he sacked her, he told her:

“Today’s today, tomorrow’s tomorrow, I’ve got a train to catch.”

Under this Bill, that will become the norm for employers in this country. They will be able to dismiss their employees with the wave of a hand. I say to Government Members, particularly the Liberal Democrats, who should know better, that Jimmy Savile would be proud of them tonight.

18:48

[Mr Redwood]

The Bill contains provisions for a framework to allow the UK green investment bank to report to Ministers and to this House. I say to the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson) that several of us will take a close interest in the bank. We hope that, when she implements the provisions, she will put in place the necessary procedures so that we can all see how well the bank is doing. It is particularly important that she implements rules for the bank, because the Government now have an £80 billion funding for lending scheme, a £50 billion national infrastructure financing scheme, a £20 billion small businesses special loans scheme, and they are doing another round of quantitative easing worth £50 billion. That represents £200 billion-worth of loans, guarantees and special money for the banking sector, which could cover quite a lot of the projects in which the green investment bank might be interested.

I hope the Minister will ensure that there is no unnecessary competition in the public sector for privileged moneys now that we have so many different strands. Now that there is so much money in the big schemes, the green investment bank can relax about some of the biggest projects, because they could clearly be taken care of by the other schemes. Ministers need to think through how all the schemes fit together and how they affect the green investment bank. They must ensure that anyone who seeks money for investment projects in this field has a clear view of which is the appropriate mechanism.

18:50

[Julie Hilling]

I spoke about the Bill in the debate on the Queen’s Speech, I spoke on Second Reading and I have sat through the last two days of debate. I am grateful to have a few moments to speak now. However, my opinion has not changed.

The Bill is called the Enterprise and Regulatory Reform Bill, but I have seen nothing in it that is very enterprising, nothing that will grow businesses, nothing that will take this country out of the double-dip recession that was created in Downing street, and nothing that will stop the Government borrowing more and more money just to pay for the cost of their cuts. What I have seen is a Bill that removes rights for ordinary working people, takes a big stride backwards on equality, takes a leap backwards on health and safety, and makes it easier to sack people. That will increase job insecurity, harm work-force morale and productivity, harm consumer confidence and, ultimately, harm the economy.

The Government do not seem to live in the real world, where it is already lamentably easy to sack workers and where discrimination is still rife. Instead of removing rights, they should be helping every employer to be a good employer, with good advice and support. That would make us more competitive and help this country to thrive. The Bill is a lost opportunity and an exercise in turning back the clock. It has no answers for our economy and it should be absolutely rejected.

18:51

[Richard Fuller]

Enterprise and regulatory reform, part of the title of the Bill, are words to bring succour to those who work in the engine room of the British economy—words that can take a thousand ideas for a new business, which have been discussed over a pint or sketched out on paper, and transform them into job-making, wealth-creating vehicles of growth.

The anticipation for the Bill is almost tangible, but I fear that it will fall short of fulfilling the hopeful expectations. Where is the rolling back of the myriad fees and charges that are blithely imposed on businesses; where is the relief for shopkeepers from the sky-high rateable values set at the peak of Labour’s boom-cum-bust; and where is the implementation of our policy to roll back job-destroying EU regulation?

The Bill’s proceedings should have started with a rallying call to our businesses that this Government are unambiguously on their side; a statement cherishing the principles of the free market as the most liberating force for social good; a determination to embrace, defend and expand the global free market that has lifted hundreds of millions of people from poverty, to which too many were consigned by the misguided socialist policies of the past; a rebuttal of the insidious assumption, which too often underlies Government intervention, that, left to their own devices, people who run their own business cannot be trusted. That assumption should be replaced by a presumption of trust that in starting and growing businesses, people are doing the essential work of a grateful nation, burdened by its debts and seeking the wealth to maintain its cherished public services.

Capitalism delivers by its results what all rival systems can only promise on paper. That is a truth that the Bill should have heralded as clearly and unequivocally as President Obama did just last night:

“I believe the free enterprise system is the greatest engine of prosperity the world has ever known.”

We need to spread access to capital for people to start their own businesses, so that it is as available in Bradford, Burnley, Bath and Bedford as it is in London, Oxford, Cambridge and Edinburgh. We need to create a front-foot nation, a nation of entrepreneurs. It must be as much a part of our culture for people to want to own their own business as to want to own their own home. We need a people with the willingness to start, the ambition to grow and the courage to try again. We need a local community spirit that expects, encourages and supports those endeavours.

18:54

[Katy Clark]

This Bill is a mishmash of ideologically driven measures that have no evidence base. As Opposition Members have repeatedly said, it is Beecroft by the back door. There is no evidence whatever, anywhere in the world, that taking people’s employment rights away from them leads to growth. There is no evidence base for the view that taking away our health and safety protections, which have been fought for by generation after generation, will lead to job creation.

The backdrop to the Bill is, of course, the Government’s red tape challenge and their belief that deregulation will in some way lead to enterprise and a better society. Some Opposition Members have always fought against the Government’s measures, but many Government Members have always believed that they represent the type of society that they wish to see. It is shameful that the Liberal Democrats are providing a face to those measures, and I believe that at the next general election we will see the result and Liberal Democrat Members will be thrown out by the British people.

18:55

[Matthew Hancock]

We have had a wide-ranging debate over two days on Report and now on Third Reading. We have heard speeches by the hon. Members for Bolton West (Julie Hilling), for Hayes and Harlington (John McDonnell), for Blaydon (Mr Anderson) and for North Ayrshire and Arran (Katy Clark) that have railed against enterprise and against the Bill.

By contrast, my hon. Friends the Members for Bedford (Richard Fuller) and for Skipton and Ripon (Julian Smith) have argued passionately for enterprise, business and jobs. I cannot quite match their eloquence or the power of their arguments about the ability of the free market system to create jobs and build prosperity not only in this country but around the world. I am disappointed to find out that President Obama has said something that it will now be impossible for us to say without reference being made to his saying it—that the free enterprise system is the greatest force for progress that the world has ever seen.

[Mr Umunna]

Will the Minister give way?

[Matthew Hancock]

No, I will not. I have only a few minutes. [Hon. Members: “Go on.”] I will come on to the hon. Gentleman’s comments.

My hon. Friend the Member for Isle of Wight (Mr Turner) spoke passionately about his constituency and the need to remove from primary legislation restrictions on Osborne house. It is interesting that in this single Bill we are amending the Osborne Estate Act 1902, the Interpretation Act 1978, the Estate Agents Act 1979 and many more Acts, to promote enterprise.

My right hon. Friend the Member for Wokingham (Mr Redwood) talked about the green investment bank and listed the Government’s various measures to support credit. We are adding a business bank, which may well sweep up some of those other measures. He asked about policy overlap, and I point out that thus far, the funds put into the green investment bank have been for projects with a maximum size of £20 million. That shows the scope of the bank so far.

The Secretary of State is at the John Cass lecture on social mobility. Government Members are in favour of social mobility, but Opposition Members argue that the Secretary of State should not be giving a lecture on it.

[Mr Umunna]

Will the Minister give way?

[Matthew Hancock]

I have two minutes, but I will give way.

[Mr Umunna]

The Minister referred to President Obama’s remarks yesterday. Where in those remarks did he talk about the need to water down people’s rights at work to promote growth?

[Matthew Hancock]

Making it easier for people to have settlement agreements, ensuring that health and safety legislation is implemented reasonably, helping the operation of listed buildings policy and improving the operation of the Equality and Human Rights Commission will all help the free market system, which is the engine of prosperity.

The Government’s record is clear. We now know that when we arrived in office, the structural deficit was £73 billion a year. Since then, however, 1 million new jobs have been created in the private sector. I did not notice any Opposition Members welcoming that fact. There are 170,000 fewer people on benefits, and the deficit is down by a quarter.

We have introduced measures on competition, on making it easier to employ people, on a green investment bank, on improvements to the Estate Agents Act and on health and safety. Members of the House are inspired and motivated to enter politics for many different reasons, and one of the best of those is to work at creating jobs and help employers to create jobs. It looks as if the Opposition will oppose this measure, and in doing so they will show that they are anti-business, anti-enterprise and anti-jobs. They have only one option—more borrowing—whereas the coalition Government are pro-enterprise, pro-business and pro-jobs. We need jobs for people who want to make their lives better, and I commend the Bill to the House.

Question put, That the Bill be read the Third time.

The House divided: Ayes 290, Noes 228.Division No. 82][7 pmAYESAfriyie, AdamAldous, PeterAlexander, rh DannyAmess, Mr DavidAndrew, StuartArbuthnot, rh Mr JamesBacon, Mr RichardBaker, SteveBaldry, Sir TonyBaldwin, HarriettBarker, rh GregoryBaron, Mr JohnBebb, GutoBeith, rh Sir AlanBellingham, Mr HenryBeresford, Sir PaulBingham, AndrewBinley, Mr Brian Birtwistle, GordonBlackman, BobBlackwood, NicolaBoles, NickBone, Mr PeterBottomley, Sir PeterBradley, KarenBrake, rh TomBray, AngieBrazier, Mr JulianBridgen, AndrewBrine, SteveBrokenshire, JamesBrooke, AnnetteBrowne, Mr JeremyBruce, FionaBruce, rh Sir MalcolmBuckland, Mr RobertBurley, Mr AidanBurns, ConorBurns, rh Mr SimonBurrowes, Mr DavidBurstow, rh PaulBurt, AlistairBurt, LorelyByles, DanCairns, AlunCampbell, rh Sir MenziesCarmichael, rh Mr AlistairCarmichael, NeilCarswell, Mr DouglasCash, Mr WilliamChope, Mr ChristopherClappison, Mr JamesClifton-Brown, GeoffreyCoffey, Dr ThérèseCollins, DamianColvile, OliverCox, Mr GeoffreyCrabb, StephenCrockart, MikeCrouch, TraceyDavey, rh Mr EdwardDavies, David T. C. (Monmouth)Davies, GlynDavies, Philipde Bois, NickDjanogly, Mr JonathanDorrell, rh Mr StephenDorries, NadineDoyle-Price, JackieDrax, RichardDuddridge, JamesDuncan, rh Mr AlanDuncan Smith, rh Mr IainEllis, MichaelEllison, JaneEllwood, Mr TobiasEustice, GeorgeEvans, JonathanEvennett, Mr DavidFabricant, MichaelFarron, TimFeatherstone, LynneFox, rh Dr LiamFrancois, rh Mr MarkFreeman, GeorgeFreer, MikeFuller, RichardGale, Sir RogerGarnier, Sir EdwardGarnier, MarkGauke, Mr DavidGeorge, AndrewGibb, Mr NickGilbert, StephenGlen, JohnGoldsmith, ZacGoodwill, Mr RobertGove, rh MichaelGraham, RichardGrant, Mrs HelenGray, Mr JamesGrayling, rh ChrisGreen, rh DamianGreening, rh JustineGriffiths, AndrewGummer, BenGyimah, Mr SamHalfon, RobertHames, DuncanHammond, rh Mr PhilipHancock, MatthewHands, GregHarper, Mr MarkHarrington, RichardHarris, RebeccaHart, SimonHarvey, Sir NickHayes, Mr JohnHeald, OliverHeath, Mr DavidHemming, JohnHenderson, GordonHendry, CharlesHerbert, rh NickHinds, DamianHoban, Mr MarkHollingbery, GeorgeHollobone, Mr PhilipHolloway, Mr AdamHorwood, MartinHowell, JohnHughes, rh SimonHuhne, rh ChrisHuppert, Dr JulianHurd, Mr NickJackson, Mr StewartJames, MargotJenkin, Mr BernardJohnson, GarethJohnson, JosephJones, AndrewJones, rh Mr DavidJones, Mr MarcusKawczynski, DanielKelly, ChrisKennedy, rh Mr CharlesKirby, SimonKnight, rh Mr GregLamb, NormanLancaster, MarkLansley, rh Mr AndrewLeadsom, AndreaLee, JessicaLee, Dr PhillipLefroy, JeremyLeigh, Mr EdwardLeslie, CharlotteLetwin, rh Mr OliverLewis, BrandonLewis, Dr JulianLiddell-Grainger, Mr Ian Lopresti, JackLord, JonathanLoughton, TimLumley, KarenMain, Mrs AnneMaude, rh Mr FrancisMaynard, PaulMcCartney, JasonMcCartney, KarlMcIntosh, Miss AnneMcLoughlin, rh Mr PatrickMcPartland, StephenMenzies, MarkMetcalfe, StephenMiller, rh MariaMills, NigelMilton, AnneMitchell, rh Mr AndrewMoore, rh MichaelMordaunt, PennyMorgan, NickyMorris, Anne MarieMorris, JamesMosley, StephenMowat, DavidMulholland, GregMundell, rh DavidMunt, TessaMurray, SheryllMurrison, Dr AndrewNeill, RobertNewmark, Mr BrooksNewton, SarahNokes, CarolineNorman, JesseNuttall, Mr DavidO'Brien, Mr StephenOfford, Dr MatthewOllerenshaw, EricOpperman, GuyOttaway, RichardPaice, rh Sir JamesParish, NeilPatel, PritiPawsey, MarkPenning, MikePenrose, JohnPercy, AndrewPerry, ClairePhillips, StephenPincher, ChristopherPoulter, Dr DanielPrisk, Mr MarkRaab, Mr DominicRandall, rh Mr JohnReckless, MarkRedwood, rh Mr JohnRees-Mogg, JacobReid, Mr AlanRobathan, rh Mr AndrewRobertson, Mr LaurenceRogerson, DanRosindell, AndrewRudd, AmberRuffley, Mr DavidRussell, Sir BobRutley, DavidSanders, Mr AdrianSandys, LauraScott, Mr LeeSelous, AndrewShapps, rh GrantSharma, AlokShelbrooke, AlecShepherd, Mr RichardSkidmore, ChrisSmith, Miss ChloeSmith, HenrySmith, JulianSmith, Sir RobertSoames, rh NicholasSoubry, AnnaSpelman, rh Mrs CarolineSpencer, Mr MarkStephenson, AndrewStevenson, JohnStewart, BobStreeter, Mr GaryStride, MelStuart, Mr GrahamStunell, rh AndrewSturdy, JulianSwales, IanSwayne, rh Mr DesmondSwinson, JoTapsell, rh Sir PeterTeather, SarahThurso, JohnTimpson, Mr EdwardTomlinson, JustinTredinnick, DavidTurner, Mr AndrewTyrie, Mr AndrewUppal, PaulVaizey, Mr EdwardVara, Mr ShaileshVickers, MartinVilliers, rh Mrs TheresaWalker, Mr CharlesWalker, Mr RobinWalter, Mr RobertWard, Mr DavidWatkinson, AngelaWebb, SteveWharton, JamesWheeler, HeatherWhite, ChrisWhittaker, CraigWhittingdale, Mr JohnWiggin, BillWilliams, Mr MarkWilliams, RogerWilliams, StephenWilliamson, GavinWillott, JennyWilson, Mr RobWright, JeremyWright, SimonYoung, rh Sir GeorgeTellers for the Ayes:Mark Hunter andMr Robert SymsNOESAbbott, Ms DianeAbrahams, DebbieAinsworth, rh Mr BobAlexander, Heidi Ali, RushanaraAllen, Mr GrahamAnderson, Mr DavidAshworth, JonathanAustin, IanBailey, Mr AdrianBain, Mr WilliamBalls, rh EdBanks, GordonBarron, rh Mr KevinBeckett, rh MargaretBegg, Dame AnneBenn, rh HilaryBenton, Mr JoeBerger, LucianaBetts, Mr CliveBlackman-Woods, RobertaBlears, rh HazelBlenkinsop, TomBlomfield, PaulBlunkett, rh Mr DavidBradshaw, rh Mr BenBrennan, KevinBrown, LynBrown, Mr RussellBryant, ChrisBuck, Ms KarenBurden, RichardBurnham, rh AndyByrne, rh Mr LiamCampbell, Mr AlanCampbell, Mr RonnieClark, KatyClarke, rh Mr TomCoaker, VernonCoffey, AnnConnarty, MichaelCooper, RosieCooper, rh YvetteCorbyn, JeremyCrausby, Mr DavidCreagh, MaryCreasy, StellaCruddas, JonCryer, JohnCunningham, AlexCunningham, Mr JimDakin, NicDanczuk, SimonDarling, rh Mr AlistairDavid, WayneDavies, GeraintDe Piero, GloriaDenham, rh Mr JohnDobbin, JimDobson, rh FrankDocherty, ThomasDonaldson, rh Mr Jeffrey M.Donohoe, Mr Brian H.Doran, Mr FrankDowd, JimDoyle, GemmaDromey, JackDugher, MichaelDurkan, MarkEagle, Ms AngelaEagle, MariaEdwards, JonathanEfford, CliveElliott, JulieEngel, NataschaEsterson, BillEvans, ChrisFarrelly, PaulField, rh Mr FrankFitzpatrick, JimFlello, RobertFlint, rh CarolineFovargue, YvonneFrancis, Dr HywelGapes, MikeGilmore, SheilaGlass, PatGlindon, Mrs MaryGodsiff, Mr RogerGoggins, rh PaulGoodman, HelenGreatrex, TomGreen, KateGriffith, NiaGwynne, AndrewHain, rh Mr PeterHamilton, Mr DavidHamilton, FabianHarris, Mr TomHavard, Mr DaiHealey, rh JohnHendrick, MarkHepburn, Mr StephenHeyes, DavidHillier, MegHodge, rh MargaretHodgson, Mrs SharonHoey, KateHopkins, KelvinHosie, StewartHowarth, rh Mr GeorgeHunt, TristramIrranca-Davies, HuwJackson, GlendaJames, Mrs Siân C.Jamieson, CathyJarvis, DanJohnson, rh AlanJohnson, DianaJones, GrahamJones, HelenJones, Mr KevanJoyce, EricKaufman, rh Sir GeraldKeeley, BarbaraKendall, LizKhan, rh SadiqLavery, IanLazarowicz, MarkLeslie, ChrisLewis, Mr IvanLloyd, TonyLong, NaomiLove, Mr AndrewLucas, CarolineLucas, IanMacNeil, Mr Angus BrendanMacShane, rh Mr DenisMactaggart, FionaMahmood, Mr KhalidMahmood, ShabanaMalhotra, SeemaMann, JohnMarsden, Mr GordonMcCabe, SteveMcCann, Mr MichaelMcCarthy, KerryMcClymont, Gregg McDonnell, JohnMcFadden, rh Mr PatMcGovern, AlisonMcGovern, JimMcGuire, rh Mrs AnneMcKechin, AnnMcKenzie, Mr IainMcKinnell, CatherineMeacher, rh Mr MichaelMearns, IanMichael, rh AlunMiller, AndrewMitchell, AustinMoon, Mrs MadeleineMorrice, Graeme (Livingston)Morris, Grahame M. (Easington)Mudie, Mr GeorgeMunn, MegMurphy, rh Mr JimMurphy, rh PaulMurray, IanNandy, LisaNash, PamelaOnwurah, ChiOsborne, SandraOwen, AlbertPaisley, IanPearce, TeresaPerkins, TobyPhillipson, BridgetPound, StephenQureshi, YasminReed, Mr JamieReeves, RachelReynolds, EmmaRiordan, Mrs LindaRobinson, Mr GeoffreyRoy, Mr FrankRoy, LindsayRuane, ChrisRuddock, rh Dame JoanSeabeck, AlisonShannon, JimSharma, Mr VirendraSheridan, JimShuker, GavinSkinner, Mr DennisSlaughter, Mr AndySmith, rh Mr AndrewSmith, AngelaSmith, OwenSpellar, rh Mr JohnStraw, rh Mr JackStringer, GrahamStuart, Ms GiselaSutcliffe, Mr GerryTami, MarkThomas, Mr GarethThornberry, EmilyTimms, rh StephenTrickett, JonTurner, KarlTwigg, DerekUmunna, Mr ChukaVaz, rh KeithVaz, ValerieWalley, JoanWatson, Mr TomWatts, Mr DaveWeir, Mr MikeWhiteford, Dr EilidhWhitehead, Dr AlanWilliamson, ChrisWilson, PhilWilson, SammyWinnick, Mr DavidWinterton, rh Ms RosieWoodward, rh Mr ShaunWright, DavidWright, Mr IainTellers for the Noes:Julie Hilling andSusan Elan JonesQuestion accordingly agreed to.

Bill read the Third time and passed.

Business without Debate

Wednesday 17th October 2012 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Social Security

That the draft Housing Benefit (Amendment) Regulations 2012, which were laid before this House on 28 June, be approved.—(Anne Milton.)

The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 24 October (Standing Order No. 41A).

Petitions

Wednesday 17th October 2012 Commons Chamber

19:14

[Helen Goodman (Bishop Auckland) (Lab)]

I wish to present a petition from the people of Shildon against the closure of the HSBC bank in Shildon. HSBC is closing 60 branches across the country. It says it wants to rebuild trust, but it is abandoning 10,000 people, leaving them without a bank, and 800 local businesses. I am today writing to HSBC to ask it to put in £10,000 to extend the local credit union and provide at least some facilities for local people.

Following is the full text of the petition:

[The Petition of residents of Shildon, County Durham,

Declares that the Petitioners support the proposal to keep the HSBC branch in Shildon open; that it is a vital service for local businesses, residents and visitors to this busy town; further that there are over 10,000 residents in Shildon, and if HSBC were to close, we would be left with no banking facilities, causing problems for local businesses and residents who are unable to make the 3 mile journey to the next nearest HSBC branch.

The Petitioners therefore request that the House of Commons urges the Treasury to encourage HSBC to keep their Shildon branch open.

And the Petitioners remain, etc.]

[P001122]

19:15

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

The petition states:

The Petition of residents of Middlesbrough and Redcar and Cleveland,

Declares that changes to tax credits will plunge thousands of working families into poverty.

The Petitioners therefore request that the House of Commons urges the Government to reverse these changes; to provide real incentives for people to work; introduces measures to clamp down on tax avoidances; and ensures that the Government honours its commitment to end child poverty in accordance with the Child Poverty Act 2010.

And the Petitioners remain, etc.

[P001124]

Oral Health Services

Wednesday 17th October 2012 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Anne Milton.)

19:16

[Alison Seabeck (Plymouth, Moor View) (Lab)]

I am pleased to have this opportunity to raise the question of oral health in the UK. Oral health is given far too little attention, in terms of what practitioners can bring to improving a population’s general health, as well as how it can be used to prevent the development of disease. Rather like opticians, our dentists are undervalued, in terms of what they can bring to the table to help to improve our nation’s health. Perhaps it is because dentists are not the most popular group in society—although I suspect that they are outdone by politicians. Why is going to the dentist not seen as a pleasurable experience? I will leave that to others to judge, but although going to the dentist may not be pleasurable, it is absolutely essential, and good practice starts right at the beginning, with the emergence of milk teeth.

Here in the UK we can be proud of many of our successes in achieving a good quality of oral health. The UK is one of the top-performing countries for oral health in Europe, but there is still much we can do. In fact, a recent joint report by Wrigley and GlaxoSmithKline suggests that Britons love their teeth and take very good care of them compared with our European neighbours. More Britons have more of their natural teeth than people in any other European country, and since the 1980s Britain has cut its decayed, missing and filled teeth score by two thirds. That is an impressive step, but there is certainly still room for improvement—I should explain, Mr Speaker, that Wrigley is based in my constituency.

I recently attended the launch of the report and listened with great interest to Professor Ken Eaton talking in detail about the work that has been going on across Europe looking at patterns of dental health. Other speakers included Dr Nigel Carter from the British Dental Health Foundation and Juliette Reeves, a dental hygienist and nutritionist with over 30 years’ experience. All the speakers set out clearly the importance of dental checks in the early identification of a number of diseases, particularly cancers, which we know are growing in prevalence, mouth cancers in particular. There has been a 48% increase in mouth cancers in the last 12 years. Early identification can make all the difference, in terms of the treatment required and the survivability of the patient. Dental health problems can also be indicative of other diseases, such as diabetes. All those issues are easily picked up during a dental health check. One of the good things in the new contract for NHS dentistry is that it recognises the importance of prevention. This will be challenging for some in the profession to implement, as they will have to change the way in which they work, but most dentists will learn to accept that prevention should be a priority.

The report’s evidence showed that although a majority of us in the UK keep to the suggested practice of brushing twice a day, only half of us brush for two minutes or longer—the rest of us just whizz around and hope that is sufficient—and that almost two thirds of us eat or drink between brushing and going to bed at night. There is clearly space to improve our personal oral hygiene practices, and there is scope for policy and campaigns to achieve that.

Personal oral hygiene is essential. Dental disease is completely preventable, and so, therefore, are those occasionally uncomfortable visits to the dentist when invasive treatment is necessary. These diseases constitute a significant public health problem across the UK and Europe. I cannot stress strongly enough that prevention is the key, and it needs to be encouraged. Many will say that the treatment is expensive. Yes, it can be, but when set against the money saved by regular dental checks reducing the likelihood of more complex treatment, the expense looks like good value for families. The prevention of debilitating diseases will certainly reduce the social and economic costs for the country and the individual.

Curative dental care is a significant economic burden across Europe, with spending close to €9 billion. In the UK, the cost is substantial. An estimated 0.5% of gross domestic product was spent on oral health care services in 2010, and that figure is rising. Expenditure on treatment for oral diseases often exceeds that for other diseases, including cancer, heart disease, stroke and dementia, yet the simple fact is that the causes of most oral diseases in the UK are preventable through cost-effective measures that would ultimately save the taxpayer money. Brushing, flossing, using mouthwash and chewing sugar-free gum—a much-maligned practice that is actually quite effective—could all be more effectively promoted to help to keep dental costs down in Britain, and the sharing of good practice should be encouraged.

Policy needs to be designed and implemented to improve research into oral health promtion. There is currently a lack of comparable data across Europe, although the report goes some considerable way towards addressing that problem. To tackle the burden of oral disease we also need to consider taking action in various ways, some of which have been suggested in the report on the state of oral health in Europe, which I hope the Minister has had an opportunity to read. The report suggests the need to address increasing oral health inequalities, improve the data and knowledge base and support the development of the dental work force.

We should be proud that Britain is a high achiever when it comes to oral health in Europe, but there is certainly room for improvement. Despite our successes, oral diseases remain a burden for much of the population, and the economic impacts are significant. There needs to be a greater focus on prevention rather than treatment, and improvements in education and awareness are also needed.

I am proud that we have the Peninsula dental school in Plymouth. I was asked by my local media why I had chosen oral health as the subject for this debate when so many other issues could have been raised. That was a good question. Having the Under-Secretary of State for Health, the hon. Member for Central Suffolk and North Ipswich (Dr Poulter), here to respond is of course a good reason. There is also the small question of the ballot for Adjournment debates. MPs often put in for a number of debates over the Session, and we cannot tell which one will be lucky enough to come out of the ballot. I was lucky on this occasion.

Also, one of the first major campaigns that I was involved with when I was first elected to Parliament was to get a dental school sited in Plymouth. I remember fighting tooth and nail—the pun is intended—for that, alongside my former colleague, Linda Gilroy, and experts such as Sir John Tooke. It was during that campaign that I began to understand just how important good dental health is, and how essential it is that we train our dentists and technicians to the highest standards. My subsequent involvement in the all-party parliamentary group on dentistry, which is chaired so well by the hon. Member for Mole Valley (Sir Paul Beresford), has maintained my interest in the subject.

The groundbreaking training offered by Peninsula in Plymouth closely links the trainee dentists and technicians to local communities that have historically had very low levels of contact with dentists, and it is making a difference. This was one of the strong points of the case we made for a dental school in Plymouth.

We have an excellent community development team at the dental school who ensure that the training includes opportunities to go out into these communities, taking dentistry to “places it has never gone before”. Some of the projects included highlighting the impact of high-sugar drinks for professional rugby players at Plymouth Albion; making mouth guards for them; offering oral health advice to local schools; and letting children enjoy and play in a clinical environment to make it less scary. The dental school also works alongside experts to support people with drug and alcohol abuse issues, and is certainly doing some excellent work around oral cancer and smoking cessation with young adults and teenagers.

There continues to be concern about access to dentists in some parts of the country. In Plymouth, we have good months and bad months. Since the start of 2012, however, improvements have been made, with an additional 6,500 NHS places coming on stream in our city. This is possible in part because the graduate dentists from the dental school are staying in the area—yet another reason why we so wanted a dental school in Plymouth. I was pleased that the then Labour Government recognised the importance of dental training—unlike the last Tory Government, who closed dental schools.

There continues to be an issue about the cost of dental care and treatment for many families, particularly in the recession. That cost is still not easily met by some families.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Lady for giving way and for bringing this matter to the House for discussion. Oral health is a big issue right across the whole of the United Kingdom. In Northern Ireland, some plans have been mooted to introduce fluoridation in the water. That has been resisted by the Northern Ireland Assembly and resisted by the population of Northern Ireland. A new consultation process has started, but it will again be resisted. Does the hon. Lady feel that the best way of addressing tooth decay is, as she has already indicated, by regular brushing and diet, and not by fluoridation of the water?

[Alison Seabeck]

I know that the hon. Gentleman feels strongly about this issue. I feel equally strongly about it, but I disagree wholeheartedly with him, not least because a lot of toothpaste has fluoride in it in any case. Neither of my daughters, now 30 and 26—they will probably kill me for revealing their ages—has any fillings, and they have lived in an area with full fluoridation. They have had no side-effects at all either.

[Jim Shannon]

The hon. Lady is generous in allowing me to intervene again. There are statistics and information showing that fluoridation of water leads to osteoporosis and other diseases. Is it not important to be careful before pursuing a policy that could affect people’s health negatively rather than help them?

[Alison Seabeck]

I understand the hon. Gentleman’s concerns, and I am sure the population in his area will continue to have that debate, but I am convinced by the data and information that I have seen that, on balance, fluoridation of the water is a good thing. I was intending to touch on it later, but I shall now skip around it.

I will come back to the issue of families and the cost of dental care. Brushing teeth from an early age is certainly something we should all be doing; it has no significant cost and has positive outcomes. Dental treatment can be expensive, so a dental contract that focuses on prevention, works with people identified as having a higher risk of dental decay and takes a more risk-based approach—patient by patient—could lead to some families spending less on their visits to the dentist each year. That would obviously be a good thing for those families. Those people who have no visible issues of tooth decay—an increasing number in the UK, thanks in part to fluoridation—do not need a service focused on drill and fill. They need a system that rewards dentists for the preventive work they do, which should lead overall to less expensive treatments.

The wider use of expert dental hygienists to monitor and advise patients as well as to carry out treatments could have a significant benefit, although there will be some dental practices—these issues have been raised—that are not currently suitable and do not have enough space to accommodate the additional clinics. Some of the proposed changes could be problematic for them. I would welcome an update from the Minister about whether he is picking up concerns from some of the pilots as to whether or not this is an issue. The result of the contract pilots will be crucial when it comes to deciding whether the patient, as well as the dentist, benefits from the change in emphasis. The wider health benefits of preventive work will also save the NHS money, if other health problems are caught early. Preventive work can save lives, which is obviously hugely important.

I urge the Minister to consider whether, as well as the pilot schemes, further public information campaigns are needed to make the general public aware of the growing number of oral cancers that are linked to smoking and alcohol consumption—particularly among young women—and the importance of brushing babies’ first teeth. It should be emphasised that dental care can be preventive, rather than something that we all have to suffer when we have toothache.

I know that companies such as Wrigley run their own campaigns linked to their products and support wider campaigns such as Keeping Britain Smiling, but, given the massive cost to the NHS of poor dental health and linked ill health, the Government also have a role to play. I hope that the Minister will not only take on board the concerns raised by me and by others, but will tell me about the steps that are currently being taken, and about those that may be planned. I invite him to come down to Plymouth, visit the dental school and look at some of the outreach work that it is doing in deprived communities, because I think that there are some very good lessons to be learnt.

We should all speak to and lobby our health commissioners to ensure that those who are involved in the new health commissioning system understand what dentists can contribute to an overall reduction in poor health and the early identification of health problems. I hope that the Minister will note that plea.

19:31

[The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)]

I congratulate the hon. Member for Plymouth, Moor View (Alison Seabeck) on securing the debate. I do not think that she needs to justify her pursuit of this issue to her local press, because it is an important issue, and we should all pay tribute to her long campaign. The need to improve dental health is often underestimated, and it is not discussed enough in the context of the health service. I am sure that the hon. Lady will continue to campaign strongly, as a member of the all-party group, in the Chamber and in her constituency, where she supports the medical and dental schools. I should be delighted to take her up on her invitation: I intend to go to Plymouth in the near future, and I hope to be able to visit the dental school then.

The hon. Lady rightly observed that, in health care generally, we do not talk enough about the fact that prevention is much better than cure. In many parts of the health service, payment systems have not properly rewarded staff in line with the recognition that good health care is about preventing people from becoming unwell in the first place, rather than picking up the pieces when they have developed cancer or other problems. The new dental contract makes it easier to identify key prevention issues. It focuses on the desirability of spotting early symptoms of ill health—in this instance, oral ill health—rather than spotting them much too late, when a patient’s cancer is already well advanced.

The hon. Lady also referred to important public health concerns about smoking and alcohol consumption. She was right to draw attention to the problem of binge drinking, not just among young men but nowadays increasingly among young women, and to the effects of excessive smoking and drinking on oral health. The links between high alcohol consumption and smoking and a number of cancers—particularly throat cancer and other cancers in the mouth—are well established. I am optimistic about the possibility that the new dental contract and the important focus on preventive care will enable us to identify cancers, and those who are at risk of developing them, much earlier, rather than waiting to treat people later when they are very unwell. The health service in general needs to be geared up in order to do that better, particularly in the context of oral health.

The hon. Lady also raised the issue of the European platform on oral health. I believe that the all-party group hosted a reception on that recently, praising its work. All the work we have been doing in this country has been rightly highlighted in that report, and I shall discuss that a little later. It is worth dwelling on how over the past 20 or 30 years, under consecutive Governments, we have had a record of improving oral health and improving access to dentistry, particularly in the past few years. If we are taking oral health seriously, it is important that we improve access, and we are beginning to do that well.

As the hon. Lady knows, in 1973 the average 12-year-old in England and Wales had five decayed, missing or filled teeth, but by 2003 the UK average was 0.7 fillings. So we have made great strides in the past 30 or 40 years. That improvement was partially due to the introduction of fluoride toothpaste in the 1970s—that brings me to the issues raised by the hon. Member for Strangford (Jim Shannon) in his interventions—and to the hard work of dentists up and down the country. They, along with dental hygienists, highlighted the importance of good tooth care and preventive measures through effective tooth brushing using toothpaste.

Adult oral health has improved in a similarly impressive manner. In 1968, the first adult dental health survey found that 37% of the adult population of England and Wales had no remaining natural teeth, but the 2009 survey found that the proportion had dropped to 6%. Again, that is a mark of how this country is taking this issue seriously, and we must continue to do so. Access to NHS dentistry has grown steadily, with more than 1 million more patients having been seen by NHS dentists since May 2010.

The hon. Lady rightly highlighted the European platform on oral health report and outlined some of its recommendations. I have read the report and it rightly identifies the promotion of good oral health as one of the most significant health care challenges facing EU countries. However, as she said, England’s oral health compares well with all the countries surveyed in the report, and we are especially pleased that it highlighted the “Delivering Better Oral Health” toolkit, which was a guide to prevention in practice published jointly by the Department of Health and the British Association for the Study of Community Dentistry as an example of good practice. Notwithstanding the fact that we have made good progress historically and that the European platform on oral health report highlighted the good things we do in this country, we must never be complacent. We must continue to ensure that we drive further improvements and reduce the inequalities in access and in oral health that still exist and are very real in some parts of the country.

The hon. Lady raised the issue of the new dental contract. The reforms of the contract focus on a number of things, including improving access to care. There is an important focus on preventive dentistry—preventing bad things from happening to people and on picking up things early. As she is aware, the new contract that we are introducing will be based on registration, capitation and quality, rather than a more payment-by-results system. Such an approach will allow more focus to be put on those preventive measures, rather than on the more reactive measures that a payment-by-results system tends to deliver. The new contract will replace the existing model that rewards units of dental activity rather than taking a more holistic view of what is good for the patient. We can learn from this approach as a good model of health care as we develop tariffs throughout the health care system. Such a model is already being used well in some parts of the country—in stroke care and other areas of preventive care, for example, where a more holistic, joined-up approach to what happens before hospital admission and afterwards in rehabilitation is as important as immediate treatment in a hospital setting.

Elements of that contract are being tested in 70 practices at the moment, and we are rolling them out to an additional 20 to 25 practices as part of the pilot to make sure that that contract is fit for purpose. When the further results from those are available, I will be happy to share them with the hon. Lady, so that we can ensure that we design the best contract.

[Alison Seabeck]

Perhaps it might be appropriate to share some of that information with the all-party group, rather than one to one.

[Dr Poulter]

Absolutely, and I would be very happy to do so. The hon. Lady’s commendable focus on this area of health care would, of course, lead me to wish to share that information with her, but of course I would be delighted to share it with the all-party group, too. The work done by a number of all-party groups, including hers, helps to ensure that many of these important issues are never forgotten and that they are kept at the forefront of the minds of our fellow parliamentarians.

Of course, as the hon. Lady rightly highlighted, there are some inequalities across the country and, as we know, among different socio-economic groups. Improving access to care will play an important part in addressing those health care inequalities. I draw the attention of the House to our progress in preventive care, in addition to the new contract. The number of adults being treated with fluoride varnish, which is one of the most effective preventive treatments available, rose by 43% last year. Among children the figure was 64%. By investing in preventive treatment, we are ensuring that future generations will enjoy good oral health throughout their lives. In addition to promoting the application of fluoride varnishes, we will seek to promote the learning of lessons from the best performing areas of the NHS and to work with the devolved Administrations and local and regional government to iron out inequalities across different geographical areas. It is important that in all areas of health care, including dentistry and oral health care, we learn from things that have gone well so that we can roll out that good practice elsewhere and ensure that it is learned from. We should also be open and honest when things have not gone so well, so that we can learn lessons and improve services for the benefit of patients.

The hon. Lady mentioned the Peninsula dental school and rightly stated that it was opened in 2007, under the previous Government, as a joint venture between Plymouth and Exeter universities. The school has been a great success. I know that she has been a great advocate for it and is rightly very proud of what it has achieved and of what it is doing in Plymouth. Earlier this year, the two universities announced changes in how the school is run. Exeter will now operate a medical school of its own while the teaching of both medical and dental studies will continue in Plymouth. I know that it is important that her constituents are reassured about that and that as we have a successful dental school we should recognise that and support its continuing function. Many of the changes were purely administrative, rather than to front-line services.

I acknowledge the concerns expressed by the hon. Lady tonight and elsewhere, but both universities have stated that the split will improve the administration of medical education in the south-west and we expect the changes to have no negative impact on the dental school. I know that she will ensure that the voices of the dental school and her constituents are heard loudly both locally and in Parliament, and I am happy to support her in that.

Let me finally make a few points about dentistry in the south-west of England. The hon. Lady talked about NHS dentistry in her constituency, including the case of an individual constituent who had problems accessing it. We know that we have further to go in improving access, but the Government have made good strides in that direction, as did the previous Government. We have made significant progress and the latest NHS figures show that since March 2010 the number of people who accessed an NHS dentist in the south-west over the previous 24 months has increased by almost 150,000. That is a strong step in the right direction.

In Devon, £500,000 was invested in four practices in March to provide a further 6,500 dental places, which will become available over the next 12 months. I understand that at the same time a further two practices have increased their capacity and will provide an additional 3,000 places over the next 18 months. We are continuing to ensure that we widen access to dental services in the south-west.

In the south-west, as in the rest of England, we are making vital improvements to access to NHS dentistry and putting in place the measures needed to continue the improvements in this country’s oral health. Access is rising, rates of decay have fallen and continue to fall, and we are piloting a new contract designed further to increase access and improve oral health, focusing on prevention as a key part of our efforts to improve people’s oral health and general health, and to keep them well. We are committed to ensuring that NHS dentistry is available to those who want it, and improving oral health is at the heart of what dentistry does.

Of course challenges remain. We must make sure that pilot studies are effective and that we listen to any concerns that emerge from them, so that we can improve the new contract accordingly. The fundamental focus is on moving away from a reactive service to a preventive care service. That will both improve oral health by reducing the incidence of cancer, and give children the best start in life by engendering good dental health habits through the involvement of hygienists and other practitioners. Our aim is to move dental care on to a more stable footing. This Government are committed to continuing the progress that consecutive Governments have made in widening patients’ access to dental services, particularly those patients who have had difficulty accessing such services in the past.

Question put and agreed to.

19:45

House adjourned.

Division 74

Ayes: 301

---

Conservative: 244
Liberal Democrat: 44
Democratic Unionist Party: 7
Labour: 3
Independent: 1
Alliance: 1

Noes: 211

---

Labour: 205
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Liberal Democrat: 1
Independent: 1
Green Party: 1

Division 75

Ayes: 479

---

Conservative: 227
Labour: 201
Liberal Democrat: 45
Social Democratic & Labour Party: 2
Independent: 2
Plaid Cymru: 1
Alliance: 1
Democratic Unionist Party: 1

Noes: 33

---

Conservative: 16
Labour: 7
Democratic Unionist Party: 6
Plaid Cymru: 2
Green Party: 1
Scottish National Party: 1

Westminster Hall

Wednesday 17th October 2012 Westminster Hall

Wednesday 17 October 2012

[Mr Gary Streeter in the Chair]

Food Prices (Planning Policy)

Wednesday 17th October 2012 Westminster Hall

09:30

Motion made, and Question proposed, That the sitting be now adjourned.—(Karen Bradley.)

[Mr Mark Spencer (Sherwood) (Con)]

It is a pleasure to serve under your chairmanship, Mr Streeter. I am delighted to have secured this debate on the effect of domestic land use on food prices.

First, I draw Members’ attention to my entry in the Register of Members’ Financial Interests. As a farmer in Nottinghamshire, I am of course affected by many of the issues around land use and the price of food.

I hope that Members will forgive me if I start by setting the scene about food prices, because the price of food is a complicated issue that crosses many Departments. I am quite aware that the Minister has responsibility for domestic planning and land use policy, but the issues that I will raise today cover a large number of other Departments. I shall try to keep my speech as focused as I can on the Minister’s responsibilities.

It is fair to say that past food prices have been stable in the recent past. I suppose that we have been fortunate as a nation to have been well fed for a number of years. Since the second world war, we have had a sustained period of level and quite acceptable food prices, but that has started to change over the more recent past. There have been a number of blips recently. In fact, in 2008, we actually saw a period when food prices came down again. We need to make our minds up really about whether this is a sustained issue or something that is just a blip in the pattern of things. In my opinion, we are facing something quite enormous in the challenges before us and the way that food prices will rise. There are a number of reasons for that, not least the price of oil, which is driving the cost for some farmers in their production methods. Anyone who is familiar with agricultural practice will of course recognise that the price of nitrogen fertilisers is based on the cost of oil and that, as their price goes up, the cost to farmers of producing food rises exponentially.

More importantly, what is really driving this process are issues around the world such as climate change, population growth and of course the change in diet for many people in other parts of the globe. Those three challenges are bringing this perfect storm together, which is a real challenge for us in the UK.

Let us look at some of those things. Whether people think climate change is carbon-driven or just something that is in the cycle does not really matter, frankly, because climate change is here to stay and is having an enormous impact on our ability to produce food; it is driving those production challenges.

Population growth, not only in the UK but around the world, is also having a big impact, which will get even worse as people on the other side of the world change to a more western diet. There have always been hungry people on earth, but all of a sudden we have hungry wealthy people who are able to pull food away from the European Union.

I think that we now recognise that an enormous challenge faces us, and the question now is how we in the UK deal with it, because the amount of domestic land that we have available is a flat figure. Without being flippant, we have stopped making land: the amount of land that we have is the amount that we have within the UK. It is imperative that, within the UK, we ensure that we use that land in the most effective way, to make sure that we are well fed and are kept warm. That is where some of the challenges on land use start to be felt.

What are the future threats? Clearly, the debate about biofuels is an interesting one. The use of land for the production of energy is not a new concept. Going back to the 1940s, my grandfather was farming and a third of his land was used for the production of hay to feed the horses that pulled his ploughs. That was, in effect, energy production at its most basic. As we have moved forward, however, farmers have found new opportunities, and as they have found themselves under pressure to increase their incomes, they have certainly looked to energy production to sustain themselves.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

Does my hon. Friend agree that some farmers have found that they get less objection from planners when they submit applications for renewable energy projects than they do for projects that might relate to their own ability to produce food?

[Mr Spencer]

I do, and that is an issue. However, I actually welcome the opportunity for farmers to diversify their businesses, so that they can make them viable, but of course we need to be mindful of the impact. The example of anaerobic digestion is a good one. I welcome anaerobic digestion, as long as it makes use of waste streams that actually are waste streams, because we get something for nothing out of that process. However, what tends to happen, of course, is that farmers build anaerobic digesters but those digesters run much more efficiently when forage maize is put through them rather than a waste stream made up either of slurry, food waste or some other product. If Members were to drive down the middle of Nottinghamshire, they would see that the landscape there today is very different from what it was five years ago.

[Glyn Davies (Montgomeryshire) (Con)]

My hon. Friend is talking about an issue that has a major effect on dairy farmers. For many years, farmers have rented land to grow their maize. Suddenly, they find that they can no longer buy maize, because it is now being taken into biofuel plants. That will inevitably have a huge impact on the production of dairy products.

[Mr Spencer]

I am conscious of the fact that I said that I would try to focus on the matters that are relevant to the Minister, and we are in danger of straying into Department for Environment, Food and Rural Affairs territory, dare I say? However, it is difficult not to do so because these are cross-Government issues, and biofuels are one such issue.

The Minister is in control of planning policy. If we look at other renewable schemes, such as the siting of wind turbines, we might think that they do not have a large effect, but I am told that the current demand means that we will have to build 5,000 wind turbines. European targets will mean that we must more than double the amount of energy from onshore wind during the next 10 years and that we will have to build at least another 5,000 turbines onshore. Guidance for farmers provided by Wind Prospect advises that less than one acre of land is required for each turbine, including the access track, the tower itself and hard standing for the crane; the remaining land can be utilised as it was previously. However, 5,000 turbines equates to 5,000 acres, and 5,000 acres of productive arable land goes a long way to producing quite a lot of food.

We need to think about where we site some of these wind turbines. There are a number of examples of how we can put wind turbines on former industrial land, former collieries, old pit-tips and places like that, where they would not impact on the use of agricultural land. That is something that we should look at much more closely.

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Gentleman on securing this debate and I declare an interest in the agri-food sector.

Most commentators would say that the era of cheap food has gone, certainly for the medium term, and that the world has become a much smaller place, so that reactions in prices happen fairly quickly. Does the hon. Gentleman agree that it is imperative that we look at something radical to encourage the primary producer of food, because if things continue as they are they will result in more imports from other countries and the loss of jobs? We need to look at something radical to encourage farmers to grow more crops.

[Mr Spencer]

I agree with the hon. Gentleman. We have achieved that before, with Government-led campaigns to improve domestic food production, and there are examples from the recent past, when the previous Government encouraged farmers to diversify and to consider adding value to their products, to get more from their production. That, however, brings with it anomalies.

I will draw on my own experience as a farmer on the urban fringe. We considered diversifying into farm retail, so that we could sell not only our own farm products but those of our neighbours, but I was told by my local planning authority that, because of the legislation in place to protect the green belt from out-of-town development, it was not possible to retail where we wanted to. Companies such as Halfords and B and Q want to build large retail units in the urban fringe, and a farm shop is, in effect, retail. I was told that most of my produce had to be sold through the farm shop and most of the shop’s produce had to come from the farm—I understand the logic of that—but if I asked my neighbours who live close to the farm, “Would you rather my farm shop retail the pork of one of my near neighbours, so that I could support both their business and the retail business, or would you rather I put 1,000 pig arks behind your houses and produce my own pork?” they would reply, “I would rather you sold another farmer’s pork than have an impact on the green belt with all those pig arks.” That is just one anomaly; there is a clear difference between agricultural diversification and major retail companies putting large warehouses in the green belt.

What can we take from the current state of food prices? We have a problem, frankly, because food prices have been rising for some time and we can no longer regard the increases as an anomaly. Whether we pin the hikes on oil prices, climate change, population increases, bad harvests or other developing industries in the green belt, it is clear that the rises are here to stay. We remain a nation dependent on imports, increasingly from all over the world, and we leave ourselves vulnerable to the storm that is raging outside our borders. We need, therefore, to protect ourselves, just like we did in the 1940s. We need to look at domestic production and ensure that we are making the most efficient use of our domestic land.

The percentage of agricultural land dropped from 39% to 25% between 1989 and 2009—a stark decrease. England has 14 green belts around its major cities, covering nearly 13% of the country, and 72% of the Nottingham and Derby green belt—1 million hectares—is in agricultural use. Overall, 66% of the green belt is used for agricultural purposes. The conclusion that I draw is that the green belt is fundamental to our ability to produce food ourselves. In Nottinghamshire, the green belt is under enormous pressure from local authorities, as they consider sites for residential developments, and it causes me enormous frustration that some of those authorities are choosing green-belt development over using the available brownfield sites.

This debate comes down to one thing, and my one request of the Minister is that he assure us that his inspectors—these things undoubtedly end up in front of an inspector—will be completely rigorous in their scrutiny of local plans. One of my local authorities, Gedling borough, has available to it the possibility of developing a former colliery site, but has chosen, for whatever reason, to develop the green belt in the villages of Linby and Papplewick, and around Hucknall, instead. That causes me enormous frustration, because most people in the borough recognise that the Gedling colliery site should be developed. There is some debate about whether an access road would allow for more housing, but clearly there is the opportunity to put between 600 and 700 houses closer to the urban fringe, rather than to tear up the green belt in Nottinghamshire.

Another example is that the Department for Environment, Food and Rural Affairs has spent a lot of money on flood defences at a site called Teal close in Netherfield. I am led to believe that the site, which is close to the urban fringe and not within the green belt, is now protected from flooding, but it is not being developed, for whatever reason, and we are, again, pushing houses out into the rural areas. We need to look long and hard at that issue.

I cannot say often enough that brownfield before green-belt development is absolutely essential. I hope that that message seeps through and that at some point in the future, when we are all feeling much hungrier and cannot afford to import food, these things will come together. We will then wonder what on earth we were doing back in the early part of this century. We cannot go back. Once we have developed land and it has been taken out of agricultural production, it very rarely goes back. Probably the only examples of such land being returned to agricultural use are those involving open-cast sites that have had their topsoil removed and later put back, but even then it is very low-grade agricultural land that is probably used for grazing sheep rather than for arable production.

There are, nevertheless, some good examples of where we can get it right. Cemetery provision is a fairly contention issue, of course, because people do not really want cemeteries to be set up in the green belt, but natural cemeteries have been developed. There are no headstones and people are buried in a more natural state in a wicker coffin, so the cemetery can be used for grazing sheep and for livestock. That is a good example of things working together, and I encourage that sort of diversification.

One of my final points is that we do not want to throw the baby out with the bathwater—if Members will forgive the cliché. Farmers need to be able to diversify, to consider other ways to support their income.

[Huw Irranca-Davies (Ogmore) (Lab)]

The hon. Gentleman has tempted me into the debate by ranging widely from anaerobic digestion to burials—no connection, of course, between the two. There is a role for Government intervention and planning controls, but farmers make commercial choices about land use, as I am sure that the hon. Gentleman does. They choose between biofuels, food production and development of other sorts. What does he think is the right balance between Government intervention, or Government control and regulation, and the freedom of the individual farmer—landowner—to make their own choices?

[Mr Spencer]

I have great respect for the hon. Gentleman. He is very clever in his thinking. It is a difficult tightrope that he has put there for me, and I almost hesitate to tiptoe down it. It is easy to come across as a hypocrite. Farmers clearly want to make the largest possible profit, and as a member of the Conservative party, I believe that the Government should not be interventionist and poke their nose into people’s private business.

The answer to the hon. Gentleman’s question is to look at the carrot and not the stick. Within the Government’s delivery of subsidies and support for different sectors, farmers are adept at finding the schemes that work for them. We need to tempt farmers back into food production, but Government support will be needed because there are commercial decisions to be made between producing energy, which is fairly heavily subsidised through the EU, or food, which has also been subsidised in the past. The Government could consider the way in which farmers retail that food and support them in getting more value from it, and there are currently plans for a grocery ombudsman to protect farmers.

[Andrew George (St Ives) (LD)]

The hon. Gentleman makes an excellent case, and I apologise for missing his opening remarks. Further to the previous intervention, does he not accept that the planning system is, after all, fuelled by greed, rather than by need? If a farmer sees the capacity to convert his land from food production to something that is akin to £1 million an acre, what could be more profitable? Is that not the issue? He says he will not consider sticks, rather than carrots, but does not that incentive for going down the route of development, rather than food production, need to be addressed, too?

[Mr Spencer]

That is exactly where the ball lands in the Minister’s lap, frankly. There is a big difference between considering controls on developing land for residential or industrial use and considering variants of crops that may be produced on that land, because whatever crop is grown, the land can be reused for another crop. Of course, once land is converted to bungalows or industrial units, it can never go back. The Government, at whatever level, have a role to play in ensuring that we get those choices right. Again, that is the thrust of the debate. I do not hesitate to repeat myself: we have to develop brownfield sites before we start tearing up the green belt, which can never return. A number of colleagues wish to speak, so I shall leave it there.

09:52

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

It is a pleasure to serve under your chairmanship, Mr Streeter. I apologise to colleagues for my post-conference lurgy. They will be pleased to know that I am past the infectious stage.

I congratulate my hon. Friend the Member for Sherwood (Mr Spencer) on securing this debate. The matter is important across the country, and I am sure the Minister will reply diligently later.

One of the things I normally talk about when discussing food prices is connected to the weather: the combined effects of drought and deluge. Although Government policies may be able to do something about that in the long term, no one can kid themselves that the Prime Minister can control the weather specifically.

In Suffolk Coastal, there are similar concerns to those raised by my hon. Friend. The expansion of development in greenfield sites is displacing potential food-growing opportunities, whether that is for much-needed housing in our part of Suffolk or for industrial purposes, such as logistic sites, that take over not only grade 3 land but higher-grade land, too.

Picking up on something my hon. Friend said about energy towards the end of his excellent speech, it is almost a lack of planning policy that is starting to cause potential issues. My right hon. Friend the Member for Tunbridge Wells (Greg Clark), in his previous role, which is currently occupied by my hon. Friend the Member for Grantham and Stamford (Nick Boles), told councils, “As part of your core strategy, you can now add a particular section to plan for renewable energy.” That recognises that, at the moment, there are many speculative applications, sometimes driven by financial desire for a return on investment.

[Huw Irranca-Davies]

Carrots.

[Mr Gary Streeter (in the Chair)]

Order. Sedentary interventions are never helpful.

[Dr Coffey]

Thank you, Mr Streeter. I think the hon. Gentleman was suggesting that financial carrots may be more worth while than actually growing carrots.

There is also a desire for lower-carbon energy, for which there is community support in parts of my constituency. Applications are starting to come in all of a sudden, and there is no question but that when a 7% or 8% return on land is offered for basically doing nothing, it is quite attractive to landowners who have hard lives working the land. As has already been mentioned, that might offer, among other things, biodiversification and allow landowners more time to focus on the quality of the food they produce on other parts of their land.

What are particularly starting to crop up—no pun intended—in East Anglia are solar farms. We are starting to see a significant number of applications, although the only application in my constituency was withdrawn because it is in an area of outstanding natural beauty. Although council officers recommended onshore turbines in the AONB, for some reason their recommendation was not to have solar farms in it. Outside my constituency—a couple of applications abut my constituency—we are starting to see a trend for significantly sized solar farms, which is of concern to local residents both because they are quite a change in land use and because of the effect on future food security.

Having addressed energy in AONBs, I do have a nuclear power station, and I hope to get another, so I am not saying that the two things are incompatible—far from it. We know that industry can co-exist with agriculture and nature without necessarily destroying them, but one of the big local concerns is that some of the subsidy is driving decisions on land use. As well as potatoes, Suffolk Coastal is best known for pigs and poultry, which are the two things not subsidised by the common agricultural policy. As an aside, there are more pigs than people in Suffolk, which shows how much we love that particular source of food for the future.

The issue is translating into other areas. We are starting to see planning applications for straw-based incinerators, and there may even be one in the Minister’s constituency. Farmers are worried that their local access to straw is increasingly expensive. We are trying to encourage better animal welfare, which leads to different use of such materials, so food costs are starting to go up, and many farmers are concerned that it will be more worth while to import food that we would naturally take for granted.

A mixture of things are going on, all of which seem designed, unintentionally, to hit the food bills that our constituents pay every week when they go to their local butcher or supermarket. A number of factors are coming together, so what can we do? My Government, quite rightly, do not want to prescribe the development of growth agendas to local councils, whether on housing or energy; they want to allow local communities, led by councils, to make such decisions for themselves.

The Government need to encourage, not compel, Departments to work with each other—the Department for Communities and Local Government working with the Department of Energy and Climate Change and the Department for Environment, Food and Rural Affairs—to ensure that our approaches have no unintended consequences and do not conflict.

Ultimately, I support the Government’s desire to build new homes, which is what we want to encourage local councils to do. DCLG has come up with great schemes such as the new homes bonus, which proactively rewards councils that recognise the need for more housing for their constituents. That is true in my part of the country, but for our longer-term security we need councils to think carefully about the displacement of land, whether for housing or energy, and planning policies that currently do not exist. We do not want to return to being an importer of food that we could easily grow ourselves; instead, we should focus on energy security, food security and creating a coherent message. We encourage our local councils to take full advantage of that.

09:59

[Chris Heaton-Harris (Daventry) (Con)]

It is a pleasure to serve under your chairmanship again, Mr Streeter. I congratulate my hon. Friend the Member for Sherwood (Mr Spencer) on securing this timely debate. As anybody who has canvassed recently will know, cost of living is the big issue on the doorstep. Whether it involves fuel prices or food prices, someone at every door has a view and a proper concern about the direction of travel of the cost of living.

Unlike everybody else, I cannot declare an interest. I used to have one; that is as good as I can get. In a former life—when I had a proper job, as my mum would say—I used to wholesale fruit and veg for a living in New Covent Garden market. I worked nights for 11 years and dealt with farmers daily. They were a joy and a pleasure. Never could there be a nicer group of people to do business with. At the other end of the equation, because it was a pure market—supply, demand and information—I dealt with buyers from very big companies as well as high-street grocers. I know how the demands of ordinary punters can change the market for farmers. They can grow one type of lettuce one year and lose a ton of money, and then grow a different type of lettuce the next year and make a ton of money. I understand the supply and demand issues of food, or at least I did when I worked in the business.

The Minister will be pleased to know that the business was set up by four Lincolnshire farmers in the late 1970s, and thrived through the days of the supermarket boom. The four farmers who helped set up that family business all diversified; in fact, in my lifetime, I have never known a farmer not to diversify. One went into transport. Two went into building things: one built homes, the other built offices that he rented out to local businesses. One ended up building a karting track, and people now hurtle on go-karts around fields that used to produce good-quality cauliflowers. It is difficult to find a farmer who has not diversified due to the market over the past three or four decades. Although food prices are now high, that cannot be said of food prices in our short-term history, which is why we started subsidising farming in the first place. We needed food, but there was not enough return on the goods being produced, so the Government started to subsidise it so that we would have enough.

Anyone considering a planning policy to encourage the production of good-quality food on a large enough scale to feed the nation would not start from where we are now, and I do not think we should try. We should support farmers a bit, but our planning policy should be much broader than simply worrying about food production. We live in a world market. If we want to encourage farmers in Africa to trade themselves out of poverty, they need a market to supply. I am not overly concerned about some of the issues raised, but we should paint the picture in historical terms.

[Mr Spencer]

I am grateful to my hon. Friend for giving way; I am conscious that I have had more than my say. Does he recognise that although the market will flow when there is enough product, the product may cease? For example, on the wheat market, Russia basically said a year ago, “That’s it, we’re not going to export another grain of wheat.” It does not matter how much money we have; we cannot buy something that is not for sale. That is when there starts to be an impact on the UK.

[Chris Heaton-Harris]

I completely recognise that, but we still produce a decent amount of wheat. Five years ago, lots of the farmers who grow wheat were diversifying into an energy crop, miscanthus. There was simply not enough value in the market for them, so they decided there would be better value in growing miscanthus, which is pelleted for biofuels, trucked up to Drax and chucked into the coal-fired plant up there. Again, the market responded. Now fewer people in the United Kingdom are growing miscanthus, or seeking to grow it, than five years ago, because the market price of wheat is rising, not exponentially but rapidly, and there seems to be no basis for it to fall. However, that is not necessarily a planning policy issue; it is a different policy issue affecting the use of land. Ultimately, it is an energy subsidy, which is different.

As far as the Minister is concerned, though, we have a dilemma. We are an island nation with roads, homes and businesses, and we need to supply energy and food for them, but we have traditionally had a broad-based food production economy. We were very good at providing for ourselves until 30 or 40 years ago. The Minister must consider his portfolio in the broadest possible sense. There are legitimate concerns about food security, which have been mentioned by my hon. Friend the Member for Suffolk Coastal (Dr Coffey). People worry, properly, that if foreign supply of a particular good dries up, we will be priced out of the market, but we are fortunate in being a relatively rich western country, and we will almost always be able to buy the goods that we require. However, that diverts goods away from developing countries. There is a concern, but I am not convinced that it is the concern highlighted at the start of the debate.

The Minister must consider some areas that are within his remit. It is significant that one part of his Department incentivises farmers not to produce food through a policy enabling renewable energy production that is way more financially beneficial to farmers than the hard graft that goes into producing a decent arable or livestock crop annually. In my last couple of minutes, I want to bang on about something that I regularly bang on about, namely the delights of onshore wind energy, how it fits within the Minister’s portfolio and how it directly affects food prices, as my hon. Friend the Member for Sherwood said. Any farmer who has not considered diversifying into renewable energy is slightly mad. The gains from doing so are phenomenal. Even the £1 million investment for a small 325-MW turbine, which is about 40 m high, might well be paid back in three or three and a half years, and subsidy is guaranteed for 25 years. A farmer who wants to put their kids through school and ensure that they can go to university will find a field—they do not care which one it is—and stick turbines on it.

The Minister will know because numerous local planning authorities have written to him—including at least one that I represent—as well as from his own experience of policy in Lincolnshire that local planning authorities are hugely concerned. They feel slightly under the cosh having to allow turbines and other renewable energy projects even when they know that the projects are not suitable for the land, whether for food production reasons or because of their proximity to dwellings. Will he help planning authorities around the country by advising us, them and the Planning Inspectorate how he intends to deal with the conundrum of super-subsidised energy production replacing less subsidised food production in areas where few people want it? Even where the parish council, local residents, the district council and maybe the local MP and MEP all object for good, solid planning reasons, a decision can be foisted on them, even though the energy production unit might be close to dwellings and so on.

Finally, I want to tell the Minister that the Planning Inspectorate that he directly controls, even though it is an arm’s length body with delegated powers, needs direction on this issue, which is causing great upset across the countryside. There is only one man who is made for the job of sorting it out, and I would like to think that it is my hon. Friend the Member for Grantham and Stamford (Nick Boles)—the Minister himself.

10:09

[Glyn Davies (Montgomeryshire) (Con)]

I congratulate my hon. Friend the Member for Sherwood (Mr Spencer) on securing the debate on such an interesting topic. I did not intend to speak—I came to listen to what my hon. Friend had to say—but a number of points have been made that are of sufficient interest to me and I am grateful that there is time for me to do so. First, I should declare an interest. I have been a farmer all my life. At the moment, my land is rented out, but the rent I receive depends on the profitability of the industry, so I feel that I need to declare an interest that will be recorded in the Register of Members’ Financial Interests.

We are debating the consequences of land that is used for food production being used for other purposes. I accept the point—I think that we all do—that we are a trading nation and part of a trading world and that Britain has always been subject to change over the decades. I cannot help but feel, however, that we have reached a stage regarding land use where the change that we face is greater than we have ever faced before. In a sense, that is inevitable, but the Minister, the Government and all of us have to be aware of unintended consequences. Unintended consequences are always the problem—those things that happen that we are unaware of and do not give sufficient attention to when dealing with an issue.

The main driver for change in land use is population growth. During my lifetime, we have seen an enormous change in the projected number of people who will live in the United Kingdom. Before too long, that number will reach 70 million. Inevitably, if that happens, we will need more houses, more roads and more rail. How we live changes, and there will be more demand for leisure activity. All that uses a huge amount of land, far more than anticipated. We have to consider population increase carefully, because of its impact on the way we live as a nation.

I, too, want to touch on the use of land for energy production. I do not oppose that, but I am one of those stupid farmers who, because I detest onshore wind to such an extent, has decided that he does not want the additional income. I have no intention whatever of going down that road, and I advise most of my fellow farmers, if they can afford not to, to do the same. I must admit that in my Montgomery constituency, an awful lot of farmers take that view: they despise how my constituency could be destroyed by the ravages of the onshore wind business. This issue is more than just about that, however.

I have always supported biofuels, but in mid-Wales the potential for the development of miscanthus is huge. That is having an immediate impact—an issue that I raised in an intervention about maize. A new biofuels plant requires maize. For decades, dairy farmers rented land to grow maize to sustain their dairy stock. That was part of how they farmed. Suddenly, they can no longer do that. It is totally impossible for them to compete in the market, because there is a subsidised industry—biofuels—buying up all the maize and they have had to withdraw. Clearly, that involves reducing the number of stock that they keep—an unintended consequence.

When we talk about onshore wind—as my hon. Friend the Member for Daventry (Chris Heaton-Harris) did, as always, in such an authoritative way—it is not just the wind turbine that takes up a certain area. I want to make two points on this. In mid-Wales at the moment, we are talking about a project that has a 35-mile line from Shropshire into the middle of my constituency. There will be 150-foot high pylons—steel towers—all the way along that line. That will mean sterilising a huge amount of land, and even the substation at the end of it will cover 20 acres. The impact on land use is huge, notwithstanding the 600 or 700 turbines involved.

We also have to be really careful about how the people of this country feel they are connected with government. In my constituency, the local authority has turned down all the large applications associated with this big project going ahead. If I have a public meeting on the issue, huge numbers of people turn up—probably a couple of thousand people. In fact, 2,000 people came to Cardiff with me, in 37 buses, to express our viewpoint. It is clear that the constituency feels that it does not want this imposed on it. Yet, my constituents also believe that, despite that being their comprehensive view, the Governments in Westminster and Cardiff do not care at all and will use every device that they have to ensure that those applications go through. It is dangerous for any Government to allow that democratic deficit to happen, in addition to the land use change, without being very careful about what they are doing.

[Chris Heaton-Harris]

For the Minister, the damage is to the localism agenda. When so many people who have a vital part to play in the communities that they represent are being ignored—this is the point that I was trying to make about the Planning Inspectorate—and overruled by one person who comes in from outside with delegated powers, that causes an issue for localism. Perhaps the Minister can give us some assurances on how the Planning Inspectorate will deal with future local plans that involve renewable energy elements.

[Glyn Davies]

That strikes a real chord with me. I very much support the principle of the Government putting localism at the heart of what they are doing. However, I must admit that if one talks to anybody in my constituency about the principle of localism at the moment, when we are talking about onshore wind, they will snort with laughter. The idea of localism has gone completely out the window.

Returning to the land use issue, there is one other point I want to make.

[Huw Irranca-Davies]

Once again, the hon. Gentleman is speaking passionately on behalf of his constituents about a cause that he believes in strongly and vehemently. On local planning and the democratic deficit, does he think that now is the right time to devolve the responsibility for large energy infrastructure projects to Wales? Would that do anything to reduce the democratic deficit, or is it an irrelevance? I am genuinely interested, because that seems to go to the heart of some of what he is saying—that some decisions could be made more locally, at least in Wales.

[Glyn Davies]

I thank the hon. Gentleman for that intervention. Indeed, I could probably speak for about half an hour on the issue, but I am sure, Mr Streeter, that you would not allow me to do so. In principle, I agree with the hon. Gentleman’s point, but the reality is that the sheer contempt for local opinion on this issue is greater in Cardiff, in the National Assembly for Wales, than at Westminster. Whereas previously, I may well have subscribed to the principle of transferring the power for over-50 MW onshore wind to the National Assembly, I would not support that now, if I were on this earth for another 100 years, simply because of the way in which the First Minister of the National Assembly has changed his views and shown total contempt for the opinions of the people of my constituency.

The final issue that I want to touch on briefly is planning. I make an appeal to the Minister regarding planning applications. It concerns not only onshore wind but energy crops. Permission seems to be granted for matters that would not even reach the planning committee if they involved anything else. Applications come through for wind farms, with no back-up, that would be thrown out without any trouble, yet they are approved. An application will come through to convert a building into a house to provide extra income on a farm, and that is turned down. We find a total difference in attitude towards genuine small businesses that want to use their property—often an empty building—in a way that would benefit the economy. That will be turned down and a totally alien application, which would cause huge damage, is approved. That balance needs to be looked at.

10:21

[Roberta Blackman-Woods (City of Durham) (Lab)]

It is a pleasure to serve under your chairmanship once again, Mr Streeter. I thank the hon. Member for Sherwood (Mr Spencer) for securing the debate.

I had a few anxious moments when I thought I had wandered into the wrong debate, because it seemed to take some while for us to get around to looking at what domestic land use policy might have to do with food prices. I was interested that we looked at oil, climate change, population growth, bad harvests and renewable energy. All those things are, of course, relevant to food prices. However, I was not convinced of their relationship to planning policy in the UK. Perhaps we can talk more about that in a moment.

I was interested that some Members seemed to argue for more Government intervention in planning policy. At one point I thought the hon. Member for Daventry (Chris Heaton-Harris) was arguing for more Government intervention in the markets. Sadly, he let me down by saying that was perhaps not the correct approach.

We did eventually return to the issue of food production. Members raised a number of legitimate concerns about land use policy. I was not so convinced by their suggested solution. They flagged up the central issue at the heart of planning policy: balancing competing interests for land that, as the hon. Member for Sherwood rightly said, is in finite supply.

[Huw Irranca-Davies]

My hon. Friend makes a good point about the distinction between short-term and long-term imperatives, which can conflict. We do not want to revisit some of the policies of the distant past. The peat bogs of the hills of Plinlimon were irrigated and freed for food production in the 1940s and 1950s, understandably at that time. We now have to undo the damage by blocking them up again to restore the carbon locked into the peat bogs. We need to focus on reconciling conflicting objectives and on taking a long-term view about what planning controls are for.

[Roberta Blackman-Woods]

My hon. Friend makes an excellent point, which I was about to come to. Some hon. Members have suggested a solution. Part of the solution has to be a national, strategic plan to set out clearly where the priority areas are for farming and food production, and how we are going to manage the need for renewable energy in future. I do not think it is acceptable for us simply to stand up and say we do not want to have wind farms in a particular area. We need to say where and how we will meet the nation’s energy needs.

I had another few anxious moments when I thought the hon. Member for Sherwood was simply going to make a case against having new housing or growth in rural areas. That anxiety was again unfounded, because he did not say that. However, I know he has in the past argued against development in former mining communities in his area, saying that large five-bedroom houses are not appropriate. I am unclear why that is the case. I do not think it fits the Prime Minister’s aspiration nation to say that because currently there are no three or four-bedroom houses in those areas, there should be none in future.

[Mr Spencer]

Fundamentally it comes down to believing passionately in localism. We believe in those decisions being taken locally. There is enormous frustration. My constituents tell me, “These are our opinions. This is what we want to see. We want houses developed in our area that suit our community, that match our community.” For whatever reason, whether it is a National Assembly, county council or district council, they are not taking on board the views of our constituents. I ask the Minister to help by having his planning inspector step in and make local authorities deliver localism, as my constituents want.

[Roberta Blackman-Woods]

I thank the hon. Gentleman for that intervention. However, it is an argument in support of localism, not an argument in favour of not having any growth locally. The point of neighbourhood planning is to encourage local communities to think about where they want growth.

I digress a little, so I want to get back to the issue.

[Huw Irranca-Davies]

I want to pick up on my hon. Friend’s point on a genuine cross-party basis. Matthew Taylor, the Liberal Democrat, brought forward a good report while Labour was in power. He was commissioned to produce a report on housing. It went to the heart of how to reconcile local aspirations for housing with local opposition to housing. How can it be made to work? We are still struggling with that dilemma. Localism is all well and good but when localism both opposes and supports development, there is a bit of a conundrum.

[Roberta Blackman-Woods]

My hon. Friend makes a good point, but that is exactly the issue that the planning system is supposed to resolve.

I fully recognise the important issue of food prices and congratulate the hon. Member for Sherwood on raising it. Last year about 130,000 people turned to food banks to meet their families’ daily needs. The number is growing weekly. I am sure a lot of hon. Members will have recently taken part in the FairShare campaign organised by Sainsbury’s to collect food in their local supermarkets. Such is the degree of need in our communities. Indeed, we see more and more families who are simply not able to feed themselves because of rising food prices. The UN Food and Agriculture Organisation says that cereal prices could be 20% higher over the next decade, and that will eventually lead to higher food prices in our shops.

I am not sure whether the point was made by the hon. Member for Sherwood, but the UK produces about 65% of its own food, so domestic land use policy clearly has a significant role to play in keeping food prices low and, critically, affordable. We therefore need a planning system that supports vibrant communities and Government policy that encourages long-term sustainability—exactly the point made by my hon. Friend the Member for Ogmore (Huw Irranca-Davies)—and builds on a sustainable rural community and economy. Things have to change somewhat if we are to achieve that, in particular in the face of some of the wider issues raised by the hon. Member for Sherwood, such as climate change and alternative land use challenges.

This year alone, the UK’s harvest was down 15% because of the unusually wet summer weather. Such unpredictability is set to worsen and will lead to a need for, possibly, a change in Government policy and, certainly, more intervention. The Government’s record to date is not good.

[Chris Heaton-Harris]

The hon. Lady said that the weather is set to worsen and that we therefore need Government intervention. Can she tell me what the weather will be like next Wednesday or in a year’s time? Weather is remarkably unpredictable, and I am not sure that it justifies Government intervention.

[Roberta Blackman-Woods]

Sorry, I thought that was going to be a sensible intervention. Obviously, given that we will have more unpredictability in the weather—that is what we think, at least, because of climate change—I meant that we need to plan for it and perhaps look particularly at a policy that would support more food production on the land we have, or on additional land, which was another point made by the hon. Member for Sherwood.

[Andrea Leadsom (South Northamptonshire) (Con)]

Will the hon. Lady give way?

[Roberta Blackman-Woods]

I will not take an intervention from the hon. Lady because she has not taken part in the debate so far, and I am rapidly running out of time. I want to ask the Minister some specific questions about what he might do to support additional food production in this country.

Rather than simply messing about with the planning system and using it as a scapegoat for the Government’s economic failure, we should have a series of policies that look at how food production, communities and infrastructure will work together. We need a policy that encourages economic growth but at the same time puts the environment at the forefront. That means supporting green infrastructure, which can be defined as a network of green spaces that provide life-support functions including food, fibre, air to breathe, places for nature and places for recreation. The idea has been taken up by some of our local authorities. Birmingham city council has set out a whole range of policy goals, such as facilitating community food growing and orchards, but that is the exception. The hon. Member for Sherwood went some way towards giving a couple of examples to Government on how to encourage food production and better use of land in rural areas—in particular, dual use of land, such as green cemeteries.

It could be argued that, instead, the national planning policy framework has undermined the strategic basis on which local authorities can build upon and improve green infrastructure in their areas. For example, we are not clear about what nature improvement areas are supposed to do or what they are for. The Government should be doing more to encourage community land-share schemes or local food webs—taking on board growing produce locally, setting up local co-ops and selling produce to the local high street and independent retailers. That whole area of getting different bits of our planning system and our rural policies to work together has been taken up by the Campaign to Protect Rural England in an excellent report, which all hon. Members should read, “From field to fork.” The CPRE recommends that planning guidance is put in place for local authorities. The Minister has put planning guidance out to consultation, but the general drift of the Government so far has been against providing guidance to local authorities, which could do with some support and assistance in this area.

What are the Government doing to support other public bodies to form partnerships to develop food strategies and action plans in their areas? That could range from supporting local farmers to putting aside additional land for food production, or setting targets for local farmers to grow additional crops or to diversify. The whole area is not being looked at with the seriousness it deserves given what we know will happen to food prices.

Has the Minister any intention to work with local businesses or local food networks to promote awareness, access, affordability and availability of local food, or to encourage local supermarkets to source food locally? Does he intend to do anything to support local community groups and to engage in initiatives to shape food production locally? For example, that could be something that neighbourhood planning concentrates on, although it might be difficult without more direction to local communities. We also want to see greater diversity on offer on the high street, so that we are not simply relying on a couple of supermarkets but encouraging a range of local retailers with local connections and food networks, providing not only an advantage to local farmers but—this is important—support for local farmers. We want, therefore, a farming and land use policy that supports local communities and, in particular, looks at ways to reduce food miles while making good-quality food accessible to a wider range of people than is the case at the moment.

10:38

[The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles)]

It is a pleasure to serve under your chairmanship, Mr Streeter, in this, my first speech as a Minister—I hope that it is my worst speech as a Minister, in that things can only go up from here.

I congratulate my hon. Friend the Member for Sherwood (Mr Spencer) on securing a debate on a subject that is very near to his heart and to that of many of his constituents. It is also near to the heart of many of my constituents and, indeed, of my own father, who has a small farm—much smaller than my hon. Friend’s—in the fine county of Devon.

I want to address the original subject, although the debate has been an excellent one, taking in almost every aspect of Government policy, for most of which, fortunately, I have no responsibility. The original subject, however, was the link between the planning system and the recent effects on food prices.

Perhaps the only part of the contribution from the hon. Member for City of Durham (Roberta Blackman-Woods) with which I could agree was when she doubted the direct impact of land use and the planning system on food prices. This country imports a great deal of food—nearly 50%, but fortunately not more—and most foodstuffs, but not all, operate in a global market. As the hon. Member for Ogmore (Huw Irranca-Davies) pointed out, the reasons for recent rises in food prices are mostly global energy prices, the change in the value of sterling relative to other currencies and the changing nature of the demand for food from the rapidly developing countries of Asia and elsewhere.

I do not believe that the planning system can be held responsible for the pressure on food prices. The hon. Gentleman and other hon. Members, including my hon. Friend the Member for Suffolk Coastal (Dr Coffey), pointed out that even if we cannot do much directly about food prices, we have a great interest in ensuring that we have a basic level of food security. Clearly, that is where the use of our land is important.

I hope that I can reassure hon. Members, particularly my hon. Friend the Member for Sherwood, about the status of agriculture in the planning system, and particularly in the much slimmed-down planning policy framework introduced last year. Agriculture is the only industry—given how hard farmers work, it deserves to be called an industry—that has specific status in the planning system and explicit consideration in national policy. The policy framework is very clear about the importance of preserving agricultural land. Paragraph 112 states:

“Local planning authorities should take into account the economic and other benefits of the best and most versatile agricultural land. Where significant development of agricultural land is demonstrated to be necessary, local planning authorities should seek to use areas of poorer quality land in preference to that of a higher quality.”

That is an explicit indication to local authorities to try to preserve high-quality agricultural land where possible.

My hon. Friend the Member for Sherwood said that much of the green belt is agricultural land, so any incursion into it for other uses is a particular threat to agricultural land. Here, too, I believe I can offer him reassurance that I hope will also reassure people who have other concerns about the green belt and the Government’s intentions. In the national planning policy framework, the Government have put in place very explicit and strong protection for the green belt. Paragraph 79 states:

“The Government attaches great importance to Green Belts. The fundamental aim of Green Belt policy is to prevent urban sprawl by keeping land permanently open; the essential characteristics of Green Belts are their openness and their permanence.”

Agriculture is one of the few productive uses of land that preserves its openness by definition.

Paragraph 83 states:

“Local planning authorities with Green Belts in their area should establish Green Belt boundaries in their Local Plans which set the framework for Green Belt and settlement policy. Once established”

it

“should only be altered in exceptional circumstances, through the preparation or review of the Local Plan.”

My hon. Friend expressed concern that some authorities, including authorities in Nottinghamshire, have not attached sufficient priority to the development of brownfield sites. All I can say is that national policy is very clear about priorities. Paragraph 17 states:

“Planning should…encourage the effective use of land by reusing land that has been previously developed (brownfield land), provided that it is not of high environmental value”.

There are certainly strong indications to planning authorities that green-belt land should be preserved and that brownfield land, when possible and viable, should be developed in preference.

I hope that it will reassure hon. Members to learn that in 2010 only 2% of new dwellings were built on the green belt, and that the quantity of green belt has increased since 1997 because local authorities, which control the designation, have designated new land as green belt. Housing development on greenfield land, which is distinguished from green-belt land, has accounted for only 0.3% of the total land area of England since 1985. House building on green land has been on only 0.3% of the country’s total area. Some of the more apocalyptic visions painted not by hon. Members, but others outside, of Governments of various stripes concreting over the countryside have no basis in fact.

[Andrea Leadsom]

On a point of clarification, when the Minister says that so little greenfield and green belt land has been developed, does he include planning that has been granted, or just planning that has gone ahead?

[Nick Boles]

I thank my hon. Friend. I believe that that applies to buildings that have already gone up. Obviously, some permissions have been granted and development has not yet taken place, but I do not believe that would change the picture dramatically, because most permissions apply to land outside the green belt—much of it, although not all, to brownfield land. Our planning policies provide protection for agricultural and green-belt land.

The importance of diversification in the rural economy has been discussed; we heard about it from my hon. Friend the Member for Sherwood and others. Many of my constituents in Grantham make the journey to my hon. Friend’s farm shop, which is famous in those parts, so I know that that diversification has been successful. The national planning policy framework makes explicit the requirement for policies to

“support economic growth in rural areas in order to create jobs and prosperity…To promote a strong rural economy…neighbourhood plans should…support the sustainable growth and expansion of all types of business and enterprise in rural areas, both through conversion of existing buildings and well designed new buildings”

and

“promote the development and diversification of agricultural and other land-based rural businesses”.

I am happy to say that the Government are looking closely at the matter, and hope to introduce specific proposals to make it easier to convert agricultural buildings into homes and for other uses without having to go through the planning process. I believe that planning policies provide many of the protections that hon. Members seek. However, I am aware that much of the debate has focused on the balance between the demands on agriculture for food production, and other uses of land, whether agricultural or other, for renewable energy.

The national planning policy framework requires local planning authorities to have a positive strategy to promote renewable and low-carbon energy. We must remember the history of the energy situation in this country. We recently received a warning—I think it was from Ofgem—that we face a real risk of the lights going out in relatively few years. The main reason for that is the complete failure of the previous Government to grasp any difficult nettles—

[Huw Irranca-Davies]

Will the Minister give way?

[Nick Boles]

Perhaps I could finish slating the previous Government before giving way. They completely failed to grasp any difficult nettles, whether in relation to building nuclear power stations or encouraging renewable industry and gas plants.

[Huw Irranca-Davies]

The Minister is making a brave fist of slating the previous Government, but he has just heard his hon. Friends, one after another, oppose renewable energy from onshore wind farms or solar farms on agricultural land. He should tread carefully. Can he explain why the Government have seen a fall from third place as an international destination for inward investment in renewables in the year when the previous Government left office, to seventh and still falling? Will he explain that to us as he slates the former Government?

[Nick Boles]

I thank the hon. Gentleman for his intervention. The Government’s policies are very clear. We need a positive strategy for renewable energy.

However, I assure hon. Members that there is a clear policy on how individual applications should be decided. Policies should be designed to ensure that adverse impacts are addressed satisfactorily, and planning applications for renewable energy should only be approved if the impacts are, or can be made, acceptable. My hon. Friend the Member for Sherwood is an indefatigable campaigner on this issue, and I am very aware that he, I, and many hon. Members on both sides of the House represent people who do not feel that all decisions—particularly about wind farms, but the point also applies to other renewable energy uses—have dealt satisfactorily with those impacts.

Hon. Members will be delighted to hear that the Secretary of State for Energy and Climate Change recently launched a consultation and a call for evidence on how developers are engaging with local communities, and in particular, on how developers of wind farms and other renewable energy sites are sharing the benefits of those sites with local communities. A lot of lessons from elsewhere in Europe show that sharing the benefits is a good way to secure local consent for developments that are otherwise justifiable.

[Roberta Blackman-Woods]

The Minister was in safer territory when he was praising the previous Government for protecting not only green spaces, but the green belt from development. We all accept that the planning community now thinks that under the present Government brownfield protection has been watered down, not strengthened. He was, however, getting to the heart of what we are discussing. I am not clear that what he is suggesting will help local communities and authorities—faced with a market that is promoting the use of land for renewable energy—to decide on other uses, particularly in relation to more land being given over to food production. How will the Government help local authorities and the Planning Inspectorate make those difficult decisions?

[Nick Boles]

The hon. Lady is quite wrong; I never praised the previous Government for what they did to protect the green belt. They only ended up doing so by completely failing to build any houses and failing to meet the nation’s housing need, thus landing the Government with the difficult task of maintaining protections for the green belt and precious open land, while also increasing the rate of house building. As in so many other areas, we are trying to clear up the mess that Labour created.

[Mr Spencer]

I share the Minister’s experience, certainly with regards to Nottinghamshire. The regional spatial strategy, which was the flagship for development under the previous Government, put enormous pressure on the Nottinghamshire green belt. All the heartache I am experiencing now is caused by some of the sites that were brought forward under that strategy. Only the localism agenda and freeing up the planning process have given us a chink of light to defend some of those green-belt areas and to try to force local authorities to develop brownfield sites first.

[Nick Boles]

I completely agree with my hon. Friend’s description of the effect of the previous Government’s policies on the green belt and elsewhere.

To return to the difficult planning balance to be struck on renewable energy, I hope that hon. Members and others are encouraged by the call for evidence from the Secretary of State for Energy and Climate Change. When I visit the Planning Inspectorate for the first time next week, I will be happy to ensure that it is aware of the call for evidence, and that the result of that call is taken into account in the inspectorate’s judgments on how the impacts on communities are being managed, and whether those impacts have been managed satisfactorily before granting planning permission.

On the other hand, I do not want to be disingenuous. I do not believe that the Government can move to a position where wind farms are built with no objections from people who live nearby. I have a lot of sympathy for the attempts by Lincolnshire and others to define acceptable boundaries. It is right that things are dealt with case by case, because sometimes the distance can be more disturbing in a flat area of the country, as Lincolnshire largely is, than it would be in a hilly area. Although the wind farm might be close, there might well be a hill in between. It is not right for the Government to have blanket policies on such subjects, but the impacts should be properly assessed and accounted for in the decision making of planning authorities and the Planning Inspectorate.

I move on to the contribution made by the hon. Member for City of Durham. Mr Streeter, you may have heard, as I did, the Prime Minister’s excellent speech to the Conservative party conference, in which he talked of the “party of one notion”—that is, the hon. Lady’s party—and that notion was of course, borrowing. The Prime Minister is right to say that borrowing is the ready stand-by of the Labour party in response to any issue.

In planning, borrowing has a slightly smaller role to play, but a couple of other notions are the ready stand-bys of a Labour Government and Labour Ministers when confronted with any planning question. The hon. Lady is no exception; she calls for more guidance, more targets, and more direction of local communities, so that they know what is good for them. Well, I am delighted to say that Lord Taylor, the Member of the House of Lords whom the hon. Member for Ogmore (Huw Irranca-Davies) congratulated on work for the previous Government, is conducting a review of planning guidance. The aim is to reduce the guidance for local authorities from 6,000 pages, which the hon. Lady clearly feels is insufficient, to something more manageable. I look forward to receiving the results of that work.

In conclusion, my hon. Friend the Member for Sherwood spoke of the importance of diversification in the agricultural sector, and of farmers being left to make their own decisions, while not being skewed excessively by the interventions and subsidies provided by Government and other branches. He left us with a particularly appealing image of natural, green cemeteries where people can be buried and which support a flock of sheep. As a son of a sheep farmer, I cannot think of any better way of ending my physical existence than as nutrition for high-quality grazing for sheep.

[Mr Gary Streeter (in the Chair)]

We move to our next debate, on the important subject of Government policy on plastic bags.

Plastic Bags

Wednesday 17th October 2012 Westminster Hall

10:58

[Zac Goldsmith (Richmond Park) (Con)]

Thank you, Mr Streeter. It is a pleasure to serve under your chairmanship this morning. I will make a short speech and allow as much time as possible for interventions, as a number of hon. Members have expressed an interest in the debate. I am also glad that our new Farming Minister is here on behalf of his ministerial colleague, the noble Lord, Lord de Mauley. I know that the Liberal Democrats have taken a positive stance on the issue of plastic bags.

The House will be aware of my early-day motion 534 with the catchy title of “Plastic Bags”. Essentially, it backs the Break the Bag Habit campaign, which involves a wide coalition of organisations, including the Campaign to Protect Rural England, the Keep Britain Tidy campaign, the Marine Conservation Society, Surfers Against Sewage, and Greener upon Thames, which was born in my constituency. That coalition calls for the introduction of a charge on single-use carrier bags.

Before explaining why that is important, I want to stress that it would be a levy and not a tax. It would be collected locally and distributed to local causes, and because there is zero need to purchase a plastic bag, except in a few circumstances, the levy would also be easy to avoid. There is also no prospect of its becoming another green stealth tax, and the approach is broadly supported by the retailers. I have received a note from the British Retail Consortium, which has couched its support in cautious language. However, in August 2012, it also said that

“if England wishes to follow the approach of the other UK Governments to achieve greater reductions”

in carrier bag usage

“it will have to introduce legislation and a charge as there is a limit to what can be achieved on a voluntary basis.”

[Ian Paisley (North Antrim) (DUP)]

I welcome the fact that the hon. Gentleman has secured a debate on this incredibly important issue. Does he believe that the levy or, as some people like to describe it, the tax should be paid principally by the retailer demanding the bags and the advertising, or should it be passed on to the consumer? That, I think, is where this measure will stand or fall.

[Zac Goldsmith]

I thank the hon. Gentleman for his intervention. I shall come back to what the levy would look like in ideal circumstances. I will deal with his point, but I shall come on to it.

To step back for a second, I should say that we are an extraordinarily wasteful country. We generate enough waste every hour to fill the Albert hall right to the tip of its dome. Plastic bags do not constitute the majority of our waste, but of all the waste that we do generate, the plastic bag is surely the most idiotic.

[Mark Pawsey (Rugby) (Con)]

Does my hon. Friend agree that only 0.2% of average household dustbin waste consists of plastic carrier bags and that therefore the measures that he is proposing would be unlikely to have a significant impact on the amount of waste generated? The figure of 0.2% comes from an assessment by the Treasury in 2002.

[Zac Goldsmith]

I thank my hon. Friend for his intervention. I am told that the figure is closer to 1.5%, but I shall not quibble with what he says. However, I do not see that as an argument against a measure to reduce the use of plastic bags. Plastic bags have a disproportionate impact. We are told that 16% of all the animals that are found dead on the coast are dead as a result of their interaction with plastic bags. The plastic bag has a hugely disproportionate impact in the wider marine environment and in terms of littering and so on. Yes, I accept that plastic bags are not the whole waste story in this country, but they are certainly a big part of it.

[Mark Pawsey]

Does my hon. Friend agree with David Laist of the Marine Mammal Commission in the United States? He wrote in March 2008:

“Plastic bags don’t figure in entanglement. The main culprits are fishing gear, ropes, lines and strapping bands. Most mammals are too big to get caught up in a plastic bag…For birds, plastic bags are not a problem either.”

The environmental impact is, in many instances, overstated.

[Zac Goldsmith]

I shall provide a few examples of why I do not accept that. I remind my hon. Friend that I did say that 16%, not 100%, of the animals found washed up on the coast that have died as a result of waste have died as a result of their interaction with plastic bags. It is still a significant number. I shall come to that issue in a second.

Despite this being described as a minority or a small issue, every year 8 billion bags are used and thrown away in the UK. Throughout the EU, 800,000 tonnes of bags are used. Only 6% of those bags are recycled. They are used for an average of 20 minutes and can take anything up to 1,000 years to decompose. The vast majority will end up in landfill. Hundreds of millions will litter the countryside, and many will end up in the oceans.

It is an appalling thought—I mentioned this to pupils at a school a few weeks ago—that if Columbus had dropped plastic bags over the side of his ship 500 years ago, there is a pretty good chance that they would still be floating around intact today. Thousands of sea turtles, whales and countless other species mistake the bags for food and, once ingested, they block the animal’s insides and cause a horrible death.

I am sure that hon. Members remember that in 2006 a Northern bottlenose whale swam past this very building. Unfortunately, it died. It was in serious trouble, for all kinds of reasons, but when it was cut open in the autopsy, it was discovered that its stomach was packed with plastic debris. Unfortunately, the bags did not have a logo on them, so we cannot blame the individual companies, but plastic was a major contributing factor.

[Caroline Lucas (Brighton, Pavilion) (Green)]

The hon. Gentleman is making a compelling case. Does he agree that if the Government care about evidence-based policy, as I am sure they do, the evidence coming from, among other places, Wales, where the tax has already been implemented, shows that it has managed to reduce the use of plastic bags by up to 95%? It also has 70% support among the general population. If the Government care about evidence, there is a lot to support the tax.

[Zac Goldsmith]

I thank the hon. Lady for her intervention. I absolutely agree with her—indeed, she has taken the words out of my mouth. I shall come to the Welsh example very soon.

Just to continue on the basic statistics, a 2006 UN report estimated that on every square mile of ocean, there are 46,000 pieces of plastic debris floating around. They are not all plastic bags, but a great many are. The plastic does not disappear, even when eaten; it does not break down. When a creature has ingested a plastic bag, the creature itself decays faster than the bag. When the body of the creature breaks down after death, the bag is likely to be released back into the environment and can be reingested—recycled—continuously. The plastic bag has been described as a serial killer for that reason.

The Minister will know that many countries and regions around the world have already sought to address this appalling waste. We heard about the example of Wales, but there are many beyond our shores. California, Bangladesh, Rwanda, South Africa, Botswana, Kenya, parts of India, Taiwan and parts of China have all introduced outright bans. Others have introduced levies. In Ireland, which is one of the best examples, a bag tax, introduced in 2002, has led to a reported 90% reduction in the number of plastic bags used.

[Mark Pawsey]

I thank my hon. Friend for giving way again; he is being extremely generous. He spoke about the reuse of plastic bags and the fact that only a small proportion are recycled. Does he accept, however, that many plastic carrier bags are used by consumers for other purposes? Immediately after the tax was introduced in Ireland, there was a 77% increase in pedal bin liner sales because consumers did not have plastic carrier bags and an 84% increase in disposable nappy bag sales. The bags are being put to other uses. If we reduce the use of plastic carrier bags, we will simply encourage people to buy plastic bags from other sources to do the jobs that carrier bags are currently fulfilling.

[Zac Goldsmith]

I am just looking at the statistic; I anticipated that this might come up. There were indeed reports of a 77% increase in the sale of plastic kitchen bags as a result of the initiative introduced in Ireland. That equates to 70 million bags—a lot of bags—but the net effect is still a 930 million reduction, so the net effect is clearly beneficial in terms of reducing the use of plastic bags.

Yes, there would be some perverse outcomes. It is also the case that in Wales there are certain exemptions in relation to prescription drugs, raw food and so on. There are any number of ways in which the measure could be brought in. I intended to talk about Wales, but the hon. Member for Brighton, Pavilion (Caroline Lucas) has already given the key stats. The initiative there is a work in progress—it is relatively new—but it seems to be working. It is wildly popular: 20% more popular now than when the idea was originally floated. There are varying statistics on its success, but no one can argue that it has not been a success. The question is how much of a success it has been.

We are, unfortunately, miles behind in this country. There are pockets of good news locally. In Kew in my own constituency, the majority of local shops have pledged not to use plastic bags and are doing everything that they can either to get them out of the shop altogether or to encourage people not to use them. Even Tesco—after some imaginative campaigning by local school pupils—eventually, reluctantly, was dragged into the campaign. That involved a gang of local schoolchildren storming the local Tesco, unwrapping all the unnecessary packaging and demanding that it never use another plastic bag. We almost ended up in jail—I was the only one of the right age—but it seems to have had an impact and it was a wonderful thing. I encourage hon. Members to go on YouTube and have a look, because it was all filmed. It was a lovely example of what can be achieved.

Nationally, we are still waiting for action. On 29 September last year, in an interview with the Daily Mail, my right hon. Friend the Prime Minister gave the supermarkets an ultimatum. He warned that if stores did not deliver “significant falls” over the next 12 months, they could either be banned outright from giving out single-use bags or be legally required to charge customers for them. The Prime Minister said that it was “unacceptable” that the number of single-use carrier bags had risen in the previous year by 333 million—a 5% increase. In July this year, despite the Prime Minister’s demand for “significant falls”, the official figures showed another increase—a 5.4% rise during 2011 compared with the previous year. We are heading in the wrong direction and have been for some years, and the Prime Minister is clearly now under pressure to act.

[Mark Pawsey]

As I said, my hon. Friend is being extremely generous with his time. I am grateful to him for allowing me to present the alternative case. One issue on which we might agree is the need for voluntary action. Does he accept that from a peak of 13 billion bags a year, the UK’s consumption has halved over time, that that has all happened through voluntary action and that this issue would be better dealt with by continuing that voluntary approach?

[Zac Goldsmith]

I thank my hon. Friend for his intervention. I believe that the position is that there has been a 36% reduction since 2006; at least, that is the figure that I was given by the British Retail Consortium. Nevertheless, that trend has not continued. There was a rapid downward trend initially, after the initiative was launched, but over the past three years the trend has been considerably reversed and there is nothing to suggest that it will not continue to be reversed. When we compare that with initiatives in other countries—we have heard about Wales, Ireland and many others—we see that we can do a whole lot better.

What line should the Government take? It boils down to three choices: a ban, a central tax or a Welsh-style charge. A ban is probably too crude; although there are strong arguments in its favour, it is not what we are asking for today. Despite the temptations for the Treasury, I hope that the Government will resist introducing a tax. There is no support or appetite for anything that could become a stealth tax. The alternative is a light-touch levy applied in the shops with the funds raised distributed to local causes, which could be identified, if necessary, by the shops themselves, the community or a combination of both. There are any number of ways to spend the money.

I will end with some questions. Can the Minister tell us the Government’s reaction to the first year of a bag charge in Wales? Have he or his colleagues met the Welsh Environment Minister to discuss how the charge has worked? According to the Welsh Government, the scheme has reduced single-use carrier bags by up to 96% in some retail sectors. A recent survey has shown that 70% of people in Wales are in favour of the new system following its introduction. Crucially, the proceeds go to charity. The Royal Society for the Protection of Birds and Keep Wales Tidy have already received a total of £800,000 since the charge was introduced.

Will the Minister confirm that the introduction of such a charge would require secondary legislation only? What would the process be and how long would it take to get a charge up and running, using powers under the Climate Change Act 2008? The Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Newbury (Richard Benyon), stated last year that we could expect the Government to decide in 2012 whether they would introduce a charge in England. What is the Government’s timetable for considering it now? The Government’s waste review states that there are

“a number of small levers which we can pull in order to deliver long-term change.”

Does the Minister agree that a bag charge is one such small lever? Will he commit to bringing forward legislative proposals? In short, does he agree that it is time for the Government to act?

11:11

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)]

It is a pleasure to serve under your chairmanship, Mr Streeter.

I congratulate my hon. Friend the Member for Richmond Park (Zac Goldsmith) on securing this important debate and on how he introduced it. I found it useful that other hon. Members who wished to take part were able to intervene on him, so that there was a genuine debate rather than simply a dialogue between the two of us.

I have had form on this issue going back a long time—to before I was a Minister, when I worked for environmental non-governmental organisations. I hope that my hon. Friend will appreciate that I am aware of the problem and eager to do something about it—and that goes for the Government, too.

The Government are committed to promoting a strong and growing economy in which all resources are fully valued and waste is minimised. That is good for business and good for the environment. To achieve it, everyone has a role to play. That is true across the whole waste agenda, but nowhere more so, I suspect, than in relation to single-use carrier bags. We all have the opportunity to change our behaviour to ensure that fewer bags end up in landfill or as litter.

[Mark Pawsey]

Does the Minister acknowledge that plastic carrier bags are part of an important industry? The packaging industry employs 85,000 people in the UK, is responsible for a turnover of £11 billion and represents 3% of the manufacturing industry.

[Mr Heath]

Of course I appreciate that, which is why I made the point in my opening remarks about the balance between the economy and the environment. We can secure a successful synthesis of the two.

[Zac Goldsmith]

I want to add to the point made by my hon. Friend the Member for Rugby (Mark Pawsey). Of the bags used in this country, 90% are manufactured in Asia, not the UK.

[Mr Heath]

This is a very instructive debate. Members have come armed with a huge number of statistics that they are happy to trade across the Floor, which is all to the benefit of the debate.

We all have the opportunity to change our behaviour to ensure that fewer bags end up in landfill or as litter. Notwithstanding the point made by my hon. Friend the Member for Rugby (Mark Pawsey), reducing the number of bags that we use would be a step towards more responsible living that also encourages people to think about the resources that we use. Aside from the potential ecological problems such bags cause when disposed of irresponsibly, it is incredibly wasteful to produce billions of them each year to be discarded after a single use. We continue to encourage the reuse of bags wherever possible.

All bags have an environmental impact, irrespective of their composition. Reusing them as many times as possible and disposing of them appropriately when they cannot be used any more minimises that impact.

[Caroline Lucas]

rose—

[Mr Heath]

The hon. Lady wants to intervene. I shall let her do so before I continue.

[Caroline Lucas]

I thank the Minister for allowing me to intervene. I was being a little impatient, because he said that he encourages people to reduce waste and not use plastic bags. Could he concretely say how that encouragement finds its way down to ordinary people? It is true that they have the opportunity to reduce waste, but they are not doing it enough.

[Mr Heath]

They are not, and I will return to that in a moment.

There are those who are clear about their obligations and will use reusable bags whenever they have the opportunity. There are some who it will always be difficult to reach, because they simply do not want to hear the message. Then there are what I call the “guilty middle”; they will use reusable bags, and want to do so, whenever they can, but they sometimes turn up—as, I confess, I occasionally do—at a supermarket and find that they have forgotten the bag that they intended to take and have to take a plastic bag. The sort of measure that my hon. Friend the Member for Richmond Park proposes might affect that large, guilty group in the middle, who want to do the right thing and feel guilty when they do not.

We have had lots of figures already, so I will add a few more. In 2011, around 8 billion thin-gauge plastic carrier bags—single-use carrier bags—were issued in the UK. If you include reusable bags, such as bags-for-life, the total figure is about 8.4 billion bags issued in the UK. Obviously, that is a very large number.

We have made some progress in recent years. The first voluntary agreement with retailers between 2006 and 2008, which has been mentioned, reduced the overall environmental impact of carrier bags by about 40%. Signatories to the agreement encouraged the reuse of carrier bags, increased their recycled content and reduced their weight, among other measures. A second agreement with supermarkets between 2006 and 2009 focused on reducing the number of bags distributed, and achieved a total reduction of 48% against the 2006 baseline. That is progress. We should not forget that.

Supermarkets and shoppers pulled together to reduce the number of carrier bags they were using. Despite some evidence of a reversal in the trend, the latest figures, for 2011, show an overall decline in bag usage of 32% compared with 2006. I hear what my hon. Friend the Member for Rugby said about the contribution that carrier bags make to landfill. He is right that they are not a large part of the total waste stream, but it is not possible to argue that plastic bags, particularly when they litter our towns and countryside, are not an unwanted eyesore. They represent 72,000 tonnes of waste entering the waste stream.

Aside from the impact that carrier bags have on wildlife, marine environments and our countryside and coast, no one travelling around our countryside wishes to see carrier bags in the trees or floating down the lanes. It is all avoidable if we, the public and retailers do the right thing by reducing the use of single-use bags. We all have a part to play.

Some retailers are taking positive action, with initiatives such as voluntary charging, rewarding shoppers for reusing bags by awarding loyalty points, offering front-of-store recycling and increasing the amount of recycled content in the bags. Although recycling is further down the waste hierarchy, after prevention and reuse, it is still important to improve recycling rates for carrier bags, because it also helps to reduce the overall environmental impact and makes use of a valuable resource. I am pleased to see that the number of shops offering front-of-store recycling facilities for bags has increased, but I would like more to do so. I hope that more retailers, particularly the big ones, will be prepared to take up that challenge.

[Zac Goldsmith]

A number of stores, including WH Smith, Marks and Spencer, Ikea and Lidl, have already introduced charges for carrier bags. Is there evidence from their initiatives to suggest that there are any perverse or unwanted outcomes from such a charge?

[Mr Heath]

I am not aware of any, but a lot of work is being done to look at all the evidence because we want to get the policy right and to make a really effective contribution. I will come back to the Government’s position in a moment, but may I just say that that is part of the evidence-gathering process in which we are engaged?

Let me go back to the point about how we behave. On average, shoppers take three to four new bags every time they go out shopping, and most of them have a large store of bags at home, often under the kitchen sink, which they could take with them and reuse. We need not only to reuse bags, but to reduce the number of new bags that we take and to use bags that have a longer life. All those things put together are the actions of a responsible citizen. None the less, I recognise that we are all fallible. I would hate to be accused of being a hypocrite on these matters, because I know that someone will spot me taking a bag in Sainsbury’s in Frome next week and say, “You said that we shouldn’t be doing that.” I will have to say, “Yes, and you are right; I shouldn’t be doing this and I wish that I had remembered to bring a bag from home.”

Let me address the specific points that have been raised. A question that was asked by my hon. Friend and echoed by the hon. Member for Brighton, Pavilion (Caroline Lucas) was about the Government’s reaction to the first year of bag charges in Wales. The results so far look positive. I hope that when we have looked at the full year’s results we will see that they are very positive indeed. We are certainly monitoring the results. When we are clear that we have robust data, we can then base any decisions on them.

[Mark Pawsey]

Will the Minister in his evaluation take account of the additional bag purchases that will take place in Wales as a consequence of people not having that stock of unused carrier bags under the sink? In resource terms, the fact that people will be buying other products should be taken into account.

[Mr Heath]

It should be. My hon. Friend is giving an example of exactly why we need to look at the results in the round rather than at a simple indicator. Let us do that and let us be convinced, if convinced we are, that what has happened in Wales is the right way to approach the issue. We will also consider the Scottish consultation on change, which closed on 28 September, and discuss the matter with our colleagues in Scotland. We will balance the benefits of any change with the real, but avoidable, effect on household budgets to ensure that we get the right option.

My hon. Friend the Member for Richmond Park asked me whether I had met the Welsh Environment Minister, and the answer is that I have not, but my hon. Friend will accept, I think, that I would not be expected to have such a meeting because that would be the job of my noble Friend, Lord de Mauley. In fact, it was Lord de Mauley’s predecessor in the Department, Lord Taylor, who met John Griffiths in July 2012 to discuss the matter.

My hon. Friend asked me whether I could confirm that the introduction of a charge would only require secondary legislation. If we did take such action, it would be from powers that stem from section 77 of the Climate Change Act 2008, which makes provision for charges for single-use carrier bags. Therefore, in England, we could introduce such a charge through secondary legislation, but it would be subject to a consultation process because that is the mechanism of government.

[Caroline Lucas]

Will the Minister say when we can look forward to a decision coming from Government? He has explained that it is right to evaluate the experience in Wales. Could we therefore expect some kind of Government decision early next year?

[Mr Heath]

I will not give a firm answer to that, because we want to look at the data, but I hope that we will be able to make an early evaluation of the data. Once we are clear that we have a full-year set of data and we are convinced that the effect is beneficial, we can make a firm decision, and I do expect that to be sooner rather than later. Obviously, that falls short of the sort of commitment on timing that the hon. Lady wants.

My hon. Friend the Member for Richmond Park asked about the small levers that can be used. He is right. This provision is one lever among many that we can take. If we find that it is efficacious to go forward on the basis of a proposal—it will be based on the evidence that the hon. Lady has asked for and that we are committed to securing—similar to what exists in Wales, we will use it as a lever to long-term change. There are other things that can be done as well. We would never want to rely on one mechanism and eliminate all others.

[Zac Goldsmith]

If, after studying the Welsh experiment, the effect is deemed to have produced a net good, both in terms of a reduction and the other considerations that have been mentioned today, is that the bar that we need to cross for our Government to pursue the same course of action? In other words, how much does this Government’s decision depend on the results in Wales?

[Mr Heath]

It is one area of data on which we can base intelligent decisions. We do not only want to see whether there is a direct correlation between the activity there and the number of single-use bags that have been used. For example, has the initiative simply prevented people from using single-use bags and led them to buy a bag for life every time they go to a supermarket? If that was the consequence, that would be a worse outcome, despite the fact that the statistics on single-use bags would be beneficial. I am suggesting not that that will be the outcome, but that it is a slightly more complex picture, and we are genuine in wanting to examine the outcomes before we come to a policy decision. Such a decision will have an impact on the consumer, on retailers and, as my hon. Friend the Member for Rugby has said, on manufacturers, so we must get it right. We want to achieve a beneficial outcome for the use of scarce resources and for the environment. That is our intention as a Department and that is the basis on which we will finally reach a conclusion.

I thank my hon. Friend the Member for Richmond Park for securing this debate and every Member for their contributions. I hope that I have responded to the points that have been made in a reasonable way. I will pass on my hon. Friend’s comments to my colleague, Lord de Mauley, for his consideration. I am sure that my hon. Friend’s early-day motion will continue to attract signatures. We will take into account all the factors involved before reaching a final decision, which I hope we will be in a position to make once we have all the information at our disposal.

11:24

Sitting suspended.

Criminal Justice System

Wednesday 17th October 2012 Westminster Hall

[Mrs Linda Riordan in the Chair]

14:30

[Tony Lloyd (Manchester Central) (Lab)]

It is a pleasure to be here under your chairmanship, Mrs Riordan. The subject of the debate is victims and their treatment in the criminal justice system.

There is increasing satisfaction with our police force. My own force in Greater Manchester claims that independent surveys show an 85% satisfaction level with what it is doing. Nevertheless, the fact that there is a 15% gap indicates that things go wrong. Many Members of Parliament are here for this debate. When things go wrong, victims feel abandoned by the system, and most MPs’ caseloads testify to that.

I recently conducted a survey across Greater Manchester. Surveys can be partial, and the people who respond will have a strong motive to respond. Nevertheless, the dissatisfaction level was quite high. A quarter of the people who responded felt that they had not been treated well by the police or the criminal justice system. That is a worrying figure.

I must pay tribute to my right hon. Friend the Member for Cardiff South and Penarth (Alun Michael)—joint signature on the application for this debate—for his work on behalf of victims in his years as a Home Office Minister. He was part of moving the whole agenda forward.

I want to talk about a few cases that have affected constituents. A woman living on her own found a mallet on her garden fence with a threatening and menacing note. When she contacted the police, they said they would send somebody round, as they should in a case such as that. However, the police officer did not turn up on time. When I intervened, the police turned up, but a single woman who is threatened should not require the intervention of a Member of Parliament to get the police to respond.

One of my daughters—I was with her at the time—had a dog that was attacked by another dog. A dog-on-dog attack does not make the national news, but had that dog attacked a child it would have been a much more serious event. The police took the matter seriously, but two months after its having been reported they have not come back to my daughter with an update. Not coming back is probably the single most common complaint that my constituents raise with me.

There are problems elsewhere in the criminal justice system. One of my constituents had to wait for nearly two years before her case, which involved violence from a neighbouring family against her and her family, came to court. The housing association would not move either the complainant family or those who were being complained about until the matter had gone to court. For two years, this family lived with pressure from their neighbours while they waited for the Crown Prosecution Service to take the matter to court.

I had another case of a constituent whose ex-partner was in prison for beating her very badly. While in prison, he threatened to kill her. She was told through other sources that he was due for imminent release, but the probation service would not give me or her any details about the timing of his release, which left her feeling extremely vulnerable in respect of a person who had already made threats to her well-being.

More generally, the courts themselves come in for criticism. We recently heard of Peter Bowers, a High Court judge in Teesside, who described a burglar as needing courage to burgle; many people feel that it might need courage to lie in bed listening to a burglar invading their house. Most of us do not feel that that is an acceptable way of describing a burglar. There is dissatisfaction, therefore, with the way in which the courts deal with cases, from the relatively serious to the most serious.

[Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)]

The daughter of a family in my constituency, Charlotte Whitby—they have allowed me to name her—was killed getting off a school bus. The family could not understand two things: first, the lack of prosecutions across the United Kingdom; and secondly, much more importantly, the lenient sentencing, which the hon. Gentleman is alluding to. I do not think anyone in this House would disagree that there is a problem, but perhaps the hon. Gentleman will dwell on the point that people are getting away with murder—literally.

[Tony Lloyd]

Killing somebody in the workplace or with a vehicle, if I am not in danger of trivialising it, would be an extremely intelligent way to go about despatching another human being. The horrible reality in cases such as the hon. Gentleman’s constituent’s is that there is now a family who will grieve for ever and who feel that there is no justice in the system. I have enormous sympathy for him and particularly for his constituent.

[Rehman Chishti (Gillingham and Rainham) (Con)]

I congratulate the hon. Gentleman on securing this important debate. On the courts and the criminal justice system, does he accept that some good systems are used in the criminal justice system to have the views of victims accounted for? For example, the victim impact statement must be taken before judges prior to sentences being passed.

[Tony Lloyd]

Yes, and that is fine. I totally agree with victim impact statements. The only problem is that they are not compulsory and not always requested. We know that victims sometimes complain that they are under pressure to produce a statement that does not reflect what they really feel to be the impact. The hon. Gentleman is absolutely right in saying that that is the direction of travel that we have to take, but I think we have to go a lot further. I will certainly make that point later.

Sir Paul Stephenson, the former Metropolitan Police Commissioner, recently made some caustic statements about his own stewardship of policing and of policing more generally. He was highly critical in saying that burglary is often not dealt with as severely as he felt it should be. He asked himself whether he had always dealt with it properly in his policing career.

It is certainly right to point out that many people think burglary is a very serious crime. Sir Paul Stephenson described it as invasive. He is right; it is invasive of people’s privacy and people’s lifestyles. Astonishingly, such an invasion of personal property and lifestyle sees more than half of those convicted receiving non-custodial sentences. Those non-custodial sentences are also relevant to a crime, which, in Greater Manchester, has a clear-up rate of less than 17%. Only one in six crimes is cleared up, and that does not necessarily include coming to court. Of those convicted, fewer than half receive a custodial sentence. We then wonder what signal that sends out to the wider community—to those who do not want to be burgled and those who want to burgle. There is a real issue.

I recently had an interesting conversation with somebody who has long experience of sentencing. He told me that he faces a regular dilemma. He works on the basis that non-custodial sentences are worth while; they can definitely perform a valuable part of the process. Nevertheless, if he feels that non-custodial sentences are not sufficient to offer proper restitution to the victim or do not offer any element of proper and legitimate punishment, he finds himself imposing custodial sentences in cases in which he would sometimes prefer not to. That is something we need to look at. If we are going to have a range of sentencing, we need to make sure that there is sufficient severity in the whole system. We need to look at sentencing as well.

Let me turn to those crimes that, although serious, have not received full-hearted emphasis throughout the criminal justice system. I refer in the most serious areas to sexual violence, rape, the sexual exploitation of children, domestic violence and even bullying and antisocial behaviour. Let me cite, as an example, the recent case of David Askew in Greater Manchester. Although he probably died of natural causes, there is almost no doubt in everyone’s mind that those natural causes were brought on by a consistent campaign of bullying that he had received from local youths, but no one took it seriously. With hindsight, people have said that had the various agencies—the social services, the children’s services and the police—shared the information base about the bullying, it would have triggered some sort of response. At no point, however, did it trigger a response, which left David Askew to spend years of his life in a degree of misery that he should not have had to put up with. It is wrong to say that bullying is not very serious; it is serious, as is antisocial behaviour. We must see antisocial behaviour as being central to the type of society in which we live. We cannot have no-go areas in which antisocial behaviour is accepted as legitimate.

It is also worth reflecting on the comparison between the celebrated cases of sexual exploitation of children in Rochdale and the situation of Jimmy Savile. I want to place it on the record that, although the English Defence League took it on itself to protest enormously about the situation in Rochdale—it is right that there should have been real concern there—it has not protested in the same way about Jimmy Savile. Sexual exploitation is about not the ethnicity or the cultural background of those involved but criminal behaviour, and criminal behaviour, whether by the Jimmy Saviles of this world or by Rochdale taxi drivers, is something that we must prosecute and pursue.

In all those cases, the culture of the criminal justice system is such that it did not take seriously the position of victims. The young women in Rochdale were described as from a council estate. I cannot accept that there is a council estate definition of acceptable crime versus those who live elsewhere. I know that my hon. Friend the Member for Rochdale (Simon Danczuk) will want to speak more on that issue.

We have to change the culture with respect to sexual exploitation, especially of children, domestic violence, sexual violence and even stalking, because they cause real misery, destroy lives and, in the end, can lead to the most serious of crimes, up to and including murder. The culture that says that such crimes do not matter or that allows them to slip through has got to change, whether that happens through the police, the Crown Prosecution Service or the local authorities.

[Andrew Stephenson (Pendle) (Con)]

I congratulate the hon. Gentleman on securing this debate and I fully endorse what he is saying, especially on domestic violence and child sexual exploitation. On sentencing, which he has touched on, constituents of mine, John and Penny Clough, set up the Justice for Jane campaign following the brutal murder of their daughter, Jane Clough, who was a nurse. She was murdered in a hospital car park by her former partner and rapist Jonathan Vass, who was released on bail by a judge. One of the things that they found most hurtful was the fact that he was only sentenced as a murderer; he was never sentenced as a rapist and a murderer. Those cases were left to lie on file. Will the hon. Gentleman join me in praising the efforts of John and Penny in talking to Keir Starmer and the Crown Prosecution Service to ensure that severe charges such as rape are not simply left on a shelf and that people such as Vass are not able to cover their crimes by murdering the only witness?

[Tony Lloyd]

The hon. Gentleman makes a valid point. John and Penny have persuaded Keir Starmer that no longer should things simply lie on file. What is clear is that there was a case to be tried. It would have gone to trial had the subsequent murder not taken place. It is distressing for the family. I can understand that not only as a father but as a citizen.

On stalking, half the people who are stalked will have been stalked for more than 18 months before anything is done about it, so many events in their lives will cause them both fear and misery. In the worst cases, stalking has led to much more serious offences, such as rape and murder. We also know that the probability of someone being brought to prosecution for stalking is still phenomenally low. Even in the event of prosecution, only about 2.2% of those involved in this serious crime end up with a jail sentence. Again, we must change the culture that allows that to take place.

There are examples of extremely good police performance. I had a meeting recently with women who had been victims of, or involved with, domestic violence. One person, who was the victim of a violent attack by her ex-partner, said that she wanted to place it on the record that her own experience of the police, the refuge that gave her shelter, the Crown Prosecution Service and other services had been good. In the same meeting, another woman told me that when she lay on the floor waiting for an ambulance to be called, she heard police officers joking with her partner, which simply should not happen in this day and age. Our police need specialist training for domestic violence and stalking, but it is not unreasonable to say that it should be there for all. Whoever polices or prosecutes domestic violence must treat that crime as something that matters, and the criminal justice system must help to resolve the problems.

Let me move on because I am conscious of the number of Members who wish to speak. The Minister will recall the debate a few weeks ago on criminal injuries compensation. I am sure that she will tell us that the Government are funding victim services in whatever way. None the less, there is still great anxiety about the criminal injuries compensation scheme and what will happen to it. I hope today that she will take the chance to clarify the Government’s intentions on the matter. There is massive interest outside in what is happening. There is massive interest, too, in Parliament. I do not say this as a warning, but I hope that she has been able to tell her colleagues in Government that her own experience in that debate was a little unfair on her but was not unfair in the spirit of what she inherited from her predecessors. We need some clarification that we will have a robust criminal injuries compensation system that survives any proposed changes.

[Mr Andrew Smith (Oxford East) (Lab)]

I congratulate my hon. Friend on calling this enormously important debate. May I underline the importance of the point that he has just made? I have never seen so many people queuing to get in to observe a debate in Westminster Hall as I have today. It shows the level of public anxiety. Following the Government’s wise decision to withdraw the statutory instrument, does he agree that when they bring back some proposals to the House they need to advertise them within both Houses, so that all Members can make their voices heard about how unacceptable the proposed cuts in criminal injuries compensation are?

[Tony Lloyd]

My right hon. Friend makes an important point. Let me add one extra thing. It would be desirable if any such debate were heard on the Floor of the House and not simply in a Committee Room, so that the full House can be persuaded of the merits of any changes and can vote accordingly. That would be in the interests of people up and down the length and breadth of this land.

[Yasmin Qureshi (Bolton South East) (Lab)]

I congratulate my hon. Friend on securing this debate and the Minister on taking up her new post. She and I worked on the Justice Committee together. I am sure that she is aware that the Government’s proposals on criminal injuries compensation would mean that more than half of victims would get nothing and almost 90% of others would get very little. If the coalition is really serious about victims, it should scrap the proposals and carry on with the current scheme.

[Tony Lloyd]

I am bound to agree, because I spoke in the debate on the scheme some weeks ago when it struck me as perverse that we talk about things such as permanent scarring or permanent speech impediments being minor. Many people listening to the debate would conclude that their view of what is minor is not consistent with the changes that the Government are proposing. It is important that we establish that point.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

My hon. Friend is being very generous with his time. I want to add to his comments about the concern that so many people outside this place feel about the Government’s plans for the criminal injuries compensation scheme. I want to ask him about a particular point in the plans that we saw before and about the fears that people have regarding any new plans. The Government intended to withdraw compensation from anyone attacked by a dog. In my constituency, I meet many constituents who have been attacked by a dog; we suffered the death of a child in my constituency because of a dangerous dog. Last year alone, we saw a 5% increase in the number of people being hospitalised because of dangerous dog attacks: just under 6,500 people were admitted to hospital last year, of whom one in six was a child. Does my hon. Friend share my view that if the Government again bring forward a proposal in this area, after all the concerns that have been raised, people should still continue to receive compensation if they are attacked by a dog?

[Tony Lloyd]

My hon. Friend is right. Dog attacks are clearly a major concern for groups such as people who work for the Royal Mail. Like the Union of Shop, Distributive and Allied Workers, the Communication Workers Union has campaigned strongly on the issue.

As I said earlier, I was present when my daughter’s dog was attacked recently. In that particular case, I actually had to attack the dog. It struck me at the time that it was a rather unpleasant dog, and if it had attacked me, I might have suffered a little, but if it had attacked a child, the child might have suffered considerably. Compensation is a really serious issue.

I want to make a few other points. As we consider what we can do for victims, I would be grateful to the Minister if she could look at the role of Victim Support. Most of us who have experience of its work know that it provides an enormously valuable service. It deals with more than 1 million victims of crime every year, of whom some 80,000 are victims of violent crime and some 8,000 are victims of sexual assault. It also trains some 7,000 people each year.

There is a genuine concern at the moment among those who work for Victim Support, both nationally and in my own area, about the changes that the Government are making to funding. Perhaps I should declare an interest at this stage, as a candidate for the role of police and crime commissioner for Greater Manchester. The Minister may be surprised to know that although the transfer to police commissioners will go ahead, there is concern among people from all parties who are standing to be police and crime commissioners about whether the transfer will be fully funded, with full transfer of Victim Support moneys, so that there is no loss of its services. It is important that we have clarity about that issue, because any loss of funding would not only be unfair to those who become commissioners but—much more importantly—it would be unfair to victims if those services were no longer there. We need some clarification about that.

14:53

Sitting suspended for a Division in the House.

14:51

On resuming—

[Tony Lloyd]

I seem to have been speaking for 50 minutes, according to the clock. It may feel to others that it has been at least that long.

In conclusion, I simply say that we need to change the culture around victim support and put victims at the centre of the criminal justice process. There are some specific points I would like to make to the Minister that I hope she will pick up. Victims who come to see me as an MP and those who speak for them, such as Victim Support, say they want to be treated seriously in the process. They want to be kept in touch with what is going on. They want promises made to them kept; for example, people turning up when they say they will and coming back to them when they say they will.

Victims also want to be involved in the process of the management of the offender. Many victims are more inclined than the general public to support restorative justice processes, as long as they are explained properly. However, they want to be properly consulted. Victims understand that restorative justice can work, but they do not like others pressing them to agree to restorative justice when it is not appropriate; rather, it should simply be an available option. Having agreed to the restorative justice process, victims particularly do not like finding out that the criminal has been through the same process on more than one occasion. That says to them that there is no restoration; it is merely a way of avoiding the justice process. Victims do not want the police to use cautions as a way of avoiding the criminal justice process. It is important to register those points. There are sometimes good reasons for police cautions, but they should be used when appropriate and not simply as a way to avoid the bureaucracy of the court and to save police time. That is not why they were designed.

There are some specifics on which the Minister and her Department can help victims. The first is to clarify the funding for Victim Support, as I said. The second is to clarify the position of the criminal injuries compensation scheme. The third would be to make a clear statement about victim and witness statements in court—particularly victim statements—to provide certainty for victims that the statements will be voluntary and properly elucidated on behalf of the victim, and that they will be used by the court to make sense of the damage done to the victim by the criminal and the crime.

I support the hon. Member for Witham (Priti Patel) in her plea through her recent ten-minute rule Bill. A code for victims has to be one with proper backing, not just a form of words. We have had victims’ codes in the past and, frankly, if they are only codes they are ignored. We need certainty that the victim is given the same rights as the offender in the criminal justice system.

I am grateful, in what will be one of my last contributions in this great Parliament of ours, to have the privilege to raise the position of victims, who matter so much because crime is still prevalent. We need to change the culture around victims. We can do it, but we need the different agencies to proceed with a sense of urgency.

[Several hon. Members]

rose—

[Mrs Linda Riordan (in the Chair)]

Order. As a result of the number of Members who wish to speak in the debate, I am imposing a time limit of eight minutes. The rules are the same as in the House. Each of the first two interventions accepted stops the clock and the Member who gives way has an extra minute. I remind Members that interventions should be short. The Clerk will ring a bell when a speaker has one minute left.

15:20

[Priti Patel (Witham) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Riordan. I welcome this debate and congratulate the hon. Member for Manchester Central (Tony Lloyd) on securing it. I feel strongly about the victims of crime. I am delighted that the debate is taking place, because for far too long the victims of crime have not had their voices heard as they should have done. I appreciate there may be many reasons for that. However, this is an opportune debate at a time when the public are quite animated about the elections of police and crime commissioners. There is an opportunity to bring greater focus on victims of crime.

I pay tribute to the excellent work of Victim Support, particularly for taking the initiative to engage the police and crime commissioner candidates of all political persuasions, to bring them on board regarding victims’ services and support and to get them to sign up to the Victim Support five promises to victims and witnesses pledge.

Those elected as police and crime commissioners, regardless of their political persuasion, must champion the rights of victims and put victims first. Once they have a mandate, it would be ridiculous not to do so. I hope that the Minister, along with police and crime commissioners, can give a commitment to the work of Victim Support and other victims’ organisations, to which I will refer later, to ensure that victims get the first-class treatment that they deserve and have not had previously.

The Minister will know that, as mentioned by the hon. Member for Manchester Central, last December I introduced a ten-minute rule Bill to call for a robust and enforceable code of practice to deliver new rights and better services for the victims of crime and their families. There have been far too many gaps and inconsistencies in the provision of services for victims and their families. Following my Bill, I was delighted to see the Government take some positive steps forward and introduce the consultation, “Getting it right for victims and witnesses”, which proposed new measures to improve services.

I look to the Minister for an update on when those measures will be implemented and when the details of the recommendations proposed by the former Victims’ Commissioner, Louise Casey, in her review into the needs of families bereaved by homicides will be put into effect.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Ten years ago, my constituents, Pat and Ian Levy, lost their son, then 16, who was stabbed by a 15-year-old in Hackney. They are very keen to present their victims’ personal statement in person at his parole hearing. They do not have control over that; it is at the whim of the chair. Even then, they do not get the chance to talk more about it; they simply read out a statement. I share their concern that that is not a balance. Will the hon. Lady comment on that?

[Priti Patel]

I agree. As I have maintained before, there is disproportion in the system when we hear more about the offender than the rights of the bereaved family and the victims of crime. That horrible example of that brings me to a constituency case of mine. Marie Heath, an extraordinary lady, faced the terrible ordeal of losing her son, who was brutally murdered in Frankfurt in April 2011. Her family have experienced considerable distress. Those of us who have constituents who have experienced horrendous crimes can relate and empathise with their ordeal. Having to travel two or three times a week to Germany since March to be present at the trial, which only concluded last month, brought home the battle that victims and their families have with the system, particularly if overseas. That highlights the need to secure resources to help them through the process—raising funds to travel, for example, and hotel costs—while also looking for the right support. Having seen the Heath family go through that horrific ordeal, I implore the Minister to do what she can. I recognise that she is new to her role, and I welcome her. Will she also commit to meet Support after Murder and Manslaughter Abroad—another organisation that has done good work in that area?

I would also like to highlight another prominent case, that of Jeremy Bamber. The Bamber murders took place in my constituency many years ago, causing immense distress at the time, as they still do, to the family of the victims of that terrible crime. It pains me to mention that there has been some bad history in how the family have been treated by the Ministry of Justice. Regrettably, two years ago, it granted Jeremy Bamber access to the media to protest his innocence, despite a number of unsuccessful applications to the Criminal Cases Review Commission. No consideration was given to the victims’ family. In the small village in my constituency where the murders took place, unfortunately, every time the gentleman’s name is mentioned in the media, the world’s media descend and cause an awful amount of grief for the family. I hope that the Minister agrees that such cases are simply not acceptable. It is awful for victims to be treated in that way. They are not kept informed of what is happening, so the first that they hear about it is when it lands in the media. The distress that that causes is appalling.

The hon. Member for Manchester Central mentioned cases such as domestic abuse and crimes against children. There are many examples of things going on in this day and age that put a stain on our justice system. My constituents certainly believe that offenders have a greater say. This is about victims. We should all be championing victims, while ensuring that offenders pay for their crimes. Serious and persistent offenders should face the necessary sanctions. When the Minister sums up, I would welcome her thoughts on the areas that I have touched on. Again, I pay tribute to the hon. Member for Manchester Central for securing the debate.

15:31

[Alun Michael (Cardiff South and Penarth) (Lab/Co-op)]

I congratulate my hon. Friend the Member for Manchester Central (Tony Lloyd) on securing this debate. I declare a similar interest; I have been nominated to stand for election as police and crime commissioner in south Wales.

I am proud to say that the needs of victims will be at the heart of my approach if I am elected. I want to be precise that a genuine focus on the needs and interests of victims must involve putting the victim at the heart of the behaviour and performance of the court system and of every agency in the criminal justice system, as well as of the police and the rest of our systems of local and national government. We must bear in mind that there is an enormous variety of victims, ranging from nurses, shopkeepers and police officers to ordinary members of the public. Our response must be right in every set of circumstances. Victims’ experiences are often very personal and different.

In my view, four major steps are required to bring about the radical change needed in how we deal with victims. The first is to act on the wise words given in evidence to the Justice Committee by the then chief executive of Victim Support, who essentially said that what victims want more than anything else, other than not to have become a victim in the first place, is the certainty that it will not happen again. Preventing crime—cutting offending and reoffending—is absolutely central to meeting the needs of victims.

That is clear enough in relation to the police. Sir Robert Peel said in terms, when he established the first police force, that the central purpose of the police was to cut crime—to prevent offending and reoffending. He also said that the police were the public and the public were the police, which must surely mean more than an identification in general terms between the police and the wider community; it must involve a conscious seeking-out of the experience of victims, especially those whose voices are not easily heard and whose suffering is hidden.

Such victims might be abused children or the victims of violence against women and girls and other forms of domestic violence that remain under-reported. They might be those suffering in silence who are exploited in a variety of ways, those victimised within specific communities by things such as female genital mutilation or those who suffer the ongoing victimisation of antisocial behaviour. The police and the public surely have a common interest and a common responsibility in taking the victims’ side.

That also ought to be the clear purpose of the court system. In my view, it was a missed opportunity when the purposes of the Sentencing Council were spelled out in legislation. I urge Ministers to put that right now. At the heart of the work of the Sentencing Council should be the answer to the question, “What works?” It is not, but it should be.

In the Justice Committee report on the role of the prison officer, we concluded that that role could not be clear unless the role and the purpose of prison was clear. The Prison Service, like many other agencies within the criminal justice system, ends up chasing specific targets that have nothing to do with their overall aim or purpose or the expectations of the public, which should be to hold prisoners securely and return them to the community less likely to offend, or at the very least likely to offend less seriously. That must be built into the granular detail of what we expect.

The second step is to ensure that the needs and voices of victims are heard clearly in the court system. Both this Government and the last have clearly wished victims to be listened to and treated better within the court system, but that is mostly dealt with through additional requirements, such as victim impact statements and witness support, which are welcome but do not touch the central purpose of the whole system. I was the first Minister to serve on a jury after the legislation changed, and it did not enhance my respect for the court system, which seems to be run mainly for lawyers and judges.

[Meg Hillier]

To return to the situation of the Levy family, what does my right hon. Friend think could be done to improve the rights of victims at parole stage as well? The victims are still suffering. My constituents rightly say, “The perpetrator has a lot of people arguing on his behalf, but the victims have nobody to argue on their behalf.” They might not even be able to be present at the parole hearing. Does he have any thoughts on that?

[Alun Michael]

My hon. Friend is right. The needs and interests of victims should be present at every stage throughout the court system. I also think that greater use of restorative justice is needed. I was interested to hear a sergeant in the South Wales police say recently that giving victims the chance to tell the offender in no uncertain terms how damaging the experience of the offence had been was, in his words, genuinely life-changing for the offender. It is not a soft option; it is a hard option, as long as it is done properly, professionally and with the interests of the victims in mind.

The third step is to provide proper support for victims at every stage. We have built up a powerful victim support network across the UK. I was involved in the establishment of one of the first support schemes in Cardiff, after the very first had been established in Bristol. I pay tribute to how Victim Support, as a national organisation, has promoted professionalism in recent years among both staff and volunteers in a superb service.

As we see in other fields such as education and health, there is a necessary tension between the national dimension, in which standards are established, and local service, which is sensitive to local needs and realities. Now the Government are putting a significant amount of commissioning in the hands of the new police and crime commissioners. That has introduced an unwelcome element of uncertainty, but it might work in practice. My commitment, if elected, is to ensure that service to victims is enhanced rather than reduced.

In a reply to my recent question, the Minister for Policing and Criminal Justice, the right hon. Member for Ashford (Damian Green), promised that more money rather than less would reach the commissioners in carrying out their duties, but there is a worry that support to victims might be fragmented from the other service. A sentence on the Home Office website states that

“the Government will retain responsibility for commissioning services where there are either proven economies of scale or they are genuinely specialist in nature. This includes support for those bereaved through homicide, victims of trafficking, rape support centres and the witness service”.

That makes sense for the other specialist services, but it is essential that the victim as witness is given a seamless service before, during and after the court experience. I hope that the Minister can clarify that and guarantee that the witness service will be delegated to the police and crime commissioners. Given that the worst experience for the victim sometimes occurs within the court system—victims in some cases describe their experience in court as being even worse than the original incident or as compounding their suffering—it would be wrong for it to appear that central Government or the court system were unwilling for support to witnesses to be provided through local and independent services.

Ministers have made it clear, as we saw at Home Office questions this week, that the police and crime commissioners should challenge other parts of the criminal justice system about their work and performance. Being in close contact with support for witnesses surely makes sense in that regard.

The fourth necessary step is to listen and learn from the experience of witnesses. In relation to violence in Cardiff, we stopped measuring reports to the police and started measuring the experience of victims who had to go to hospital for treatment. As a result, we found that many cases were not being reported and that that needed to change.

The purpose of establishing the crime and disorder reduction partnerships in the Crime and Disorder Act 1998 was to bring in every aspect of the public service to support the objective of reducing offending and reoffending. That surely has to become the central responsibility of Government, to enable the whole of the criminal justice system to operate much more effectively and in the interests of victims, and to make it a clear priority for the whole of the criminal justice system and every agency.

Changing the focus of the Sentencing Council to make “what works” its clear priority would be part of that. The work of the police and crime commissions will be extremely challenging, but in the House this week Ministers set very high expectations of how commissioners might add value in pursuing the “and crime” part of their role. I am pleased they did so, but if that is to be turned into reality, the direction of the whole criminal justice system needs to support that ambition.

[Mrs Linda Riordan (in the Chair)]

I am now imposing a limit on Back-Bench speeches of four minutes.

15:41

[Dr Sarah Wollaston (Totnes) (Con)]

I congratulate the hon. Member for Manchester Central (Tony Lloyd) on securing the debate. Hon. Members will be pleased to hear that I am not running for election as a police and crime commissioner. I support fully the passionate words on behalf of victims that we heard from my hon. Friend the Member for Witham (Priti Patel) and many others.

As treasurer of the all-party parliamentary cycling group and a keen cyclist, I know many people who have been affected by this issue. Today, I would like to talk about vulnerable road users who are victims in our system. We need changes right the way through the system, from how cases are investigated, to charging standards and the involvement of victims and to sentencing.

I will start with a chilling statistic. We have now reached the 95th cyclist death on the roads in Britain. Some 82 of those were caused by collisions with vehicles, and many of those cases are still being investigated. The overwhelming majority of deaths to cyclists are caused by collisions with vehicles, and not because of carelessness. Indeed, we saw in statistics from Transport for London for last year that only 6% of cyclist deaths were attributable to carelessness on their part. The majority were attributed to fault by the driver. That needs to be stressed.

In many cases, of course, there is not enough evidence either way, but the majority of deaths are caused by motorists, so we need to be very clear about where the balance of fault lies in these instances. If we look at deaths and serious injuries together, last year 3,192 people were killed or seriously injured on our roads. For far too long, justice has been weighted in favour of the motorist.

Terminology is also an issue. We all refer to road traffic accidents, but I put it like this: if a cyclist is killed by a speeding lorry driver on a mobile phone, that is not an accident but a crime, and we should refer to them as road traffic collisions rather than road traffic accidents. That would help to drive a change in culture. This debate is not about being anti-car—I am a road user myself. In fact, most people who are campaigning on this issue both cycle and drive.

There are examples of unsafe cycling out there. I am sure that I owe my life to a traffic policeman who hauled me over the coals for cycling down what he called the “tunnel of death” between two lanes of slow-moving lorries and buses. Hon. Members will be pleased to hear that I did not shout; I just apologised very meekly. Sometimes, being informed about these things makes a difference.

Inconsistencies run right through our system. We need to look at the boundaries between careless driving, death by careless and inconsiderate driving, and death by dangerous driving. There is evidence, because of the higher conviction rates, that offenders are being driven towards lesser charges. That has huge implications for sentencing. In many cases, there is the decision that there is no one to blame at all. That cannot be right.

As with the Sentencing Council guidelines on the impact on victims of assault, let us have victim statements. Losing a child through a collision with a speeding motorist has no less impact than losing them as a result of an assault, so let us take that seriously. We should look again at strict liability in civil cases, and I would like the Minister to talk about that.

15:45

[Mr Ben Bradshaw (Exeter) (Lab)]

I would like to pick up on some of the comments made by the hon. Member for Totnes (Dr Wollaston). Let us be clear—when people are behind the wheel of a vehicle, they are in charge of a lethal weapon. If somebody is killed or seriously maimed because of careless or dangerous driving, that is no different from killing or seriously injuring someone through any other kind of negligent or dangerous behaviour.

According to figures given to me in parliamentary answers, more than 500 killer drivers have avoided jail in the past five years. While the number of people convicted of causing death by careless or dangerous driving in England and Wales between 2007 and last year rose, there was a dramatic fall in the proportion of those convicted receiving a custodial sentence.

In 2008, there were 271 such convictions; in 2011, there were 383. However, in 2008, 90% of drivers who were convicted went to jail, while in 2011 only 50% of them did. That is totally unacceptable for the families and loved ones of the victims. They feel a deep sense of injustice and unfairness when they see somebody who has killed their loved one get off with little more than a rap on the knuckles. It brings the whole of our criminal justice system into disrepute.

I welcome the relatively new Minister, the hon. Member for Maidstone and The Weald (Mrs Grant), to her post. I have not had the opportunity to congratulate her personally because I do not see her anymore around our neighbouring offices. I hope this will not damage her career, but I was delighted at her well deserved promotion. I have a number of questions for her; if she cannot answer them now, I would be grateful if she wrote to me.

Has there been any change in the sentencing guidance issued to courts in relation to these offences? If the guidance has not changed, how does she explain the huge drop, which is way beyond the possibility of statistical fluctuation based on the individual circumstances of the cases? Will she agree to the request from CTC and other cycling and road safety groups for a review of how the criminal justice system is working in these cases?

We have a good record in Britain, going back over many years, of improving our road safety and reducing death and injury on the roads. That has not happened by accident; it has happened through joined-up Government policies that have boosted safety and changed our whole culture and attitudes towards road crime. I am sure that the Minister, who is a reasonable woman, would not wish to see the recent worrying reversal of that progress as part of her legacy. To avoid that, she needs to ensure that we can restore the confidence of the victims of road crime in the justice system.

15:48

[Mr David Burrowes (Enfield, Southgate) (Con)]

I want to speak about information and draw attention to the Victim Support survey, which stated that 82% of people did not know their local candidates for the position of police and crime commissioner. We have seen the hon. Member for Manchester Central (Tony Lloyd) and the right hon. Member for Cardiff South and Penarth (Alun Michael) working hard to change that percentage. More than two thirds of those surveyed thought that they should be better informed about an offender’s progress and what an offender is doing, particularly if they are serving a community sentence.

The Government have set as a priority the issue of information. Indeed, in response to a question that I asked in the House on 18 September, the Justice Secretary said that that has to be a priority. It has been mentioned before. Louise Casey told me that across a whole range of issues affecting victims the big task needed to improve the service dramatically is relentless information throughout the criminal justice system. She said that in 2010.

The previous Labour Government talked a lot about the issue, too. Indeed, in 2002 they threw £11 million at the Crown Prosecution Service, setting a target of tracking all cases of victims online by 2005. Sadly, as with many other targets set by the previous Government, that was not met and the money went into the ether.

We must ensure that we can do better than that. From my own experience—I declare an interest as a criminal defence solicitor, although not practising much now—I know that the system of criminal justice is too closed and too insular. The coalition programme said clearly that we must be the most open and transparent in the world, and that light must also shine in the shadows and darknesses of the criminal justice system.

We have some momentum across the political spectrum. The Institute for Public Policy Research report this year supported the tracking of cases online. In these days of information technology, we must be able to enable victims to track cases, from the moment when they are reported to the point at which justice is served. All too often the CJS Online information is largely impersonal, and when victims want personal, relevant, useful and timely information, it is lacking.

[Mr Andrew Smith]

Does the hon. Gentleman agree that victims are entitled not only to things being tracked properly and so on, but to proper compensation? Has he looked at the Government proposals on the cuts to compensation and does he agree that they need to be abandoned?

[Mr Burrowes]

I am happy to talk about that and, if the right hon. Gentleman is patient, I will respond shortly, but first I must finish my train of thought on information. It is important not to lose the momentum gained from the development of online crime mapping and take it into online victims’ justice mapping. That must happen. Yes, there is benefit from social media and peer support, but there are examples from across the sea, in Florida, where VINELink can be used to track information properly online. Avon and Somerset has TrackMyCrime and a 90% satisfaction rating for victims.

On the case for compensation, I was the shadow Justice Minister in 2008 and during a delegated legislation Committee it was interesting to note the concern in respect of removing or limiting the scope of compensation under the criminal injuries rules. The Labour Government were seeking to reduce the scope then, but I did not see the attention and concern among Labour Members that I see among them now.

An issue that we should all recognise is that “criminal injuries compensation scheme” is a misnomer; it is a criminal injuries contribution-to-compensation scheme—it is a contribution and essentially limited. Homicide victims who have not come through the criminal justice system but are going through the highly bureaucratic process do not get adequate compensation; they get to a maximum level, which is a derisory amount for the victims of crime in many ways. It is essentially limited, and compensation has to be broader than that.

Yes, we should provide the support, in particular where the offender has not been identified and brought to justice—that lies within the scope of the scheme—but we ought to recognise the progress made by the Government. For the first time, we have a statutory duty for compensation on all offenders who come to court. Let us ensure that, when cases get to court, victims are properly compensated, so that they do not have to go through civil and other remedies.

It is also planned that offenders will now have to pay an extra £50 million into the victims’ pot; there is the prisoners’ earnings scheme, which will go to victims, as well as the additional surcharges. Let us recognise that the issue of compensation covers a whole range of areas. Let us get the right compensation and the right information. Let us ensure, as I am sure we can with the new Minister, that we carry out the central task of doing so much more, so that those surveys from Victim Support and others do not come back and tell us that too many victims feel that the criminal justice system does not treat victims fairly.

15:53

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

It is a pleasure to speak in the debate this afternoon, Mrs Riordan, and I congratulate my hon. Friend the Member for Manchester Central (Tony Lloyd) on securing it. I speak today as a member of the trade union USDAW, the Union of Shop, Distributive and Allied Workers—I draw attention to the Register of Members’ Financial Interests—but also as the former Cabinet Secretary for Justice in the Scottish Parliament for four years. I am proud that I was able to introduce legislation that improved the lot of victims and witnesses in the court system in Scotland, as well as speeding up court processes to stop victims and witnesses from having a lot of their time wasted and to ensure that public money was not wasted in unduly lengthy processes.

Today I want to concentrate on the changes to the criminal injuries compensation scheme. Just before Parliament broke up for the recess, I had the opportunity to present a petition to Parliament signed by thousands of people—mostly, but not all, members of USDAW—who were concerned about that. The process of presenting a parliamentary petition means that it is in formal parliamentary language, which I felt did not really give the flavour or the opportunity to explain what it is like for the victims of crime. That is why I was so keen to speak in this debate.

Earlier today I had the opportunity to hear directly from a number of people who have been victims of crime fairly recently, including a young man who was walking to his place of work to cover the shift of a colleague who had been unable to turn up. He was set upon by three drunken teenagers, hospitalised, ended up in a coma for some days and possibly suffered a stroke. He said that the criminal injuries compensation scheme allowed him “to reset his life”, as he described it. It perhaps did not provide all the compensation mentioned by the hon. Member for Enfield, Southgate (Mr Burrowes), but no one would ever say that monetary compensation is enough in such circumstances. What that young man said was that it had at least given him the opportunity to put right some of the wrongs.

I also heard from another young man from Glasgow, who was going home from his workplace—he works in retail—to see his baby daughter at lunchtime; at 2.40 in the afternoon he was violently attacked and left unconscious and with scars that will last for a lifetime. As he said, it is not only the physical scars, which both he and his family have to deal with, but the emotional scars. Every time he goes out, he sees faces in the crowd who he believes may yet be those same people who attacked him. His clear message to us as parliamentarians is that our focus should be entirely on cutting crime and not on cutting compensation. He laid out clearly that the compensation was not about the finance—he lost more financially, by being off work for a year, than he ever got back in compensation.

I appeal to the Minister, who is new but whose background I know. She is a reasonable person, not to be seen—I am sure she does not want to be—as on the side of the assailants in such circumstances, rather than on the side of the victims. It is a real concern to me that the Government’s proposals would do away with compensation for a huge number of serious injuries—in particular those covered in the lower bandings, bandings 1 to 5. The amounts of compensation for the individuals are relatively small, but the message, the signal sent to the victims, is that the state—society—has recognised their suffering and is prepared to do something about it. I hope that the Minister will listen and that she will bring any proposals back to the Floor of the House for us all to debate in more detail.

15:57

[Mr Frank Doran (Aberdeen North) (Lab)]

I add my congratulations to my hon. Friend the Member for Manchester Central (Tony Lloyd) on securing the debate.

I want to associate myself entirely with the comments just made by my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson). I value her experience as a Member of the Scottish Parliament, and I saw her work in the role to which she referred. I do not want to repeat what she said, but I do want to think a little about how we got to where we are.

Criminal injuries compensation is a relatively new concept. Whenever it was thought about in the past, it was considered to be a payment from the criminal to the victim. Relatively recently, in the 1950s, people started to look seriously at the responsibilities of the state. I will not go through all that history, but the first compensation scheme of its kind anywhere in the world was our compensation scheme, introduced by the Labour Government’s Criminal Injuries Compensation Act 1964.

How that legislation operated was very different from how today’s legislation does. There are three particular things to note about the 1964 Act. The hon. Member for Enfield, Southgate (Mr Burrowes) talked about a contribution to compensation. The 1964 Act based compensation for crime on the compensation that would have been received for a similar civil injury. There was no limit, and that was the downfall of the legislation, because the budget became very high.

In the first year, around 44,000 cases were presented and more than £50 million was paid in compensation. That legislation was the first of its kind in the world, and throughout its gestation and progress through Parliament the Treasury opposed it. That must be noted.

The provisions of the scheme have changed substantially. Compensation payments have been restricted, and we have fixed bands of payments, depending on the gravity of the injury. The current legislation still meets the basic principles of the scheme—that the victims of crime should be compensated for their injuries in certain circumstances.

A financial payment can never fully compensate anyone for a violent crime. Physical and mental scars may take a long time to heal, and some never heal. I was a practising solicitor in Scotland for many years, and dealt with many victims. I also worked in the criminal courts and saw the effect of crime. I have been a victim, not of a violent crime, but it left a few scars that remain today.

It is important that the state should acknowledge the effect of violent crime on individuals—

16:00

Sitting suspended for a Division in the House.

16:20

On resuming—

[Mrs Linda Riordan (in the Chair)]

This debate will now end at 4.50 pm.

[Mr Doran]

In the short time available to me, I want to make a simple point. One of the principles behind the 1964 Act was set out in the relevant White Paper:

“The Government do not accept that the State is liable for injuries caused to people by the acts of others. The public does, however, feel a sense of responsibility for and sympathy with the innocent victim, and it is right that this feeling should find practical expression in the provision of compensation on behalf of the community.”

The current Government intend to cut that provision, but I think that principle is still very important. The Treasury lost in 1964, but it looks as though it is winning in 2012. The victims of crime will be the losers.

16:24

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

It is a pleasure to speak under your chairmanship, Mrs Riordan.

On 16 September 2004, Robert Levy was stabbed and killed near Hackney town hall when he went to help a younger boy who was being threatened by a schoolboy with a knife. Robert was only 16 years old when he lost his life. His murderer was 15 years old.

Robert’s murderer is due to have his parole hearing in September 2013. I have received correspondence from the former Justice Minister, the hon. Member for Reigate (Mr Blunt), saying that Mr and Mrs Levy can apply to their local parole board to attend the parole hearing and read out their victim personal statement. However, Mr and Mrs Levy believe—I have a lot of sympathy with their position—that the victims of crime should have the right to speak, or to have a lawyer speak for them, at the parole hearings of the people who have harmed them or members of their immediate family. As I said, I have a lot of sympathy with that position. The Levys feel strongly that although articulate people can present their case well—in fact, I would think the Levys fall into that category—some people might not be able to do that and others might not even be able to write their victim personal statement very well. There is, therefore, an issue about parity in the law.

Mr and Mrs Levy are concerned that at the moment, the decision on whether victims of crime can speak or have a lawyer speak for them at a parole hearing is up to the discretion of the chair of the relevant parole board. They feel that reading out a statement is not adequate—I support them on this—and does not allow family members to respond to points made during the hearing. They would like to be able to have some comeback. The perpetrator has the chance to have other people speak for him, but they do not have anyone to speak on their behalf.

I wrote to the Justice Secretary, the Minister’s boss, on 4 October. We have not had a response yet. That is not a criticism. I expect that he has to consider the matter, and we have had a good dialogue with Ministers. However, could this Minister say specifically in her summing-up of the debate whether the Department might consider what has been proposed and look into whether there could be better rights for victims, particularly at parole hearings?

This is not about retribution. It is about balance and ensuring that the perpetrator accepts responsibility for their actions at each stage of the process. For someone who has served a sentence, the crime becomes more distant. For the family who have to live without their family member—in this case, their son, Robert—the pain never goes away. It is important that perpetrators understand that the impact of their crime does not lessen with time.

I sincerely apologise, Mrs Riordan, because I may have to leave a little before the end of the debate. Perhaps I can correspond with the Minister, and if she would be willing to meet my constituents, I would be very happy to facilitate it.

[Mrs Linda Riordan (in the Chair)]

I am now imposing a time limit on Back-Bench speeches of three minutes.

16:27

[Ian Austin (Dudley North) (Lab)]

I congratulate my hon. Friend the Member for Manchester Central (Tony Lloyd) on securing the debate. I would like to follow on from some of the points made by the hon. Member for Totnes (Dr Wollaston) and my right hon. Friend the Member for Exeter (Mr Bradshaw) and ask the Minister to look at the sentences that drivers receive after killing or injuring cyclists, which many people feel are often derisory.

For example, British Cycling employee Rob Jefferies was killed when he was hit from behind on an open, straight road in broad daylight by someone who had already been caught for speeding. Unbelievably, the driver got just an 18-month ban, a retest, 200 hours’ community service and a small fine. That was in line with the guidelines, so there was no hope of an appeal. Mr Jefferies’ brother, Will, is following this debate. He said:

“The present state of the law meant that his killer could never receive a sentence proportionate to the crime.”

The lorry driver who killed another cyclist, Eilidh Jake Cairns, admitted in court that his eyesight was not good enough for him to have been driving. He was fined just £200. He was free to drive again immediately. Unbelievably, 18 months later, he knocked down and killed Nora Gutmann, an elderly pensioner. His eyesight was still poor and he was not wearing his prescribed glasses. If he had been convicted of causing death by careless driving the first time, he would have been given a driving ban and would not have been able to kill Nora Gutmann. The justice system failed not only Eilidh, but Nora.

When Cath Ward, who worked for the police in the west midlands, was knocked off her bike and killed, the driver was convicted of careless driving and received just a short driving ban. Cath’s friend, Ruth Eyles, wrote to me:

“What shocks me is that the driver who killed Rob Jefferies will be able to drive again in 18 months…If that young man had had a legal firearm and had accidentally shot and killed someone through carelessness, would he be given a new licence 18 months later?”

All too often, incidents in which people are seriously injured are downgraded from dangerous driving to careless driving because it is easier to secure a conviction, but a conviction for careless driving usually results in the driver just having to attend a course.

We need a comprehensive review of how the justice system operates when people are hurt or killed on the roads that includes, first, a full analysis of how the police and coroners investigate such cases; secondly, a review of the charging standards and legal guidance used by the CPS; thirdly, a full examination of the offences available to the CPS, particularly causing death by careless driving; and fourthly, a review of the sentencing guidelines to ensure that they adequately reflect the actual or potential consequences of an offence.

British Cycling, of which I am a member, has called on the Ministry of Justice to start a review. Despite repeated letters and 78 MPs signing an early-day motion in favour, it has had no response to its request. I congratulate the Minister on her appointment and welcome her to her post. Is she prepared to meet a delegation from British Cycling to discuss justice on the roads in more detail, as the organisation has requested? Is she prepared to undertake a review of the justice system?

[Mrs Linda Riordan (in the Chair)]

Order.

16:30

[Simon Danczuk (Rochdale) (Lab)]

I want to share my knowledge of the Rochdale grooming case and, in particular, talk about an aspect that has not come to light or been much discussed: what one might term, the criminalisation of sexually exploited girls. The Howard League for Penal Reform recently produced a detailed report on that very issue, involving research by Professor Jo Phoenix of Durham university, entitled “Out of Place”. Soon after the Rochdale trial, I met a range of people involved in the case, including the victims. It became apparent that at least some of the victims had committed crimes that were clearly a response to the abuse that they had received—a cry for help.

Girl A in the Rochdale case described to me how on one occasion she tried smashing up a vending machine in one of the takeaways in which she had been repeatedly raped. The perpetrators of the rape had no hesitation in phoning the police, who attended and arrested the girl. It was during police questioning about smashing up the vending machine that she explained that she had been sexually exploited. It is the episode that people might remember; the police officer interviewing her yawned throughout the interview, as though he was not interested in what he was being told. It was at that stage that the girl’s parents first learnt about the abuse that she had received. That was in 2008, and we now know that no prosecutions, either of the girl or the perpetrators, took place and that the abuse continued for another two years.

From that incident and others, we also know that the perpetrators of those horrific crimes were emboldened to continue the abuse. As, I am sure, they saw it, they were being left alone to continue raping girls. Indeed, if the girls stepped out of line and committed crimes against them, the perpetrators felt emboldened enough to report it to the police. I was told of an incident in which one of the victims smashed up a taxi of a perpetrator, and she, too, was arrested.

I press the Minister to review the cases in which the victims were prosecuted, and possibly revoke some of the action taken against them. I shall conclude with an important point: in such cases, children must always be treated as victims, never as willing participants, and certainly never as criminals.

16:39

[Nia Griffith (Llanelli) (Lab)]

I was one of the MPs who last month went to the delegated legislation Committee considering the Government’s proposals to cut the criminal injuries compensation scheme. We were absolutely determined to speak up against those cuts. Indeed, in contrast to many such Committees, where most of the speaking is left to the Front Benchers, there was lively and vigorous opposition, not only from the Opposition side, but from Government MPs. I thank the Minister for having the wisdom not to push the motion to a vote and to allow time for a rethink.

If the cuts had gone ahead, they would have ended payments to victims, who include postal workers and children, mauled by dangerous dogs and to victims of criminal injury who suffered any of a raft of so-called minor injuries, including multiple broken ribs, who are currently eligible for payments of between £1,000 and £2,000. Cuts would have been made to payments that currently range from £2,500 to £8,000 for more serious injuries, such as fractured joints and significant facial scarring.

The criminal injuries compensation scheme is the last resort for victims of crime, when payment cannot be recovered from the perpetrators of the crime or from insurance cover. It involves modest sums, awarded under stringent conditions to the victims of crime, many of whom suffer loss of earnings due to their injuries. It is particularly valuable for those on low pay, such as the third of front-line retail workers who do not earn enough to qualify for sick pay. Victims of criminal injury also include health workers injured by violent patients and postal workers attacked by dangerous dogs. We cannot compensate for the trauma of an attack, but we, as a society, should at least provide modest financial help for the victims.

Furthermore, even if an injury is work-related and the employer has employers’ liability insurance, the Court of Appeal has said that no employer could be expected to go as far as preventing any robbery from taking place at all, and therefore employers do not breach their duty of care by not preventing robberies. Clearly, there is a need for a safety net and for the criminal injuries compensation scheme. For the sake of victims of crime, I again ask the Minister to abandon plans to cut the criminal injuries compensation scheme.

16:35

[Robert Flello (Stoke-on-Trent South) (Lab)]

As ever, it is a pleasure to serve under your watchful gaze, Mrs Riordan. I congratulate my hon. Friend the Member for Manchester Central (Tony Lloyd) on securing this crucial debate and on the support he has had from colleagues.

How society looks to and supports the victims of crime is most important. We had a proud record in government of helping and supporting victims, not least with a 43% cut in crime, but we recognise that there was and is much more to be done. That is why, among other things, we propose bringing forward a victims’ law at the earliest opportunity—hopefully, before not too long.

In welcoming the Minister, I must say, as I said some weeks ago, that we have high hopes that she and her colleagues will do far better than their predecessors in the two and a half sadly wasted years to date. Despite the little waver when she responded to an Adjournment debate on the criminal injuries compensation scheme before the issue went to the delegated legislation Committee, she rightly and properly pulled the statutory instrument on the scheme when it came to Committee, to ensure that it was not fully considered and an injustice was not continued. Her recollection of that fateful afternoon and evening will no doubt be such that she would not want a repeat of the clearly expressed unease from the Government Benches and across the Committee.

Will the Minister give a categorical assurance that the Government will not rush through both Houses a new proposal that has been only cosmetically changed? I urge her to assure Members that the criminal injuries compensation scheme will be properly considered on the Floor of both Houses. Will she also assure Members that proposals will not be brought forward unless a proper review and reworking of the scheme has taken place to address all the concerns raised by Members on both sides of the delegated legislation Committee and by various outside organisations?

It is important to stress that the criminal injuries compensation scheme is the last resort. It is important to the most vulnerable and innocent victims in society. We are talking about modest sums, but they are very valuable, particularly to those on low pay.

A number of Members mentioned dog attacks. It is horrendous when anybody is attacked, as a lot of postal workers are, but we must remember that all too often the victims of such attacks are children. Are we seriously saying that no compensation scheme or a weakened scheme would be right? Members on both sides of the House mentioned the information available to victims; the important issue of prisoner release needs to be addressed in particular. We also heard contributions about the attitude of professionals. I hope that the Minister will say something about that. They should be professional when dealing with victims of crime.

Restorative justice has to be done properly. It is not a cheap alternative. It is not something that can be swept in to deal with the matter and save a few quid on the side. If it is done properly and effectively and in the right circumstances, it is very good indeed, but it can be incredibly damaging if it is not.

The hon. Member for Witham (Priti Patel), who is not in the Chamber at the moment, mentioned the case of her constituent Marie Heath whose son was murdered, and the good work of SAMM Abroad. I add my support to that organisation.

My right hon. Friend the Member for Cardiff South and Penarth (Alun Michael) spoke about the four steps. They are extremely good points that the Government need to take on board. I have concerns that the Government still do not even know how much money is going to be delegated for PCCs to use for victims. I believe it is work in progress, which is a little worrying given that we are only a month away.

I will not repeat the points about cyclists at any length. British Cycling has done an extremely good job of raising the profile, and Members on both sides of the House have spoken well on that point. I simply urge the Minister to take the opportunity to have a proper root and branch review of the way that not only the criminal justice system but the entire system looks at victims of incidents—quite rightly, not accidents—where cyclists are involved.

There have been so many good points. I urge anyone observing the debate to read it in Hansard. I finish with a couple of points. My hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) raised the matter of Robert Levy’s murder, which raises important issues, and I look forward to what the Minister has to say. My hon. Friend the Member for Dudley North (Ian Austin) talked about British Cycling, and I met Will Jeffreys, the brother of Robert Jeffreys. My hon. Friend the Member for Rochdale (Simon Danczuk) raised the appalling behaviour in Rochdale. The children’s commissioner said that the issue does not just affect certain communities; it is a problem in every community of every part of our country. That is chilling.

I look forward to the Minister’s comments. I have spoken for slightly longer than I intended. My apologies to the Minister.

[Mrs Linda Riordan (in the Chair)]

Order. Before I call the Minister, may I remind her that the debate must finish at 4.50 pm?

[The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant)]

I am grateful, Mrs Riordan. It is a pleasure to serve under your chairmanship today. I congratulate the hon. Member for Manchester Central (Tony Lloyd) on securing the debate. I am conscious that this may be one of the final times we hear from him. I want quickly to convey that he will be missed right across the House. I wish I had time to say more. There is so much to say and so little time.

I am delighted to be responsible for representing the needs of victims and witnesses in Government. I am committed to ensuring that they are high on the Government’s agenda, which is exactly where they belong.

At the beginning of the year, we launched a consultation that sought views on a far-reaching package of proposals. We called it “Getting it right for victims and witnesses”, because that is what we need to do. Victims too often feel themselves to be at best an afterthought and at worst forgotten in the process of justice. Despite improvements over the past two decades, the system has continued to fall short, whether in relation to helping victims recover from the aftermath of a crime, supporting them through the inevitable stresses of investigation and trial, or providing the right services in the right place, funded as far as possible by offenders rather than the taxpayer. The urgent need to remedy the current weaknesses is why we are implementing the package of proposals that we committed to in our response to the consultation.

The Government have a responsibility to ensure that practical and emotional support is provided to help victims cope with the initial impact of crime and, in the longer term and as far as possible, recover from the consequences of crime. We are proceeding with plans to make improvements to the support available, raising up to an additional £50 million from the perpetrators of crime. On 1 October, the victim surcharge payable by an adult on a fine was increased. More than that, it has been extended to other disposals such as conditional discharges, community sentences and custodial sentences. Similar provision has also been made in respect of juveniles. The increase in revenue will increase the help that we can give to victims.

However, there is little point in ensuring that decent funding is available if we do not use it in the best way possible. That means prioritising support to those who truly need it: victims of the most serious crimes, victims who are persistently targeted and victims who are the most vulnerable in our society, and who may be isolated because of lack of support or family. That prioritisation of support underpins a second, related reform. For too long most funding decisions about victims’ services have been made in Whitehall. Past Governments have tested to destruction the virtues of monopoly purchasing of services, which I do not believe are in the interests of victims or taxpayers. We will take a more intelligent approach to victims and witnesses.

Under our plans, the Ministry of Justice will retain responsibility for commissioning services where either proven economies of scale exist or they are genuinely of a specialist nature. In our judgment, that means continued support from the Ministry of Justice for those bereaved through homicide, for victims of trafficking, and for rape support centres. We are also continuing to consider where else this approach would make sense.

Our coalition agreement also promised much needed stability for rape support services across the country, and we have given them long-term funding. We have also opened new support centres in areas lacking such provision.

For the bulk of victims’ services, however, funding will be devolved to democratically accountable police and crime commissioners. It is a plain fact that the needs of victims vary locally, and PCCs, much more than officials and Ministers in Whitehall, will be best placed to decide what their communities want and what they need. Hon. Members have raised the issue of national budgets and how much money will go to PCCs. I envisage that the majority of the budget will go to PCCs.

For many victims of crime, of course, their contact with the criminal justice system involves neither drawing on services to help them recover, nor—I shall come to this policy in a moment—seeking compensation. Rather, their priority is that the system treats them decently during the investigation and trial. It is unacceptable that victims still frequently feel that too little is being done. They have been given too little information and they are expected to sit next to the families of offenders. The Government are undertaking a review of the victims’ code and the witness charter to consider in detail how they can be made more effective and robust.

I am sure that the hon. Member for Manchester Central will be pleased to know that we are taking a careful look at the operation of victim personal statements, which can be invaluable to victims in court, making sure that the impact of the crime upon them is really understood. We are committed to ensuring that offenders take greater responsibility for their crimes and do more to repair the harm that they have caused. I have already talked about the additional money that will be provided to victims through the surcharge. Restorative justice is something that could transform lives, and I will certainly be pursuing that.

The Government believe that the role of the victims’ commissioner is vital to making sure that victims’ needs are championed and their voices heard across Government. The announcement of our intention to fill the post of victims’ commissioner is another clear signal that the Government’s commitment to criminal justice reform is real.

There have been numerous contributions made today by hon. Members. I will quickly list them: the hon. Member for Manchester Central; my hon. Friend the Member for Witham (Priti Patel); the right hon. Members for Cardiff South and Penarth (Alun Michael) and for Exeter (Mr Bradshaw); my hon. Friend the Member for Enfield, Southgate (Mr Burrowes); the hon. Members for Kilmarnock and Loudoun (Cathy Jamieson) and for Aberdeen North (Mr Doran); my hon. Friend the Member for Totnes (Dr Wollaston); and the hon. Members for Hackney South and Shoreditch (Meg Hillier), for Dudley North (Ian Austin), for Rochdale (Simon Danczuk) and for Llanelli (Nia Griffith). Unfortunately, I do not have time to go into detail and comment as I would like on the issues that they raised, but I assure them that I have listened very carefully indeed to everything that they said, and I may have to write to them to clarify issues.

[Mr Bradshaw]

I am sorry that the Minister has not been able to respond to the points made by three hon. Members about road traffic victims. Would she at least agree to meet a delegation led by British Cycling to discuss the issue?

[Mrs Grant]

I will write to the right hon. Gentleman and I agree to meet a delegation.

I am right out of time, so I will just say that our package of reforms is designed to ensure that victims’ services are put on a more intelligent and sustainable footing. It is designed, in particular, to ensure that those in greatest need of help and support get what they actually need when they need it. It is not about one size fitting all. I am committed to these reforms.

16:49

Sitting suspended for a Division in the House.

16:50

On resuming—

Parliamentary Language

Wednesday 17th October 2012 Westminster Hall

[Mrs Linda Riordan (in the Chair)]

Before we start, may I remind Members of the importance of abiding by our usual rules and conventions during this debate?

00:00

[Chris Bryant (Rhondda) (Lab)]

It is a delight to serve under your chairmanship, Mrs Riordan. I do not think that you say that at the beginning of every debate, so I feel a little admonished already.

“Erskine May”, the volume that governs how we behave in Parliament and dictates many of the rules that are not written up in the Standing Orders of the House of Commons, must be one of the most regularly ignored books in the history of English literature. Members will perhaps be surprised to know that it says:

“All Members should maintain silence.”

I do not know how often there is silence in the Chamber when somebody else is speaking. It is pretty rare, although on occasion the mood of the House can change on a sixpence. “Erskine May” also says that

“Members must not read any book, newspaper or letter.”

I have often seen Members signing Christmas cards in the House of Commons while a debate is going on, so I gently suggest that “Erskine May” is often ignored. I suspect that one of the reasons is that it is not generally available to the public—it costs £260 to buy. I believe that it should be available online and I cannot see any earthly reason why it should not be. All the Standing Orders of the House and everything else that dictates the way that we do our business are available online.

I know that some members of the public might think that there was a golden age when all MPs sat in the House of Commons and listened to one another carefully and attentively, only ever voting according to their consciences and not according to any party Whip, and that there was never any unruliness. In fact, the modern era has probably been one of the most ruly in parliamentary democracy.

On 24 July 1911, Tory MPs completely and utterly refused to allow the Prime Minister—Mr Asquith—to speak for the best part of 20 minutes by literally shouting at him at a very important point in his attempt to resolve a row between the House of Commons and the House of Lords. Then, when F. E. Smith was going to speak on behalf of the Conservatives, the Liberals, who believed that Smith had orchestrated the shouting at Mr Asquith, all shouted at him until the Speaker had to suspend the sitting before eventually adjourning it for the rest of the day. It is the only time that I have found that the Prime Minister was literally unable to get a single sentence out and on to the record; I suppose that is what happens when there is a Chamber dominated by Conservatives and Liberals.

In 1920, things got even worse. On 22 November that year, a Conservative, John Elsdale Molson, attacked an Irish nationalist, Joseph Devlin, when Devlin raised the matter of the Croke Park massacre, which had happened the day before. Indeed, things got so bad that the Conservative dragged the Irish nationalist over the top of the Bench and started pummelling him on the Floor. A Liberal actually shouted out, “Kill him,” and obviously the sitting had to be suspended.

Likewise, on 11 April 1923 the Speaker suspended the sitting because the Government had lost a vote the day before and Labour MPs were insisting that they should therefore change their policy on ex-servicemen. At that point, Robert Murray, a Conservative politician, and Walter Guinness, a Labour politician, ended up in a fist-fight and the rest of the day’s business was lost.

I mention all those incidents because people sometimes have this glorious image of a perfect, pacific past in the House of Commons. Sometimes we romanticise the past too much and I would argue that “Erskine May” has also entrenched some of the archaisms of the past that are no longer necessary.

Personally, I find the whole business of calling somebody an “hon. Friend”, a “right hon. Friend” or an “hon. Member” rather unnecessary. I do not know why; it just makes us seem as if we are hung up on titles. Ordinary members of the public have no idea what the difference is between an “hon. Member” and a “right hon. Member”—indeed, often Members themselves do not know the difference. It just seems so ludicrous when one Member has referred to another Member as “honourable” and then someone else pipes up and says, “Oh no, he’s right honourable.” I just think, “Honestly, have we not got something better to obsess about than our own status?”

Similarly, it is a particular irony that we always refer to one another by our constituencies, not least because we can rarely remember each other’s constituency names. So we will go, “The hon. Member for…somewhere down in the south-west,” or something like that, and then somebody will shout out the constituency name and it gets corrected and tidied up by Hansard. The irony of it all is that Hansard will actually then put the name of the Member.

It is bizarre that we play this game of having to refer to one another by our constituencies rather than our names. I do not think that the fact that people in the Welsh Assembly or the Scottish Parliament call one another by their names means they are any less courteous to one another; indeed, they might actually be a little more courteous.

There are also a lot of inconsistencies about how the Chair sometimes rules in relation to specific comments that are meant to involve unparliamentary language. For instance, Eric Forth regularly got away with using the term “PMPs”. When he was shadow Leader of the House, he always referred to “PMPs” as opposed to “PMQs”, with “PMPs” meaning “Prime Minister’s porkies”. If that was not accusing the Prime Minister of lying, I do not know what would have been.

That was quite a direct accusation of dishonesty, yet Jacob Rees-Mogg—sorry, I am not allowed to call him that; I must call him “the hon. Member for somewhere or other down in the south-west”—did not get into trouble for using the word “flipping”, but Sally Keeble got into considerable trouble for using a word that begins and ends with the same letters as “flipping” but is slightly different in the middle, and that was because it was used in a quotation.

Members are not allowed to use quotations. It says quite clearly in “Erskine May” that Members are not allowed to use a quotation at all, at any point. No extracts from books, magazines or newspapers can be used, and yet we do it regularly—in fact, we do it all the time. On occasions in 2002, the current Secretary of State for Work and Pensions used quotations as a means of accusing Stephen Byers of lying, but he was not reprimanded by the Chair for doing so, even though it is absolutely clear in “Erskine May” that a Member is not allowed to use the fact that they are quoting somebody else as a means of passing off an imputation of dishonesty against another Member.

I cannot remember Tom Watson’s constituency, but it is somewhere in the midlands—West Bromwich east, north, south or west. He was told off for using the word “pipsqueak” on 8 July 2010, yet the words “stoolpigeon”, “hooligan”, “blackguard” and “idiot” have all been used at various times by hon. Members and they have never been told off for using them. So I simply say that it is time for a greater degree of consistency about what we consider parliamentary and unparliamentary language. Indeed, I would say that it is time for a full redraft of “Erskine May”.

In particular, Members may not know that they are not allowed to be ironical in a debate in the House of Commons. It was a ruling of the Speaker on 25 August 1860, when he spoke to a Member:

“I should have informed him that to discuss any matter in the House in an ironical sense is unparliamentary and out of order.”—[Official Report, 25 August 1860; Vol. 160, c. 1827.]

When I have heard people make ironical comments in the House, I have often wondered whether those comments should be put in italics in Hansard, so that everybody catches the drift of what the person was really saying; sometimes it looks as if they are saying exactly the opposite of what they really mean. However, the ruling is still in “Erskine May” as a result of that decision in 1860.

I have already referred to the fact that “Erskine May” says that extracts from newspapers or books, and paraphrases of or quotations from speeches and so on, are not admissible. I think that that ruling is out of date and it is

“more honoured in the breach than the observance”.

[Gloria De Piero (Ashfield) (Lab)]

I am sorry to have to use the term “my hon. Friend”; in fact, I will just say “my Friend.” Does my Friend agree that some things cannot be put in “Erskine May” and that there should be some guidelines that just mean that we lead by example? For instance, when I have been going round the country asking people why they hate politicians, they say that one of the primary reasons is that they do not think that we answer questions put to us. We may think that senior politicians might lead the way on that issue, but the Prime Minister demonstrated the opposite today in an answer—or non-answer—to the question that my Friend put. That is the kind of thing that infuriates voters.

[Chris Bryant]

I will come later to what the Prime Minister said this afternoon, but to be honest I think that it was pretty scandalous. The whole point of Parliament is that Members are sent here on behalf of their constituents to be able to hold the Government to account, and that must surely require the Government to answer questions. Indeed, the ministerial code of conduct, ironically enough, was written by the Prime Minister in May 2010. It says absolutely categorically:

“It is of paramount importance that Ministers give accurate and truthful information to Parliament”.

It also says:

“Ministers should be as open as possible with Parliament and the public, refusing to provide information only when disclosure would not be in the public interest”.

People might think that that is just the ministerial code of conduct, and that the Prime Minister wrote it so he can ignore it. However, it is also a motion of this House —it was a resolution of this House carried on 19 March 1997. I cannot understand, and I do not think that our constituents will understand, why the Prime Minister should think himself able to declare that he will not answer a particular question from somebody, apparently just because he does not like them.

I happen to think that the Prime Minister did that because he had something to hide. He made it pretty clear that he chose not to deny the fact that there are additional e-mails between him and Rebekah Brooks and Andy Coulson, of a salacious nature and embarrassing to him, which he refuses to publish. He could have chosen to deny that today. It seems absolutely clear to me that there is precisely such a stash, and he should, in the interests of democracy—and, frankly, in the interests of his reputation—publish them as soon as possible.

Incidentally, the Prime Minister said earlier this year that he was not going to reply to any of my questions, then he started replying to some of them and now he has gone back to not replying. I presume that today’s not-replying answer was precisely because I had asked a question that embarrassed him and because he had something to hide.

“Erskine May” also says that we are not allowed to ask certain kinds of questions:

“Questions which seek an expression of opinion, or which contain arguments, expressions of opinion, inferences or imputations, unnecessary epithets, or rhetorical, controversial, ironical or offensive expressions are not in order.”

That would rule out pretty much every single parliamentary question I have ever heard, certainly those on the Floor of the House; perhaps written questions are rather different. This seems to be yet another example of where we must consider changing how we write our rules.

Some of the issues are very specific, and I want to refer to how “Erskine May” says we are allowed to refer to other Members of Parliament, Members of the House of Lords, judges, governors-general of other territories, the Queen, the heir to the throne and members of the royal family.

It is absolutely right and proper that we should not seek to bring members of the royal family into our debates, and not seek to pray in aid a member of the royal family to try, in some way or another, to influence a debate—by saying, for example, “Princess Anne agrees with me” or “Prince Andrew disagrees with me.” However, extending that to mean that we cannot say a word about a member of the royal family is inappropriate, because we can write about them in newspapers. As Members of Parliament, we can say things on television, and in debates on “Question Time” or “Any Questions?” so not to be able to say the same things in Parliament, which is meant to be the fundamental place of debate in our society, seems misguided and wrong. It relies on an understanding from the late 17th century, which is archaic.

“Erskine May” also states, incidentally, that we are not even allowed to ask a question about ecclesiastical patronage. When the Prime Minister, in the next few days, gets two names suggested to him as next Archbishop of Canterbury, we will not be allowed to ask him which name he put forward to the Queen for appointment. One of the problems with the Church of England today is that the whole process of appointing bishops and archbishops is far too clouded in secrecy. It would be far better to have an open and transparent system, as we have for any other Government appointment. Why can we not ask questions about how patronage is exercised?

Similarly, and this strikes me as very strange, we are not allowed to ask questions about how the Prime Minister exercises his patronage in the granting of honours. That is particularly bizarre, because in 1922 a Conservative Member, Colonel John Gretton—as I am sure you know, Mrs Riordan, he won two golds in the 1900 Olympics—wanted to ask Lloyd George if he could give a definite assurance

“that no money or other consideration of money value has been paid, or passed either directly or indirectly, in connection with any of the honours recommended by the Prime Minister in announcing the list of honours on the 3rd of June this year.”—[Official Report, 27 June 1922; Vol. 155, c. 1842.]

The Speaker refused to allow him to ask the question, but it seems to me absolutely quintessentially important that we should know whether money has been handed over to a political party or an individual for the granting of an honour. The Speaker relied on the answer that had been given by his predecessor, Speaker Lowther, on 21 July 1907, when another MP, Hugh Lea, wanted to ask Campbell-Bannerman, another Liberal Prime Minister, about a knighthood he had given to Sir James Brown Smith. We know, in retrospect, that those were corrupt arrangements, but we could not have found that out through Parliament. If exactly the same were to happen today, we would have no means of establishing whether there was a corrupt arrangement.

I want to come to the matter of imputations of falsehood. Earlier this year, we had a debate about the then Secretary of State for Culture, Media and Sport, who is now the Secretary of State for Health—a bizarre promotion to my mind, but that is a matter for the Prime Minister’s conscience and not for anyone else’s. I made allegations about him in the debate, which had been made by other people in different terms, but amounting to exactly the same thing. I will not repeat them here, because that would be inappropriate. Members have to understand that when a motion specifically refers to the conduct of a Member they must be able to make an allegation about that conduct, and that also applies to Members of the House of Lords and of elsewhere.

In the 19th century, there were direct accusations against Viscount Palmerston, who, because his viscountcy was an Irish one, was a Member of the House of Commons. The Speaker ruled very clearly that if the debate was about whether Viscount Palmerston had lied to the House, it was perfectly possible to make that allegation, although it would not be in any other kind of debate. We need to draw that line very carefully, because there will be times when our constituents want us to say directly, in words that they understand, adhere to and support, what the allegation is. Sometimes when we mystify parliamentary language, we do ourselves an enormous disservice.

I have already referred to the issue of what should and should not be said in Parliament, and there is just one other thing that I want to mention. If we are to do our job well in opposition—all of us, at some point, are likely to be in opposition—it is important that Ministers adhere to all the elements of the ministerial code. I note that on Monday the Home Secretary was not able to provide a copy of her speech to the Opposition before she stood up to make her statement. It was said that providing it beforehand was merely a convention of the House. That is not so. Section 9.5 of the ministerial code states:

“A copy of the text of an oral statement should usually be shown to the Opposition shortly before it is made.”

I think that “usually” is there because of the Budget, and only because of that. It goes on:

“For this purpose, 15 copies of the statement and associated documents should be sent to the Chief Whip’s Office at least 45 minutes before the statement is to be made.”

I cannot remember the Home Secretary providing a copy of her statement to the shadow Home Office team 45 minutes, 40 minutes, 35 minutes or 25 minutes before, and I very much hope that when the Minister replies, he will tell us that he will ensure that the Prime Minister will reply to questions and that all Ministers will provide Opposition spokespeople with a copy of their statements at least 45 minutes before they deliver them, as required in the ministerial code.

17:18

[The Deputy Leader of the House of Commons (Tom Brake)]

It is a pleasure to serve under your chairmanship, Mrs Riordan. I congratulate the hon. Member for Rhondda (Chris Bryant), who is a former Deputy Leader of the House, on securing the debate. He has set out his detailed historical knowledge of parliamentary procedure and his long-standing interest in the matter. He highlighted some of the discrepancies that can be identified in “Erskine May”, and has entertained us with stories of how Parliament used to be. He presented an image that resembled a fight club, but with occasional use of parliamentary procedural language.

It is a great pleasure to respond to the debate, particularly as the Government have no direct responsibility for parliamentary language. As the hon. Gentleman knows, the language used in Parliament is a matter for Parliament itself, and in this House it is the Chair rather than the Government who has responsibility for ensuring that what is said is in accordance with the rules and conventions of the House. We all rightly respect the Chair, and in responding to the debate I certainly will not be suggesting to you, Mrs Riordan, nor to the Speaker or his Deputies, how they should apply the rules of the House.

Having absolved myself of any responsibility for parliamentary language, I am happy to address the points raised by the hon. Gentleman. It is right that we conduct debates in the House in a courteous and reasonable manner. Although we may profoundly disagree with one another, resorting to personal insult and abuse would demean the institution of Parliament and its Members. “Erskine May” states that

“good temper and moderation are the characteristics of parliamentary language.”

There may be times when those characteristics are not as in evidence as they might be, but we rely on the wisdom and authority of the Chair to set the limits.

Being too prescriptive about terms that are and are not parliamentary is easy. Much depends on the context in which they are used. As the hon. Gentleman may know, pre-1983 editions of “Erskine May” contained lists of terms that had been ruled unparliamentary. The disadvantage, of course, is that unparliamentary use is often more to do with context or the tone with which something is said. Simply having a list is no guarantee against parliamentary abuse by Members.

We have all experienced this, me included: I thought that my language was in good temper and moderation as I introduced a ten-minute rule Bill on freedom of information, during which I did not accuse individual Members, but accused some of perhaps duplicitous behaviour in relation to expenses and a particular Bill, but I was slapped down because my language was deemed bad-tempered and immoderate. I felt that, in those circumstances, the language that I used was appropriate. To codify such things is extremely difficult, as they are not always black and white, which is why it is better for the Chair to judge the factors on a case-by-case basis.

I think that most Members would not want us to go down the Australian route, where a much more colourful turn of phrase is permitted. The terms of endearment that Paul Keating used towards John Howard include “desiccated coconut,” “mangy maggot,” and much worse. I hope most Members would agree that that is not the route we should go down.

The hon. Gentleman referred to arcane language. I understand his point. He said that the arcane language we use is often unnecessary or old-fashioned, but addressing other Members through the Chair provides some distance and perhaps reduces the antagonism that might be felt and, therefore, slightly lowers the temperature of debates, which should be welcomed.

[Chris Bryant]

I could talk through the Chair but, none the less, refer to Tom Brake, rather than the right hon. Member for whatever constituency he represents.

[Tom Brake]

Indeed, the hon. Gentleman could. My point is that, by talking through the Chair and referring to other Members as right hon. Gentlemen or right hon. Ladies, we are providing some distance and reducing the temperature, which, except for some rather bad-tempered debates, ensures that good-tempered and moderate language is used in the House.

People might feel that some of the terminology that we use—Adjournment debates, early-day motions, substantive motions and Divisions—do not help the public to engage, but others would argue that at least some members of the public appear to have little difficulty in following parliamentary proceedings on the Parliament channel. They seem to cope with some of that language. Of course, there have been some incremental reforms: we do not refer to the Public Gallery as the Strangers Gallery any more. The hon. Member for Broxbourne (Mr Walker), the new Chair of the Procedure Committee, might have views on such matters and want to consider the question of archaic language.

One point on which the hon. Member for Rhondda was perhaps not entirely correct is that, in this House, we may refer to members of the royal family, the Speaker, members of other Parliaments and judges, provided that there is a substantive motion for the House to debate. In such circumstances, it is perfectly legitimate to debate members of the royal family or other categories, such as senior judges. Again, the fact that that is done through a substantive motion ensures that, for instance, the courts are treated with the respect they should and that there is a strong relationship of trust and respect between the courts and the House.

[Chris Bryant]

If, for instance, a member of the royal family is appointed by UK Trade and Investment to adopt an ambassadorial role on behalf of the country and the Government, is it not perfectly appropriate that Members of Parliament should be able to ask questions about the expenditure on their flights, how much it costs for them to travel, whether they have been doing a good job and whether, frankly, they have been a complete and utter embarrassment to the country?

[Tom Brake]

A debate on the hon. Gentleman’s specific points might be possible through a substantive motion, and I will write to him to clarify that.

Finally, time does not allow me to rehearse the 13 June debate on the then Secretary of State for Culture, Media and Sport, but that debate made something clear: when a serious allegation is made against a Member and provided there is a substantive motion, it is perfectly in order for that debate to take place and for matters contained in the substantive motion to be raised. The only caveat is that there is still a need to maintain good-tempered and moderate language in that debate, so that the genuine, substantive issues contained in the motion can be debated appropriately.

I thank the hon. Gentleman for raising the matter. I have noted his concerns and will ensure that they are drawn to the attention of, for instance, the new Chair of the Procedure Committee. He raised the specific point about Ministers ensuring that statements are received within 45 minutes, which I will ensure is taken up with Departments.

Chancel Repair Liability

Wednesday 17th October 2012 Westminster Hall

17:28

[Peter Luff (Mid Worcestershire) (Con)]

Should the vote due at 6 o’clock come towards the end of the Minister’s concluding remarks, I am content for her to write to me with her final remarks, rather than bring Members back at quarter past 6.

I am also sorry that the late start means my hon. Friends the Members for Truro and Falmouth (Sarah Newton) and for Stafford (Jeremy Lefroy) are not in their places, as they had hoped; sadly, they have other duties.

This debate is on the consequences of events that happened centuries ago, between 1536 and 1540 to be precise, so I will give a little context. Parliament and English democracy will be 750 years old in the year of the next election: it was in 1265 that Simon de Montfort first called the shires to assemble in what is generally recognised as the first true English Parliament. We honour him in the vale of Evesham with particular enthusiasm; he was killed later in the same year at the battle of Evesham. Our modern freedoms can be dated from exactly 50 years earlier: it was in 1215 that King John reluctantly signed the Magna Carta. He now lies buried in Worcester cathedral. The inheritances of democracy and freedom, therefore, perhaps ring a little louder in the ears of an MP from Worcestershire.

The freedoms that Parliament defends often affect many thousands, even millions, of people, but the freedom of small groups is just as precious. So it is with the archaic workings of the law on chancel repair liability. “Archaic” is the word to describe those workings: we do not have to go back as far as King John or Simon de Montfort to establish its origins, but we do have to go back to Henry VIII and the dissolution of the monasteries, which concluded in January 1540.

I am no lawyer, let alone an ecclesiastical lawyer, but I hope that the essence of what I am about to say will be accurate. At the time of the dissolution of the monasteries, their land was sold off by the King. Often, there was a church used by the local community, associated with the land sold off, that had been sustained by the local monastery. The King wished the churches to continue to function, so he decided that those who purchased the land associated with them would be nominated lay rectors and have continuing responsibility for the upkeep of that part of the church used by the rector himself, the chancel. Thus the principle of chancel repair liability was established.

Often, the purchasers were major institutions, such as the schools of Eton and Winchester and the colleges of Oxford and Cambridge. They own to this day the land that they purchased from the King, and the liability to repair the chancels of the relevant churches has continued, providing many fortunate parochial church councils of the 21st century with a useful source of income for the maintenance of their mediaeval churches.

Other purchasers were less long-lived, or the land was sold and sold again and the liability forgotten. It still existed in law but had lapsed in practice, perhaps for centuries. Although lapsed, it was still enforceable, and so we come to 1994 and Aston Cantlow. Just across the border from my constituency, in Warwickshire, events unfolded that put an unwelcome spotlight back on chancel repair liability. A family purchased a property knowing the liability attached to it but expecting it to be unenforceable in modern law. The case went throughout the courts and eventually the family lost, which cost them a total of about £500,000. The courts asserted afresh, to much amazement, that the liability remained a valid claim on modern householders.

The then Government reflected on the advice that they had received from the General Synod of the Church of England, the Law Society and the Law Commission that the liability was an archaic law that should be scrapped, and ignored that advice. Actually, I think that they were right to do so. The major institutions that own land to which the liability attaches can afford the burden and budget for it. To remove that useful source of income from the cash-strapped Church would provide a windfall for some very rich and privileged institutions—including, by the way, and with some irony, the Church Commissioners themselves, who own considerable amounts of land to which the liability attaches.

Although the then Government may have been right not to abolish the law, they should still have chosen a different route. They decreed in 2003, in the light of the Aston Cantlow verdict, that the liability would lapse on any property to which it attached if it was not registered by October 2013, but only when the property first changed hands after that date. Registration meant that the existence of the liability would appear on the title deeds and be registered as such by the Land Registry. The liability would continue indefinitely on registered properties and, importantly, on unregistered ones until the first sale after the deadline. It was the ultimate long-grass manoeuvre, simply delaying the problem until the end of the 10-year period—now—but doing little to solve it. In the meantime, an unknown number of householders and landowners in an unknown number of parishes faced the threat that chancel repair liability might be registered on their property, even though its existence had been entirely forgotten.

As the deadline looms, the reality is becoming clearer for many small and unfortunate landowners. Evidence that I have seen from the Land Registry suggests that there has been a rush of registrations. It is believed that about 5,200 churches are entitled to claim the cost of chancel repairs from the lay rector. The majority of those lay rectors will be major institutions, but a significant minority will not. Let us say that just 10% of the parishes have private householders as lay rectors and that the average number of householders and small landowners affected in a parish is about 30—the number in the parish of Broadway in my constituency, where the situation arose recently. That would give us about 500 parishes and 15,000 private individuals. This debate is about the rights and freedoms of that small group. They may not be numerous, but they face jeopardy. If the Government believe in justice, they must take their plight seriously.

It is a real plight. The chancel of a mediaeval church can constitute about one third of the total church building. A repair bill of £200,000 would not be uncommon. In the case of Broadway, a regular bill every decade or so for about £7,000 can perhaps be expected. Fewer householders in a parish with the liability would mean a correspondingly higher sum. I know of at least one parish where only two properties are liable for repairing the chancel of the church.

[Nia Griffith (Llanelli) (Lab)]

The hon. Gentleman has explained clearly the problems faced by householders. Given that back in 1982, the General Synod of the Church of England overwhelmingly supported a motion proposing that chancel repair liability be phased out and that the Law Commission’s 1985 report recommended that chancel repair liability arising from the ownership of land should be abolished after 10 years, does he agree that the Government should now consider implementing that recommendation or, at the very least, agreeing to set up a parliamentary committee of inquiry shortly after October 2013? It is outrageous that people should be facing the unfairness of chancel repair liability. A few householders are facing enormous bills.

[Peter Luff]

I agree with the spirit of what the hon. Lady says, but happily, I think I have a rather simpler solution. Let us see.

As I was saying, the sum would be payable pretty much on demand and would be unpredictable in both amount and frequency. A house in such a situation would be either unsaleable or substantially reduced in value. Some wrongly say that insurance is the answer, but it is not. When someone buys a house, the solicitor should do a search to establish whether the liability exists on the property. Such searches are complex and often difficult to conduct, so after a brief search, many solicitors instead offer purchasers chancel repair liability insurance.

Such insurance is available only where it appears that no liability is registered. Where liability is registered, insurance is not available. Where there is no awareness of the possibility that the liability might be claimed, no insurance is purchased; I doubt whether many of us here today have such insurance. For most property owners, the registration of the liability means that they will have to pay large sums at regular intervals for ever, passing on the liability to anyone foolish enough to buy their property.

[Jeremy Lefroy (Stafford) (Con)]

I congratulate my hon. Friend on securing this debate. Does he agree that, as pointed out by my constituent, the Rev. Greg Yerbury of Penkridge, the matter applies not just to rural parishes but to many urban parishes as well? People might think that it is just a matter of country churches, but it is not.

[Peter Luff]

My hon. Friend, who I am glad to see has made it to this debate, anticipates the point that I was just about to make. I agree entirely. His constituent has been in touch with me, too, and I welcome the correspondence that I have had with him.

Other people say that householders can commute the sum by paying a lump sum to the Church, but that, too, is an arbitrary and unfair tax. It might extinguish the liability, but at considerable cost to the householder. It is important to realise that there is generally no easy way of telling whether the liability attaches to a property unless it has been registered. Proximity to a church is no measure of the likelihood that the liability attaches to a property. The land could be anywhere, town or country. It just had to be purchased by the right person when Henry VIII sold it in the late 1530s.

What transpired next was legal advice from the Church of England to dioceses that parishes should make efforts to register liability before the October 2013 deadline. A parochial church council that did not register the liability could be held in charity law to be in breach of its duty to maximise the income due to the charity. Failure to do so would make individual churchwardens and PCC members personally liable for the cost of chancel repairs.

Of course, had it not been for the Aston Cantlow case, all this might have remained theoretical. Chancel repair liability had been entirely forgotten in many parishes, but PCCs were now obliged to reactivate it. To make matters worse, English Heritage, showing what I can only describe as a regrettable lack of understanding, said that it would not provide funding for the repair of historic churches whose PCC had declined to enforce the liability.

A perfect storm now faced many PCCs, including the Broadway PCC with responsibility for the wonderful mediaeval church of St Eadburgha, which dates back to the 12th century. PCCs generally do not want to enforce the liability against their neighbours and friends. If they enforce the liability for the first time in living memory, they incur the wrath and indignation of the householders and landowners who were living in happy ignorance of their liability. If they do not, they become personally liable for the repairs and lose all grant aid from English Heritage. It is no surprise to me that since I began this campaign, I have heard from parishes and dioceses the length and breadth of England: from Norfolk, York, Cambridgeshire, Devon and Kent to Somerset, Oxfordshire, Cornwall, Staffordshire and Wiltshire. The issue is alive again, and communities around the country are living in fear.

At this point, I must turn the finger of blame on the national structures of the Church of England. Perhaps because it did not appreciate the growing scale of the problem and the increasing number of parishes caught up in it, the Church seems to have made no attempt to understand the implications of the advice that it offered and given no guidance on how dioceses should explain the other option open to PCCs, for there is another option; I would like the hon. Member for Llanelli (Nia Griffith) to listen carefully to this point.

The consequence in Broadway of the sudden arrival of letters from the Land Registry on the doormats of 30 local families, the Broadway Trust and landowners, some of whom live many miles away, was dismay, anger and cries of anguish. I heard that anger for myself at a public meeting in the village. Acting with the best of intentions and pursuing the only route that it believed to be open to it, the PCC had made enemies of a large number of local people. A diligent process of mapping, done entirely by volunteers comparing ancient maps with modern Ordnance Survey ones, had caused chaos. It is not an easy job.

As one vicar from elsewhere in the country wrote to me:

“It is not only a matter of the resentment that some parishioners are expressing when they find their properties are burdened with CRL. I am also concerned about the thousands of volunteer hours being expended on trying to trace, map and register CRL, often fruitlessly.”

In other parishes, there were no volunteers. As a churchwarden a good long way from Worcestershire told me:

“Members of our Church have managed to obtain limited information but to further pursue the matter we will be forced to obtain, and pay for, professional advice.”

Sadly, the Anglican church in Broadway was seen to be behaving in a profoundly un-Christian way. As a correspondent from another part of the country told me:

“As a former PCC member, I can only say that I would have resigned immediately, rather than be forced to implement what can only be considered as a Draconian law. I also wonder if the Second Commandment of our Lord Jesus—to Love our Neighbour—is being disregarded by any diocese that invokes such an unfair law.”

To decree that a very small and random proportion of Broadway’s 2,000 or so inhabitants should, irrespective of their financial standing or personal faith, suddenly assume liability for the repair of an ancient church, is just plain wrong. The arbitrariness flew in the face of all Christian teaching.

To quote another parish in another diocese:

“The PCC is concerned at the enormous damage that registering liability would cause to the reputation of the church in the local community and the adverse effect this would have on the pastoral mission of the church, the furtherance of which is the first function of the PCC.”

The incoming vicar of Broadway, the Rev. Michelle Massey, realised that that could be the key to resolving the dilemma. If enforcing the liability was an obligation imposed on the PCC as trustees, would it also not be true that, if to enforce the liability was demonstrably un-Christian, that too would put the PCC in breach of its charitable responsibilities? Here was an ingenious paradox worthy of Gilbert and Sullivan, were the consequences not so serious for everyone involved.

It transpired that other PCCs from around the country, also aware of the paradox, had sought the guidance of the Charity Commission under section 110 of the Charities Act 2011 and been informed that, on the basis of the specific circumstances in each case and with no general precedent set, they would be deemed to have behaved responsibly as trustees if they decided not to enforce the liability. The Broadway PCC put together a compelling case outlining the ways in which registration of the liability would work against their fundamental duties and the Charity Commission, with commendable speed, responded saying that it agreed. Broadway PCC was free not to enforce the liability and the PCC members would not be held personally liable.

The Charity Commission has recently put together some excellent advice to PCCs, which is now available on its website. All parishes worried about the issue should read it. The advice concludes:

“Section 110 advice can provide additional reassurance for PCC members that they have acted correctly and in accordance with their duties by protecting them against the possibility of any subsequent legal challenge to their decision. We are willing to consider providing such advice where PCCs consider there is a real likelihood of their decision being challenged and they are able to present us with a substantive case explaining how they have reached their decision.”

Meanwhile, and very happily, responsibility for the grant funding of repairs to historic churches is being transferred from English Heritage to the Heritage Lottery Fund. In line with that excellent organisation’s reputation for pragmatism, the fund has told me that it will not require church communities to register the liability to receive grant funding, so all is well—not quite.

There are at least three remaining problems. First, and perhaps most importantly, many parishes are unaware of the options open to them if they do not wish to set neighbour against neighbour. Secondly, even though the current PCC in Broadway and other similar parishes have decided not to enforce or register the liability, and even though a liability unregistered by October 2013 cannot be enforced subsequently if the property is sold, it could still be enforced by a future PCC on a property that has not changed hands. A decision taken now not to enforce a liability does not mean that a future PCC might not decide differently. In practice, therefore, every landholder aware of his liability, which continues until the time of first sale after October 2013, cannot obtain insurance and, until his property is sold, could still face the possibility of a future PCC coming after him for the costs of chancel repair.

The third problem is time. Will there be time to ensure that all PCCs are aware of the courses of action open to them and, where necessary, for them to secure Charity Commission approval not to enforce the liability? Is there a real risk that a failure to get section 110 guidance from the commission could leave PCCs in a legal limbo, with liabilities unregistered and personal liability a real possibility? I think so.

The solution for my Broadway constituents is easy, I think. A simple piece of legislation is needed to ensure that, where a PCC acts on the advice of the Charity Commission and chooses not to enforce the liability, its decision is binding in perpetuity and cannot be revisited. A PCC can choose to sell land or buildings. It should also be enabled to renounce its right to claim chancel repair liability in perpetuity. In terms of ensuring that other parishes are aware of the options, I hope today’s debate will help draw attention to the issue and will focus the national Church authorities on what I see as serious neglect of their responsibilities.

The Church of England, at national and diocesan level, must act urgently to help PCCs to navigate their way round the minefield through which they are required to pass, drawing their attention to the very helpful advice of the Charity Commission. I am sure that the Government—the Minister is a very reasonable lady—will wish to do more than casually assert that chancel repair liability is a legitimate property right, as they have done in the past. If they believe in the freedoms and democratic responsibilities with which I began this speech, they must find a way to ensure that the liability is fairly applied and that the outrageous arbitrariness of this archaic law is ended.

In essence, the solution revolves around giving PCCs the right to renounce their right to the liability in perpetuity and to make their decisions, intended to have permanent effect, watertight. The state should not arbitrarily remove legitimate property rights, but where an organisation or individual wishes to give them up, the state should be willing to help them to do so. Chancel repair liability may be a complex problem, but it has, I believe, a simple solution, which I commend to the Minister.

17:45

[The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant)]

It is a pleasure to serve under your chairmanship again, Mrs Riordan. I congratulate my hon. Friend the Member for Mid Worcestershire (Peter Luff) on securing a debate on the subject of the approaching deadline for the registration of chancel repair liability. I am replying as the Minister with responsibility for general land law in England and Wales.

The debate has highlighted the issues that people affected by chancel repair have to address in light of the October 2013 deadline. I do not underestimate the seriousness and difficulty of those issues, and the problems that they can cause for communities; I am, however, for reasons that I will explain, not persuaded that any change in the law is necessary. I know this conclusion will be disappointing to my hon. Friend, but I will keep the matter under consideration and will monitor developments carefully.

As we have heard, chancel repair liability is an ancient, but enforceable, part of the land law of England and Wales, whereby property owners can be compelled to pay for the repair of the chancel of a church. The liability is thought to benefit about 5,200 ancient churches, and to burden a large number of properties. Liability as between owners is joint and several. However, the present owners of the properties affected by the liability are not the only people to whom chancel repair liability and the approaching deadline for registration are important. Anyone seeking to buy a property will want to know whether it may be affected by chancel repair liability. Searches will be conducted and insurance may be taken out.

On the other side of the liability, the owners of the benefit of the liability will have issues to address. In England, the benefit is usually owned by the local parochial church council. The members of the council, who are essentially charity trustees in relation to their local church, have potentially difficult decisions to make about registration and, should it be necessary, enforcement of the liability.

[Nia Griffith]

Given the difficulties the Minister has just referred to, could there not be a simpler solution by doing away with the need to have the liability in the first place? It seems very unfair, and she has just pointed out why it would be very difficult to put a halfway solution in place. Perhaps a final solution needs to be made that actually gets rid of it.

[Mrs Grant]

The main issue, though, is that it is a valid property right that has been upheld by the House of Lords. I will say a little more about the hon. Lady’s point as my speech develops.

In most situations concerning private property rights, only the parties directly involved are engaged, but with chancel repair liability, the surrounding issues may be important for the relationship of the clergy, congregation and wider community in parishes where the liability exists and may be enforced. The approach of the deadline for registration may well have given everyone in those groups pause for thought.

In the midst of all the activity that registration or the consideration of registration may have produced, however, we should not forget the essential fact that the existence of chancel repair liability over a property is long standing. No new liabilities have been created. The registration of a notice of the liability or a caution against first registration on the land register merely preserves the right to make a claim. Properties subject to a notice or a caution are therefore not subject to a new obligation. In legal terms, in relation to such properties, nothing has really changed.

Of course, if the owners did not know about the obligation before registration, they will no doubt want to be sure that the registration is correct, but the issues brought out by registration would have arisen had the owner of the liability sought to enforce it. Failure to register may make a liability unenforceable, but registration does not guarantee that the claimed liability is legally enforceable. Whether a claim is sustainable will depend on the facts of the case. Homeowners and other landowners remain as free as they are at present to contest a claim. What registration removes is the uncertainty and unpredictability—the lack of discoverability—that currently surround the possible existence of chancel repair liability.

[Peter Luff]

What registration achieves is the unsaleability of property. Where a parochial church council wishes to give up the right in perpetuity, the Government have a moral obligation to enable it to do so.

[Mrs Grant]

My hon. Friend met with officials of the Ministry of Justice yesterday and they had an opportunity to discuss that and other issues, but he might also find it helpful to meet me at some point in the near future. If he could be a little patient and let me finish what I have to say, I might cast some further light on the matter.

People should no longer be surprised to discover that their property is subject—or, rather, claimed to be subject—to chancel repair liability. It is a positive development for property owners in general that chancel repair liability will be brought on to the register or wither for want of registration.

Registration of chancel repair liability is of course distinct from actual enforcement of payment of the liability, which will only arise if the chancel needs to be repaired. The October deadline does not affect that or the type of decisions that parochial church councils and other owners of the liability will have to make when money needs to be raised. I do not deny that deciding whether to register a notice or caution is a new step for members of parochial church councils, but it is a one-off and should not be any more onerous than past decisions to do with enforcing the liability.

Such decisions may not be easy and legal advice may well be necessary, but the Church Commissioners, the diocesan authorities and the Charity Commission are available to help to some degree. For better or for worse, parochial church councils and others who own chancel repair liability have an asset entrusted to them for a specific purpose. I accept that they may not wish to enforce the liability to preserve the harmony of their local communities, but they cannot wish away their responsibilities and, in any event, the providers of public funding for the maintenance of historic buildings will almost certainly take a close look at the reasons behind any decision not to register or enforce the liability.

We need to be clear about the nature of the deadline of 13 October 2013. The date was the 10th anniversary of the coming into force of the Land Registration Act 2002, and it is worth remembering why chancel repair liability became subject to a registration requirement. The need arose with the 2003 reversal by the House of Lords of the 2001 Court of Appeal decision in the Wallbank case. The Court of Appeal appeared to have resolved all the issues to do with chancel repair liability when it decided that the liability was not enforceable, and the Land Registration Act 2002 was drafted on that basis. The House of Lords subsequently decided that the liability was enforceable. In 2003, faced with a newly resurrected chancel repair liability, the then Government responded by making a transitional provisions order under the Land Registration Act, putting chancel repair liability on the same footing as other rights that had their status as overriding interests preserved for a period of 10 years.

Overriding interests are interests in land that bind a registered owner whether or not they are on the register. One of the aims of the 2002 Act was to bring more information on to the register, so that it formed a more complete record of legal ownership. Chancel repair liability is a good example of the kind of hidden burden that the policy was designed to expose. The October 2013 deadline for registration is a deadline in the sense that the liability needs to be registered before that date to ensure that it affects those who subsequently buy the land involved. No fee is payable for applications or registrations made before that date. Registration will generally still be possible after that date.

Naturally, the approach of the deadline has brought about a number of registrations and, unsurprisingly, issues around chancel repair liability have been awoken as the owners of the burden consider what to do, and those subject to it are reminded—or perhaps learn for the first time—that their property is claimed to be subject to chancel repair liability.

No doubt property owners subject to chancel repair liability would be delighted if the liability were to cease to exist. The Law Commission recommended abolition or apportionment of the liability as long ago as 1985. Abolition, however, would probably have to be accompanied by some form of compensation for the owners of the liability, and that money would have to come from somewhere.

There is no need to invent ways to release properties from the liability. It can be done by private treaty, although there are pitfalls, or under the formal procedure provided by section 52 of the Ecclesiastical Dilapidations Measure 1923. I am not suggesting that they are easy or inexpensive options, but they are possible.

In conclusion, the requirement for registration will achieve a much better balance in the law between the interests of the owners of chancel repair liability, the interests of those who are subject to the liability and the interests of those who may at some time in the future become subject to the liability. I am grateful to my hon. Friend for bringing the matter before us today. We have had an intelligent and informed discussion. I am not persuaded that the case for a change in the law has been made, but I shall of course keep the matter under careful review.

Question put and agreed to.

17:55

Sitting adjourned.

Written Ministerial Statements

Wednesday 17th October 2012 Written Statements

Wednesday 17 October 2012

Banking

Wednesday 17th October 2012 Written Statements

[The Economic Secretary to the Treasury (Sajid Javid)]

Today, the Government announce the exit on 18 October of the Royal Bank of Scotland (RBS) from the asset protection scheme (APS).

The APS, announced in January 2009, was created to enable the UK Government to provide participating institutions with protection against future credit losses on defined portfolios of assets in exchange for a fee.

The scheme provided support to RBS during and in the immediate aftermath of the financial crisis. However, as the bank has continued to stabilise and manage down non-performing assets, the APS no longer provides material benefit in strengthening RBS’s financial position.

Today, having reached the minimum fee of £2.5 billion and with no payout under the scheme deemed likely, the Government have agreed with RBS to allow its exit.

The Government launched the Asset Protection Agency in December 2009 to manage the APS on behalf of Her Majesty’s Treasury. Now that RBS has exited the APS, the agency has fulfilled its objectives and will aim to close on 31 October 2012.

This represents an important milestone on RBS’s path of recovery and towards a return to the private sector.

It also removes a substantial contingent liability from the Government’s balance sheet. At its peak, the APS pledged £400 billion of taxpayer support to the UK banking sector, and by exiting the APS this figure is reduced from approximately £40 billion to zero. During this Parliament the taxpayer guarantee to the sector has fallen by over £450 billion, a drop of almost 95%.

LIBOR (Wheatley Review)

Wednesday 17th October 2012 Written Statements

[The Financial Secretary to the Treasury (Greg Clark)]

At the end of June it was revealed that LIBOR—the London interbank offered rate, the benchmark used in trillions of pounds worth of financial contracts—had been subject to repeated attempts at manipulation.

The attempted manipulation of LIBOR is totally unacceptable and has further undermined trust in the financial services industry—without which this vital sector cannot operate.

Although the abuse is by no means confined to London—banks and benchmarks in a number of jurisdictions have been implicated, including Euribor and Tibor—I am determined that we in this country should move quickly to restore credibility to this globally important benchmark and repair the damage to London’s reputation caused by this behaviour and the failure of the regulatory sector to prevent it.

In July, one week after the scandal came to light, the Chancellor asked Martin Wheatley, the managing director of the Financial Services Authority and chief executive-designate of the new Financial Conduct Authority to consider immediate reforms to LIBOR and to report back by the end of September.

On the 28 September—13 weeks later—Mr Wheatley presented his review to the Government. I am very grateful to Mr Wheatley and his team for their excellent work on this matter.

This statement sets out the Government’s response to the Wheatley review of LIBOR.

The Wheatley review made 10 main recommendations:

1. The new Financial Conduct Authority should regulate the submission to, and administration of, LIBOR—and that there should be criminal sanctions for any attempted manipulation.

2. The British Bankers’ Association (BBA) should make an orderly transfer of responsibility for LIBOR to a new administrator, selected by an independent committee.

3. The new administrator should scrutinise submissions and regularly review the effectiveness of LIBOR.

4. There should be a new code of conduct for submitters, approved by the Financial Conduct Authority.

5. LIBOR should, as far as possible, be corroborated by transaction data in line with the guidelines in the review.

6. To improve this ability to corroborate submissions, the number of currencies and maturities for which submissions are made should be cut substantially to achieve a sharper focus on the more heavily used benchmarks.

7. Submissions should be published, but after three months to avoid the incentive for banks to try to flatter their perceived credit standing and reduce the opportunity for collusion.

8. The Government should provide the Financial Services Authority with a reserve power to compel banks to submit to LIBOR.

9. All market participants should consider whether LIBOR is the most appropriate rate for their needs and to ensure that their contracts have workable contingency provisions.

10. The UK, European and international authorities should establish clear principles for global benchmarks.

The Government fully endorse every one of these recommendations. All institutions involved in the process of setting LIBOR should implement them. For those recommendations that require Government action, we will take it without delay.

The Government will bring forward amendments to the Financial Services Bill to implement those recommendations that require primary legislation. These amendments will enable the submission of rates to benchmarks such as LIBOR and the administration of such benchmarks to be brought within the scope of regulation. The power to regulate these activities will be vested in the new Financial Conduct Authority. Existing offences covering the making of misleading statements, under section 397 of the Financial Services and Markets Act, will be extended to capture the making of misleading statements to manipulate benchmarks such as LIBOR. The Financial Conduct Authority will have the lead role in investigating the possible commission of such offences and bringing prosecutions.

Most people expect that the law should be respected and enforced at all levels of society. If someone breaks the law, they should be punished. Where the crime is serious, the punishment should reflect this. The Government also intend to legislate to enable the Financial Conduct Authority to make rules requiring authorised persons to contribute to the LIBOR setting process. Draft legislation and further details of these measures will be deposited in due course in the Libraries of both Houses.

But statutory regulation and criminal enforcement alone are insufficient. LIBOR is a mechanism created by the market for use by the market. That is why it is right that some of Mr Wheatley’s recommendations fall to the industry to implement.

The Government agree with Mr Wheatley that, in order to restore credibility to the LIBOR setting process, the BBA should give up its operational role with regards to the computation, administration and governance of LIBOR. My noble Friend Baroness Hogg has agreed to chair a panel of independent experts tasked with identifying an appropriate successor to the BBA.

Other urgent reforms will be implemented by the BBA and, in time, by the new LIBOR administrator—such as phasing out the benchmark rates for those currencies and maturities wherever they are not heavily used by the market and there is an available alternative.

The recommendation to consider the use of benchmarks in other financial and commodities markets will be taken forward through the relevant international bodies. These discussions have already commenced in the Financial Stability Board, the International Organisation of Security Commissioners (IOSCO) and the institutions of the European Union. The Government stand ready to work with their international partners to ensure that we can have confidence in the integrity of all major global benchmarks.

The Government recognise that the LIBOR scandal cannot be seen as an isolated incident. There are wider standards of integrity and ethics in banking which have compromised the confidence and trust between banks and the businesses, customers and general public they exist to serve.

Parliament has established the Parliamentary Commission on Banking Standards under the chairmanship of the hon. Member for Chichester (Mr Tyrie) and including similarly respected Members of both Houses. We all look forward to receiving the recommendations of the commission by early next year.

The financial services industry is of great importance to this country. It employs, directly and indirectly, 2 million people, in every part of the United Kingdom. The essential condition for the functioning of the financial services industry is trust. The behaviour that has been uncovered in the LIBOR scandal corrodes that trust, and the behaviour of a few has tainted the reputation of an industry in which the vast majority of people have been proud to work, not least because it has been associated with integrity and responsibility.

We owe it to all of those people as well as to the millions of people who rely on the financial services industry in their day-to-day lives and in running businesses to restore that reputation for probity and strength. The reforms that Martin Wheatley has recommended are a significant step towards achieving this goal.

Agriculture and Fisheries Council

Wednesday 17th October 2012 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Mr Owen Paterson)]

The next Agriculture and Fisheries Council is on Monday 22 October and Tuesday 23 October in Luxembourg. I will be representing the UK, accompanied by the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury (Richard Benyon) who is responsible for natural environment, water and rural affairs. Richard Lochhead MSP and Alun Davies AM will also attend.

The first day will include discussions on both fisheries and agriculture. On fisheries the discussion will cover the European Maritime and Fisheries Fund (EMFF).

On agriculture there will be further discussion of the CAP reform proposals on direct payments, the single CMO regulation, and possibly the horizontal regulation. There will be a presentation by the Commission on the financing of the CAP.

The Council will also discuss the adoption of a standard setting maximum residual levels for ractopamine by the Codex Alimentarius Commission.

On the second day the Council will return to the EU maritime and fisheries fund. There will also be discussions about Baltic sea stocks, the EU/Norway 2013 catch quota and the International Commission for the Conservation of Atlantic Tunas (ICCAT) annual meeting.

One item under any other business has been confirmed, a report on the 32nd Conference of Directors of EU Paying Agencies.

Relations between Sudan and South Sudan

Wednesday 17th October 2012 Written Statements

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mark Simmonds)]

I would like to update the House on developments in the relationship between Sudan and South Sudan, and what action the UK took to support the negotiations between the two countries that led to the signing of nine agreements in Addis Ababa on 27 September.

The African Union has been facilitating discussion of a number of important issues that were unresolved at the date of South Sudan’s secession in July 2011. A breakdown in talks at the start of this year was followed by shutdown of oil production in South Sudan and an increase in tensions and military actions by both countries across their shared border. This put a great strain on the already struggling economies of both countries.

In response to the worsening situation, the Peace and Security Council of the African Union set out a road map for resumed talks towards a comprehensive agreement. This agreement was endorsed by the UN Security Council in its resolution 2046. Five months of intensive dialogue within the framework of the road map, and UNSCR 2046, led to a four-day presidential summit between the two countries in late September, and the signing of an overarching presidential agreement on co-operation, and eight detailed agreements between the two countries on 27 September.

Negotiations have been facilitated throughout by the African Union high-level implementation panel led by former President Thabo Mbeki. The UK has provided funding for the work of the panel and for the negotiating teams. We have seconded staff to offer expert advice on security and other issues, and deployed diplomatic support to implementation of the road map. The UK special representative for Sudan and South Sudan and other officials have been involved at key stages of the negotiations.

The agreements signed in Addis Ababa are a significant step forward. In particular, they open the way for the establishment of a safe demilitarized border zone and deployment of a joint border verification and monitoring mechanism with international involvement, as a means of avoiding military confrontation at the border and attempting to prevent cross-border assistance to rebel groups in either country. The agreements also allow significant improvements in practical co-operation, including on cross-border trade, the rights of citizens, and on the payments for transit of oil. These measures should help alleviate the economic difficulties both countries have faced in recent months.

There are, however, still significant elements of a comprehensive agreement that are outstanding. We regret that no agreement was reached on the final status of Abyei, despite President Mbeki’s presentation of a comprehensive proposal on the subject, and final demarcation of the international border remains subject to Sudan and South Sudan settling a number of disputes and claims. We have urged both countries to press on immediately with negotiation on these remaining issues, in the spirit of compromise that brought the latest round of talks to a successful conclusion.

We are deeply worried by the lack of progress in the parallel talks between the Government of Sudan and the Sudanese People’s Liberation Movement—North (SPLM-N) to end the conflicts in Southern Kordofan and Blue Nile, which also form part of the African Union’s road map and UN Security Council resolution 2046. Both sides appear to be set on a military solution that is having a serious humanitarian impact on civilians in both states. The indiscriminate military tactics employed by the Sudanese armed forces are a cause of particular concern. As of the end of September, the UN Office for the Co-ordination for Humanitarian Affairs estimated that 212,000 refugees had fled to neighbouring countries as a result of the fighting and humanitarian situation.

Both parties in the conflict agreed a proposal put forward by the African Union, the United Nations and the League of Arab States for full independent humanitarian access. However, no substantive progress has been made implementing these agreements since they were signed. We continue to press the Government of Sudan in particular to allow impartial delivery of aid to areas held by the SPLM-N.

Ultimately a permanent cessation of hostilities in Southern Kordofan and Blue Nile must be agreed, and a political process established to address the causes of the conflict. Wider national reform will be necessary to address these conflicts and others in Sudan’s periphery as well as the aspirations of all Sudanese people. The UK will continue to press the Government of Sudan and the SPLM-N to recognise that there is no military solution to their disputes, and that they must agree a cessation of hostilities and enter into negotiations. We will work closely with the African Union, the Arab League, President Mbeki’s high-level implementation panel and through the UN Security Council to this end.

Sino-British Joint Declaration on Hong Kong

Wednesday 17th October 2012 Written Statements

[The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)]

The latest report on the implementation of the Sino-British Joint Declaration on Hong Kong was published today. Copies have been placed in the Library of the House. A copy of the report is also available on the Foreign and Commonwealth Office website: www.fco.gov.uk. The report covers the period from 1 January to 30 June 2012. I commend the report to the House.

Grand Committee

Wednesday 17th October 2012 Grand Committee

Wednesday, 17 October 2012.

Arrangement of Business

Wednesday 17th October 2012 Grand Committee

Announcement

15:45

[The Deputy Chairman of Committees (Baroness Harris of Richmond)]

My Lords, if there is a Division in the House, the Committee will adjourn for 10 minutes.

Chief Scientific Advisers: S&T Committee Report

Wednesday 17th October 2012 Grand Committee

Motion to Take Note

15:45

Moved By

[Lord Krebs]

That the Grand Committee takes note of the Report of the Science and Technology Committee on The role and functions of departmental Chief Scientific Advisers (4th Report, Session 2010-12, HL Paper 264).

[Lord Krebs]

My Lords, I beg to move the Motion standing in my name on the Order Paper. I want to start by thanking the members of the Science and Technology Select Committee for their excellent contributions to this inquiry. I want also to thank the clerk and the policy analyst for their outstanding support for the committee and the Minister for the Government’s response to the report, to which I shall return shortly.

In this country, we benefit from what, by international standards, is an excellent system of scientific advice in government. That is of the highest importance. I can think of no area of government policy, whether related to economic growth, enhancing our quality of life, the sustainability of the environment and much else, where scientific advice does not play a central role. When I say “science”, I mean to include engineering and the social sciences as well as the natural sciences.

In one recent review of EU member states, it was reported that while all member states have some kind of system—usually a committee—of providing scientific advice, only four countries other than the UK have independent chief scientific advisers—the Czech Republic, Estonia, Ireland and Latvia. In recent times, we in the UK have been very fortunate to have had a succession of distinguished government chief scientists who have commanded respect from the scientific community and been effective, independent voices for scientific evidence within government.

The Government also have many other sources of independent expert scientific advice, including the 70-plus scientific advisory committees that deal with specific issues such as nutrition, drug use and climate change; the Council for Science and Technology, chaired by Sir John Beddington and Dame Nancy Rothwell, to report to the Prime Minister; and the 14 departmental chief scientific advisers. It is those departmental chief scientific advisers who are the focus of our report.

With all this scientific expert advice in place, your Lordships might think that Ministers are sufficiently well furnished with scientific advice to enable them to base their policies on evidence. This Government have often said that they wish to base their policies on evidence. Sadly, however, it is still the case that the Government, perhaps too often, prefer policy-based evidence rather than evidence-based policy. For instance, the Government still insist on wasting taxpayers’ money on homeopathic treatments and have a Secretary of State for Health who believes that homeopathy works. I hesitate to mention the topical subject of bovine TB and badgers, given my involvement in this policy area during the past 15 years, but I will succumb to the temptation. The fact is that the overwhelming majority of scientific experts have concluded that the policy of killing badgers to control TB in cattle will have only a small beneficial effect, if any. It is essentially a waste of effort and money, and a distraction from the business of getting on top of a serious animal health problem that can have devastating effects on the livelihoods of farmers.

Together with other scientific experts, I would not expect scientific evidence to be the only factor that influences policy in this or any other situation. As is often said, scientists advise and Ministers decide. But where Ministers override the scientific evidence, it is vital that they make it clear that they are doing so and explain their reasons rather than pretending that the science supports their case. Only yesterday, the Food and Farming Minister was reported in the Guardian as saying that the science supports badger culling. If he looked at the evidence and listened to the experts, he would see that it does not.

I turn now to the substance of our report. The inquiry was triggered in part by the downgrading of the chief scientific adviser in the Ministry of Defence from four star to three star; by the failure of DCMS to appoint a chief scientific adviser; and by wider concerns about the lack of consistency of the roles and qualifications of chief scientific advisers across departments. This inconsistency has been highlighted by the Campaign for Science and Engineering’s recent publication of a scorecard. For instance, some departments have CSAs who are senior figures from outside the Civil Service, with established reputations and authority in the scientific and engineering communities; in other departments the CSAs are more junior officials from within the Civil Service.

We recognised in our report that, overall, the system of scientific advice works well, but our recommendations highlighted where improvements could be made to level the playing field up rather than down. We made 19 recommendations and I do not propose to go through all of them.

For me, the three central issues for an effective CSA are authority, independence and access. Authority comes in part from external reputation and in part from level of seniority within the Civil Service system. That is why we recommended that all CSAs should be external appointments and at least at the level of director-general—in old speak, Grade 2. Senior external appointees with a high reputation command both the confidence of stakeholders and, importantly, have the networks to seek advice on matters where they do not have intimate expert knowledge. Knowing whom to ask is crucial for a CSA, especially where the science is uncertain. I know from my own experience as head of the Food Standards Agency that, especially when dealing with the science of difficult problems such as BSE, it is important to know who are the experts and to be able to act as an intelligent customer for expert advice. We were somewhat sceptical of claims that grade no longer matters in the Civil Service. Certainly in my experience it remains one of the most finely graded hierarchical organisations in civilian life.

Independence is also key. A chief scientific adviser must be able to speak truth to power, especially when the truth is inconvenient. Of course, we acknowledge that all civil servants should be able to tell Ministers the facts and the evidence without fear or favour, but we concluded that senior external appointees whose careers do not depend on progression within the Civil Service are more likely to feel uninhibited in telling inconvenient truths. One chief scientific adviser who gave evidence to us, a career civil servant, when asked whether a major policy change in the department following the last election was because the evidence had changed, gave the reply that the evidence as a whole had not changed but that Ministers had been presented with different bits of the evidence. This is clearly unsatisfactory for a chief scientific adviser. Senior external appointees will not guarantee independence but it is more likely to help than to inhibit.

To add a footnote, when Research Fortnight recently contacted the Department for Culture, Media and Sport to ask to speak to its new, internally appointed chief scientific adviser, it was told in terms, “Civil servants do not talk to the press”. This hardly seems to me a case where there is an independent voice within the department.

The third point I wish to highlight is access. We think it is crucial that chief scientific advisers have access to Ministers and access to key policy discussions within their departments. We heard of more than one instance in which departmental chief scientific advisers were sidelined in key policy discussions and/or rarely, if ever, saw the Secretary of State in their department. This is unacceptable.

I turn now to the Government’s response. Quite frankly, we were disappointed—very disappointed—in the Government’s response. We made 19 recommendations, of which the Government unequivocally accepted only eight. Crucially, they did not accept our key recommendations pertaining to the three issues I have highlighted—authority, independence and access. We were disappointed that the Government did not accept our recommendation that chief scientific advisers in departments should always be external appointees with standing in the science and engineering communities. We were disappointed that the Government did not accept our recommendation that chief scientific advisers should routinely sit on departmental boards at the top table to hear policy delivery and policy development. We were disappointed that the Government did not accept our recommendation that chief scientific advisers should be appointed at the equivalent of director-general level or higher. We made these recommendations on the basis of a substantial body of evidence—they were not just plucked from the air.

Subsequently, I have held a follow-up meeting with the head of the Civil Service, Sir Bob Kerslake. He has written a letter to me, as chairman of the Select Committee, to clarify the Government’s response to our report. His letter offers some degree of reassurance but I should like to ask the Minister, when he replies, to clarify further the Government’s position. First, does he agree that it is crucial that departmental chief scientific advisers have authority, independence and access to Ministers, and does he agree that our proposals would go a long way to ensuring that these requirements are met? More specifically, Sir Bob Kerslake’s letter in response to my meeting with him places a great deal of responsibility on the Government Chief Scientific Adviser to ensure that these requirements are met. Can the Minister explain precisely how the Government Chief Scientific Adviser will indeed be able to ensure that this happens?

I am sure that other noble Lords will wish to explore aspects of the report in more detail than I have been able to do in this brief overview, and I look forward to their contributions. I commend this report to the Committee.

15:56

[Lord Jenkin of Roding]

My Lords, I begin by welcoming my noble friend to the Front Bench. It will be the first time that I have spoken in a debate to which he is to reply, and I look forward to that very much.

I warmly commend the committee on what seems to me an extremely valuable and thorough report. Its main purposes were well described by the noble Lord, Lord Krebs, in his introduction. There are of course a number of very important points to which he has drawn our attention and to which I hope we will be able to return.

I want to deal with just one issue, and it can be posed in the form of a question. What is supposed to happen when a chief scientific adviser disagrees with his department’s policy? This was one of the issues explored by the committee. I shall start with the Government’s response, as the noble Lord, Lord Krebs, did. The recommendation was that there should be guidelines for this particularly directed at CSAs. The Government’s response was:

“Evidence given to the Committee by current and former CSAs suggests that this is not a significant problem”.

I disagree with that and I shall give an example. It goes on:

“The Government therefore is not persuaded of the need for a further set of principles specific to the role of CSAs”.

I regard that as a very complacent and disappointing response.

I believe that it is the fundamental job of CSAs to be prepared to challenge their Ministers over a range of issues for which there has to be a proper scientific basis when what is proposed is not in accordance with the scientific evidence or, in the light of the CSAs’ special knowledge, in the best interests of the UK. This can work very well. I took advantage of a short meeting that I had with Sir David King a few days ago to discuss his experience of this. I hope that I am not boring the Committee but this is just to remind us what happened with the foot and mouth epidemic in 2001. Sir David told me that when he came on to the scene the epidemic was clearly going out of control and it appeared that MAFF, the department involved, was not grasping the seriousness of the issue. Sir David became involved and had a meeting with Permanent Secretaries. It was clear that the policy and procedures were not working. They were based on experience of 30 to 35 years earlier and were no longer relevant in the current farming environment.

A team of epidemiological modellers, virologists and logistics modellers was established, who pointed to the need to cull animals at the earliest possible opportunity to avoid the spread of foot and mouth disease, even in advance of a full laboratory test. The immediacy was important and that it should be spread to neighbouring farms as well. He found it necessary to brief the Prime Minister, Mr Blair, and there was subsequently a meeting of COBRA when the policy was outlined and agreed. He promised the Prime Minister that if the models were followed the outbreak would be eradicated by June of that year. At that point the Prime Minister became very interested because he was hoping to have an election in June, so it became very relevant. He kept a close interest and Sir David’s advice was right. He reported to COBRA sometimes twice a day during that whole process. The new strategy was implemented and the result was what had been predicted: cases went down very quickly and the Prime Minister was able to call his election only a week later than he had originally planned. That was a case where the system worked extremely well. I have to say that the election was not the only consequence. After the election the Minister who had been responsible lost his job.

Of course, the Government’s Chief Scientific Adviser has the right of direct access to the Prime Minister over the heads of departmental heads and officials. However, many noble Lords will have had more recent experience which tells a rather different story. It was a rather different situation, but nevertheless I hope that it justifies my statement that the Government’s response is complacent. My interest in this was prompted by a passage in the Select Committee’s report in paragraphs 69 to 71 on what a CSA should do if there is a disagreement with the Government’s policy. There was a sharp difference of views. A number of witnesses told the committee that it should be open and transparent and that what the chief scientific adviser wanted to say should be clear and published. The views came from the Royal Society of Chemistry, the Wellcome Trust, the Institute of Physics and others.

However, another group argued that it should all be held closely within the department. I was particularly struck by a passage cited in the report at paragraph 71, given by Professor David MacKay, the chief scientific adviser of DECC. He expressed a reluctance to disagree in public and said,

“I feel I do my job best if I retain the confidence of ministers. In the past, I used to speak very freely in public and I enjoyed giving frank views, but now I hold those views back more and express them very strongly within the Department, where I feel I am listened to and respected”.

Some of us have recently had the experience of listening to Professor MacKay, and I was struck by the passage in paragraph 71, which I have just quoted. I therefore looked at the evidence to see the context for what the professor was saying on that occasion. There is no printed volume of the evidence; it is nearly 400 pages long and I was told to look at the website. I apologise but I think that this is an important point. A question was asked by the noble Lord, Lord Crickhowell, who is not in his place today. He asked Professor MacKay about CSAs not being bound by ministerial collective responsibility, about whether his reasons for disagreeing with a policy decision had been publicly expressed, and if so, about the reaction of Ministers and others to his department.

We had had the example of hearing Professor MacKay at the nuclear research and development inquiry. Without going into details, the committee was extremely critical of DECC’s policy and attitude, with its lack of evidence of long-term thinking. There were calls for a roadmap going well beyond the 2025 limit, which seemed to be the Government’s forward look. The DECC official who had described the policy was both unconvincing and very negative. He was of course echoed by his then Secretary of State. However, we also heard Professor MacKay, who was very refreshing. As the committee reported, he said that,

“the department is conducting … foresight work on future R&D needs by carrying out a Technology Innovation Needs Assessment … on nuclear which will look beyond the 5-10 year timescale to try to ‘quantify’”,

the need. He went on to describe his pathways programme. To those taking part in those exchanges on that inquiry, that passage clearly gave a very different picture from that given by the official who we had heard earlier. Indeed, we referred to that in paragraph 101 of that report.

Here I come to my main point. Before he gave evidence to that inquiry, Professor MacKay came to ask my opinion. We have had a good relationship over a number of years. He asked, “What does your committee want?”. I said, “David, what we want are your views, not those of your Permanent Secretary”—and, bless him, that was exactly what he did. It greatly helped the committee which, as its report made clear, relied on his evidence as well as that of others for that report. But what happened next? The civil servant who had earlier given evidence to the committee complained to the Permanent Secretary that he had been made to look very foolish. Professor MacKay was then carpeted by the Permanent Secretary and told that he had spoken out of turn.

The consequence lies in the answer that Professor MacKay gave in this report. “Oh yes—I used to talk in public, but now I feel I do better if I don’t”. Is that what we want? If a chief scientific adviser is invited to give evidence to a parliamentary Select Committee, is he not entitled to give his own view, even if it differs from that of a department? Is it really his duty to hold his views back and expose them only within the department? My noble friend Lord Willis said that we were a small, cosy group but of course evidence is heard in public, so this was in public. It would be very helpful if the Government, instead of rejecting the committee’s recommendations for a “set of guidelines”, considered this.

Chief scientific advisers are not the same as departmental civil servants. They have a clear duty to challenge Ministers. They are given much of the independence and authority to be able to do that, as the noble Lord, Lord Krebs, has described, and even on occasions to speak out. I would contend that this is a significant problem, contrary to what was in the answer. I have today had a copy of Sir Bob Kerslake’s letter, which the noble Lord, Lord Krebs, outlined. On recommendation 8, it simply says, “Yes, we’ll make sure that they are subject to the same rules as the civil servants”. That does not answer my question at all. I do not want to hear another repeat of what happened to Professor MacKay after he gave his very useful and telling evidence to the Select Committee on Science and Technology. This has to be dealt with.

16:09

[Lord Hunt of Chesterton]

My Lords, this is an important report on the role of chief scientific advisers and the Government Chief Scientific Adviser. I have had some experience of working with both those people—when I was at the Met Office, here in Parliament and indeed as a university professor. One point to note is that many technical agencies have chief technical advisers, such as the chief scientist at the Met Office and the chief mathematician at GCHQ, and these chief scientists are of increasing importance since the chief executives of many technical agencies are no longer technically qualified. This is therefore an important part of the whole grouping of scientific advice available to the Government.

Furthermore, these agencies—the Met Office, Cefas and GCHQ, and there are many others—report to departments, and an important role of chief scientific advisers to departments is to make use of the scientific ability in these agencies and to ask difficult questions about the effectiveness of the agencies. When I was head of the Met Office, the Government Chief Scientific Adviser, the noble Lord, Lord May, who is going to speak later, said, “Why do you do all this computing of weather? Why don’t you just look at the clouds and use statistics?”. That was a good, challenging question, and we gave him an answer—we had thought about it. We continued to use our modelling but we were well aware of his idea. That kind of challenging approach is necessary in this large and important part of the Government’s scientific effort.

I refer to the final paragraph of the Government’s reply. There was a discussion about how to look at the annual performance of the GCSA and, by extension, the CSAs. I agree with the Government when they say that there are several ways of judging the effectiveness of CSAs, and in that context I want to comment that it is well worth while recording some of the signal achievements of CSAs and Government Chief Scientific Advisers. In some cases they have helped to identify issues and brought them to the Government and indeed to the country, notably on aspects of climate change, food security, emphasised by Sir John Beddington, and natural disasters, in the case of Sir David King. They have introduced new techniques. For example, on comparative modelling the role of Sir David King, whom I have mentioned, was very important, while the use of foresight models was an introduction of the Government’s. That kind of development of new techniques is very important. The one that might still be missing is the use of system methods in government, which is coming in; indeed, the noble Lord, Lord May, is working on that with the Bank of England.

The third aspect of the important role of CSAs is to emphasise and explain the practical aspects of scientific development, sometimes even before they have been published. Sir David King spoke often, perhaps somewhat dangerously, on some of the uncertain aspects of climate change, but he certainly brought it to the public. Recently Sir John Beddington has focused on the question of long periods of static weather, with heat and temperatures and so on. Again, this is an area where the science is still not completely certain but he has felt it to be so important that he has brought it before the public with the sureness of someone with a great scientific reputation.

The other aspect of their important role is that chief scientific advisers have raised the profile of science in government decision-making. However, there are some critiques of the role of CSAs that have not been brought out in this report. The first is the question of whether CSAs are ensuring that we are making the best use of foreign science. I keep commenting on this: Britain’s science is 7% or 8% of the world total but there is a huge volume of important ideas outside that. In the United States there is a strong programme to ensure that they are, as it were, horizon-scanning around the world and looking at the technical approaches of foreign Governments; they are not afraid to do that. One foresight panel that I was familiar with on flooding made almost no use of the experience of the Netherlands, which is not very far away.

The second point in this slight critique is that CSAs could do more with UK Trade & Investment to promote UK science and technology by showing how they are being used in government in a practical way in order then to explain this to other countries. That is something that we discussed in this Room a week ago.

The third point is that they could play a more effective role in the scientific aspects of the UK’s involvement in international bodies. The noble Lord, Lord May, was very active in the Kyoto climate change agreements. However, in my experience and as we have heard—and as we shall discuss tomorrow afternoon on the polar issues—CSAs have not been particularly active in pushing research councils on how they provide expertise through these international panels. That is an extremely important part of the scientific aspect of advising government on policy.

The fourth point is that CSAs have a role in informing Parliament. As we have already heard from the noble Lord, Lord Krebs, there is some belief that CSAs should talk only to Ministers within departments. In fact, they have an extremely important part to play—the point made by the noble Lord, Lord Jenkin—on scientific developments and issues. Appearing at Select Committees is one thing; they also inform Ministers. My own hand was slightly smacked—not by the noble Lord, Lord Oxburgh—when I was at the Met Office and advising the Opposition about various important matters before they came to power. In the United States, the head of the weather service spends the month of August on the Hill, talking to everybody. That is exactly how it should be. They do not have to go to the Hill; they can just go round the corner.

Another important point is that CSAs could do more to promote the important scientific developments emerging from the practical work of departments. I am very glad that the noble Lord, Lord Sainsbury, is with us. I have a slight disagreement with him: his model of science used to go from pure to applied, whereas I believe that it often goes from applied to pure. One of the roles of chief scientific advisers is to see this applied work and ensure that it gets back out into the pure world. There are things that I cannot tell noble Lords about, but some areas of defence technology are leading to very interesting scientific developments. For example, the Met Office lightning programme is now out there and visible; people can use it. It provides the possibility of great new research. There are many government agencies working in data-handling and that is another area.

Another feature of this report is the question of appointment procedures for CSAs in particular departments. Again, it is essential to give signals that these CSAs are important. It should be clear that the Permanent Secretary or his or her deputy should be present at the appointment. If you are told that you are going to be able to speak to the Permanent Secretary but his or her deputy never comes to the appointment process, that sounds a bit hollow. If that was absolutely clear, it would send an important message through the department.

The report rightly recommends that external scientists should be on the panel. Departments would also benefit if the panels included foreign scientists, and the report recommended that CSAs should be scientists of international rank. For example, they could be scientists from international organisations that the government departments work with, so they would be familiar with the work of the department.

I agree with recommendation 7—that CSAs, having right of access to Ministers, should be allowed also to speak to politicians.

Paragraphs 11 and 12 refer to the CSA’s role in steering research, either through direct control with his or her own budget, or indirectly through oversight and the department’s programme. As the departmental CSAs are part time, the latter is probably their major role. It is very difficult to be part time and run your own programme. They can bring outside knowledge of different approaches and connections to other departments.

I believe that when they are appointed CSAs should learn one or two elementary rules of Whitehall; namely, you have a meeting. The CSA might make a good point, to which the Civil Service chairman might say, “Very good point”. However, the written minutes may not correspond with what was said at the meeting. If the CSA does not read the minutes of the meeting afterwards, their “very good point” may not carry through. That is elementary but it is part of the learning curve that might be explained.

In agencies with full-time chief scientists, their main task is running the research programme. However, in most cases a cultural shift is needed so that those chief scientists also have a role in the application of research and the operations of the agencies.

One point that this report misses is that chief scientific advisers have a wide knowledge of science and technology and they should make sure that the methods of science and technology are used at the highest level throughout an agency’s activities. They should be involved in areas relating not only to research but to operations.

A chief social scientist ranging over all departments and agencies could, I am sure, ask questions and improve methodologies in all the departments and agencies with which I am familiar; for example, from how to account for population policies which did not have the benefit of the input of social scientists when they were first discussed to how to present certain long-range forecasts and the many societal effects of that. Social scientists interested in politics could certainly help with the provision of policy advice to Governments. This might have helped with the difficulties in explaining the extraordinary change that took place in the reasoning for action to mitigate climate change from, in the 1990s, being a policy based on a long-term prediction to, after 2001, being a response to current trends. That leads to all sorts of difficulties—as was evident in a recent article asking all sorts of funny questions in the Mail on Sunday that I was looking at in the Library yesterday.

One hopes that this move will be supported even by Nature—I do not know how many scientists have been ridiculed for totally wasting time by a leader in Nature. We were just looking at the effects of wind on people. This was considered to be a joke; nowadays its social aspects are taken seriously, hopefully even by Nature.

00:00

[Lord Willis of Knaresborough]

My Lords, it is a pleasure to follow the noble Lord, Lord Hunt, who made some very good points. They will be recorded in the minutes. It reminds me of my mother-in-law, who, whenever we had an argument, said, “You’ll be right, Phil”, which was a good way of ending it.

I thank the noble Lord, Lord Krebs, the chairman of the committee, for his patience and tolerance during an inquiry which could have gone nowhere but turned out to be incredibly important. Like him, I was disappointed by the Government’s initial response. It is a testimony to his skills of diplomacy that he went back to Sir Bob Kerslake, the Head of the Civil Service, and got a set of responses which “clarified”—I love that word—the Government’s response such that they were far more in support of many of the recommendations which the report made. While that was not ideal, and there is still a long way to go, it was a useful thing for the chairman to do, being a good way of having an interface rather than simply accepting the Government’s position.

This report was not intended as an assault on the Government’s lack of support for DCSAs; in fact, quite the opposite is true, as I think most members of the committee would agree. We recognise just how significant has been successive Governments’ support for this layer of scientific advice for Ministers. It is because it is such an important layer of support that we felt the inquiry was important. Our report sought to ensure that the current system was at least maintained given some of the assaults being made on it and, where possible, enhanced at a time when there were worrying signs that DCSAs were being seen as a luxury that could be dispensed with rather than as an investment to underpin sound evidence-based policy.

My interest in this area arose in the House of Commons when I was chair of the science committee. Many of our inquiries looked at evidence-based policy. The previous Government and this Government proudly say that their policies are based on evidence. It is the job of parliamentarians in both Houses and those outside who scrutinise government policy constantly to ask, “Where is the evidence to support that policy? Where there is no evidence to support that policy, how are you actually going to find the evidence in order to take it forward?”. That is a very good principle. It is the principle of scrutiny, and scientific advisers, both at department level and particularly the Government’s Chief Scientific Adviser, have a crucial role to play in it.

The noble Lord, Lord Krebs, rightly pointed out that there is no lack of scientific advice available to Ministers. In addition to the Government Chief Scientific Adviser and the Government Office for Science, advisory committees, learned societies, professional institutes and countless think tanks put a stream of advice into the public arena which is available for Ministers. The reality is that much of it is not listened to or even read, but the roles of the DCSA and the Government Chief Scientific Adviser are fundamentally different. The individuals holding these posts have the crucial interface between the scientific, academic and commercial world and that of civil servants and Ministers. Their function is not simply to offer advice; in many ways, it is more a challenge function than an advisory one. As the noble Lord, Lord Broers, said in our committee yesterday, they need sharp elbows, demanding presence where it is sometimes not wanted and demanding resources where sometimes they are not available in order to provide evidence as to whether policy can work, or at least whether it has a chance of working. As our report emphasised, their value lies, first, in their independence, the currency of their expertise and their standing within the scientific and commercial community. To carry out that function, they should be appointed at a very senior level. They should have a seat on departmental boards, as they are part of the policy-making as well as implementation machinery, and they should retain their academic or industrial base to remain current.

Why is that needed? Given that every utterance from the Prime Minister and his Ministers—every single challenge facing this nation from ageing to obesity and from the environment to the economy—will require science and engineering solutions, objective scientific advice is not simply desirable but absolutely critical. According to research from the Science Council, 20% of the UK workforce depends on scientific skills to do their job. Some 5.8 million people are currently employed in science-based occupations, and this will increase to more than 7 million by 2030.

To manage and lead this “scientific century”, we need, but do not have, a scientifically literate political class. However, only 11% of MPs have ever had science-based careers and only one MP has come directly from the research laboratory. Not a single member of the current Cabinet is a science graduate. Only five out of 42 Permanent Secretaries have a science or engineering degree, and fewer than 4% of civil servants have a science or engineering background. Indeed, as was said by our previous Government Chief Scientific Adviser, Sir David King, it was an impediment to progress to admit to having a scientific background.

Therefore, it is not surprising that the response to the budget deficit by departments has been to slash departmental spending on R&D and, in some cases, to downgrade their DCSA or, worse still, to delay appointing altogether, as in the case of the DCMS until very recently. In fact, only the DECC is to be credited with bucking that trend by spending more in terms of science. The reasoning defies logic. It is true that BIS has maintained a flat cash settlement during the current CSR for science funding for research councils and for HEFCE—that is very welcome, although in real terms it is a 12% cut—but that appears to have been used as a signal to departments to reduce spending on science. Had reductions come as a percentage of the overall budget, perhaps one could argue that they were “taking their fair share”, but no. Defra, despite the problems that it is currently experiencing, has reduced its R&D budget by 15%, the Department for Transport by 47%, the Ministry of Justice by 27% and the CLG by 45%. The figure for the Department for Education has actually gone up, but that for the FCO is down by 45%, the DWP by 17% and the Ministry of Defence by 11%. That is unacceptable. To argue for science within departments requires powerful, influential and challenging DCSAs to ensure that policy decisions are at least made on an evidential basis rather than on one of political convenience. No one on the Science and Technology Committee argues that DCSAs should make political decisions, nor did we argue in our report that their view should always trump other considerations. However, they are there to provide good evidence and to make clear that when their evidence is not taken by Ministers, they should be fully aware of the consequences. You cannot do that if you hide all those arguments in a back room somewhere; they have to be made public, and resources are needed in order to do that.

The lower the grade of the DCSA, of course, the more difficult it is for them to argue their case. While access to the Permanent Secretary is clearly important, it does not compensate for direct contact with Ministers. It surely does not say a great deal for the status of the DCSA who stated to our inquiry that she could not recall ever having had a meeting with the Secretary of State. Equally, we found the justification of tagging the DCSA role on to an existing brief neither convincing nor acceptable. How can the DCSA in Health provide a challenge when as Chief Medical Officer she is the lead on policy? How can the DCSA in the Treasury perform his challenge function when he is in charge of public spending? I am delighted that he no longer has that function and has only the role of chief microeconomist to contend with.

The report on DCSAs was timely, pertinent and crucial. The Government’s amended response is encouraging and I hope that in 12 months’ time, when the new GCSA is in place, they will have met even further some of our concerns.

I take this opportunity to applaud Sir John Beddington and the way in which he has fought for the departmental scientific advisory service, the way in which he has brought the DCSAs into an informal but effective cross-government group and for his championing of science in government. I recognise, too, the genuinely remarkable talent that exists within our GCSA ranks. Sadly, one of the brightest stars, Sir Bob Watson, is returning to the States after his stint at Defra. His knowledge, wit and wisdom will be sadly missed. Perhaps the new DCSA at Defra will find a homoeopathic remedy for bovine TB to avoid the badger cull.

16:32

[Lord Rees of Ludlow]

My Lords, as the noble Lord, Lord Krebs, explained, among European countries none matches our practice of having DCSAs in most departments. They are plainly a feature of our system that we should welcome and sustain, and the fact that we are having this debate is therefore in itself a positive sign.

Science and technology impinge more and more on our lives, and are therefore more pervasive in government. The issues that they raise are often highly technical and sometimes the underlying science in itself is uncertain and controversial. Almost always, a ministerial choice involves considering social, economic and ethical elements as well, and in these broader areas, of course, scientists speak merely as citizens. Within their remit, though, scientific advisers should not just offer facts; still less should they merely buttress policies already decided. They should be prepared to challenge decision-makers and help them to navigate the uncertainties. This was recognised in the US by President Obama, who opined that scientists’ advice should be heeded,

“even when it’s inconvenient—indeed, especially when it is inconvenient”.

Of course, Obama filled some of his key posts with a dream team of top-rate scientists. They have had a tough and frustrating time, but it is good for all of us that Steve Chu, John Holdren, Jane Lubchenco and the rest are still “hanging in there”. We can learn from their experiences, as the noble Lord, Lord Hunt of Chesterton, emphasised.

It is indeed good practice that CSAs generally come from outside Whitehall and that they serve a limited term of three to five years. They may keep a foothold in some kind of research lab or university, and they should certainly get around and participate in conferences in the UK and abroad. As compared to career civil servants, those recruited from outside are more likely to be plugged into recent research and international science. Their careers do not depend on ingratiating themselves with the hierarchy, which is why we have urged that only in very special situations should these posts be internal appointments.

As has already been emphasised, their rank and reporting line within the hierarchy does matter. Indeed, in the MoD, there is special importance in having someone who is not outranked by his or her French and American counterparts in formal talks and negotiations.

A DCSA’s personality is at least as crucial as their professional standing. They need to operate adeptly in a system that is a real culture shock for those coming from academia or industry. In this respect, we are disadvantaged compared with the United States, where it is easier to identify people who are truly independent but who have enough experience to hit the ground running when parachuted into a Civil Service culture. Senior staff in the US shuffle between government jobs and posts in, for instance, the Brookings Institution or the Harvard Kennedy School of Government whenever the Administration changes. There are always some who are “out” rather than “in”. Here, of course, we do not have the same revolving door system; government service is still generally a lifetime career. For that reason, and because secrecy is more pervasive, those recruited as DCSAs often have a steeper learning curve.

No individual has the breadth of expertise to cope with all that they will encounter. In particular, the issues are often more engineering than academic. That is certainly the case in the MoD, DECC and Defra. That is why a DCSA needs not only a strong in-house team but a network of external contacts, why there are numerous standing and ad hoc committees of experts across Whitehall, and why the guidelines about their independence are crucial. As has also been emphasised, there should be fewer constraints on whether DCSAs can talk to the press than in the case of regular civil servants, otherwise we will replicate what happened in the Bush Administration in the US and what is happening now in Canada. It is also why independent bodies such as the Royal Society and the Royal Academy of Engineering are important.

I shall venture a few words on broader scientific advice which can support DCSAs. Outside bodies such as academies and universities can do more to support them and ensure a richer network of contacts between external experts and policymakers. Declaring an interest as a member of Cambridge University, the new Centre for Science and Policy there aims to do that. Among its activities are not only seminars for politicians and senior officials but a policy fellowships scheme, whereby individuals from Whitehall, business and NGOs spend a week at the university having one-on-one meetings with academics across a range of expertise, helping them to develop new contacts relevant to their brief. Incidentally, the converse of that process—short-term secondments of academics into government departments—should surely be encouraged more as well.

There is one advisory body in the United States which is highly effective there and has no parallel here. It is the JASON group, founded in the 1960s, which involves top-rank academic scientists. They are bankrolled by the US Government but it is a matter of principle that they choose their own new members. They spend about six weeks together in the summer with other meetings during the year, and they tackle applied problems and analysis from a menu that is suggested partly by them and partly by the US Government. They are able to address these problems in depth. The sociology of such a group has not been fully replicated anywhere else. It requires a substantial commitment by people to solve difficult problems. However, there are steps towards this mode in the so-called Blackett groups, set up by Sir John Beddington, where independent experts engage more intensively than just through committee meetings. We should at least try to go a step further towards the intensive JASON model, if not in the military, where it is focused in the US, but in civilian areas within the remit of, for instance, DECC, Defra or the Department for Transport, where some integrated view from independent experts of interdisciplinary strength could be valuable.

A further reason for supporting our committee’s recommendations is that the more clout the DCSAs have, the more effective they will be in leveraging further steps along these lines to enhance the tactical expertise available to Ministers. We will not only cope less well with emergencies if we do not do this but stumble into suboptimal and unco-ordinated plans for developing our transport, environment, energy and health policies.

16:40

[The Earl of Selborne]

My Lords, over the years I have had many reasons to be grateful to departmental chief scientific advisers and, for that matter, Government Chief Scientific Advisers, particularly in my capacity as chairman of the Foundation for Science and Technology—a role which I took over from my noble friend Lord Jenkin. I hope that we have been of some help to chief scientific advisers; they have certainly been helpful to us in formulating policy by ensuring to ensure that what might be called a discussion held with policymakers, parliamentarians, industry, academics and the like can explore a whole range of scientific issues.

That has led me to agree entirely with the thrust of the report that the noble Lord, Lord Krebs, introduced so concisely and clearly. What we are looking for from any chief scientific adviser must be credibility and respect from their own community of scientists and engineers. They must have the ability to speak on level terms and must know who to go to nationally and internationally, as the noble Lord, Lord Hunt, reminded us. There must also be confidence in their ability to navigate the shoals of Whitehall—not necessarily an easy one if coming out of academia. They need good links with the user community, whether doctors, industry, academia or farmers such as myself. Above all, they need independence of mind. When they find that their views do not conform with the Minister’s or the Permanent Secretary’s, they must be prepared to speak out. My noble friend Lord Jenkin dealt very clearly with the issues that arise when the DCSA is stifled.

The role is, clearly, to offer independent advice to Ministers that is underpinned by the evidence base. Much more than that, it is important to recognise that the DCSA has a role within the department to ensure that scientific evidence is used to a consistently high standard throughout. As my noble friend Lord Willis has reminded us, there is not a culture of scientific understanding and appreciation in either Parliament or the Civil Service—at least, not very deeply. Promoting trust of the department’s policies among the user community—the scientific and engineering communities—is a central role. That is where credibility has to be maintained. If the credibility of the DCSA is to be undermined, measures have to be taken to protect his or her credibility. There has to be public trust, too, in the policies of the department on scientific issues. That includes in Parliament; that is very much part of the role of the DCSA.

To achieve these objectives, you are looking for somebody who has communication skills and an understanding of policy issues and risk assessment. They simply must be independent; the idea that it could be an appointment from within the Civil Service seems to beggar belief. My noble friend Lord Jenkin provided an exposition of the need for a protocol that can be followed—guidelines which could be developed—in order that CSAs who have felt the need to express disagreement with policy decisions do not put their relationships at risk with the Permanent Secretary or the Minister. This seems to be absolutely critical. I agree with those who have already said that the Government’s response in that respect has been disappointing. It is not just that the Minister might find it inconvenient. It is much more likely that if the chief scientific adviser cannot speak his mind, the whole department will eventually find that it will return to haunt them.

On reflection, the committee asked a rather unfair question of Sir John Beddington which, nevertheless, he answered with aplomb. We asked him what was his greatest failure and, as we have heard already, he mentioned his inability to persuade the Government that they should not be spending money in the National Health Service on homeopathy.

We also heard examples of the failure of chief scientific advisers to engage effectively within departments. Professor Collins gave us the example of offshore wind, where he was not able to participate in the discussion and the department let him down. Professor Wilde of the Home Office said that when he heard about ID cards it was on the “Today” programme. That is not a very good example but it was clearly a failure to engage the CSA which, in turn, will lead to a lack of trust in policies.

As a farmer, I always follow with interest the scientific issues in the farming and food sector, where public trust has been a real issue for many years. We have already heard mention of BSE, genetic modification, foot and mouth, salmonella, e-coli and much else. We all remember the lesson that public confidence was destroyed by not being transparent enough with the information; by not engaging in a dialogue where you treat the public in an open and frank way and put all the information that you have in an accessible form. Of course, nowadays, that means websites. If you do not do that, the chief scientific adviser, again, will find himself or herself greatly exposed.

That brings me back to badgers. The noble Lord, Lord Krebs, said that he would succumb to temptation and mention badgers. This is a topical issue. The noble Lords, Lord Krebs and Lord May, and 28 other very distinguished scientists published a letter in the Sunday papers to which there has been a response today in the Times. This demonstrates, at least to a layman like me, that this is an area where, at the very least, there is an enormous scientific divide. We are told by two equally eminent groups of people that the culling either will or will not help. The noble Lord, Lord Krebs, has already given his views on that.

This is a topical issue. I looked at the Defra website today to see to what extent this has been taken on board—presumably many people are concerned and confused by this plethora of advice—and the only thing I could find which referred to this particular issue dated back to March 2012. It mentioned the Observer and the BBC and described it as a “myth bust”. In other words, what the BBC and the Observer were saying about the culling lacking scientific support was a myth. I hope the debate moves up a notch to something much more responsible than that.

Do please recognise that you must put in the full evidence that Natural England and other scientists are giving to the Minister and compare it with the contrary evidence that you are getting from others such as Professor John Bourne, who led the original trials and is one of the signatories, and the public must be given credit for having an ability to weigh both arguments. I am not passing judgment as to whether the 30 signatories are right or wrong; I am simply saying that the way the debate has been handled is wrong.

Lastly, let me refer to the need for links from chief scientific advisers into the user community, which will often mean business. Until recently, I chaired the Partners Board of Living with Environmental Change, which included all the research councils, a large number of government departments and agencies, the Met Office, the Environment Agency and many others, and we did one thing which was helpful—we set up a business advisory board. I was enormously impressed by the commitment of those very high-powered members of the business advisory board; in fact, the Minister took much more notice of our advisory board than he did of us. That is perhaps understandable, because the transformation of policies into wealth creation, quality of life or whatever else is their purpose simply will not happen until you engage the user community.

At the moment, in his effort to try to promote the science policies within his department, the chief scientific adviser has a science advisory committee, and there may well be people from business or from the user community on it. However, they are really there as an accident; they are not quite there in order to help the transformational research. So I commend very strongly the idea of something like a business advisory board, or whatever other advisory board, for transforming science into the user community. That is a precedent which could be followed elsewhere.

16:50

[Baroness Warwick of Undercliffe]

My Lords, I am very pleased that the noble Lord, Lord Krebs, has secured this opportunity to consider his committee’s hard-hitting and incisive report. So let me be equally trenchant. This report is hard-hitting because it needs to be. Science is essential to robust policy-making. At a most basic level, science and engineering are essential to finding practical solutions to problems. The fact that all government departments now have a chief scientific adviser, with the inexcusable—in my view—exception of the DCMS, is the measure of the progress made in recent years to ensure that the Government have access to the best scientific expertise and advice. However, science is not yet taken as seriously as it should be in the Civil Service, despite strides in the past 10 or 15 years in having science embedded in decision-making. I had years of dealing with the Civil Service in my time as a trade union official, and I know just how difficult it is to get generalists to take science and specialism seriously. Other noble Lords have made a similar point.

With that in mind, I wish to state both my strong support for the report’s recommendations and my concern at what seemed to me to be a pretty feeble response from the Government. I would like to focus particularly on recommendation 9, that all CSAs should be graded at either Permanent Secretary or Director General level, to ensure that they have the authority and the ability to work across the whole department. The noble Lord, Lord Krebs, made it clear that the role and status of the CSA was one of the main reasons for the inquiry leading to this timely report. I believe that the status and independence of the chief scientific adviser role cuts to the heart of the matter. I draw noble Lords’ attention to paragraphs 74 to 76 in the report, relating to grading, where a former CSA comments on the Civil Service as being rather “status-obsessed” and where the discussion is focused on the hierarchical reality and grade culture of the Civil Service.

This report stresses that it is vital that the chief scientific adviser in any government department be suitably senior. I believe strongly that incumbents of this role, so crucial to evidence-based policy, must have the necessary standing and authority, not just within the scientific community, but to gain access and exert influence where it matters within the Civil Service. Witnesses to the committee’s inquiry repeatedly highlighted the importance of CSAs having access to Ministers and to senior departmental officials and the need for CSAs to be involved early and throughout the policy process. Professor Paul Wiles, former CSA to the Home Office, made the point pretty succinctly by observing that part of the job of a CSA is to make sure that they kick the door down, frankly.

There are plenty of examples in this report of what follows when the door is kept obdurately shut, or when there is no one kicking at the door, or when you simply do not kick hard enough. These include the proposals for biometric ID cards, plans for offshore wind power—as mentioned earlier—and the closure of the Forensic Science Service. A more recent failure comes to mind, that of the franchising process for the West Coast Main Line. We do not yet know the full details, but if civil servants’ risk assessment was incomplete and if economic and financial modelling was inadequate, we can but wonder whether the absence of a chief scientific adviser to the Department of Transport was a factor.

While the report acknowledges that the picture varies across government departments, there are too many examples of where expert advice has been ignored, dismissed or not sought early enough to influence decisions. That failure to either ask for or take expert advice has undermined policy too many times. In the report the Home Office Science and Engineering SEA review is cited as finding a consistent,

“lack of appreciation of the value and importance of scientific evidence among (especially senior) officials”.

The BIS CSA review findings are summarised as showing that some policy officials had little enough motivation to ensure that potentially excellent advice from the then CSA incumbent went through.

It is all the more frustrating, therefore, to note the Government’s response to this report. They seem particularly pusillanimous on the independence of CSAs. To give just a few examples, I return to the question of the CSA’s standing and authority, in recommendation 1, and the importance for a CSA to be a heavyweight within the scientific community. In their response the Government appear to agree, but then say that each department—with, admittedly, the GCSA—should be able to determine this as,

“some of the … expertise may be provided by a support team and therefore may not be a high priority for the CSA”.

Just whose wishes are being served here? The CSA needs to be able to stand up to belligerent Ministers or civil servants, yet here the Government are already bending over backwards to leave it to each department to decide who it is prepared to listen to.

Recommendation 2, that CSAs should be external appointments, is rejected by the Government on the grounds that:

“Departments must be free to carry out open and fair recruitment … without bias as to existing positions of candidates”.

I have more sympathy with this position, but nevertheless I believe that the expectation should be an outside appointment. Sir John Beddington made this point very effectively in his evidence to the committee, and I echo the praise from the noble Lord, Lord Willis, for Sir John in his role. It needs to be recognised that the conventions and trappings of a long career in the Civil Service are hard to shake off.

The Government also rejected recommendation 4, that the GCSA and the head of the Civil Service should look again at current arrangements where the CSA role is combined with other departmental roles. Given the importance of this part-time role, why will they not do this? What are they afraid of? A review may indeed show up weaknesses that need to be dealt with.

There is more government complacency in their rejection of recommendation 16, which suggests that the GCSA, the Government Office for Science and the head of the Civil Service should evaluate departmental scientific advisory bodies to see whether they are the most effective way to critique the departmental use of science and to suggest improvements. In their reply the Government say that they are content with current arrangements for reviewing science advisory councils. They show no recognition that over time a department may become part of groupthink, becoming progressively less independent or brave in its reviews.

The Government’s failure to embrace the committee’s longsighted view on the need for independence in the CSAs’ role is deeply frustrating. No wonder there is talk of kicking down doors. In my view, the report is a well aimed and timely shot across the bows in the long-running skirmish between the Civil Service and science. If we are truly to have evidence-based policy, if we want to be sure that robust, joined-up evidence is at the core of decisions within departments and across government, it is vital that some if not all of the salvos contained in the report hit home.

When I look at the membership of the Science and Technology Committee, I stand in awe of its expertise. Parliament ignores such advice at its peril, and I hope that the Minister will reassure us that it will not be ignored.

16:58

[Baroness Sharp of Guildford]

My Lords, I was not a member of the Science and Technology Committee when this inquiry took place, but I congratulate the noble Lord, Lord Krebs, and the committee as it then was on this highly pertinent report. As others have made clear, if Britain is to compete in a world in which the mastery of science and technology is becoming ever more important, it is vital that our decision-making is aware of leading-edge developments and that the evidence used in decision-making is itself up to date, relevant and applied.

I want to pick up three issues that have been mentioned by many other people but noted in particular in his introduction by the noble Lord, Lord Krebs: first, that chief scientific advisers within departments should have authority, independence and access; secondly, that on the whole they should be external appointments of people with status in their own profession and therefore with their own networks to call upon; and, thirdly, that they should be able to rely upon being able to speak directly to Ministers and senior officials when they feel it necessary to do so.

I have asked to speak in this debate because of my concerns about one particular department, with which I have had more to do than others in terms of the chief scientific adviser appointment. This is the Department for Culture, Media and Sport. My interest in this stems from an inquiry by the Science and Technology Committee back in 2005-06, which I chaired, looking at the application of up-to-date techniques of science and technology to the conservation and preservation of cultural heritage. We called our report Science and Heritage. At that time, the DCMS stood out as resisting the idea of having a chief scientific adviser; while we argued not only that the understanding of the heritage science sector, as we called it, required someone with a good grounding in science but that its responsibilities in relation to, for example, the digital technologies, media and communications, also required someone with these capabilities.

The department came under a good deal of pressure at that time, not only from the committee itself but also from the Government’s Chief Scientific Adviser, and eventually appointed a CSA in 2008. She was a Treasury economist, who had also served at the Department of Health. Nevertheless, she proved herself quick to take up the job and very interested in the department’s issues and its developments and science and technology implications. In particular, she set up a science and research advisory committee, which was expressly seen as a means of accessing expert scientific opinion and as providing Ministers and senior officials with advice on the implications of developments in science and technology for the department’s policies and priorities and to identify issues which might have an impact across the range of DCMS issues. We were concerned as a committee that the role of chief scientific adviser would greatly help such an area where the efforts from one part of the sector to another were extremely fragmented. We wanted to see the chief scientific adviser pulling people together and helping to develop what we called a national heritage science strategy, which has, in fact, since got off the ground.

The committee picked up these issues again and a follow-up report, which identifies some of these things, was issued in July this year. Sadly, however, the post of chief scientific adviser in the department was dropped as part of the restructuring after the general election in 2010 and remained unfilled when we took evidence for the follow-up report from the DCMS in March this year. Indeed, it was also unfilled when the committee was looking at chief scientific advisers. In spite of coming under very considerable pressure at that time from the Government’s Chief Scientific Adviser and its own advisory committee—the science and research advisory committee—it found itself to be really rather rudderless without a chief scientific adviser within the department.

When we took evidence from Ministers during the summer, John Penrose, the then Minister for Tourism and Heritage, said that they were looking for a “workable solution” appropriate to the “scale and needs” of the department. We argued in this follow-up report that two years seemed to be sufficient time for the department to have found a workable solution. However, I am very glad to report that, thanks perhaps to pressure from us and from the Government’s Chief Scientific Adviser, DCMS has now appointed a new scientific adviser. As the noble Lord, Lord Krebs, and my noble friend Lord Willis have pointed out, he comes from the Treasury like his predecessor. Although he was initially an English graduate, and, indeed, an English teacher for some time, he took an MSc in Economics at Birkbeck. He comes to fill the post as head of policy analysis within the department and will cover the principal functions of chief scientific adviser as well.

From the point of view of this report, this appointment illustrates a number of features where the committee expressed considerable reservations. First, it is an internal appointment and the post holder will have other substantive responsibilities in the department. It is a relatively junior appointment, at director—the former Civil Service grade 5—level rather than, as recommended, at a more senior rank. The appointee has no background in science. Although, as I have shown, this was the case also with his predecessor, nevertheless, at a time when the committee had put so much emphasis on this and when the Civil Service could have shown that it had been listening to its strictures, it was extremely disappointing that it should pay no attention to it whatever.

Nevertheless, I wish the incumbent well. Speaking with my hat on as the chair of the Arts and Humanities Research Council and the Engineering and Physical Sciences Research Council joint project on science and heritage which has been going forward for the past five years, I look forward very much to meeting him and I hope that he will enjoy the breadth and challenge of the new job that he has taken on, as did his predecessor.

17:06

[Lord Parekh]

My Lords, I thank the noble Lord, Lord Krebs, for introducing this report. I endorse almost all its recommendations and feel slightly uneasy that I am neither a member of the Science and Technology Committee nor a natural scientist. I might have got in by virtue of being a social scientist—which, again, I am not—because I cross the border between social science and philosophy by being a moral and political philosopher. I therefore have no real competence in the matter, which is precisely why I thought I should use this occasion to think within the framework of the report and open it up a little to raise issues that it hints at but does not systematically pursue. I shall make three general points.

First, chief scientific advisers generally—I think, almost all of them—come from the natural sciences or engineering backgrounds. I can see why this is so historically, but I do not see the rationale. Public policy has profound social consequences and can easily go wrong if it makes wrong assumptions about the nature of society or the profound changes taking place in it. We should therefore widen the background of chief scientific advisers by including sociologists, psychologists and political scientists, who all have an important role. I would wish to go a step further. Public policy does not occur in a cultural vacuum; in fact, it is suffused with cultural assumptions to which scientists are not immune. A form of behaviour that we take to be uniform across the species is shaped by cultural preconditions. Unless, therefore, we begin to understand the cultural factors which are at work, we would have considerable difficulty in understanding even a non-cultural phenomenon such as global warming, let alone rising population or lots of other things.

Culture is at the centre of human existence. Unless we take account of cultural factors in policy-making, we would get our policy as wrong as if it took no account of the natural sciences. This is particularly so in a society like ours, which is increasingly multicultural. If other policy is based on the assumption that we are a Christian or secular society, taking no account either of the Jewish community, the Muslim community, the Hindu community or lots of others, we will simply fail to understand why our fellow citizens behave in the way they do, why they respond to science in the way they do and why the very idea of scientific evidence might frighten them if they take science to be inherently secular and anti-God.

Given all this, it is important that we take account not only of the social sciences but of the humanities, languages and philosophy. Profound changes are taking place at the cultural level and we need to appreciate this. I therefore suggest that there might be a space among the distinguished body of chief scientific advisers for historians, cultural anthropologists and students of humanities—even, perhaps, for students of literature.

If you think along those lines you can see where I am going: it is to locate at the very heart of the Government, at the very heart of their policy decision-making, the natural scientists, the social scientists and the humanities, and to institutionalise a dialogue between the three different perspectives that are central to understanding the kind of society in which we live. Once that dialogue takes place at the very heart of the decision-making process, it will have the capacity to trigger and stimulate similar dialogue at other levels of our society. One then begins to see why knowledge drawn from different areas should be pulled together to shape a more sensible society than we sometimes have.

The Government have already recognised the need for a chief social science adviser but their response is rather tentative. As far as I can see, their response talks in terms of it as one of several options. I do not know what other options they have in mind—I certainly do not see one—so perhaps the Minister, who I gather is not, like me, a natural scientist, will tell us what the Government have in mind. I would have thought that the idea mooted as a possible alternative—namely, joint heads of research—will not work because, in that kind of role, the social science adviser would not have the same authority and the same degree of independence.

My second point is slightly different. We have been talking about scientific advisers and the role that they can play in shaping policy. Scientific advisers are an institutionalised voice of science located in a government department. However, outside the government machinery you have national academies such as the British Academy and the Royal Society, and these bodies can provide cross-disciplinary expertise that can supplement the expertise of chief scientific advisers. The body to which I belong, the British Academy, has done this in recent years in trying to bring together the policy-makers and social scientists and, in some cases, the natural scientists. In discussing foreign policy issues such as Iraq, it brought in historians and linguists to show how that disastrous policy could have been avoided if the policy-making had taken place in a more intelligent and sensitive manner.

National academies can also play an important role in increasing public understanding and awareness of scientific evidence, as well as perhaps increasing public trust in science. An important point that was made earlier is that it is one thing for scientists to be banging away in their discussions with the Government but, if the Government are not scientifically minded, are scientifically illiterate or do not see or are unable to appreciate the point of what is going on, then that evidence, however high a role the chief scientific adviser might occupy on the governing board, the departmental board or whatever, will simply have no impact.

So while looking at the supply side, we must also look at the demand side. We must make the Government want to ensure that their decisions are right, based on scientific evidence and not discredited once they have been taken. That can happen only when we have a scientifically literate political class. That will take years to arrive but at least we can make sure that public opinion puts pressure on the Government. The national academies can increase public awareness and encourage public opinion to exert adequate pressure on the Government to listen to scientists and scientific advisers.

My last point concerns humility. Evidence is absolutely crucial in any decision-making but no decision can be based on evidence alone. Evidence is a necessary but not a sufficient condition. We require evidence, obviously, but also certain normative principles under which we charter, harness and use the evidence for this or that purpose. Evidence therefore tells us what factors are relevant, what the empirical truth is and how important these are. However, all decisions, including policy decisions, are ultimately normative; they involve moral principles and moral commitments of a certain kind, even religious convictions, and they balance various factors in judgment. Mercifully, scientists cannot provide that judgment or those moral principles. The day when scientists begin to provide these things, those scientists will be God.

In any such discussion between scientists and the Government, therefore, the Government need to recognise that scientific evidence is a necessary condition, while scientists need to recognise that scientific evidence is not a sufficient condition. Once each side begins to recognise its own strength as well as its own limitations, a sensible dialogue becomes possible.

17:15

[Lord May of Oxford]

I begin by saying that the UK probably handles these issues better than any other place I know. I part company with my long-standing good friend, the noble Lord, Lord Rees, in that I have lived 20 of my professional years in the United States and 23 here. I know the comparison between the resources, access and influence that I had as Chief Scientific Adviser to John Major and Tony Blair and what is available to the corresponding people in the States, one of whom was quite a good friend. They do not have anything like the same influence or contact, so the criticisms that I am about to make start from the position that we are doing well but could do much better.

I come to this in a rather different way. It is roughly half a century since, as a very young post-doc and newly arrived at Harvard, I had the privilege of hearing CP Snow give the Godkin lectures. These lectures are currently being republished by Cambridge University Press and I have just had the privilege of revisiting them to write an introduction. Snow’s “two cultures” theme runs strongly, if implicitly, through these lectures. He draws several lessons, all of which resonate with the recommendations of our committee, from two critical events in World War II, in which he was an observer as a senior civil servant.

In the first event, in 1935 when war seemed increasingly likely, the distinguished scientist Tizard was asked how best to defend the UK, particularly against bombing from Germany. He promptly put together a committee of real experts: Blackett, Appleton, AV Hill and others. They came forward with a bold and emphatic recommendation that essentially all resources should be concentrated on what we now call radar. This, mark you, was before we knew it worked. The Labour Party was in government then and Churchill was on the outside. Churchill’s adviser, Lindemann, later Lord Cherwell, who was an indifferent scientist but a skilled social climber and courtier, consistently gave Churchill the advice he wanted to hear. He was very much against radar and produced an amusing concatenation of silly ideas as alternatives.

In retrospect it was very fortunate that Churchill was not in a position of influence at that time, because it is generally agreed that radar played a decisive role in Britain’s survival in the 1940 Battle of Britain. By 1942, however, with the war in full swing and with Churchill in power, Lindemann was enthroned as the sole source of scientific advice. There arose a second major row around the question of the effectiveness of the massive bombing of German cities. Lindemann was entirely in favour of this bombing, and one must have sympathy, in the light of what happened in Coventry and London, for doing this. In fact, Tizard made an estimate and suggested that Lindemann’s cost-benefit analyses were out by a factor of five, Blackett said that it was a factor of six, and post-war estimates suggest that it is closer to wrong by a factor of 10. The strategy was not particularly effective and hugely costly both in British lives and in resources, but the Cabinet had heard no advice other than from the egregious Lindemann.

Is this relevant to today’s debate? I think that it is, because the recommendations in the Select Committee’s report are essentially very much along the lines of how Tizard went about handling things. I regret to say that the Government’s response, which is not the Minister’s fault, is essentially in the idiom of Lindemann. If we listen carefully we can hear Snow rotating in his grave.

It will be helpful to sketch briefly the evolution of science advice and policy-making in the UK since World War II, because for several decades after the war, although science people were seen as so important—from the initial people I talked about through Bletchley, and so on—the status of science adviser that persisted as an ad hoc appointment drifted down until it was a sort of one day a week pop-in to talk with the policy unit in No. 10. The really major change that we have almost forgotten and which we take now for granted began in the 1990s and emanated from a grey eminence behind the scenes in the Labour Party, Jeremy Bray, whom some noble Lords will remember. He convinced Neil Kinnock that one of the manifesto commitments for the Kinnock/Major election should be the creation of an office of science and technology, headed by a distinguished scientist and appropriate person brought in at the mandarin, Permanent Secretary level. He would go along to the Wednesday morning meetings of all the other Permanent Secretaries and be given an adequate star.

William Waldegrave persuaded John Major, who won the election, to implement the Kinnock manifesto commitment, and I was the first such person appointed in that wave in 1995-2000. I was succeeded by David King and then by John Beddington. I found it fascinating and challenging, although it was also an experience in the cultural anthropology of the Civil Service. I had always thought that “Yes Minister” was a sitcom, but I discovered that it was a documentary. I had great good fortune; I was really lucky. I had better fortune than some of my successors. Both my Prime Ministers—first, John Major and then Tony Blair—were people who sought informed and honest rather than comfortable advice, and I had direct access to both of them. The two Cabinet Secretaries—Robin Butler and Richard Wilson—could not have been more helpful.

During my time, the Permanent Secretary for trade and industry, where OST was housed, changed. At first it was Peter Gregson and then Michael Scholar. At our first acquaintance we had lunch together and Michael said, “How do you think you are doing?”. I said, “Well, I’m really enjoying it and I feel that I am being moderately effective, but the one thing that is clear is that had I pursued a career in the Civil Service, I would never have made it to the grade of Permanent Secretary”. Michael, with characteristic honesty and the right words said, “That is absolutely right. How shall I put it? You don’t have the courtier skills”. I was confronted, as successors have been, by the kind of resistance to outsiders that we see subtly expressed in the failure to accept so many of the recommendations that have been written by civil servants. Civil servants are not bad people; like everywhere else there are good and bad people, but they have a culture that is not well suited to the sort of things we are talking about.

Let me give noble Lords a very quick sketch of some of these issues. In the early 1990s, the apparent peace dividend—the end of the lunacy about the end of history—meant that the Ministry of Defence had to take big cuts. What did it want to do? It did not want to get rid of its civil servants and so thought that the best thing to do was to spin out the whole of the research enterprise. This would have been a disaster because it would have impaired all relations with the Americans, among other things. This is the first time I have ever claimed this in public, but I think that my biggest achievement was that I kept a big chunk of that. QinetiQ was spun out, but the defence science and technology labs in Porton Down are still in the public sector and still interacting with the Americans. I could not possibly have done that if I had not had the status—four star—and direct access to the Prime Minister and Ministers. I could multiply such examples.

On JASON, given the way the MoD is now, I do not think that JASON is quite appropriate. One of the conclusions that came out of the defence science and technology labs is that we should have more interaction with academia and more attempts should be made to bring in that kind of free-ranging and great strengthening dialogue. The one bee in my bonnet throughout my entire tenure as a non-exec there was to build up the social sciences in the research part of the MoD because then, as you began to go into Iraq, you could ask questions about what was going on in Iraq and what were you going to do when you had won. I was told consistently by people in the MoD that they were too busy to think about that.

I could multiply this endlessly and give you examples that we have already heard, but I will not. After the war, the chief scientist in the MoD, the very distinguished Hermann Bondi, a hugely important person, fought off repeated efforts, one of which I fought off during my brief tenure, to downgrade the post or capture it for a civil servant, but that is what has now happened. It is a real loss. I could multiply these examples more or less indefinitely.

I cannot resist mentioning that the story of FMD and what happened was not quite as rosy and simple as the noble Lord, Lord Jenkin, portrayed. To begin with, it was not Dave King who put together the committee but John Krebs. When he put together the committee of experts on epidemiology—I forget whether it was under MAFF or Defra at that time—not a single one turned up, but Dave did. Dave then took it over and did a super job.

In retrospect, it is clear that if we had been able to use bigger and wider firebreaks and vaccination, we would have stopped things by June. However, that was thwarted by the farmers’ union. The most satisfactory thing took place at the post mortem, where the Royal Society recommended that next time vaccination must be used. Defra had clearly forgotten this, but the Royal Society reminded the Government, and I have a letter signed by Tony Blair apologising for their oversight and saying that it would not reoccur. There is now a rule that if there is another outbreak and vaccination is not part of the strategy, the Permanent Secretary must give reasons in writing to Parliament before abandoning the measure.

Against that background, I conclude by strongly urging the Minister to sweep aside the objections, denials and equivocations that constitute the present Government’s response to this report. It will require a certain amount of courage to go up against them, but I am willing to be as helpful and to enlist people if he wishes. I particularly emphasise the following six recommendations in the following order of importance. The first is recommendation 10: that all CSAs must have a seat on the departmental board. The current response contains some weasel words about the need for flexibility, but flexibility has nothing to do with it. It is another expression that means that we want to put these guys on tap, not on top. The issue here is getting the job done.

The second is recommendation 9: that CSAs must be grade one or at least grade two. Here, again, in wonderful Civil Service double-speak, the Government replied:

“The precise grade of the position should remain a matter for the Permanent Secretary in managing his or her department”.

It has nothing to do with managing the bloody department; the grade has to reflect the importance of the person so that they have the clout to be heard. To accept that recommendation is a no-brainer.

On recommendation 7, on direct access to Ministers, the response does not say that it does not accept it but it uses weasel words to that effect. Again, there is no alternative to an unequivocal agreement to direct access. I know examples—and other people have given them—of chief scientists who just have not had direct access, as they are carefully managed and encapsulated.

Recommendation 1 lists a catalogue of desired qualities. Again, there are weasel words in the response, but they are obviously the things that you want. Recommendation 2 is one of the trickiest. It says that, given that these are the qualities that are wanted, recruitment “necessarily excludes internal candidates”. That is an awkward thing to do. I would recommend that one does not just say that they cannot be internal candidates but rewords it to say, first, that there is a very strong presumption that the appointment will be from outside and, secondly, that if it is not, the Government Chief Scientific Adviser should have a veto and justify it.

Finally, recommendation 8 concerns the formal protocol designed by the Government Chief Scientific Adviser for CSAs when they disagree with Ministers or civil servants about policy decisions that are contrary to scientific advice. I am not going to talk about that because, in the week when badgers are in the news, we do not need to.

17:31

[Viscount Hanworth]

As there can now be no doubt, our politicians and civil servants have an uneasy relationship with scientists and technologists, exemplified by the circumstances of the departmental chief scientific advisers and the roles that they play.

If you look elsewhere in Europe, you will be hard put to find persons who are playing comparable roles. You will not find the counterparts of our chief scientific advisers either in France or in Germany. It is interesting to consider the reasons for their absence there and for their presence here.

There are cultural and historical circumstances that explain the roles of the scientific advisers in the UK that I shall touch on later. In France and Germany, their counterparts are absent for the reason that their civil services are already permeated by scientists and technologists, which implies that there is no need to appoint them to a special role.

Many of the civil servants in France have been educated in les grandes écoles. These establishments fall outside the main framework of the French university system and have traditionally produced many, if not most, of France’s high-ranking civil servants, politicians and executives, as well as many scientists. We tend to date the inception of les grandes écoles from the years following the French Revolution and to attribute them to a Napoleonic initiative. In fact, some of the better known ones, including les Ecoles des Mines and l’Ecole des Ponts et Chaussées, predate the French revolution.

In Germany, a high status is accorded to scientists and engineers, who are well represented in the civil and diplomatic services. The current German ambassador to Britain, for example, is an academic physicist.

In a common perception, the role of scientific advisers in UK government is to represent the scientific point of view. To persons trained in science, this must seem to be a curious requirement which mistakes the fundamental nature of science. Science is not a systematised set of opinions; instead, it is a discourse.

Admittedly, the discourse depends greatly on codified knowledge; and scientists can be arrogant and dismissive of arguments that pay no respect to such knowledge. However, in the main, arrogant opinionation is not the hallmark of science or a common personal characteristic of scientists. If science does encourage any particular traits of personality, surely these are a diffident nature and a tentative opinionation. Such personal characteristics are the very opposites of those that the report we are considering has identified as the necessary qualities of a chief scientific adviser. For this, there are good reasons.

However, it is probably misleading to talk in general of the personal characteristics of scientists or, indeed, to talk of the scientific ethic as if individual scientists necessarily embodied it. The greatest virtues of science are not intrinsic qualities that are inherent in the individual scientists; instead, they are the extrinsic qualities that characterise the realms of scientific discourse. Aberrant opinions and false conclusions, which abound in science, tend to be eliminated in a ruthless manner in the process of scientific debate. This is another feature that is barely recognised or is generally misunderstood in the common perception.

A difference of opinion among scientists is commonly perceived to be a symptom of scientific failure. On occasion, when differences arise, the right-wing press, which is largely inimical to science and to scientists, can be vengeful in its invective. Such invective accompanied the dismissal in 2009 by the Minister of Health of his chief scientific adviser, Professor Nutt, for making observations that were contrary to his own fixed ideas. Professor Nutt had ventured the opinion that cannabis is less harmful to those who smoke it than would be their likely consumption of tobacco and alcohol. He suggested that it should therefore be classified not as a class B drug, in common with alcohol and tobacco, but as a class C drug of a lesser potential harm. The contrast between this mild opinion and the fierce invective to which it gave rise was remarkable. Professor Nutt received the support of many of the chief scientific advisers, some of whom resigned in sympathy on the occasion of his dismissal. This episode highlighted the hazards of the job and illustrated how different the political environment is from the normal scientific environment. It also emphasised that considerable strength of character is often required in the role.

Some persons of remarkable strength of character have filled the role of a chief scientific adviser in the past. The formal arrangements that prevail today date from 1964, at the beginning of the Government of Harold Wilson, and the first person to fill the post was Solly Zuckerman. However, there had been precedents, among which the careers of Churchill’s wartime advisers were perhaps the most influential. The personalities of Henry Tizard and Frederick Lindemann impacted heavily. Lindemann, who became Viscount Cherwell, was—according to a received opinion that has been strongly challenged today—an able scientist with a wide range of competence. He tended to derive firm and inflexible opinions. In the main, valuable services were rendered but sometimes his opinions were decidedly haywire. This created difficulties for his successors and was responsible, in large measure, for the cautious and resistant approach that has often characterised the reactions of senior civil servants to scientific advice. The expectation that the Government Chief Scientific Adviser should be able to give informed opinions on a wide range of matters is also a legacy of Lindemann. To meet this requirement, the chief scientific adviser needs far more support in terms of staff and resources than is currently available. This is a need that the report has clearly identified.

The effect of Harold Wilson’s exaltation of the roles of science and technology has been widely misconstrued. A conventional interpretation is that, despite his commitment to “white heat” technology, his intended scientific revolution came to nothing because of the resistance of the established powers. In fact, the Governments of Harold Wilson were committed to the tasks of curtailing the nation’s expenditure on military and civil aviation, of resisting the ambitions of Britain’s nuclear scientists and of holding many other great technological endeavours in check. Many people would maintain that this was a necessary endeavour. However, its pursuit had an influential effect on the attitudes of the Civil Service to expensive technological projects.

It is precisely such ill effects that the recommendations of the report are designed to counteract, by advocating that the roles of the scientific advisers should be enhanced and that the resources available to them should be increased. The advisers have to contend with the effect of the history that I have recounted. They also have to contend with a culture within our Civil Service that is largely ignorant of the sciences, if not inimical to them. For a hundred years from the beginning of the 19th century to the middle of the 20th century, the education of senior civil servants was predominantly in the classics and humanities. A rapid change then began in the 1950s. It was recognised that it would be more appropriate for civil servants to study economics and law. A degree in politics, philosophy and economics became the paradigm of the appropriate education.

Economics can be described as a philosophical Weltanschauung, which is to say that it represents a powerful overview of science that can afford to ignore the inessential details. There is a common opinion among economists that matters of science and technology are among such details. We need to defeat this false opinion and the Science and Technology Committee has been influential in its endeavour to do so. Unfortunately, it has recently suffered at the hands of those who fail to recognise the importance of its mission and some of its activities are being curtailed.

17:40

[Lord Mitchell]

My Lords, first of all I congratulate the Minister on his new position and welcome him to the job. He and I are both new boys at this and are both non-scientists so we have a difficult task in front of us. I was very fortunate to serve on the Science and Technology Committee, which reported on nanotechnology and food and was chaired by the noble Lord, Lord Krebs. I was able to witness first-hand his mastery of the subject, his team leadership and his ability to tease out every last detail, and in the report before us we see the very same competence. It is an excellent document on an important subject, and it is a tribute both to the noble Lord and to all the other Lords who have spoken in this debate today. I must say a particular word to the noble Lord, Lord May of Oxford; he spoke for 16 minutes and I would have happily sat here for 16 hours listening to what he had to say.

On previous occasions I have lamented the inability of Government to take reports issued by your Lordships’ House as seriously as they should. That is as true of this Government as it was when my party was in power. I just do not understand why a report that was published at the end of February has taken so long to come to the Floor of your Lordships’ House. I know that this is another debate for another occasion, but it is very irksome.

I would also like to add that in 2004 I had the privilege to chair another Science and Technology Committee report on science and treaties. In that report we wrote a section on chief scientific advisers and examined closely whether DfID and the FCO in particular should have CSAs. We achieved one immediate victory in that, shortly after the report was published, DfID indeed appointed its own CSA, and the FCO followed later. The noble Lords, Lord Oxburgh and Lord Hunt, were on that committee at that time. Was the noble Baroness, Lady Sharp, on that committee?

[Baroness Sharp of Guildford]

No, I was not on that one.

[Lord Mitchell]

I shall be referring to that 2004 report tomorrow in the debate on Antarctica, in which several noble Lords speaking today will also be speaking—it is a busy two days. However, to my mind today’s report follows on from the initial recommendation that we made back in 2004. I am no longer a member of the Select Committee on Science and Technology. Obviously I did not sit on this investigation but, when I read the report, the word “frustration” screams through, barely concealed—the lament of scientists at not being appreciated by politicians and not being listened to, in some cases until it is too late. Not much has changed.

Luckily for us, but unluckily for the badger population of this country—I too will succumb to the temptation—we have a very topical example in front of us today of politicians versus scientists. We see how a decision to instigate this cull has been taken against the advice of some of the leading scientists of the country. The cull must be the wrong decision, but why do decisions of this nature happen? Why do the politicians so frequently get it wrong? In my opinion, it happens because politicians live in a different world and march to a different drumbeat. It is this disconnect between politicians and scientists that I would like to address today.

I am a businessman by background. Indeed, they describe me as a serial entrepreneur—I think that that is a compliment but I am never too sure. Businessmen in general make for lousy politicians and the reasons are not difficult to see. In business, the CEO generally takes what they believe is the correct course of action; you make an executive decision and you live and die by the outcome. Often you do not have to persuade your colleagues to back you. The buck stops with you. If you get it right, you get the glory, and if you get it wrong—well, as the CEO of Citibank saw yesterday, you have to fall on your sword. Business is not about 100% success; it is about getting it right more often than getting it wrong. However, politics is a different game. You have to be seen to be infallible. You have to be collegiate—or pretend to be collegiate—you have to take the team with you and you have to live for the moment. In a 24/7 world it is always tomorrow’s headline that matters. We have all seen this but in this new world of social media, where a single tweet can go to hundreds of millions of people in a second, the game becomes even more intense, and it is often a nasty and brutish game. You are never completely sure who is on your side. This is not my personal experience, but it is what I have observed.

Why do I say all this? Because scientists also come from another world—not another planet, but another discipline with a different temperament. Their judgments are evidence-based, their opinions do not pander to the media, their timeframe is long-term and their reputations have to stand the test of time. I am going to say something that many people might not agree with, but I am going to say it all the same: scientists need to learn to play the game. They cannot just lean on the purity of their research. They have to fight for their views to be taken seriously and acted upon. A noble Lord mentioned sharp elbows, and they are absolutely needed. Just as we in the business world have to adapt to the realties of the world of politics, so too should scientists. The game is often murky but that is the world that politicians inhabit, and to get their attention we outsiders have to have guile and square up to them on their territory, or we will never be heard.

Throughout this report we hear about scientists’ frustration at not being taken seriously—“easily marginalised”, I believe it says in the report. We can visualise it now: the Minister has had a bad day, everything has gone wrong, it is late, and his wife has told him that he dare not be home late. He is in a foul, stressed mood. Then in comes the CSA with yet more bad news. They use terminology that the politician does not understand and does not want to understand; he listens, but he does not hear. It is the clash of cultures, and it will be another disaster. I love the expression used in the report about the interchange between the scientist and the Minister: “Truth speaks to power”. That just about sums it up. It reminds me of the old adage: “Don’t let the facts spoil a good story”.

The report spends quite a bit of time focusing on the skills that departmental CSAs must have—his or her standing in the scientific community, communication skills, public engagement, understanding the policy environment and project delivery—but I wonder how many of them actually fit the role. Lack of access is constantly cited; the Minister is too busy to see the CSA. The report even talks about CSAs having to kick down the door, but does that really happen? I am a pretty good door kicker, but I am the first to admit that I am a pretty lousy scientist. We must be careful in seeking attributes in people that in many ways are mutually exclusive.

The report refers to the now infamous NHS IT project where the Blair Government decided to digitise and computerise the whole NHS at a stroke. It is an interesting example. At that time I was a consultant to IBM, not directly on that project but certainly on the periphery. The anticipated benefits of the project were enormous, but so too were the dangers. No businessman I know of would ever have taken on a project of that size without taking it step by step, but for the politician it was the opportunity to change everything at a stroke. Grand plans and glory beckoned but they went pear-shaped, and someone else was left to pick up the pieces. In that case the Government were naive in the extreme, and they were taken to the cleaners. They did not ask the questions and they certainly did not want the unpalatable answers. Those with experience knew that it would all end in tears; £12 billion later, they were right. It was a river of tears, and so it is with chief scientific advisers, who are often right but are so often ignored.

My advice, for what it is worth, is this: CSAs need to be much more politically savvy and must be able to play the game. Perhaps they should be selected from scientists who have ventured into the outside world, from quasi-scientists who are not really scientists but who understand the scientific argument or even from scientists who have ventured into politics—although I concede that there are not many of them.

In summary, we have a real problem. Scientific experts need to be listened to by Government, and this excellent report makes strong recommendations for CSAs to be given much more prominent positions. I believe that CSAs should also be appointed as much on their personalities as they are on their scientific skills.

18:29

[Lord Gardiner of Kimble]

My Lords, first, I thank noble Lords for their kind remarks. I congratulate those noble Lords who have participated in this debate and those who have supported this inquiry, both here today and through their work in the committee. I pay tribute to the noble Lord, Lord Krebs, and the committee for such a thought-provoking inquiry. I am conscious that, as the noble Lord, Lord Mitchell, mentioned and to the disappointment of my noble friend Lord Willis, I am a non-scientist replying to so many eminent scientists. Having read the report, its quality is self-evident. It recognises the value and the standing of the current CSAs and the achievements of Sir John Beddington.

The Government are committed to ensuring that all policy is underpinned by the best science and engineering evidence. The many significant challenges we face in the world today can be addressed only by the implementation of robust and effective policy, applying the best knowledge. CSAs are crucial to delivering this. As the noble Lord, Lord Hunt, rightly pointed out, this must be drawn from all sources—from government agencies to abroad. The enhancements to the CSA network over the past few years demonstrate the commitment to continued improvement. The present GCSA, Sir John Beddington, deserves considerable credit for the effort and expertise he has invested in building and supporting the CSA network over the past five years.

The committee made 19 recommendations, several of which have already been acted on. The report is already a key guiding document for the GCSA, the Government Office for Science and the CSAs. This has been acknowledged by the head of the Civil Service, who, as noble Lords know, recently responded to the noble Lord, Lord Krebs. While not all the recommendations could be accepted in full, the Government are committed to further continued development of the CSA network. The challenge for the future is to deliver effective, excellent policy yet we will have to do so with fewer resources. There are cost implications for departments arising from many of the recommendations made in the report. Very careful attention will have to be given in balancing these against the many competing needs that each department faces. I can reassure your Lordships that, none the less, the Government are committed to delivering the CSA influence that the report aims to promote.

I will now explain the steps being taken to implement some of the key recommendations. First, on the characteristics of chief scientific advisers, the report identified a number of personal characteristics necessary for an effective CSA and made recommendations on the terms and conditions for appointment. The Government agree with the noble Lord, Lord Krebs, on the three criteria of authority, independence and access. The Government consider that the characteristics set out in the report, as emphasised by noble Lords today, are a relevant, appropriate and very useful guide for departments to use in recruiting a CSA.

The noble Lord, Lord Hunt, raised issues relating to recruitment. I can confirm that the GCSA will be closely involved in advising Permanent Secretaries on all CSA appointments. He will also expect to sit on the selection panel and will encourage departments to seek additional external independent advice in the recruitment process.

Turning to the appointments procedure, I want to reassure the noble Baroness, Lady Warwick, that the default position will be to advertise all appointments externally in open competition. However, under the rules of open and transparent appointments, internal candidates cannot be excluded.

Moving on to the issue of the right grade for a CSA, again the Government agree with the noble Baroness, Lady Warwick, and my noble friend Lady Sharp that these are important roles that must have suitable status in their department. As I said earlier, these are difficult times. Departments have gone through restructuring and downsizing at all levels, which has led to a significant reduction in the total number of directors-general and other senior grades across Whitehall. It is simply no longer feasible for there to be an expectation for the CSA always to be at Permanent Secretary or DG level. The Government have agreed that departments should not appoint CSAs below director level and have already held a department to this.

The noble Lords, Lord Rees and Lord May, referred to the position in the MoD. I can assure noble Lords that the post remains one of the most influential within the MoD and a distinguished and respected engineer, Professor Vernon Gibson, has been recruited to this important role.

My noble friend Lady Sharp also raised the issue of the DCMS. As your Lordships will know, the DCMS has been without a CSA for a few years. The department is now very small, with very few senior staff at all, and is unable to appoint a CSA at the level agreed to. The DCMS has appointed a head of analysis who is linked into the network of deputy CSAs and who will receive support from the CSAs in other departments as well as the advisory committee referred to by my noble friend Lady Sharp.

As recommended, the Government have also agreed that the GCSA should contribute to the CSA’s annual performance reviews and a mechanism for this will be in place from this year. The Government also agree with the committee that the CSAs must have the necessary resource, both budget and staff, to carry out their role effectively. Your Lordships acknowledge in your report that departments vary greatly in size, scope and type of evidence they need. It is not therefore sensible to be too prescriptive on what that resource should entail. Governments, with the advice of the GCSA, must be free to balance the many competing needs for limited resources.

In response to the noble Lord, Lord Krebs, I would like to confirm that Sir John Beddington wrote to Permanent Secretary colleagues last month to start discussions on the implementation of all the recommendations to which I have just referred. Professor Sir Bob Watson, until recently the CSA in Defra, presented the issue well. He said, in relation to CSA policy processes, that policy proposals should,

“point to these questions: what do we know? What do we not know? What is controversial? What is uncertain? What are the implications of the uncertainties?”.

If CSAs have any concerns that these questions are not routinely being answered in policy submissions to their Ministers or that they are not sufficiently engaged in the process, they should raise the matter with their Permanent Secretary and with the GCSA. We also accept the importance of CSAs, like other officials, offering challenges to developing policies. I know that my noble friend Lord Jenkin referred to this.

The Government have well-established routes for raising concerns about the policy-making process. These are enshrined in the Civil Service Code by which CSAs are bound for the duration of their appointment and, in turn, Ministers are bound by the principles of scientific advice to Government which are enshrined in the Ministerial Code. I am conscious of the controversy and indeed the specific case of bovine TB as referred to by the noble Lords, Lord Krebs and Lord Mitchell, and my noble friend Lord Selborne. The GCSA is content that the evidence base, including uncertainties and evidence gaps, has been communicated effectively to Ministers.

On the issue of CSA membership of departmental boards and access to Ministers, I hope that the noble Lord, Lord May, knows of the respect that I have for him—indeed, he and I sat on a Select Committee for a year—but, after the greatest consideration was given to these recommendations, it was concluded that the departmental boards did not meet frequently enough, and indeed were not involved in the day-to-day policy process, for them to be the best mechanism for policy to be influenced in the department.

[Lord May of Oxford]

That is a typical Civil Service response. One has to enter the mindset of this devious subculture. Does the noble Lord really take that as an argument?

[Lord Gardiner of Kimble]

I have not yet attended a departmental board. Perhaps I will be better able to tell the noble Lord when I have. It is fair to say, though, that this is not considered to be the best mechanism to deal with the point that he wishes to affect. While we expect that CSAs should have regular and frequent interactions with Ministers, I am bound to say that not even Permanent Secretaries have access on demand.

My noble friend Lord Willis referred to government policies and the need for them to be underpinned by relevant research. I agree with him that R and D budgets should not be seen as a soft touch when overall departmental budgets come under pressure. Indeed, the Government have affirmed the requirement that departments should discuss in advance with the GCSA and Her Majesty’s Treasury any planned reductions in research budgets or expenditure. Sir John Beddington has recently written to all departmental Permanent Secretaries to remind them of that point.

I turn to science advisory councils. Indeed, the noble Viscount, Lord Hanworth, gave an appropriate reminder of the importance of the advisory system. While the Government do not feel that a full review of science advisory councils is necessary, it is acknowledged that there are some specific concerns. The Government Office for Science will therefore be looking at the way in which these bodies identify and prioritise issues for consideration and how their advice is fed back to the department. The GCSA continues to discuss with all departments the benefits that can be gained from having a council. However, we are committed to funding the best evidence from all sources. The noble Lord, Lord Parekh, referred to national academies as important partners, and indeed we need to build on links with industry too.

The noble Lords, Lord Hunt and Lord Parekh, referred to the recommendation for the appointment of a chief social scientist. I assure noble Lords that the Government recognise the importance of the social sciences and are giving careful consideration to the recommendation.

It remains for me to thank all those who have participated in the debate today and to thank the members of the committee again for their extremely valuable report. The recommendations of the report have been taken very seriously and of course I have studied the letter that the head of the Civil Service sent to the noble Lord, Lord Krebs. I hope that that letter reaffirms that, although I understand there may have been disappointment in the early stages, the Government take seriously all that the committee has said, even where we could not accept the proposals in full. That many have been acted on confirms Her Majesty’s Government’s commitment to strengthening their science advisory systems. As so many noble Lords have referred to, with all their expertise, strengthening those advisory systems will benefit the whole nation as we meet the challenges of the future.

18:04

[Lord Krebs]

I thank all those who have taken part in this debate. I have enjoyed it very much and noble Lords who have contributed have illustrated great depth of understanding, experience and expertise. I do not propose to go through any points in detail, because we have already taken up a substantial amount of time. I thank the Minister. His reply, together with the letter from Sir Bob Kerslake, gives us some encouragement that we are perhaps inching in the right direction rather than making a sprint for the finishing line. I can assure the Minister that we will keep an eye on these matters in the Select Committee and will no doubt make our opinion strongly felt if we are not satisfied with the way that the Government respond in the light of Sir Bob Kerslake’s letter.

In closing, I make two further comments. One is to join others who have acknowledged the good work done by Sir John Beddington, the Government’s Chief Scientific Adviser. He has slightly less than six months to serve and, as I mentioned at the beginning, he stands in a long line of distinguished predecessors and has served with exceptional distinction. It will not surprise noble Lords if I give the very last word to the badgers. I want noble Lords to think about what the Government are proposing to embark on. The Environment Secretary will, I believe, announce this week the initiation of the pilot culls, designed to determine the effectiveness and humaneness of free shooting as a way of controlling TB in cattle. Think about what is being done. There are two areas, so there is a sample size of two. There are no control areas. So the analogy is with my being asked to figure out the average height of professors in Oxford. If I said, “I have measured two of them and here is the average height”, you would say, “That is ridiculous. You have to measure 100 or 200”. Then, if you asked whether professors in Oxford were taller than in the rest of the country, and I said that I had not actually looked at what was happening in the rest of the country, that would be ridiculous. It is a completely meaningless, pointless pilot. It emphasises how policy decisions, if they are to be of any sense or value, have to have a scientific underpinning. This is in a department where we have a senior independent chief scientific adviser. In spite of that strong system, the policy makes no sense. In departments where there are weaker systems, things could well be worse. However, I leave it at that point. The last word is with the badgers and I thank everybody very much indeed.

Motion agreed.

18:08

Sitting suspended.

Sudan and South Sudan: EUC Report

Wednesday 17th October 2012 Grand Committee

Motion to Take Note

18:10

Moved by

[Lord Teverson]

That the Grand Committee takes note of the Report of the European Union Committee on The EU: Sudan and South Sudan—follow-up report (28th Report, Session 2010-12, HL Paper 280).

[Lord Teverson]

My Lords, probably at the end of this debate I will not be able to raise the applause that the last debate did. It would be most inappropriate for the subject we are debating this afternoon. This is probably the shortest report ever produced by an EU Committee, but its purpose was specific: to maintain focus—not just within this House but well beyond it—on events going on in Sudan and South Sudan, following our original report published around the time of independence last year. I will give the Grand Committee some background to the issues; we have such an excellent level of contributions to this report that I hope everyone else will then be able to contribute.

Sudan has been much troubled. Since 1955, the year before independence, up to 2005, it was a period of almost continual unrest, except maybe in the late 1970s and early 1980s. Then in 2005, we had the comprehensive peace agreement, very much with the help of the United States, which was seen as a major breakthrough. That led to a referendum in January 2011, which was generally seen as successful in terms of the way it was carried out and its validity, which overwhelmingly called for the independence of South Sudan. On 9 July last year, both Presidents Omar al-Bashir and Salva Kiir were there to celebrate the independence of the first African state to be declared independent by consent. That was a tremendous achievement, not just for that continent, but for the people of both Sudans and the world community.

However, despite that comprehensive peace agreement, a large number of issues were still there: debt, citizenship, most of all the delineation of the border and the status of Abyei in particular, and the issue of oil revenues. As we are an EU sub-committee producing this report, there were a number of EU issues as well, such as the slow establishment of the mission there, but overall those problems internationally between Sudan and South Sudan were of great importance. Not just that—in South Sudan there was very little infrastructure. There were about 50 kilometres of tarmac road, hardly any social infrastructure, rebel forces within South Sudan, an overlarge Sudanese People’s Liberation Army and $11 billion of oil revenues unaccounted for post-2005, when the comprehensive peace agreement took place. That was some challenge and the comprehensive peace agreement was not so comprehensive by the time of independence.

Since that report and since independence, as members of the Grand Committee will know, the problems have been just as large: a huge refugee flow, going both ways, but particularly into South Sudan, has created a grave humanitarian crisis; Sudan’s bombing of South Sudan; and the occupation of the Heglig oil region by South Sudan; which hardly helped that situation and almost led to war around March and April this year. One of the things that stimulated us as a sub-Committee to look at this issue, was South Sudan’s decision to stop the flow of oil through Sudan, which was its only way of exporting oil to the Red Sea at that time. It meant a reduction of public revenues to the South Sudanese Government, who are not well endowed otherwise, of 98%.

In fact, when we circulated the draft report among the EU Committee, one of the members wrote back and said, “You have got this wrong because it says that South Sudan has stopped the oil, whereas clearly you mean it was Sudan”. Of course, it was not. It is like South Sudan having imposed oil sanctions upon itself. Whatever the reasons and however deep the injustice, the sub-committee felt very strongly that this was reckless behaviour by the new state towards its citizens. Of course, within Sudan itself there has been the ethnic cleansing and all the other violence that has taken place in Blue Nile and Southern Kordofan.

In September, there was some light at the end of the tunnel, perhaps, with the agreement made in Ethiopia and all the work that Ethiopia has undertaken in this area around oil and the demilitarisation of the border zone. Having said that, we are aware that it is very easy to turn off oil; it is much less easy to turn it back on again, and the oil in the Sudan region is particularly viscous and waxy, and getting that pipeline to work again is going to be a major issue. In fact, the International Energy Agency estimates that even in five years’ time, output will not be back to the levels that it was before the supply was cut off.

The EU is doing a number of things and we should not forget that some €285 million will be spent on the development budget since independence and up to 2013, and this month a CSDP mission is due to go into Juba airport to help with communications and that area of infrastructure.

Our report says that it is easy to go through all these difficult issues, but the comprehensive peace agreement is still not implemented. Although there has been a resolution, perhaps, on oil revenues and on the demilitarisation of the border, those border disputes are still not resolved and there is still infinite possibility of continued conflict between the two states, and all of history will tell us that it will continue. Clearly, the committee hopes that that will not be the case.

What the region very much needs is for the international community to stay involved. The African Union has played an important role, as has the United States, the United Kingdom and other member states of the European Union. This region must not be forgotten. The international community must help it to reconcile its difficulties. Apart from the important work of China, one thing that is absolutely clear to all of us is that for the foreseeable future the two Sudans need each other, and to live in peaceful coexistence. I beg to move.

18:18

[Lord Trimble]

My Lords, I very much welcome the fact that this debate is taking place comparatively soon since the publication of the report. After taking out the couple of months in the summer, it is a comparatively early debate. I also welcome the new Minister, the noble Baroness, Lady Warsi, to her position. I believe we do not have the honour of being her first debate—I think that was last week—but we welcome her here very much indeed.

This follow-up report is very short, just one page. The background has been ably set out by the noble Lord, Lord Teverson, so I am not going to go through it. The core concerns are set out in paragraphs 3 and 4. Paragraph 3 says:

“The Committee is particularly alarmed that South Sudan has cut off the flow of its own oil”,

and paragraph 4 says that,

“economic or social development in South Sudan will become profoundly difficult, if not impossible, with rapid and serious adverse effects on its economy and people”.

That, of course, is absolutely right.

In many respects, South Sudan’s actions in cutting off the oil struck us as almost suicidal. However, looked at from another point of view, the South Sudanese were in a situation where they believed Khartoum was deliberately using the pipeline as a lever and was misappropriating some of the oil and consequently the proceeds of it. They felt that they could not allow themselves to be held to ransom by Khartoum. If they had said, “The effect of this on us would be horrendous”, they would effectively have put an ace into Khartoum’s hands. Therefore, while the action had all the implications stated in our report, the South Sudanese had to show Khartoum that if need be they could do without the oil, and that eventually this would start to hurt Khartoum and perhaps bring it back to a more reasonable position. Perhaps that happened; I do not know. My comments are speculative. I am aware that there was pressure from others. Perhaps they—and even the Chinese, who had a very clear interest in getting oil out of Sudan and South Sudan—had an effect.

When we think of the impact on South Sudan, we should bear in mind that its level of development is already comparatively low. None the less, it is a rich agricultural area where people exist largely by subsistence. However, the people have narrow margins to deal with and they have problems with intertribal disputes, as occurred last year. Of course, the flood of refugees into South Sudan was something that they could not cope with. We are looking at this from a development point of view; they are looking from the other end of the pipeline, where things appear rather different.

Since we produced the report, there has been a new agreement. On 27 September 2012 the co-operation agreement between the Republic of Sudan and the Republic of South Sudan was signed and countersigned on every page with the initials of the persons involved. Obviously one welcomes it; a new agreement is a good thing. However, one also asks the question: will the agreement be any better than the other agreements in resolving the outstanding problems?

It is important to step back from day-to-day matters and remember some of the basic facts about, first, the nature of Sudan and of the Sudanese Government. Sudan exists within colonial boundaries, and if ever there was a set of completely inappropriate boundaries, this is it. It unites sub-Saharan Africa with the north of the Sahara in terms of the peoples it covers. The ethnic and economic differences are enormous. In a sense, splitting the country is a sensible thing; one could say that it should never have been one unit in the first place. I will come back to this in a moment.

The second thing to bear in mind is the nature of the Khartoum Government. I will not go into detail, but refer noble Lords to comments I made in the 7 December debate on our first report. We are dealing essentially with an Islamist Government. We should remember that this is where bin Laden first moved when the Saudis drove him out of Saudi Arabia. The President of this Government was indicted as a war criminal. The regime has been responsible for enormous atrocities within its current boundaries and also in the area of South Sudan. My impression is that the regime is hunkering down under pressure and doing things reluctantly when it is forced to, and that if ever it gets a chance to get out from under that pressure and try to reclaim part of the authority that it had, or to destabilise others, it will not be able to resist the temptation.

When we consider these two factors we see that in this situation normal diplomacy will not work. The African Union is—perhaps “incapable” is too strong a word, but it is intrinsically unlikely to be effective. It is heavily inhibited by anything that changes the colonial boundaries, because of the implications that would have through country after country south of the Sahara. Furthermore, it is extremely reluctant to pass judgments on the character of Governments. Too many other African countries have skeletons in their own cupboards. Therefore, the African Union will not be effective in dealing with the character of the regime.

The only thing that will work is pressure. The only thing that produced the comprehensive peace agreement was pressure, and by pressure, I do not mean normal diplomatic pressure, I mean really strong pressure, exerted primarily by the US Government, which left Khartoum at one stage fearing that it was facing an existential threat. I am not saying that we should be trying to persuade the current US Administration to do that. I do not think we would have any chance if we tried and, of course, we must not make any assumptions about what might happen in future. As the interim report says, we end up saying that the international community should be doing what it can to bring about the resolution of the outstanding issues, and while, for the sake of politeness, we have to name check the African Union, the European Union and others, we ought to bear in mind that at the heart of the matter the people who are going to bring effective pressure to bear are those with the ability to do so, which, I am afraid, puts the ball back in someone else’s court.

18:25

[The Archbishop of York]

My Lords, in May, I attended a three-day retreat of Anglican and Roman Catholic Bishops in Yei, South Sudan. Unfortunately, the bishops from the Republic of Sudan could not be there because of the political situation. I was struck by how, as Anglicans and Roman Catholics seeking to work as one across both nations, they were committed to working with each other and with Muslim leaders as well for the good of all.

These bishops are close to the grass roots. In their joint statement, they said:

“We begin to wonder whether the International Community still understands the aspirations of the people of South Sudan, as well as the marginalised communities in Sudan”.

The fact is that the needs and aspirations of these noble people are not actually understood in the West.

One thing is absolutely clear: the future well-being of both Sudan and South Sudan depends on achieving peaceful and constructive relations between the two countries. The agreement reached in Addis Ababa between the Presidents of Sudan and South Sudan on 27 September in the course of talks mediated by the African Union high-level panel is good news and represents a significant step back from the brink of war and towards peace. The African Union’s role and, in particular, that of President Mbeki in heading the panel is to be applauded. The support of the international community, including both Her Majesty’s Government and the European Union, has also played an important part.

However, the 27 September agreement is only partial. The oil agreement enabling the resumption of oil production is critical to the economies of both countries, but the oil deal on its own is not enough. Achieving border security, particularly establishing a demilitarised zone along their common border, will be a prerequisite for stability. Stability will require agreement on disputed border areas and, most notably, on the future of Abyei. This needs to be resolved as soon as possible. Although the basis has long been agreed, the Sudan Government have so far rejected every attempt to make progress, despite the considerable efforts and concessions made by South Sudan.

A church delegation led by Archbishop Daniel Deng returned from a visit to Abyei last week. It was shocked by what it saw. The town is deserted and has been completely destroyed. The Catholic church, Catholic and Episcopal Church of Sudan schools, boreholes, administrative offices, government houses, the power station, shops, and even the latrines have all been destroyed. There appear to be no humanitarian agencies working there as, apparently, it is considered part of Sudan, and they do not work cross-border. A huge number of displaced people from Abyei, perhaps as many as 100,000, are in Agok with very few basic services. The people simply ask for what is their right under the Abyei protocol of the comprehensive peace agreement agreed by both parties: a referendum in which they can choose their destiny. All parties should be ready to accept the African Union high-level panel proposal. Abyei cannot endure this much longer. There are some real signs of hope. The four freedoms agreement, under which rights are granted reciprocally to the two countries’ citizens to allow freedom of movement, property ownership, work and residence, is much to be welcomed. This offers much needed safety and stability. The 27 September agreement did not address conflicts internal to Sudan in South Kordofan and Blue Nile, which nevertheless affect both countries.

There can be no military solution. Both parties to the conflict—the Government of Sudan and the Sudan People’s Liberation Army in the north—are militarily well equipped and are set on military success. Both urgently need persuading of the need for a negotiated resolution, which must safeguard the rights of the indigenous population and resist any attempts to force them to flee south and take over their lands and resources. Attacks on civilians by either side must immediately cease, particularly the aerial bombing of civilians by the Sudan armed forces.

Resolving the conflicts in South Kordofan, Blue Nile and Darfur remains critical for the future stability of the Republic of Sudan. Key to this will be the recognition of the reality of Sudan as a multiethnic, multicultural and multireligious nation. The UK and the EU need, in their engagement with the Government of Sudan, to encourage respect for this reality and a constitutional process that enables the inclusion and participation of the whole of Sudanese society.

Freedom of religion is an essential element of respect for human rights in Sudan and needs to be emphasised. There is a significant indigenous Christian presence in Sudan whose rights must be respected. There was a marked deterioration earlier in the year following dangerously provocative language from President Bashir, which included the destruction by a mob of a Presbyterian evangelical church and community centre in Gereif and the destruction by police of an Anglican church in Haj Yusef, both in Khartoum. Anglican church premises in Kadugli were also badly damaged by government forces in June 2011. It is welcome that the local government has taken some steps to work with the church in repairing that building.

Back in South Sudan, the church has a significant role in supporting the transition from armed conflict and in addressing development needs. The church makes a unique contribution in peace-building, and great leadership has been shown by Archbishop Daniel Deng in achieving a regional peace agreement in May 2012 between the different groups in Jonglei State. Development support should be encouraged to ensure a peace dividend becomes apparent so as to consolidate such efforts. In education and health initiatives, the church continues to be a strategic major player. On the first anniversary of South Sudan’s independence in July this year the two archbishops, Anglican and Roman Catholic, Daniel Deng and Paulino Lukudu Loro, reiterated the dream expressed when we met back in May:

“We dream of two nations which are democratic and free, where people of all religions, all ethnic groups, all cultures and all languages enjoy equal human rights based on citizenship. We dream of two nations at peace with each other, cooperating to make best use of their God-given resources, promoting free interaction between their citizens, living side by side in solidarity … We dream of people no longer traumatised, of children who can go to school, of mothers who can attend clinics, of an end to poverty and malnutrition, and of Christians and Muslims who can attend church or mosque freely without fear”.

I call upon Her Majesty’s Government to do all in their power to assist both countries in making this dream a reality, and I welcome this short report.

18:33

[Lord Jay of Ewelme]

My Lords, it is difficult to follow the right reverend Prelate the Archbishop of York, but I shall do my best. I join other noble Lords in welcoming the Minister to her job. It is very good that she is in the Foreign Office and that the ministerial team in the Foreign Office is no longer 100% male. Perhaps the noble Baronesses, Lady Kinnock and Lady Chalker, will join me in saying that.

I feel a slight frustration that in this House, when we discuss Africa, we tend to move from crisis to crisis. I hope that I will be forgiven if I say a few words about Africa more generally before moving on to Sudan. The broader context is changing rapidly. We have come a long way from the day 10 years ago when the economists described Africa as the hopeless continent. There are positive developments. There has been strong growth in sub-Saharan Africa. It was nearly 5% last year and considerably more in some sub-Saharan African countries. Investment and labour productivity are growing.

There are also some startling statistics. Between 2010 and 2050, the population of Africa is expected to double, which means that by 2050 one in every four people in the world will be African. These changes of course provide opportunities and I shall give just a couple more statistics. British exports of goods and services to Africa last year were about the same as those to China and India combined. When I first read that statistic, I blinked slightly and checked it. But I am told that it is true, and African exports to Britain have now doubled since 2000.

With that good news, as always, comes the need for caution. To comment on another part of Africa, something that looks good one year can look pretty ropey the next. Mali was a success story until the takeover in the north and the coup in the south. We now have in the north of Mali, an al-Qaeda/Boko Haram/radical Tuareg state which threatens our interests in the region and across the Mediterranean seaboard. I find it profoundly depressing that just as the desperate scenario in Somalia begins to get better, we risk having a quasi-terrorist state further west. Therefore, there is all the more reason to ensure that the tensions elsewhere in the continent, such as in Sudan, are well handled.

As others have said, the recent agreement between north and south on restarting the oil pipeline is positive, even if it is still fragile. However, that agreement did not touch other flashpoints. It did not touch Abyei, South Kordofan or the Blue Nile, and horror stories in Darfur remain. I feel that there is a slight risk that with the focus on the north and south, we forget about Darfur. We still need to remember that there are atrocities in Darfur which, if they were the only thing in Sudan that attracted our attention, really would attract our attention. I urge that we do not forget that.

While these tensions remain, particularly those between north and south, there remains too the risk of miscalculations leading to renewed and serious conflict. That includes the south overplaying its hand in the expectation that international support will always be there, and the north committing atrocities in the border areas and intervening in the south to a degree that causes the south’s neighbours, perhaps Uganda, to intervene or attempt to intervene to protect it.

Just as the noble Lord, Lord Teverson, said, there is a key role for the international community to work with both Sudans to ensure that those sorts of miscalculations do not happen, and to help with the humanitarian and development needs, particularly in Darfur and the south. There is a need first just to keep Sudan at the top of the international agenda. Good news or relatively good news, such as that over the oil pipeline, is not a reason for shifting our attention elsewhere but for ensuring that there is no backsliding. I hope that the Minister can give us an assurance that Sudan will remain a key part of the Government’s priorities. Despite the difficulties, there is a real need, too, for closer co-operation between the EU, the African Union and, as we said in our report, China, which has a real interest in the north and the south.

There is also a need for new and improved mechanisms for aid funding to meet the huge needs of South Sudan in particular. I declare an interest as chair of the international medical charity, Merlin, which operates in South Sudan and Darfur. A few years ago when I was in Juba, much play was made by donors, bilateral donors and the World Bank of new interim donor co-ordination measures that had been put in place and how they would provide some assurance of continuity. However, three years later, they are still interim measures and there has not really been the improvement in donor co-ordination which will make a real difference to people in South Sudan. I hope that there, too, the Minister can give us an assurance that we will do all we can to ensure that donor co-ordination is improved.

As well as keeping Sudan and South Sudan firmly in the headlights, and ensuring that western countries, the EU and China work together to prevent potential disastrous political miscalculations, we need also—perhaps above all—to strengthen our donor mechanisms and continue to focus on the real humanitarian needs in much of South Sudan and Darfur.

18:41

[Lord Selkirk of Douglas]

My Lords, the speech made the noble Lord, Lord Jay, places this matter very well in its correct context. The deals over oil, trade and security signed by the leaders of Sudan and South Sudan last month were a most welcome development. They have brought hope of a better future for some of the poorest people on earth whose lives have been ravaged by civil war. However, it would be naive to believe that all the economic woes, the plight of the dispossessed refugees and the dangers arising from the volatile border disputes can simply be eliminated overnight.

It is acknowledged that international pressure, particularly from the African Union, helped to produce the recent agreements. However, the committee’s report, which was written before the deals were signed, makes the still very relevant plea that the European Union must work urgently with the African Union and the United Nations to persuade Sudan and South Sudan to seek a mutually advantageous resolution of the outstanding issues between them.

The most important economic issue is how soon oil sales can begin again, as the precarious financial position of both countries has been seriously damaged as a result of the shutdown in oil production in the south in January this year. It will be recalled that at the time of independence in July last year, the new country of South Sudan got two-thirds of the former Sudan’s oil but Khartoum continued to retain the processing and export facilities. Oil sales, in fact, account for around 98% of South Sudan’s budget.

There is also the prospect of negotiations and arguments over the possible development of a pipeline from oil fields in South Sudan through Uganda to the coast of Kenya. Here, I should very much like to congratulate and welcome the Minister, the noble Baroness, Lady Warsi, and to wish her every good fortune. Perhaps she would like to say a word about the possibility of such a pipeline through to Kenya. However, it seems to me that Sudan will assert an interest in any such development and that discussions with a view to finding a meeting of minds are extremely likely to be necessary. Perhaps the Minister can say how best a way forward might be found on that subject. Judging from past experience, the African Union should have a considerable influence in this connection.

While the deal over resuming oil production is the most encouraging aspect of the recent agreements, international pressure should also be maintained. The noble Lord, Lord Trimble, emphasised that point. That pressure should be maintained on both Governments to try to reach a solution on the vexed question of Abyei. I was very pleased that the most reverend Primate the Archbishop of York referred to this and to other urgent matters. A demilitarised buffer zone is part of last month’s agreement but little progress seems to have been made on deciding the future of this disputed border area, which contains valuable oil reserves.

Here again, perhaps the Minister can tell us whether the British Government favour the concept of a referendum being held that could assign the area to one of the two countries or whether they prefer the idea of political negotiations and a negotiated solution that could mean the region being divided between the two Sudans. I note that Sudan has stated a preference for a negotiated solution.

I should also like to ask the Minister about the current status of the EU office in South Sudan following the previous commitment of the noble Baroness, Lady Ashton, the high representative of the EU, to upgrade it into an EU delegation with a new head of delegation, and also about the planning of development support in areas such as law, education, health, water management and food security. The average life expectancy of men in this part of the world is around only 58 years of age. Half the women are not literate, and we know the horrifying total of at least 1.5 million people who died during the long years of warfare between the north and South Sudan. Future generations deserve a great deal better than that.

I was very pleased to have the opportunity to support the noble Lord, Lord Teverson, and his committee in having a follow-up report. As that report urges, European Union countries must continue their efforts to play an effective part, through development aid, in helping the people of these two countries, who have endured so much suffering and upheaval, to achieve a stable, peaceful and economically viable place in the modern world.

18:46

[Lord Anderson of Swansea]

My Lords, I begin by apologising to the Minister and members of the Committee; because the earlier debate overran, I have run into personal problems with a longstanding family engagement, so I may have to leave before the end of the debate.

I welcome the follow-up report and the initial committee report, The EU and Sudan: on the Brink of Change. The very title of the initial report poses two questions. First, clearly the committee remit is restricted to the EU role, thus it does not have the total picture in focus—for example, the atrocities in Darfur. Surely we as a House need to revisit the possibility of a foreign affairs committee in the House of Lords. When I chaired the committee in the other place, I was in favour of such a foreign affairs committee because the world is a big place and, with adequate co-ordination, one could have such a committee.

Secondly, the title says “on the brink of change”. The initial report was published in June, after evidence over the previous months, with a follow-up report in March 2012. However, it is thin in the extreme, with only one witness, the Minister, and was a snapshot of a serious problem at the time, with the oil blockade and war. Happily, things have improved with the agreement of 27 September. This House needs to examine its procedures in order to allow such reports to be debated in a timely manner and not just deal with historic documents.

I will make one other preliminary remark. I looked in vain, in both reports, for any mention of the Commonwealth. The Government trumpet their attachment to the Commonwealth but they seem to ignore it when opportunities like this present themselves, particularly on governance and because of the proximity of Kenya and Uganda—two Commonwealth countries—and given the great experience, for example, of the Commonwealth Parliamentary Association in helping Governments in relation to their own administration.

States divide in different ways. At one extreme is the velvet divorce of the Czechs and Slovaks and at the other is Korea, where, after 60 years, North and South Korea still confront each other across the DMZ. The jury is out as to which of the two models the two Sudans will be closer to. There will certainly be a difficult transition. The wicked fairies at the birth of the new state ensured that there were many unresolved problems ready to flare into conflict. In 2005 the CPA, as the noble Lord, Lord Teverson, has said, left the borders not agreed, for example, on Abyei. The CPA stated that they should be based on a future consultation, but none has been held. There are 1,800 kilometres of border. There are some estimates that the disputed areas range up to 60%; the lowest expert estimate that I have seen is 20%. Of course, the concerns are different. At state level the concern is over the border, mainly related to the division of natural resources, particularly oil. At local level, and for the people, the concern is over access to water and pasturage because of seasonal migrations. Hence the case is for flexibility and soft borders, given the salience of that issue.

I am surprised that the first report did not highlight the expert work of a British-based NGO, Concordis International, with which I was involved over South Africa in the 1980s and Rwanda in the 1990s. I concede that in paragraphs 73 and 238 in the base report there is a recommendation that the EU should play a role in border-management issues, and in paragraph 159 a glancing reference is made to one EU Concordis project. In fact, though, Concordis International has been supported by the European Union since 2009, working to assist with conflict resolution and issues concerning border management and security. Now it has 15 staff based in Khartoum and 18 based in South Sudan, with three more soon to be deployed. The majority of the funding is of course from the EU’s EDF and Instruments for Stability. Activities facilitated by Concordis International include cross-border and migration conferences, the formation and training of peace committees, and capacity building for development projects. The recommendations that it has made from these activities on soft borders, seasonal migration and training for conflict resolution have been passed to the key stakeholders, including the AU panel mediating the conflict, and have been reflected in the September agreements. Perhaps the Minister will say a little about the expectations of those agreements and the key unresolved issues, such as the settlement of refugees and the pipeline projects. Currently the south is dependent on the good will of the north for its oil exports.

There has been a significant contribution by the EU to conflict resolution—prevention in both Sudans—as recommended in the committee’s report. There is, however, a case for saying that the projects could have benefited from an assurance of funding over a longer period. Again, the European Union has played a significant role in financing the work of the AU High-Level Implementation Panel. I understand that the EU delegation in Juba in the south is now in operation, after the delays mentioned in the report. Perhaps the Minister will confirm that.

The base report is valuable, but dated. The Concordis International experience of working with the EU has been very good. The EU has provided funding in a flexible way and shown great interest, enabling it to meet EU objectives based on its experience and modus operandi elsewhere. The EU has also been helpful in the management of grants and overcoming practical and bureaucratic problems.

After so many years of civil war the transition, since I first visited a rather more peaceful Sudan in 1967, was bound to be bumpy. Two highly vulnerable and fragile states emerged in July last year, and many serious political and economic problems remain. In the north the Republic of Sudan is the only country in the world led by an indicted war criminal. Only in September did the Republic withdraw its candidacy for the UN Human Rights Council at a time when its atrocities in Darfur were reported to be worsening. Surely this says something about the “Buggins’s turn” view of the African region in terms of the UN Human Rights Council, which may, alas, repeat the mistakes of its predecessor, the UN Commission.

A year after independence in the south, it is still talked of as a failed state. I cite the Africa Growth Institute at Brookings, the Atlantic and the special report in Le Monde on 7 July, all giving a very gloomy end-of-first-year report. Let us recognise that the EU is just one of the key players involved—others include the African Union, the UN, the US and China—but it should be given credit for its work. Obviously the two Sudans must make the key moves but the international community is playing a positive role in the transition. The base report and the follow-up report are therefore valuable, if dated. I very much hope that the Committee will return to this subject in future and will perhaps be able to give a more positive analysis of the two Sudans.

18:55

[Lord Chidgey]

My Lords, those who have followed events in Sudan through the end of the civil war and the progress of the comprehensive peace agreement will share the disappointment of the Select Committee that many crucial issues left outstanding remain unresolved, in particular the failure fully and faithfully to implement the memorandum of understanding and the tripartite plan to expedite the unhindered delivery of humanitarian assistance in Southern Kordofan and Blue Nile state, and the resolution of the issues of the final status of Abyei and disputed areas. The Security Council, the US mission to the United Nations, the High Representative of the EU for Foreign Affairs and Security Policy, Norway, the UK’s Foreign Secretary William Hague and the tripartite group have all voiced their concerns over the failure to address the continuing humanitarian crisis and have pledged their practical and political support for putting the tripartite agreements, signed in early August, into immediate effect.

This is not to deny the value of the nine agreements reached at the presidential summit on 27 September in Addis Ababa by the presidents of South Sudan and Sudan. In its press statement of 28 September, the UN Security Council recognised that:

“These agreements represent a major breakthrough for the establishment of peace, stability and prosperity in both Sudan and South Sudan and give cause for genuine hope that the peoples of these two countries will realise the fruits of lasting peace and friendship”.

The nine agreements covered oil, citizenship, border demarcation, border monitoring, economic co-operation and other matters. There are still important outstanding issues. The humanitarian situation in Southern Kordofan and Blue Nile is critical. Hundreds of thousands of people are suffering, and this cannot continue any longer. The Government of Sudan must grant full, safe and immediate international humanitarian access and, in co-operation with the tripartite group, implement the MoU and the action plan without further delay.

As the Associate Parliamentary Group for Sudan and South Sudan—of which I am a vice-chair—discovered when it visited South Sudan in April, the new country faces a profound state-building challenge. International investment and skilled returnees are contributing to pockets of economic development and represent a foundation for future growth. The decision to shut down oil production was biting, with the Government set to reduce spending by over 25% from an already low base. Ministry budgets had been slashed and remaining spending was concentrated on salaries, with little left for investment and maintenance. In South Sudan, over 50% of the population lives below the poverty line. Less than 50% of children enrol in primary school and far fewer complete eight years of education, with just one teacher for every 117 children. There is the highest maternal mortality rate in the world, with a one-in-seven chance of a woman dying of pregnancy-related causes. There is only one qualified midwife for every 30,000 people.

Corruption became a major recurring theme throughout the APG delegation’s visit, with concerns expressed that it was becoming fairly ingrained within South Sudan’s fledgling systems. The mismanagement of public funds was a central concern, sitting at the hub of all others, fuelled by avarice and a sense of entitlement. The anti-corruption commission, established in 2005 with a mandate,

“to protect public property and investigate cases of corruption”,

and combat,

“administrative malpractices in public institutions”,

finds, however, that it lacks sufficient authority, independence and transparency. International non-governmental organisations including Global Witness, the Open Society Initiative for Eastern Africa, Oxfam, World Vision and others have all expressed concerns over the continuing humanitarian crisis and the lack of governance and capacity in South Sudan to address it.

There is a call to work more closely with the audit chamber of the South Sudan Government as a key player in the financial management of state funds. The Ministry of Finance needs support, and USAID is tutoring and mentoring the development of budget systems. Acts of Parliament are being passed to bring in financial control and management systems, but donor nations need to press for their implementation. It is no good just passing the Act; it has to be put into force. Global Witness has told me that it is very disappointed about the lack of transparency and accountability in oil governance, with no independent auditor provided. A petroleum law has been passed that calls for open tendering and for all beneficial ownership to be published. Global Witness’s consultant, Dana Wilkins, says:

“Sudan and South Sudan’s citizens are the ultimate owners of their countries’ natural resources. Yet they have been totally cut out of this new oil deal, with no way to verify the amount of oil and money that will be transferred between their governments”.

While the new agreement establishes mechanisms for internal information-sharing and auditing, there are no requirements for transit and financial data to be made public.

The United Kingdom and the EU have important roles to play in building institutions in South Sudan and Sudan and in concentrating on the constitutional process. Again, to quote Oxfam:

“South Sudan and Sudan do not have a European Champion right now and therefore are slightly off the EU Foreign Affairs Council radar”.

The EU has the policies and mechanisms in place and, for the first time, member states have agreed to a joint development programme in South Sudan. There is one joint strategy paper, agreed by the EU institutions and member states. Priority sectors are identified, with donors agreeing to complement each other in their implementation. This is a first and is part of the EU commitment to aid effectiveness but, so far, implementation has been postponed because of South Sudan’s oil crisis. Now the oil agreements are in place, there is an ideal opportunity for the EU and member states to make real progress.

There is a consensus that the humanitarian crisis will continue to dominate the South Sudan agenda for some time. Analysts predict that it will take two generations of long-term engagement to establish basic infrastructure and achieve significant and substantial development of basic services. There is a compelling need for continuing support in capacity-building at all levels of government to gain the benefits of a strong and empowered Parliament.

To this end, the Norwegian Government commissioned a report on training needs in the South Sudan National Legislative Assembly, which was conducted in August 2011—just one month after independence. The analysis was undertaken with the co-operation and support of the Association of European Parliamentarians with Africa, commonly known as AWEPA and of which I am a UK council member. This was part of a capacity-building exercise for this new legislative assembly, the main objective being to analyse its training needs. The majority of assembly staff did not have appropriate academic qualifications for their duties. Qualifications did not match their job descriptions or the departments in which they were deployed. There was a clear need for a wholesale retraining exercise.

As well as having inappropriate skills, over half the assembly staff stressed their concerns over a lack of proficiency in the English language. This was considered alarming, given the move from Arabic to the English language in South Sudan. A close second in skills deficit was that in technical skills, particularly information and communications technology. In the course of a short one-week exercise, the study identified a large capacity-inhibiting skills shortage with massive scope for retraining and confidence building, particularly through exposure to established parliamentary practices.

The National Legislative Assembly of South Sudan has now, with the support of the Netherlands Government and AWEPA, adopted a five-year strategic plan whose core aim, as described by the Assembly Speaker, is that by 2016:

“The National Legislative Assembly will be valued as the central institution in promoting democracy, effectively holding the Executive to account, scrutinising proposed legislation and representing the diverse views of the people of South Sudan”.

The strategic plan is clearly fundamental to South Sudan’s progress towards sustainable government. Recognising that the UK, through DfID, is a major donor in South Sudan, I would like the Minister, either in her response or later by letter, to tell the Committee whether DfID is aware of the strategic plan for South Sudan; if so, how it figures in DfID’s business plan, given that Sudan is one of the UK Government’s top priorities in foreign policy; and what DfID plans to contribute to capacity building and structural support in the National Legislative Assembly, through what means and over what timescale.

19:05

[Lord Cameron of Dillington]

My Lords, following a parliamentary visit to South Sudan last April, I should like to focus on the new country. It will come as no surprise to some noble Lords here that I should also like to focus on agriculture there.

I realise that all the political emphasis now is on coping with the immediate problems and the crisis— I do not think that that is too strong a word—that currently exists in South Sudan: very little food; no real infrastructure to aid the delivery of supplies; no money; too many people running around with guns; too many threats to stability from both without and within; too much corruption; and both national and local government often more real in theory than in practice.

However, as Sub-Committee C’s report of June 2011 made clear, and as we discovered on our visit last April, there is tremendous potential to develop the agriculture of South Sudan as a real tool for development. For a start, we saw a lot of seemingly fertile soil that, to my farmer’s eye, has not been depleted of nutrients as with so many soils elsewhere in Africa. We also discovered that the whole country has masses of water, mostly lying in aquifers throughout the country, just under the surface and easily accessible with only a small amount of investment and help.

So my plea to DfID, the US, the UN and others, including the South Sudanese Government themselves, is: while dealing with the immediate crisis, please do not forget the essential role that agriculture can play in the medium to long-term future. It is agriculture that will kick-start the South Sudanese economy and keep it self-sufficient and resilient, and it is profitable agriculture that will give its women better status and also give those women the nutritional means to keep their children healthy, as well as the money to keep them educated.

Right now, if building roads to help the delivery of aid and supplies, build them with a view to getting future agricultural produce to markets and city centres. If distributing emergency aid and food, consider doing so from well constructed centres that will in future provide the much needed market hubs for those growing food locally. If storing emergency food, build the necessary cold stores to last and in locations of future agricultural production. If much needed water supplies are being constructed for sanitation and life in various venues around South Sudan, then think seriously about future agricultural needs in the way they are designed and located.

There are many ways to think about farming when dealing with today’s tempestuous times but, above all, because knowledge and training are the absolute key to agricultural success in sub-Saharan Africa, start now to educate those from all over the country who are to be the top of your pyramid in the pyramid selling of the necessary knowledge and training. It is only in this way that we will be able to reach out to every community in South Sudan, all of whom are needed to help that country to fulfil its enormous agricultural potential.

I came away in April with the feeling that a growing dependency culture is developing in South Sudan, which is worrying. However, fostering better agriculture, if done in the right way, can foster resilience and self-sufficiency, not dependency. It takes a long time to get an agricultural economy going from scratch, so the sooner we get started, the better.

Finally, I realise that many of the recent political efforts have concentrated on trying to get the oil flowing again so that the South Sudanese Government have funds to operate and can get things done. However, oil, too, can be a distraction, unless it is used to kick-start a real economy. Nigeria and Ghana make two interesting comparatives in this respect. Nigeria had oil and the Government, and possibly tens of thousands of people, did well out of it, but the other 159 million, until recently, failed to develop out of a precarious subsistence existence. Ghana, not quite next door, did not have oil and had the sense to develop its agriculture, and thus this year has a double figure growth rate shared by much of the population. So South Sudan must use its oil revenues in partnership with others, including the UK and the EU, to kick-start its farm production. Like Tanzania, “Agriculture First” must be the slogan for South Sudan if it is to realise its true potential.

19:10

[The Lord Bishop of Exeter]

My Lords, the most reverend Primate the Archbishop of York spoke in some detail of the pressing need for a peaceful and honourable solution to both the conflict that exists between Sudan and Southern Sudan and the internal conflicts within Sudan itself, not least those affecting the South Kordofan and Blue Nile regions. However, whether such a political solution is quickly forthcoming or not, there is currently, as the noble Lord, Lord Chidgey, pointed out, a severe humanitarian need in these same regions—a need that, sadly, is largely unknown to many who live in the West, especially when we compare it to other humanitarian crises of recent years. It is a need that cries out to be responded to effectively, and now.

Last week I had the opportunity of meeting Bishop Andudu Adam Elnail, the Bishop of Kadugli, and heard at first hand how, one year into the renewed conflict between the Government of Sudan and the Sudan People’s Liberation Movement-North, communities in South Kordofan and Blue Nile continue to experience significant humanitarian needs against a backdrop of severely limited humanitarian access. In South Kordofan there are approximately 400,000 internally displaced persons, more than 300,000 of them in areas controlled by the Sudan People’s Liberation Movement and almost 100,000 in Government-controlled areas. In the Blue Nile region 300,000 people have been affected, resulting in some 80,000 refugees in South Sudan and 32,000 in Ethiopia. The situation is deteriorating day by day because of poor harvests and high food prices, a situation that follows two years when harvests were simply not possible due to the conflict.

Despite the provisions of the tripartite agreement between the United Nations, the African Union and the League of Arab States, as yet no agreement has been reached on conducting a needs assessment in the SPLM-North areas. The Government of Sudan have deployed indiscriminate aerial bombardment against military and civilian targets, and for the past year they have not permitted any humanitarian assistance to enter SPLM-N-controlled areas. In these circumstances it would be good to know what Her Majesty’s Government and the EU can do to enlist the support of those countries such as those in the Gulf, which have influence in Khartoum, to exert pressure to ensure progress in the humanitarian access negotiations. In the absence of progress in such negotiations, it would be good to hear what other options are being considered to ensure that humanitarian needs are met.

Among the most pressing needs are effective aid, especially in food security, which in turn requires agricultural inputs and veterinary services, and I endorse all the comments just made by the noble Lord, Lord Cameron, but also health assistance, including support for EPI—expanded programme on immunisation—activities, basic medicine and support to health workers at the level of primary health care. Looking to the longer term, there is also a need for educational aid, which is often overlooked in the act of trying to meet the immediate needs of the present day, not simply in the context of the Sudan. At present the proportion of humanitarian aid for education globally is just 2% of the whole. There seems to be a general consensus among aid agencies that, as a percentage, this needs to be at least doubled. That in turn requires a reaffirmation of the international community’s commitment to universal primary education, both in the lead-up to 2015 and beyond; commitment to learning for all beyond 2015, including for children in conflict-affected and fragile states and those caught up in emergencies; and, to this end, the improved delivery of education in emergencies by establishing pooled funds, with a single policy framework that combines rapid financing for devolved school construction, teacher recruitment and in-service training, support for local communities and the development of capacity at all levels of government. I welcome the comments of the noble Lord, Lord Jay, on the need for more effective donor co-ordination.

Coming back to education, what is needed is education in literacy and skills but also education, without indoctrination, in basic human rights and the ways of co-operation, something that is very difficult when enmity is longstanding and when a young country is, understandably, trying to avoid being told what to do by the wider world. So there is an important issue to do with the nature of education aid in the medium term. It is challenging, and yet such education support is vital for long-term stability and, hence, recovery.

This brings me, briefly, to the potential contribution of the churches. Even though many within the international NGO sector recognise the value of churches and other faith groups at community level and their long-term engagement, there are still huge obstacles to overcome in order to establish operational partnerships. International humanitarian mechanisms do not currently provide space for engagement with non-NGO-shaped actors. There is often a feeling that the Church should come to the NGO forums, rather than the NGOs seeking out the local wisdom of local faith leaders and networks. Churches, like all of civil society, have struggled to build financial, communications and technical capacity—although, compared to local government, their capacity is strong—so new models for accompanying them need to be found. An understanding of the social and spiritual capital of local faith communities needs to be part of strategic planning, and innovative opportunities for engagement should be tested out.

I welcome the fact that the Department for International Development guidelines recognise that local churches are key partners and players in the delivery of aid, including education, even though the same guidelines tend to oversimplify the situation by stating that Sudan is now a largely homogeneous Arab Muslim state. That this latter statement is not true is demonstrated not only by the two major conflicts already referred to—not to mention the continuing conflict in Darfur, which is a case of multiple and diverse ethnicities, although mainly Muslim—but also by the continued persecution experienced by the local Church, something to which the most reverend Primate the Archbishop of York has already referred.

However, although DfID recognises the role of the Church, it is highly unfortunate that UNHCR and other NGOs do not always adopt the same policy. The churches and other religious bodies have a key role to play in both delivery and mediation, and yet often the UNHCR treats them as special interest groups without a general humanitarian agenda. Such an approach not only risks marginalising significant groups that work for the common good but can also exacerbate tension if people believe that they are the subject of discrimination. A genuine partnership here could be so effective, with church leaders often having the potential to act as honest brokers in the local community as well as delivering local aid, especially education. The Archbishop and Lambeth Palace are deeply committed to welcoming and supporting the upcoming UNHCR High Commissioner’s Dialogue on faith to be held this December, as well as to an international interfaith research project called the Joint Learning Initiative on Faith and Local Communities.

I therefore conclude by inviting Her Majesty’s Government to encourage the UNHCR to recognise the crucial role of churches and other religious bodies in places such as Sudan and South Sudan in building the broad coalition that is needed to ensure that vital humanitarian aid, including educational aid, is delivered to the places where it is required.

19:20

[Lord Alton of Liverpool]

My Lords, I welcome the noble Baroness, Lady Warsi, to her new ministerial responsibilities, as others have done. I couple with that my thanks and, I am sure, those of many other noble Lords, to the noble Lord, Lord Howell of Guildford, who dealt with these issues over such a long period and with patience and diligence, and always with great kindness in the way in which he responded to the vexed inquiries that many of us made to him. The noble Baroness, of course, has personal knowledge of Sudan, having travelled there to negotiate the release of Gillian Gibbons, the British teacher who was arrested after her class named a teddy bear after the Prophet Muhammad. I know that the noble Baroness is deeply committed to religious tolerance, to co-existence, and to finding ways of resolving the kinds of conflicts that your Lordships have been discussing today. We should all be extremely pleased that she has these new ministerial responsibilities, and we all, I am sure, wish her well.

Earlier we heard from the noble Lord, Lord Jay, about how Darfur has often been swept to one side in the concerns about north-south relationships. That is true, and I want to return to that issue shortly in my remarks. I begin by referring to the situation in South Kordofan, as the most reverend Primate, the right reverend Prelate and the noble Lord, Lord Chidgey, have done. I have raised this issue on the Floor of the House with my noble friend Lady Cox, who I am sure will expend a lot of her remarks on that question when she comes to speak.

A meeting was held earlier today with members of the All-Party Group on Sudan, of which I am an officer, along with the noble Lord, Lord Chidgey, and others who are here. I was struck during that meeting with senior officials from the Foreign Office by how immediate and contemporary these concerns are. As a result of a reference that they made to an article that appeared in yesterday’s Guardian, I took the trouble to obtain a copy of that article. I have not seen the YouTube video that apparently has been placed on the internet to which the article refers, but it says:

“Dramatic video footage and satellite images have revealed Sudanese security forces are waging a violent campaign in the Nuba mountains comparable to war crimes in Darfur … The Satellite Sentinel Project … shows the terrifying ordeal of a teenager being tied up and interrogated at gunpoint as a village goes up in flames”.

It goes on to say:

“The SSP said a joint unit of Sudanese army, militia and police forces burned and looted Gardud al Badry”.

John Prendergast, co-founder of the Enough Project, a partner in the SSP, was quoted in the Guardian report just yesterday as saying:

“‘We are seeing a repeat of Darfur without the international witnesses’ … He added, ‘Through this campaign of targeted violence, which amounts to crimes against humanity, and its denial of humanitarian access, the government of Sudan is displacing thousands of civilians and contributing to insecurity in the region’”.

Four days ago, an AFP report stated:

“Tanks, artillery and helicopters staged a show of force in the capital of Sudan’s South Kordofan state on Friday, official media said, after unprecedented and deadly rebel shelling of the town”.

The military parade of force was led by Ahmed Haroun, who, along with Field-Marshal Omar al-Bashir, referred to earlier in our debate as president of Sudan and the governor of Kordofan, is also indicted as a war criminal by the International Criminal Court. As I raised with officials earlier today, I hope that we will hear from the Minister what we are doing to ensure that we are taking witness statements from those who have been driven into South Sudan from South Kordofan. Many are in refugee camps. It is perfectly possible, therefore, to take first-hand witness statements of the depredations that have occurred while they have been there. Aerial bombardment continues even while we are meeting.

I turn specifically to Darfur because we are about to reach the 10th anniversary of that conflict, and I hope that the Foreign and Commonwealth Office will take the opportunity, when we reach the anniversary in February next year, to mark it with a series of events, as the all-party group intends to do. Today is a good day to ask the Minister what has happened to Darfur, as did my noble friend Lord Jay and the noble Lord, Lord Anderson, in their remarks. Why is Darfur forgotten while violence is not only continuing, but when one report earlier this month stated that this is,

“the bloodiest year yet in the region”?

Why is the international community so supine in demanding an end to the violence? Since my visit to Darfur in 2004, and the report which I then published then, entitled If This Isn’t Genocide, What Is? 2 million people have been displaced. About 200,000 to 300,000 people have been killed and 90% of the villages have been razed to the ground; and the situation continues to be bleak. Just this week, the acting head of Darfur’s peacekeeping mission, Ms Aichatou Mindjaouldou, highlighted the recent alarming rise in violence with high civilian casualties, calling the trend an “alarming development”. Between 25 and 27 September, more than 70 civilians were killed in Hashaba with reports of aerial bombardments there as well as in South Kordofan. Further west, four Nigerian peacekeepers were killed on 2 October in an ambush near El-Geneina in west Darfur, the area I visited eight years ago.

In the context of the EU sub-committee’s remit—at paragraph 6 the report refers briefly to the “extremely serious” situation in the region—the EU is a member of the Joint Commission which is one of two ceasefire monitoring and implementation mechanisms provided for in the July 2011 Doha Document for Peace in Darfur. It was tasked with resolving disputes referred to it by the Ceasefire Commission, the other mechanism. Perhaps in the sub-committee’s future work, it might be interested to find out why we have failed to put those instruments into operation.

The failure to create some peace has left approximately 3.2 million people in Darfur currently receiving food aid, including some 1.7 million IDPs registered in camps. As I said, Darfur is a dangerous and lawless region. There are fears that the operations of the NGOs and humanitarian agencies that deliver this aid will face increasing difficulty due not only to increasing violence, but also to deliberate attempts by the Government of Sudan to restrict access and impede operations. We have already seen the expulsion of numerous NGOs from Sudan over the past few years, 13 in 2009 and four this year from east Sudan. The situation that is developing there is extremely ominous as well. If the space for humanitarian operations in Darfur continues to narrow, what will be the implications for the millions of people dependent on aid? If the remaining NGOs are made to leave, how will the gap be filled?

Let me mention one of those NGOs. Earlier in the year, with my noble friend Lord Sandwich, I attended a meeting in your Lordships’ House which was addressed by the remarkable Patricia Parker MBE, who is the chief executive officer and chairman of trustees of Kids for Kids, a charity that works in Darfur and whose patrons include the noble Baroness, Lady Rendell, and the noble Lord, Lord Cope. Mrs Parker believes, as I do, that Darfur is has become out of sight and out of mind as the juggernaut of the world media and campaigning activism has simply decided to move on. At the Conservative Party Conference, the Foreign Secretary William Hague specifically highlighted the use of rape as a weapon of war and rightly cited Syria, Rwanda and Bosnia, but not Darfur, where there continue to be almost weekly reports of rape. Why was there this omission and why has it gone out of mind?

In Darfur, rape has led to HIV becoming a major issue. I was sent a photograph last week of a dying little boy in El Fasher hospital who had already seen both his parents die of HIV. Before the conflict erupted in Darfur 10 years ago, HIV was unknown. Since then, year by year, rape has been used as a weapon of war with horrifying consequences. This conflict has been fuelled by a regime whose leaders are indicted by the ICC for crimes against humanity. The Sudanese air force continues to bomb its own people weekly and a recent report from the organisation Waging Peace shows that government-sponsored attacks are increasing in their regularity as the regime continues to work through its local proxies.

It would be good to hear from the Minister what she is doing to ensure that Field Marshall Omar al-Bashir is brought to justice. Have we supported the suggestion made on 5 June by the International Criminal Court prosecutor, Luis Merino Ocampo, as he relinquished his post? He argued that the UN Security Council should consider asking member states and regional organisations to conduct operations to arrest Sudanese officials indicted by the ICC. Is that something which Her Majesty’s Government would be prepared to support?

As the conflict has raged it has led not only to systematic rape, it has decimated the ability of the people to feed themselves and their children. We heard a very pertinent contribution by my noble friend Lord Cameron on the issue of agriculture and the importance of sustainability in terms of people being able to feed themselves. Let me give an illustration of the scale of the problem. Last year, Hilat Ibrahim, a village of 1,500 people, lost 37 children to malnutrition. One in every 12 families has lost a child, and Kids for Kids reports that the majority of families in the villages have not been able to save enough seed to plant this season. Children are facing horrendous conditions in the villages of Darfur, yet again the international media is sadly silent.

In February 2011, Henry Bellingham, then the Minister for Africa, said that,

“we will not be taking our eye off Darfur, as we work tirelessly to establish a lasting peace in that troubled province”.—[Official Report, Commons, 1/2/11; col. 724.]

Yet whatever the words, the violence is increasing, HIV is rampant, children are malnourished and the world has moved on. Even at the height of the violence and when Darfur was in the headlines, aid did not reach two-thirds of the population. The international community claimed that its aid programme was a success because the aim was to help those people who had fled to the camps. But what of the families struggling to survive in the villages in rural areas? The months ahead are set to be the hardest ever.

Over half the population of Darfur has no water source. Almost a quarter of the population, including children, walk more than six miles to reach water in winter. In the summer “hungry” months, many walk more than 20 miles. Walking for water continues to be dangerous, with frequent reports of attacks. UNAMID has at times provided escorts to groups of women from the camps, but not for the women in the villages. With failed crops, women have to scavenge not just for water, but for wood and wild food such as mukheit, which is toxic, but anything is better than nothing if you are trying to survive. It is harder to find scarce food in a group, and still they are attacked. Healthcare in villages has collapsed.

UNAMID is the world’s most expensive peacekeeping force, yet it is regarded by most Darfuris as siding with their oppressors in Khartoum, so ineffective have been its operations. Moreover, its capacity is about to be cut. On 31 July, the UN Security Council adopted Resolution 2063, renewing the mandate of UNAMID for a year. The resolution authorised a reconfiguration of UNAMID to include 16,200 military personnel, 2,310 police personnel and 17 formed police units of a maximum of 140 personnel each. Prior to the adoption, the council was briefed by the joint AU-UN Special Representative for Darfur, Ibrahim Gambari. Mr Gambari said that implementation of the Doha Document for Peace in Darfur was behind schedule and that a new implementation timeline had been created. UNAMID, the world’s largest peacekeeping force, has received a lot of criticism for its failure to protect civilians, a lack of clarity in its protection mandate, and some suspicions from Darfuris that UNAMID is too close to the Government. However, as with the humanitarian agencies, UNAMID has been a victim of the number of restrictions and bureaucratic impediments to its operations by the Government of Sudan. Darfur, as I have said in every respect, is difficult terrain. Its new iteration consists of a number of cuts to troop numbers to reflect the contested suggestion that there had been a “drastic decrease” in the number of people killed in clashes and to enable it to react more rapidly. This does not accord with the description of 2012 as the “bloodiest year yet” in the region.

I would like to hear from the Minister about the renewal of the UNAMID mandate and whether Her Majesty’s Government supported the reductions in the number of peacekeepers in Darfur. What steps have been taken to implement the Doha Document for Peace in Darfur, to which I have already referred? Can she tell us how the UK has highlighted other critical issues, including the escalation in violence that I have mentioned—the attacks against civilians and the use of sexual or gender-based violence? What of the failure of other rebel movements to sign the Doha document? What of the deaths of 10 UNAMID peacekeepers in the past year and the prevention of humanitarian agencies from assessing those most in need?

Given that Khartoum has expelled most international humanitarian groups, whose presence is desperately needed, what representations are we making to the Government of Sudan, the rebel groups and the international partners to urge greater access for the humanitarian organisations? What has been the result of those representations? What assistance might we consider extending beyond our current programmes to communities struggling to survive in rural villages in Darfur? Will we commit to adjusting the balance of spend on bilateral assistance in Darfur towards greater funding for sustainable development projects in rural villages, and encourage other donors to do likewise?

What support will we give to IDP families to enable them to settle in host villages, enabling them to be assimilated in the community through integrated projects? Kids for Kids has a unique “welcome home” package that is sustainable and does that, and I hope that the Minister will agree to meet Mrs Parker to discuss that important work. Can the Minister tell us, either today or through correspondence, what we are doing to promote civil society in Darfur? Finally, what is the Minister’s assessment of the current state of this continuing conflict?

The situation in Darfur, and more broadly in Sudan and South Sudan, requires sustained high-level political action by the European Union and Her Majesty’s Government for years to come. As we approach the 10-year anniversary of the beginning of the conflict in Darfur, we must also remember that this area of the country has been consistently and intentionally marginalised for decades. It will take decades to build peace and stability, and a long-term view of development is essential. Now is most certainly not the time to take our eyes off Darfur.

19:36

[Lord Sheikh]

My Lords, I thank the noble Lord, Lord Teverson, for securing this important debate. I also congratulate my noble friend Lady Warsi on her new appointment. As someone who speaks periodically on foreign affairs, I look forward to her active involvement in these matters. I also commend the noble Lords who sit on the EU Committee for producing such a thorough and informative report, which of course preceded the follow-up report that we are debating today.

Some years ago I visited Juba and have always taken an interest in the region. The situation in Sudan and South Sudan is a major concern for the citizens of those countries and among the African diaspora. It is important to recognise that there is a regional as well as a global dimension to possible further hostilities between Sudan and South Sudan. The international community must continue to take interest and be involved in all issues relating to the two countries. Therefore, I wholeheartedly support the committee’s view that the international community must play a greater role in maintaining peace.

When South Sudan became the world’s newest country last year, owing to the 2005 comprehensive peace agreement, a number of issues remained unresolved with Khartoum. The economically sensitive and disputed areas of oil production and transit fees had essentially led to a stagnation of both economies, since South Sudan stopped pumping oil in January. Both Sudan and South Sudan are heavily reliant on oil revenues: 75% of the oil lies in South Sudan but all the pipelines and processing facilities are in Sudan.

Like Members on all sides of your Lordships’ House, I welcome the recent progress made on this issue. I commend the work of Thabo Mbeki, Pierre Buyoya and Abdulsalami Abubakar, the African Union mediators and former Presidents of South Africa, Burundi and Nigeria respectively, in working tirelessly to achieve this breakthrough. However, I would like to see a resolution to the dispute over the oil-producing Abyei region, preferably through a referendum. It is vital that this should take place once issues surrounding voter eligibility have been resolved.

Darfur remains a source of tension between both countries. My own charity, the Sheikh Abdullah Foundation, has undertaken humanitarian work in Darfur. Rebel groups in Darfur have joined forces with rebels in the Sudanese states of Blue Nile and South Kordofan. The shelling last week of Kadugli in South Kordofan led to the deaths of five people. I welcome the decision by the Sudanese Government to allow relief supplies to enter South Kordofan and Blue Nile states. Sudan has accused South Sudan of backing the Darfur rebel groups, which Juba denies, although a number of reports suggest that it is supporting the rebels operating across the border in Blue Nile and South Kordofan. I would be grateful if the Minister could shed some light on this matter.

The humanitarian situation in South Sudan is a cause for grave concern. It has been reported that children at the Yusuf Batil refugee camp in South Sudan are dying at more than twice the rate that is internationally recognised as an emergency. On average, consistently three or four children under the age of five are dying each day. Yusuf Batil is one of four refugee camps in Maban county and houses more than 100,000 people fleeing the fighting in Blue Nile state. Approximately one-third of all children at the camp are suffering from malnutrition. The lack of clean water and adequate sanitation facilities are also contributing to the high rate of infant mortality.

I wholeheartedly support the work of the Department for International Development in both Sudan and South Sudan. These efforts are changing the lives of many impoverished citizens in both countries. I commend the refugee and aid agencies that are providing food and healthcare to the thousands of displaced persons. I may add that there are several Muslim charities, including Islamic Relief, undertaking vital humanitarian work in South Sudan, where the people are mainly Christians and non-Muslims. These Muslim charities have in fact formed the Muslim Charities Forum to co-ordinate the work of the various charities.

As a landlocked nation, South Sudan must find ways of facilitating trade with its immediate neighbours. The South Sudanese Government have opened a 192 kilometre- long highway, which connects Juba with Nimule on the Ugandan border. The highway goes on from Nimule to meet Kampala, the capital of Uganda, and then runs through Kenya to the port of Mombasa. This highway project, which was funded by the United States Agency for International Development, is expected to significantly boost trade with east Africa. I particularly welcome this infrastructure project because it will reduce the cost of importing goods from Kenya and Uganda, the respective countries of my birth and where I spent my formative years.

I also welcome the announcement by the South Sudanese Government to launch an airline, which reflects the determination by the Government in Juba to address the current challenges surrounding infrastructure. At present, South Sudan has only 300 kilometres of paved roads. China has invested heavily in Sudan’s oilfields where its companies PetroChina and Sinopec are partners of Sudapet, which is owned by the Sudanese Government. China has also made investments in South Sudan, where the Government have announced that they will be receiving a $158 million loan from China to finish building a new airport in Juba.

In making reference to the follow-up report, I share the view that China must ensure that Chinese companies operating in both Sudan and South Sudan are responsible corporate citizens. I would be grateful if the Minister could inform the Committee about the steps that Her Majesty’s Government are taking to encourage China to play a more positive role in the region. The International Monetary Fund stated in its most recent report that South Sudan is failing to reach its economic potential owing to weak state institutions and poor infrastructure. It is therefore essential that Juba invests oil revenues wisely in order to remedy this situation. The stalemate over oil revenue revealed that the economic fortunes of Sudan and South Sudan remain linked. It is vital that Sudan and South Sudan reach agreements on all disputed areas so that both nations can prosper.

The British Government were active members of the comprehensive peace negotiations and the Darfur peace accords; they have an obligation, therefore, to work towards a favourable outcome for citizens in both countries. The international community has a responsibility to strive towards achieving stability in Sudan and South Sudan through building a multinational coalition that produces lasting change.

19:46

[Lord Curry of Kirkharle]

My Lords, I, too, thank the committee for producing this valuable report. It is a very good analysis of the issues faced by Sudan and South Sudan. I need to declare an interest: I am a trustee of Anglican International Development, which is working in South Sudan. I visited South Sudan again in September, about three weeks ago; I met Archbishop Daniel Deng and a number of other bishops. I fully endorse the comments made by the most reverend Primate the Archbishop of York and the right reverend Prelate the Bishop of Exeter about the key role that the Church can play in international development generally, but specifically in South Sudan.

My comments today do not concern the continuing unrest in the border region or in Darfur—however serious that is, it has been well articulated this evening—other than to reinforce the message that, notwithstanding the dreadful suffering that continues as a consequence of the strife, it is a complete distraction at this present time from the desperate need for political stability and economic development.

The lack of oil revenue this year as a result of the tap being turned off has had a significant negative impact on the economy of South Sudan and has eroded the nation of vital resources at this critical time. There is a shortage of fuel and many projects are being seriously delayed. If I can refer to paragraphs 250 and 251 in the report, it is very pleasing to see that a number of EU member states now have a presence in Juba. Our own embassy is up and running and I had very helpful meetings with the ambassador and representatives from DfID. However, the situation is extremely serious, as has been reinforced by all speakers this evening. South Sudan is stuck at the bottom of global development indices and by most measures it is still going backwards. There is an imposing sign on the outskirts of Juba advertising the anti-corruption commission, in front of an empty piece of land. The noble Lord, Lord Chidgey, referred to this. The commission does exist in embryonic form but has an uphill task in undertaking its role.

Paragraph 269 of the report is a critical statement about the need for good governance and a well-functioning justice system, free from corruption. It expresses concern that no major donor has emerged to lead on this. That must be addressed. It would be highly irresponsible of us and of the EU and the United States if we did not do all that we can to influence South Sudan in establishing good governance and good justice systems. Some progress is being made but we must seize this unique moment in time to establish and achieve the outcomes that are necessary for the long-term interests of the people of South Sudan.

The report makes a very good point about the lack of coordination to which other speakers have referred. Lots of very well meaning representatives of NGOs and aid organisations are falling over themselves in their desire to help. Coordination is absolutely critical and desperately needed. AID is working with a number of potential investors in agriculture in South Sudan as well as trying to help small-scale farmers. I absolutely endorse the comments made by the noble Lord, Lord Cameron of Dillington—the potential is huge.

The need, however, is very clear. The people produce very little of their own food—the Minister estimated about 7%. Inflation is rampant and I am amazed that even more people who have no income are not dying of starvation or malnutrition. The need to diversify their economy to become less dependent on oil is very clear. The response to the report in paragraph 256 states that the Government aim to encourage economic growth and diversification in Sudan and South Sudan and the creation of conditions for private sector investment to generate employment for the people. This is absolutely correct and needs to happen. However—I need to choose my words carefully here—the impact of a generation growing up with civil war, a lack of education and a huge dependence culture, which is not just emerging but is endemic, has led to a lack of a work ethic in the men in South Sudan. Employing Sudanese people is a real challenge and many organisations are taking their own staff to South Sudan or recruiting staff in Uganda or Kenya rather than recruiting people in South Sudan. That is a real concern and there is a desperate need for further teaching and training.

There is little or no infrastructure and, until there are some decent roads, at least between the key population centres—which reinforces what the noble Lord, Lord Cameron said—and into Uganda and Kenya, it will be very difficult to attract the level of inward investment needed to diversify the economy. The two need to go hand in hand. It is a massive issue and must be a priority for international development support in conjunction with the Government of South Sudan. There were compounds full of earth-moving equipment standing idle three weeks ago.

South Sudan is a high priority. We must not relax our efforts to assist and to help to influence the transition from civil war to independence, to stable and sound governance with good healthcare and education facilities and economic stability. I hope that our Government will seriously address these issues. We have a huge responsibility. I apologise to noble Lords but I have a long-standing commitment and may have to leave before the end of debate because of the overrunning of the previous debate.

19:55

[Baroness Cox]

My Lords, I add my congratulations to the noble Lord, Lord Teverson, and his comprehensive introduction to this debate. I welcome the noble Baroness, Lady Warsi, to her ministerial position in this capacity. I will focus predominantly on first-hand evidence obtained during a visit to South Sudan with the Humanitarian Aid Relief Trust—or HART—in April this year. We visited Agok, near Abyei, and three camps in the border areas of Sudan and South Sudan at Yida, Doro and Renk. However, I refer very briefly first to nine agreements reached in Addis Ababa, which address many of the issues highlighted in the EU follow-up report and are to be warmly welcomed as a hopeful sign of a major breakthrough in the relations between Sudan and South Sudan. I also welcome the significant progress with regard to reopening the oil pipelines and the distribution of oil revenues.

In this context, I return very briefly to the point made by the noble Lord, Lord Trimble, regarding the Government of South Sudan’s concern over criticism of their decision to cut off the pipeline, believing that the international community did not appreciate its reasons for doing so. These included the Republic of Sudan’s imposition of ludicrously high transfer fees for oil and unprovoked bombings by Sudan across the international border into South Sudan. I can testify to the reality of those bombardments across the international border, having been there at the time of the bombings near Agok and of Bentiu in Unity state.

The Government of South Sudan felt, I believe understandably, that the only leverage available to them to put pressure on the Government of Sudan was to cut off the pipeline, although they fully appreciated this would bring hardship to their own people as well as the people in Sudan.

I turn to our visit to the borders of South Sudan, South Kordofan and Blue Nile. As the right reverend Prelate the Bishop of Exeter has so powerfully highlighted, a humanitarian catastrophe exists. While we were there half a million people had fled from their homes in South Kordofan and Blue Nile because of constant bombardment by the Government of Sudan. Many were hiding in caves with deadly snakes, with little or no access to food, water, shelter or medicine. They said that they feared bombs more than snakes. Civilians have also been too terrified by the bombs to return to their villages to plant or reap harvests. They have been suffering food shortages, causing acute malnutrition. Humanitarian conditions for these internally displaced people deteriorated even further with the problems associated with the rainy season.

A recent assessment in South Kordofan found the nutrition situation verging on critical—81.5% of households are surviving on only one meal a day compared with only 9.5% a year ago and zero two years ago; 65.7% of households have less than one week’s food stock and a significantly smaller than normal harvest is expected as civilians have been unable to harvest crops. The situation is exacerbated by the Khartoum Government continuing to deny humanitarian aid organisations access to the civilian victims of its military offences. There is now an urgent need for targeted supplementary and therapeutic feeding programmes in South Kordofan, with supplementary feeding for children aged six to 59 months and similar needs for the displaced people in Blue Nile.

Given the scale of the humanitarian crisis and Khartoum’s continuing failure to allow aid organisations to access all those in need, will Her Majesty’s Government consider, as a matter of great urgency, provision of funding for life-saving aid for those in need in South Kordofan and Blue Nile? Like my noble friend from Merlin, I must also declare an interest as CEO of HART, currently working in South Sudan, and previously working in the Nuba Mountains of South Kordofan.

I want also to ask the Minister if Her Majesty’s Government will join with others to put more effective pressure on Khartoum to allow and ensure immediate access by aid organisations to all in need in Sudan.

When we visited the camps in South Sudan at Yida and Doro, for people who had been forced to flee into South Sudan from South Kordofan and Blue Nile because of aerial bombardment, the humanitarian situation was already dire and with the rainy season it has become truly catastrophic. According to the UN Refugee Agency, there are now at least 174,000 refugees from South Kordofan and Blue Nile in South Sudan’s Unity and Upper Nile states. In some areas more than 40% are children. Local Sudanese aid workers are reporting high incidences of diarrhoea, skin infections, malaria and typhoid.

According to the UN Refugee Agency, last week about 100 Sudanese refugees from South Kordofan were arriving daily in Yida camp and with the end of the rainy season approaching, UNHCR is expecting an increasing deluge of refugees to arrive.

We also visited the camp at Doro for civilians who have had to flee from Blue Nile to escape aerial bombardment. Conditions were as serious there as those at Yida and much of the neighbouring camp at Jamam is now under water, increasing the risk of malaria and epidemic diseases such as cholera and typhoid.

Finally, we visited the camp at Renk, where civilians deemed “southerners” by the Government of Sudan had been expelled from their homes and were living in horrendous conditions. They were allowed to bring only a few possessions and had built pathetically fragile shelters which were no match for the rains. Many had not wanted to leave their homes or jobs in Sudan, many had never lived in the south. Sudan’s policy of expulsion has caused immense suffering for thousands of civilians.

Will Her Majesty’s Government make representations to the Government of Sudan about the problems still affecting those who were affected by this very disturbing policy? There is a need for an honest appraisal of responsibility for the problems suffered by both nations. Too often there is an implied attribution of moral equivalence with regard to the Governments of Sudan and South Sudan. The ICC-indicted president of Sudan continues to inflict remorseless military offences against his own people in Darfur, South Kordofan and the Blue Nile and to bomb targets across the border in South Sudan. By contrast, South Sudan does not attack its own civilians, nor expel them from the land whatever their race or religion. A failure to call the Government in Khartoum to account for its asymmetrical aggression and systematic violations of human rights of its own people may be seen as a licence for impunity.

Of course, it is also important to recognise many problems in South Sudan, such as inter-tribal conflicts, lawlessness and some disturbing corruption. These need to be addressed. However, the point was emphasised by speakers meeting at Chatham House yesterday that it should be appreciated that violence, such as that which occurred in Jonglei State is inevitable in all such post-conflict situations. It is remarkable, they also emphasised, that there has not been more violence. A similar point was made in a joint statement by the Sudanese Anglican and Roman Catholic archbishops whose people on the ground, including mediators, emphasised that there have been some improvements. That is indeed a great achievement, given the very catastrophic situation prevailing in so much of the country.

In conclusion, the recent agreements offer hope for significant developments to promote much needed peace between the two nations. However, the international community, including the European Union, will need to maintain support, encouragement and apply pressure, where necessary, to ensure that the agreements are fulfilled and that neither Government renege on commitments already given. There is also a need to encourage both Governments to make progress on the outstanding issues, such as those concerning Abyei, South Kordofan and Blue Nile. Let us hope that a subsequent EU report will be able to record positive change and a scenario of hope for the peoples of Sudan and South Sudan who have suffered too much for too long. We all look forward to that day.

20:07

[Baroness Kinnock of Holyhead]

My Lords, I, too, pay tribute to the commitment shown by the EU Committee to the situation in Sudan and South Sudan. We have been provided with a very welcome opportunity to take stock, which Members here this evening have shown they are very capable of doing. I, too, welcome the noble Baroness, Lady Warsi, and wish her well in her new role. I pay tribute, too, as the noble Lord, Lord Alton, did, to the work of the noble Lord, Lord Howell.

The misery and suffering of the people of Sudan and South Sudan is relentless. There are continuing insecurities, humanitarian crises, lack of resources and grave shortages of food. Roads are not being constructed, despite the fact that they are crucial to building unity, security and economic development in that country. Education and health systems are not functioning and water and sanitation needs are not being met. In fact, South Sudan is really living on the edge of disaster and faces perpetual and manifold crises and emergencies.

Against that background, the African Union-promoted agreement, guided by Thabo Mbeke’s African panel made in Addis last month, is worth applauding, as noble Lords have done. But all success now depends on its full and faithful implementation and the urgent use of what could be a brief and positive period that we have now to address outstanding issues. Building a functioning and legitimate South Sudan Government is obviously essential to efforts that have to be made to manage the expectations of the people of South Sudan and to deliver essential services to those who have waited such a long time. Now, even in the context of the insecurity and humanitarian crises in border areas, it remains vital that this work is supported consistently and continually by all donors. Transference to the state is just not happening and clearly, dependence on NGOs has to be reduced.

Central to delivery of sustainable change in South Sudan is that the citizens of that country see the Government in Juba being able to deliver basic services locally across the country, using their own local authorities. Action means so much more than words and intentions when the needs are clearly so great. Traditional authorities must be involved, while at the same time strengthening the role of the state.

This is after all a country where 200,000 dangerously malnourished refugees from Blue Nile have arrived in the past, and where thousands of southerners have returned since 2010. In South Sudan, the health needs are substantial: cholera, measles, meningitis, polio, river blindness, sleeping sickness, yellow fever and whooping cough are all prevalent. It remains the case that what services exist are largely delivered by humanitarian and other NGOs funded by donors. As the noble Lords, Lord Cameron and Lord Curry, have said, the level of dependence in South Sudan is simply not sustainable or desirable.

Can we at last anticipate an end to the flip-flopping between humanitarian aid and development aid, which we have seen for far too long? Most recently, donors—including the UK, I have to say—pulled out of developments following the oil shutdown. However, as soon as that oil deal was reached, they started talking about development aid, and working with government systems. Now we see that current and urgent humanitarian concerns have simply been obscured or ignored completely.

There is a widespread perception that aid is being used in South Sudan as a mechanism for political conditionality, when what the Government of South Sudan really require is an understanding from donors that they need consistent and reliable support. Development and humanitarian aid should never be used to hold a government and people to ransom, because for practical as well as moral reasons, one should never be at the expense of the other.

On the European Union’s engagement, we should certainly support the fact that the EU institutions and member states have agreed to work together to produce a joint strategy paper on the implementation of programmes. However, if it is to be meaningful, it is essential that sectors are identified and donors complement each other in the implementation of that country’s strategy. On paper, this is of course agreed as part of efforts to increase EU aid effectiveness. However, one official was quoted as saying that they agree on something and then each member state continues to do its own thing. It was ever thus. This, I regret to say, includes what I see to be a reluctance demonstrated by the UK to forcefully and enthusiastically join co-ordinated efforts to draw up an all-European Union position.

The preoccupation of European Union member states with East Africa, Palestine, the Amazon, the Sahel, Syria, Yemen, the DRC and Mali—depending on what your various colonial connections happen to be—mean that priority is just not being given to South Sudan. That is clearly and repeatedly reflected in the agendas drawn up by the Foreign Affairs Council. Therefore I ask the Minister: will the UK Government make every effort to push Sudan and South Sudan up the agenda at this very critical time?

Sven Kühn von Burgsdorff, the head of the delegation in Juba, and Dame Rosalind Marsden, the EU special representative, are both doing an excellent job. The delegation and the embassy are up and running, with plans to co-ordinate these efforts. I commend urgent action, especially when the potential for advancing peace and security is great, but the possibility of a descent into disaster is ever present in any fragile state, and of course that remains the case for South Sudan.

In November, South Sudan will join the Cotonou partnership agreement between the African, Caribbean and Pacific Group of States and the EU, and will access European development funds. Very importantly, it will also join ACP partners in what is called the “Everything but Arms” market access agreement with Europe.

Other noble Lords have raised the concerns that we share about the need for peace and security in the South Kordofan and Blue Nile states. Is it not time to do more and end the ambivalence about the clear need for a more strategic approach to deal with these crises, as a number of noble Lords have said? After the Addis agreement, I am afraid we are continuing to see more of what is really just a “wait and see” approach, which has frankly brought nothing more than paralysis in the whole system.

After 18 months of efforts to negotiate humanitarian access, nothing has changed for the people affected by these conflicts. Is it not time now to explore alternatives to repeated failed attempts to negotiate with Khartoum? I also ask the Minister whether she would agree that the efforts to negotiate have failed and diplomatic efforts need to be substituted with a different approach. Many thousands of people are suffering in these areas, and we know full well that the Government of Sudan have absolutely no intention of protecting civilians suffering from starvation. Will the Minister tell us whether any consideration is being given to delivering cross-border aid without the permission of Khartoum? If noble Lords around the Table here were honest, we would say that this is already happening through the efforts of civil society, international partners and, yes, Governments.

When fruitless diplomatic toing and froing has not achieved anything, it is time for the tripartite partners to take effective action. All of this is made more emphatic by the fact that food is being used as a weapon of war. It is time, recognising the realities, that action is taken to deliver food and aid immediately and urgently. The special representative of the UN Secretary-General confirms that progress has been made in South Sudan. Many noble Lords have been, I think, extremely pessimistic and cynical perhaps about what has happened in South Sudan for some, and maybe many, understandable reasons. However, having read a recent report by the UN Secretary-General’s special representative, I will say that state institutions have been strengthened, and militias and rebel groups have been integrated into the national army. Nevertheless, a great deal needs to be done to protect civilians and to broker peaceful coexistence among feuding tribes. Demobilisation is a massive challenge. The salaries of the army, police and other forces make up more than half the budget, and donors and the Government must focus on this challenge of change.

South Sudan now has a new legislature made up of a Legislative Assembly and a Council of State, and there seems to be a real appetite for strengthening and developing the country’s institutions. Work is in progress on new laws, developing political parties, elections and a constitutional review. These are major tasks for an infant democracy. It is surely realistic to understand that it is going to take time. It is also going to take time for the current Government to build the maturity that state-building will demand. The Government of South Sudan also have to insist on increasing transparency and accountability, by introducing new and clear standards of conduct in government.

Corruption must be fought with vigour and elected politicians must be constantly reminded of their obligation to be accountable to the people they serve. All this may seem like a very tall order but many of us who have followed Sudan, and now South Sudan, over many years and other crises in developing countries know that these issues are well worth supporting and encouraging. I hope that we will have future meetings on reports from the European Union Committee which will confirm that these things are happening and that change is taking place for the people of South Sudan.

20:15

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

My Lords, I start by thanking the noble Lord, Lord Teverson, for tabling today’s debate, and for providing at its outset a very helpful historical and political summary. I also thank all noble Lords for their kind comments welcoming me to my new role. In my few short weeks as a Minister at the Foreign and Commonwealth Office the Sudans have consistently been a high priority for the FCO, and it is heartening to see such strong interest in this subject from my fellow Peers. I should also commend the continued commitment of the Associate Parliamentary Group for Sudan and South Sudan, many of whom are present tonight.

I welcome the follow-up report of 22 March by EU Sub-Committee C entitled The EU: Sudan and South Sudan. This report, in addition to the longer report from June 2011, made some very useful recommendations. I hope that noble Lords saw the response issued by the Government at the time in which we broadly agreed with the recommendations on international co-operation, particularly with the EU and China, as a means of resolving the disagreements between both countries.

Since the publishing of the report in March, we have seen moments of great tension between the countries. In March the risk of open conflict seemed very real, but following the road map set out by the African Union Peace and Security Council, which was further endorsed by United Nations Security Council Resolution 2046, a new sense of co-operation and negotiation has resulted in agreements on eight key issues between the countries. We welcome these agreements signed on 27 September. They represent a significant step forward towards the goal of resolving all outstanding disputes between the two countries and we congratulate both countries on what they have achieved. It was also a positive sign of what can be achieved through co-operation between the African Union and the United Nations.

Some issues, however, remain unresolved. It is disappointing that no agreement was reached on the final status of Abyei. Final demarcation of the international border remains subject to settling a number of disputes and claims. My noble friend Lord Trimble raised important points about its practical application. The noble Lord, Lord Selkirk, also referred to the possibility of further negotiations or referendums in Abyei. The latest proposal put forward by the African Union would provide for a referendum on final status with important safeguards for the rights of all communities. We believe that this provides a good basis for agreement. The partition of Abyei would be in the interests neither of the residents of the territory nor of the nomadic groups who pass through annually. The noble Lord also raised the issue of an alternative pipeline for oil through Kenya. I understand that the Government of South Sudan continue to study options for alternative pipelines but the only immediate prospect for addressing South Sudan’s economic needs is a resumption of production and export through the existing pipeline in accordance with the agreement signed on 27 September. However, I note the comments of the noble Lord, Lord Cameron, about using the proceeds of oil to invest in sectors that could provide future financial stability.

The noble Baroness, Lady Cox, highlighted the lack of a ceasefire in Southern Kordofan and Blue Nile State and the continued restrictions on humanitarian access. These are greatly worrying. The suffering of people in both states must be addressed and the UK teams in Juba and Khartoum are working closely with the Office for the Co-ordination of Humanitarian Affairs and a range of NGOs to ensure we explore all options to see that assistance reaches those who need it. The noble Baroness always produces very powerful personal accounts of the situation on the ground in Sudan and South Sudan.

The noble Baronesses, Lady Cox and Lady Kinnock, raised cross-border aid. We know that some others are considering how to provide aid across the border from South Sudan. However, there are risks associated with this, including difficulties of ensuring that aid reaches those who need it most. We are also concerned that attempting to provide aid without the consent of the Government of Sudan is likely to put at risk humanitarian assistance to millions elsewhere in Sudan, particularly in Darfur. However, we remain in close contact with a range of NGOs as well as the United Nations, the African Union and the Arab League, to ensure that all options for getting assistance to those who need it are explored.

I can also assure the noble Baroness, Lady Kinnock, that long-term development in South Sudan remains a top priority for the United Kingdom. However, development programmes are based on a partnership in which both sides contribute resources. By halting oil production, South Sudan has denied itself access to 98% of its revenues. The UK and other donors cannot fill that gap. It was essential that we refocused our development programme away from the Government’s longer-term development agenda and towards supporting the most vulnerable and addressing life-saving needs. After the successful agreement on oil revenue, once revenues start flowing in again, we hope that we can restart the development programmes that were planned.

The most reverend Primate the Archbishop of York and the right reverend Prelate the Bishop of Exeter raised the role of churches in South Sudan. We welcome the critical role of the Church in South Sudan, both in conflict resolution among communities and in development, particularly education. We remain committed to working in partnership with the Church on these issues. It has a huge amount of experience, knowledge and reach and we regularly meet representatives of the Church when they are in the UK. I thank the noble Lord, Lord Alton, for his kind remarks about my commitment to the issue of faith and the role of faith organisations, both the role that they play domestically and internationally. I endorse the comments of my noble friend Lord Sheikh in relation to the work of Islamic Relief.

The right reverend Prelate the Bishop of Exeter also raised concerns about the humanitarian crisis in South Kordofan. We are deeply concerned by the plight of the civilians caught up in the fighting in South Kordofan and Blue Nile. The limited assessments available of the humanitarian situation of those in that conflict zone, as well as of those who have sought refuge in South Sudan and Ethiopia, all point to a severe crisis. DfID is working with humanitarian partners better to address the needs of those in the refugee camps and we have set aside resources to meet the needs of those remaining in the conflict zones, once access is possible. We are putting our efforts behind a proposal on arrangements for humanitarian access made by the UN, the AU and the League of Arab States. I agree that the Arab League can play an important role in bringing the Government of Sudan to accept full, independent humanitarian access. We are in close contact with it and will continue to urge it to use its influence with Sudan to this end.

The noble Lord, Lord Jay, and the noble Lord, Lord Alton, are right to highlight ongoing concerns in Darfur. We remain deeply concerned by the security and humanitarian situation in Darfur: 1.7 million Darfurians remain displaced. Through the Department for International Development, humanitarian programmes are providing life-saving support for those in need in Darfur. DfID also supports community-level peace building and stabilisation to tackle the drivers of local conflict. I also assure both noble Lords that DfID is at the forefront of efforts to improve aid co-ordination in South Sudan, in support of the development priorities of the South Sudan Government. Earlier today, the noble Lord, Lord Alton, was kind enough to raise his concerns with officials when they met as part of the All-Party Group on Sudan and South Sudan. The issues raised were quite comprehensive and I have asked my officials to reply in detail to the noble Lord in writing.

The noble Lord, Lord Chidgey, raised the issue of corruption and financial management. DfID provides a significant capacity-building support to the Audit Chamber and the Anti-Corruption Commission. A high-level dialogue on accountability and transparency is led by the UK and the South Sudan Ministry of Finance and is central to our development programme.

On transparency, I agree that there needs to be transparency for the South Sudanese people in the revenues from oil. We are encouraging the Government of South Sudan to adopt the principles of the extraction industry’s transparency initiative.

The noble Lord, Lord Curry, asked about the role of China. China has remained in close touch with both Sudan and South Sudan through negotiations and visits by its special envoy to encourage both sides to negotiate constructively. I understand that the China National Petroleum Corporation is working to support implementation of the deal reached on oil. Our special representative for Sudan and South Sudan has a regular dialogue with his Chinese counterpart to discuss the constructive role that China can play in the peace process and in the development of both countries.

The noble Lord, Lord Anderson of Swansea, raised important issues. In light of him having to leave early, I agree to respond to the noble Lord in writing.

At the moment, we have a situation which we all agree shows a marked improvement from six months ago. Both countries should be applauded, as should the efforts of the African Union, the African Union high-level implementation panel and other countries. However, there is still a great deal of work to do and it will take a continued effort from both countries to settle their remaining differences properly and peacefully.

For our part, the United Kingdom is prepared to do whatever it takes to ensure that the agreements are implemented and finalised and to press for resolution of all outstanding issues. We also remain fully committed to helping the people of both countries through our humanitarian and development projects. We will continue to provide assistance to respond to the humanitarian needs of conflict-affected populations, to ensure security and access to justice, to build basic services, and to encourage more transparent and accountable Governments in both countries. Through all of this, we will continue to work as closely as possible with our key international partners, including the European Union. A united approach is the best way to ensure that both countries remain on the path towards the peaceful future that their people so greatly deserve.

I thank noble Lords for their time today and I look forward to the next opportunity that I have to discuss these matters with them. I hope that next time the discussion will be able to focus once again on the progress that has been made between the two countries.

20:27

[Lord Teverson]

My Lords, I thank all noble Lords for their contributions. I am delighted to see here past members of the sub-committee, particularly those with a much broader experience and on-the-ground expertise in this area who have brought to this subject the passion that our own sub-committee feels is fundamentally important. I thank particularly those who have brought an optimistic note to the debate—particularly the noble Lords, Lord Jay and Lord Cameron, and the noble Baroness, Lady Kinnock—in regard to the future because, as has been said so often, we sometimes look upon Africa negatively when so much is going on across the whole continent.

I thank our clerk, Kathryn Colvin, for all the work she did. Finally, I thank my noble friend Lady Warsi for her response to the debate, for taking on this portfolio and for the enthusiasm that she has for the subject. We look forward to seeing her next week when we discuss EU defence issues, although perhaps that does not come into this area.

The rest of Westminster has given up tonight but we are still here. I commend this report to the Grand Committee and to the House.

Motion agreed.

Committee adjourned at 8.29 pm.

House of Lords

Wednesday 17th October 2012 Lords Chamber

Wednesday, 17 October 2012.

15:00

Prayers—read by the Lord Bishop of Manchester.

Devolved Administrations: Industrial Strategy

Wednesday 17th October 2012 Lords Chamber

Question

15:07

Asked By

[Lord Roberts of Conwy]

To ask Her Majesty’s Government whether their industrial strategy is fully supported by the three devolved Governments.

[Lord Gardiner of Kimble]

My Lords, the Government’s industrial strategy sets out a long-term, whole-government approach to delivering economic growth. Although some measures will be UK-wide, economic development, including financial assistance to industry, is a devolved matter. Her Majesty’s Government lead regular discussions with the devolved Administrations to ensure that the strategy reflects this. This involves consulting devolved Administrations on key policies as well as sharing information and good practice on a regular basis. The Government support growth across the whole UK by introducing ultrafast broadband into Belfast, generating new investment in Scotland for North Sea oil fields, and bringing mobile coverage to 60,000 rural homes in Wales.

[Lord Roberts of Conwy]

I thank my noble friend for his Answer and, of course, compliment him on his elevation to the Front Bench on this auspicious day, when unemployment has fallen by 50,000. Bearing in mind the fact that the unemployment rate in those devolved government areas is higher than the UK average, and bearing in mind their dependence on the state and the public sector, does my noble friend agree that special measures should be taken by the Government to encourage the private sector in these areas? Can he assure me that the Department for Business, Innovation and Skills is collaborating closely with the devolved Administrations to that end, although they are of different political persuasions? That is very much in the interests of the United Kingdom as a whole.

[Lord Gardiner of Kimble]

My Lords, first, I thank my noble friend for his very generous and kind remarks. He is a great champion of Wales. I am delighted by the news this morning that employment has grown to its highest levels since records began in 1971. Indeed, in Wales, there has been an increase in total employment since April 2010 of 67,000.

The Government’s objective is to make the UK the best place to start, run and expand a business. The success of the private sector in all parts of the UK is key to the recovery, and 900,000 private sector jobs have been created in the past two years. I reassure my noble friend that we are working closely with the devolved Administrations. Regardless of political colour, the national interest comes first.

[Lord Stevenson of Balmacara]

I, too, welcome the noble Lord to the Dispatch Box and commiserate that it is not he but the noble Lord, Lord Marland, who is topping up his tan. I listened carefully to his reply to the noble Lord, Lord Roberts, but note that he has failed to explain exactly the detail of the industrial strategy of which he speaks. Without knowing that, it is hard to understand how he can make the judgment that it is fully supported by the three devolved Governments. Will he take this opportunity to confirm that he agrees with the Secretary of State of his department, who said recently:

“The Government lacks the compelling vision … to get the economy growing again”?

[Lord Gardiner of Kimble]

I thank the noble Lord for his initial remarks, but I have to say that the Government’s plan for growth is very clear and outlines 250 measures to deliver the four growth ambitions: the creation of the most competitive tax system in the G20, at the lowest level in the G7; as I said before, to make the UK the best place to start a business; to encourage investment and exports; and to create a more educated workforce that is the most flexible in Europe.

[Lord Elystan-Morgan]

My Lords, the Minister has assured the House that regular discussions take place with regard to devolved subjects. I am sure that the House will agree that that is most laudable, in that it in no way trespasses on the distinctiveness of the devolved Assemblies, but at the same time brings about as much cohesion as possible. However, perhaps I may ask him about matters that have not been devolved. Does the Minister recollect that when the legislation of 1998 was being considered by both Houses, solemn undertakings were given with regard to matters that were not devolved, whereby concordats would be formed so that there could be such a discussion, even in relation to matters that still remain under the authority of this House?

[Lord Gardiner of Kimble]

My Lords, I reassure the noble Lord that all matters, whether reserved or devolved, are regularly discussed with the devolved Administrations. As I said before, the whole purpose of what the UK Government and the devolved Administrations are doing is to work in the national interest to achieve greater economic growth.

[Lord Roberts of Llandudno]

My Lords, what discussions have already taken place with the Welsh Assembly Government to ensure that businesses in Wales have access to loans and the small-business grants that have been announced recently, and that in any promotion of this UK investment project, assistance is available to Welsh industry?

[Lord Gardiner of Kimble]

My Lords, across the United Kingdom, and in Wales of course, there is encouragement for that. In Deeside Enterprise Zone, for instance, the Government have agreed enhanced capital allowances, which will deliver up to 5,000 new jobs. Indeed, the Government are working very closely with the Welsh Government and have provided them with almost £57 million to help to bring broadband to everyone, and superfast speeds to 90% of Welsh homes and businesses. This is all very good news for Wales.

[Lord Wigley]

My Lords, I also wish the Minister well in his new responsibilities, but does he accept that when the devolution settlement was made, the fact that some aspects of economic policy were devolved to Cardiff, Edinburgh and Belfast was a reflection of the need to have flexibility in policy that reflects the needs and aspirations of the three devolved areas? In those circumstances, does he agree that there is two-way traffic on the question of co-operation and will the Government at Westminster support the devolved regimes in their policies, where those are seen as the priorities for those areas?

[Lord Gardiner of Kimble]

My Lords, as I said before, we will of course be sharing information with all devolved Administrations.

[Lord McConnell of Glenscorrodale]

My Lords, are the Government aware that unemployment has gone up in Scotland today, while it has gone down elsewhere in the United Kingdom? Will the Government have immediate discussions with the Scottish Government to ensure that the uncertainty that will now exist in Scotland over the next two years as we lead up to the referendum on Scottish independence does not lead to higher unemployment in Scotland due to uncertainty over investment?

[Lord Gardiner of Kimble]

My Lords, there are regular discussions; and, in fact, there has been an increase in total employment of 54,000 people in Scotland since the general election.

Energy: Shale Gas

Wednesday 17th October 2012 Lords Chamber

Question

15:15

Asked By

[Lord Naseby]

To ask Her Majesty’s Government what is their policy on shale gas extraction in the United Kingdom.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)]

My Lords, my department’s key objectives are to ensure that the UK has safe and secure energy supplies for the future. It is also committed to reducing carbon emissions. That is why we are encouraging a diverse and sustainable energy mix and therefore support industry’s endeavours in pursuing new energy sources in the UK such as shale gas.

[Lord Naseby]

I congratulate the Government on the recent announcement encouraging the extraction of gas by fracking. When your Lordships’ House realises that nearly 40% of the United States is now supplied by natural gas, does this not offer a huge opportunity for the United Kingdom to develop cheap and reliable domestic sources of energy, to create jobs, in particular in the greater Blackpool area, to reduce imports of gas and, finally, to improve the environment? At the same time, your Lordships’ House will remember that when North Sea oil was developed, it was a success because of the combination of government working with the industry. This must happen with shale gas as well.

[Baroness Verma]

My noble friend is of course right that the Government are very alert to the possibilities for boosting growth and employment in Lancashire and across the country. If shale gas does prove to be commercially viable, there is every reason to suppose that it will be positive for the economy and employment. However, the industry is at a very early stage of development and we need to make sure that all our commitments to ensuring that it is safe and secure to extract are formally looked at.

[Lord May of Oxford]

The Government are currently on course to fulfil their legally binding commitments under the Climate Change Act—only, however, by virtue of the recession. A second “dash for gas” rather than a speeding up of our decarbonising of electricity generation is flatly inconsistent with the commitments to 2030. Am I correct in assuming that the only way to square this is to maintain the recession, and that that explains some of this?

[Baroness Verma]

No, my Lords. I think the noble Lord knows from his question that that is not the case. We need to look at a wide range of energy sources and make sure that in the long term we fulfil our commitment to the 2030 target, but also that we utilise new renewable sources .

[Lord Howell of Guildford]

Further to my noble friend Lord Naseby’s Question, has my noble friend noticed that in the United States domestic gas prices are up to one-third lower than they are here, that its CO₂ greenhouse gas emissions are falling and are the lowest for 20 years, and that it is attracting a great deal of new industry and manufacturing back into America and creating new jobs? Is this not the sort of balanced model we should be considering?

[Baroness Verma]

My noble friend is absolutely right. However, the conditions in the United States are different from those in the United Kingdom. We first need to make sure that we thoroughly explore the ability to develop shale gas safely and securely. However, it is something that we are looking at very constructively.

[Lord Taylor of Blackburn]

My Lords, can the Minister tell us whether the Government have any idea when shale gas will be viable or not?

[Baroness Verma]

My Lords, I have tried to make it quite clear that we are still exploring all the possibilities for extracting shale gas. As soon as we have the go-ahead, we will report to your Lordships’ House and make a general statement.

[Baroness Parminter]

My Lords, fracking to extract shale gas uses enormous quantities of water, three-quarters of which remains down the wells. Given that the overabstraction from our rivers is already causing huge problems, what can the Minister tell us about the consideration that is being given to water resources in determining our future energy policy?

[Baroness Verma]

My Lords, my noble friend is right to raise her concern, and I hope that I can reassure her that any abstraction of water for industrial purposes is subject to control by the Environment Agency or by corresponding bodies in Scotland and Northern Ireland. The agencies will not permit additional abstraction in any area if they consider that it is not sustainable.

[Baroness Worthington]

My Lords, whether gas comes from fracking or more conventional sources, it is still a source of carbon dioxide and greenhouse gases. Therefore, will the Minister reassure us that in the horse trading that we believe is going on around the Energy Bill at the moment, there will be no concession to reduce our investment in carbon capture and storage in favour of decarbonisation? We must do both, and we must have carbon capture and storage on gas if it is to play a role in the future.

[Baroness Verma]

I absolutely agree with the noble Baroness. It is an exciting technology that can decarbonise coal and gas-fired power stations and large industrial emitters. The Government are absolutely committed to CCS. We have one of the best offers anywhere in the world, including £1 billion in capital funding for our new competition, contracts for difference for low-carbon generation through our electricity market reforms, and £125 million to support research and development.

Equality: EC Policies on Women on Corporate Boards

Wednesday 17th October 2012 Lords Chamber

Question

15:21

Asked by

[Baroness Falkner of Margravine]

To ask Her Majesty’s Government what is their assessment of European Commission policies on women on corporate boards.

[Baroness Stowell of Beeston]

My Lords, the European Commission has yet to announce its proposed policy for women on boards. The Government agree with the Commission that increasing the representation of women on the boards of UK-listed companies is important. However, we are not in favour of EU legislation or regulation, including quotas. National-level solutions are best, and evidence shows that, following the Davies review that the Government commissioned in 2010, the UK’s voluntary, business-led approach is working.

[Baroness Falkner of Margravine]

I agree with my noble friend that the EU is probably not the body best placed to deal with this problem, particularly as corporate governance varies from country to country. However, does she agree that the real problem is the lack of progress on getting women executive directors on to FTSE 100 company boards? We have had good progress with non-executive directors; we have something like 22% against the Davies targets, which is progress. However, our flagship companies are not nurturing and developing talent to get people promoted from within. What are the Government proposing to do about that?

[Baroness Stowell of Beeston]

My Lords, my first point is to reinforce what progress has been made since the Davies review on the recruitment of women to boards. Notwithstanding the point that my noble friend made, it is worth saying that the percentage of women on FTSE 100 boards is now 17.3%; that is up from 10.5%. However, my noble friend is right to say that progress in executive ranks is not as fast. More effort is needed in that area, particularly around what is called strengthening the pipeline, so that women are recruited from a wider pool of backgrounds to these executive posts and that we do not rely just on the kind of criteria that are normally placed on men who are recruited to those jobs.

[Baroness Nye]

My Lords, I, too, welcome the increase in the number of women on boards, but does the Minister agree that the voluntary code needs to be reviewed, as the evidence suggests that while the 30% target for female applicants on the long list is being met, these women do not make it on to the shortlist? Surely the code should be extended to include targets for the shortlist as well.

[Baroness Stowell of Beeston]

As I said about the shortlist, the executive search companies are putting forward 30% of women to companies; clearly that is working in getting women into non-executive positions. However, more work is needed to target the executive ranks. As I explained, this will take longer. It is worth noting that in countries such as Norway where there are quotas, the quotas in force for non-executives have not led to a greater improvement among the executive ranks at the same rate. This is a difficult problem that goes much wider than the narrow point we are discussing.

[Lord Watson of Richmond]

My Lords, does the noble Baroness not agree that public opinion plays a very important role in this and that the battle has to be won with public opinion? After all, what is the chance of recovery from recession unless women play a more important leadership role in our top companies?

[Baroness Stowell of Beeston]

My noble friend is absolutely right. The case for women in senior positions, whether they are executive or non-executive, is clear. Women account for nearly half the workforce and women outperform men educationally at every level. We are also responsible for about 70% of household purchasing decisions so it makes sense to have women in positions of authority in the corporate world.

[Baroness Howe of Idlicote]

My Lords, does the noble Baroness agree that a great deal of credit should be given to all sides of the House for encouraging more women in executive positions? Would she also agree that encouraging more boards to make flexible arrangements for men to work will increase the numbers of women who also have family responsibilities and are likely to come through to top executive positions?

[Baroness Stowell of Beeston]

The noble Baroness makes an interesting point. The sooner employers think about the flexible arrangements to which she refers in the context of men as well as women, the more quickly women will be seen not as a special case but as what they rightly are—equal in terms of ability, and the type of people that we want in those positions.

[Baroness O'Cathain]

My Lords, does my noble friend agree that the work commissioned by this Government and continued by the noble Lord, Lord Davies of Abersoch, still continues and that he is very concerned about the issue raised by my noble friend on the pipeline leading to executive directors? I am convinced that progress has been made since 2010 whereby 13.3% of FTSE 100 companies had women on boards at that stage and now 34% of non-executive directors are women. At that stage, there were 21 male-only boards and now there are only eight. However, the work will continue and we do not need an EU directive on quotas because they are patronising.

[Baroness Stowell of Beeston]

There are lots of statistics to show that progress is being made. As far as I am concerned, business needs to show that it wants women and not just that it is willing to put up with them

[Baroness Thornton]

My Lords, notwithstanding the party opposite’s visceral hostility to all things European, I think the Minister concedes that the fact that the European Commission has initiated this discussion will have focused the minds of many FTSE 350 companies on the need to address this problem. What are the Government doing to address the presence of women on public bodies, for example on health boards and clinical commissioning groups? Are the Government monitoring the number of women who are coming forward and are being appointed to those bodies as well?

[Baroness Stowell of Beeston]

Just to be absolutely clear, while we do not support the quotas or the European legislation, we feel very strongly about this issue. I think that I am right in saying that we have a target of 50% for appointments to public bodies by 2020. If I am wrong I will write to the noble Baroness, but we are definitely ensuring that as much effort is made in that area as it is in the corporate world.

[Lord Forsyth of Drumlean]

My Lords, as two-thirds of the European Commission membership are themselves men, would not the Commission do better to put its own house in order before deciding on other people?

[Baroness Stowell of Beeston]

My Lords, I shall not say anything.

Care Services: Elderly People

Wednesday 17th October 2012 Lords Chamber

Question

15:30

Asked By

[Lord Hunt of Kings Heath]

To ask Her Majesty’s Government what action they propose to take in the light of reports that vulnerable elderly people are obliged to rely on care workers with criminal records.

[Lord Hunt of Kings Heath]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and I refer noble Lords to my health interests.

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

My Lords, providers of services are responsible for the safety and quality of the care they provide, and the well-being of the people they care for. Providers should undertake a risk assessment as to whether a criminal record check is needed or not, and what action to take as the result of such a check. Providers should keep a record of this process as an audit trail of their decision-making.

[Lord Hunt of Kings Heath]

My Lords, I am grateful to the noble Earl, and of course we all welcome the rehabilitation of ex-offenders. However, I refer the noble Earl to reports that recent CQC inspections show that more than 220 care agencies working for older people in England have failed to show that they were employing properly qualified and vetted staff. What action will be taken about this? Further, does this not show that the time is now ripe for the statutory regulation of care-home workers?

[Earl Howe]

My Lords, it is the responsibility of the employing organisation to carry out appropriate checks on the people they intend to employ. They should take decisions in the context of their responsibility for the well-being of the people who use the service. That position has not changed, and indeed it must be at the core of the safeguarding agenda. Organisations need to risk-assess the suitability of their staff for the role, considering all the information they have on the person, including criminal record checks. If someone has a criminal conviction, the employer should consider how old and relevant that conviction is in the context of the activities that the person would be undertaking and the characteristics of the people they would be looking after. That situation cannot, I think, change substantively.

[Lord Patel]

My Lords, will the Minister follow up on the question asked by the noble Lord, Lord Hunt? What progress is his department making towards establishing skills requirements in the training and regulation of nurse support workers and care assistants?

[Earl Howe]

My Lords, we recognise that there is a need to drive up standards in this area. More care workers will be trained, including an ambition to double the number of care apprenticeships by 2017. We have commissioned Skills for Health and Skills for Care to develop, before the end of January next year, a code of conduct and minimum training standards for healthcare support workers and adult social care workers in England. We expect that these will cover minimum training or induction standards for a range of support tasks, including personal care and other activities. Through the Health and Social Care Act 2012 we are creating a system of external quality assurance for voluntary registers.

[Baroness Gardner of Parkes]

My Lords, is the Minister aware that it is not just an issue about criminals, but an issue about the total shortage of care, which the previous question addressed very clearly? Does he not think that in general care and healthcare we are sadly missing the SENs, and is it not time to develop additional levels of training to fill the gaps both in care homes and the National Health Service?

[Earl Howe]

My Lords, we need to focus on a mixture of things. As my noble friend rightly says, we need to look at workforce numbers and capacity. We need to look at minimum training standards, which I have referred to, and we need to look at quality. We are doing that by targeting for the first time personal assistants and their employers with greater support and learning through the Workforce Development Fund, which will help with recruitment and retention. We need better leadership because high-quality leadership is essential for the delivery of all the proposals in the care and support White Paper, and we are setting up a new leadership forum to bring together expertise. I should add that we need better intelligence on the ground as well, and that we shall see from the local Healthwatch organisations when they are established.

[Baroness Pitkeathley]

My Lords, the Minister has pointed out that the employer, the provider, is responsible for the recruitment and training of care workers, and I am sure he will confirm that that applies whether they work in the private, the public or, indeed, the voluntary sector. In view of some of the scandals that there have been involving care workers, does he agree that we need to encourage value-based recruitment so that people are recruited not only for their technical skills, which can be provided through training, but for their compassion and empathy?

[Earl Howe]

Yes, I firmly agree with that. It bears upon the point that I alluded to very briefly, which is that the risk assessment process should not just be a tick-box exercise. It should assess the suitability of the individual and their own characteristics, the environment in which they will be working, the kind of people for whom they will be working and whether they have the right skills and characteristics as the people required to do that job.

[Baroness Masham of Ilton]

My Lords, does the Minister agree that it is not only the elderly who are vulnerable but also some very disabled people, including some with learning disabilities?

[Earl Howe]

Yes, like the CQC, we are very clear that when providers are assessed for the recruitment processes that they undertake in relation to those groups of patients and service users, no corners whatever should be cut in the requirements for vetting those people.

[Baroness Jolly]

My Lords, safeguarding the vulnerable needs real commitment from us all. Will the Minister tell the House whether the Government intend to support this by ring-fencing funds, as have Wales and Scotland?

[Earl Howe]

My Lords, we are not taking that approach. However, we have declared our intention to strengthen safeguarding arrangements to prevent and reduce the risk of significant harm to adults in vulnerable situations. That is a key priority for the Government. We intend to put safeguarding adult boards on a statutory footing. This will assist in furthering the agenda which my noble friend rightly raises, by ensuring that organisations involved in safeguarding have to make a co-ordinated contribution to local adult safeguarding work. Of course, it continues to be an offence for a provider to employ a person barred by the Independent Safeguarding Authority.

Constitution Committee

Wednesday 17th October 2012 Lords Chamber

Membership Motion

15:37

Moved By

[The Chairman of Committees]

That Baroness Wheatcroft be appointed a member of the Select Committee in place of Lord Shaw of Northstead, resigned.

Motion agreed.

Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) (No. 3) Regulations 2012

Wednesday 17th October 2012 Lords Chamber

Child Support Maintenance Calculation Regulations 2012

Child Support Maintenance (Changes to Basic Rate Calculation and Minimum Amount of Liability) Regulations 2012

Motions to Approve

Moved By

[Lord Freud]

That the draft Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) (No. 3) Regulations 2012, the draft Child Support Maintenance Calculation Regulations 2012 and the draft Child Support Maintenance (Changes to Basic Rate Calculation and Minimum Amount of Liability) Regulations laid before the House on 2 July be approved.

Relevant documents: 6th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 15 October.

Motions agreed.

Forestry Commissioners (Climate Change Functions) (Scotland) Order 2012 (Consequential Modifications) Order 2012

Wednesday 17th October 2012 Lords Chamber

Motion to Refer to Grand Committee

Moved By

[Lord Wallace of Tankerness]

That the draft Forestry Commissioners (Climate Change Functions) (Scotland) Order 2012 (Consequential Modifications) Order 2012 be referred to a Grand Committee

Motion agreed.

Financial Services Bill

Wednesday 17th October 2012 Lords Chamber

Committee (8th Day)

15:38

Relevant document: 4th Report from the Delegated Powers Committee.

Clause 57 : Treasury power of direction

Amendment 190ZE

Moved by

[Baroness Noakes]

190ZE: Clause 57, page 136, line 4, leave out from “to” to “the” in line 5 and insert “any of the Bank’s powers or functions, including but not limited to”

[Baroness Noakes]

My Lords, Amendment 190ZE is in my name and that of the noble Lord, Lord McFall of Alcluith. This represents the last of the amendments in our joint names which respond to the first report of this Session by the Treasury Select Committee in another place.

Clause 57 provides a welcome power of direction that enables the Treasury to direct the Bank of England when public funds are at risk. The Treasury Select Committee initially recommended that such a power be created when the Bank notified the Treasury that there was a material risk to public funds. The committee regarded such a power of direction as a necessary corollary of the leading role of the Chancellor in any financial crisis. Unfortunately, the Bank of England sought to water this down to a power of direction operating only in relation to certain instruments of crisis management. Even more unfortunately, the Government have sided with the Bank and have restricted the power of direction to the three areas listed in Clause 57(2).

The Treasury Select Committee remains unhappy with this and believes that if the legislation is to stand the test of time, it should not be restricted to the specific tools listed in subsection (2) but should be capable of being exercised in relation to tools not currently considered appropriate; for example, those tools that would be available to the Financial Policy Committee or other tools that have not yet been developed. The Treasury Select Committee believes that this power should be broader and future-proofed.

Amendment 190ZE seeks to achieve this by saying that the direction can relate to any of the powers or functions of the Bank of England, leaving the three specified tools as a non-exclusive list of such powers.

I am told that the House could not hear me in my previous position so I have moved.

[Lord Peston]

Start again.

[Baroness Noakes]

This is a probing amendment for today, not least because I think that it is too wide. For example, it would allow the Treasury to direct the Bank in relation to monetary policy functions, which would not be appropriate. Section 4 of the Bank of England Act 1946, which took the Bank into public ownership, has a general power of direction, which puts monetary policy out of scope. I believe that any Clause 57 power should similarly be constrained but I cannot see that there needs to be any further restriction on the Treasury’s power of direction when public money is at stake.

When my noble friend the Minister replies, can he also explain the relationship between the 1946 Act’s power of direction and the new powers of direction in Clause 57? The 1946 version is very broad and, monetary policy apart, seems to cover everything that is in Clause 57, and more. I do not believe that the 1946 Act power is being repealed or otherwise amended in this Bill, so I am puzzled as to the relationship.

I am aware that general powers of direction have rarely been used in practice, because their force lies mainly in the threat of their use rather than their actual deployment, but I hope that my noble friend the Minister can say what effect Clause 57 has on the existing power of direction. I beg to move.

[Lord Peston]

My Lords, this is a most interesting amendment, which enables us to clarify one or two aspects of the Bill. I literally did not hear the first part of what the noble Baroness was saying, so I was not joking when I suggested that she started again and she may well need to repeat what she said at the beginning.

This amendment brings into focus the relative power of the Bank of England in the areas that the Treasury is concerned with. This has worried quite a few of us throughout the proceedings on the Bill. To put it too simply, the question that emerges is: who really is in charge of the stabilisation process? Before I press that a little bit further, I take it that when in this part of the Bill we are talking about stabilisation powers, we are restricting ourselves to stabilisation powers within the financial services sector and not discussing a subject to which I have devoted most of my academic life; namely, powers to stabilise the whole economy—or, if people had followed my advice, probably destabilise the whole economy. We are not discussing the general question of the theory of economic stabilisation here. We are discussing just stabilisation.

Can the Minister throw some light on the simple question here? Who really is in charge? The noble Baroness includes in her amendment “not limited to”. However, unless this was part of what I did not hear, I do not think she said what else she had in mind that might then arise if it was not limited to these things. It may well be that she did say it and I missed or it may well be that she would like to say it now.

15:45

[Baroness Noakes]

It might help those Members of the Committee who did not hear my opening remarks if I say that my amendment is designed to ensure that the power of direction can be used for all of the functions of the Bank of England not simply those listed in Clause 57(2). I also said that it probably ought to exclude the functions related to monetary policy.

[Lord Tunnicliffe]

I spent some years sitting on the Benches opposite facing the noble Baroness, Lady Noakes, and it comes as a refreshing new experience to find myself so frequently in agreement with her on this Bill. I am sure that will distress her as much as it is distressing me. Unfortunately, her caveating remarks are every bit as important as the lead remarks recommending the amendment.

We would not be able to support the amendment as drafted because, as she rightly points out, it could involve a direction to the MPC. This part of the Bill is a limiting list. The noble Baroness may want to consider either extending the list—we would look at that with great interest—or reversing it and extending the powers to the whole of the activity as her present amendment does and then caveating it with a number of areas where this power could not be used. This is a very useful amendment to develop the debate. I look forward to the Minister’s reply and thank the noble Baroness for proposing it.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, first let me be clear that I do not believe that it would be appropriate to extend the scope of the power in the way that is suggested by this amendment. It would make the power unusable. I was going to remind my noble friend, but she already made the point, that the Treasury already has a very broad power of direction over the Bank. As my noble friend pointed out, Section 4 of the Bank of England Act 1946, which continues and will continue to be operative, as my noble friend says, allows the Treasury to,

“give such directions to the Bank as ... they”,

the Treasury,

“think necessary in the public interest, except in relation to monetary policy”.

I think we are all agreed that the amendment was not intended to cover monetary policy.

[Lord Tunnicliffe]

Does the noble Lord agree that every Committee that has looked at this and reported and all professional commentators take the view that the power is so wide and so nuclear that no Chancellor would ever use it?

[Lord Sassoon]

My Lords, the noble Lord, Lord Tunnicliffe, is getting ahead of me. That was precisely what I was going on to explain. He is absolutely right that the power has never been used. Even at the height of the recent financial crisis, the then Chancellor felt unable to use this power to direct the Bank. Indeed, Alistair Darling’s book is rather interesting on this point. He explains in it that he was told,

“that it might be legally possible”,

to direct the Bank, but that,

“there would be wider implications of such an action. We had set great store by making the Bank independent and a public row between myself and Mervyn would have been disastrous, particularly at this time”.

The 1946 Act direction power is considered, and was considered by a Chancellor very recently, to be such a nuclear option because it is so broad that it would be very difficult to use. This means that any use of the power would likely be interpreted as the Chancellor overruling decisions and judgments that should rightly be for the Bank. This would be seen as a direct challenge to the Bank’s independence and a judgment on the competence of the Bank’s senior executives, which could cause a crisis in leadership in the Bank and a serious loss of public confidence. That line of thinking has prevented Chancellors from using the 1946 Act power in the past, as the fallout could be more damaging than the situation that they might be trying directly to address.

That risk was recognised by the Treasury Committee. That is why their report recommended that,

“the Chancellor should be granted a power to direct the Bank in a crisis which is free of the problems associated with the power under the 1946 Act”.

That is why the new power of direction in Clause 57 is designed to be a targeted and usable power. There will still be the power in the 1946 Act, for the reasons that underlie what my noble friend and the noble Lord, Lord Tunnicliffe, said. It is probably worth maintaining that reserve power somewhere in the system, albeit with the caveat that it is difficult to see the situation in which it might be exercised.

On the other hand, and going to the heart of who is in charge and who is responsible for what is in the new system, it was muddled and confused under the tripartite system but we want to make it much clearer in the new system that the Chancellor and the Treasury are principally there as guardians of public funds. That is why the specific direction in Clause 57 is designed that way. It is targeted. It does not allow the Treasury to overrule the Bank’s decisions and judgments; it allows the Treasury to take the decisions that are rightly for the Government to take. It is designed to allow the Chancellor to intervene to require the Bank to take specific action in a crisis management situation where public funds are at risk. That is why the power covers only the Bank’s crisis management functions, specifically the provision of liquidity and the operation of the special resolution regime. Again, I hope that that helps the noble Lord, Lord Peston, with the intended scope of this.

[Lord Peston]

My Lords, the noble Lord has clarified that very well. I take it that there would still be, as happens all the time, informal meetings between the Chancellor and the Governor, where the Chancellor might say, “Well, it is your decision but I am a bit worried about this or that”. Nothing will infringe on that because, as the noble Lord well knows, no system can work without informal and off the record meetings and things of that sort. This will not get in the way of what one might call ordinary human behaviour.

[Lord Sassoon]

No, indeed. The next time, in another context, the noble Lord challenges me about why we are not disclosing more meetings, I shall remember what he just said about informal and confidential meetings. It is important that they happen. Having seen how things happened before and how they happen now, it is striking to see the much greater regularity of meetings between the principals—they are critical—than happened at some periods in the past. That is very important as a background in peacetime as well as in crisis time.

I hope that is clear. The Bank is in charge of operating the resolution regime, but the Chancellor must agree to any use of public funds and has the final say when they are used. Even setting aside the unintended drafting of Amendment 190ZE to include a power that would be even more widely drawn than the 1946 Act, the targeted power that we have drawn is the appropriate one. If we had drawn the power more widely to allow for future proofing, as my noble friend puts it, I would be standing here defending why we had left such an important area open in the Bill. It is better to draft such a power related to the system as we know it. It is broadly future proofed in the sense that there is a clear distinction between the use of public funds and other matters, and after that helpful debate I hope that my noble friend will withdraw her amendment.

[Lord Barnett]

I thought that the Minister in his earlier answer was about to say that the meetings between the Governor and the Chancellor would be available on the web. The other day he rather misled me and probably the House when he said, in answer to my question about a meeting between the OBR and the Chancellor and how often he had had meetings in the last 12 months, that it was all transparent and on the web. I am no expert in these matters, but I spent quite a bit of time on the web and could not find it there. I asked my noble friend Lord Peston, who is perhaps better on the web. He too spent a lot of time on it and still could not find it, either transparently or non-transparently. Can the Minister explain to the House whether it is misleading to suggest that these things are transparent on the web?

[Lord Sassoon]

My Lords, although I believe that we are allowed to use portable electronic devices in the Chamber, I cannot in 30 seconds find it. I can assure the noble Lord, Lord Barnett, that it is done on either a quarterly or six-monthly basis. I do not know whether the search was made on the OBR website or the Treasury website, but my recollection is that the OBR releases something on its website periodically. I will find the appropriate link and let the noble Lords have it.

[Lord Peston]

I understood him to say the other day that it was on the Treasury website and I wasted three-quarters of an hour this morning. There is lots of good stuff on it. You can spend a happy day searching the Treasury website, but it did not contain anything that the Minister had told us it did contain. We can leave it at that.

[Lord Sassoon]

I apologise if I directed people to the wrong website. I will find the right one, which I think might be the OBR’s own website.

[Baroness Noakes]

My Lords, I thank all noble Lords who have taken part in this short debate. I thank my noble friend for his response. I take the point on general powers of direction. They have not been used since these have been written into statute. They existed in all the nationalised industry legislation, which gives rise to the question as to why they are there, but I am sure Ministers feel more comfortable that they have this nuclear option should nuclear war ever need to break out.

The Treasury Select Committee would still say that it thinks that the power is too narrow. If there were a crisis where it is clear that he should be in charge, the Chancellor should not be restricted in what he can direct the Bank to do. For example, he may feel the need to direct the Bank on the use of macroprudential tools. These are in the hands of the Financial Policy Committee. If the Bank were slow in using them and where it took a particular view on something on which the Chancellor took another, public money would be at risk. The Chancellor ought to be able to get his way on things. On that basis the Government have drafted too narrow a power, but I shall not pursue it any further. It is the Government’s choice, and I beg leave to withdraw the amendment.

Amendment 190ZE withdrawn.

Clauses 57 to 60 agreed.

16:00

Amendment 190ZEZA

Moved by

[Lord Tunnicliffe]

190ZEZA: After Clause 60, insert the following new Clause—
“Duty of coordination: early warning
In furtherance of collaboration under this Part, the Bank of England, FPC, FCA or PRA must provide the Treasury or the Secretary of State with an early warning of the possibility that a notification of a material risk to public funds may be given under any provision of this Part, and must provide full information about circumstances.”

[Lord Tunnicliffe]

My Lords, the intention behind this amendment is twofold. It is to bring more players into the decision about an early notification and to bring in the requirement for early notification. Touching first on bringing new bodies into this, the clause effectively brings the FPC, the FCA and the PRA into the early notification procedure advocated in this clause. The essence of our concern has been rehearsed around the House. It is that the Bill gives enormous power to the Governor of the Bank of England and, in a crisis, he effectively ends up as the gatekeeper of information flowing from the Bank to the Government. We believe that there should be ways of making this gate wider and that where the FCA and the PRA—I shall talk about the FPC in the next amendment—believe that an early warning is required, they should have a duty to consider the circumstances; and where they believe that it makes sense, they should have a duty to communicate that to the Treasury or the Secretary of State. This would clearly require them, as part of their function, to be proactive in their stance when they are horizon-scanning or looking forward at various risks.

The second part of the amendment is about the essence of an early warning. The concept of an early warning is that it is a warning short of a formal notice. The amendment lowers the bar from the form of words in the Bill that implies the “probability” of a material risk or the requirement of the use of public funds to the “possibility”. It echoes the concerns of the Treasury Select Committee in its 21st report which was published on 8 November 2012. Its recommendation at paragraph 166 was:

“We are concerned that the formal notification of a material risk to public funds may still not give the Chancellor enough time to consider other policy options. The Treasury needs to know as early as reasonably possible when it might receive a notification. We therefore recommend that the forthcoming legislation also require the Bank to give the Chancellor an early warning of the possibility that a notification of a material risk to public funds may need to be given, and full information about the circumstances”.

We very much agree with that recommendation and in this amendment we seek to give effect to it.

The process of crisis that we are debating will probably involve protecting the activation of the proactive intervention framework. The noble Baroness, Lady Noakes, knows what I am talking about because she is familiar with the document, The Bank of England, Prudential Regulation Authority: Our Approach to Banking Supervision, published in May 2011. The PIF is described on page 18. It describes five stages of escalation, which presumably are the key stages that lead up to a crisis. There is almost a presumption that there is a clear difference between normal business and a crisis. I hope it never happens, but if it did, it would be an escalating situation. Some of the stages of the proactive intervention framework will be in private. Some will not want to be the subject of a notice, as the final notification as envisaged in the Bill should be. The ability and duty of the Bank to give a notice of possibility would allow those private activities, in the early stages of the PIF, to take place, alerting the Government that they have to start thinking about the possibilities and how they may develop.

The counterargument often revolves around the fact that the Chancellor and the Governor of the Bank of England talk to each other. Of course, at the moment we have two most charming individuals and I am sure that they have useful conversations. However, once again, if you go into the evidence of the Select Committee and its comments, clearly this has not always been true. I am rather sorry that the noble Lord, Lord Lawson, is not in his place so that he could reflect on the events of 1984 when he had to find a great deal of money to save a failing bank and, according to the Select Committee, was advised of that requirement on the morning of the crisis. Equally, one cannot read Alistair Darling’s book without a clear feeling that the day-to-day communication between the Governor of the Bank of England and the Chancellor was less than warm. Certainly, it was not enough to leave one comfortable that the necessary preliminary warning that this amendment envisages would take place at an informal level.

As this crisis gathers, one has to presume a situation that relationships could really be quite bad. They could be in seven years’ time. The new governor might turn out to be less charming than the present one. The Chancellor of the day could well be less charming and communicative than the present one. In fact, there could have been a total breakdown of trust between them. It has happened in the past. This amendment would require a preliminary notice and there would be a dereliction of duty if the Government did not provide this preliminary notice. This mechanism would allow the Government to start their preliminary thinking and consider mitigation measures other than the expenditure of public money—as envisaged in the Bill —and give the lead times necessary. Crucial is a situation of no surprise. We are very uncomfortable about the sense behind some of the remarks, and the extent to which the governor is the gatekeeper of information to the Government. We believe the Government should be equally sensitive and concerned and I commend the amendment to the them.

[Lord Sassoon]

My Lords, I am genuinely puzzled about this amendment. I know that it was put forward in another place by Mr Leslie, the colleague of the noble Lord, Lord Tunnicliffe, and that it is designed to implement a Treasury Select Committee recommendation to create an early-warning mechanism of a risk to public funds. No one would be keener than me to have such a mechanism in place if I believed that it was necessary because I thought that the Treasury would not, under the provisions of this Bill, get sufficient early warning.

However, this provision and the question of an early warning do not rely on what I think we all agree is very important; namely, that there is constant dialogue about a whole range of things between the Treasury and the authorities, including the Bank. The question of an early warning does not rely on that, although we would expect it to carry on because it is working well at the moment.

I believe that the amendment is unnecessary and inappropriate. Therefore, let me carefully go through why. First, as the Government made clear in their response to the Treasury Select Committee, the duty on the Bank to notify the Treasury of risks to public funds already achieves this aim. The existing duty is already designed to give the Treasury an early warning of a potential risk to public funds. That is because Clause 54 sets an extremely low bar for notification; for example, when the Bank or the PRA looks at the position of a firm or a group of firms, if it thinks that a possible future scenario could lead to a situation in which the Treasury might reasonably be expected to decide to use public money to protect stability or the public interest, a notification must be made.

I do not think that the bar could be set much lower than that. For example, in the type of scenario described by the noble Lord, where the Bank is aware that at some point in the future a risk to public funds could arise, the Bank should be making a notification of a risk to public funds under the existing duty in Clause 54. I am happy to put that on the public record again. The Bank completely accepts that and there is no debate about the interpretation of the duty under Clause 54.

With this amendment, the noble Lord also risks undermining the clarity and force of the statutory duty to notify the Chancellor of risks to public funds by broadening the grounds on which it could be triggered to include risks to the FCA’s objectives which do not involve public money. Just as in the previous debate we were talking about issues which related to the line between risk to public money and other matters, again, in relation to this particular early warning, the duty is drafted very deliberately with the line drawn, which is not reflected in the noble Lord’s amendment.

[Lord Tunnicliffe]

I feel that the words used by the Minister are quite a shift. He referred to a “possible future scenario”. As I read Clause 54, it is much closer to a probable future scenario. Will he explain to me—I am sure that he is much more familiar with the Bill than I am, much as I have tried to study it in the past few days—where in statute I can draw the comfort that a possible very low bar to notification is emphasised.

16:14

[Lord Sassoon]

My Lords, the fact is that a regulator would have to look at future scenarios when it is thinking of its duty under Clause 54. The clause refers not to a situation that has arisen but to,

“a material risk of circumstances”,

which links it, as I have said, to the provision of financial assistance. It is clear and simple. There is a lot of other stuff in Clause 54(1), but the key things are,

“that there is a material risk of circumstances within any of the following cases”,

which are then explained in detail. As understood by the Government and the Bank, this is a forward-looking statement and requirement, which obliges them to think about possible future scenarios that could lead to the situations that are then developed in Clause 54. Of course, the duty in Clause 55 is to notify any changes to that.

[Lord Tunnicliffe]

I think that some of what the Minister has just said is quite a shift from what Clause 54 says. I would be delighted if he came forward on Report with some amendments that contained a duty to look at scenarios and a duty to bring forward a notification at the point of a possibility. There has been considerable debate in another place and in various committees, as to what “a material risk” means. There is a commitment in Clause 61 that it must be in the MoU, but as I search the MoU I cannot find it coming readily out to me—I shall be asking about that later. I invite the Minister to consider what he has said and see whether he can improve the legislation so that there will be no ambiguity about the test that the Bank has to apply in bringing forward a notification.

[Lord Peston]

My Lords, perhaps I can help the Minister—it is not a question of persuading him to say yes or no at the moment. Looking at Clause 54, I take “material risk” to mean a significant probability; “possible” is much less than that. I think that my noble friend suggests in his amendment that Clause 54 would be strengthened if we went down the “possible” line, the technical point being—and I do not press it—that there is deep philosophical argument, particularly within probability theory, about the difference between possible and probable.

I interpret the amendment to mean that if the relevant body—whether the Bank of England or another regulator—is looking at a specific part of the financial services sector, or even a specific firm within it, it should let the Government know that it is doing so and that one definitely possible outcome is a need for the use of public funds. The amendment, as I understand it, is simply an attempt to be helpful to HMG when it comes to the control of public money. The Minister may say, “We do not want to know about possibles; we only want to know when the real demand for the money is coming”. That may be his argument, but that is the difference—am I not right?—as to what we are talking about here.

[Lord Sassoon]

Perhaps I did not make sufficiently clear the rather obvious point that we need to look at the heading of Clause 54, “Duty of Bank to notify Treasury of possible need for public funds”. At the risk of stating the obvious—it seems that we need to come back to the obvious—this whole duty is about the notification of a possible need for public funds. If we wanted to say “probable need for public funds”, the Bill would say “probable” in the clause heading, but it does not, it says “possible”. I advise the noble Lord that we are looking at the heading of Clause 54 in part 4 on page 134 of the Bill.

[Lord Peston]

Forgive me. I am willing to accept that I am wrong. I agree that the top line says “possible” but “material risk” is what goes into the material section of the Bill. That seems to me to undermine the clause heading. That seems to me the real point. Why have the Government put in “material risk” if they meant possible risk?

[Lord Sassoon]

My Lords, there are some points where, frankly, I have to take the advice of the legal experts here, which I have done. Frequently Bills, this one included, contain constructions which follow some sort of drafting formula and are sometimes difficult to understand. As I say, my starting point is that if I really thought that the Treasury was not going to get the sort of early warning which the noble Lord, Lord Tunnicliffe, and the Treasury Committee rightly ask for, I would propose a government amendment. I take the point that “possible” appears in a heading and not in Clause 54(1) but it is very clear from the heading that we are talking about the material risk in the context of the possible need for public funds. I assure the Committee that all the advice that I have been given is to the effect that this will achieve the purpose that the noble Lord, Lord Tunnicliffe, desires. Finally, I draw the noble Lord’s attention to paragraph 13 of the draft MoU to find the interaction between the MoU and these issues. On the basis of those explanations, I hope that the noble Lord will feel able to withdraw his amendment.

[Lord Tunnicliffe]

My Lords, this has been a useful debate. However, members of the Treasury Committee are concerned that there is confusion about material risk. We will come to the extent to which the MoU does or does not define that. I believe that a Prime Minister once said, “Circumstances, old boy, circumstances”. As I said, I am happy to accept the Minister’s assurance that the legislation will work under the present charming governor and charming Chancellor, but it needs to be future proof. The words that the Minister used in connection with this important point were reassuring but they need to be in the Bill if they are to persist beyond the tenure of the present Government. I hope that he will consider bringing forward an amendment to achieve that. In the mean time, I beg leave to withdraw the amendment.

Amendment 190ZEZA withdrawn.

Amendment 190ZEZB

Moved by

[Lord Tunnicliffe]

190ZEZB: After Clause 60, insert the following new Clause—
“Collaboration under this Part: power to make regulation
(1) The Secretary of State may, by order subject to affirmative resolution in each House of Parliament, add to the list of bodies specified in section 54(4).
(2) The first such order made under this section shall add the FPC to that list.”

[Lord Tunnicliffe]

My Lords, I apologise to the Committee for this extraordinarily clunky amendment. I give a prize to anybody who really understands what we are trying to do. Those who are committed members of the conversation on the Bill will know that at the end of the previous sitting, the Chair, as is typical or traditional, or whatever the right word is, swept through a whole series of clauses which we approved. Unfortunately, that destroyed about five amendments which we had tabled that day.

I am not suggesting malpractice on any part, but it rather ruined the arguments that we wanted to make today, and we have had to find a way around it. The first amendment slipped around it quite comfortably but the second one looks rather difficult to understand.

For the avoidance of doubt, this amendment puts the FPC into the notification process; it is as simple as that. Indeed, if we bring the amendment forward on Report, we will make sure that it is very clear, straightforward and in the right place and that the Committee does not plough it out by accident.

The FPC is at the centre of this Bill. In many ways the FPC is the new activity that will give force to the consideration of stability. I could not find any one place where it is nicely described. The best that I could find is in the Explanatory Notes to the Bill, where paragraph 35 states:

“New section 9C provides that the objective of the FPC is to contribute to the achievement by the Bank of the financial stability objective provided for in section 2A of the BoE Act … Subsection (2) provides that the FPC is to contribute to that objective primarily by identifying, monitoring and taking action to remove or reduce systemic risks (such as those set out in subsection (3)) with a view to protecting and enhancing the resilience of the UK financial system”.

In the FPC, we are seeking to put together the people who are the most able in the country to monitor, consider and mitigate financial instability. We are requiring them to opine on it and to make directions on it. We are requiring them to be the best informed people in the country and the FPC to be the most important body in the country in terms of financial instability. It is therefore strange that the new body is not able to pull what I would call the Clause 54 trigger. The Bill leaves this entirely in the hands of the Governor of the Bank of England. The presumption is that the governor will always provide the best information and the best notification of where a risk is likely to come about.

It is difficult to understand that, because at first sight of the Bill you would expect it to be a narrative about setting up structures and organisations to address the whole issue of financial instability. You would expect it to give those institutions the appropriate powers to understand, to control and to mitigate financial instability. Broadly speaking, the Bill does that; and, broadly speaking, the Bill is not opposed by these Benches in how it seeks to do that.

However, suddenly the narrative stops. The FPC, watching instability occur in the economy, is expected to take actions—quite powerful actions. It is able to instruct the PRA to take certain actions with respect to banks, perhaps to consumer credit, and so on. Yet suddenly, once the deteriorating situation is labelled a crisis, there is no involvement by the FPC. There is the presumption that the Bank of England Governor will be all-knowledgeable, that the FPC will no longer have any role, and that it should not opine on whether the Clause 54 trigger is pulled.

The facts of life are that real organisations have a diversity of opinion, and the FPC, if it is doing its job well, will have interesting and difficult discussions about a gathering storm. We contend that it should be able to decide that, as a result of those discussions, it can advise the Chancellor that a situation is deteriorating and that there may well be a situation in which public funds would be required. If we require this body to have that role, then the FPC will be a safeguard against the possibility that voices that should be heard by the Chancellor are not heard. I beg to move.

16:30

[Lord Newby]

My Lords, amendments to probe the role of the FPC in triggering a public funds notification under Clause 54 were also laid in Committee in the other place. They were inaccurate then and they remain inaccurate now, primarily because these amendments would have no legal effect. The FPC does not have any powers under Parts 1 to 3 of the Banking Act 2009. So in referring to the powers of the FPC under those provisions, the amendment refers to powers that simply do not exist.

The thrust of the noble Lord’s amendment is that the FPC should be able to give notification of risks to public funds separately from the Bank itself. As we have explained previously, the new system that the Government are putting in place is based on making the Bank a single point of accountability for financial stability. Consistent with this, we are making the Bank, and the Bank alone, responsible for notifying the Chancellor of risks to public funds. This is because, as we have seen so strikingly with the tripartite system, the risk of splitting responsibilities over various institutions is that each one thinks that one of the others is responsible, or blames another, when things go wrong, thereby allowing serious risks to fall through the gaps. This will require the Bank and its senior management team to identify and evaluate risks emanating from all parts of the financial sector, working closely with the PRA, the FCA and the FPC.

However, the statutory responsibility for formally notifying the Chancellor must be clear and unequivocal. It is not that the FPC is going to be separate somehow from the Bank and, given that the governor in his new enhanced role is going to chair the FPC, if the governor, representing the Bank, goes to speak to the Chancellor under the terms of Clause 54 he, of necessity, will also be representing the views of the FPC.

We therefore think that the amendment is unnecessary and inappropriate, and ask the noble Lord to withdraw it.

[Lord Tunnicliffe]

My Lords, the essence of this situation was caught in the last part of the noble Lord’s response. If the governor goes to see the Chancellor and, say, does not represent the FPC’s view, that would to some extent be unthinkable. However, our concern is if he does not go to see the Chancellor—that he listens to the debate at the FPC and may find himself in a minority, but still concludes that he has no responsibility to share FPC’s doubt with the Chancellor. We are not talking about competing roles where it is not clear who is responsible. We are not in any way challenging the split of responsibilities set out in the Bill. We accept that the Bank has the executive responsibility to take action in a crisis. We accept that there need to be rules about where the Chancellor comes in and has executive responsibility.

This is not about who is responsible, other than the points raised by the noble Baroness, Lady Noakes, earlier in the debate, where we may think the line has to be moved about a bit on direction. We are not, broadly speaking, challenging the thrust of the Bill and the division; we are challenging the idea that only the Governor of the Bank of England can advise the Chancellor that there is a gathering crisis that may involve the use of public funds. We believe that it is safer to have more bodies involved in that situation and we particularly believe the best qualified body in the land should have a duty to consider whether there is a crisis situation developing and should have a right, if it considers that to be true, to advise the Chancellor.

I can see that I am not persuading the noble Lord but nevertheless the point is important and valid. We may come back to it on Report but in the mean time I beg leave to withdraw the amendment.

Amendment 190ZEZB withdrawn.

Clause 61 : Memorandum of understanding: crisis management

Amendment 190ZEA

Moved by

[Lord Davies of Oldham]

190ZEA: Clause 61, page 137, line 32, after “England” insert “, the FCA”

[Lord Davies of Oldham]

My Lords, in moving Amendment 190ZEA, I will speak also to the other amendments grouped with it. I imagine the Minister feels that his reply earlier was so definitive that the Opposition ought really to pack up their bags and go home at this stage. I have bad news for him—we still have open bags with plenty of issues that we seek to explore, not least because we do not think the Government are clear about the issue of crisis management. This, after all, is the absolute heart of this Bill. We all know the reasons why we are greatly concerned about financial crisis management and the difficulties that have obtained in the past. Therefore, I am afraid that the Minister will have to tolerate the fact that we are going to probe as far as we can within the framework of these Committee proceedings. However, he can of course rest assured that when his answers are totally satisfactory, that will only foreshorten the amount of debate we will need on Report. He stands to gain from giving as full answers as he possibly can that may allay our anxieties at this stage.

All these amendments relate to the memorandum of understanding on crisis management—the blueprint on who has to do what and what would happen in the particular circumstances of any crisis situation. The substance of the memorandum is not in legislation and therefore not quite subject to the scrutiny that we are afforded on other aspects of crisis management. It is being published separately and does not go through quite the same degree of parliamentary scrutiny as the other agents and factors involved in crisis management. Therefore, the Minister is bound to expect us to press hard in this area.

The broad message of this group of amendments is to call for the Financial Conduct Authority to be given an explicit role in the process and its related mechanisms. The tenor of all our amendments today is that the collaboration between the Treasury, the Bank and the regulators is exceptionally important. In particular, why does the Bill allow the Bank, the Treasury and the Prudential Regulation Authority to include in the memorandum provisions on co-operation between any of them and the FCA, but the FCA itself seems to have no reciprocal power? It can like it or lump it; it can accept what is put forward as an agreed position or it can seek to veto, but it is not party to the drafting process. We are concerned about this because the risks of disruption and instability in the financial markets, which are overseen by the FCA, are not being given sufficient weight.

We all appreciate that we are reckoning with the future and that we cannot predict it. We also know that the last people we want to be are generals solving the problems of the last war and not being ready for the next. We understand the very real difficulties that the legislation seeks to address. We can put in place as many suitable mechanisms as possible to try to implement appropriate safeguards, but we cannot be certain that we have got it right, and we cannot foresee totally the type of crisis that might arise. Therefore, we on this side of the House think that properly involving the FCA in crisis management preparations can only enhance the collective pool of knowledge and increase the likelihood of better outcomes.

I recognise that there is an element of repetition in these amendments. The Minister addressed this earlier when he explained how Clause 54 addressed many of these issues. However, we believe that our case merits consideration by the Government. The amendments are framed in a constructive fashion and I hope that the Minister will accept the spirit in which they were tabled and perhaps indicate that the Government might think again. I beg to move.

16:45

[Lord Sassoon]

My Lords, I am very happy to accept the spirit in which the noble Lord, Lord Davies of Oldham, has spoken to the amendments in the name of his noble friend Lord Tunnicliffe. However, the rather hesitant and apologetic tone in which he presented them would make it all the more surprising if I were to say that they found favour with me. They do not, but I will take them seriously because although they replicate amendments that were debated in Committee in another place, of course we as a Government should respond to them.

Why do I believe that it would be a mistake to include the FCA as a full participant in the crisis management MoU? The issue goes right to the heart of what the new regulatory architecture is trying to achieve. The Government are committed to moving away from a tripartite model where accountability was confused and diluted, and responsibilities were overlapping and unclear. There cannot be an issue in the Bill that goes closer to the heart of it than the MoU. A key element in achieving the clarity of responsibilities that we need is making the Bank a single point of accountability for financial stability. We debated that, and it goes to the heart of the architecture. This will help to ensure clarity and focus of communication; it will reduce the potential for delay or confusion; and it will provide the best chance of delivering a timely and successful solution to a risk to public funds. The construction of the MoU, and who is and who is not a party to it, flows directly from that central part of the architecture which this Bill seeks to put in place.

Of course there will be occasions on which the FCA might need to be involved in discussions around financial crisis management. For example, the FCA might have a role in identifying how a scenario might impact on the interests of consumers and in suggesting what action should be taken to protect those interests. However, the FCA does not need to be one of the primary participants in the MoU for those interactions to take place. The legislation provides explicitly for this co-operation between the participants to the MoU and the FCA to be covered in the MoU. That is why, as I am sure the noble Lord, Lord Davies of Oldham, will have noted, paragraph 34 of the draft memorandum sets out that the Bank and the Treasury will involve the FCA and other organisations as necessary. Again, I fully understand and respect the substantive point made by this amendment but it is dealt with through the obligation in the legislation for the co-operation. It is backed up by a paragraph in the draft MoU and that is where we believe it should rest in a way that is compatible with this greater clarity of responsibilities that we have to get into the new system.

To underline the point, the FCA does not have a significant role in the crisis management itself. It is not responsible for responding to or managing serious threats to stability—that is for the PRA and the Bank— nor for prudentially regulating firms that are likely to pose a risk to public funds; a matter for the PRA. Therefore, the FCA does not need to be a primary participant in the crisis MoU alongside the Treasury and the Bank of England. Indeed, I would suggest to the Committee that, if the FCA were included in this way, it would force the FCA to be a participant in meetings and discussions where it had no clear role.

The approach taken by the Bill is the most sensible solution. It ensures an appropriate level of FCA engagement in crisis management, without requiring the conduct regulator to get involved in aspects of crisis management where it has no remit or expertise. I would hope that, on the basis of this explanation of the rationale for the position, the noble Lord would feel able to withdraw the amendment.

[Lord Blackwell]

Before the noble Lord responds, clearly one area where the FCA has particular responsibilities are competition issues relating to the industry. Can my noble friend put on the record that, if a competition issue is raised in a crisis management situation, there will be an explicit expectation that the FCA would be involved it that?

[Lord Sassoon]

My Lords, I believe that paragraph 34 of the MoU is sufficiently widely drawn that the MoU will provide for the Bank and the Treasury to involve the FCA in that circumstance. However, we do not specify, and it would not be right to specify, the particular circumstances because the competition and other remits are made clear in the general objectives and obligations that the authorities are under. I do not believe that there is any lacuna in that respect.

[Lord Flight]

My Lords, I want briefly to support the Government’s position here. I am one of the few people still around who participated in the lifeboat back in 1974 in the wake of the secondary banking crisis then. Although I felt that the Bank of England had been less than perfect in allowing that crisis to develop, the way in which it handled it was first class. It did not cost the taxpayer a penny and the lifeboat got to grips and sorted out the various banks that were, in essence, bust.

The fears that I expressed in the other place at the time of the FiSMA about the tripartite agreement were exactly what transpired. The three parties failed to reach agreement, as I think is now widely recognised and known, and it is a miracle that the banking system did not actually collapse because it was dangerously close to doing so. In a banking crisis which is not about, if you like, conduct and how customers are treated, but for whatever reason is about the potential pack of cards implosion of the banking system, it is crucial that it is the banking regulator entity—in essence the Bank of England in consultation with the Chancellor of the Exchequer of the day—that has clear authority to get on and take the necessary measures promptly.

[Lord Davies of Oldham]

My Lords, I am not sure that we are disputing that last point. We are arguing that there may be a crisis in which the contribution of the FCA would be of considerable importance. Perhaps the Minister will answer this point for the clarification of the Committee and all those interested in this matter. We are not quite clear why the other regulator, the PRA, operates in a different fashion from the FCA with regard to the consultation on the memorandum. I should like the noble Lord at least to identify that factor.

[Lord Sassoon]

I am not quite sure I have understood what clarification the noble Lord is asking for. The simple fact is that we are talking about a memorandum to do with crisis management. Crisis management is to be led by the Bank of England under the clear responsibilities that we have in this framework and therefore the memorandum is focused entirely on matters where the responsibility lies between the Bank and the Treasury in so far as public money is at risk. We are talking about matters where essentially the FCA is an ancillary party because dealing with crisis management is not the FCA’s principal role. It has a lot of other responsibilities in the new system, but crisis management is not one of them. That entirely drives the logic behind who is and who is not party to the MoU. I do not know whether that helps the noble Lord.

[Lord Davies of Oldham]

The Minister is always helpful, if not always totally convincing. We shall think further about this matter and the answers he has given today. For the time being, I beg leave to withdraw the amendment.

Amendment 190ZEA withdrawn.

Amendment 190ZEB

Moved by

[Lord Davies of Oldham]

190ZEB: Clause 61, page 137, line 38, at end insert “which must include risks which significantly impact upon the safety and soundness of PRA-authorised persons, or which put at risk relevant markets functioning well”

[Lord Davies of Oldham]

My Lords, again I apologise to the Committee that this amendment is also a casualty of the fact that we ought to have tabled and discussed it the other evening in the context of Clause 54, but in fact we failed to do so. I would therefore ask the Committee to show a degree of patience and bear in mind the content of Clause 54 which, as the Minister has already identified, is absolutely critical to this part of the Bill. We want to make our argument as it relates to Clause 61 because that is where the amendment is actually located. However, Clause 54, which sets out the circumstances under which a decision is made to notify the Treasury about the need for financial assistance to address a risk to public funds, is the background to the amendment.

The amendment seeks to arrive at a clearer definition of what “material risk” means. We have already had one shot at this issue today and I think we made a modicum of progress, but as my noble friend Lord Peston indicated, if we are not careful we might become engaged in a somewhat philosophical debate about the definition of risk. However, the term “material risk” appears in the Bill and therefore we ought to be as clear as we possibly can about what the term means. In the context of the memorandum of understanding, this amendment states that the memorandum needs to make provision for what the Bank and the Treasury regard as material risk. The amendment requires the definition to include risks that significantly impact on the safety and soundness of PRA-authorised persons and factors that put at risk relevant markets functioning well.

These are specifically and deliberately definitions which directly refer to the roles and objectives of the PRA and the FCA respectively. This is because the Opposition argue that the Bill and the draft memorandum are too vague about the role of the FCA and PRA in circumstances of material risk to public funds. I do not think that our discussion earlier this afternoon cleared this matter up. That is why we are once again giving the Minister the opportunity of being clearer about the matter, perhaps. We want to ensure that the Bank—the governor—will involve the FCA and PRA in these matters. The importance of defining material risk, and concerns that the Bill currently falls short on this, was raised by the committee convened to look at the draft legislation. That pre-legislative committee argued that it should be subject to parliamentary approval and should not be left to the memorandum of understanding.

We have parliamentary colleagues who have a real anxiety about this matter. I do not think that the discussions we have had thus far this afternoon allay all those anxieties. However, the Minister may be able to have a better shot at it a second time. I beg to move.

[Lord Sassoon]

Well, I will have another shot at it, but I do not suppose the schoolmaster opposite will necessarily mark me any better, however well I do. I am under no illusions. Nevertheless, I take this amendment suitably seriously. I will go through the arguments in the expectation that perhaps all will become clear and I will get an alpha plus for this one.

Amendment 190ZEB would link the threshold of the “public funds notification” detailed in Clause 54 to risks that could significantly impact the safety and soundness of PRA-authorised persons or undermine the orderly operation of financial markets.

This amendment would make the public funds trigger confusing, and less, rather than more, effective. I should explain why. The phrase “public funds notification” set out in Clause 54, which is a notification that public funds could be at risk, is precisely that. It is not a notification that there are circumstances in the financial sector that threaten the PRA or FCA’s objective.

The PRA will be responsible for prudential regulation of a large number of small deposit-takers and insurers, many of which can and do fail without any risk to public funds. Requiring the Bank to make a formal notification to the Treasury under Clause 54 every time and any time any of these institutions got into trouble could lead to a relatively large number of notifications where there was in fact no risk to public funds.

Similarly, adding a reference to the FCA’s objective to the definition of material risk in this way would broaden the grounds on which the duty to notify would be triggered to risks which do not involve public money. It would mean that the notification under Clause 54 was not in fact a public funds notification at all. Crucially, this would mean that the Treasury’s power of direction in Clause 57, which is available where there is a live public funds notification, would be available when there is no risk to public funds. I do not know whether that is what was intended here but I hope that the noble Lord would agree that that is not what should be achieved. This matters because decisions to use public funds to resolve a financial crisis are for the Government to take, usually the Chancellor personally. As such, the purpose of Clause 54 is to ensure that the Treasury is always informed when there is a material risk to public funds, and not for other, wider purposes.

17:00

The noble Lord is nodding, which is encouraging. I shall carry on. This does not apply in the same way to problems in the financial sector that do not affect public funds. These matters are the responsibility of the regulators and the Bank of England, not the Treasury. As we discussed in the debate on early warning mechanisms for the notification, the trigger is already wide, with a low threshold: if there is any doubt that public funds may be at risk, the Bank must notify the Treasury.

Of course, there are all sorts of other publication mechanisms for all sorts of other matters, which we have discussed, but here we are talking about a very deliberately targeted issue to do with public funds and a trigger mechanism that relates to that issue, and we do not want to confuse it with other types of notification, which this amendment risks doing.

In conclusion, of course the FCA and PRA should keep the Treasury informed when they are managing significant issues that are of wider public interest but do not impact on public funds, not least because it is Treasury Ministers who will need to explain these issues to Parliament where necessary. This type of communication already goes on routinely between the Treasury and the FSA, on matters such as PPI mis-selling or bank charges. There are provisions in Part 5 of the Bill, which we will be discussing in Committee next week, to ensure that the Treasury and indeed Parliament are informed where there has been potential regulatory failure. However, these are very different matters from the formal notification that public funds may be at risk, which is the sole purpose of Clause 54.

It is quite right that we tease out these issues. If the noble Lord feels that there are gaps in Part 5, I am sure that he will raise them in debate next week and I look forward to that. For the moment, I can assure the noble Lord, Lord Davies of Oldham, and the Committee that the provisions in the Bill as drafted have this direct link between the warning mechanism and the public funds power of the Treasury, with a bar that we believe is sufficiently low, and that we should not risk confusion with the much wider trigger mechanism that Amendment 190ZEB would introduce.

I hope on that basis that at the very least the noble Lord will consider withdrawing his amendment, even if he does not give me an alpha plus for my further explanations.

[Lord Davies of Oldham]

My Lords, it is almost half a century since I was a schoolmaster so I have forgotten what alpha plus means. I cannot remember ever offering one to a student. I might have done to undergraduates later but certainly not in school.

However, I am not going to grade the Minister. I would not want to flatter him too much. After all, he derives enormous satisfaction from these interesting debates and I do not think that I should add to his sense of self-satisfaction at this stage by marking his last effort. Where I was nodding is obvious enough. Of course I agreed with the Minister when he was emphasising that what we are concerned about with the warning mechanism is where public funds might be engaged. That is the nature of Clause 54 and our amendments with regard to Clause 61 also take that very much into account.

I am grateful to the Minister for his commendable contribution today, which I very much enjoyed and I hope the rest of the Committee did. Like him, I am looking forward to our engagement next week on Part 5. As he predicted, he has not heard the end of this matter, although I beg leave to withdraw the amendment.

Amendment 190ZEB withdrawn.

Amendments 190ZEC and 190ZED not moved.

Amendment 190ZEE

Moved by

[Lord Tunnicliffe]

190ZEE: Clause 61, page 138, line 2, at end insert “, and how a temporary Stability Committee would be convened and function in a crisis”

[Lord Tunnicliffe]

My Lords, I shall refer to the memorandum of understanding, particularly paragraph 20. I am mindful that people reading Hansard may wonder which memorandum of understanding it is and where it is. It is Annexe E to A New Approach to Financial Regulation: Securing Stability, Protecting Consumers, Cm 8268, from January 2012.

Paragraph 20 of that document states:

“During a potentially fast-moving crisis, it will become especially important to ensure close and effective coordination so as to maintain coherence in the overall crisis management process. At the heart of institutional coordination during a live crisis will be frequent contact between the Chancellor and the Governor. However, the Chancellor and the Governor may agree to establish ad hoc or standing committees at other levels to support this process”.

That is fine as far as it goes. Our amendment seeks to require in the MoU more detail of how a temporary stability committee—as we have called it but we do not mind what the Government call it—would be convened and how it would function in a crisis. We are essentially saying that we would like a commitment in the Bill to emergency preparedness—to planning how the crisis might be handled.

I have a very strong relationship with the concept of emergency preparedness. It has been part of my whole professional life. My first job was as an airline pilot—third class; I struggled up to second class. We spent our time hurtling down runways with engines on fire and so on and coping with it—not for real, I hasten to add, or there would be piles of burning metal all over the place, but in simulators. It was a crucial part of our role. The public who use those services have every right to expect that people in that critical position spent a great deal of time preparing for emergency.

The next phase of my career in which this was particularly important was when I was managing director of London Underground Ltd. A year before I came into that office we had 31 people at Kings Cross. We got more or less everything wrong that could possibly have been got wrong. Emergency preparedness was part of the series of errors. If we had had good emergency preparedness processes and all other things had gone wrong, in probability nobody would have died. Later in my career I was chairman of the United Kingdom Atomic Energy Authority, which has the potential of course to release radioactivity into the atmosphere and we took the whole issue of emergency preparedness right up to what the role of the non-executive chairman would be in such circumstances.

In the airline business, London Underground and UKAEA, we had the potential to kill tens or hundreds of people—in LU, it was thousands of people. I am happy to reassure anyone reading this debate that we engineered out the scenario that involved thousands of people and London is much more secure for that. Nevertheless, they were grave and important consequences and we took them very seriously. Yet the damage that we could cause through our failure in that mode pales into insignificance compared with the pain the country is suffering in this double-dip recession.

I do not want to go into the causes of where we are today. There is not the slightest chance of the Minister and I having any serious common ground in such a debate. Despite the time we have in front of us this afternoon, it would be rather fruitless to start such a discussion. Yet I do not believe that we would disagree that the banking crisis made a significant contribution. We might argue over what came first or so on, but if the banking system had remained stable through the circumstances as they developed in the last part of the previous decade and the first part of this one, we would be in a much better position. A banking crisis does absolutely enormous damage to an economy—and to the world economy—and needs to be prevented, avoided or handled at all costs.

This amendment invites the Government to set out, at least in terms of duties or some such way, how they do the necessary emergency preparedness for such a crisis. For anybody who has been through a crisis—I have been through some modest ones in my professional career—there is absolutely no question that the extent of emergency preparedness has a significant impact on the ability to handle that crisis. Knowing who to talk to, who to bring together for skills and how to communicate with appropriate external agencies, and the effort put into developing scenarios and looking at the various tools that can be addressed by them, is massively repaid in those scenarios happening.

In my previous professions, very serious scenarios were very improbable. Very serious scenarios in the banking world have proved all too probable. They really happen and cause enormous damage. This amendment seeks to encourage the Government to set out what planning they are doing, how they would convene the committee envisaged in paragraph 20, what functions it would have and how it would involve the main players. In our experience, you have to have the top players involved. I am sure that, for instance, in contemplating a possible unfavourable military situation in the Middle East, the Prime Minister spends part of his time working through how the Government would respond to that and how the process of debate, analysis and so on would take place. I put to the Committee that exactly those sorts of capabilities ought to exist within Government for a possible future banking crisis. I am reasonably confident that they are in place. As a minimum, I hope the Minister can outline what preparedness is envisaged. I ask him to accept the amendment, which would require him to set out that preparedness in a memorandum of understanding. I beg to move.

17:15

[Lord Newby]

My Lords, we have stated many times during this debate that the Government place great importance on effective co-ordination between the relevant authorities. We accept that this will be particularly important with regard to crisis management. That is why the Bill places a legal duty on the Treasury, the Bank and the PRA to co-ordinate their functions, and requires that they prepare a memorandum of understanding setting out how they intend to co-ordinate in a crisis management situation.

Obviously in such a situation the Treasury, Bank and PRA will need to be in regular contact. These events are often by their nature fast-moving or take place outside office hours. The protocols in place for ensuring co-ordination need to be flexible to accommodate this uncertainty. A committee is not necessarily the most appropriate way to deal with every crisis. For example, setting up a formal committee for a crisis event that lasts the duration of a weekend would be overly bureaucratic and cumbersome if the event required a particularly swift and flexible response.

These crises require that. They require frequent and immediate contact between Ministers and senior officials at the Treasury and senior executives at the Bank of England. Each financial crisis situation is different, and sometimes the circumstances will mean that a formal committee process would not be appropriate. If you look at three events which have either been, or had the potential to trigger, a financial crisis, without going into the details you can see how greatly they differ. There was for example BCCI, which was referred to earlier. There were the concerns in the immediate aftermath of the 7/7 bombings. There was the RBS crisis. These happened at different times of the day and at different points in the week. Some were put to one side relatively quickly while others have had long-term consequences. In those circumstances, it is difficult to imagine how you could set out in a memorandum of understanding either how a committee might be formed—we do not think that you always need one—or, if one is formed, how it will be convened and would function.

The memorandum of understanding is currently 39 paragraphs long. I do not know whether, when the noble Lord, Lord Tunnicliffe, was doing his training on the plane or when he was at London Underground, they had instruction manuals and crisis manuals. From working in humble PR, I recall that crisis management plans there ran to page after page. An MoU would not be the right place for these plans. This is not to say that the authorities do not plan. I can reassure the noble Lord that the authorities now have regular war games to prepare for a range of financial crises and participate in a range of cross-governmental operational crisis war games. This is to try to make sure that when a crisis explodes its participants have some preparedness for how they can respond.

That is different from saying that you need a committee in every case, even though we have said in the memorandum that in some cases you might. Certainly it is different from saying that in a memorandum of this scope and length you could set out how a committee could be convened and function. I hope that the noble Lord will be reassured that officials are spending quite a lot of time in crisis management planning and that that is the appropriate way of making sure that we are ready to deal with a crisis, rather than having the formal structure that his amendment would require.

[Lord Tunnicliffe]

My Lords, I thank the noble Lord for his response. I am reassured to a degree about the issues. We are not likely to press this further. The Committee might be reassured if he could flesh out some stronger sense of the preparedness and if he could write us a note that sets out the levels at which people are involved. I am not asking him to make a commitment now. He does not have to do anything as dangerous as that.

The thoughtfulness that has gone into the pre-crisis preparation is crucial. So many organisations fail to do it properly. British Petroleum successfully wrote off something like a quarter of its value through not having an adequate level of preparedness. In the defence sphere, for instance, the committee systems within government for national security and so on are documented as part of the strategic defence plan. Anything the Minister can do to add to our understanding of the depth and height of this preparedness and who is involved would be reassuring. With that request, I beg leave to withdraw the amendment.

Amendment 190ZEE withdrawn.

Amendment 190ZEF

Moved by

[Lord Davies of Oldham]

190ZEF: Clause 61, page 138, line 6, at end insert “, and ensure that the Governor and all Bank of England Deputy Governors and the Chief Executive of the FCA may consult with the Treasury directly”

[Lord Davies of Oldham]

This amendment furthers the points that my noble friend and I have already made this afternoon about widening the range of individuals who should be in a position to contribute their knowledge, experience and advice to a crisis management scenario. We remain concerned that the Government have narrowed the point of action in crisis management. I listened very carefully to what the Minister said about the advantages of that narrowness and fully understand it, but I am still unconvinced that the Government have the Bill right about who should contribute fully to the management of what we all recognise is an issue of very great significance to the nation.

The memorandum of understanding on crisis management must, according to the Bill, make provision about obtaining and sharing information. This amendment seeks to facilitate this requirement and enhance the Bill. We need to ensure that certain key personnel can consult directly with the Treasury. The amendment develops our clearly argued concern that reference in the legislation to “the Bank” is too often taken to mean, or certainly risks being interpreted and acted on as meaning, simply the governor. We argue that the Bank’s deputy governors and the chief executive of the FCA should in the Bill be explicitly enabled to consult directly with the Treasury in such extreme circumstances.

We are worried about the concentration of power and feel that relevant alternative voices must be given the opportunity to be heard in the management of an issue of such great concern for the nation. This is particularly important if there proves to be a difference of opinion within the Bank. We know there are differences of opinion in the Bank on very important matters. One would expect that highly capable individuals with different experience would not always reach an identical opinion. If they did, they would not deserve the high position they occupy because they would be merely yes men or, in one or two cases, yes women.

Under the current formulation of financial regulation, the Chancellor can hear directly from the chairperson of the FSA. Under the new system and the memorandum of understanding, the Chancellor could hear from no one but the governor.

In the other place, the Minister said, “Well, of course, the Bank encompasses a range of people”. We are not convinced about that. We do not feel that the position is explicit enough. It does not address the point about including the FCA in the vital process of obtaining and sharing information. Nor does it indicate that, at a moment of great crisis for the nation, voices which might present a somewhat different view from that of the governor will have their position adequately reflected to the Chancellor. In every other aspect of the role that the Chancellor plays, he welcomes engaging with the opinions of a large section of the population, represented by Parliament. We are talking about crisis management here. It is an extremely important dimension. We all recognise the constraints; I am not sure that it is right that the legislation should so circumscribe those who advise the Chancellor. I beg to move.

[Lord Sassoon]

My Lords, the arguments represented by the amendment have been raised at virtually every stage of this Bill’s progress in both this House and another place. Indeed, my honourable friend the former Financial Secretary speculated that it seemed to reflect the Opposition’s obsession with dominant figures preventing any dissent emerging from within an organisation. That is probably more a reflection of where those concerns are coming from than anything to do with how the Bank of England operates. This is an extraordinary line with which the Opposition persist. I start by repeating what the Government have said on every previous occasion when this point was made. I agree entirely that frequent communication between Treasury Ministers and the senior executives of the central bank and financial regulators is important. However, there is absolutely no need to legislate to ensure that the deputy governors of the Bank and the chief executive of the FCA can speak directly to the Treasury. There is categorically nothing prohibiting that in the legislation or anywhere else. In fact, Treasury Ministers regularly meet the current deputy governor for financial stability and senior executives in the FSA. Senior Treasury officials maintain a virtually constant dialogue with the deputy governors and senior FSA figures via meetings, phone calls and e-mail. The same was true under the previous Government. I was a senior Treasury official in this area for three years. There were many things that did not work well under the previous regime—that is why we are changing it—but I know perfectly well from experience over a long period that official contact with deputy governors works extremely well. I see no reason why that should change in future. It has existed over a considerable number of years and is just a natural part of the way the system operates.

In a financial crisis where public funds were at risk, if one of the deputy governors or the CEO of the FCA felt that there was something that the Treasury should know about, they would of course be able to speak to the Treasury directly. They are senior figures who are well aware of their responsibilities and quite used to making their feelings felt. In the case of the deputy governors, as well as the CEO of the FSA and the future FCA, they will be in front of the Treasury Select Committee. It is extraordinary to suggest in some way that legislation should be required to allow those senior figures in the system to make their views clear, as they have always done in the past.

However, when it comes to the statutory duty to notify the Chancellor formally of a risk to public funds, this responsibility is rightly given to the Bank of England as an institution. In practice, I would expect that in most cases a notification would be made by the governor personally to the Chancellor, but there is no reason why one of the deputy governors cannot send it on behalf of the Bank. The key thing is that it must be a decision of the Bank. As the Government have made clear on multiple occasions, the Bank must come to a view internally about the best way to fulfil the duties and responsibilities that are placed on it, including the duty to notify the Chancellor of risks to public funds.

On the basis of that further explanation of the position, I ask the noble Lord to withdraw Amendment 190ZEF.

[Lord Davies of Oldham]

I am grateful to the noble Lord, who seems to have retaliated because of my failure to give him alpha plus last time by suggesting that I am guilty of excessive plagiarism in my arguments this time. If that proves to be the case, I apologise. However, I insist that he at least accepts that in tabling and speaking to these amendments we think that there is real substance to them and that the Government have a case to make in answer to them. I am grateful for the way in which he has presented that case.

17:30

I am not totally convinced. The Opposition still have great anxieties about the concentration of power in relation to what we all recognise are the most extreme circumstances in which the nation might find itself, short of armed conflict. The collapse of financial institutions and the difficulties we have all faced in recent years is a situation which we have to take every step to ensure never recurs. That is why we feel that we in the Opposition are under an obligation to test the Government in every aspect of the Bill on their understanding of how the legislation will work. I am grateful to the Minister for clarification on this occasion. I beg leave to withdraw the amendment.

Amendment 190ZEF withdrawn.

Amendments 190ZEG to 190ZEK not moved.

Amendment 190ZEL

Moved by

[Lord Tunnicliffe]

190ZEL: Clause 61, page 138, line 24, leave out subsection (7) and insert—
“(7) The memorandum is a measure prescribed by the Treasury by order which shall not be made unless a draft of the order has been laid before and approved by resolution of both Houses of Parliament.”

[Lord Tunnicliffe]

My Lords, the MoU is an important document. We believe that it is incomplete. Earlier, we suggested that it should have some additions relating to what I will call, more generally, emergency preparedness, if only to acknowledge that there should be an acknowledgement that there is a duty to do that. There is a real question mark over whether the commitment to explain material extent is fulfilled in Clause 61(2)(a). I have read the memorandum with care and I do not see in which paragraph that commitment is discharged. I should be grateful if the noble Lord could bring that out in his response. I see curiosity spreading across the faces of the Government.

[Lord Newby]

For clarification, will the noble Lord repeat which duty he is referring to?

[Lord Tunnicliffe]

Clause 61 is entitled “Memorandum of understanding: crisis management”. Clause 61(2) states:

“The memorandum must, in particular, make provision about—

(a) what the Treasury and the Bank regard as a material risk for the purposes of section 54(1)”.

We have had quite a debate about material risk but I cannot see which paragraphs of the memorandum address that duty. I should be grateful if the Government would flesh that out. I do not want to cause the Government undue problems. We would be very happy to see a letter setting that out, although a response now would be delightful. The memorandum is important. It will change because, in my view, it already has question marks over it as it stands, but also because the world will change and, as the world changes, the Government, the Bank and the Treasury will want to change the memorandum. It is crucial that Parliament is involved in such an important document.

This MoU deserves to be a formal document and it deserves to be approved by both Houses. The amendment is a standard amendment such as we find in these situations. It requires an affirmative resolution, first, to register the document and, secondly, to allow for when it might change. I cannot see why it is being resisted. The concept of an MoU is entirely sound but the document, frankly, should be more formal than it is at the moment. Its alteration in the future should be by affirmative resolution of both Houses. I beg to move.

[Lord Newby]

My Lords, I shall start by answering the noble Lord’s question as to where in the memorandum of understanding the question of material risk appears and where it is defined. The principal paragraphs dealing with this matter are paragraphs 8 to 18, but paragraphs 13 to 16 set out the matters that the Bank should take into account in determining the material risk.

The Bill does not actually say that the memorandum of understanding has to define material risk. It says that it must,

“make provision about … what the Treasury and the Bank regard as a material risk”,

which is a slightly different requirement. The paragraphs in the memorandum of understanding to which I have just referred do exactly what the Bill requires the Treasury to do.

[Lord Tunnicliffe]

Forgive me—the noble Lord was going faster than my brain. Will he repeat the paragraph numbers that cover the point?

[Lord Newby]

The whole section is headed “Notification by the Bank of a risk to public funds” and it runs from paragraph 8 to 18. It explains the background and sets out, particularly in paragraphs 13 to 16, the matters that the Bank needs to take into account in determining whether the material risk test is met.

The amendment would transform the MoU into a statutory instrument. In our view, that would severely limit the usefulness of the MoU as secondary legislation is, like primary legislation, extremely prescriptive. It sets out what must and must not be done and confers powers that have legal effect. Although we agree that clear responsibilities are important for effective crisis management, we believe that the Bill sets out the framework for this extremely clearly and the MoU then fleshes that out. That is the role of an MoU. It goes beyond what must, in all cases, be done or not done. It allows the authorities to set out what is likely to happen in given situations and why that is the case and provides an insight into the aims of the authorities involved. We do not believe that it would be possible for the MoU to fulfil this purpose effectively if it were required to be in the form of secondary legislation. That is because it is difficult to impose clear legal constraints on how a crisis is managed because of the wide variety of situations that could be considered as a crisis, each requiring bespoke handling that suits the characteristics of that particular event. Earlier I talked about the different kinds of financial crises we have had in recent years which I think exemplify that point.

It is our view that the MoU should be a living, responsive document, able to change as is needed. Requiring that it should be a piece of secondary legislation would severely curtail the authorities’ ability to change the MoU as circumstances change. As things stand, the MoU can be changed within a matter of days. That requires no huge amount of legal input because it is a working document about how to handle a crisis. That is very different from dealing with a statutory instrument which goes through a different formal process. It would be difficult to deal with a statutory instrument when the House is not sitting and that would be inappropriate.

The Bill already provides for the MoU to be laid before Parliament. It will then be open to scrutiny. The Treasury Select Committee will be able to scrutinise it, as will the Economic Affairs Committee in this House if it decides to do so. In my view, that is the best way to get parliamentary input rather than through an overprescriptive and inappropriate statutory instrument. In view of those arguments, I hope that the noble Lord will withdraw his amendment.

[Lord Tunnicliffe]

My Lords, my experience is that statutory instruments do not have to be that inflexible. Statutory instruments that have to have early effect can be laid and come into effect immediately, if that is appropriate. However, they do require formal scrutiny by Parliament. I have not won many points today and I am not going to win this one. I beg leave to withdraw the amendment.

Amendment 190ZEL withdrawn.

Clause 61 agreed.

Clause 62: Memorandum of understanding: international organisations

Amendment 190A

Moved by

[Lord Flight]

190A: Clause 62, page 139, line 24, at end insert—
“( ) The memorandum must make provision for the UK authorities to consult with the financial services industry and, where appropriate, consumers on initiatives brought forward by the European Supervisory Authorities, the EU institutions and other international organisations.”

[Lord Flight]

My Lords, as everyone will be aware, Clause 62 concerns the MoUs among the Treasury, the Bank of England, the FCA and the PRA and how they intend to co-ordinate their respective functions as they relate to their relations with the various European supervisory authorities, the EU itself and other international organisations. It is perhaps implicit that in order to handle such relations effectively, they should naturally consult the industry and even consumers. However, Clause 62 does not prescribe that that should be the case. As this legislation is generally fully prescriptive, it certainly seems to me that it is at least worth discussing that in arriving at the MoUs there should be consultation. My amendment simply requires that provision is made for the UK authorities to consult thus.

17:45

I also make the wider point that there has almost been a sort of global excess regulatory reaction to the banking crisis. We have the ESMA at a European level; we have the European Banking Authority, which, under the present EU proposals, would have powers to have the last say with regard to banking regulation in this country; and we have international regulatory authorities. All of those bodies effectively are saying what should be done without very much accountability. Therefore, at least to avoid mistakes, it is important for the UK entities to have consulted very fully with the relevant parts of the financial services industry. I pay tribute to the fact that in the main that has happened in practice and that by and large the UK representatives in Brussels seem to have done a pretty good job of looking after UK interests. Nevertheless, as prescriptive legislation is the fashion of the day, I think that there is a strong case for this Bill to prescribe for such consultation.

[Lord Northbrook]

My Lords, I rise to support my noble friend Lord Flight in his Amendment 190A. As far as I can see, Clause 62 currently contains no reference to consulting the financial services industry or, where appropriate, consumers in this area. I think that the clause should be amended to this effect as it is a useful and important potential extra area of consultation.

[Lord Sharkey]

My Lords, my noble friend Lord Flight seeks to amend Clause 62(6). The paragraph states that the MoU that we are discussing,

“need not make provision about co-ordination between the FCA and the PRA in relation to membership of, or relations with, the European Supervisory Authorities”.

However, subsection (1) of the same clause states:

“The Treasury, the Bank of England, the FCA and the PRA … must”—

I emphasise “must”—

“prepare … a memorandum describing how they intend to co-ordinate the exercise of their relevant functions so far as they relate to membership of, or relations with, the European Supervisory Authorities”,

and some others. On the face of it, these two paragraphs appear to directly contradict each other. I am sure that that is not actually the case, but I would be very grateful if my noble friend the Minister could explain why there is no contradiction here and perhaps also explain the purpose of subsection (6).

[Lord Davies of Oldham]

My Lords, I rise briefly to say that it gives me considerable and indeed a rare pleasure to agree with the noble Lord, Lord Flight, and we support his amendment.

[Lord Newby]

My Lords, what we are talking about here is how we make sure that all those who should be consulted are consulted in respect of the work of the European supervisory authorities, the EU institutions and other international organisations. We are talking about the international dimension of the work of the financial services authorities as opposed to the domestic work that we have been looking at up to now.

We agree absolutely that consultation is an important part of the formulation of policy at the international level as well as the domestic level. It is perhaps worth starting by saying a bit about the way in which the international bodies themselves have sought to consult. The EU, following the Lamfalussy report in 2001, has increasingly appointed expert groups comprising industry, academics and consumers as the first stage of formulating policy. The UK has provided many distinguished members of those working groups. For example, the Commission set up a financial services user group, whose members included Mick McAteer, who was a founder director of the Financial Inclusion Centre, and Robin Jarvis, professor of accounting and head of SME affairs at Brunel University. We have therefore had strong UK representation on those European bodies for a long time.

One of the other main pillars of the international regulatory framework is of course the Basel Committee on Banking Supervision. It has consulted widely on its proposals for Basel III, and the Financial Stability Board’s charter clearly states:

“In the development of the FSB’s medium- and long-term strategic plans, principles, standards and guidance, the FSB should consult widely amongst its Members and with other stakeholders including private sector and non-member authorities”.

So at the international level, there has been growing recognition that the board itself needs to consult, and in many ways that will be the most effective level of consultation in respect of provisions that the board is making.

National regulators also have an important role to play in the consultation and feed their views through to the European supervisory authorities. The FSA already takes that responsibility extremely seriously, and the PRA and the FCA plan to do the same.

The regulators will be required to consult on any proposed new rules that are required to implement EU or international regulatory initiatives, except in cases of urgency. The FSA already does that. For example, in July this year, the FSA published a consultation asking for views on how to transpose Solvency II into the UK rulebook. In addition, the FCA and PRA’s contributions to international policymaking processes will be informed by engagement on an ongoing basis with the industry and other relevant bodies. That means that the views of affected parties will be considered at all stages of the policymaking process.

The UK practice has been a mixture of formal and informal consultation, which has meant that the regulatory bodies—the FSA and the Treasury—when going into negotiations in Brussels or at Basel, have taken a lot of trouble to gauge the views of the UK financial services sector and have sought to reflect them effectively. I may be wrong, but I think that the sector feels that that is the case.

Regarding the question asked about why the MoU does not deal with PRA-FCA co-ordination with the ERAs, the PRA-FCA memorandum of understanding is covered in new Section 3E(3)(a) on page 31 of the Bill. I am afraid that I cannot read that out at the moment, but I refer noble Lords to it.

My noble friend Lord Sharkey asked an extremely good question but, as I have explained regarding the way that the authorities are approaching co-ordination, even though not every last detail will be set out in a memorandum of understanding—and some clearly are—the authorities plan to take consultation extremely seriously. Apart from anything else, they have learnt through harsh experience that unless they have done that and are able to carry the industry with them, it just stores up more problems for the future.

I am convinced that the culture of the regulators is that they consult widely with relevant stakeholders and will continue to do that, and that it is not necessary to have an explicit provision in the Bill to ensure that that continues well into the future.

[Lord Flight]

My Lords, I made the point that it had worked pretty well so far. However, we are dealing with new regulatory bodies being set up, and I just repeat the point that this Bill is pretty prescriptive in what it requires. I have, I regret to say, encountered some criticism that the FSA has not gauged the views and criticisms of the different bits of the industry adequately with regard to MiFID 2. We have some MiFID 2 proposals from the EU that are likely to be wholly unworkable and could be very damaging to this country by penalising trading between a London-based party and an overseas party. Although the record is pretty good, it is a little disappointing that on an important recent matter I found criticism of the consultation.

I cannot see why we should not put it in the Bill rather than just relying on it happening automatically. It is not a very great issue, but perhaps the Government might think a little further about this. I do not think it is an onerous requirement. In the mean time, I have raised the issue and beg leave to withdraw the amendment.

Amendment 190A withdrawn.

Clause 62 agreed.

17:58

House resumed.

Sitting suspended.

Young Offenders: Employment and Training

Wednesday 17th October 2012 Lords Chamber

Question for Short Debate

18:05

Tabled By

[Baroness Healy of Primrose Hill]

To ask Her Majesty’s Government what measures they have in place to help young offenders find employment or training on release from prison.

[Baroness Healy of Primrose Hill]

My Lords, I thank the Government for granting this short debate, and I am grateful to the many organisations, including the Library, which offered briefings on young offenders and their opportunities for employment and training on release. I am concerned about the level of reoffending among young people. Most reoffending on release occurs in the first three months, so questions must be asked about the effectiveness of these prison sentences. Can we as a society find a better way for these young men and women to lead a more fulfilling and productive life?

It is believed that the total cost to the UK economy of offending by young people could be as much as £11 billion a year. This is a bad time to be young, with 22% of young adults not in education, employment or training, and just under 1 million 16 to 24 year-olds unemployed. The abolition of the education maintenance allowance, increased tuition fees, cuts to services and further caps to housing and other benefits are creating a hostile climate for our young people.

For young adult offenders, finding long-term, stable employment is an even greater challenge. Young adults in trouble with the law often have particularly high levels of complex needs and come from deeply disadvantaged backgrounds. Frequently they have few or no educational qualifications and no experience of work. Often they lack positive adult role models and suffer high levels of mental ill health and alcohol and drug misuse. This month Sadiq Khan said that a future priority for a Labour Government would be to give the Justice Minister specific responsibility for rooting out mental health problems in our criminal justice system.

In order to reduce reoffending, we must understand the underlying conditions that affect so many young people before we can find solutions that offer hope. Statistics reveal the stark reality of lives lived against the odds. Of young offenders imprisoned in 2012, two-thirds were unemployed, nine out of 10 had been excluded from school, one-quarter had learning difficulties and half had a reading age below that expected of an 11 year-old.

Once released, the picture does not improve. According to the Barrow Cadbury Trust’s Young Adult Manifesto, published in 2009 and developed by T2A, the Transition to Adulthood Alliance, one in five men between the ages of 15 and 21 leaving prison did not know where they were going to live on release. Many of those will have been in care. Black and minority ethnic young adults experienced even higher levels of homelessness and were less likely to have a family or support system to return to.

Unstable accommodation triggers a vicious cycle, severely hindering former prisoners from finding employment. It is believed that around a quarter of employers would not consider employing a homeless person. The Inquiry into the Future for Lifelong Learning organisation points out that difficulties in finding accommodation on release reduce the opportunities for training, education and employment. It suggested that ex-offenders need to find accommodation and employment or training within three weeks of release or they are likely to reoffend.

At the end of June 2012 there were 7,443 young people aged 18 to 20 in prison in England and Wales. Although there has been a welcome steady decline in the number of young people in custody in the past decade, thanks in part to the work of the Youth Justice Board, there are still far too many. Greater use of restorative justice should be examined. What works best to reduce reoffending? T2A has run three pilot projects in Birmingham, London and West Mercia with 36 young offenders. Funded by the Barrow Cadbury Trust, they show very positive results, and the Government should take note. T2A argues that the transition to adulthood is happening later in people’s lives than in recent generations. Research has shown that the adult brain is not fully developed until at least the mid-20s, yet these young adults with complex problems often have to negotiate multiple transitions between services and systems when they reach 18. They can easily fall between the gaps and lose the support that might have helped them make a smooth transition to adulthood.

Young adults aged between 16 and 24 are the group most likely to commit a criminal offence, but with the right intervention and support they are also the group most likely to desist from offending and grow out of crime. Therefore T2A argues that the focus for public expenditure should be on encouraging desistance by concentrating on the factors which are known to reduce crime; namely, employment, housing and health. The pilots gave the young people individual support, resulting in a reduction in the six-month reconviction rate to 9%, compared with the national one-year reconviction rate for 18 to 20 year-olds of 46%. Those participating in the pilots experienced a trebling in employment and were more positive about apprenticeships and courses with a vocational and training element, rather than purely educational courses. The London pilot was particularly effective in finding its clients sustainable apprenticeships. However, accommodation remained a problem. The majority of those who were homeless to begin with did not move into stable accommodation.

The need for assistance with accommodation on release is confirmed in numerous reports. An HM Inspectorate of Prisons report on looked-after children found that a significant number of children and young people had not obtained early release because they had nowhere safe to be released to. HMIP also reported that one-quarter of boys and more than half of girls had been in the care of social services before entering custody.

I am very concerned by the Government’s proposals to deny young people aged under 25 housing benefit. It will mean that many young offenders who do not have families to return to, and who desperately need to find a job or training to help them desist from returning to crime, will be without any kind of home from which to go out and find work, training or education.

In attempting to find solutions to the problem of young people reoffending, the Howard League for Penal Reform argues that the current system sets children and young people up to fail. The league strongly argues that young people should spend much less time in isolation in their cells while in prison and must have increased and more purposeful activities during association and at weekends. This would make a real difference in preparing them for release and the possibilities of taking up employment, training or education.

There appears to be general agreement about what needs to be done. The Government’s Green Paper of December 2010, Breaking the Cycle, recognised that custody should be,

“used sparingly as a last resort as it separates young people from their families and communities, can seriously disrupt education, training and development and is an expensive option that does not deliver good outcomes for young people”.

Therefore, will the Government consider taking a number of steps which would not necessarily increase spending but would make outcomes more effective?

First, they could issue guidance to local authorities to link up with crime-reduction partnerships and the new police and crime commissioners to ensure those young people just released have access to appropriate accommodation.

Secondly, will they encourage local authorities to develop wrap-around support for young adults leaving custody, as recommended by the government-appointed panel which published the After the Riots report?

Thirdly, in partnership with voluntary and probation teams, the Government could develop greater use of “through the gate” support. Mentors can provide the role of a significant adult and enable the young person to stick to their tenancy agreement, training programme or supervision. Young people must not be left to sink or swim on release.

Fourthly, the Government should ensure that planning for resettlement should start from the moment a person enters custody, and include the young person and their families. Those who received visits from their family were twice as likely to gain employment and three times more likely to have accommodation on release.

Fifthly, they could incentivise employers to employ ex-offenders. A good example is the National Grid’s young offender programme of apprenticeships for those still serving sentences, which then guarantees jobs on release. This has resulted in reducing the reoffending rate to below 6%, as compared to the national average of 70%, and is estimated to save the UK taxpayer more than £350 million.

Sixthly, the Government could consider some special financial assistance for these young people to help them through FE colleges and access courses.

Finally, they should reconsider the abolition of housing benefit for those aged under 25. Securing appropriate accommodation on release has been shown to be vital for obtaining employment and therefore preventing reoffending. The Government need to support voluntary bodies, local authorities and employers to give these young people a fresh start for their sake and that of society, and to cut crime and save taxpayers’ money in these austere times.

It is incumbent on all in public life to try to solve this problem of young reoffending. There is growing agreement both here and abroad that access to employment and training, education and housing, health services and help with recovering from substance abuse are all part of the package needed to give young people a second chance on release.

18:15

[Lord Bates]

My Lords, it is a privilege to follow the noble Baroness. On behalf of all who will take part in this debate, I thank her for securing this time for this very important issue to be aired and discussed. I also thank her for the way in which she introduced the debate, which was very even-handed and fair, and reflected the fact that this is not a situation that developed in May 2010 but is something that all Governments have been wrestling with for many years, and needs to be approached as such.

There are a number of speakers who I am looking forward to hearing, particularly my noble friend Lady Stedman-Scott, who, through her wonderful organisation, Tomorrow’s People, has shown how even the most hard-to-reach young people can be picked up, have a future and a job, and work their way out of the problems they have found themselves in early in life. My own contribution comes through growing up on Tyneside, being involved in a church youth group and meeting lots of young people and seeing the problems that they encountered at that time; then through a long involvement in secondary education, and also having visited many young offender institutions, particularly in the north-east of England.

I want to put down one marker before moving on to some of the suggestions and analysis. There is nothing intrinsically different about the young people who enter the criminal justice system. They could be any child—and anyone’s child—but for the environment in which they spend their formative years and the choices that they make. I have no doubt that had a young offender had the good fortune to be born into a home where they were loved and affirmed by their mother and father, had attended one of our outstanding public schools, where expectations of life success were set at a very high level and where they mixed with similarly motivated and secure students, their life choices would have been different, their peer group very different and the outcomes profoundly different. In short, for better or worse, we are all the products of our environment but also of the personal choices that we make in responding to the circumstances in which we find ourselves.

We live in a very unforgiving world. That may seem like a strange thing to say at a time when we are supposed to all be very liberal, but in many ways it is a very dismissive world and culture, in which people are written off, whether they are young people or people in senior positions in public life or sport. It is far too easy for people to be caricatured and written off as problems, particularly in the media. Therefore, it is very important to see these young people as having the same potential and gifts of any young people and to approach the situation in that respect.

This subject is a statistician’s dream. There are statistics everywhere, including those in the excellent briefing pack prepared for this debate by the House of Lords Library. The noble Baroness has highlighted some of those statistics. If she will forgive me, I will repeat one or two because they so clearly point out where the problem lies.

Reference has been made to the fact that 54% of males and 71% of females have no qualifications, which reflects the fact that these young people do not just arrive in the criminal justice system. They arrive there having been excluded from school, having been sent to pupil referral units and having probably been in local authority care at some stage. It is difficult enough to get a job these days when you have a degree. When you have no qualifications and a criminal record, it is challenging to make your way into the jobs market. Again, that is where the work of Tomorrow’s People is so utterly inspirational for me.

We know that often people have mental health disorders. We know—I think this is a key element—that many are involved in drug or alcohol misuse. It is a common denominator throughout. Sometimes there is a tendency to take a soft approach to this and say that people need simply to control their habits. I have visited, an initiative called the Betel Trust. These Betel places say to young offenders who have come out, “What we will do is have a contract. We will offer you a bed, we will give you a job but there is absolutely no alcohol or drugs. It is zero tolerance”. Sometimes that can be a bit harsh because it means that if there is one transgression, the person has to leave the home. However, for those who remain the success rate is quite astonishing, showing drug or alcohol misuse to be a particular cause of offending.

We know that people get drawn into the criminal justice system and therefore it behoves us to do everything we can to keep them out of it. Some 70% highlighted the fact that the major driver for crime was that their peer group consisted of criminals. If you can stop them going into that environment that would seem to be eminently sensible. The costs of this, financially and socially, are dreadful for society but I would argue that they are worse for the young people themselves. The most important thing we can do is to battle for a culture in which we allow people to make a fresh start and tell them that their future is not determined by where they started in life but that their worth is determined by where they finish.

Examples such as the competitors at the Paralympic Games show how people can overcome all manner of difficulties in their early life to achieve incredible success. They are the kind of inspirations and role models that we need. We do not need self-pity. We need to inspire these young people to realise their full potential and full worth.

18:23

[Lord Warner]

My Lords, I congratulate my noble friend on securing this important debate. I agree very much with what she said. I want to speak in more systems terms from my experience in designing Labour’s reforms of the youth justice system after 1997 and my six years as a director of social services in Kent, helping youth people in care and young offenders.

It is a sad fact that so many young people who have been in care end up in our prisons, often from a young age. Many of these young people have been failed by society and the state, in whose care they have been. Their educational attainments are often modest, with literacy and numeracy skills among the lowest in our society. Too many have addiction and mental health problems inadequately addressed by public services. They have too often experienced a pattern of being let down by adults, rejected by their families and not helped to cope with family losses. They can too easily drift into offending after homelessness, exclusion from school and a lack of the skills to compete in today’s job market. By the time they end up in custody, they often have complex needs that cannot easily be addressed by any single agency.

Labour’s youth justice reforms tried to address those needs through radical changes to the structures for handling and supporting young people under 18 at both the local and national levels. At the local level, these provided for multi-agency—that is important—youth offending teams with a single budget and easier access by team members to the services of their own agencies. At the national level was a Youth Justice Board for England and Wales, supporting and performance managing youth offending teams, purchasing custodial places and carrying out research, with a budget for driving change, including bidding for money from government departments for new schemes such as preventive measures.

I do not want to claim that everything we at the board did was wonderful. We certainly had many critics—the board still does. We would not engage in a popularity contest and we could be critical of both local and national bodies. But over a decade or so, and with the wonderful work of the YOTs, the board halved the number of young people committing their first offence and cut by a quarter the number of young people locked up. This record produced the support in this House for the Government stopping the abolition of the Youth Justice Board in the Public Bodies Act. All other groups of offenders have seen their prison populations rise over the same period, so maybe there is something in this systemic approach that we need to learn from.

I do not tell this story for vainglorious reasons but to emphasise the merits of targeting a specific group of offenders and tailoring a set of services and approaches to that group’s very specific circumstances and needs. You also have to put in place local and national mechanisms, processes and organisations, properly funded, that can deliver a complex set of service responses over time. You have to stick with the agenda, irrespective of who is in government. It takes time and effort to change offending behaviour. Short-term programmes and quick fixes do not work. They only let down young offenders and the many splendid staff who try to work with them.

Our failure has been not to apply the same logic to young offenders aged 18 to 21—preferably up to 25—that we applied to the under-18s. That does not mean the same services but the same systemic approach. Older young offenders often have similar needs to the 15-17 year-olds in the reformed youth justice system. They do not just need employment and training but levels of personal support and development to stay away from drugs, stay away from other addictions, stay away from bad company—as the noble Lord, Lord Bates, mentioned—and secure and retain the jobs and training that they need. Above all, they must have access to accommodation. Homelessness is not a basis for reforming young people who are offending.

I do not have time to map out my programme for young offenders over 18 but this Government—or any future Labour Government—need to learn from the experience of the youth justice reforms and develop the same targeted approach to young offenders over 18, dealing with their specific needs, if we are to keep more of them out of prison and help them become productive and participative members of our society. Can the Minister say what will be done specifically to meet the needs of 18-21 year-old young offenders to cut significantly the numbers of them ending up in prison?

18:28

[Baroness Linklater of Butterstone]

My Lords, we are all grateful to the noble Baroness, Lady Healy, for securing a debate on this very important subject. I am very glad to say that I joined forces with the noble Lord, Lord Warner, in rescuing the Youth Justice Board —something of which we should both be jolly proud.

The employment and training of young offenders on release is one of the most important and difficult challenges that they and we face, especially in a recession. A simple jingle goes round the criminal justice world that distils what anyone coming out of prison needs: a roof, a relationship and a job. All three are necessary and interdependent: you cannot have a job without an address; you cannot pay the rent without a job; and it is difficult to sustain a relationship without a place in which to live. Of course, these are also the three things that you are likely to lose when you go to prison.

We have heard many useful statistics already. A couple demonstrate the vulnerability of young offenders and how coping with life after release is particularly hard. A survey by the YJB and HM Inspectorate of Prisons in 2011 showed that 86% had been excluded from school and around half said that they were 14 or younger when they were last in education. Another survey shows that a total of 59% have an IQ of below 79, yet offender behaviour programmes are not generally available to offenders with an IQ below 80.

Speech and language provision is of key importance. These young people often lack essential communication skills necessary for employment, but it is still not routinely available as it should surely be. In 2010, HM Inspectorate found that too many young-adult prison establishments had high levels of unemployment and poor-quality work placements for prisoners, which did not provide the vocational qualifications that they needed. This was despite the required individual learning plans, internal assessments and National Careers Service advice. The result was that 70.6% of those first-time young offenders will go on to reoffend.

We know that the Government through NOMS are now developing a specific strategy for 18 to 24 year-olds and I look forward to hearing more from the Minister about this. It is widely recognised that there is a need for a distinct and radically different approach to young adults in the criminal justice system if things are to improve. The noble Lord, Lord Warner, also referred to this. The Youth Justice Board has developed a new youth-to-adult transitions framework that takes into account the immaturity of this group, who still need a great deal of support because they are not actual adults. Working in three areas of the country with this group since 2009—some in prison and some on community orders—the organisation T2A, which has already been referred to, has tripled its numbers in employment. Its numbers not in training, education, or employment—the NEETs—have halved. This success is because it tailors its interventions specifically to the needs of individual young adults.

The St Giles Trust similarly tailors support in its Through the Gates work, where continuity from prison to the outside world is absolutely vital. It finds housing, education, training and employment for up to 70% of its clients. All this shows what is possible. We must ensure that these appropriately delivered initiatives are widely developed for this group of offenders.

A project funded by Rethinking Crime and Punishment during five years of work, which I chaired, involved bringing local businessmen into prisons in London and Reading. Like most people they had never been near a prison before. Not only were they fascinated by what they found, but interested in employing the young men whom they met. As the noble Lord, Lord Bates, said, they were the very young men from whom they drew their staff out in the community. Our recommendation was that a dedicated business sector co-ordinator should be employed in every prison to maintain informed links with local businesses, which would know and understand local business needs and be the link between prison and this part of the community. I urge the Minister to consider this now.

Finally, brilliant work is being done in a few private sector firms. The National Grid young offender programme, which has already been referred to, has been employing young offenders since 2001. A couple of years ago I went to a reception, at which the noble Lord, Lord Jones, was present and spoke most eloquently, and saw the amazing commitment, enthusiasm and belief in this area of work, which shows what is possible. Dr Mary Harris, the programme director, is a great advocate of offender employment to other businesses and to Ministers. It has now supported 2,000 offenders from 22 prisons, and secured the partnership of over 80 businesses from a wide variety of employment sectors since the beginning.

Another example is Timpson, the shoe empire, which, having started eight years ago with one young offender from Thorn Cross, who is still with them, has now set up several training workshops for offenders with prison industries at HMP Liverpool, HMP Wandsworth and HMP Forest Bank. They train 12 to 14 prisoners at a time with a guaranteed trial period at Timpson, and 75% are still there after six months. With shops all over the country, they can be flexible about where they work, which is brilliant, and Timpson has even started to recruit ex-offenders for other businesses. James Timpson, the chairman, says:

“It’s seen as something that’s good for the business, but also good for society”,

and he is right. I look forward to the Minister’s response.

18:36

[Baroness Young of Hornsey]

My Lords, I, too, congratulate the noble Baroness, Lady Healy of Primrose Hill, on introducing this topic and giving us the opportunity for a measured, though highly passionate, debate.

I want to draw attention to two ostensibly very different projects that achieve remarkable results with young offenders. It is important to note that there is a range of models that work and can thrive and produce long-term success with young offenders if they are supported with a commitment to the long term, as has already been mentioned, and are not seen as either one-offs or short-term fixes. It is also important to have results that can be independently assessed and defended against tabloid accusations of going soft on offenders. When I talk of remarkable results and successes, I am referring to examples of hard evidence of exceptionally low reoffending rates when compared to the norm.

Recent research undertaken with young offenders across several institutions found that 44% of the young men surveyed thought that getting a job was the factor most likely to stop them reoffending. For women, finding a job could potentially, they thought, stop 52% reoffending. Young men who were in custody for the first time were more likely to say they wanted to stop offending than those who had been in custody before. That is a worrying trend given the average reoffending rate of around 70%. The same research found that just under half the young men surveyed anticipated a problem finding a job once they were released, but 72% of the women interviewed foresaw problems finding work.

Many noble Lords have already spoken of the National Grid’s young offender programme and I shall add a few more points that I think are important in the context of this debate. I declare an interest as a freeman of the Tallow Chandlers livery company, which supports the programme through an award scheme. The National Grid programme has been produced through testing, piloting, being cautious and taking risks. That is important to note. The long-term nature of the programme means that it can work with offenders while they are still in prison, towards the end of their sentences, providing training and, crucially, employment. That promise of a job is a real incentive.

First and foremost, the participants learn skills. Yes, they learn employment skills, but they also learn self-discipline and how to deal with authority figures, which for many of them will have been a problem in the past. They gain self-confidence and learn how to motivate themselves. They are accepted on to the programme having satisfied the prison governor and the employer that they are safe to be released into work-based training and, crucially, have achieved a minimum literacy standard. As we know, many young people in prison are not able to complete their studies and therefore have very low literacy levels, but there are schemes around to help them as well as schemes targeted at those who do not have those skills. I will come on to one of those schemes shortly. There is a proper recruitment procedure with interviews et cetera in which they are treated like any other applicant for a job. Crucially, they are given mentoring support both before and after they are released from prison. As we have heard from other noble Lords, that means the reoffending rate is exceptionally low—less than 6%.

Noble Lords have also pointed to the economic and social costs of incarcerating huge swathes of young people. The economic costs run into hundreds of thousands of pounds. The social costs include intergenerational antagonisms, neighbourhoods where residents are uncomfortable and fearful, blighted lives and lack of trust. In addition to diminishing the financial and social costs, employers who participate in this scheme report that employees coming through this route are well-motivated, loyal and hard working, with many progressing up the career ladder into supervisory and managerial positions.

The other project I draw to the House’s attention is an arts project, Dance United. I am sure most noble Lords would agree that prevention is better than cure with regard to young people and crime. Dance United works with young people at most risk of being incarcerated. It is not so concerned with issues such as high levels of literacy and so on. Most of the young people it works with have had really negative experiences at school, at home and in their encounters with police and the criminal justice system. Modern dance may seem an unlikely medium through which to achieve really good results with young offenders and potential offenders, but, believe me, experienced practitioners from diverse backgrounds work with some very tough young women and men. They undergo exceptionally rigorous contemporary dance practice. We are not talking about street dance or hip-hop, but high-level, high-quality dance practice to such a standard that some participants have been admitted into our top dance schools and pursue professional careers, although that is not necessarily the aim. As the company says:

“Dance United works with people in difficult circumstances who are often marginalised in society and whose potential is often unrecognised. Contemporary dance training and performance of the highest quality has the power to unlock this potential. Dance United delivers work that is tough, tightly focused and highly disciplined. No hiding places, no short-cuts, no excuses”.

I cannot emphasise enough that this is not a soft option. Often the chaotic lives that these young people have led mean they have little sense even of how to get up in the morning and perform basic hygiene, let alone adhere to a strict physical and mental regime. They learn a lot about trust, teamwork and working with authority figures, which they have not been able to learn before. I had the good fortune to speak to young people, employers, instructors, facilitators, parents and carers connected with both these programmes. I know they feel they have reaped rich rewards in terms of the successes they have had with the young people they engage with.

One further point I want to make in this debate has been mentioned by the noble Baroness, Lady Healy. I refer to the position with regard to black, Asian and minority ethnic people in the youth justice system. The figures seem to continue to rise and this needs to be looked at in much more detail. I hope that we can return to this topic in the next few months. There are no quick fixes here, obviously. Meanwhile, it is necessary to investigate the root causes and strategies for mitigating these terrible statistics.

After the riots of August 2011, we sentenced about 2,000 people. With the current reoffending rates, that puts us into a downward spiral. It is really important to give support to the kinds of projects that I and other noble Lords have referred to. I hope the Minister will help to persuade his colleagues in the department that these are not soft options.

18:43

[Baroness Stedman-Scott]

My Lords, the subject of this debate is critical to the young people of our country who find themselves being released from custody. I, too, congratulate the noble Baroness, Lady Healy, on securing this debate. My heart beats in concert with her on this, because it is a very important issue. I must declare that I am CEO of Tomorrow’s People. I hope that the work we are doing with young people gives me some insight into how we need to support them when leaving custody; and, even more importantly, supporting them before they get there in the first place.

I am conscious of the work done by others in this field. There is the National Grid, Blue Sky and the Prince’s Trust to name but a few. The statistics of National Grid have been well voiced this evening, so I will not go over them. Blue Sky develops social enterprises for people to work in. It operates contracts and, therefore, is trading. Its concept is “not for profit” but it would call itself a “not for loss” organisation. Certainly, it makes sure that it pays its way in providing invaluable support to young people. The Prince’s Trust, which is well known to all of us, helps young people to start their own businesses.

My experience of these young people is that they are clever and talented. They are just waiting for someone to help them realise their talent and—perhaps I am old-fashioned—to love them so that they can blossom. A great deal is being done to help people make an effective transition from custody but, as the founder of the Salvation Army, William Booth, said when his son was waxing lyrical about the wonderful work that the Salvation Army was doing:

“Bramwell, that and better will do”.

We may be doing good things, but there are more and better things that we can do.

In preparation for my contribution, I read the Local Government Association’s paper on the resettlement of offenders, which lists well the key elements that young people need to make an effective transition from custody. I know that the debate today is focused on finding employment and training on release but other critical things need to be in place if young people are to get the best from any development opportunity. Indeed, when we see what they are, we start to appreciate why things do and do not work.

Those important components include accommodation and long-term mentoring. Let us not work with them for just a few moments; we must stick with them for a year or even longer. We should ensure that they have an acceptable attained level in at least literacy, numeracy and general education. They should also be given some personal development and vocational training. At the heart of the key elements is that these young people are prepared for the world of work and that they are given work experience. Much has been said about work experience and how, sometimes, people are abused but it gives an opportunity for young people to go to an employer and show what they are able to do in the working environment. Most importantly, all these things need to be packaged so that they can get and keep a job.

Recently, I have spoken to a number of young people who are sofa surfing. They go from one house to another sleeping on the sofa. From one day to the next, they never know where they are going to stay. If they do not have a sustainable and stable, in every sense, roof over their head, all the training, employment and support that they are given can be lost because they are worrying about other things.

Long-term personalised mentoring and support is not a commodity business. I regret that we cannot scale it up, solve the problem, stack them high and sell them cheap. It will not work. This should be an individualised and one-to-one practice. The young person in front of you and looking for help needs to be the most important person in the world to you on that day.

One thing that I have learnt at Tomorrow’s People is that it is not the time to walk away when someone gets a job and makes a positive step in their journey. We need to stay with them in order to get the sustainability rates that we want. It is hard enough to get a job if you are well educated, come from a loving home and have everything, as has already been said. If we do not prepare these young people well for the world of work and do not spend as much time with the employer as we do with the young person, we will never effect the integration.

For employers to take on these young people is a big risk, on top of their worries about profits and things like that. We have to give them as much support as we can. Let me give one practical example. We were asked by a very large company to recruit, integrate and induct 12 of the most challenging cases in its community into its workforce. The young people were all assigned a job.

One young girl turned up for work on Monday, Tuesday, Wednesday and Thursday, and everyone was really happy with her. On Friday, she did not show up, so a member of staff drove to her house and knocked on the door. The girl came down in her PJs. She was asked, “Why aren’t you at work?”. She said, “I never went to school on a Friday and no one ever bothered to chase me”. The girl was told to get dressed and get to work. The second week, it happened again, but on the third week she turned up on Monday, Tuesday, Wednesday, Thursday and Friday. The whole thing could have fallen apart for the sake of two car journeys. It is not rocket science, it is not sophistication, it is very practical.

I come to the most difficult part of what I have to say and I hope that the Minister is sitting down and happy. All of this needs money and there is not a lot of that about, is there? I am not making any judgments about that, but I know that there are people, employers and people who care about our society, who are prepared to invest in this area of work through the medium of social impact bonds and social finance. I want the Minister, please, to spend some time seeing whether we can accelerate our social investment activity. Patience is not a virtue I have managed to cultivate and I think that I am going to give up trying, because we need to go faster and the one thing that is holding us up is the commissioning side, from Government. Please do not take that as a judgment: we just need to get better at it.

Young people’s history in this field is well documented and well versed; everyone knows what they have done wrong and I would like us to spend time giving them a destiny and forgetting their history.

18:51

[Baroness Nye]

My Lords, I, too, thank my noble friend Lady Healy for initiating this important debate. As the noble Lord, Lord Bates, said, there is consensus on all Benches; we all want a reduction in crime, a reduction in reoffending, and we want it to go hand in hand with a just system of punishment. This, as all Governments have found, is a very tall order. When Ken Clarke launched his “rehabilitation revolution” in the Breaking the Cycle Green Paper, it was warmly welcomed by reformers. The new Secretary of State uses more punitive rhetoric but still repeats that aim.

I hope that the Minister will tonight give us an idea of the direction of travel for that revolution, because while all sides of your Lordships’ House must and will welcome the reduction in the youth unemployment figures announced today, the background to that revolution is the fact that the long-term youth unemployment figure is still disturbingly high. While 18 to 24 year-olds make up less than 10% of the population, they constitute a third of those on community or suspended sentences and a third of those sentenced to prison every year. As my noble friend Lady Healy said, we all know that those young offenders are more likely to have mental health issues, to have spent some time in care and to have relatively few qualifications.

The Prince’s Trust report Down, But Not Out showed that one in five unemployed young people think that finding a job in the next year is “unachievable” and that three in five describe their inability to find work as “demoralising”. With graduate unemployment running at 20%, it is our responsibility to help those long-term unemployed young people make progress because that is in the social and economic interests of Britain.

We have heard about the third sector programmes which have had excellent success rates and I make no apology for talking again about the work of the National Grid programme. I am sure that Dr Mary Harris’s ears must be burning with the number of times we are about to mention it, but I mention it again because from small things, great success can happen. It started in 1998, training 50 young offenders to become fork-lift truck drivers. In 2002 a second project was established to train young offenders as gas distribution technicians. As has been said, the reoffending rate at that time was 7% and they have managed to bring it down to 6%, when the national rate is 70%.

In 2003, the then Chancellor of the Exchequer announced in the Budget that he had asked Sir John Parker, the chairman of National Grid, to see how the programme could be applied nationally. As a result, as we know, that programme is now partnered with 80 leading companies and more than 2,000 offenders have benefited from it. In 2007 a Smith Institute pamphlet was produced that came out of a seminar held in No. 11 Downing Street. Sir John Parker described the programme as win-win—that is, meeting business and society’s needs—and he is absolutely right. Not only that, it is also of direct benefit to the taxpayer—for every 100 young offenders completing that programme, the savings are more than £17 million. That must be better than paying out taxpayers’ money to lock people up. While obviously it is not a universal panacea, it demonstrates that business can help address a difficult social issue while acting in its own interests at the same time. If National Grid and the other leading companies are able to see the business benefit of a progressive attitude to corporate social responsibility, then the Government should take the lead in encouraging other companies to join in.

One of the factors in the success of the National Grid scheme is the transition from prison to work. The training begins before offenders are released, thereby getting them used to going to work and establishing a commitment to that employer. Mentoring and help in finding accommodation are also important parts of the programme. I would like to mention briefly some other proposals from the Prisoners’ Education Trust and the Young Adult Manifesto of the Transition to Adulthood Alliance.

The Prisoners’ Education Trust evidence to the Education Select Committee inquiry on careers guidance suggested that there should be a career guidance package which would have information about training and education during and after release, have local links to the community and be able to signpost people to the right organisations. Young offenders are only too well aware of the difficulties of finding employment with a criminal record. The work of the Learning Matters advocacy project, which is part of the Prisoners’ Education Trust, found that what would make a difference would be more useful subjects, the same courses being available in different jails, more practical and vocational courses, more level 3 courses and more hours of educational courses.

The T2A manifesto calls for young offender institutions to be twinned with local further education colleges and for a national employment initiative to improve the chances of employment by the private, voluntary and public sectors, but the fact is that these are all measures that try to get young offenders not to reoffend through education and employment opportunities. We all share the aim of stopping young people offending in the first place. However, I am worried that with the Government cutting programmes such as Sure Start, youth club provisions, family intervention projects, Youth Inclusion and the Future Jobs Fund, the future does not look rosy. One of my concerns is that by abolishing the education maintenance allowance, the Government took away the incentive for young people at 16 to stay on in full-time education.

I know that the Government have introduced the youth contract but the Work and Pensions Select Committee has said that it alone is not enough,

“to address the current unacceptably high level of youth unemployment”.

I am, of course, aware that it is the responsibility of every individual to remain inside the law. There is no excuse for crime. I know also that getting a job does not always stop people offending and I know that plenty of people who have jobs offend, but all the evidence shows that a job and basic literacy play a crucial part in the rehabilitation process. Against the background of a double-dip recession, the programmes that could help being cut and with growth proving elusive, I would like to hear from the Minister how the Government will take forward the rehabilitation revolution.

18:57

[Lord Aberdare]

My Lords, I start by declaring an interest as a director of Waltz Programmes, a small social enterprise which has worked with young offenders in partnership with the crime reduction charity Nacro, and with funding from the European Social Fund via the Greater London Assembly. Based on this experience, I would like to comment on three rather specific challenges relating to the issues raised in this debate, which I congratulate the noble Baroness, Lady Healy, on obtaining and introducing so well. I apologise if at this stage of the debate some of what I say may be a little repetitious.

First, what is needed is a seamless process of support, starting while young people are still in custody and continuing all the way into sustained education or employment. We have usually had one of two experiences in working with young offenders. We have worked with groups in custody, who have turned up reliably for every session—they are, after all, in the most literal sense a captive audience—and show great enthusiasm and determination to plan an appropriate path towards work or study and to get into a different peer group on their release. However, once they are released, many of them disappear without trace, despite the best efforts of Nacro’s resettlement brokers and the local youth offending teams to keep track of them and to keep them on track.

Alternatively, we have worked with young offenders who are not in custody. They may have community sentences or be out on licence or with tags. Their average attendance tends to be a depressingly small fraction of the numbers expected, but at least for those who attend regularly support can be offered that ultimately leads them into training or jobs. Lessons to be learnt from this are: support needs to start in custody, where possible; it needs to be on a close one-to-one basis with each individual and it needs to stay close to them all the way through from release to a successful placement.

One of the greatest challenges to this is the difficulty of building up a sufficiently close and trusting relationship in prison for it to continue outside, which in our experience has not been made any easier by the difficulties of agreeing and scheduling in-custody programmes with the Prison Service, particularly when those programmes involve bringing outsiders such as employers in to the prison. I very much support the idea, emphasised by the noble Baroness, Lady Linklater, for a link person in each prison to help make that happen. That has not always been our experience.

Secondly, the majority of young offenders are very far from being ready to go back into education, let alone being job-ready. More than 80% of under-18s in custody have been excluded from school, 25% have special educational needs, 46% are rated as underachieving, and 21% have difficulties with literacy and numeracy. Young people leaving custody face significant barriers, including experience of social exclusion, low self-confidence and self-esteem, problematic family situations, and previous negative educational experiences. They may need a wide range of intensive, one-to-one, specialist support. This may include housing and benefits support; help with literacy and numeracy; help with English language skills; drug and alcohol treatment, which is very important; mental health and other medical support; help with parenting skills in many cases; gang awareness and avoidance—I am not sure whether that has been mentioned in the debate so far, but certainly in a London context it is a crucial element of the process; help with communication and interview skills; mentoring, which has been mentioned; confidence building; life coaching; and I could go on. Above all they need access to a range of education and employment options so that they have some choice about the direction in which they wish to go.

An additional need, sometimes overlooked, is that of support for employers and training organisations, who may be willing to offer places to young offenders but may need considerable extra help to address the challenges that that employment can present. The noble Baroness, Lady Stedman-Scott, mentioned the example of the person who did not turn up on Fridays. The idea put forward by the noble Baroness, Lady Healy, of some sort of incentive for employers is well worth looking into.

Support programmes such as those run by Nacro are valuable for all those who take part in them, but the number who actually get as far as gaining, let alone keeping, training places or jobs within a specified period is likely to be only a low percentage of the total. That brings me to my third and final point, which is that the Government should be careful not to make it impossible for the sort of organisations that are best at delivering such programmes—often small, specialist, local bodies working in partnership or on a multi-agency basis, as the noble Lord, Lord Warner, mentioned—to be able to afford to do so. I am a believer in outcome-based payments, but not in payments by results alone. To illustrate what I mean, we worked last year on a programme that offered up to £5,700 for each young offender placed into sustained work or training. Of that amount, 20% was for pre-entry support, 28% for actually placing them into work or training, and 52%—over half the total—for supporting them to remain there for at least six months. I see that as a very reasonable balance.

A new funding programme that has recently been launched offers between £4,300 and £4,700 per head in total. That is over £1,000 less, of which only 9% is available pre-entry, about 24% on entry into a job or training place, 36% after staying for six months, and a further 31% after a full year. In other words, two-thirds of the total funding available is only payable after six to 12 months of sustained training or employment. Such a model risks acting as a real disincentive to many organisations that are otherwise capable of delivering effective work and training outcomes for young offenders but find it hard to manage cash flow when payment for much of their efforts comes only after six to 12 months.

Young offenders are among the most difficult to place of the very many young people seeking work or training today. I welcome the Government's commitment to providing appropriate support to help them, and hope that in doing so they will recognise and address the challenges that I have mentioned. I look forward to hearing the Minister’s response.

19:05

[Baroness Sherlock]

My Lords, I should start with a confession, which is that 18 months ago I knew precisely nothing about this subject, but that would not have necessarily deterred me from contributing to the debate. In the intervening period, something happened that taught me a lot. I was asked to serve on the Riots Communities and Victims Panel, which the Government appointed to look into the riots of last year. That was an experience that left me profoundly concerned about what happens to the astonishingly high number of young people who end up in Britain’s prisons.

As part of that experience, we went into prisons and talked to a number of young men who had been sent to prison for riot-related offences, and their stories highlighted a lot of the issues that noble Lords have raised. One young man described having applied for hundreds of jobs. He attended 19 interviews and completed two apprenticeships, but had not been able to get a job. If he could not get a job before he went into prison, what were his chances when he came out the other end? Another young man had been employed when he committed the offence, and when I asked, “What are you going to do when you get out?”, said, “I want to go back to my job”. I thought, “You haven’t even begun to appreciate what is going to happen to you when you come out the other end”. As the noble Baroness, Lady Young, pointed out, so many young people do not understand the consequences of what will happen when they have served prison sentences.

When the riots panel published our interim report in November last year, we noted that nearly three-quarters of those brought before the courts for riot-related offences were under 25. Most of those in court had a previous conviction and a small group were serious serial offenders. However, as my noble friend Lady Nye noted, young adults are overrepresented in the prison population. They also seem to be more likely to reoffend. In the year ending March 2010, more than 113,000 young people were given what is rather unpleasantly called a formal disposal, of whom a third committed a proven reoffence within a year.

However, what scared me was that the 2009 re-offending figures state that 65% of offenders aged 18 to 20 who are discharged from a custodial sentence of less than 12 months reoffend within a year. Let me say that again: 18 to 20 year-olds come out of prison after a sentence of under 12 months, and two-thirds of them reoffend within a year. What are we doing about that waste of lives, or indeed of public money? What an astonishing figure. What are we going to do to tackle the lives ruined, not just the young people’s lives but those of the victims of the riots? I had the opportunity to meet all kinds of victims whose lives were ruined too. If these young people go out and reoffend, more people’s lives will be ruined. Even if one does not—and I really do—care about those young offenders, as a society we should at least care about the consequences of failing to treat them appropriately.

The riots panel produced a large report, which I hope the Minister has had every opportunity to read, mark and inwardly digest by now, because much of it related to his areas of responsibility: young people, work, the criminal justice system, and a great deal more. Today, I can pull out only a small number, but I want to ask about just a few of the conclusions we reached. Some of the others have been raised by other noble Lords.

A key issue seems to be the transition between the youth and adult justice systems. We heard all kinds of stories about where this goes wrong. However, aside from the general problems of transition, we heard stories of young people either being unable to take courses or that moving them resulted in the loss of all records, which meant that they could not carry on where they had previously left off. That meant that the value of any education or training they received in prison was simply wasted. The panel recommended that a nominated officer be assigned to each young adult whose case is passed between young offending and probation teams to help to manage that.

As my noble friend Lady Healy noted, the provision of proper wraparound support is crucial. We were impressed by many schemes, such as that operated by the Prince’s Trust, mentioned by the noble Baroness, Lady Stedman-Scott. Its scheme at HMP Lewes includes meeting at the gates, mentoring as role models, having someone on hand to sort out practicalities, and support about everything from college places to housing and employment. They are all crucial to the support. However, there is only so much a mentor can do if appropriate provision is not readily available.

Given that the Minister who has the pleasure of replying today is the noble Lord, Lord Freud, I decided that I would pick out a few issues related to his empire, rather than more generally, as it might make it easier for him to respond. In March, the Government announced that people claiming jobseeker’s allowance in prison or within 15 weeks of leaving would be fast-tracked on to the Work Programme. This seems to be a marvellous idea. Does that include all young people leaving custody, even those on short sentences? Is the fee still £5,600 for getting an offender into work if they stay there for two years, as was the case when the scheme was announced? I can see the Minister nodding. Is that amount enough? I understand that the highest payments to Work Programme contractors who aim to get people into work who are a long way from the labour market is £13,000. If £13,000 is paid for some categories, why is such a small sum paid to those who are helping young offenders get into work, given how difficult we have heard it is for them to get in there?

What happens if someone does not get a job within two years? The riots panel was very concerned in general about young people being parked on the Work Programme. Because of the nature of the contracting arrangements, there came a certain point when there was no economic benefit to the provider to do anything more with them; if they passed that time, you might as well let them sit there. The panel recommended that that simply should not be allowed to happen.

I very much support the point made by the noble Lord, Lord Aberdare, about the importance of contracting directly with some of the smaller voluntary or specialist organisations that have the experience to work directly with this client group. I understand why procurement might tempt the Government into awarding contracts only to large prime contractors and letting sub-contracting arrangements go on, but all the evidence shows that that simply is not working for most voluntary organisations. Many voluntary organisations have gone out of business or are simply unable to work in those conditions. Frankly, I would sooner trust the kind of work described by the noble Baroness, Lady Stedman-Scott, and the work I have heard about from the St Giles Trust and many other voluntary organisations, than something sub-contracted, either from a much larger provider or even directly from Jobcentre Plus.

Finally, what kind of career development advice can be provided to young people coming out of prison? I am still haunted by one young man I spoke to. We asked him to describe what happened when he came in. He thought for quite a long time and then said that when he arrived, someone had asked him: “What do you want to do with your life?”. The reason it was so memorable was that no one had ever asked him what he wanted to do with his life, and maybe someone should have. If no one had up to that point, is that not something that whoever the Government ask to work with these young people should have the time and space to do?

I will not go on as time is short. There have been so many wonderful speeches, and I congratulate my noble friend Lady Healy on having provoked a marvellous debate. I hope very much that the Minister will be able to give us the answers that we need.

19:12

[Lord Rosser]

My Lords, I, too, add my congratulations to my noble friend Lady Healy of Primrose Hill on securing this debate. The contributions of both the noble Baroness and all other Members of your Lordships’ House who have spoken have made this a thoughtful and informative debate.

Young offenders, like other offenders, cost the country money through the damage and disruption they have caused and may cause, in addition to the adverse social consequences of their actions and the impact on their victims. It is in everyone’s interest, not least their own, to try to minimise the likelihood of their reoffending. Not having any money, a job or anywhere to live are three factors that increase the likelihood of reoffending by young offenders leaving prison. Having no money, or hardly any, to buy the basic necessities of life simply encourages action, often in desperation, to obtain money by illegal means or in return for illegal acts. Having no accommodation to go to also increases the likelihood of resuming previous contact with those who would hardly act as a brake in discouraging reoffending and generates a feeling of instability, hopelessness and despair. Having no job, or not being on a worthwhile training programme with a realistic prospect of obtaining a job, means that a significant potential ladder for reaching the goal of turning away from offending and achieving a sense of purpose in life is removed.

Reference has already been made in this debate to reductions in or withdrawal of benefits, both actual and pending, that would adversely affect the already weak financial position of young offenders leaving prison. It would help if the Minister could indicate in his response what effect the Government feel these reductions or withdrawals of benefit will have on the incidence of reoffending by young offenders leaving prison and the basis on which the Government reached whatever may be their conclusions on this specific point.

I hope the Minister will also be able to advise us of what the most recent figures show in respect of the cost of helping a young offender find employment or training, as compared with the savings resulting from an end to reoffending or a reduction in the incidence and level of seriousness of reoffending by that young offender. Money may be in short supply, and helping young offenders in prison and on leaving prison may not be a priority for most of the national media in this country—or perhaps for some politicians. However, it would be helpful to know what the costs and savings figures are on which the Government are presumably basing their approach to deciding how much to spend on training for young offenders in prison, and on training, finding employment and the levels of benefit available for young offenders when they leave prison.

Obviously we can have only one departmental Minister replying to this debate on helping young offenders. However, what does or does not happen to the young offender in prison in respect of skills, training and education has a considerable impact on their position once they leave prison. Once again, it would be helpful if the Minister would talk about the contact and liaison arrangements between the Ministry of Justice and other relevant departments, including his own, to ensure some continuity of training provision and assistance in finding employment for young offenders once they leave prison, and in addressing the problems so many of them face, which were eloquently and forcefully highlighted by many noble Lords.

In a debate on 9 February this year, the noble Lord, Lord McNally, said that the MoJ and the Department for Work and Pensions were in close contact and trying to work through the issues associated with offenders leaving prison. Have we now got beyond the stage of the DWP and MoJ trying to work through the issues, including ensuring no delay over the payment of relevant benefits? Have the issues now been worked through with agreed solutions and processes? If so, what decisions have been made since February, and what policies and processes implemented, that will contribute to helping young offenders find employment or training on release from prison, and will also address the many and diverse problems that so many have to overcome, which were highlighted by many noble Lords? What is the level of contact between the Department for Work and Pensions, the Ministry of Justice and the Department for Communities and Local Government over assistance to young offenders in finding accommodation on release, since their success or otherwise in finding accommodation is likely to have a major impact on their success or otherwise in finding employment or securing training?

Young offenders who have just left prison are likely to be under some form of supervision for a period of time. Apparently the Government are embarking on significant changes in the role of the probation service and the level of private sector involvement in that field. Has the Department for Work and Pensions had any input into the Government’s thinking on the extent of the future role of the probation service, since that, too, could have an impact on young offenders when they are in prison and when they leave?

As my noble friend Lady Healy of Primrose Hill said, schemes have been in existence for some time, run by different organisations, particularly in the voluntary sector, which show that finding and providing training, and finding employment for young offenders by also addressing the problems faced by so many of them, can have a significant impact on reoffending rates. Outside commercial companies are also used to assist in finding employment or training schemes for young offenders leaving prison. Perhaps the Minister will say something about the success rate of these organisations and the nature of the contracts with them. How is having helped someone find employment or an appropriate training course defined and assessed in the contract? Are payments made at different stages in the process? If so, how are they weighted, and how and by whom is the checking and verification undertaken?

Employment and training for young offenders requires resources and commitment. It also requires a mentality that does not think that young people who have committed offences should receive what are described as tough sentences and not much else. Neither will an approach work that considers it inappropriate for young offenders leaving prison to receive publicly funded assistance in finding employment or training—although the continuing high unemployment rate for young people generally does not help the situation.

Finally, I come back to the question of money and resources. Will the Minister say whether the Government regard money spent on the training and education of young offenders in prison, and on helping them find employment or training on their release, as an overall cost to the public purse or as expenditure that produces an overall saving?

19:20

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, I join other Peers in thanking the noble Baroness, Lady Healy, for raising this important issue. I also thank all noble Lords for their valuable contributions. Young offenders face multiple barriers in accessing employment, training and jobs on release from prison. If we are to tackle these problems and take effective steps to reduce reoffending, there has to be a co-ordinated response across government departments. Since May 2010, the Government have led positive change on how we tackle the causes of crime to reduce reoffending rates, as a number of noble Lords spelt out. The Government are committed to offering young unemployed people the opportunity to access high quality training relevant to the labour market so that they can gain the skills they need for sustainable employment and enable them to progress in a learning and work environment.

I will do my best to answer as many of the points put to me as possible, but I suspect that I will not get through them all in the limited time available. Before I do so, I will go through some of the steps that DWP is implementing to respond to the noble Baroness, Lady Nye, who looked at the programmes she liked, to try to explain that what we have replaced them with are in many cases doing the job rather better. Since last April, Jobcentre Plus managers and advisers have been given more flexibility to tailor support to claimants and local market needs. To support this, Jobcentre Plus has introduced a suite of measures bringing together communities, the voluntary sector and employers to help people get back to work. That support is complemented by the Get Britain Working measures: the new enterprise allowance supports those looking to start their own business; work clubs help claimants to share skills and experiences; the Work Together programme helps claimants to develop skills through volunteering; work experience is particularly important because it enables young claimants to get a placement with a local business; and finally a range of sector-based work academies which offer pre-employment training and work experience placements.

We added to that in April this year the Youth Contract, providing an additional £1 billion of support for young unemployed people over the next three years. The Youth Contract builds on existing support to provide young people with more intensive adviser support and work experience, as well as providing employers with wage incentives and apprenticeship incentives to encourage them to recruit young people. Within that total, £150 million of new support is directed at the most disengaged 16 and 17 year-olds to help them get into sustained learning, an apprenticeship or a job with training. In addition, we have launched a new innovation fund of £30 million over three years for social investment projects of the kind that the noble Lord, Lord Aberdare, would, I am sure, have his eye on in terms of providing opportunities. These projects aim to support disadvantaged young people and those at risk of disadvantage, with a particular focus on those aged 14 and over. We have completed the first round of commissioning for the projects and we are now looking at the second round.

Apprenticeships are right at the heart of the Government’s drive to equip people of all ages with the skills that employers need to prosper and compete. We want to make it as simple as possible for employers to take on apprentices, and we want advanced and higher level apprenticeships to become the level to which learners and employers aspire.

I am sure that all noble Lords are aware that last year we introduced the Work Programme, the biggest single payment-by-results programme in this country and possibly anywhere else. In response to the inquiry of the noble Baroness, Lady Sherlock, we introduced a feature to ensure that all offenders leaving custody are given immediate support through the Work Programme, on the proviso that they claim jobseeker’s allowance. So it is that group. Of the total of 80,000 leaving, 30,000 are in that category. I can also confirm that when we move to universal credit, the effect will be much wider. Not only can prisoners get on to the benefit system in prison, they are then picked up on day one. As the noble Baroness pointed out, that is a wonderful development.

Is that money enough? That is a good question. We will find out. It can be supplemented by the apprenticeship and employment incentives structures, so that is not all the money that is going to those youngsters. The noble Baroness was concerned that there would be parking after a period; it does not work quite like that. If you get a person into a job within two years, they are sustained well beyond the initial two-year period. You are not locked in to that two-year period; you have two years to start them on the process.

I will now try to pick up on as many other questions as I possibly can. There was an enormous number, so I will not cover them all. Where I have not been able to cover them, I will write.

Many of the questions surrounded my noble friend Lady Linklater’s jingle of a roof, a relationship, and a job, and looking at how one achieves that. When we look at the schools agenda, both the noble Lord, Lord Warner, and the noble Baroness, Lady Healy, talked about the Youth Justice Board which supported the establishment of seven resettlement consortia which aim to provide a co-ordinated approach across local authorities for all young people leaving custody, so that they can access the services that they need to help prevent them from re-offending. Each of these consortia engages with the third sector and private providers through national and local organisations, as the noble Lord, Lord Warner, pointed out.

In addition, the Ministry of Justice is now working with the Department for Education to take forward the commitment in the cross-government Ending Gang and Youth Violence report to explore ways to improve education provision for young people in and released from the secure estate.

The result of the review, Making Prisons Work: Skills for Rehabilitation, which came out in May 2011, means that a refreshed curriculum is being introduced in prisons, and there will be a strong focus on providing training and access to apprenticeships to prepare prisoners for employment. We are increasing collaboration between Jobcentre Plus, the National Careers Service, probation, colleges and other training providers to make sure that they are referred to the appropriate training and work opportunities.

The work in the private sector that my noble friend Lady Linklater talked about is based on the Jobcentre Plus provision of about 180 advisers working in prison, providing help and advice to offenders. Clearly, that ties in with early referral to the Work Programme.

With regard to some of the further measures that the Government are taking, the Home Office has committed £18 million of funding for 2012-13 to support the police, local agencies and the voluntary sector to tackle knife, gun and gang-related violence and prevent young people entering a cycle of crime. An Ending Gang and Youth Violence Team is now place, with the support of a virtual network of more than 100 advisers.

Picking up the concern raised by the noble Baroness, Lady Healy, on housing benefit for under-25s—the “roof” in the jingle—I remind her that that is not government policy, as she suggested; it is a topic of debate at this stage and no decisions have yet been made. I should also point out that were such a decision to be made, the issue that was being discussed was around automatic entitlement to housing; it does not necessarily mean that the most vulnerable groups would be excluded from such housing.

My noble friend Lady Stedman-Scott raised the issue of commissioning. Coincidentally, I have been taking a deep interest in that lately and have been meeting some of the financial groups considering it. She has put her finger precisely on the issue: we need a group that organises the structure between government and providers, a commissioning body or bodies to do that and get it to work well.

I must conclude. Punishment of offending behaviour upholds the values of law and order that all civilised society is based on. We know that work is a primary factor in reducing reoffending. The Government are working hard to ensure that young offenders emerge better equipped to become part of law-abiding communities and better able to reintegrate into society and build the skills necessary to have useful and productive lives.

House adjourned at 7.32 pm.