Grand Committee
Reservoirs Act 1975 (Exemptions, Appeals and Inspections) (England) Regulations 2013
(10 years, 11 months ago)
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Lord De Mauley
That the Grand Committee do report to the House that it has considered the Reservoirs Act 1975 (Exemptions, Appeals and Inspections) (England) Regulations 2013.
Relevant document: 23rd Report from the Joint Committee on Statutory Instruments, Session 2012-13.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley)
The amendments to the Reservoirs Act 1975 by Schedule 4 to the Flood and Water Management Act 2010 introduce a more risk-based approach to the management of large raised reservoirs, and these regulations are a key component of this process. The regulations are required to be brought into force as soon as the substantive provisions amending the 1975 Act are commenced.
By way of background to the Reservoirs Act 1975, while it is rare for a large raised reservoir to fail, the impact of such failure on life and property could be considerable. During the 2007 summer floods, there was a near-miss incident at Ulley reservoir where a complete reservoir failure was averted only by emergency action. In his review of the 2007 floods, Sir Michael Pitt made recommendations for improvements to reservoir safety. These recommendations were addressed through amendments to the 1975 Act made by Schedule 4 to the Flood and Water Management Act 2010.
Regulation-making powers inserted into the 1975 Act by the 2010 Act include the allowance of specific exemptions from the 1975 Act, the introduction of appeal rights and clarity on the timing of inspections. The regulations relating to exemptions specify what are not to be treated as large raised reservoirs for the purposes of the 1975 Act. Exemptions from the 1975 Act include tips that are covered by mines and quarries legislation and canals and inland navigations, and these exemptions are maintained. Due to the new definition of a large raised reservoir as a result of the 2010 Act, other bodies of water potentially fall within the scope of the 1975 Act. This has led to a new exemption for road and rail embankments with drains that have not been artificially blocked, such as with gates. Where a road or rail embankment effectively acts as a flood storage reservoir, it should be recognised as such and managed accordingly.
The regulations also provide undertakers of large raised reservoirs with the right to an appeal. An undertaker may appeal against the designation of a large raised reservoir as high risk and against notices given by the Environment Agency either to appoint an engineer or to carry out a recommendation of an engineer in the interests of safety. The regulations provide that the First-tier Tribunal will hear all appeals under the amended 1975 Act. To maintain the credibility of the 1975 Act and the efficacy of the designation regime, it is important that the appeals mechanism is independent, efficient and comprehensive and is a fair and cost-effective way of adjudicating any disputes. The process for bringing an appeal is governed both by these regulations and by the Tribunal Procedure (First-tier Tribunal) (General Regulatory Chamber) Rules 2009.
The regulations also set out the timings of inspections. Previously, under the 1975 Act, all large raised reservoirs had to be supervised and inspected, whereas the 2010 Act amends this to include only those large raised reservoirs designated as high risk. Transitional arrangements will be in place to ensure the smooth introduction of these requirements. The regulations also require the Secretary of State to review the operation and effect of these regulations and to publish a report within five years after they come into force. The powers to make these regulations are contained in the amendments made by Schedule 4, which were commenced in October 2011. The substantive provisions introducing a more risk-based approach to reservoir management cannot be implemented without these regulations.
The amendments to the Reservoirs Act 1975 introduce a more risk-based approach to the management of large raised reservoirs and these regulations are a key component of that process. They are a necessary and appropriate statutory obligation and I therefore commend them to the Committee.
Lord Knight of Weymouth
My Lords, anyone observing this debate might think that, based on attendance, there is little interest in these regulations. However, I think that this is one of those circumstances where attendance signifies consent, and lack of attendance signifies positive consent. I think the fact that more noble Lords have not attended the debate simply demonstrates the extent to which the regulations are not contentious.
I remember well the floods of 2007 and how perilously close we came to real disaster when emergency action averted the failure of Ulley reservoir. That was why the previous Government, of whom I was a member, asked Sir Michael Pitt to carry out the review, and the Pitt report recommended these improvements to reservoir safety legislation and, in particular, this risk-based approach. It would be extremely churlish of me to be anything but supportive of these regulations given that they reflect the work that was done following the Pitt review. It merely remains for me to ask two or three questions that arise from the regulations.
The first, which might sound slightly oppositional, is straightforward. Why has it taken so long to bring forward the regulations given that Sir Michael Pitt carried out his review some time ago? They are dealing with significant matters of risk in respect of flooding and we have had a lot of flooding activity in the past 12 months. Everyone has noticed the nature of the weather during that time and the flooding that goes with it, so it would be helpful to know whether more could have been done to bring these forward sooner.
The second question is on Regulation 3 and those items not treated as being large raised reservoirs. As the Minister said in his opening comments, certain items such as tips, which have been exempted as large raised reservoirs, and other items are being added here. Assuming that some of those items might have some high risk attached to them on a risk-based approach, how is that risk being assessed? Who is inspecting them and how is the risk then being raised and dealt with by the owners of those bodies of water? If none is of high risk because of its very nature—such as its embankments or drains—then to ask whether the risk-based approach would not have dealt with it without this piece of legislation is perhaps rather a pedantic, subsequential question to that.
Finally, Regulation 4 deals with the right to appeal first against designation and Regulation 5 with the right to appeal against a notice. The basis of that appeal is to be able to go to a First-tier Tribunal. Can the Minister update us on how much capacity the Tribunals Service has to deal with these appeals? What is his expectation regarding the volume of appeals? As we refer more things to the Tribunals Service, there is a general concern that the service’s funding is not growing. I am quite confident in saying that. I suspect that it might be shrinking, and yet we are asking it to do more work. In these matters of public safety, which is what these regulations are dealing with, we would certainly not want appeals to be delayed because of a backlog at the Tribunals Service due to its lack of capacity.
That is probably my most significant question. The Minister has been assiduous in writing to me when things do not initially seem as forthcoming as they could be, and any information that he could give us about the Government’s assessment of the Tribunals Service’s capacity would be very helpful. Incidentally, if an appeal is unreasonably delayed in the Tribunals Service and an incident then occurred, where would the liability fall? Would it fall with the owner of the reservoir or with the Government because they did not have sufficient capacity in the Tribunals Service?
My final question also relates to the Tribunals Service. There was some mention either in the impact assessment or the Explanatory Notes of discussions that are still going on with the Tribunals Service about how it will deal with technical matters as opposed to legal matters when appeals are being heard. If the Minister has any update to put on the record about those discussions that would obviously be very helpful.
To summarise, we on this side are extremely happy to see the Government coming forward with these regulations, although we would have liked them to have happened a little quicker. There are one or two issues of concern in terms of the tribunal arrangements for appeals, but it is right that people should be able to appeal and it is right that it should be done in the context of the Tribunals Service. I therefore do not have any substantial argument with the way in which this is going forward. On that basis, I hope that I have given the Minister enough time, by talking a little longer, for him to give us some answers.
Lord De Mauley
My Lords, I thank the noble Lord for his comments and questions: I will do my best to answer them. As he kindly said, if there is anything that I am unable to answer now I will of course write to him.
The noble Lord's first question was why in the broadest terms it has taken this long to get to where we are today. I acknowledge that phase 1 has taken longer than I would have liked. He was kind enough to acknowledge, and he is right, that resources have to be prioritised. It has been, as everyone knows, important to deal with ongoing, relatively widespread instances of flood emergency. That simply has to take priority and I think that everyone would acknowledge that life and property must take first place.
The noble Lord also asked about the prioritisation of reservoirs, and if reservoirs are excluded from this regulation then how the risk is encompassed. Tips and so forth are covered by the mines and quarries legislation, save for other extant arrangements there, and the Health and Safety Executive leads on that. I hope that that is adequately helpful to him. Canals are managed using risk-based management approaches.
The noble Lord asked about the right to appeal under Regulation 4 and he was specifically concerned about the capacity of the Tribunals Service. We are in discussion with the service about the likely workload and the resources needed at the moment and I cannot at this stage go further. However, he has pinpointed the right question. We agree with him and are investigating how we will deal with it.
On that basis, I hope that noble Lords will agree that the Grand Committee has considered the regulations.
Duty to Participate in Education or Training (Alternative Ways of Working) Regulations 2013
Baroness Garden of Frognal
That the Grand Committee do report to the House that it has considered the Duty to Participate in Education or Training (Alternative Ways of Working) Regulations 2013.
Relevant document: 23rd Report from the Joint Committee on Statutory Instruments, Session 2012-13.
Baroness Garden of Frognal
My Lords, I am grateful to the legislation committee for its consideration of this order on 27 March. Noble Lords will be aware that the necessary consultation has been undertaken and that the regulations are being debated in the other place.
I shall start by setting out the background to these regulations. The Education and Skills Act 2008 places a duty on all young people in England to participate in education or training. Later this year, we will commence that legislation to require young people to continue in education or training until the end of the academic year in which they turn 17. From 2015, that will rise to their 18th birthday. As noble Lords will be aware, this is termed “raising the participation age”. This does not require young people to remain in school and they may choose an educational path that is best for them. This could be full-time education at a school, college or elsewhere, an apprenticeship or full-time employment combined with part-time education or training.
While this legislation was put in place by the previous Government, we are committed to supporting as many young people as possible into education or training and will be commencing the central part of this legislation shortly.
Continuing in education or training means that our young people will gain higher skills and qualifications, making them more attractive to employers and giving this country a more productive and competitive workforce. Our aim is that young people will be better educated and better prepared for higher education and for productive, sustainable jobs. The evidence is clear that participating in education post-16 improves young people’s life chances. It means that they are more likely to attain higher levels of qualifications and have increased earnings over their lifetime, better health and improved social skills—for instance, young people with two or more A-levels earn around 14% more than those without.
However, there are still a number of young people who are NEET—not in education, employment or training—and this number has been too high for too long. The most recent national statistics show that at the end of 2011 more than 90,000 16 to 17 year-olds were NEET—7% of that age group.
Participation in education or training is not an end in itself, so we are also substantially reforming the post-16 education system, taking significant steps to improve the quality of education and training and the outcomes for young people.
All the evidence shows that the better-educated children are pre-16, the more likely they are to continue in education post-16. Therefore, our reforms to the school system, increasing the freedoms of schools and providing additional support through the pupil premium, will mean that in the long term more young people continue in education for longer. By increasing the number of university technical colleges and studio schools, and supporting colleges to enrol 14 to 16 year-olds, we will ensure that pupils inspired by vocational education are better prepared to continue post-16.
From this September, all 16 to 19 year-olds will be able to take a study programme, which will include one or more substantial qualifications or extended work experience. Students who do not have a GCSE in maths and English at grade C or above will continue to study these subjects. These are exactly the areas that employers say they value most strongly, so study programmes will help all young people to be better prepared for work.
We know that many young people are highly motivated by the prospect of work. We are introducing a new high-quality traineeship programme that will better prepare young people for apprenticeships and sustainable jobs. Traineeships will offer a combination of high-quality work placements, work skills training and English and maths, together with other flexible training and support to suit individual young people’s needs. We know that some young people need additional help to overcome the barriers and difficulties that currently prevent them from participating in education or training. Through the youth contract we are providing intensive support for 70,000 of the most disengaged 16 and 17 year-olds with no or low qualifications. Some young people also need financial support to enable them to continue in education or training. Our £180 million 16-to-19 bursary fund provides targeted support, with guaranteed bursaries of £1,200 for the most disadvantaged.
The two instruments under consideration today are simple steps to ensuring that the legislation that was passed in 2008 is still fit for purpose. One is technical in content only. The other is in line with both the primary legislation and feedback from public consultation and is supportive of young people gaining experience from a range of valuable opportunities. I will briefly address each in turn.
The consequential amendments order is made under the Apprenticeships, Skills, Children and Learning Act 2009. That Act established the Office of Qualifications and Examinations Regulation, commonly known as Ofqual. This order simply updates the 2008 legislation to take account of that Act. It is important for raising the participation age, as young people undertaking full-time work are required to combine that with part-time study towards a qualification that is recognised and transferable.
I now turn to the Duty to Participate in Education or Training (Alternative Ways of Working) Regulations 2013. A key way for young people to meet the duty to participate in education or training will be through getting a full-time job and combining that with part-time education or training. This will be an important route for young people who are motivated and able to secure employment, while also allowing them to get rigorous transferable qualifications. Gaining experience of employment before the age of 18 is a key way to begin building the skills and experience that will lead to a long, fruitful career. However, there are also alternatives to paid work that can provide valuable experience to young people and we would not want to prevent young people from pursuing these activities for fear of falling foul of the legislation.
The 2008 Act makes allowance for further activities described as “ways of working” that could be considered in the same way as paid employment. These could be combined with part-time study to meet the duty set out in that Act. We consulted on the possible options available to young people in this regard, and that consultation agreed with the three routes that are proposed in the 2008 Act. These are: self-employment; working not for reward, for example by volunteering; and holding a public office. In all these instances, the requirements are the same as those set out for full-time employment in the 2008 Act. These ways of working must be full-time and accompanied by accredited part-time study or training.
In summary, these regulations amend and give detail to the 2008 legislation to ensure that it is still fit for purpose and allows young people to undertake the full range of opportunities that will stand them in the best stead for their future lives. I therefore commend them to the Committee.
Lord Young of Norwood Green
I thank the Minister for her comprehensive introduction to these statutory instruments. As she rightly said, they bring into force legislation that we introduced in 2008, which I think, without appearing to be overly indulgent, was a smart bit of legislation. Rather than raising the school leaving age but the participation age took into account the fact, as the Minister said, that not every youngster wants to stay on in full-time education.
I want to draw out a few things raised by the Minister. She talked about the study programmes, and I wonder whether she can come back to that in her reply, as I am interested in that. The Minister gave a figure on the youth contract support but unfortunately I did not have time to note it down. Who will be employed in that? It seems that it might refer to young people who have not been in significant employment or education. I do not know whether it related to the NEETs.
A group of people that I am particularly interested in is those with disabilities. I was at a specialist school that deals with autism last Tuesday. In talking to a group of 15 and 16 year-olds when we got to the end of the visit, it was interesting how small their chances of employment are. I think that in their experience, they have managed to have one or two jobs but it is really very difficult, and I wondered whether they were going to be included in that youth contract support.
The other questions that I wish to raise are in my general contribution. As the Minister rightly said, we raised the participation age in the Education and Skills Act 2008. It was a Labour Party policy. We agree that if Britain wants to seek to maintain its competitive edge, it is absolutely essential that we upgrade our skills base and ensure the well trained workforce which is essential to that. We know that part of our challenge is the long tail of poor performance within the 16-to- 18 age group, so raising the participation age—as I said, it is not the school-leaving age—is an essential part of confronting that challenge. We are certainly not seeking to oppose these powers today but I have a number of questions, which I would be grateful if the Minister could answer.
While we are happy to agree that self-employment, volunteering and holding an office could combine with part-time study to meet the duty to participate, we remain unclear as to the precise description of holding an office. There seems to be no explanatory guidance, so I would be grateful for some examples. If they are not available, I am sure that the Minister can write. I would also be keen on an update on the Minister’s discussions with the Department for Work and Pensions on how the requirements for education and volunteering align with benefits conditionality, as set out in the July 2012 consultation, and what impact, if any, universal credit will make.
Within the consultation, there was some concern that home schooling might be exploited as a loophole when raising the participation age. I would be grateful for the Minister’s thoughts on how this will be addressed. We saw only last week the vulnerable situation that many young carers find themselves in, so I would be grateful to know what special considerations have been given to young people with caring responsibilities. It seems clear that if we are not to repeat the mistakes made in relation to some low value apprenticeships, which were revealed in the Government’s system, we need a proper system of agreements to ensure that young people are not simply engaged in low-level activity at work but learning decent skills and having proper training. The consultation document speaks of working with relevant organisations to draw up such agreements. Can the Minister explain how that will be taken forward?
Chapter 3 of Part 1 of the Act puts duties on employers to take certain actions in respect of young people who meet the duty by combining work with education and training. The Minister has said that these duties will not be brought into force at this stage and that the possibility of commencing them will be kept under review. I would certainly like some indication of the timetable of that review and who will be conducting it. Finally, a series of responsibilities are placed on local authorities by this legislation to ensure compliance. Will these apply to pupils in academy and studio schools, and in university technical colleges?
Perhaps the real challenge in raising the participation age is that we are inevitably going to raise expectations—at least, I hope we are—that at the end of this process the young will find a job. That is going to be the biggest challenge, no matter who is in power, and I do not wish to make light of it. We know of the significant numbers of young people who are now in unemployment; it is nearly 1 million. It was disappointing to see that if you looked at the number of apprenticeships in the 16 to 18 year-old group, in 2012-13 that had dropped to 69,600 compared to 79,100 in 2011-12, which is a 12.1% drop. Although I pay tribute to the Government’s efforts to increase the number of apprenticeships, there is sometimes a lot of emphasis on the overall figure, which includes a significant number of those aged 19 and above, whereas for us and society as a whole, the biggest challenge is the 16 to 19 group.
Baroness Garden of Frognal
I thank the noble Lord for his comments and agree with him that raising the participation age was a very good move to make to the breadth of possibilities to young people. On the figures which he said that he had not had, the study programme is for 16 to 19 year-olds with qualifications and extended work experience. On the youth contract, there is intensive support for 70,000 of the most disengaged 16 and 17 year-olds. That was in my opening remarks.
To pick up some of the noble Lord’s points on this, the raising of the participation age will indeed be reviewed annually from spring 2014. We have not yet agreed the members of the review team, but they will be agreed later this year. He asked about holding an office. Obviously, that may be a bit more difficult for 16 to 17 year-olds, but we have already had the example of someone being an adviser to a police commissioner or a charity trustee. There are things that young people might find, and if they do, that will count for them.
The noble Lord mentioned young carers. They receive a carer’s allowance, and that could certainly be classified as a way of working for they would get credit. Home education is allowed under the scheme, and local authorities will check with parents to confirm that that is indeed taking place in a robust and proper manner.
We have published the document about re-engagement programmes and are involved with organisations such as the Prince’s Trust to try to assure them. On universal credit, we remain in discussion with DWP on how that will fit in with the orders.
The noble Lord also mentioned learners with learning difficulties. Of course, we recognise that too many children and young people do not get the support that they need and that their families have to battle for services, but we are reforming the special needs system. That will come through in the Children and Families Bill, which is in the other place at the moment and coming to us later this summer. That will provide points for debate, and we look forward to hearing the noble Lord’s views on those proposals, but we hope that that will be a distinct advantage for those with special educational needs. I think that I already mentioned the study programmes.
There is a good story to tell on apprenticeships. I will always give credit to the noble Lord and his Government for what they did to beef up apprenticeships and increase the numbers going through. The coalition Government have taken that forward, with significant increases in the number of apprenticeships. They will be looked at again in the light of the Richard review. We are engaging more and more employers in taking on apprentices and some of the bigger companies such as BAE Systems, BT and BP have well accredited schemes. Some of them have more applicants for places than for some of our best universities. That is raising the profile of apprenticeships and the fact that young people, their parents and indeed their schools and careers advisers are aware of the possibilities of apprenticeships and what an excellent way they can be of getting into fulfilling careers. We have a great deal of work going on in that regard and obviously we will work with the noble Lord to make sure that that programme continues.
The noble Lord also raised again the possibility of making apprenticeships contingent on government contracts. Sadly, I have to disappoint him because I have no answer other than the one I gave him previously on that. It is for the employers to decide how that will proceed. I do not have a different answer. We have not found it possible to insist on it in the contracts. Of course, a great many government contractors have apprentices.
There may be one of two points that I have not covered: the noble Lord was raising them slightly more speedily than I was able to note them. But if there is anything I have not covered in those replies I will of course write to him.
Meanwhile, the legislation for raising the participation age will bring a historic and significant change to the English education system. It will bring benefits to young people, especially the most disadvantaged, and our country as a whole socially and economically. The Government are taking decisive action to improve the quality of education in this country and are providing support to the most vulnerable young people so that they can also continue in education and training. We want as many young people as possible to receive a high-quality education that will equip them to progress into higher education or sustainable employment.
The two instruments under consideration today should not be contentious. As I said at the start of the debate, one is technical in content only. The other is in line with both primary legislation and feedback from public consultation and is supportive of young people gaining experience from a range of valuable opportunities. I will come back to the noble Lord if there is anything that has not been covered.
Lord Young of Norwood Green
I have a couple of points before the Minister sits down. Her answer on public procurement was slightly different this time. Last time it seemed to be emphatic that there were legal barriers. I am challenging that. That does not appear to be the case, and I would welcome the Minister taking that away and giving me a more considered answer on that issue. I am quoting from the UK Office of Government Commerce guide.
I encourage the Government to look again. The Minister cited the large employers. Yes, they are good and if they were all like them we would not have a problem, but the difficulty we face is the point that the Minister made herself. Places are vastly oversubscribed. The demand is huge. We will raise the demand even further when we raise the participation age. My question to the Government is how we are going to meet that demand. Although the overall picture looks good, we still face the problem that in the 16 to 19 year-old age group there is a drop. I do not raise that to score any political point. I want the Government to succeed in this area, but somehow I do not detect enough urgency in the Government’s approach to this.
The more you meet young people—I go out and speak to lots of sixth formers—the more you realise the chances of a group of them getting more and more disillusioned and saying, “What is the point? When I get to the end of this what are my chances of getting a job?”. We know what the figures are for unemployment in various parts of the country.
We really should be straining every sinew to ensure that we give a work experience or job opportunity to every young person. That should be the target, and not at some distant point. If we do not do that, we will be in danger of creating another lost generation, and a generation that becomes disillusioned does not always respond in the most constructive way, as we witnessed not all that long ago. Therefore, I hope that the Government will reflect on this. There are lots of good intentions within these two statutory instruments and I do not challenge any of those.
There is one other point to which the Minister might reply in writing. We also need to check on the quality of training that employers provide. We know that lots of young people are going into a job. For those who want to do so and can get a job, that is great, but we want to make sure that every employer who takes them on has a proper training programme laid out, otherwise that will be another objective. I am not sure whether that was covered in the Minister’s response. If she does not have the answer to it now, I would welcome a reply in writing. Other than that, we will be supporting these instruments.
Baroness Sharp of Guildford
Perhaps I may pose one further question to the Minister. Chapter 2 of Part 1 of the Act places quite a number of obligations on local authorities—in particular, the rather difficult obligation of chasing up and identifying the young persons not meeting the Section 2 duty. Guidance is to be published on the Department for Education website, but I wonder when it is likely to be published and what proposals it is likely to make. Given that the diversity of schooling now means that it is not necessarily so easy to chase up what young people are doing and how they are participating, I think that this is going to be quite a difficult task for local authorities.
Picking up the point that the noble Lord, Lord Young, made—
The Deputy Chairman of Committees (Lord Colwyn)
My Lords, there should be just brief interventions for clarification. Perhaps the noble Baroness could keep it fairly short.
Baroness Sharp of Guildford
I was just going to ask the Minister whether she would like to comment on the role of traineeships in relation to young apprenticeships.
Baroness Garden of Frognal
In reply to the first point, the guidance was published in February, so it is available. We also have a recently published document on traineeships, and there is more detail in that. We see the traineeship programme as providing another very valuable route for young people, and it will be rolled out further once the first programme has been established. We understand that local authorities will have a central database to try to monitor it.
I fear that this debate is rather moving away from the order and regulations. However, it is very interesting and valuable, and I am sure we will go into great detail when we come to discuss other aspects of this. I will indeed undertake to write to the noble Lord about the public procurement apprenticeships, and I will look at the other points that have been raised and try to come back to both my noble friend and the noble Lord. Meanwhile, I think that we have discussed the regulations, which I commend. I hope that the Committee is fully supportive of our ambitions and this legislation.
Apprenticeships, Skills, Children and Learning Act 2009 (Consequential Amendments to Part 1 of the Education and Skills Act 2008) Order 2013
Baroness Garden of Frognal
That the Grand Committee do report to the House that it has considered the Apprenticeships, Skills, Children and Learning Act 2009 (Consequential Amendments to Part 1 of the Education and Skills Act 2008) Order 2013.
Relevant document: 23rd Report from the Joint Committee on Statutory Instruments, Session 2012-13.
Industrial Training Levy (Engineering Construction Industry Training Board) Order 2013
Viscount Younger of Leckie
That the Grand Committee do report to the House that it has considered the Industrial Training Levy (Engineering Construction Industry Training Board) Order 2013.
Relevant document: 23rd Report from the Joint Committee on Statutory Instruments, Session 2012-13.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, the purpose of this order is to seek authority for the Engineering Construction Industry Training Board—the ECITB—to impose a levy on employers in its industry in 2014, and this will relate to an assessment of employers’ payroll in the 2012-13 financial year. The prime purpose is to meet the skills needs of the industry.
I believe that it is worth spending a little time elaborating on the reasons why there is a statutory training levy in the engineering construction industry. The engineering construction industries construct and maintain the power and utilities essential to the UK’s infrastructure. The industries include coal and gas power, offshore oil and gas, chemicals and pharmaceuticals, steel and metal smelting, nuclear power and renewable energy. The construction and maintenance requirements for these industries call for a mobile, flexible and highly skilled workforce. It is the employers in these industries who have, since 1991, come together to support collective action through the levy to develop the workforce, manage risks and address skills needs.
Similar statutory arrangements are in place for the wider construction industry, which operates under a separate levy order passed in Parliament in 2012. The Government have made, and continue to make, major investments in skills and training. However, while the Government have a role in setting the framework for success, employers need to be in the driving seat if we are to equip the workforce with the skills that employers need. The ECITB has a central role in training the workforce and supporting the industry to achieve sustainable growth. In doing this, the Government look to the ECITB to minimise bureaucracy and ensure that support to employers is relevant and accessible. The ECITB is employer-led, rather than government-led, and its role is to encourage the provision of adequate training of employees and prospective employees in its industry. It provides a wide range of services, including setting occupational standards, developing vocational qualifications and delivering apprenticeships, as well as paying direct grants to employers who carry out training to approved standards.
Employers in the engineering construction industry continue to support a statutory framework for training. The ECITB is a model of the successful application of such a framework, and the order that we are considering today will enable these statutory levy arrangements to continue. I welcome this order as evidence that employers in the engineering construction industry want to continue to invest in the skills of their workforce.
The ECITB operates under the provisions of the Industrial Training Act 1982. That Act permits the ECITB to raise a levy on employers so that the costs of training are shared more evenly between companies in the industry. This order gives effect to proposals submitted to us for a levy to be collected by the ECITB in 2014. It is a condition of the ITA that a levy order is made affirmative as a resolution in the House where it involves the imposition of a levy estimated to be in excess of 1% of emoluments—that is, essentially wage costs—for some employers.
The orders can be made only if the Secretary of State is satisfied, first, that the amount of levy is appropriate in the circumstances; secondly, that the proposals are necessary to encourage adequate training in the industry; and, thirdly, that the previous levy order received support from the majority of employers and the levy rates remain unchanged. I confirm that my right honourable friend in the other place, the Secretary of State for Business, Innovation and Skills, is satisfied that these conditions have been met.
The Act also requires the ECITB to include proposals for exempting small employers from the levy. This order therefore provides that small firms will be exempt if their expenditure on payroll and sub-contract labour is below a certain threshold that the industry considers to be appropriate, and I will come to the details of the thresholds in a moment. Those firms that are below the threshold and exempt from paying the levy are still able to benefit from grants and other support from the ECITB, and indeed many of them do so.
The ECITB does not propose to make any changes to its levy rates or small firms exemption thresholds. The rate for site employees will remain at 1.5% of total payroll, plus net expenditure on sub-contract labour. Employers who spend £275,000 or less on payroll costs for on-site employees will not have to pay the levy. The rate in respect of off-site employees—often referred to as “head office” employees—is 0.18% of total payroll, plus net expenditure on sub-contract labour. Employers who spend £1 million or less in respect of payroll costs for off-site employees will not have to pay the levy.
Of all the establishments which are considered to be leviable by the ECITB, it is expected that around 35% will be exempted from paying the levy. For the ECITB, the one-year proposal is expected to raise around £20 million in levy income. The Committee will note that the ECITB order covers a one-year period. The Industrial Training Act requires ITBs to submit proposals—and I quote—“from time to time”. These proposals may provide for levies to be imposed for a period of up to three years.
The ECITB has proposed a one-year levy order because, in view of the current economic conditions, employers considered that flexibility should be retained on the issue of future levy rates. It is anticipated that next year the ECITB levy order will also cover a one-year period, with the intention of realigning with the Construction Industry Training Board to a three-year levy cycle from 2015 onwards.
The Committee will know from previous debates that the ECITB exists because of the support it receives from employers and employer interest groups in its sectors. As I indicated earlier, there is a firm belief that without the ECITB there would be a serious deterioration of the quantity and quality of training in the industry, leading to a deficiency in skills levels. Consultation with the industry in 2012 demonstrated that there is strong support among employers for a levy system, with 71% of employers liable to pay a levy in 2014 supporting the levy arrangements. Only 2% of employers indicated that they opposed the levy. Those that did not express a view are not counted as supporting the levy. This draft order will enable the ECITB to continue to carry out its vital training responsibilities, and I commend it to the Committee.
Lord Young of Norwood Green
I thank the Minister for his comprehensive contribution. I must admit that I found it interesting because, by mentioning all the different industries, he stressed their importance. As he rightly said, this is a mobile, flexible and highly skilled workforce. Our one concern is the point that he raised near the end of his contribution: because of the somewhat fragile state of the economy, which is clearly impacting on these industries, they are going for only a one-year levy. I do not expect the Minister to have the answer to this but I should be interested to know what impact this will have on the number of apprenticeships that are likely to be offered. These are highly skilled industries and these apprenticeships are highly sought after, so it is a bit worrying that they have decided to go for only one year.
It was interesting as well that the Government are proposing an alignment with the ECITB in 2015, which is probably a step in the right direction. I could not help reflecting that, in looking at that level of support from the employers, a levy is perhaps one way of ensuring that all employers contribute to training in industry. It gets us away from the idea that so many employers have. They seem to think that they do not have to bother and can poach their skills from other employers. However, with those couple of questions and that slight caveat, we offer our support to this statutory instrument.
Viscount Younger of Leckie
I thank the noble Lord, Lord Young, for his general support for this order. I will indeed refer back to him in writing on the one-year levy and the impact that it has on apprenticeships. I should make the point that the support that the ECITB is giving for skills is over and above the other schemes and initiatives that this Government are taking, which the noble Lord will be aware of. I listened in briefly to the previous debate in this Committee concerning apprenticeships, and it is the case that the previous Government indeed started off much on the apprenticeship scheme. This will add to that. It is pleasing to note that apprenticeship numbers are holding up and, indeed, increasing. There were 849 apprentices recruited in 2012, a figure which I hope I can improve upon with an increase as time goes on.
The other point to make about apprenticeships is that they remain the prime route into the industry; the noble Lord raised this point. The ECITB supports and promotes apprenticeships to employers. That is a very important part of what it does. It also provides financial support and grants for apprenticeships. In 2012, demand for apprenticeships was much tighter than expected, indicating rising employer confidence and additional demand from employers—in particular, in the nuclear sector. I know that I could say more about apprenticeships but I am very pleased that there is overall support for this order. I commend it to the Committee.
Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013
(10 years, 11 months ago)
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Lord Newby
That the Grand Committee do report to the House that it has considered the Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013.
Relevant document: 23rd Report from the Joint Committee on Statutory Instruments, Session 2012-13.
Lord Newby
My Lords, the Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 set out the legal framework under which tax-transparent funds will be introduced to the UK. We are introducing two new vehicles, both of which will be subject to Financial Conduct Authority authorisation and which are collectively known as authorised contractual schemes. The first of these schemes is the co-ownership scheme; the second is based on existing limited partnership models. As a matter of course, I can confirm that the provisions in the regulations are compatible with the European Convention on Human Rights.
The UK investment management industry serves millions of customers all around the globe and is one of the UK’s success stories. It is a key part of the UK’s financial sector, managing £4.9 trillion of funds and earning an estimated £12 billion a year for the UK. About a third of European assets under management are managed out of the UK and the industry is a significant provider of high value-added jobs and skills, with clusters of expertise in London, Scotland, and across many UK regions.
However, this sector is about more than just the management of funds, it is also about where the funds themselves are located. The establishment of a tax-transparent fund vehicle is an important part of our programme to ensure that the UK remains competitive as a European centre for fund domicile.
Once introduced, these funds will be suitable for use in many roles, whether by themselves as stand-alone schemes, or as part of more complicated structures. Introducing them will also help to ensure that the UK is able to take full advantage of the opportunities presented by the Undertakings for Collective Investment in Transferable Securities IV—UCITS IV—Directive. That directive governs more than 70% of the net value of European funds for collective investment in transferable securities. The directive in 2010 enabled fund managers for the first time to operate cross-border UCITS master funds. That means that feeder funds from across different member states can invest into a much larger master fund, pooling their assets and thereby benefiting from economies of scale and greater investment diversity.
For that structure to work well, the master fund must be tax transparent. That means that there is no taxation of income in the master fund itself. The feeder funds and any other investors are then taxed as normal in their own jurisdiction on their investment return. In this way, the Exchequer does not lose revenue. Instead, investors pay tax as appropriate based on their circumstances.
As I mentioned, we are introducing two types of authorised tax transparent funds. Both of the types being considered are contractual funds under the UCITS IV directive. One type is the co-ownership scheme. This is a new type of fund structure in the UK, but is already in place and used extensively in other European member states.
Legislation being introduced separately will provide that for the purposes of UK capital gains tax, such funds will be treated as opaque. That means that the investors’ holding in the fund will be the relevant asset for investors’ capital gains tax purposes, not the underlying assets held by the fund. That will avoid some of the complex reporting and accounting requirements associated with investment in fully tax-transparent entities.
We are also introducing an authorised limited partnership scheme, which will be based on the already well-recognised unauthorised limited partnership vehicle currently used in the UK, and which will be fully transparent for both income and gains. Given the existing availability of these funds in other domiciles, there is commercial demand to have similar vehicles in the UK.
Once introduced, the tax transparent funds will enable UK fund managers to take advantage of the opportunities created by UCITS IV and establish master funds here in the UK. These funds will also be suitable for other purposes, and fund managers will be able to make commercial decisions over how best to employ them. For example, the new fund structure will also allow some investors, in particular pension funds and charities, to retain the benefit of lower rates of withholding tax on their foreign investments under double taxation treaties. These benefits cannot be retained if investment is made through non-transparent funds.
Whether forming part of a master-feeder structure or not, these new funds are an important part of our strategy to support the UK as a competitive location for fund management and domicile.
The Government consulted widely with industry to ensure that these vehicles are as competitive as possible. The consultation responses were strongly supportive of the introduction of the new vehicle. Many respondents have stated that the new structure would enhance the UK’s reputation as a fund domicile and help promote the UK investment management industry.
The instrument is to be made under the European Communities Act 1972 to provide for the formation of UCITS in accordance with contract law. Specifically, the instrument inserts a new Chapter 3A in Part 17 of FSMA to govern the authorisation and supervision of contractual schemes by the FCA. It extends to contractual schemes the FCA’s power to make rules for this purpose in relation to unit trusts. As with other authorised collective investment schemes, and to ensure consistency and coherence of tax treatment, the rules will also extend beyond UCITS to non-UCITS retail schemes and to qualified investor schemes. These latter more lightly regulated schemes will be within the ambit of the new AIFMD directive. As well as providing consistency with other UK funds, this will give greater flexibility to fund managers.
Other primary and secondary legislation is amended to provide for contractual schemes broadly in line with provisions already made for unit trusts and open-ended investment companies. The Limited Partnerships Act 1907 partly governs limited partnerships and is modified for the operation of partnership schemes. The Insolvency Act 1986 and insolvency rules and equivalent legislation for Northern Ireland are modified to enable co-ownership schemes to be wound up in the event of insolvency.
In addition to this legislation, there will be additional regulatory changes to bring the tax-transparent funds into effect. Regulations governing the tax treatment of UK resident investors in the new funds will shortly be laid before the House of Commons. These regulations will cover the capital gains tax, stamp taxes and VAT treatment of these funds. Regulations covering stamp duties and VAT are being made through the negative resolution procedure; the capital gains tax regulations are subject to affirmative resolution of the House of Commons. Before any new schemes can be launched it will also be necessary for the FCA to approve its own rules which govern their regulation. This regulation is necessary to ensure the schemes are operated in a responsible and appropriate manner.
These changes pave the way for the introduction of effective and competitive tax-transparent funds to the UK. These funds will help to provide improved returns to investors, as well as providing new opportunities to industry and strengthening the UK investment management sector. I therefore commend these regulations to the Committee.
Lord Tunnicliffe
My Lords, I thank the Minister for introducing these regulations and for the speed with which he read his brief. I have looked at the regulations and particularly at the impact assessment, as well as all the various issues related to the regulations, and it seems to me that they are good news for everybody who has been consulted—and they seem to be pretty good news in general. However, the consultation has essentially been with the industry, and a couple of words that I heard in the Minister’s speech were “lightly regulated”. We have had light regulation in the past, and, clearly, that is good for the industry, fund managers, and so on. But I seek an assurance that the regulations have been carefully checked so as not to increase the opportunities for tax avoidance and that there will be no increase in tax avoidance as a result of our approving the regulations.
Lord Newby
My Lords, I am grateful to the noble Lord for his speedy response to my speedy introduction. I think that I can give him the assurance that he seeks. In terms of tax avoidance, the great advantage of the new vehicles is that, by being transparent in the country of domicile, they ensure that each taxpayer is accountable for domestic tax payable in the country where they are based. So we are content that they will not become tax-avoidance vehicles.
I used the phrase “more lightly regulated” in respect of one relatively small category of schemes. The schemes will be fully regulated and, because of the scale of investment involved, will be taken very seriously by the FCA. On that basis, I hope that the noble Lord will be happy with the regulation.
Cash Ratio Deposits (Value Bands and Ratios) Order 2013
(10 years, 11 months ago)
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Lord Newby
That the Grand Committee do report to the House that it has considered the Cash Ratio Deposits (Value Bands and Ratios) Order 2013.
Relevant document: 23rd Report from the Joint Committee on Statutory Instruments, Session 2012-13.
Lord Newby
My Lords, the draft order makes changes to the cash ratio deposit scheme, which is how the Bank of England funds its monetary policy and financial stability functions. Under the Bank of England Act 1998, banks and building societies of a certain size are required to place a proportion of their eligible deposits in a non-interest-bearing account in the Bank of England. The Bank of England then invests these deposits in interest-bearing assets, specifically gilts, and the return it makes funds its monetary policy and financial stability functions.
The Government continue to believe that the cash ratio deposit scheme is the right way to fund the important policy work of the Bank. The operation of the cash ratio deposit scheme means that the Bank’s income is subject to changes in two variables: first, changes in the gilt rate; and secondly, the size of deposits eligible for the scheme, which is largely driven by the performance of the banking sector. Over the past five-year period, both of these have been lower than expected, which has caused a shortfall in funding for the Bank. The Government seek to address this shortfall by recalibrating the parameters of the cash ratio deposit scheme to current economic conditions.
Specifically, the order increases the proportion of deposits that eligible financial institutions are required to deposit at the Bank of England from 0.11% to 0.18%. It also increases the total amount of deposits that an institution has to hold to be eligible for the scheme from £500 million to £600 million. These changes, when taken alongside efficiency savings to be made by the Bank, aim to ensure that the Bank of England’s income is able to cover the costs of its policy functions over the next five years.
The Government have come to this conclusion after conducting their five-yearly review of the cash ratio deposit scheme. The parameters for the scheme were last set out in 2008, and, of course, economic circumstances have changed significantly since that time. I shall set out some of the more detailed findings of this review.
The total costs of the Bank of England’s monetary policy and financial stability functions between 2008 and 2013 are expected to be around £600 million. The income that the Bank of England is expected to receive over the same period is only £520 million. This will generate a shortfall of £80 million, which the Bank will have to recoup from its reserves, resulting in a reduction in the dividend that the Bank passes over to the Exchequer. This has largely arisen because the return the Bank has received on its investments over the past five years has been lower than expected. At the time of the previous review, the Bank had estimated that its investments would generate a return of 5% based on market expectations of gilt yields in 2008. However, the Bank’s average return is now expected to be about 4.25% between 2008 and 2013.
In addition, the level of deposits that the Bank has received under the CRD scheme has grown slower than expected. In 2008, these were expected to grow at 4.5%. They have instead grown by just under 2%, reflecting the performance of the banking sector during the financial crisis. Should no action be taken, the review found that the outlook for the coming period is much worse. The projected costs of the Bank’s monetary policy and financial stability functions over the next five years are expected to rise to £670 million. This increase is driven by the costs of additional responsibilities that the Bank is taking on, including the supervision of clearing houses and security settlement systems, macroprudential regulation and the setting up of the Financial Policy Committee to identify, monitor and take action to reduce risks to the financial system.
In contrast, the income that the Bank will receive will fall further because market expectations of gilt yields remain low over the next five years. This means that if no action is taken, the Bank’s income will be £440 million and its costs will be about £670 million in the next five-year period, generating a £230 million shortfall. In meeting that shortfall, the Bank is playing its part. It has committed to bearing down on its costs. In particular, it will seek efficiency savings through establishing a shared corporate services model with the Prudential Regulation Authority. The Bank’s budget for the next five-year period takes these savings into account.
Lord Tunnicliffe
My Lords, I thank the Minister for presenting this order. I would almost say that the scheme is essentially a tax on banks and effectively a charge—a way by which the Bank of England receives appropriate revenues to support its policy activities. My understanding from the paperwork—I briefly read the report—is that in essence the revenue from this scheme has proved to be significantly less than predicted. Essentially, the Bank got its forecasts wrong, and therefore it needs to adjust the parameters of the scheme to raise its income over the next five-year period.
The report says that the Government announced the setting up of a review on 18 September 2012. I just wonder how thorough this review has been, because it concludes that this scheme is the best way of going about this but there is little argumentation. It seems to be quite an elaborate scheme. Banks and building societies funding this policy activity is an entirely reasonable idea but the scheme does seem elaborate and I believe that it would bear a more careful review. Therefore, my first question is: in how much depth have the Bank and the Treasury looked at this scheme of requiring banks to place non-interest-bearing deposits with the Bank of England to fund the Bank of England? How much study has there been into whether this is the best way of doing it?
The increase in the levy—a de facto levy—is pretty substantial. As the Explanatory Memorandum points out, the expected revenue will rise from £436 million if the parameters have not changed to £657 million over the period under consideration. That is a 50% increase.
I note from the consultation that there has been no great squeal from the banks which will be paying it, and therefore one must assume either that these sums of money are lost in the roundings of such institutions or that the banks feel that the increase is fair. Nevertheless, it calls into question the efficiency of the Bank of England and whether, in what I loosely call the 2013 review, the efficiency has been properly considered.
In listing the outcomes of the review, the report goes on only to explain the parameters which have changed requiring a review and one efficiency saving, which is in the back-office joint operation with the PRA. Does the Minister feel that the efficiency of the Bank has been properly reviewed? Does he feel that there should be further mechanisms to review the level of funding of the Bank of England in the circumstances?
I have a very open mind on this. I think that the Bank of England should be as efficient as possible. Equally, however, given the tremendous change in circumstances and the responsibilities of the Bank of England, not only do we need an assurance that the Bank of England is as efficient as possible; we need an assurance that the resources are adequate to meet the exceptionally increased responsibilities now being placed on it. Has the Court of the Bank of England carefully considered the funding over the next five years, and can we be assured that the court feels that it is adequate for these new responsibilities?
I turn to my final question. This number might be too small but, again, it is in the roundings. The Explanatory Memorandum says that the larger institutions will have to top up their deposits with the Bank to the tune of £1.558 billion. To a mere mortal that is quite a substantial sum. I do not understand from the EM the extent to which this sum impacts on the balance sheet and capital reserves of the banks and the extent to which that will have an impact on their lending capability. The whole of industry, and in that sense the nation, is looking to the banks to lend more, to create more liquidity and to increase industrial activity. It is crucial that we do not see any significant impairment in the banks by the changed parameters in this scheme.
I would be grateful if the Minister could answer those questions. As I said, we do not want the Bank to be underfunded. We want it to be efficient and therefore, in the generality, we support the order.
Lord Newby
My Lords, I am grateful to the noble Lord. I will attempt to deal with his questions. He asked about the basis of the scheme. There was a significant review in 2008 which considered whether a fee-based approach would be a better way of funding the Bank. That review concluded that the benefits arising from the Bank’s activities accrued to the whole banking sector and that it was not possible to apportion the service being received in that way to individual firms. That remains the case.
We asked the banks whether they agreed with that. Some 154 organisations were proactively invited to respond to the Treasury's consultation which ran earlier in the year, in February and March, and the Treasury received three responses. Broadly speaking, the responses were sympathetic to what was being sought. I think that we can take it that this is one of those cases where the banking community is not up in arms about what is proposed.
The noble Lord asked about efficiency and whether this will be properly reviewed, whether resources are adequate and whether the Bank is operating efficiently. The background is that the Bank’s real-term budget is not any higher now than it was in 2000-01, so there has not been a drift. It is fair to say that the Bank has not been subject to significant savings over the past year or two. However, the Government’s view is that the past year or two has been a period of almost unrivalled change in the financial services and regulatory architecture and in the role that we wish the Bank to undertake. Therefore, this was not the time to have a root-and-branch look at efficiency, particularly given that many of the efficiencies that we are talking about will be realised only when the PRA is up and running and it is possible to see how well the joint operation of the back-office activities is going and how much can be saved in that way. Between now and the next review, the Treasury and the Bank itself will look at efficiency afresh in the light of the new arrangements which are happening all around them and the new responsibilities that the Bank itself has taken on in terms of the FPC and direct regulatory roles. Yes, we are concerned about efficiency, but we need to get the balance right and we will be looking very carefully at that over the next year or two.
Finally, the noble Lord asked about the effect of the cash ratio deposits on the Bank’s ability to lend. The cash ratio deposits continue to count as assets for the financial institutions making them so they do not have an impact on the capital requirements. Obviously, however, they represent an opportunity cost as the cash is tied up with the Bank without a return. Nevertheless, as he suggested, this opportunity cost is relatively small. The best estimates of the extra return they will forgo is about £220 million and this will be split between 150 institutions, albeit not equally. Although this is a not-insignificant sum, it is insignificant compared with the £13.8 billion that the banks have drawn from the Funding for Lending scheme. Taken together, the banks are bearing a modest cost. I think that that is why they were content when we undertook the consultation.
I hope that I have answered the noble Lord’s questions. On that basis, I commend the order to the Committee.
House of Lords
Schools: Sport
(10 years, 11 months ago)
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Baroness King of Bow
To ask Her Majesty’s Government what plans they have to increase sports activities in schools.
The Parliamentary Under-Secretary of State for Schools (Lord Nash)
My Lords, the Government are providing £150 million for each of the academic years 2013-14 and 2014-15 to be distributed to every state-funded school with primary age pupils. This funding will be ring-fenced and must be spent on improving the provision of physical education and sport. Schools using this funding will be reviewed by Ofsted. The funding will complement efforts across Government which will ensure that all children enjoy opportunities to take part in sporting activities. We are also spending up to £166 million on the School Games.
Baroness King of Bow
Is the Minister aware that the Prime Minister has lamented the fact that elite sport is dominated by those with a private education? This happens because private schools have hockey masters, rugby masters, cricket masters, and so on, who can spot and develop talent. Is he further aware that state schools can do that only if they create the infrastructure by pooling resources essentially to do the same thing? Incidentally, that is what the school sports partnerships do. Will the Minister come to Tower Hamlets Youth Sport Foundation to see how the borough’s schools are pooling resources so that everyone can continue to keep the Olympic legacy alive and have the chance to do more sport in schools?
Lord Nash
I would be delighted to come to Tower Hamlets to do that. The noble Baroness may be pleased to know that, in addition to the four free schools we already have opening in Tower Hamlets, several more will probably be approved shortly. She makes a very good point about independent schools. The Headmasters’ and Headmistresses’ Conference is working on a scheme for co-operation between private schools and primary schools and King Edward’s School in Birmingham is developing a scheme and looking for other schools to do the same.
Baroness Grey-Thompson
My Lords, sports and activities are incredibly important for disabled children and some very pleasing figures have been released in Wales today in the aftermath of the Games which show that participation among disabled people has risen. Has the Minister given any possible consideration to whether sports provision could be cemented within the educational plans as proposed in the new Bill? It is much more cost effective than therapy and it would be a perfect opportunity to help change the fitness and health of disabled people.
Lord Nash
One of the best ways to celebrate and encourage disabled pupils is to celebrate the success of our Paralympians, including that of the noble Baroness, who won 11 gold medals, four silver and one bronze. It is central to our curriculum that all children enjoy sport at school. We have provided £300,000 to Sport England for disability sport to encourage wider participation in sport among children and of course the School Games are open to all participants. We have also been involved in a number of other measures.
Lord Higgins
Thank you. I was going to give way. I declare an interest as patron of Herne Hill Harriers. Does my noble friend agree that far too many people give up sport when they leave school and that it would both encourage the general standard of sport in schools and encourage people to continue sport after school if more schoolchildren joined outside sports clubs before they left school? Will he see whether the department can do something to encourage this?
Lord Nash
My Lords, I agree entirely with my noble friend. I would like to see all our children doing sport every day. The Department of Health has funded the Change4Life sports clubs. We aim to establish 13,500 clubs in schools by 2015. We also aim to have 6,000 partnerships between schools and local sports clubs by 2017 by providing funding for the national governing bodies of the various different sports. A number of other measures are also in place.
Baroness Billingham
Is it not the case that one-third of schools have reported a decline in sports participation in the past two years? They report that this is due to a cut in funding and to timetable pressure. Michael Gove has much to answer for. Given the dire warnings, how do the Government intend to deliver the promised Olympic legacy of a new sporting generation?
Lord Nash
The latest Taking Part survey shows that the number of 11 to 15 year-olds participating in sport increased significantly in the six months to September 2012, from 86% to 94%. The school sport partnerships were expensive and patchy in their delivery. We have announced £65 million to release PE teachers to help primary school pupils, in addition to the funding that I mentioned earlier.
Lord Addington
My Lords, there is a great deal of consensus that if we want school-age sport to follow on to adult activity we must involve clubs at an early stage, as my noble friend suggested. Will the Minister give me an assurance that in future, if any changes are made to the interaction between a club and a school, all those involved will be publicly consulted to make sure that the changeover does not take anybody by surprise and that we keep as much expertise as we have gathered so far?
Baroness McIntosh of Hudnall
My Lords, does the Minister agree that the effective use of the money that has been set aside for sport depends on the continued willingness of teachers—not just dedicated PE teachers but other teachers—to support sports activities outside the normal school curriculum and timetable? Will he take this opportunity to pay tribute to all the teachers who put a lot of their own time into making sure that children are able to take advantage of sporting opportunities when they arise?
Lord Nash
I agree entirely with the point made by the noble Baroness and will take this opportunity to pay tribute to teachers. The House has heard me say before that I regard teaching as the most noble of professions. All good schools provide a comprehensive range of sports during and after the school day and we are keen to send a message to all schools that we expect them to do the same.
Lord Woolf
My Lords, does the Minister think that it is important to extend the very broad approach that he is adopting to the use of sport to the criminal justice field, and in particular young offenders? Is this a matter that he discusses with the Ministry of Justice?
Asylum Seekers
(10 years, 11 months ago)
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Lord Roberts of Llandudno
To ask Her Majesty’s Government what consideration they have given to allowing asylum seekers the right to work after six months of waiting for a decision on their application.
Earl Attlee
My Lords, the Government believe that it is important to maintain a distinction between economic migration and asylum. That is why asylum applicants may work only if their application has been outstanding for over a year. A more generous policy would encourage those not in need of protection to claim asylum for economic reasons.
Lord Roberts of Llandudno
That is a half-disappointing Answer from the Minister. Does he agree that allowing somebody to work who has been applying for, say, six months would bring them some dignity and some hope? It would also bring in tax revenue and cut the Government’s benefit bill. Does he not think that if we continue as now, asylum seekers will have no reason to get up in the morning, no hope and no job to go to? There will just be total despondency. The present system of not allowing asylum seekers to work really just condemns them to penury and despair and is a total denial of their potential.
Earl Attlee
My Lords, I hate to disappoint my noble friend. I accept how important it is for people to work. However, we cannot allow these asylum seekers to work until the 12-month point because it would encourage economic migration. My noble friend talked about the loss of tax revenue, but the current policies of asylum support under Section 95 and Section 4 have reduced expenditure from £1.2 billion in 2003 to below £300 million now.
Baroness Lister of Burtersett
My Lords, will the Minister tell the House what account has been taken of the evidence of the harmful impact on children’s well-being of continuing to deny their parents the right to work?
Earl Attlee
My Lords, I am sure that it is taken into consideration, but our obligation to asylum seekers is to meet their essential living needs and determine their applications as fast as possible, which we do in a significant number of cases.
Baroness Hamwee
My Lords, the Government have been very careful to keep the distinction between asylum seeking and migration, which, in his Answer to my noble friend, the Minister seemed not to retain. Would he agree that that is important? Would he also agree that it is important not to drive asylum seekers underground, perhaps into the black economy, which denying them the opportunity to work may well do?
Earl Attlee
My Lords, I hope that I made the distinction between immigration and asylum seeking very clear indeed. I accept my noble friend’s point about the need to avoid driving asylum seekers underground, but that is trumped by the need to avoid making seeking asylum an attractive proposition.
The Lord Bishop of Newcastle
Is the Minister aware that the Church of England’s General Synod, representing local churches with considerable first-hand experience of the lives of asylum seekers, voted overwhelmingly that all asylum seekers should have access to work? Does he accept that 12 months is far too long to be unable to provide for their families while waiting for their claim to be resolved?
Earl Attlee
My Lords, I do not accept that 12 months is far too long, because it is backed up by European legislation.
Earl Attlee
Indeed, there is much good legislation that comes from Europe. The point I would like to make is that asylum seekers can do voluntary work.
Lord Touhig
My Lords, there is anecdotal evidence showing that denying asylum seekers the right to work prevents their integration into British society. Have the Government made an assessment of this aspect of the problem, and if they have not done so, will he agree to do it?
Earl Attlee
The noble Lord is right: denying asylum seekers the ability to work makes it difficult for them to integrate into our society, and that is what we want. We do not want asylum seekers who have not determined their right to be in the UK to become integrated into the UK, as it makes it more difficult for them to return. When we find that someone has a good claim for asylum, asylum is granted, they can work straight away and we can then try to integrate them into our society as fast as possible.
Baroness Bakewell
The noble Earl will know that when women seek asylum following often violent sexual abuse in their country of origin, they are most likely to have their application accepted on appeal, so while they hang around without any income, many of them become destitute. How does he propose resolving that problem?
Earl Attlee
My Lords, the legislation is specifically designed to make sure that asylum seekers do not become destitute. They are supported under Sections 95 and 4, particularly Section 95 when their application is being determined. I would like to discuss with the noble Baroness privately why she thinks that female asylum seekers should be more vulnerable to becoming destitute. She has also previously raised with me the difficulties experienced by female asylum seekers, particularly in respect of torture.
Baroness Smith of Basildon
My Lords, asylum seekers sometimes wait years for a decision and delays are increasing. As we have heard, that leaves genuine refugees in limbo and makes it harder to send failed cases home. We currently have a shambolic situation whereby 300,000 people are trapped in the immigration asylum backlog, with 90,000 cases being written off so far or given effective amnesty because papers have been lost in some cases. I know the Minister will tell us that the Government are making organisational changes, but can he say something about the specific practical actions that are being taken to deal with the problem? Does he recognise that the dramatic cut in the number of staff at UK Border Agency has contributed to this backlog?
Earl Attlee
My Lords, I do not recognise some of the figures the noble Baroness has quoted. My information is that the expenditure on asylum support has gone down, as I said, from £1.2 billion in 2003 to below £300 million now. I accept that there is a problem in dealing with the legacy backlog, but the Question is about asylum seekers’ ability to work. The more we can reduce unfounded asylum claims, the better we can properly determine the genuine applicants and look after them properly.
Transport: Bus Services
(10 years, 11 months ago)
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Lord Greaves
To ask Her Majesty’s Government whether they plan to introduce any proposals that may affect local bus services.
Lord Sharkey
My Lords, on behalf of my noble friend Lord Greaves, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.
Earl Attlee
My Lords, as set out last year in the policy document, Green Light for Better Buses, the Government have a programme of action to improve local bus services. This includes reforming the way we pay the bus service operators grant (BSOG), incentivising partnership working through Better Bus Areas, and improving competition between bus companies by implementing the Competition Commission’s recommendations. We are also accelerating the development of smart ticketing on buses in England’s largest cities.
Lord Sharkey
I thank the Minister for that Answer. Last week, the Parliamentary Under-Secretary of State, Norman Baker, announced in a Written Answer that the role of traffic commissioners would be reviewed later this year. When this review takes place, will the Minister consider that when buses run late because of local highway issues, traffic commissioners should be given the power to summon not only the bus companies responsible but also local authority representatives?
Earl Attlee
My Lords, I am not aware of the particular point that my noble friend makes. However, with the Better Bus Areas, there will be much closer co-operation between bus operators and local authorities, which should improve the situation to which he refers.
Lord West of Spithead
My Lords, the noble Earl may be aware that there is a very limited bus service down to the Point in Portsmouth. This is important because today HMS “Ark Royal” is being towed away to be scrapped. Is the Minister willing to convey the thanks of the House for her 25 years’ amazing service to this nation?
Earl Attlee
My Lords, I am delighted to stray completely off piste. First, I have not been on HMS “Ark Royal” but I have been on the “Illustrious”. Secondly, there is a railway station called Portsmouth Harbour.
Lord Davies of Oldham
My Lords, the Minister regaled the House with a list of optimistic policies that the Government were pursuing with regard to buses. However, if the grant and support for local buses are reduced by 20%, how on earth are any of these policies going to make a real difference? Will he recognise that there is absolutely no point in the Prime Minister guaranteeing the bus pass for pensioners if there are no buses for them to travel on?
Earl Attlee
My Lords, I am a little disappointed. I thought that the noble Lord would have given me a much better run for my money. I accept that there has to be a 20% cut in the bus service operators grant. It is painful. My honourable friend Mr Norman Baker would have liked not to have done it—I am sure he would have fought hard to avoid it—but the best way of reducing the budget is to make small cuts everywhere, and we have had to make a small cut in the bus service operators grant. However, the effect on the bus service mileage has not been as much as one might expect.
The Countess of Mar
My Lords, talking of small cuts, our local village has a rather intermittent bus service, but they use quite large buses on the route. The buses are mainly empty. Would it be possible to use minibuses, which are cheaper to maintain, do not take up so much of the road and do not wreck the roads quite so much, instead of expensive single-decker buses?
Earl Attlee
The noble Countess makes a good point, but it is of course up to the operator to select the most suitable bus for its operations. It is a purely operational matter.
Lord Geddes
My Lords, has any further consideration been given to moving the central coach station out from Victoria?
Earl Attlee
My Lords, unfortunately that is a matter for the Mayor of London.
Lord Stoddart of Swindon
My Lords, I hope the noble Earl will take due note about what the noble Lord, Lord Davies, has said about pensioners’ bus passes. If they are removed—and I sincerely hope that the Government have no plans to do so, since I have a personal interest in the matter—the bus services would decline very seriously in this country.
Earl Attlee
My Lords, I can assure the noble Lord that there is no intention to remove the old-age bus pass.
Lord Foulkes of Cumnock
My Lords, did the Minister see that the Prime Minister had to go all the way to the United States to go on a London bus with Prince Harry? Has he ever been on a London bus in London, or is he afraid of running into swivel-eyed loons?
Earl Attlee
My Lords, I do not know when my right honourable friend the Prime Minister last went on a bus, but I use the bus when I go to see my mother because the bus frequency is high enough and it goes exactly where I want, when I want.
Health: Cancer
(10 years, 11 months ago)
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Lord Saatchi
To ask Her Majesty’s Government in what proportion of deaths recorded as caused by cancer is the actual cause of death the treatment of cancer.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
The Office for National Statistics publishes national cancer mortality data annually. Data are collected where cancer has been recorded as the cause of death, but not on treatment for cancer as the cause of death. I therefore regret that I am unable to provide this information.
Lord Saatchi
My Lords, I thank my noble friend for that reply. The point of this Question is that there is no answer to it. Since I tabled the Question, I have received an estimate from within the medical profession that last year 15,000 people in Britain were killed by cancer treatment rather than by cancer. We do not know whether 1% or 100% of patients die as result of the treatment; what we do know is that cancer drugs do such damage to the immune system that the patient is helpless to resist fatal infections such as MRSA, E. coli or septicaemia. Does my noble friend agree, as I think he has, that the official statistics for the UK cannot distinguish between cancer death and treatment for cancer death? Is this not because the ONS, under WHO guidelines, records only the single underlying cause of death? In other words, it does not record the sequence of causation, sometimes known as the sequence of conditions, that led to the death. This is supposed to be the era of big data. Will my noble friend review the limitations of cancer mortality statistics in order to assist scientists and doctors to have the information to move forward innovation towards a cure for cancer?
Earl Howe
My Lords, I agree that it is important to have more information on the effect of cancer treatments on mortality. New data collections which will provide more detail in this area are under way. The systemic anti-cancer therapy dataset will enable better information to be collected about deaths after the delivery of chemotherapy, and the cancer outcomes and services data set will provide information in respect of death after surgical treatment. However, it is important to make one point here: it can be hard to identify the precise cause or sequence of progression of factors resulting in death, particularly for those with end-stage cancer or who are particularly frail and are experiencing physical deterioration. I do not think that it can ever be a precise science.
Lord Campbell-Savours
My Lords, what about the circumstances where a person awaiting treatment in a congested cancer clinic is surrounded by patients who are coughing and spluttering? There will be consequential effects on immunity for those being treated. It may well be the drop in immunity that kills the patient, not necessarily the original cancer.
Earl Howe
My Lords, the noble Lord makes a good point. When recording the cause of death on a medical certificate of cause of death, doctors are required to start with the immediate, direct cause of death and then go back through the sequence of events or conditions that led to death until they reach the one that started the fatal sequence. This initiating condition will usually be selected as the underlying cause of death according to the International Classification of Diseases coding. However, that does not mean that someone with a primary cause of death of cancer will not have pneumonia, or whatever it happens to be, recorded somewhere on the death certificate.
Lord Patel
My Lords, does the Minister agree that as we progress with the current research into the molecular tagging of drugs that have the same molecular make-up as the cancer itself and nanomedicine we will be better able to target cancer tissue while leaving normal tissue alone? That will save lives lost to the complications related to treatment.
Baroness Jolly
My Lords, everyone—families, statisticians, managers and, indeed, researchers—wants accurate death certificates. What are the arrangements to monitor the recording of death as part of clinical governance?
Earl Howe
My noble friend has raised a very live issue because consultation will begin shortly on the Government’s plans to reform the governance relating to death certification. The proposed reforms will simplify and strengthen the process for death certification by appointing local medical examiners to provide independent medical scrutiny of the cause of death for all deaths not subject to coronial investigation. The medical examiner will improve the accuracy of information recorded on medical certificates of cause of death because the process will include a review of medical records and consideration of the circumstances leading to death.
Baroness Symons of Vernham Dean
My Lords, does the Minister agree that some forms of cancer, particularly the leukaemias and, within those, acute myeloid leukaemia, need a very aggressive form of chemotherapy in order to maintain life and that that necessarily includes the very high risk of infection through blood poisoning or diseases affecting lung capacity? Where the only alternative to very aggressive forms of chemotherapy is the certainty of death, does not the noble Earl agree that these forms of chemotherapy remain enormously important in the treatment of cancer?
Lord Ribeiro
My Lords, we have 11 cancer registries in the United Kingdom and Public Health England is due to merge eight of the English cancer registries with the National Cancer Intelligence Network this year. The United States and Sweden have national registries, and the benefit of that is that they are able to establish not only the diagnosis and causation but also the impact of treatment on patients and provide much more information to improve the quality of outcomes for patients. Is it not time that we had a national registry, mindful that independence for Scotland may put this at some risk?
Earl Howe
My noble friend raises a very important issue. I agree that it is important to draw together as much information as we can about causes of death from across the country. However, I am advised that the question of whether a cancer-related death can be attributed to the underlying disease or to the treatment cannot be answered comprehensively from information collected as part of the death certification process or the cancer registration process or, indeed, a combination of both. However, as I hope my previous answer indicated, I am sure that this is a developing science.
Baroness Brinton
My Lords, the Minister has kindly explained the tracking of the causes of death. What advice is given to doctors about recording dementia, which is often excluded when somebody has died of cancer? In the case of my late father, it was possible to get it added, but I suspect it may also be one of the reasons why dementia is underrecorded in this country.
Earl Howe
My noble friend asks a very good question. I will write to her on the specific question of dementia. I understand that the completed medical certificate of cause of death is given to the bereaved family which will present it to the registration service to register the death. The registrar will check that the doctor has completed the certificate fully, so it could then be open to the family to question anything that is not quite right on the certificate.
Equality Act 2010 (Amendment) Bill [HL]
Offender Rehabilitation Bill [HL]
(10 years, 11 months ago)
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The Minister of State, Ministry of Justice (Lord McNally)
My Lords, the purpose of this Bill can be summed up very simply: to improve the support we give to offenders in order to break the cycle of reoffending. There are many noble Lords speaking today who have championed reforms on this topic with successive Governments. Faced with such experience and expertise, it may seem unnecessary to dwell on why we need an Offender Rehabilitation Bill, but let me remind the House of the problems that have inspired this Bill, and of what has driven those who have campaigned long and hard for those reforms.
Last year, around 600,000 crimes were committed by people who had broken the law previously. Almost half the offenders released from our prisons offend again within a year. That goes up to a staggering 58% for those sentenced to prison terms of less than 12 months. And yet there is no statutory requirement for most of this group to receive supervision and support after release. As a result, many of them leave the prison gates with little more than the £46 in their pockets.
Such offenders have a host of complex problems: a shocking number of them will have been through the care system, and many have come from broken homes and are addicted to drugs and alcohol. As noble Lords will know, a greater proportion of women than men in custody are serving sentences of twelve months or less—21% compared with 10% of men in 2011—and many of those women will themselves have been victims of domestic violence.
The Bill aims to transform the support available for offenders given short prison sentences by introducing a 12-month period of rehabilitation in the community after release. The first part of this period will involve release under licence, in the same way as with longer-sentenced prisoners now. Indeed, the first clause of the Bill extends release on licence to all offenders given custodial sentences apart from those of a single day. However, for many offenders, this will not give long for those providing services to intervene. That is why Clause 2 creates an additional supervision period, solely for the purpose of rehabilitation, which will “top up” the licence so that every offender released from a sentence of less than two years has at least 12 months of supervision after release.
The conditions of this supervision period, which are set out in Schedule 1, reflect its explicit purpose of rehabilitation. They can include visits from the offender’s supervisor, drug testing and appointments in relevant cases, and participation in activities that the supervisor thinks will support rehabilitation. Activities may cover a wide range of different interventions. For example, they could include restorative justice where appropriate and where both victim and offender consent. I remind noble Lords of the Government’s strong commitment to increasing the use of restorative justice. In particular, I take pride in the fact that the Crime and Courts Act 2013 now puts pre-sentence restorative justice on a statutory footing for the first time.
We might also expect to see providers make greater use of mentoring. Excellent work is already going on, for example, in prisons. My right honourable friend the Deputy Prime Minister in a speech this morning drew attention to the work being done in Peterborough prison, where older, longer-serving prisoners are actively mentoring those serving shorter sentences. Given their experience, those who have been through the criminal justice system themselves can sometimes be most effective in convincing others that they really can and should turn their lives around.
Supervision after licence will allow maximum discretion for the professionals who work with offenders to tailor their interventions to the needs of each individual. However, it also balances that with a period long enough to tackle the complex issues that prisoners released from short sentences often face.
The Bill also creates a new role for the magistracy in overseeing the effectiveness of supervision after release. While the supervision period will apply automatically to all short-sentenced prisoners after release, magistrates and district judges will be able to hear cases in which an offender is alleged to have breached a requirement of supervision. Clause 3 will give them a range of options for dealing with a breach, including a fine, unpaid work, a curfew or, ultimately, committal back to custody for up to 14 days. This will give magistrates a much greater oversight of the delivery of sentences for this group of offenders. We intend to engage with the Judicial College and the Sentencing Council on the support and guidelines that this new role might require. I look forward to hearing the noble Lord, Lord Ponsonby, on these matters, given his experience as a magistrate.
I now turn to the wider Transforming Rehabilitation reforms. Noble Lords will know that, on 9 May, the Government published their strategy for reforming the services delivered to offenders in the community. We will create a new public sector National Probation Service, working to protect the public and building upon the expertise and professionalism which are already in place. The National Probation Service will report to the Secretary of State as part of the National Offender Management Service. This will give the probation service a stronger role within NOMS and the Ministry of Justice. The National Probation Service will play a fundamental role in protecting the public from the most dangerous offenders in our communities. Probation professionals in the National Probation Service will continue to work to protect the public from those who pose the greatest risk of harm and have committed the most serious offences.
Alongside this, we will open delivery of services for offenders in the community to a diverse range of new rehabilitation providers, as envisaged in the Offender Management Act 2007. We expect to see a wide variety of voluntary and private sector providers, from local community groups to regional and national organisations. In particular, we want to see a system which values and utilises the local expert knowledge of the voluntary and community sector. These providers will work alongside the National Probation Service and will manage the vast majority of offenders. We expect that most staff currently performing probation roles will transfer to the new providers. We will put in place a new system where the skills and expertise of probation professionals, coupled with the innovation and versatility of voluntary and private sector providers, support the rehabilitation of all offenders.
Opening up these services will allow us to make savings which we will invest in rehabilitation. It will also allow us to make better use of the money we already spend on managing offenders. We will create incentives for providers to focus relentlessly on reforming offenders, giving those delivering services flexibility to do what works and freedom from bureaucracy, but only paying them in full for real reductions in reoffending. Our payment structure will ensure that providers have to work with all offenders, including the most prolific and hardest to reach.
Finally, we will also put in place an unprecedented nationwide through-the-prison-gate resettlement service. This will mean that one provider will give most offenders continuous support from custody to the community. We will support this by ensuring that most offenders are held in a prison designated to the area to which they will be released for at least three months before release takes place. I hope that noble Lords will be as enthusiastic about this last reform as we are. It has long been recognised that closeness to home is an important factor in an offender’s resettlement process—and something on which the noble Lord, Lord Ramsbotham, has long campaigned. Our reforms will draw on the best that organisations across all sectors have to offer, allowing access to offenders at the start of their time in custody through to release and beyond.
Linked to these wider reforms, parts of this Bill will support individuals working with offenders—whether they are staff of the National Probation Service, voluntary and community sector workers and volunteers, or those working for new rehabilitation providers—to use their experience of working with offenders to provide innovative services. Just as the new supervision period provides the maximum discretion, so we have tried to match that for non-custodial sentences. For community orders and suspended sentences, Clause 13 will create a new rehabilitation activity requirement. This combines the existing supervision and activity requirements and gives those supervising an offender more discretion to tailor activities to their needs during the course of the order. Clauses 14 and 15 make similar reforms to the programme and attendance centre requirements. These reforms build on the efforts we have already made to strengthen community orders, so that sentencers and the public can be confident that they are a robust sentence which combines punishment with effective rehabilitation.
I am sure that today we will hear genuine concerns about the pace and direction of our reforms, but I remind the House that a number of noble Lords across all Benches have campaigned for many years for greater support to be given those sentenced to less than a year in custody. They have argued for better through-the-gate services and for more effective and better respected community sentences. These are ambitions which this Government share and this Bill gives a real opportunity for them to become a reality. The hard fact is that without our wider reforms we would not be able to afford to extend rehabilitative support to offenders released from short sentences, but neither could we afford the status quo, with offenders passing through the system again and again, with more victims hurt and more communities damaged. It is the need to tackle that cycle of reoffending, particularly for offenders released from the shortest prison sentences, which drives these reforms and is the central purpose of this Bill. If we can cut deep into the 58% reoffending rate for those sentenced to less than 12 months, it will change lives—not just for victims but for offenders, whom it may well help to move away from a life of crime.
I know that the objectives underpinning this Bill are supported by the whole House. The provisions themselves will be subject to close and careful scrutiny today and through every stage of the Bill’s passage through this House. But I believe it is a piece of genuinely radical reform deserving of your Lordships’ support, and I commend this Bill to this House. I beg to move.
Lord Beecham
My Lords, the whole House will join me in thanking the Minister for his very clear exposition of the Bill and the proposals relating to it, which do not appear in legislative form, and in welcoming efforts to reduce reoffending and its cost to the public purse and the life chances of the offenders themselves, and above all the damage to society at large and to the victims of crime in particular. That said, changes should be evidence-based, practical and cost-effective. A rehabilitation revolution is unlikely to be achieved on the cheap or by an ideological obsession with the market.
Members will wish to probe the details of the scheme for offenders on short sentences as well as those serving longer terms of imprisonment, to consider the implications of a binary system in which what are described as low to medium-risk offenders are dealt with by one set of providers and high-risk offenders by another, and to discuss the future of our successful probation system, which is effectively to be nationalised and then privatised under the proposals in the Government’s consultation document and their response to that consultation. Your Lordships will wish to examine the case for payment by results and the degree to which all relevant agencies, including local government, health services and the Department for Work and Pensions—to name but three—and the third sector can come together and be involved in the planning and delivery of services tailored to the needs of the individual offender and of the society to which we all want to see them return and in which they can play a useful part.
I begin with the proposals for offenders serving short-term sentences. The lack of supervision and support for this group has clearly been a major contributor to the high rates of reoffending. Welcome though a change in this position is, it is as well to recall that a thought-through policy would address the issues that lead many of these offenders into trouble in the first place. We are familiar with the early symptoms of a significant proportion of those who commit crime: low literacy and numeracy skills, truancy, early parenthood, mental health issues and, yes, poverty. However, in addition to addressing those matters, which involve policies across a range of government and local authority responsibilities and departments, we need to look at the justice system itself. As both Nacro and DrugScope point out in their responses to the consultation, greater use of community sentences would avoid custodial sentences, especially short ones, in the first place while still allowing the effective support envisaged under the Bill.
Experience of community sentences, however, demonstrates a potential problem with the Bill’s proposals to provide a sanction of two weeks’ imprisonment for non-compliance with the sanction order. There is a widespread view that in the existing regime there is an overreliance on this expensive and ineffective approach. The Criminal Justice Alliance suggests that recall to custody should be a last resort but sentence review powers should be available to all magistrates’ courts.
The Bill envisages supervision of all short-sentence offenders. Is this really necessary? To pick an example at random, should it apply to someone convicted of a road traffic offence, possibly combined with perverting the course of justice? There is surely a case for concentrating resources on those offences and offenders to which they are most likely to be relevant; otherwise, in a payment by results system, the low-hanging fruit will be too readily plucked by the providers, to the cost of the taxpayer.
In relation to the split between who supervises low and medium-risk offenders as against high-risk offenders, there are real concerns. These matters, along with payment by results and the radical changes to probation, are not part of the Bill. Therefore, in addition to a binary system of dealing with offenders, we have a binary legislative and policy process. This is an unsatisfactory, piecemeal approach, made worse by a flimsy—and belated—impact analysis.
The National Council for Voluntary Organisations points out that a quarter of offenders change risk category during their sentence, and calls for,
“a clear and consistent process for changing levels of risk”.
Where there is a change of risk, and therefore of responsibility, it calls for a system of managing the transition, including,
“a clear process for the attribution of payments”.
What proposals do the Government have in relation to these matters? Would change to a higher-risk category constitute a reason for withholding payment in whole or in part, or would that happen only in the event of reoffending?
The House may wish to consider amendments to the Bill designed to address some aspects at least of the radical changes to the probation service which form part of the Government’s agenda but are not, as yet, encompassed by the proposed legislation. The need to do so is highlighted by this issue of risk. The category of medium risk would appear to include sex offenders and some of those guilty of violent crime. There must be a concern that such offenders will or may be dealt with, not by the established probation service on release, but by providers in the new and untested payment by results scheme. Given the recent revelations about the soaring number of cautions for what seem to be potentially serious offences, there is likely to be legitimate public anxiety about the issue, especially as offenders can and do move up the risk scale.
The whole question of payment by results raises huge doubts. The Lord Chancellor has form on this; he is a high-risk offender as the progenitor of the staggeringly unsuccessful Work Programme. Why did he cancel the two schemes in Staffordshire and the West Midlands and Wales, and why has the Ministry of Justice refused an FOI request to release details of the evaluation of those pilot schemes? I repeat these questions, which I voiced in the Queen’s Speech debate and to which I have received no reply. Such a radical change should, at the very least, be properly piloted and evaluated before being rolled out. The notion of G4S, Serco and the like extending their growing takeover of the public services is not one with much public appeal, even if occasionally dressed up with a modicum of bid candy in the form of modest third sector involvement. Why will public providers be excluded from working with the low and medium-risk offenders? What will constitute a failed result—any offence, or one of similar or more serious character? If the latter, how is gravity to be measured and for how long is the period of non-offending to be measured before payment is made? What discussions have Ministers held with potential bidders about how the scheme might work? What proportion of the payment will be related to success, however defined, and when will it be paid?
There are also problems with the centralising thrust of the Government’s approach. Local justice is already being undermined by the continuing process of amalgamating magistrates’ benches and court closures, coupled with increasing reliance on full-time district judges. Probation trusts, arguably too large already, will disappear as commissioning will be carried out nationally. How will this help to promote the necessary joint working so obviously required between the justice system in its various manifestations and other relevant agencies? We know that housing and employment are the key drivers in preventing reoffending. Health issues, particularly in relation to substance abuse and mental health problems, of course also loom large. There is a clear need for local authorities, as deliverers of key services and support, to be engaged alongside clinical commissioning groups, the NHS Commissioning Board, police commissioners and the DWP at local level, together with the courts. That will be extremely difficult given the proposal to establish only 21 areas for the contract packages. Moreover, with contract areas as large as this, the opportunity to involve third sector organisations, to which the Minister referred, which so often bring innovative approaches to difficult areas of social policy such as those we are discussing, is likely to be much more difficult. All the promises of involving such bodies in the Work Programme disappeared as rapidly as the Prime Minister’s resolution on the question of a European referendum. What concrete measures will the Government take to ensure that the role of the third sector, particularly small, local organisations, will be secured in the commissioning process? Do the Government recognise the risk that, as the NCVO puts it,
“using a PbR model alone threatens to significantly reduce the potential range of providers”.
That is its split infinitive, please note, Mr Gove, not mine.
Will the Government ensure there are no gagging clauses in the employment contracts offered by providers? For that matter, will the Lord Chancellor lift the gagging order he made on probation officers and court staff in relation to the probation proposals and the interpreters fiasco respectively? Will the Government, as Nacro urges, make quality, and not price, the key criterion when commissioning services, and for how long will contracts run? Who will evaluate performance, and will such evaluations be made public?
There is clearly a host of doubts and questions, not about the Government’s objectives in reducing reoffending, nor about many of the proposals—for example, in relation to drug-testing and the like—but in addition to the matters that I have raised and others will air, including my noble friend Lord Ponsonby, whom I welcome to his first, and by no means, I hope, last, appearance on the Front Bench.
I wish to suggest a new way of dealing with the problems of one particular group of offenders, namely ex-service personnel. I recently attended a presentation about veterans’ courts, now established in every US state. They do not replace the ordinary courts, but in cases not involving serious or violent crime, for which probation would not be an option, and after conviction or a guilty plea in the ordinary court, veterans are offered referral to a veterans’ court, presided over by a judge—it might the same judge as in the court of first hearing—where with a veteran mentor they enter a period of supervision and help to overcome the problems that they both face and perhaps pose. They return to the court monthly and if they fail to co-operate, or reoffend, they are returned to the court of first instance. There is a remarkably high rate of success in reducing reoffending and it is cost-effective—so much so that in Buffalo, New York, I understand, out of 300 cases the success rate in avoiding reoffending was 100%. Given the particular problems of a group of men and women who have served their country, often in dangerous and difficult conditions, and the relatively high incidence of mental health problems and offending with which they become involved after their service, it would be a fitting complement to the military covenant to pilot such an approach.
As the north-east is proportionately the biggest contributor of recruits, and as work is already under way in the region around the mental health problems of veterans, I suggest that a scheme of this nature be piloted there and, if successful, rolled out more widely. If, in a slightly different form, we can have special traffic courts, domestic violence courts and the community court in Liverpool, we should at least see whether what the US has adopted so successfully could work here. That would make in my view a potentially useful addition to carrying out the intentions that the Government have expressed and from which there would be no dissent in this House.
However, we are in a peculiar position of having a Bill before us that does not deal with many of the significant problems to which I have referred and other noble Lords may wish to address their remarks, with a wholly inadequate series of impact assessments and a great paucity of detail about how matters will work in practice. I am afraid that this is fairly consistent with the way in which Parliament and this House in particular have been treated over various legislative matters. Perhaps it is not too much to suggest that, when it comes to policy-making, the Government are in need of a rehabilitation revolution.
Lord Marks of Henley-on-Thames
My Lords, in welcoming this Bill, I know the House is all too conscious of the degree to which the history of our penal policy during the past few decades has been one of failure. The failure has been a failure of our criminal justice system and our penal system to turn an acceptable proportion of convicted offenders away from lives of crime.
When offenders are apprehended and convicted, that process, and the contact with the system that it entails, should afford society an opportunity not only to punish but to work out what has gone wrong with offenders’ lives and provide help and support to try to put things right. Every offender for whom the prison gate has unnecessarily become a revolving door has blighted his own life, damaged his victims’ lives, often irreparably, and at least disrupted, but often wrecked, the lives of his family. Society has been infected with the harmful effects of crime and the fear of crime, and we have all borne the extra financial costs: victims, the criminal justice system, social services, the penal system, insurers and those who pay the premiums.
As the Minister pointed out, reoffending rates are appallingly high, disproportionately so for those released from sentences of less than 12 months, for whom the figure is more than 58%: not far short of half overall. The very fact that never before have we provided support for prisoners released from these shorter sentences is a disgrace. It is very important that this is now being addressed by Clause 2 of this Bill.
The commitment to through-the-gate services for prisoners on release is very welcome generally. However, it is crucial that, as is proposed, the link with those who will provide support services for an offender on his release is firmly established well before release. The goal must be a planned release. There should be arrangements in place, so far as can be achieved, for a released prisoner to have a place to go to, an occupation, whether in employment, education or continued training, and people to return to. With respect to employment, it is heartening to note that a number of companies, including Network Rail and National Grid, are training prisoners within prisons and employing them on release.
Those providing services preparatory to release should, so far as possible, be the ones providing the support following release. The mentoring system in Peterborough, mentioned by my noble friend, has been a success and should be rolled out. It is important that those mentors should be able to see prisoners before release as well as after.
To enable all this to happen, it is vital that the Government implement their intention, mentioned by my noble friend, to ensure that at least the last few months of every prisoner’s sentence are served geographically close to the community to which the prisoner will return on release.
I particularly welcome the increased focus on drug treatment provided for by Clauses 10 and 11. The new arrangements will enable supervisors to help offenders to tackle drug dependency. Drug appointments and drug-testing requirements will enable the more effective monitoring of drug use in the community, but it goes without saying that the rehabilitation of drug-dependent prisoners would be massively improved by a successful drive to stamp out the scourge of drug use in our prisons.
The Government propose a far-reaching reorganisation of the probation services, to be implemented under the umbrella of the National Probation Service. This reorganisation has the worthwhile aims of increasing the diversity and range of providers, of involving the many organisations within the voluntary and not-for-profit sectors in contracted services, which are already doing significant and ground-breaking work in this area, and of giving service providers greater autonomy. However, it is important that we bring the probation service with us in this reorganisation, and it is imperative that the expertise and the good will of our probation officers are retained within the newly reorganised services. It is important that we do not underestimate the difficulties that we face in achieving these aims in the context of larger probation trusts and difficult new arrangements for contracting.
The new proposed structures will inevitably be much more diffuse than the probation service hitherto with which we and the probation services are familiar. My noble friend the Minister has been considering whether and how the professionalism and expertise of probation officers might be marked and recognised within the context of the new arrangements. I believe that we should consider how we might achieve this. Something like a new chartered institute of probation officers might serve the purpose well, enabling professional qualifications to be fully recognised and enabling the profession to remain united and subject to a respected code, with employers having the benefit of a guarantee of professionalism and quality that would mark out members of such an institution.
The proposed arrangements for payment by results have been controversial, as the noble Lord, Lord Beecham, pointed out. If they work and prove practical to implement on a national scale, they might at best provide incentives and rewards for success by cutting reoffending and enabling more informed choices to be made between services that are proved to be effective and those that are not. However, there is always a risk that such arrangements might be seen only as a way of saving resources at a time when that is, rightly, a national imperative, even where the use of extra resources might be justified.
The cost to the United Kingdom economy of reoffending is estimated by the National Audit Office at between £9.5 billion and £13 billion. In a speech this morning, my right honourable friend the Deputy Prime Minister put the figure at £10 billion. These are staggering figures. While that expenditure cannot be eliminated, of course, I believe that a more enlightened and determined approach to rehabilitation can take people out of lives of crime and help them to lead useful and productive lives in their place.
That is the background to the general point that I made in the debate on the gracious Speech: that the changes to be brought about by the Bill and the Government’s proposals must be properly resourced and that the potential savings are so substantial as to justify, where necessary, a departure from the traditional approach of Treasury accounting to spending proposals, where the outcomes are savings that are of their nature, and almost by definition, unquantifiable. If they are properly resourced and if there is good will and determination on all sides—within the service, within government and, I might say, in co-operation with local authorities as well—I believe that the changes in the Bill, in the context of the programme of rehabilitation involved in the greater use of community sentences on which we have embarked, might now start turn to turn around the failure of the past few decades.
Baroness Howe of Idlicote
My Lords, we should all be grateful for two aspects of the Bill before us: first, that it has come directly to your Lordships’ House, with the experience and strong expertise of the noble Lord, Lord McNally, in charge of it—albeit with many material government facts and figures by which to judge it still remaining to be disclosed—and, secondly, that in the Secretary of State for Justice’s strategy for reform he has accepted that short sentences serve little, if any, useful purpose, and cost the taxpayer huge sums. As he said on 9 May, and we have heard again from the noble Lord, almost half of all offenders released from our prisons offend again with a year, and the 58% of those with the most prolific reoffending rates are those sentenced to prison for less than 12 months.
So, all have accepted that change is essential and that to continue with the status quo is not the right way to go, as what existed before was valueless for both taxpayers and victims of crime alike. The Criminal Justice Alliance, among others, welcomes this focus on short-term prisoners, who currently get no support on release yet have very high reoffending rates. The concept of resettlement, which was mentioned, is an attractive idea, with appointed mentors to help offenders to get back constructively into their community and find employment or training and, at least as important, somewhere to live. If it is begun a few months before the offender is released, it is even more likely to succeed.
Although, as has been said, many questions remain to be answered, the Government’s plans for dealing with low-level crime make sense, especially the one calling for rehabilitation to be provided to all 50,000 of the most prolific reoffenders—those who are sentenced to less than 12 months in prison. However, the biggest question mark remains over just how this is to be financed.
Importantly, too, the Secretary of State has also acknowledged, as has the noble Lord, Lord McNally, that although serious offenders must be imprisoned, many come from chaotic backgrounds, have complex problems and addictions and have lived much of their life within the care system, and more must be done to help them get their lives back on track—not, as now, just releasing them from prison on to the streets with that famous £46 in their pockets. I hope that the Minister will share more of his plans, including the likely financial cost for this group of offenders, when he responds to the debate. Will the Government consider commissioning research to see how many generations back similar offending patterns have existed in the families of this group of offenders?
There are obviously many essential questions about the Bill that I hope will be answered by the Minister in his reply or during later stages. However, for me and many others, the most important question of all is the glaring omission of any specific policies for dealing with women offenders. That is despite the Government’s acknowledgement in their Transforming Rehabilitation strategy of the widespread support among those consulted that services specifically tailored to women offenders’ needs should be delivered by those chosen as the commissioned providers. The highly worrying assertion that opening up the probation service to market forces will strengthen services for women released from prison, as the Prison Reform Trust says, lacks an explanation of how this will be achieved via an untested payment by results scheme. It will probably mean, as the Magistrates’ Association also points out, that only large corporations can take the financial risk involved, not the small voluntary organisations which have experience in this area of work already. As I said in my comments on the humble Address, this continues the destruction of the probation service which the noble Lord, Lord Carter of Coles, began under the previous Government with his suggested probation reforms, and continues to ignore the damage this approach would be doing to our highly trained, really invaluable probation service and the vital service it provides for the community, the courts and individual offenders.
While on the subject of women offenders and their special needs, do we have any accurate figures of how many members of a woman’s immediate family are affected if she is given a prison sentence? We all know that the vast majority of those looking after these children are women—mothers rather than fathers—and that therefore a highly likely result of a prison sentence for a female offender is for her children to be taken into care, resulting in considerable extra public cost as well as inevitable long-term emotional damage for the children concerned. How much better to ensure, as the Prison Reform Trust points out, that the majority of low-level offences—and most offences committed by women are just that—are dealt with by cost-effective, robust community sentence penalties made available to courts in all areas of England and Wales.
Noble Lords will have heard some details of this again from the introduction of the noble Lord, Lord McNally. Can the Minister tell us what action and incentives are planned to ensure that a range of community services is uniformly available across the country to help prevent at least the unnecessary break-up of families?
I have not yet mentioned the generally welcome news for women offenders—indeed, for us all—of the creation of a women’s ministerial advisory board, led by Justice Minister Helen Grant. Returning to the issue of offending patterns continuing over generations within the same family, can the Minister also consider commissioning research here to see if the breakup of families by a mother’s unnecessary imprisonment leads to a repeat pattern of offending over generations? I put this idea forward because such evidence would help to make the already strong money-saving case even stronger for a full implementation of Frank Field and Graham Allen’s early-intervention strategy.
Apart from today’s speeches, I shall look forward to the debates on the Bill during all its stages. With the considerable expertise in your Lordships’ House, it is certain to arrive in the other place in very much improved shape—if the Government listen.
The Lord Bishop of Newcastle
My Lords, as we have heard, the Bill deals with two broad issues. First, there is the extension of the licence and supervision requirements placed on offenders in the community, which I warmly welcome. Secondly, there is the national commissioning of services to support those requirements, inevitably bringing in private companies—as they are now called, “lead providers”—in 21 large contract areas. I have considerable misgivings about aspects of that development. The Government claim that it is needed in order to finance the supervision arrangements but, in principle, those are two quite separate matters.
I declare an interest: for the past 15 years I have been president of Norcare, a Newcastle-based charity which provides housing and personal support to vulnerable ex-offenders, and to those recovering from drug addiction and substance misuse. Throughout its history, Norcare has developed considerable expertise and has worked closely and constructively with the probation services and the local authorities in the region. We have well established and experienced staff and systems in place, and are already delivering contracts with an element, anyway, of payment by results about them.
I welcome the fact that the Government’s response to the consultation process has taken account of some of the points and issues raised by churches, voluntary bodies and third-sector bodies. The key for the future, for me, will be the importance of preserving and developing those existing partnerships. However, I fear that there are real dangers and difficulties ahead. There is the danger of the fragmentation of services. There are the risks of perverse incentives to providers. There is the question of how best practice is to be shared and developed. There is the question of how good communication between all parts of the system can be established.
The speed of change to an untried national commissioning system is a major concern—not least the use of payment by results, which is a very inexact science indeed. Behind all that there is the greater danger of dissipating the accumulated wisdom and expertise of existing probation teams and services. I worry about the underlying assumption that public is bad and private is good, when there is no evidence of which I know to support it. Fundamentally, if this is a step towards the dismantling of the probation service, that is a tragic mistake which will leave a hole in the criminal justice system, which will one day need to be filled again.
I return to the extension of supervision, both for those released after short sentences and for those serving community-service sentences. I welcome of course the extension of rehabilitation support to those serving short sentences; it would be even better if it began before they are released from prison. To offer structured support to that large group which, as we have heard, is most likely to reoffend will be a major step forward.
However, when the Bill is considered in detail there are bound to be a number of detailed concerns. Some people imprisoned for very short periods may well be drawn into the toils of the criminal justice system, with the threat of breach proceedings hanging over them for a full year after release. The provision forbidding somebody to change residence without permission and the power to impose compulsory attendance at drug appointments are further examples of a creeping culture of control.
The probation service has served our country very well down the years. It has enshrined the key values of vocation, service, care and compassion, with the rehabilitation of the individual at the very heart of it. That can seem a far cry from the kind of contract culture being proposed, and I worry that the needs of the individual and the importance of the local will be lost. I worry when the language is that of the supply chain. Local schemes, working closely with individuals, must not find themselves disempowered or dismissed by the new world we are about to enter.
Of course there can be benefits if the efforts of the voluntary, statutory and these commercial bodies can be combined well to support those released after serving short sentences. However, how are we to avoid the bureaucratic nightmare of expensive contractual structures that could so easily crush local initiatives, deny local experience and dismiss existing expertise? I hope that the Minister can allay some of my fears and reassure me, at least, that service, support, care and compassion will remain at the very heart of any new arrangements.
Baroness Berridge
My Lords, I will speak only briefly on the purpose of this Bill, as I spoke on these matters in response to the gracious Speech. Again, I declare my interest as a trustee of the charity Kainos Community.
When I looked in more detail at the outline of the release on licence and the supervision requirements for offenders serving less than two years, I could not help but think, “Why have we not done this before? It seems so obvious”. The Bill will increase public confidence in our sentencing regime because short, sharp shock sentences will no longer seem derisory and will no longer be easy, cheap headlines for newspapers. In fact, as is outlined in the very helpful Explanatory Notes to the Bill, a six-month sentence will comprise three months in custody, three months on licence and nine months of supervision. This is a total of 15 months during which, either by virtue of the original sentence or for the period of supervision, the offender will be under the purview of the courts. This is the best blend of getting tough on crime while also increasing the focus on the rehabilitation of the offender.
Although it is now many years since I did many breach of community orders in the Crown Court, it was very rare for the person to be sent back to prison. This led to many offenders not taking seriously the requirements of their community penalty. In fact, I always remember seeing the usher call a case, only to have to go and wake up the defendant, who was having 40 winks in the waiting area, such was the gravity he placed on the breach of his order. Although ultimately it is a matter for judicial discretion, I hope that the sentence of up to 14 days in prison is utilised. However, does the Bill mean that that short period of imprisonment for breach of a supervision order will trigger, in and of itself, a supervision order? I would be grateful if the Minister could clarify that point.
I am also very pleased to see clarity in the Bill, rather than in a statutory instrument, about which functions connected with bringing court proceedings for review of a community order, a suspended sentence or the drug rehabilitation requirements are exercisable only by a public sector provider. With the expansion of the involvement of the private and voluntary sector providers, such clarity of functions is essential.
The most pertinent parts of the consultation, and now of the Bill, are competition in the delivery of rehabilitation services, ensuring that the new system is responsive to local needs and paying providers for their services according to results. The highly imaginative concept of payment by results is, as I understand it, already part of the provision of rehabilitation within the prison estate. I would be grateful to know from the Minister what the practical experience is of calculating the results that have been achieved. What will be the position, once the Act is in force, if someone under a supervision requirement provided by one charity goes back into prison and on to a project, such as St Giles in Peterborough, then goes back under a supervision order provided by a different charity and is then reformed? How is it determined whose result this is—or is it a score draw, with everyone getting paid by the state for the outcome?
Furthermore, how will the new structure of the probation system ensure that it is responsive to local needs? The Ministry of Justice, along with the Department for Work and Pensions, issues huge contracts. Will Serco, Atos and G4S be the providers, with SMEs and local charities unable to get involved? How these principles will work in practice will depend on this, and some indication from the Minister would be most welcome.
Tucked away in paragraph 129 of the Explanatory Notes is a major key to the outcome of these initiatives. The paragraph suggests that it is anticipated that a large part of the funding for this additional service provision will be,
“dependent on the outcome of competing provision of probation services”,
which is not directly part of the Bill. It is essential for the success of the Bill that this “competing provision” delivers a service that is effective in qualitative terms. With the design of the new probation structure, it will be important that this is done with certainty from the outset, as I can say as a trustee of a voluntary organisation that the many reforms and changes to NOMS and ROMs were very destabilising. The new service needs to be robust in order to maximise the likelihood of the Bill having the intended highly beneficial effect.
Finally, we often speak of the low levels of literacy, mental health problems and drug issues of many prisoners, and of course that is true. However, when I have gone into Her Majesty’s Prison Stocken in Rutland to see Kainos work, I have always been struck by how talented a lot of prisoners are. Of course, there are some whom you would not wish to bump into in a dark alley. However, when I hear in conversation of their complicated family backgrounds and of how many people, usually men, came and went in their childhoods, I cannot keep track. It is like a family tree where part of it is stuck on temporarily with Velcro and then torn away. When playing dominoes on one occasion, a prisoner insisted that he was really good with numbers. My response was, “Yeah, yeah”, partly because I thought he was blagging and partly as I have to concentrate very hard on the dominoes because beating prisoners at pub games is very difficult. However, I had to eat my words when I discovered that he had got eight years for a first offence. It turned out that he was the banker for a multimillion pound drug racket. I then told him about the Prince’s Trust and starting his own business.
Although our role is to review and scrutinise legislation, I wonder whether practically your Lordships’ House could help with rehabilitation. In the Robing Room the largest painting is entitled “Hospitality”, which is something that the House does so well. Some noble Lords may be aware of a charity called The Clink, which runs restaurants in certain prisons where prisoners are trained to work in the hospitality industry. It is most successful, and it would be an excellent role model if the House employed a graduate from The Clink. Noble Lords may think that ex-offenders might fail our stringent security test. My contention is that while the House has ex-offenders on its Benches, ex-offenders should serve at its tables. I hope that the Bill succeeds and that short sentences will become part of reducing crime rather than having their current adverse effect of just equipping prisoners for further criminality.
Baroness Armstrong of Hill Top
I, too, welcome the intent of this Bill, but I am afraid that the devil may well be in the detail; that is what we will discover in the days and weeks to come. It would be rather disingenuous of me not to welcome much of the intent, because such things were being worked on in the previous Government. Indeed, I tremble to confess, particularly to my own Front Bench, that I was probably the first person to discuss payment by results with the Treasury. I was doing so in relation to children in care and the relationship between central and local government. We discussed how one would look at outcomes when the young person was, say, 22 or 23. If they were in work and in a stable home, should the local authority not be rewarded for that? On the other hand, if they were in the criminal justice system, should it not be paying some of the costs of that to the state? Even then, I was interested in a more innovative means of ensuring that the most vulnerable in our society were looked after, because I had to accept that very often in our society the value we place on a service depends on money. That was what I was concerned about, and the Treasury went on to do a lot more work in this area.
There are one or two things, however, that Ministers have either not been concerned about or not taken seriously enough. First, if you are going to enter into this area of activity, you have to have a very good database and evidence base. Much of what I wanted to do when I was Minister for Social Exclusion could not be done because our initial baseline data were insufficient, even on domestic violence. We therefore set in train a whole series of measures to collect better data so that we could then see how to measure movement, change and so on. I am concerned that the Secretary of State does not seem to believe in evidence bases. He says, “Anybody needs to go and look at Peterborough and see that the social investment bond there works” and so on. Actually, however, those of us who have been trying to develop models of social investment bonds in order to invest in payment-by-results programmes know that there are many things that you must right and must know about before you can enter. I suggest that that is why the real excitement created around Peterborough has not manifested itself in lots of other social investment bonds and lots of other work.
There are two things of which the Government need to take account, and I say this in my role as chair of the Cyrenians, which is based in Newcastle. I am beginning to think that there is a sort of a north-east conspiracy here; I hope that does not say anything about offending in the north-east, but rather about what good programmes there are in the region to tackle it. Indeed, the right reverend Prelate used to be on the board of the Cyrenians and the noble Lord, Lord Ramsbotham, also has a role as a mentor and supporter of my chief executive, so we all have a little insight into this.
We have been approached by both the Ministry of Justice and the DCLG to develop social investment bonds. We have a real problem in the areas for which they want us to do that simply because we do not have the numbers going through. That is particularly true for people sleeping rough because we do a very hard job making sure there are not dozens of people on the streets of the north-east sleeping rough. I do not want it to be otherwise, but that means we cannot then develop the model which gives us the levels of investment in order to do a PBR programme. However, that is also true of other programmes. One of the programmes that I think is extremely successful, and is absolutely relevant to the Bill, is what the women themselves call the WoW project—the Women Outside Walls project. That is an example of what the Ministry of Justice would call a Corston project established with support from the MoJ to keep women out of prison. Evaluation of the first two cohorts of women who took part in the project shows a 45% drop in reoffending rates. I think that we all welcome that figure and I know that the Ministry of Justice welcomes it. Small numbers were involved; the two cohorts amounted to some 53 people, but the project was absolutely the right thing to keep them out of prison. Some 90% of the women with whom we were working had experienced abuse, rape or domestic violence. Our support did not comprise merely seeing them once a week to sort out their needle exchange or address whatever was the practical immediate issue. We offered very important support of a different nature given the background of those women. More than 80% of them had a range of health needs, which included a high prevalence of mental health issues. Therefore, we had to access not only mainstream health provision for them but get them involved in group and other situations which addressed the issues that had led to their offending.
The Minister knows I am a bit concerned that Northumbria probation’s redesigned programme is a box-ticking exercise. We will not engage with it on that basis as we know that it will not have the same results as the work we have undertaken. We are looking to see whether we can supplement through other means what the probation service is able to offer given the cutbacks it has undergone. If we can do that and we can secure other funding, we will continue with the project. The Minister needs to understand that that is the reality on the ground.
It is a case of numbers and length of time. We have a very successful programme for getting people into work. We have got people back into work who had been written off. Delegations from the DWP have come to see how we have done that. The main lesson we try to instil is that you cannot do this in three months. That is why we have not been able to take part in the Work Programme and why we continually have to look for other independent funding, so projects are done on a piecemeal basis year by year. If you want effective interventions which prevent reoffending, you cannot do that on a short-term basis. That means you have to put sufficient investment into the small charities. We are quite a large charity employing more than 250 people in a range of work but we cannot do anything on a sustained, long-term basis without investment in our projects. There is no evidence at all that the Government will match their ambition with that reality. The Government must get hold of the detail in both time and numbers.
I know that everybody else will talk about probation but I want to make one point in that regard. When I was a Member of Parliament, I had a very good relationship with the probation service. Whenever a difficult offender was about to be released into the constituency, the probation service would talk to me. I would work out the relationship of the schools with the service because it did not know the details in the small villages and so on. On one occasion, when an ex-probation officer who had been involved in child pornography was coming out of prison, we worked with the school and we had a public meeting. That was very successful. We worked with the parents on ensuring that they helped their children to understand what was going on in a way that did not damage them. The fragmentation will make that very difficult, but, again, I am not sure that Ministers have thought about that.
Lord Dholakia
My Lords, this morning I visited the offices of NACRO, the National Association for the Care and Resettlement of Offenders—I declare an interest as its president—to listen to a speech by the Deputy Prime Minister Nick Clegg on victims, the rehabilitation of offenders, and crime. I am delighted that the rehabilitation of prisoners remains at the heart of the coalition Government. I welcome the Bill and the Government’s clear recognition of rehabilitation in any strategy to reduce crime. The Bill will transform the way offenders are rehabilitated by ensuring supervision for all offenders leaving prison.
One of the advantages of being deputy to my noble friend Lord McNally is that I can knock on his door to talk about party business. Inevitably, most of the time we end up talking about criminal justice matters. I am well aware that he has recognised that the current system of rehabilitation is just not working. This is just not good enough for offenders, victims of crime, or the community, which has invested so much in our criminal justice system.
I welcome in particular the proposal to introduce post-release supervision for short-term prisoners. These prisoners constitute the majority of those we send to prison each year, and they have higher reconviction rates than any other group of prisoners. Although their crimes, taken individually, are not the most serious, many short-term prisoners are prolific offenders who are responsible for much of the high-volume offending that makes life a misery for so many people living in high-crime areas. It is indefensible that for so many years we have been prepared to imprison so many more people than other European countries, only to put them back on the streets with no supervision and little if any support.
There is, however, a need for caution when we talk about rehabilitation strategy. Providing post-release supervision for short-term prisoners creates the risk that it could also lead to the courts imprisoning more people. I will explain. At present in borderline cases, courts might decide not to imprison offenders because supervision in the form of a community sentence is more likely to divert them away from offending.
Under the new arrangements, the courts might feel that by imprisoning the offender, they can get the best of both worlds: both the punitive impact of imprisonment and supervision of the offender when he or she is released. This is where we need to be absolutely clear: this would be a very short-sighted view, as even a short period of custody can lead to an offender losing accommodation, losing a job and fracturing family links, all of which make it more likely that he or she will reoffend. To guard against this risk, perhaps I may ask my noble friend Lord McNally to examine whether it is possible to provide by law that no one should be sentenced to custody, except for very serious offences, if they have not previously been subject to an intensive community sentence.
I greatly welcome the reorganisation of the prison system that will accompany these legislative changes. This will involve most prisoners spending at least the last three months of their sentences in a resettlement prison near their home area, making it easier to build up links with the local agencies responsible for providing support and supervision before and after release, and I do not think we should underestimate the role that local government can also play in this. This is an important step forward in the provision of resettlement and rehabilitation for released prisoners.
The Government are proposing a new system of service providers. As the Minister has explained, a new National Probation Service will supervise high-risk offenders and carry out risk assessments for the courts and the Parole Board. Low and medium-risk offenders will be supervised by providers from the private and voluntary sectors, or by consortia of private and voluntary organisations working together. We all know that this is a controversial proposal that is causing considerable anxiety among professionals, and we shall need to examine carefully in Committee how far the Government have got these proposals right. It is crucial to ensure that there is the rigorous monitoring of contracts to ensure that providers are delivering a high-quality service for the rehabilitation and supervision of offenders.
As president of NACRO, I am keen to see an extension of the valuable work of the voluntary organisations in the rehabilitation of offenders. Voluntary does not mean amateur. Many voluntary organisations have highly professional expertise in the key resettlement areas of accommodation, education, employment, drug and alcohol treatment, mentoring, family support and community engagement. All these factors can make a huge difference to an offender’s chances of avoiding reoffending. Some voluntary sector organisations have expressed fears that they could be squeezed out if contracts are given only to large private sector companies. It is important to make sure that any organisation given a contract to provide supervision and rehabilitation services works in partnership with voluntary organisations in arrangements that give the voluntary sector full cost recovery. This is vital if we are to make full use of the voluntary sector’s expertise in the resettlement of offenders. This is a once in a generation opportunity to fully involve the people and organisations who know how to unlock and mobilise local resources and shift the focus from isolated and disconnected pockets of service delivery to rebuilding the lives of victims, offenders and communities.
I have talked about NACRO, which knows from five decades of delivering community-based services to offenders, ex-offenders and those at risk of offending that the reform of the current system offers an opportunity to break new ground and deliver collaborative change across government and with the involvement of local communities. These reforms offer the opportunity to address the multiple and interdependent social outcomes of crime and reoffending: homelessness, unemployment, ill health and all the other factors that are responsible for crime and criminality in this country that we have talked about. Voluntary organisations are well equipped to deliver. They combine practical help with emotional support, training in social skills and problem solving, and attrition prevention activities. This balance of measures is designed to match the offender’s risks and needs upon release.
As has already been mentioned by many colleagues, one risk under the new arrangements is the loss of the expertise of probation officers who do not go into the new smaller National Probation Service. The Government envisage that many probation officers who do not enter the new service will transfer to work for other providers. I hope the Minister will be able to deliver a clear assurance that suitable jobs will be available to ensure that no probation officer need have any fear about their future career prospects under the new system. This will help to reduce the risk that uncertainty about the future will lead to probation officers leaving for other areas of work so that their expertise is lost to the field of offender supervision. I also hope that the contracts with providers will be of sufficient length to ensure the stability of service provision. As long as providers are providing a good quality service, it is important that the provision of services is not subject to constant uncertainty and instability because organisations have to compete too frequently to keep on providing the service.
It is important to make sure that everyone supervising offenders has the right kind of training and expertise in a number of key areas. These include knowledge of the criminal justice system and the operation of offending behaviour programmes, the protective factors that can prevent reoffending, the interpersonal skills necessary to supervise offenders effectively, and ways of monitoring the warning signs that can indicate that an offender’s risk is rising. Low and medium-risk offenders may not be the most serious offenders, but they are often difficult, intractable and prolific. Their risk can rapidly rise if they return to alcohol or drug abuse, start associating with old criminal associates, become homeless or unemployed or lose motivation to change their way of life. Most serious offenders have a previous history of minor offending. Those supervising them must have the skills and knowledge to recognise when that risk is increasing and to take appropriate action.
The Bill aims to create a system that does more to tackle high levels of reoffending. However, once people have served their sentences and have turned their lives around, it is important that society recognises this and ensures that there are no unnecessary obstacles in their way. That is why I welcome the Government’s proposal to reform the system of criminal record checks so that people with a single conviction that did not lead to a prison sentence will no longer have it revealed when applying for a job except where the conviction was for certain offences. Evidence from Unlock, a charity for people with convictions, shows that the proposed filtering system will enable many people to compete for work on a level playing field.
However, I am keen to see the Government go much further so that genuinely reformed individuals are able to wipe the slate clean when it comes to finding employment. For example, the filtering proposals are limited to one conviction only. This fails to recognise how two identical cases may end up in court: one as one conviction only and the other as multiple charges. One sentencing event would seem to be a more sensible threshold. The one-conviction limit also ignores the reality of petty offending, particularly when committed by young people, whose offending is dealt with by way of a small number of minor convictions. The case of Bob Ashford, former prospective PCC candidate, is a perfect example of this discrepancy. Nevertheless, along with the forthcoming changes to the Rehabilitation of Offenders Act 1974, which I hope the Government will shortly announce will be in force by the end of the year, the system is certainly moving in the right direction.
I hope we can explore these and other areas in the course of the Bill’s progress. I am keen to ensure that the new arrangements deliver a quantum leap in rehabilitation for offenders. I hope that the Government will be open to discussion and, where necessary, amendments to ensure that the risks of these proposals are minimised and the benefits are maximised. In conclusion, this is the best way to ensure that the Bill helps many more offenders to turn their lives around and reduces the damage which crime inflicts on our communities.
Lord Woolf
My Lords, we have heard some hugely impressive speeches generated by the action that the Government are proposing in the Bill. Those speeches raise the hope that we may, at last, be able to do something about reoffending, which has unfortunately been low on the agenda of successive Governments, certainly during the periods when I have been involved in criminal justice.
I should disclose that I am now the chairman of the Prison Reform Trust. The matters raised in the Bill are of considerable importance to the trust, which has, as I am sure the Minister is aware, done some very valuable work in preparing for this debate.
Like every other speaker in this debate, I welcome the Bill with enthusiasm. However, I urge the Minister and his department to pay heed to the words of caution that have also been expressed. Those of my seniority—in age, at any rate—know that other attempts that have been made in the past have bitten the dust because what started as very optimistic progress turned to something very different when it was found that these proposals would not succeed without resources. They did not succeed because they did not have the financial backing necessary for change on the scale that is now proposed by this Bill. They also did not succeed because the groundwork that is necessary to introduce reforms on this scale had not been undertaken. I am afraid it is obvious that, because they are understandably in a hurry, the preparations that the Government have made for the introduction of this scale of change are very modest indeed. I urge the Ministry of Justice to proceed with caution, even though its objectives are excellent and the possible rewards are considerable.
It has been pointed out that the numbers involved in the exercise—of those sentenced to short periods of imprisonment—are very large indeed. We are talking about more than 50,000 people, who will be coming before courts up and down the land. The Bill will create problems, as has already been indicated, as there will be a temptation in some courts to undermine the objective of the Bill by seeing the proposals for dealing with reoffending as justifying short sentences. I am one of the many who have previously urged courts not to impose short sentences because they are destructive of the process, as they are extraordinarily difficult for the Prison Service to manage. The consequence of short sentences is the reoffending rate of which we are aware. What can be achieved by a short sentence in prison can always be better achieved, in my experience, by a community sentence. Of course, there comes a stage when courts have to use short sentences. Magistrates up and down the country will tell you that they need short sentences when there is no alternative. However, short sentences should be limited to those cases where there really is no alternative and where the length of the sentence is as short as possible.
I wonder, and ask the department to consider carefully, whether the blanket approach, of taking a category of short sentences and applying the process proposed in the Bill to everyone caught within that blanket, is the right process. Is there to be no judicial involvement in determining whether the case is one that really needs the expense of the rehabilitation process involved? There are offenders, who have to go to prison, for whom the one sentence of imprisonment is likely to lead to the end of any further problem so far as they are concerned. We tend, in the Bill, to focus on the cases that fail; but however bad the statistics are, we have to realise that there is the other percentage—if it is 58% or 42% who do not come back before the courts. Who will judge whether this case is one that needs to be the subject of the action that is taken?
The most recent attempt to do something similar to these government proposals was custody-plus in the Criminal Justice Act 2003. This became law with the same admirable objectives proposed here, but when the department at that time was faced with the question of whether to bring it into law, it turned away. We must not make that mistake again.
So many other points have been drawn to the attention of the House and the department that indicating them again would not help. However, I remind the House of the experiment—briefly referred to—of the Liverpool community court. It showed that there are other features which are important for rehabilitation —in particular, the fact that those who need special rehabilitative assistance should be provided with it promptly. This is an administrative problem. Unfortunately, the successful community court experiment in Liverpool has not been repeated to the extent that it should have been up and down the country. The reason is again a lack of resources. I am afraid that resources will be at the heart of this reform and I hope that the Minister’s department will think carefully about the introduction of these reforms, to ensure that the resources will be available.
Finally, it is welcome to see the noble Lord, Lord Ponsonby, come here to assist the Opposition on this. The practical experience of a magistrate who has dealt with these matters over many years is something to which everybody should pay attention.
Baroness Healy of Primrose Hill
My Lords, I wish I could wholeheartedly welcome this Bill as the way forward to reduce reoffending, encourage people to live purposeful lives and save taxpayers’ money, but I fear that in the end too little will be achieved. Instead, despite the best intentions of some in the Government, the Bill may set people up to fail, lead to longer sentences and put more people in prison. Of course, there is a pressing need to change the system whereby prisoners who have served a sentence of 12 months or less are released with £46 and typically receive no support on the outside. I welcome the Government’s acknowledgement that this cannot continue.
Prisoners sentenced to short terms often lead particularly chaotic lifestyles and have higher levels of need in relation to homelessness, joblessness and drug and alcohol abuse; 58% of people who have served a prison sentence of 12 months or less reoffend within a year of leaving custody. I am disappointed that the opportunity finally to implement the Corston report, authored by my noble friend six years ago, which called for the end of imprisoning women who pose no risk to the public and the closure of women’s prisons and their replacement by small custodial units for serious and dangerous offenders, has not been taken up. Instead the Government intend to commission all rehabilitation services under a single contract, regardless of the different offender cohorts.
Rather than wait for the promised review of women in prison expected this summer, the Government are rushing ahead before the specific needs of women have been considered. The Howard League rightly warns that the proposed payment-by-results system poses a particular threat to the continued provision of services for women. Many are small, local, holistic and gender-specific, and some could now face closure as they are not large enough to bid for contracts. However, the circumstances surrounding women in prison, as set out in my noble friend Lady Corston’s report, reveal that incarceration is not the best way to help these already vulnerable women. Most women prisoners are mothers; some are pregnant on entering prison; they are often drug users with £200 a day crack and heroin habits; many are alcoholics; and many are in poor physical and mental health. Common experiences include sexual, emotional and physical abuse leading to chaotic lifestyles and, often, to self-harming.
Women commit a different range of offences from men; they commit more acquisitive crime and have lower involvement in serious violence, criminal damage and professional crime. Relationship problems feature strongly in women’s pathways into crime. Coercion by men can form a route into criminal activity for some women. Mental health problems are far more prevalent among women in prison than in the male prison population. Self-harm in prison is a huge problem and more prevalent in the women’s estate.
Women represent just less than 5% of the overall prison population, and 20% of sentenced women entering prison serve sentences of less than 12 months. Not only do women suffer grievously by being imprisoned, but so do their families. It is estimated that more than 17,000 children are separated from their mothers each year by imprisonment. Only half the women who had lived with or were in contact with their children prior to imprisonment had received a visit since going to prison. Maintaining contact with children is made more difficult by the distance from their home area that many prisoners are held. Taking children away from their mothers and into care only creates the next generation of vulnerable youngsters, many of whom will end up in the criminal justice system, as the noble Baroness, Lady Howe of Idlicote, has already mentioned. I support her call for further research into this.
However, the Government’s proposals in this Bill to address reoffending could make the situation far worse. The Howard League for Penal Reform warns that the proposals,
“are likely to result in negative and costly unintended consequences”.
Breach and return to custody may be a very real prospect for many.
I welcome the acknowledgement that prisoners should be supported through the prison gate and have argued for this in the past, along with many other bodies, especially where young offenders are released back into the community with no change in their circumstances in terms of housing, jobs or training. Often their situation is made worse by having lost relationships and contact with their families.
However, the Government are in danger of going too far by insisting that engagement with rehabilitation will become mandatory over a 12-month period for all prisoners released from short custodial sentences. Each year 50,000 to 60,000 additional people will receive support on release, but it is difficult to believe that efficiency savings will pay for it, as the Government claim. It would be better significantly to reduce the use of short-term prison sentences and invest in intensive community sentences as an alternative. A prison place costs on average £40,000 a year, whereas community sentences can be a tenth of that cost.
There is a danger that these proposals will create disproportionate sentences for minor crimes so that a two-week prison sentence becomes a year and two weeks of being trapped in the criminal justice system. All those released from short custodial sentences will first be subject to a standard licence period for the remainder of their custodial sentence, served in the community, followed by an additional supervision period. Magistrates may “up-tariff” and sentence offenders to prison, when a community sentence would have been more appropriate, in order for them to qualify for the 12-month statutory rehabilitation, as the noble and learned Lord, Lord Woolf, and the noble Lord, Lord Dholakia, warned earlier. However, breaches while on licence could result in offenders being recalled to custody until the end of their sentence. Breaches while under supervision could result in the offender receiving a fine, unpaid work, a curfew or ultimately a return to custody for up to 14 days.
The Howard League estimated:
“If probation services are extended to those 60,000 people a year sentenced to custodial terms of less than 12 months, a substantial number will breach the conditions of their licence or fail to engage with rehabilitative services and may be sent back to custody as a result”.
The Government’s impact assessment states that there will be court costs associated with breaches, including,
“additional pressure on the prison population arising out of offenders being recalled to custody and further electronic monitoring starts. Initial estimates of these costs are of the order of £25m per year”.
I fear that the decision to extend drug testing to class B drugs and to require offenders to attend drug appointments will only increase the likelihood of breach unless there is a radical change in the way addiction is dealt with, not only in prison but on release, as the right reverend Prelate the Bishop of Newcastle has already mentioned.
The impact assessment also states:
“We want to enable providers to tackle offenders’ drug misuse issues and to support offenders to desist from crime. We have not quantified these benefits as we cannot predict the success rate of the probation providers”.
Indeed, there is much in this Bill that is difficult to predict and the danger of unintended consequences is very real.
Baroness Linklater of Butterstone
My Lords, we return once more to the question of how we should be more effectively managing offenders in our society; an issue which is rather like the holy grail, so seductive yet elusive. We now have a new Minister at the MoJ, who is bringing to bear his own perspective and his own solutions to the challenges of the criminal justice world coming, as he does, from the world of business. We have seen, in particular, the initiation of payment by results, where financial incentives are being introduced as a means of encouraging service providers to step up their efforts to change offending behaviour through financial reward. Starting in Peterborough, which I have indeed visited, and Doncaster prisons, they have been regarded as pilots to this new approach, which is still in its relatively early days. Now, fired by the idea but ahead of fully-tested results, we are seeing the proposed extension to the management of a particular group of low-level, persistent offenders. This has significant implications for the probation service, the range of voluntary agencies in the field of offender management, the private sector—which has been growing like Topsy in the past few years—and, of course, the offenders themselves.
It is important to start with the current context; the number of people being sentenced to prison is dropping and last year there was a 5% decrease on the year before. Recorded levels of crime are at their lowest for 30 years, and youth crime is down 47% since 2001, thanks to the YJB. Surprisingly, the prison population itself fell in the last 12 months for the first time since 1999. However, the group that gives the greatest cause for concern consists of those relatively minor offenders, who are serving a year or less of whom at least 57% will reoffend—the figure goes up, the younger the offender. This is more than 50,000 people annually, as we have heard, so it is a huge problem which costs us all billions and which the Government are now attempting to address.
The focus of this Bill is on the 50,000 to 60,000 persistent, low level offenders who are serving anything from a few weeks to a year in prison and who currently have no automatic statutory follow-up support in the community and usually precious little during their time in prison. This is the most intractable group in the system and the Government’s aim to provide for them with a year’s statutory supervision and help, targeted to their needs, is potentially very important and welcome. This is, typically, a very vulnerable and challenging group with a range of coexisting difficulties, including drug and alcohol addictions, learning difficulties, mental health problems and generally chaotic lives. Again, this has been alluded to. Most have had no education past the age of 14, are unemployed, homeless and all are in need of help to turn their lives around if they are not to end up in prison again and again as they currently do. The benefit of individual support is not only the guidance it can give and the connections made but, ideally, the experience of a positive, personal relationship which is precious. The Government are to be congratulated on recognising and addressing this. This has the potential for changing lives if it is properly done. However, as anyone in the business, as I have been for years, knows, desistance cannot be imposed—prisoners must want to change.
The Bill raises as many questions as it answers, because the practicalities of catering for 50,000 to 60,000 additional offenders are huge and complex. How it is to be administered, by whom and with what skills or supervision, and at what cost, are left entirely unclear. There is no reference to what provision already exists across the country which could be built on and where there are already signs of success. Who are the skilled providers needed for such a task with such a large and challenging group? How many are available and how geographically spread are they? How will the Prison Service manage the reorganisation of about 70 prisons into “resettlement prisons”? Above all, once again, the question has been asked: at what cost?
The Government have said that there is no new money. It is expected that the private sector, and possibly the voluntary sector, will be in charge of the bidding for contracts, but how they will deliver such a service nationwide and how the need for budgetary arrangements for essential cross-departmental working at both national and local level will be choreographed are not clear. As we have already heard quoted, the Government’s impact assessment simply says that,
“we expect there to be significant downward pressure on costs from competing the delivery of rehabilitation services … This has the potential to cut prison and probation costs, reduce court backlogs and allow for savings on legal aid provision”—
ambitious, but—
“we have not quantified these benefits as we cannot predict the success rate of the providers”.
So it is an act of faith aimed at an end that we all seek but with means that we are yet to discover. I ask my noble friend the Minister to elaborate on the expectation of costs, without which I do not believe that this House could agree to these proposals.
One likely outcome, which is of widespread concern to many who already work in the field, is that of breach. With more than 50,000 to 60,000 people caught up in the criminal justice system through supervision for a statutory year, particularly for relatively minor crimes, this could have unintended costs. The experience with custody plus in 2003, already mentioned by my noble and learned friend and hero Lord Woolf, demonstrated that and was then scrapped as a result—it was a parallel scheme and was simply going to be too expensive. The very nature of this group’s needs means that the likelihood of breach is high, and already 6% of all prisoners are in prison for breach of licence conditions due to the lengthening of licence periods. Tailored, targeted and flexible supervision arrangements are therefore vital.
Moreover, young offenders, who are as adolescents particularly vulnerable to problems of transitions of all kinds, will find that, once they turn 18, they come into the Government’s new world of supervision, causing change and disruption at a difficult time in their lives. Currently, continuity of YOT supervision past 18 is routinely maintained to ensure continuity. The YJB and many others working with young people are very concerned that, without flexibility, including in the length of supervision, there is an increased risk of breach with this group, with all the costly, associated results of recall, courts, possible prison and general upheaval.
Can the Minister clarify the Government’s plans for the handling of the transfer of supervision to a new probation/private provider for this group? The YJB has responsibility for under-18s, and its work and skills are outstandingly successful. It has made it quite clear that the transfer, whenever it occurs, should be managed by public sector probation. It should be listened to as an expert on whom the Government rely. What are the Government’s plans for the handing of the transfer to a new probation/private provider and what scope is there for flexibility for this particular group?
Another element of concern is that young offenders who turn 18 before release will be treated for the purposes of their supervision as adults, with the same expectations and demands. This is contrary to accepted practice by the YJB that young people should not be managed as adults. Transition to adulthood does not have a neat cut-off point, and each young person’s development and maturity must always be the governing issue. The T2A pilots in three areas are examples of support tailored to these young people, both as part of community sentences and after release. NOMS and the Sentencing Council have recognised that this group needs properly tailored arrangements. It is a highly skilled and sensitive area and a particularly relevant one here, as these young people represent a significant proportion of the group as a whole. This in turn includes the issue of breach and how it is to be managed, which can have crucial implications for how young people in particular are managed. I hope that my noble friend the Minister can clarify why there is no reference to this in the legislation and little provision to ensure that custody will be used only as a last resort for breach. Otherwise, I fear that positive, constructive work risks being undone.
All the evidence shows that community orders are the best option for low-level crime. It reduces reoffending by 8% to 12 % and costs one-tenth of a year in prison. The Government are right to say that supervision and support are needed for virtually all the low-level offending that we are discussing. Even one short prison experience significantly undermines the chances of a person going straight and increases the likelihood of reoffending. The Government are absolutely right to say that supervision and support in the community are what work for this low-level offending—support which is flexible and tailored to need but which should not be used as an adjunct to prison.
This is precisely the work that the probation service has been doing for the past 100 years or so. It continues to offer supervision as successfully as any other provider for this group of offenders. I declare an interest as a patron of the probation trusts, along with my hero, my noble and learned friend Lord Woolf. The probation service has the skill, experience and knowledge, accumulated over its history, as well as a demonstrable willingness to work with the Government in taking forward their plans and cross-sectorally with a whole range of other providers, including the private sector—or “probation providers”, as they are to be called. There is a structure and a presence all over the country, so no set-up costs are required. The fact that the present Government plan to leave it with the role of working with the most difficult, high-risk offenders demonstrates a recognition of its skills and that it is a very safe pair of hands.
My concern is twofold. First, if this experience, skill and knowledge—which are not gained overnight—relating to this lower-level offending group are to be organised exclusively by the private sector, they are lost to this group. Secondly, the continuity of offender supervision would be fractured, particularly with the probation service taking the high-end offenders, because assessment of risk is not a static concept, and public protection will become a real concern.
The other responsibility that remains with the probation service is the management of potential or actual breach. In Transforming Rehabilitation, the Government state on page 23,
“the public sector will decide on action in relation to all potential breaches beyond a first warning, and will advise the courts or Secretary of State on sanctions or recall to custody”.
They go on to say that this is to be sure to avoid,
“the potential for perverse incentives for providers in breach decisions”,
and,
“will mitigate any risk that commercial interests play a part in contracted providers’ decisions on whether to instigate breach or recall proceedings”.
This is to acknowledge the possibility that “commercial interests” risk influencing or affecting decisions by private providers on the service or advice that they give and that the financial self-interest of a provider could influence the future of a vulnerable person on possible recall or breach proceedings. Meanwhile, it trusts the probation service to be properly accountable to the court. In the light of this, I ask the Minister to look again at this fundamental issue, which could undermine the basis on which plans for private providers are being presented. It questions the accountability of private providers for the delivery of community orders, which is highlighted here by the issues of breach and recall. Does it not also apply to the other services that they provide? I look forward to my noble friend’s reply.
The Government really do not need to reinvent the wheel. What is needed now is continuity, consistency and co-operation between all the professional agencies, which share an unqualified commitment to the reduction of reoffending that should be harnessed to deliver the outcomes that we all seek.
Lord Ramsbotham
My Lords, I have to admit that I am deeply uneasy about the Bill, not because I do not agree with its general objective of reducing reoffending—of course I do—but because of the many questions about the implementation of its associated strategy that remain unanswered and the speed with which it is being rushed through this House. I entirely associate myself with the wise words and caution expressed by my noble and learned friend Lord Woolf.
The problem with the Bill is not what it contains so much as the fact that it is a cart being put before a horse before we know whether it is going to be pulled by a horse or a tractor. Knowing his support for the probation service and his appreciation of the practical, I welcome the fact that it is the noble Lord, Lord McNally, who will take the Bill thorough the House, while sympathising with him in his role of conveyor to the messianic Secretary of State of the fears expressed by many noble Lords in this House.
Until last summer, the criminal justice system was embarked on a rehabilitation revolution led by a Secretary of State whose method included careful examination of practicalities and attention to the all-important role of people in the rehabilitation process. In the new rehabilitation revolution on which we are now embarked, people appear to be made to play second fiddle to the market, while the timing appears to be determined by the need to present tough achievements to the electorate in the 2015 election manifesto. The problem with it is that in addition to punishing offenders it also punishes those who work with them, particularly the probation service, for all the wrong reasons.
My unease stems from the inconsistency in two statements by the Justice Secretary. First, in launching the consultation associated with Transforming Rehabilitation on 9 January, he said:
“Despite significant increases in spending on probation under the previous government, almost half of those released from prison still go on to reoffend within 12 months”.
This confirmed my fear that—for entirely illogical reasons, because this is the one group of offenders for whom the probation service currently has no responsibility—he blamed probation for the fact that three-quarters of the annual cost of reoffending could be attributed to this group and was bent on total reorganisation, despite all the various changes that had been imposed on the service over the past 15 years and the fact that it was hitting all its targets.
Secondly, in his foreword to Transforming Rehabilitation: A Strategy for Reform, published on 9 May, the same day as the Bill, he says:
“Through the savings we make, we will extend rehabilitation support to those on short-term sentences, who currently have the highest reoffending rates but who are typically left to their own devices on release. This support will be guaranteed through legislation, which is the only way to ensure we target the hardest to reach and most prolific offenders”.
When has legislation ever been able to guarantee the consistent availability, provision and affordability of the money and people required to produce that support?
To go with my caution, I have many questions about the practicalities of the transforming rehabilitation exercise but I intend to focus on the impact assessment, which became available only four days ago and is about as thin and inadequate a document of its type as I can remember. I have discovered in the past that the quality and content of an impact assessment invariably reflects the quality and quantity of the thinking behind the measure it is designed to assess. The fact that, although signed on 9 May—the same day as the publication of the White Paper and the Bill—it was made available only last Thursday, makes me wonder whether Ministers had it during their work on the Bill or whether it was written later to justify decisions that had not only been taken but laid down since before the consultation exercise was launched.
To question the few assessments it contains of the implementation of a policy whose objectives it states will be reviewed at a date to be determined, may I ask the Minister what factors were taken into account in estimating that there would be a cost of only £25 million a year associated with the breach of licence and supervision conditions for short-sentence prisoners? How many offenders were assessed as likely to breach? Were any facts, and therefore costs, deliberately excluded from the assessment? What factors did the Government consider in estimating that there might be additional police costs of only £5 million a year? What is the Government’s estimate of the cost of providing a rehabilitative service to offenders released from custodial sentences of less than 12 months and how much of that are they looking to recover through competition? Surely, the Government know the cost per individual of drug testing and treatment and, based on existing figures, how many offenders are likely to qualify for the testing and treatment that this legislation purports to guarantee? Why then has the cost not been quantified on that basis so that the affordability of the measure can be assessed? Finally, does “not applicable” in the box showing the full economic assessment on page 2 mean that the Government made no assumptions in coming to their decision and believed that there were no associated sensitivities or risks? What about the risk to the public?
Those are all the assessments that the document contains. There is no mention of the cost of extending rehabilitative services to short-sentence prisoners—an expense that the previous Government found to be unaffordable—or evidence to explain how it may be balanced by competing services. There is no mention of any assessment of the ability of the private sector, which failed so spectacularly to provide security staff for the Olympic Games, and to provide trained and accredited staff who can be relied upon to provide the regular contact needed with offenders, whose chaotic and dysfunctional lifestyles are described in the White Paper. There is no mention of the cost of the proposed reorganisation of the probation service, of any assessment of the cost of training and accrediting non-public sector responsible officers, or of whether the requirements of the Private Security Industry Act will apply. Nor is there any analysis of the timeframe or content of the results for which providers will be paid, or any estimate of inevitable IT costs. There is no mention of how reoffending will be measured. In this connection, I wish that the Government would drop the use of “reoffending” when talking about measurement because, as the Home Office statisticians told me on my first day as Chief Inspector of Prisons, when I asked what it meant, it simply cannot be measured because nobody knows. We all know that reconviction rates can be measured, so why do we not just use those?
On top of all that, there is no assessment of how many additional short-term sentences are likely to be awarded or of the impact of the new provision on either prisons or the supervision of those awarded community sentences. Then there is what I can describe only as spin in relation to some other measures. Nothing is worse than announcing something that is unanimously welcomed, only to have to admit that it cannot be delivered because it cannot be afforded. I am always suspicious of the word “new” when all that is meant is a redistribution of existing responsibilities. In connection with this, there are many questions about how the governance of the probation service will be exercised, many of which have been asked already. However, I am currently concerned that probation trusts are in the lead of an array of essential local partnerships that I will not list. Under the Government’s proposals, it appears that these trusts are to be abolished. How are these partnership responsibilities to be reallocated? How do the Government think that the introduction of the market will improve existing arrangements in this respect?
On prisons, I am glad that the Minister mentioned the welcome intention of regrading resettlement prisons. However, this, too, is incomplete and comes 22 years after the original direction from the noble Lord, Lord Baker of Dorking, then the Home Secretary, following the recommendation made by my noble and learned friend Lord Woolf. Bearing in mind that everything done with and for prisoners during their sentence should be aimed at helping them to live useful and law-abiding lives, why not go the whole hog and, instead of disrupting half the prisons in the country, activate regional clusters to enable local rehabilitation of local prisoners to take place throughout their sentence and not just at its tail?
In conclusion, while I accept that there are good things in the Bill, I am concerned about the timetable. The Government justify that by alleging that, by legislating early, they can give potential providers clarity over the service that will be required, allowing them to prepare their bids and form partnerships. However, while the Bill may be clear to those who have drafted it, there is a considerable lack of clarity about the achievability of what it is designed to enable. I ask the Minister to seriously consider delaying the Committee stage of the Bill—which I note is to be on 5 June, three days after the House resumes—because it leaves precious little time, either for noble Lords to prepare amendments or for the Government to provide answers to the questions that have been asked this afternoon, including those that the Secretary of State was unable to answer on a recent Radio 4 interview.
I admit that, during all the thinking about the Bill, some words of Shakespeare have been coming into my mind, from act 3, scene 2 of “The Tempest”, in which Caliban says:
“Be not afeard; the isle is full of noises,
Sounds and sweet airs, that give delight and hurt not”.
I am afeard that the isle that is the transforming rehabilitation exercise, including the Bill, is full of soundbites and hot air that give hurt and delight not. Like other noble Lords, I look forward to having those fears allayed during the passage of the Bill.
Lord Bates
My Lords, in following the noble Lord, Lord Ramsbotham, who must be foremost among all prison reformers of the present generation and who knows more about this subject than anyone, I fear that my only contribution for my friends on the Front Bench in speaking in support of the Bill might be to allow them a gentle eight minutes in which to receive messages from the Box to respond to the noble Lord. None the less, I hope that that might be a useful function.
I firmly agree with the noble Lord, Lord Ramsbotham, on one thing: the value of our probation services. Sometimes it is very easy to cast aside their contribution to the criminal justice system. Yet the whole tenor of and reason for the Bill is an argument based simply on the fact that the reconviction rate beyond 12 months is substantially less than that under 12 months. The answer, of course, is the intervention of the probation services in cases where people have served a longer period, and their absence in the cases of those with short sentences. That is worth drawing attention to. It points to a fact, in Annexe C of the report that we are considering, Transforming Rehabilitation: A Strategy for Reform, that for those who have served a sentence of more than 12 months, the reconviction rate—or reoffending rate, in the report’s terms—is 35%, due in large part to the intervention of the probation service. For sentences under 12 months it is 58.2%. These are therefore significant sums, and at the outset it is worth paying tribute to the work of the probation services in bringing about that change.
There are many reasons why this Bill is necessary and should be welcomed. I would argue that chief among them are the crimes that are committed by those who reoffend upon leaving prison after a short sentence. Again, they are highlighted in Annexe C. In the year to September, there were 208,699 offences, including,
“35,000 violent crimes; 66,000 burglaries, robberies and thefts; and 6,600 sexual offences”.
Therefore, a reduction in that rate is undoubtedly the greatest prize on offer.
Second to that is undoubtedly the financial cost. The numbers have already been mentioned: the £10 billion cost of those crimes, the £3 billion spent on the prison system, and the £1 billion spent on community services. These sums are significant, and in a sense it is sad that we need an economic downturn, with economic constraints and fiscal reorganisation, to focus on this massive proportion of government spend and the need to reduce it.
There are also the lives of the 17,318 who reoffended during that period of one year. The question of why they did that needs to be addressed. Of course, as regards the answers, this area is not short of analysis. All the causes have been mentioned and are known to us. We know of the very high proportion of people who are subject to alcohol and drug addiction, and there are welcome things in the measures in this Bill that seem to address that for those who are released on licence. People also leave prison and have no home to go to, or were homeless before they came to prison. Housing is a critical element, so the joining up of the health services and local authorities with the criminal justice system, which this Bill provides for, seems very welcome.
I conclude my remarks simply by referring to an area that is absent: education. I know that there are good reasons for that, but they ought to be addressed none the less, because there might be further legislation coming down the tracks later in the year that seeks to respond to the consultation paper that is currently before us: Transforming Youth Custody: Putting Education at the Heart of Detention. We know the lack of education—of literacy, numeracy and IT skills—is the critical common denominator of those who find themselves in prison. It is also critical because however well meaning we are when we say that people need employment, if they do not have literacy, numeracy and IT skills it will be incredibly difficult to provide that. How we can miss that crucial element when we have a captive audience for education in our establishments and young offender institutions is beyond me. We have a requirement only for a statutory 15 hours of education, but the Centre for Social Justice, in its report, found that not even that is being provided. In most young offender institutions, the average is 11 hours. It should be 40 hours or more to make sure that people have the skills.
My honourable friend from another place, Guy Opperman from Hexham—to add to what the noble Baroness, Lady Armstrong, referred to as a north-east conspiracy, which I am happy to sign up to—wrote an excellent publication, which I commend to noble Lords, called Doing Time: Prisons in the 21st Century. In it, he came up with a number of innovative and progressive suggestions in education. One was the provision for what would in effect be academy prisons: boarding schools that would be secure detention areas but whose prime purpose would be not containment but education. That is an example of the type of thing that we should see. He quoted Victor Hugo, who said:
“He who opens a school door, closes a prison”.
That may not be strictly correct in numerical terms, but it argues for the centrality of education.
If the purpose of this is to join up provision across different departments and make sure that welfare, health and local authorities are all involved, we cannot exclude from that consideration the Department for Education. I know that legislation will be coming down, but it is crucial that we address the issue of education in this paving legislation. Whether in the supervisory arrangements mentioned in Schedule 1 or in some other way, we should recognise that education must be at the centre of reform and rehabilitation, particularly of the young.
Baroness Hamwee
My Lords,
“The isle is full of noises,
… that give delight and hurt not.
Sometimes a thousand twangling instruments
Will hum about mine ears, and sometimes voices”.
I will leave it to my noble friend on the Front Bench to add his take on what those voices are saying. I certainly do not cast the noble Lord, Lord Ramsbotham, as Caliban, who is offensive, aggressive, cringing and pathetic by turns. None of those applies.
The Bill was announced in the Queen’s Speech with the description that it would,
“reform the way in which offenders are rehabilitated in England and Wales”.
Of course, as we know, the problem is that too many are not. Like other noble Lords, I consider it a statement of the blindingly obvious to say that I support rehabilitation—but I will say it.
I was struck by an observation in the recent report, Intelligent Justice, from the Howard League for Penal Reform, that perhaps the first practical step would be to ensure that any court sentence should observe a principle analogous to the Hippocratic one: first and foremost, it should operate to minimise harm. Too often, prison adds to the damage. It seems that the academies programme was in operation in prisons—that is, learning about crime—long before the Department for Education took an interest.
As other noble Lords said, one must ask whether there is any value in short prison sentences. As we have heard, there must be in almost half the cases. Among the problems is the potential loss of a job and a home, yet we know that what underlies offending and reoffending will include unemployment, mental health, family problems and the generally chaotic lifestyle to which my noble friend Lady Linklater referred. A community sentence is much less likely to add to those problems.
I am sure that the Minister will be able to reassure me that the Government are working with magistrates and the Sentencing Council on how the new provisions will operate and to avoid imprisonment when the position is borderline in the way to which my noble friend Lord Dholakia, and the noble and learned Lord, Lord Woolf, referred. I hope that he will also assure me that the Government are working with local government, which has an important place in commissioning relevant services.
The mentoring programme could be very effective, for both the mentor and mentee. I, too, was at the speech by the Deputy Prime Minister this morning. Frances Lawrence talked about young people—although, as she said, her remarks applied to all mentors—and the value for them of acting as a role model and reaching out. The connection for them is life enhancing. However, it is not something that can be done on the cheap, and it is not something that is a substitute for—I hesitate to use the word, because I do not want to be pejorative about a mentor—professional work. They are complementary. Like my noble friend, I would not suggest that volunteers are by definition amateur, not at all, but there is a place for all in this programme.
There is much that a mentor can discuss, and ways in which he can discuss it, because he is talking to a peer with shared experience. If you like, the mentor gets it. Literacy is one of those things. The noble Lord, Lord Bates, spoke very powerfully about the importance of education, but we all know that education can be resisted if it is not promoted in the right way. Victim awareness is another thing that a mentor can, perhaps very effectively, raise. Supervision will be needed for offenders acting as mentors, not to control, but to guide, support and monitor. I am not clear whether supervision has been costed into these arrangements.
I hope to hear that there has been considerable consultation with prison staff. The Justice Secretary, in his Statement in the House of Commons, suggested that it was just starting—I do not suppose that it can only just have started—but another point made this morning was about a prison governor who refused access to an ex-prisoner. What message does that send to everyone about the possibility of there ever being rehabilitation?
The needs of women that are different from those of men have rightly been raised this afternoon. NOMS is reviewing the women’s custodial estate and is due to report soon. It is considering post-release supervision and support. There is also Minister Helen Grant’s group. How far are we appropriately anticipating what they might report? For women and men—but possibly especially for women with family commitments—the requirements for rehabilitative activity outside prison must be realistic. They must be seen as part of a programme, but not—and I have come across this in other contexts—imposed in a way that makes attending a course or being at a job impossible. I look forward to looking at the provision in the Bill for this.
When the noble Baroness, Lady Howe, asked a Question in March about licence arrangements, the noble Lord, Lord Ahmad, told us that 5% of the prison population was on recall. As noble Lords have said, it would be self-defeating if a breach of supervision or a breach of a licence automatically meant recall to prison, bumping up the numbers. The penalties for non-compliance have to be flexible. The Criminal Justice Alliance has suggested that legislation may need to be considered to make recall to custody on breach genuinely a matter of last resort.
Turning to resettlement prisons, I am sure that the geography does not work, and this will have to be a matter of evolution. Like others, I would like to see all prisoners serving their sentences as close to home as possible in order to maintain family links. However, I believe that some prisoners positively do not want to return to their old environment, so we should not be saying that prisoners should be released near home. It should be a matter of choice for prisoners; they should have some input. After all, if you are not consulted, you feel downgraded. I am concerned about the transition here and in the probation services. We are looking for diversity and innovation and to incentivise the services, but the risk will be carried by providers. However, it is necessary to take risks in this work to achieve results whatever the definition of “result”, when the result will be assessed and how much will be withheld from payment for the result or non-result.
I was going to ask the Minister how the MoJ, which we know has to make very considerable savings, will be able to pump-prime or provide seed corn for the smaller players in this field. However, this morning, I was pleased to hear the Deputy Prime Minister announce a package of support for bidding but, as I heard it, that was for putting in the bid, which is not the same as what will be needed for providers to function, get going and develop. Is the MoJ working on something like a model contract for bidders to look to?
I do not want to seem unenthusiastic about what the Government are proposing. I am enthusiastic, with appropriate moderation. The momentum must be kept up. Thinking about today’s debate, it occurred to me that to be a reoffender must often feel to the person concerned like condemning oneself to a life of crime, and that the second occasion must be significant. As my noble friend Lady Linklater said, the younger the age of the offender, the more reoffending rates increase. Work at and outside the prison gate is hugely important, but so is work on the wrong side of the prison gate, and so is work, as often as that is possible, when there is no gate at all.
Lord Ponsonby of Shulbrede
My Lords, I am making a guest appearance on the Front Bench and am in the unenviable position of making a speech that is far more moderate than the tremendous speech made earlier by the noble Lord, Lord Ramsbotham.
It is common ground between all political parties that reoffending rates are far too high. This problem is particularly severe for prisoners who serve sentences of less than a year. It is also common ground that if reoffending can be reduced, this will reduce the number of victims and the overall cost to the criminal justice system. It is worth recording that the probation service is not responsible for those leaving prison who have served sentences of less than a year, so it would be wrong to blame it for the current high reoffending rates, as the noble Lord, Lord Ramsbotham, said. The figures we have heard this afternoon are stark. The most prolific group among those committing some 600,000 crimes are the 60,000 or so people who receive sentences of a year or less, as we have heard from a number of speakers today. Some 60% of this group are reoffenders and many go on to reoffend multiple times. Certainly in my experience as a magistrate, the vast majority of people I have sent to prison have offended multiple times while serving community sentences. It is comparatively unusual to send somebody to prison who has never offended while serving a community sentence.
The Government’s stated objective is to drive down reoffending. They will use the Offender Management Act 2007 to privatise large elements of the probation service. That measure and this Bill will provide private supervision in the community for the majority of offenders. The Government’s objectives can be divided into two parts. The first is the privatisation itself with payment by results, about which we have heard, which comes across as little short of an article of faith on the part of the party opposite. The second part is the administrative mechanism by which this is to be achieved. Under the Bill, there is to be a welcome expansion of support for offenders who leave prison having been sentenced to a year or less in custody.
On the first objective, the Government intend through this privatisation to make sufficient savings to fund the expansion of support for those leaving prison. On the Secretary of State’s figures, some 45,000 offenders will gain support financed through these savings. The Government cite the example of Peterborough Prison, where additional support has been provided to leavers financed by social impact bonds. I have read the independent assessment of the project and agree that there is good reason to be encouraged by it, although the project it is in its early days. Surely, the central point is the additional money provided for the project. That is the main reason why it is successful. As we heard from my noble friend, the Secretary of State himself is a repeat offender when it comes to the Work Programme, and he is unsurprisingly very cagey about the commercial arrangements likely to be entered into with the service providers. Surely it is appropriate for the House to know the scope of the payment-by-results contracts, their likely structure or even the Government’s definition of payment by results in this context. I know very well from my own experience that drawing up large complex contracts where both parties are breaking new ground is an unnerving experience. There is every reason to believe that things could go wrong, so it is reasonable for the House to be given reassurance on the structure of the contracts to be entered into.
It is, of course, regrettable that the pilot schemes initiated by the previous Secretary of State were abandoned by the current incumbent. I also believe that commissioning should be managed to maintain a diversity of providers. This point has been made and I know that it is addressed in the strategy document issued by the Government last week. I make the simple point that the greater the number of contract packages, the greater the scope for smaller service providers.
I return to the Bill and the Government’s second objective, as I have characterised it. This raises a whole raft of practical questions about the competences and qualifications of those who will support the offenders in the community, their payment and responsibilities in the event of breach. Indeed, as we have heard, 25% of offenders move between different case offender levels. What happens if, for example, an offender starts drinking? Would that be reported to the court? It is of central importance that the courts have faith in the probation service providers to bring to court in a timely manner offenders who have breached their conditions. I am not sure that any member of the public will distinguish between people being supervised in the community who have served a short prison sentence and those being supervised in the community who are on community sentences. There is a risk that the project could be undermined if there is inadequate supervision of those who are released from prison sentences.
It is worth reflecting that the Government are proposing to transfer many thousands of probation staff to different employers. A number of noble Lords have mentioned the invaluable work done by the probation service. It has to be said that under the new arrangements members of the probation profession will get a narrower range of experience as there will be a binary system, as referred to by my noble friend Lord Beecham. The noble Lord, Lord Marks, referred to the possibility of a probation officer charter. I do not know whether he proposes to take the idea forward in the Bill but it is an interesting one. The right reverend Prelate the Bishop of Newcastle spoke about the dissipation of expertise through the new arrangement. The noble Lord, Lord Dholakia, wants an assurance from the Minister about the future prospects of the probation service. I was interested to hear him ask for that. However, I think it would be very difficult for the Minister to give that assurance given that those staff will be employed by the private sector.
It is also worth saying that co-operation on the ground between the various providers is key to the success of this venture. Nothing must be done which undermines this. A number of noble Lords have said that this is really centred around the local authorities working with a number of providers. It is the day-to-day management of these different providers of housing, YOT, social services and so forth, which is key to making any community sentence successful. I also note that the noble Lord has made positive comments about restorative justice, and it is said that he will be giving new comments about that in due course.
A number of organisations have contacted me about the centralisation of the commissioning process. First, I welcome that the police and crime commissioners will be part of the selection process of new providers. However, I want to mention one organisation in particular, and that is London Councils. It is particularly concerned that this would not be an appropriate arrangement for it. In London the PCC is the mayor, there are 33 local authorities, and there is an existing structure which could be used for the commissioning process. The Government often state their commitment to local services, local decision making, and local accountability. This is a question which I intend to explore at a later stage of this Bill.
I want to say, in brief, a word about the perspective of the courts on this. They are of course the sentencing body. Clearly, the recently introduced LASPO arrangements, whereby prisoners on sentences of less than one year are unconditionally released at the halfway point in their sentence, are to be reversed. Now there will be requirements on release. The standard requirement, as we have heard, will be a rehabilitation activity requirement, and the courts will have new breach powers. I make a number of comments on this. First, when the sentencer announces the sentence in court, it should be very clear what actually is to be said, because it is not always clear to magistrates and judges what one should actually say about the length of the period in custody, the period on licence and the period on supervision. I know from the comments of the noble Lord, Lord McNally, that his ministry will be working with the Judicial College and working out suitable arrangements for this.
We had a number of very interesting comments in this Second Reading debate, and I want to address a few of them. First, the noble Lord, Lord Bates, quite rightly talked about the huge importance of education. The noble Baroness, Lady Hamwee, set out how important it is. I used to be a trustee of the Wandsworth prison visitors’ centre and we provided to all the prison visitors education facilities at some cost—computers and the like. I have to say, very depressingly, that they were almost completely unused by the visitors to Wandsworth prison. While I wholeheartedly agree with the objectives, I note that the group of people we work with can be resistant when we are trying to introduce education programmes.
A number of noble Lords spoke about other matters which could be introduced to this Bill. We heard from the noble Baronesses, Lady Howe and Lady Healy, about women offenders not being specifically discussed. We also heard a very interesting idea from my noble friend Lord Beecham about a court for veterans, which I hope he will take forward.
I want to raise a point that was mentioned by a number of Peers. That is the possibility of an increase in the overall custody levels because magistrates or sentencers would be using a custodial sentence for people who breach these sentences. In my experience, magistrates use custodial sentences as an absolute last resort. This is not a new problem. It is a very real dilemma when one has a repeat breacher of a community order, for example, for perhaps a relatively minor matter, but they just do not comply with the provisions of the community order. I believe that magistrates should, as a very last resort, have the possibility of enforcing custody, otherwise there will be even less incentive for certain people to comply with their community order.
Finally, I want to pursue the point raised by the noble Baroness, Lady Linklater, about the transition from youth to adult, and the work from the YOTs to the probation service. This was not addressed by any other Peer. It is a very important and practical point, and as the noble Baroness very rightly said, the YOTs—the ones I have worked with—have a more nurturing role, if you like, in trying to help young people. When they move to the probation service, it is quite often an unpleasant surprise for them. I hope we may explore that more fully.
In conclusion, we have the introduction of a payment system which is untested anywhere in the criminal justice world, the abandonment of the pilot schemes, and the removal of the 35 probation trusts and their replacement with a centralised commissioning service. We will judge this Bill in the wider context of the Government's rehabilitation strategy. We agree with many of the specific provisions of this Bill itself. Reducing reoffending while maintaining public safety must be any Government's objective, but ill-thought-out policies based on an unproven ideologically driven funding policy risks the very services which this Bill seeks to enhance.
Lord McNally
My Lords, first, I thank the noble Lord, Lord Ponsonby, for that measured response. I thought his peroration wandered into Beecham territory, but for the most part it was moderate and constructive, and for that I am most grateful. I see him as a kind of David Beckham figure, coming to dazzle us on the Front Bench and then all too soon going away again. However his participation today and, I hope, in Committee and at other stages of the Bill is now guaranteed.
It is very difficult responding to so comprehensive a debate. It is one where Governments can never win. We pilot, analyse and consult, and then we run out of steam. If we push ahead with radical ideas, we are going too fast and failing to consult. I am not quite sure how to respond to the tour de force of the noble Lord, Lord Ramsbotham. He ended on “The Tempest”, but his message was more from “Life of Brian”. He is quite sure that the Secretary of State is,
“not the Messiah, he’s a very naughty boy”.
One rather more serious point, which I make in all comradeship to both the noble Lord, Lord Ramsbotham, and my noble friend Lady Linklater, is that sometimes if a department makes any move at all, they are so precise about what is wrong that you lose all sense of whether they are supportive of at least the attempt. Of course, there are questions about so radical and innovative a policy. I will try to cover some of them in this reply and I will also look forward to a very thorough examination in Committee.
Since he was one of the last speakers and his name is at the top of my pile of notes, perhaps I may thank my noble friend Lord Bates for his intervention. It gave me a breather and he made a very important point about education. We will be bringing forward thoughts on education and its place in the youth sector, but it also has an important role to play in rehabilitation in the adult sector. It ties in with a point that is often made by the noble Lord, Lord Ramsbotham, about mentoring and the benefit of initiatives such as the Toe by Toe project, whereby literate prisoners help illiterate prisoners to master reading and writing.
I will try to cover the major points in my response and note some of the key ideas. I will follow up the idea from the noble Lord, Lord Beecham, on ex-service personnel because there is growing concern about how many of our ex-servicemen seem to end up in the criminal justice system as offenders. We will look at ideas that have worked and we will certainly follow them up.
A number of noble Lords expressed concern about whether there will be scope for small providers. We intend to put in place market stewardship arrangements so that the smaller voluntary and community sector providers can bid to be a prime provider or to be a partner. We are running a two-part £500,000 grant to support VCS organisations to overcome the barriers to participating in the rehabilitation reforms and, as has been said, this morning my right honourable friend the Deputy Prime Minister announced further funding. I should also like to follow up with my noble friend Lord Marks the idea of a chartered institute of probation officers or some such body. That is something that sits well with the idea of a National Probation Service. I have said many times from this Dispatch Box that I have great admiration for the probation service and at no time have I suggested that it is the fault of the service that we have a 56% rate of reoffending, or indeed any other percentage. The service does an excellent job. What we are doing here is not a condemnation of the probation service but an attempt to restructure provision in a way that gets us better value from the money that we are making available for rehabilitation. I take the point made by a number of noble Lords, including the noble Baronesses, Lady Howe and Lady Healy, about women. It is something that we may explore in Committee.
I will deal with some of the broader points made by the right reverend Prelate the Bishop of Newcastle later, but I do not think that ever in my political life have the words, “Public is bad, private is good”, passed my lips. It is an absurd assumption and is certainly not part of the motivation behind this Bill. However, diversity, variety and flexibility are good, and those are what we are trying to promote in what we are doing. I will deal with the matter of breach, raised by my noble friend Lady Berridge, later, but perhaps I may flag up that I have visited one of the Clink restaurants, and very good it was too. They are a real and functioning example of rehabilitation; the hospitality world is one in which the range of skills required matches well with those of prisoners.
I have noted the point made by the noble Baroness, Lady Armstrong, that the previous Government themselves examined payment by results and were none the worse for that. As we have pointed out before, much of this restructuring depends on the 2007 Act. I am not scoring points here; I just want to make the point that it has been a direction of travel for a long time in both prisons and probation because, as has been said a number of times, the private and voluntary sectors have been involved in rehabilitation for a long time. I have seen provision by St Giles Trust, Turning Point and others that demonstrates that. We want to look again at social investment bonds. As the noble Baroness said, they could and should be a major long-term part solution to some of the issues we face. However, I acknowledge her experience and take her advice about the need to find a long-term basis for such investment.
My noble friend Lord Dholakia let it out of the bag that he is my long-term mentor on criminal justice matters, and I hope that I am all the better for that. He made the important point that we should not confuse voluntary with amateur. The voluntary sector has a great deal of professionalism to give us in this area. I hope also that we can press forward on the Rehabilitation of Offenders Act 1974, and we certainly intend to do so as soon as possible.
I take on board the warning from the noble and learned Lord, Lord Woolf, that we should proceed with caution and about the danger that what we are doing will somehow legitimise and justify an inflation in short-term sentencing. I do not think that will happen. As the noble Lord, Lord Ponsonby, recognised, we are talking to magistrates and the Sentencing Council with this very much in mind. The noble and learned Lord also made the point that this kind of attempt has been made before with custody plus, and we will try to learn some of the lessons from that.
As well as raising the issue of women in prison, which I am very willing to explore further in Committee, the noble Baroness, Lady Healy, warned against setting people up to fail. I see that as a proper warning and one that we will take to heart when putting these reforms in place. I was glad that my noble friend Lady Linklater welcomed the emphasis on mentoring. She, too, expressed concerns about the probation service and mentioned that it is now 100 years old. I do not believe that we will lose the skills base through these reforms. They will be redeployed across the sector. However, I will say quite frankly that I believe that a National Probation Service along the lines that we are contemplating will have far more status and influence on policy than the service did as, if I may say, the poor relation of NOMS within the Prison Service. Under our new structure, the National Probation Service will have within NOMS direct reporting to the Secretary of State, and I think that that is an advance on what has gone before. My noble friend Lady Hamwee also welcomed mentoring, and I take to heart the importance of getting a complete buy-in to this from prison staff.
I suspect I shall run out of time for all the other issues. We are trying to give discretion to the courts when they are sentencing. Applying the provision to all offenders then setting the appropriate level of supervision is a much more practical approach than deciding at the time of sentencing not to supervise an offender and then realising too late that they actually pose a risk of reoffending and need supervision. A blanket, one-size-fits-all type of supervision will not be applied; there will be proportionality and judgment in taking this forward. The noble Lord, Lord Beecham, gave an example of somebody who has been in prison for an offence that is unlikely to be recommitted and has a minimum requirement for supervision: that is exactly what will happen.
My noble friend Lord Dholakia, the noble Lord, Lord Beecham, the noble and learned Lord, Lord Woolf, and the noble Baroness, Lady Healy, spoke about the danger of raising the threshold for imposing custodial sentences. The Bill is focused on improving rehabilitation for those whom the court decides need to go to prison. We have already made changes to the community order in the LASPO Act and the Crime and Courts Act to ensure that sentencers have tough community sentences at their disposal. The fact remains that, as the noble Lord, Lord Ponsonby, said, some people need to go to prison, even if only for short periods. The current custodial threshold is already high. The court must not pass a custodial sentence unless it is of the opinion that the offence is so serious that a final community sentence cannot be justified. Other matters on the details of application would be better left to be dealt with in Committee.
The noble Baroness, Lady Berridge, asked me specifically whether 14 days committal for breach activates its own 12 months of supervision. It does not: committal is the ultimate sanction for breach but the objective is to get the offender back on to the original rehabilitation programme. That also covers how we intend to extend this to 50,000 offenders and apply it with a sense of proportion in each specific case.
On the question of women, we have, through my honourable friend Helen Grant, taken on a women’s advisory board and will be taking forward proposals on female offenders. I welcome the opportunity to discuss this in Committee.
A number of noble Lords, including the right reverend Prelate the Bishop of Newcastle, the noble Lord, Lord Beecham, my noble friend Lord Dholakia and the noble Baroness, Lady Berridge, raised concerns about the participation of small charities. Our reforms will open up the probation service to a far wider range of potential providers. We want to encourage partnerships between voluntary or charitable organisations and between VCs and the private sector. In reply to the right reverend Prelate the Bishop of Newcastle about faith group involvement in rehabilitation, I recently went to Liverpool as a guest of the right reverend Prelate the Bishop of Liverpool and saw some of the projects being run there. The noble Baroness, Lady Healy, may be interested to know of Adelaide House, a very interesting project for the resettlement of women offenders. I want to put on record my appreciation of all the faith groups, which already have a network and a committed flock who readily make themselves available for rehabilitation work. That is something we want to work with and build on. In St Albans and Norwich, which I have visited in the past couple of years, the cathedrals are being used as centres for getting the various groups together on projects that work.
Lest I get into trouble for going on too long, I will just deal with the question of payment by results. Our payment mechanisms will ensure that providers have to work successfully with all offenders, including the most prolific and hardest to help, if they are to be paid in full. There will be a fixed fee for service, ensuring that they deliver the sentence requirements, and licence conditions for every offender. The remainder of their payment will be dependent on the reductions they make in reoffending. To be paid in full, providers will need to achieve an agreed reduction in both the number of offenders who go on to reoffend and the total number of offences committed by those in their cohort. So they cannot just focus on the easy wins; they will have to work with the most prolific offenders and keep working with those offenders who have already reoffended. We will be developing the details of our payment mechanism in discussions with providers and practitioners. I am sure that will be developed in Committee.
Lord Beecham
Could the noble Lord clarify whether it is the intention to bring those details back to the House or to Parliament for approval? In what way will there be parliamentary scrutiny of the detail?
Lord McNally
Those are matters of contract with the providers, but the noble Lord can probe me further on that in Committee, when I will try to give more specific answers.
It does not surprise me, given the speakers list today and the range of experience and expertise on view, that a lot of questions have been asked. I hope we can delve deeper into this in Committee. I do not accept that this is not worth pursuing. Most people have welcomed the objectives and, as I have told the House before, we must accept that, in these straitened times, the department cannot call on other resources to fund ambitious programmes. However, we are spending just less than £1 billion on the wide range of rehabilitation services. We have heard about holistic approaches and making sure that we have buy-in from other departments and from local government; these are all important to its success and I passionately believe it is worth trying. I understand the dangers but, in the end, you can spot so many dangers that you are paralysed. I do not believe that is the right approach. We should press ahead with this, let this House use its expertise to examine it in detail and see if we can put in place a piece of legislation that will give the framework to bring in ideas, flexibility, innovation and value for money in an area where there is a great deal of common agreement about objectives, as today’s debate has shown. As we take this Bill forward, our job is to see if we can tease out the practicalities so that it is also effective. I beg to move.
Bill read a second time and committed to a Committee of the Whole House.
Syria
(10 years, 11 months ago)
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The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi)
My Lords, with the leave of the House, I shall now repeat a Statement made earlier today in another place by my right honourable friend the Foreign Secretary, on Syria. The Statement is as follows.
“Mr Speaker, with permission I will make a Statement on the conflict in Syria, which continues to worsen.
The Syrian regime’s military offensive against opposition-held areas around Damascus, Homs, Idlib, Hama and Aleppo is intensifying, with complete disregard for civilian life. The death toll has doubled in the first five months of this year, and now stands at an estimated 80,000 people. There have been well verified reports of massacres around Damascus by regime security forces, and communities killed in cold blood in villages around Baniyas. Online footage has shown bodies heaped in the streets, and children butchered in their homes. Ten thousand people are believed to have fled the area in panic created by these brutal killings. And last week there were unconfirmed reports of further attacks using chemical weapons.
Over 4 million Syrians are internally displaced and a total of 6.8 million are in desperate need, including 3 million children. It is horrifying to imagine what life must be like for these children, witnessing violence and death on a daily basis, and enduring trauma, malnutrition and disease. This suffering has devastating consequences. It is undoubtedly contributing to radicalisation in Syria. Syrian people are facing a regime that is using warplanes, helicopter gunships, heavy artillery, tanks, cluster munitions and even ballistic missiles against them, often without them having the means to defend themselves and their communities. The conflict is therefore creating opportunities for extremist groups. Syria is now the number one destination for jihadists anywhere in the world today, including approximately 70 to 100 individuals connected with the United Kingdom.
It is also endangering regional peace and security, with over 50 people killed in a bombing in Turkey last week, the kidnapping of UN peacekeepers in the Golan Heights, cross-border shelling and clashes on the Lebanese-Syrian border. Half a million Syrians have become refugees in the last 10 weeks alone, bringing the total number of refugees to 1.5 million, 75% of whom are women and children. The UN assesses that, by the end of this year, on these trends, more than 3.5 million, or 15%, of Syria’s total population will have become refugees. And the Foreign Minister of Jordan has warned that Syrian refugees are likely to make up 40% of his country’s population by the middle of next year, with similar numbers predicted for Lebanon.
One of two scenarios lies ahead for Syria: on the one hand, an ever more savage conflict and military stalemate, producing an even bigger humanitarian disaster, greater radicalisation and deeper sectarian divisions, further massacres, and even the collapse of the Syrian state and disintegration of its territory; or, on the other hand, what we must strive for—a negotiated end to the conflict which ends the bloodshed and leads to a new transitional Government, enabling refugees to return to their homes and extremism to be contained.
All our efforts as the United Kingdom are devoted to bringing about such a political settlement, and to saving lives. We have provided over £12 million in non-lethal assistance so far, including to the Syrian National Coalition. This includes vehicles with ballistic protection, body armour, trucks and forklifts, solar power generators, water purification kits, equipment to search for survivors in the aftermath of regime shelling, computers, satellite phones, and office equipment to help people in opposition-held areas.
We have provided human rights training and support to members of Syrian civil society. We have supported human rights investigation teams to collect documentary, photographic and interview evidence of abuses, and trained medical staff to gather forensic evidence of torture and sexual violence. This material is being made available to the UN commission of inquiry and other international investigative bodies so that those involved in human rights violations can be held to account. We therefore welcome the resolution sponsored by Qatar, which was adopted by the UN General Assembly on 15 May by 107 votes to 12, urging accountability for human rights violations and progress on a political transition as well as humanitarian assistance to Syria.
The Prime Minister announced last week that we would double our non-lethal assistance this year to £20 million. This will be used to help provide services to the Syrian people, deliver assistance to them on the ground, forge links between different communities and opposition groups, and support better communications. Our humanitarian funding to date totals £171.1 million, including £30 million announced by the Prime Minister last week in support for people in need in opposition-held and contested areas of Syria. Much of our funding is going to support refugees in Lebanon and Jordan. We have already provided food for over 150,000 people, clean drinking water for over 900,000 people and over 280,000 medical consultations for the sick and injured. The Government have worked hard to urge other countries to meet their commitments to the UN humanitarian appeal for $1.5 billion. This is now 71% funded, and we will continue to urge other countries to do more.
We are increasing the support we are providing to Syria’s neighbours, including providing equipment to the Jordanian armed forces to help them deal with the immediate needs of the Syrian refugees at the border and to transport them safely to international humanitarian organisations. We have provided funding to the Lebanese armed forces for four border observation towers, to help reduce cross-border violence in key areas and to protect and reassure local communities. And we are also working with the Syrian National Coalition and key international supporters to develop plans for transition and Syria’s post-conflict needs, building on the conference we held at Wilton Park in January.
The international focus must, above all, be on ending the crisis. To that end, we are stepping up our efforts to support the opposition and increase pressure on the regime, in order to create the conditions for a political transition.
On 20 April I attended the meeting of the core group of the Friends of the Syrian People in Istanbul, where a new ‘compact’ was agreed with the Syrian National Coalition. The coalition issued a declaration committing itself to a political solution and transition, promising to guarantee the rights of all Syria’s communities and rejecting terrorism and extremist ideology. It pledged to preserve the Syrian state, uphold international law, guarantee the safety and security of chemical weapons in Syria and work to keep weapons out of the hands of extremist groups; commitments which I am sure the whole House will welcome. In return, the core group nations agreed to expand support to the coalition and its military council, as the United Kingdom has already done. We are working as I speak to broaden and unify further the Syrian opposition.
On 8 May in Moscow, Secretary Kerry and Foreign Minister Lavrov agreed the basis for a new international conference bringing together representatives of the regime and the opposition. The Prime Minister visited Russia on 10 May for talks with President Putin to cement understanding about the purpose of that conference. He held further talks with President Obama in Washington on 13 May and spoke again to President Putin last Friday. In our view, the conference, which should be held as soon as possible, should be focused on agreeing a transitional governing body, with full executive powers and formed by mutual consent, building on the agreement we reached at Geneva last year.
We are urging the regime and the opposition to attend the conference and to take full advantage of the opportunity to negotiate. In the end, there will have to be a political and diplomatically supported solution, if there is to be any solution at all. There is no purely military victory available to either side without even greater loss of life, the growth of international terrorism and grave threats to neighbouring countries.
The Prime Minister and I have also spoken to UN Secretary-General Ban Ki-Moon about the conference, and we continue to support Special Envoy Lakhdar Brahimi in his role. I am in constant contact with Secretary Kerry about the preparations. Tomorrow I will travel to Jordan to meet him and other Foreign Ministers of the core group on Wednesday, and on Monday I will go to Brussels for the EU Foreign Affairs Council. The EU should give strong support to this diplomatic process, including by agreeing further amendments to the arms embargo, without taking any decisions at present to send arms to the Syrian opposition.
The case for further amendments to the arms embargo on Syria is compelling, in order to increase the pressure on the regime and to give us the flexibility to respond to continued radicalisation and conflict. We have to be open to every way of strengthening moderates and saving lives, rather than the current trajectory of extremism and murder. We have not sent arms to any side during the conflicts of the Arab spring. No decision has been made to go down this route and if we were to pursue this, it would be under the following conditions: in co-ordination with other nations, in carefully controlled circumstances, and in accordance with our obligations under national and international law.
The United Kingdom and France are both strongly of the view that changes to the embargo are not separate from the diplomatic track, but essential to it. We must make it clear that if the regime does not negotiate seriously at the Geneva conference, no option is off the table. There remains a serious risk that the Assad regime will not negotiate seriously. This is the lesson of the last two years, in which the regime has shown that it is prepared to countenance any level of loss of life in Syria for as long as it hopes it can win militarily. We also have to persuade the opposition to come to the table; recognising how difficult it is for them to enter into negotiations with a regime engaged in butchering thousands of people.
There is a growing body of limited but persuasive information showing that the regime used—and continues to use—chemical weapons. We have physiological samples from inside Syria which have shown the use of sarin, although it does not indicate the scale of that use. Our assessment is that chemical weapons use in Syria is very likely to have been by the regime. We have no evidence to date of opposition use. We welcome the UN investigation, which in our view must cover all credible allegations and have access to all relevant sites inside Syria. We continue to assist the investigation team and to work with our allies to get more and better information about these allegations.
The UK holds the presidency of the Security Council next month, and we remain in favour of the Security Council putting its full weight behind a transition plan if it can be agreed. All our efforts are directed at ensuring that the coming conference in Geneva has the greatest possible chance of success. We are entering in the coming weeks a period of the most intense diplomacy yet, to bring together permanent members of the United Nations Security Council, to attempt to create real negotiations and to open up the possibility of a political solution. The Prime Minister is fully committed to these efforts and the central role of the Foreign Office over the coming weeks will be to support this process. At the same time our work to save lives, to help to stabilise neighbouring countries and to support the national coalition inside Syria will continue to be stepped up.
With every week that passes we are coming closer to the collapse of Syria and a regional catastrophe, with the lives of tens of thousands more Syrians at stake. We are determined to make every effort to end the carnage, to minimise the risks to the region and to protect the security of the United Kingdom”.
My Lords, that concludes the Statement.
Lord Wood of Anfield
My Lords, I thank the Minister for the Statement. We have all watched events unfold in Syria with increasing horror, and we on this side of the House share the determination that Britain plays its part, in partnership with the international community, in helping to bring about a cessation of violence. I shall ask questions about three aspects of the Statement: first, arming the Syrian rebels; secondly, efforts to bring about a long-term settlement in Syria; and thirdly, humanitarian assistance to the victims of this horrific war.
I begin with the issue of arming the rebels. The Prime Minister has suggested in recent months that arming the rebels is key to tipping the balance and creating peace in Syria. The Statement said that:
“The case for further amendments to the EU arms embargo on Syria is compelling, in order to increase the pressure on the regime and to give us the flexibility to respond to continued radicalisation and conflict. We have to be open to every way of strengthening moderates and saving lives”.
This signal should not surprise us. In recent weeks, there have been reports of a confidential document that sets out a range of options that would allow the UK to send lethal support to Syria’s opposition. The Statement had carefully chosen words on this subject. However, I believe that the prospect of what could be a decade-long sectarian civil war in Syria, fuelled in part by weapons supplied by us or others, should give the Minister and her colleagues serious pause for thought before embracing that course of action.
The struggle in Syria today is between forces funded and armed by outside sponsors, notably Saudi Arabia, Qatar and Iran. Also participating are foreign religious groups, not directly controlled by the sponsors, namely the Sunni, Salafist and Iranian-aligned militias, together with anti-western al-Qaeda-aligned fighters. So will the noble Baroness answer these questions? If the Government’s priority is peace, how does contemplating arming the rebels address the central question faced by the international community: how to create a sustainable political settlement in a fractured country? Surely future actions or policies of the UK Government should be adopted only on the basis of their capacity to contribute to that peaceful outcome.
Syria today is awash with weaponry. So what is the Minister’s assessment of how much weaponry would be required to tip the balance against Assad, and how in practical terms will the Government ensure that if they supply weapons they do not fall into the hands of al-Qaeda supporting jihadists? The choice for the international community today is not between sending military support to Syria’s opposition and doing nothing. Assad is sustained by external support from Russia and Iran and the foreign funds that allow him to pay his forces. Will the Minister explain why this Statement did not place more emphasis on the practical steps that could be taken to choke off Assad’s finances and the country’s energy supplies through the effective enforcement of sanctions?
Secondly, I turn to questions about international efforts at establishing a settlement in Syria, in particular an international peace conference. I agree with the Minister that we should seize the opportunity afforded by the proposed US-Russia conference to try to end the fighting and prevent the Lebanisation of Syria. We will continue to argue for exactly this type of direct engagement with the Russians, as we have done for some time. As a country which has experienced minority rule for 40 years, a comprehensive peace settlement for Syria must be inclusive. So all parts of the country’s diverse society should be involved in this peace conference—whether Alawite, Sunni, Kurd, Shia, Druze or Christian—because it would be wrong to underestimate the fear, particularly in the Alawite community, but elsewhere as well, that a change from minority rule to democracy provokes.
We have learnt from recent history that when a country with such a range of religious and ethnic identities emerges from a bloody war, communities can be slow to trust each other again. In this regard, will the Minister tell us what lessons she draws from the experience of Syria’s neighbour Iraq, where the disbanding of the Ba’ath Party and its associated structures contributed to the challenges that that country faced in the immediate post-war period? Will the Minister also explain the Government’s assessment of the scale of post-conflict planning by partners in the international community currently under way and what role our Government play in facilitating that? Will the Minister also assure the House that in the Government’s conversations with the Syrian national council and with our allies, they are making the case for the importance of a peace conference which genuinely involves all parts of Syria’s diverse society?
Thirdly, I turn to the issues around humanitarian assistance. We strongly welcome the Government’s humanitarian funding for the Syrian people, but I am sure the Minister accepts that Britain alone cannot take on the burden of upscaling the humanitarian response in Syria in the wake of a peace agreement. It is vital that the Foreign Secretary delivers on the pledge he made at the G8 Foreign Ministers’ meeting he chaired, when he said that his priority was,
“ensuring that donors who generously pledged their support at the Kuwait conference fulfil their commitments”.
What are the Government doing to ensure that all those commitments from different countries are turned into payments to help rebuild Syria? I finish by asking the Minister for a final assurance: that before any decision to loosen the EU arms embargo is taken, she or a colleague will come in advance to this House and make the case for doing so?
Baroness Warsi
My Lords, first, I thank the noble Lord for being so supportive. The Opposition have been incredibly supportive of the various initiatives that we have brought before this House and the other place, and in terms of the many briefings that have been given to individual Ministers. I will try to address some of the specific issues that he raised.
None of the options is without risk. This is an extremely difficult and protracted dispute. The noble Lord referred to the various factions, whether they are theological, within tribes or relate to concerns about minority rule over a long time. We recognise and acknowledge this difficulty. This dispute has gone on for as long as it has precisely because there are no easy answers.
However, I assure the noble Lord that the arming of rebels, which has been discussed here and in the other place, is not something upon which a decision has been made. The Statement made it clear that the Foreign Secretary and I feel that the amendment to the arms embargo, which is what we are seeking at this stage, allows us the flexibility to continue to put pressure on the regime and say that the situation where those who have the weapons are either the Assad regime or the extremists being funded from elsewhere cannot be allowed to continue.
The noble Lord is right: Syria is awash with weapons. I do not think there is an answer as to how much weaponry is required before a political solution can be reached. As an international community, we have two responsibilities: first, to ensure that people are given the opportunity to defend themselves where a political solution is not immediately obvious; and secondly, to allow the pressure to build to say to the regime that this situation cannot continue and that Assad cannot continue to butcher his own people.
We are absolutely of the view that all communities should be included in the international peace conference. In fact, part of the compact that was agreed with the national coalition earlier this year was about it extending its base and outreach to other communities and ensuring that it was as representative as possible of the Syrian people.
Post-conflict planning is already taking place. The Wilton Park conference in January this year was part of that. We have all learnt the lessons of what happened in Iraq, and we are of the view that we must not dismantle everything that is there. Clearly, that did not work in Iraq, and it is important that we keep what is there and what is workable.
With regard to humanitarian funding, it is important for us to step up to the mark and make the pledges, and I am grateful for the positive comments from the noble Lord. It is also important that we continue to lobby the countries that unfortunately have sometimes chosen to fund and support bilaterally when we are making the case that it should be done through the UN system. The good news is that many more pledges have been delivered. We are at more than 70%, but we use whatever opportunity we have to continue to push for these countries to ensure that the pledges that were made are now put on the table.
I assure the noble Lord that I will use whatever opportunity presents itself to keep the House up to date before any decision is made. There is another Question on Syria listed for just after the Recess, and I know that certain questions were raised when foreign affairs were debated in the Queen’s Speech debate last week. I also thank noble Lords for being so gracious when I had to step out of that debate at the very last moment.
The noble Lord will be aware that every member state has to vote to renew the arms embargo. If a single member state were to say no, that embargo would fall. At this stage, we are negotiating for an amendment to provide us with some flexibility, and as soon as I have further information I will, of course, come back to the House with an update.
Lord Wright of Richmond
My Lords, I will address the first of the questions put by the noble Lord, Lord Wood, and I will be as brief as possible.
Has the Minister read a very pertinent article in the latest issue of the Spectator, by my former colleague, Sir Andrew Green? He is probably better known to your Lordships as head of Migration Watch, but in this case he is speaking as a former ambassador to Syria, like me. Will the Minister please draw that article urgently to the attention of her right honourable friends before they take any decision? I note that the Statement says that no decision has yet been taken to supply arms to the rebels. The article’s headline is:
“Arm Syria’s rebels? That would be pouring petrol on a fire”,
and I beg the Government not to do that.
Baroness Warsi
I have not read that article, but I will make sure that I do and that it is brought to the attention of my colleagues. It is important that a wide range of views is fed into the debate when these decisions are made. I absolutely accept the noble Lord’s concerns about pouring petrol on a fire, but I think that he will agree with me that doing nothing is not an option.
Lord Howell of Guildford
My Lords, I am extremely grateful to my noble friend for setting out the position with such acumen and accuracy. There are two points that she did not mention. First, China has growing influence and concern in this region. Indeed, it relies on the area for more and more of its fuel. What discussions, if any, have there been with the Chinese authorities about them playing a more constructive role, in addition to the discussions with Russia?
Secondly, can the Minister clarify the position of Jabhat al-Nusra? As I understand it, Hezbollah is working with Assad and the Iranians and is fighting against Jabhat al-Nusra. Jabhat al-Nusra has declared that it is in alliance with al-Qaeda. Al-Qaeda and Hezbollah are both dedicated to attacking Israel and, indeed, the West. This is an extraordinary melange. Will the Minister describe how we are going to ensure, now that Jabhat al-Nusra dominates areas of Syria and the opposition, that we are not going to find ourselves helping people who are our direct enemies and a direct threat to further peace in the Middle East?
Baroness Warsi
I will have to write to my noble friend in relation to his first question about negotiations and direct discussions with China. I am not familiar with the extent of those conversations, although I know that some have taken place.
My noble friend raises a really important point about the complications of the country that we are dealing with and the overlaps and different loyalties of groups at any one time. Extremism deeply concerns us in relation to what is happening in the region and its impact upon the United Kingdom. We have credible evidence that up to 100 young British people, or people connected to the United Kingdom, are out there fighting. It is attractive for people around to the world to go there and fight. We are concerned about the implications of that for the region and for when these people start to come home. That is why when we had the discussions with the national coalition one of the first things that we discussed was extremism. We have a commitment from the national coalition that it will do all it can to ensure that terrorism and extremism do not manifest themselves and grow and that weapons or any support given to the national coalition do not get into the hands of extremists.
Lord West of Spithead
My Lords, my question relates to the chemical arsenal held within Syria. As a military man, I find it very strange that the Syrian Government should use chemical weapons in a piecemeal way. Therefore, attribution is crucial in assessing who is using them. As a military man, although I think that the use of them is reprehensible and that it is a pretty odious regime, if you wanted to use them, you would use them on a major scale to try to get a military advantage.
The Minister is absolutely right that no one can win this militarily. That raises the issue of who is actually responsible for the release of a weapon of mass destruction in Syria. I am sure that this is a RFI—request for information—among our security services, but we need to be very clear about that so we can hold whoever it is responsible. If this is being allowed to be done down at very low unit level, that is extremely dangerous. There is quite a lot to be unpicked in this before we move forward.
Baroness Warsi
We have limited but persuasive information that a chemical weapon has been used. The evidence is that it has been used at a low level in a small way. There is credible evidence of sarin being used but the extent of the use is not clear. The noble Lord raises an important point in relation to why the regime would use it in this particular way.
It is important that we act on this matter in conjunction with the international community. We have sent the evidence to the United Nations. It is important that the United Nations takes a view on the evidence that we and other international partners are submitting. The House will agree that if there is anything we have learnt over the past decade and more it is that before we put into the public domain evidence of chemical or biological weapons or weapons of mass destruction, it is crucial we are clear about when they were used, how they were used and by whom they were used.
Lord Anderson of Swansea
My Lords, I congratulate the Minister and the Foreign Office on their sure-footed approach thus far, but they should heed the wise words of the noble Lord, Lord Wright, about putting fuel on the flames. I have three quick questions. What is our policy on the 70 or 100 jihadists resident in the UK when they seek to return home? We know there are many laggards in terms of honouring the pledges made at Kuwait; given that, what is the Government’s position? Do we name and shame or is there a way to encourage those laggards to honour their commitments? Given the poor and tardy response so far, what confidence do we have that any commitments made for post conflict reconstruction are met? Finally, on the international conference, President Assad has already said he will attend. Is it assumed that the opposition will also attend? We understand that Iran has largely subcontracted the air operations there to the Revolutionary Guards. Will Iran be invited to the conference? We know the strong opposition of France to that. What does Russia say about the role of President Assad in the interim period before the next presidential election, and how do we, our EU partners and the US respond to the position of Russia in respect of President Assad?
Baroness Warsi
First, in relation to the 70 to 100 jihadis, we have been working, both domestically and through the advice given by the Foreign Office, to discourage people travelling to Syria. Not only are there risks to them as individuals, but there is concern when these people return. It is not entirely clear who these people are fighting for when they are there. There will be interest in those people when they return, and noble Lords can rest assured that if they have intentions against the United Kingdom, they will be dealt with appropriately. We have a number of programmes, as noble Lords are aware, which deal with radicalisation and extremism within communities.
In terms of the international community, those countries that took part in the first Geneva discussions a year ago will be the countries that will take part in the second conference. It is not intended at this stage to invite further countries; Iran was not one of the countries involved last time, and it is not anticipated it will take part in the negotiations this time. We have no indications to suggest otherwise. The noble Lord may be aware of quite positive comments from the Russians; they do not see that Assad remaining in Syria has to be a precondition and do not appear wedded to a leader. We may have different views on how we handle the situation but, like us, the Russians want an end to the conflict. They see Syria fragmenting, and they want that to stop and the people of Syria to determine who governs them. Like us, they are concerned about the growth of extremism. There are lots on which we agree; there may have been differences on how we get there, but the recent negotiations and the Russians’ commitment to these further peace talks is a step in the right direction.
Lord Kilclooney
My Lords, one of the most alarming developments in Syria in recent months has been the ever-increasing influence of radicalised Muslims in the opposition. It is also reported that Qatar and Saudi Arabia are already supplying arms to the opposition. Have Her Majesty’s Government yet made any representations to Qatar and Saudi Arabia to ensure that they do not supply arms to radicalised Islamic groups in Syria?
Baroness Warsi
Qatar and Saudi Arabia have both been part of many of the negotiations, including the Friends of Syria discussions which took place earlier this year. Radicalisation, extremism and the commitment of the Syrian national coalition were a big part of those discussions. The countries which form the Friends of Syria stand by those requirements not to support and foster extremism and radicalisation. There is a huge discussion going on at the moment about what inspires radicalisation and extremism. From a domestic perspective, the ideological basis for radicalisation can take two completely different forms. On the one hand, western intervention in Muslim countries can be seen as encouraging extremists to go out and fight, but there is also growing radicalisation and extremism on the back of what is seen as western inaction while many Muslims are being slaughtered in Syria. There is an argument being put which is more akin to Bosnia rather than to Iraq, and it is important that we bear in mind what different drivers of radicalisation and what drives people to extremism.
Lord Brooke of Sutton Mandeville
My Lords, the Statement reports 1.5 million refugees now, with a current response to the UN humanitarian appeal of 71% of the $1.5 billion for which it is appealing. The Statement goes on to report the further UN assessment that on current trends there will be more than 3.5 million refugees by the end of this year. Have we yet begun to calculate what the financial humanitarian need will be next year?
Baroness Warsi
This is the biggest humanitarian appeal ever. Half the country’s population has been displaced, and we are constantly playing catch-up. The UN relief effort is, despite the 71%, still critically underfunded; it is constantly kept at the table, and we continue to assess it. The longer this goes on, the larger the humanitarian need. Without being able to give specifics about what that humanitarian need will be, we should be even more encouraged to bring this matter to a political settlement so that refugees and displaced people can return to their homes.
Lord Soley
Can I take the Minister back to her penultimate answer about the religious aspect? I agree with her about Bosnia; the failure to intervene radicalised and organised people. What I struggle with, and I am certain the Government do too, is the religious divide and how it is moving. The Sunni-Shia divide is getting wider and was never as it is now. Driven, as it must be to some extent, by divisions between Iran and Saudi Arabia, I wonder what thought has been given to the Sunni-Shia divide. If that becomes, as it may well do, a much wider issue playing out on the streets of Baghdad and elsewhere, we have got a much wider and more complex problem. The Minister has painted a picture which is already complex, but underlying it is a religious divide issue which is feeding some of the battles.
Baroness Warsi
This is something with which the Foreign Office is acutely engaged. The concern, not only in relation to Syria but in the wider region, is that intra-community tension is becoming more apparent and support for that intra-community tension compounds that problem. It is a phenomenon of more recent years. On a personal level, my background makes me half Sunni and half Shia. As I was growing up, it was never considered to be that unusual as so many families came from that mixed background. Recent political events have brought certain differences into stark light. We see that not just in what happened in Iraq but in the wider region and also now coming to the fore in places like Pakistan. It is something that we are aware of and about which we are doing a huge amount of work, both on the ground and in strategic thinking at the Foreign Office.
Lord Stoddart of Swindon
I shall be brief because I do not want to repeat the questions that have already been asked, particularly by the noble Lord, Lord Wood, who was perhaps moving a little away from the “me too-ism” that we have had from the Opposition in the past. Is there any movement on the part of this Government and the United States Government in relation to the position of Assad? As long as we and the United States say that we will not treat with Assad, the conflict within Syria is likely to continue for a very long time.
Baroness Warsi
It is not for us, the United States or anybody else to decide who should govern Syria; it is for the people of Syria to decide that. The national coalition, which is a broad coalition, is very clear that it does not feel that Assad can be part of the solution. Assad has slaughtered many of his own people and the consequent break-down of trust between those communities does not allow for Assad to play his part. However, if the Syrian people and the national coalition decided that he could play a part, it should be a matter for them, but it is not something that I can envisage in light of what is happening at the moment.
Mesothelioma Bill [HL]
(10 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, every Member of this House can recognise that working people should have proper protection from personal injury or disease arising during their work. When this principle is breached through negligence or breach of statutory duty, it is right that a person should be compensated by their employer or employer’s insurer.
We find ourselves presented with a situation that undermines these seemingly simple assumptions. Many sufferers of diffuse mesothelioma, caused by exposure to asbestos, are unable to find an employer or insurer against whom to make a claim. These people were negligently exposed to asbestos and subsequently developed a fatal disease, yet they must go uncompensated for their immeasurable loss because sufficient records do not exist to trace the responsible insurer or employer. The need to address this is apparent and urgent.
Government, media and public interest in asbestos-related diseases is long-standing. In 1965, the Sunday Times brought this issue to the spotlight and reported on research showing the fatality of exposure to asbestos fibres. Since then, this spotlight has rightly not gone away. Asbestos-related diseases have featured in the press and on television repeatedly, with dedicated programmes produced in 1967, 1971, 1975 and 1982. In 1979, the then Government legislated to make payments to those with certain dust-related diseases who had been exposed to asbestos at work but who could not find an employer or insurer to sue, although lump-sum payments under that were lower than civil damages. In 1999, the insurance industry created a code of practice for better tracing of employers’ liability insurance policies. Although success rates for inquiries on difficult-to-trace policies increased, more needed to be done. In 2008, the previous Government introduced a scheme to make lump-sum payments to all people with diffuse mesothelioma regardless of whether they were exposed to asbestos at work. I pay tribute to the work of the noble Lord, Lord McKenzie of Luton. In 2010, as Parliamentary Under-Secretary for Work and Pensions, the noble Lord issued the consultation that has led us to where we are now. Without his efforts, this matter would not have had the profile that it so rightly deserves, and due credit must be given for his continued efforts to obtain support for sufferers.
The focus of this Bill is diffuse mesothelioma, a fatal disease caused almost exclusively by exposure to asbestos. Diffuse mesothelioma has a long latency period, often of 40 to 50 years. Once diagnosed, the average life expectancy of a sufferer is short: between nine and 13 months. The long delay between exposure and developing the disease, combined with inconsistent record-keeping in the insurance industry, means that individuals often struggle to trace an employer or insurer against whom to make a claim for civil damages. The insurance industry and this Government recognise that this is unjust and that provision must be made for these people.
Despite the recognition of this market failure, the insurance industry alone has not been able to put this right. Disputes between insurers and the different interests of companies that still offer employers’ liability cover, which I shall refer to as “active” insurers, and those that no longer do so—I shall refer to them as “run-off” insurers—have prevented the industry agreeing on a voluntary levy. Industry representatives have therefore asked for legislation to impose a levy to support a payment scheme.
The Mesothelioma Bill will establish a payment scheme to make a lump-sum payment to eligible sufferers of mesothelioma and their eligible dependants. The scheme will be funded through a levy on insurers active in the employers’ liability market, meaning that the active employers’ liability insurance market as a whole will bear the cost. Timing is key; the number of diffuse mesothelioma cases is expected to peak around 2015. My aim is to launch the scheme as soon as possible—ideally in April 2014.
We expect there to be roughly 28,000 deaths from mesothelioma between July 2012 and March 2024. If the Bill is passed during 2013, first payments could be made around July 2014 to those diagnosed with mesothelioma on or after 25 July 2012. Around 300 people a year could receive an average payment of approximately £100,000.
The Bill is first and foremost a means to create a scheme to provide for those people who would otherwise be unable to bring a civil claim against their employer. In other words, it is a scheme of last resort. The driving principle is that, where adequate records are not available, those who have developed this disease as a result of their employer’s negligence, or breach of statutory duty, should still be able to access payment for their injury, and the process of applying for this should be as straightforward as possible.
Secondly, the Bill is part of the ongoing commitment of this Government, previous Governments and the insurance industry to correct a market failure. The Bill includes measures which will improve the tracing of employers’ liability insurance policies through the creation of a technical committee that makes binding decisions on insurance cover.
It is at this point worth reflecting on the work that the Ministry of Justice, too, is doing to support sufferers of mesothelioma. In December, a Written Ministerial Statement was issued confirming the Government's intention to consult on a range of measures, including a specific pre-action protocol for mesothelioma cases, a portal and fixed legal costs for such cases. None of these elements is beholden on our Bill and, similarly, our Bill is not beholden on them, but together they demonstrate the desire across government to help people with this terrible illness.
I turn to the question of payments. The scheme will make payments on a tariff basis to eligible people with mesothelioma, or to an eligible dependant if that person has died, where they cannot trace either an employer who exposed them to asbestos or that employer’s insurer and where they have not received civil damages or some other compensation payment in respect of mesothelioma. The scheme is not intended to be an alternative to civil damages, nor is it a compensation scheme. The scheme will be set up by the Secretary of State, who will make arrangements for another body to be the scheme administrator.
The Bill allows for the payment amount to be determined in regulations that will set out a simple tariff, basing payments at roughly 70% of the amount of average civil damages. Payment amounts in the tariff will be linked to an individual’s age. Calculating the amount of civil damages that a person is to receive is complex. However, published research shows that awards in civil cases decrease with the age of the victim. Regarding the amount of the payment, I ask your Lordships’ support in understanding that the scheme strikes a careful balance and does so in a way that is fair and lawful. It ensures a substantial payment to people who have mesothelioma and cannot trace the liable employer or insurer, while ensuring that the contribution made by insurers is fair and not excessive, since not all of them were in business at the relevant time. It will ensure that the scheme can get on with helping sufferers and not get bogged down in legal challenges from insurers.
There are four main criteria for eligibility. The first is that an individual was diagnosed with diffuse mesothelioma on or after 25 July 2012. The second is that they were employed at the time of exposure to asbestos and that this was due to negligence or breach of statutory duty on the part of an employer. The third is that they have not brought a claim for civil damages against an employer or the employer’s insurer and they are unable to do so. The fourth is that they have not already received damages or other compensation payment in respect of their disease, nor are they eligible to. I should point out that individuals who have received a payment under existing state schemes will be eligible to apply, but any such benefits and lump sum payments will be recovered when a payment is made under the new scheme. Eligible dependants of sufferers of diffuse mesothelioma may apply to the scheme where the sufferer has died before making an application. Calculating awards of compensation for dependants in civil cases can be complex, but under the scheme it will be simple and quick. The scheme will pay eligible dependants exactly the same amount as the sufferer would have received. We will set out details of the application process in the scheme rules. The scheme will give a right to an applicant to request a review of decisions taken and confer a right of appeal to the First-tier Tribunal against a decision taken on a review.
A sufferer must have been diagnosed on or after 25 July 2012 to be eligible under the scheme. A cut-off date will always be unfortunate for those whom it excludes. However, we must be pragmatic. The costs to the active insurers funding the scheme would be prohibitive if we were to make the scheme open-ended. It was on 25 July 2012 that the Government announced that they would set up a payment scheme and so created a reasonable expectation that eligible people diagnosed with mesothelioma on or after that date would receive a payment.
The Bill does not—and cannot—look to respond to all asbestos-related disease. The issue of individuals who have developed other asbestos-related diseases through negligence or breach of statutory duty and are unable to bring a civil claim for damages of course needs to be addressed. However, this Bill is not the appropriate instrument to do that. Mesothelioma is distinctive, and its link to asbestos exposure is undeniable. This allows for the fast processing of cases because there is no doubt that asbestos exposure caused the disease. The Bill supports the administration of a simple and streamlined scheme. It could not cover other diseases, where there could ever be a question as to the cause, because the lengthy investigations required in order to prove these cases would choke the scheme, preventing the comparatively simpler mesothelioma cases being administered with the necessary speed. Again, I ask noble Lords to look at this emotive issue from a pragmatic perspective and focus not on what is impossible but on what can be achieved. This legislation is a huge step forward and should be recognised as such.
The establishment of a technical committee to handle disputes relating to cover is key. The technical committee will be distinct from the scheme and will deal solely with disputes related to insurance cover. If a question arises between an insurer and an individual about whether an employer maintained employers’ liability insurance with the insurer at a particular time, the technical committee will be able to make a binding decision on this issue. In practical terms, this means that if a person with diffuse mesothelioma has some evidence that an insurer was providing cover at the time they were negligently exposed but this evidence is contested by the insurer, they can ask the technical committee to make a decision. This will also benefit other mesothelioma sufferers exposed to asbestos by the same employer at the same time, who may wish to bring a claim against that employer in the future. The technical committee will ensure consistency in decision-making and allow more people to take a case to court, having had the issue of cover already decided. Where the technical committee decides that an insurer is not on cover in a particular case, and no other employer or insurer has been traced, the person with diffuse mesothelioma may then be able to apply for a payment under the scheme.
The Bill envisages a review process for any decision taken by the technical committee. Following a review, a person may refer a decision to arbitration, after which very limited recourse to the courts is possible under the arbitration legislation. Again, timing is key; undue delays in the decision-making process would prevent an eligible applicant taking further action while they are still alive, be it seeking damages in the civil courts or applying for a scheme payment. It is expected that the decisions and reviews will be undertaken by the technical committee with the utmost speed.
I now turn to the levy on insurers. The levy will be imposed on active employers’ liability insurers at large, not on the individual insurers who took the premiums and who were on cover in the cases that will come to the scheme. The levy will be fair and not excessive, and set at a rate that does not require the insurers to pass on increased costs to business. The scheme could be jeopardised if the levy were set disproportionately high, which might invite legal challenges from the insurance industry. This would delay the introduction of the scheme, preventing a payment mechanism being in place at the time of the peak of mesothelioma deaths around 2015. Once more, we must be pragmatic and recognise what can be achieved.
The cost of the scheme in the first year will be considerably higher than in subsequent years because of the number of cases dating back to 25 July 2012. To avoid the first period’s levy being unaffordable and risking costs being passed on to current employers through higher premiums, the costs will be spread over four years.
Existing government provision is available for those who are unable to claim damages or receive payments from elsewhere. Where a person has received government benefits or lump-sum payments for diffuse mesothelioma and subsequently becomes eligible for a payment under the new scheme, the benefits recovery legislation will apply. This is because people should not be compensated twice for the same condition or compensated in excess of their loss. This means that an eligible applicant will receive a scheme payment after the deduction of relevant social security benefits and lump-sum payments, which the scheme administrator will repay to my department through its compensation recovery unit. Similarly, the Bill includes amendments to the existing lump-sum payments legislation to prevent an individual receiving such payments after they have received a payment under this new scheme.
I hope that noble Lords can agree today that the principles driving the Bill are right and just; that it is right that we legislate to provide for people with diffuse mesothelioma who are unable to claim civil damages from an employer for negligence or breach of statutory duty; that it is right that the insurance industry bear the cost; and that it is right that we establish the scheme with the greatest possible speed.
The measures contained within this Bill will mean that people with diffuse mesothelioma or their eligible dependants will be supported financially at this most stressful time. Quick access to payments will allow victims to afford care and treatment costs so that they can die at home with dignity.
The Bill marks great progress and strikes a careful balance in a fair and lawful way between the rights of victims and the active insurers funding the scheme. Several active insurers funding the scheme will not have even existed at the time when the exposure to asbestos occurred. Several of these insurers will have also maintained good records for the periods when they were providing insurance services. The Bill demonstrates the commitment of the insurance industry to correcting a terribly damaging market failure, and I thank the Association of British Insurers for this commitment. I am encouraged by the support of the industry, and look to the Financial Conduct Authority to support this work further through vigorously pursuing any insurer that fails to comply with requirements relating to EL record tracing.
The Bill is timely and necessary. It is something that I believe we should all welcome, and I commend the Bill to the House. I beg to move.
Lord McKenzie of Luton
My Lords, I thank the Minister for his explanation of the Bill, for facilitating a briefing with officials and the follow-up notes, and indeed for his kind words. The core of the Bill, a lump-sum payment scheme funded by insurers for those diagnosed with diffuse mesothelioma who cannot otherwise access redress from their employer or an employer liability insurance policy, is one that we strongly support. The Bill has its shortcomings and we will outline our view on those in a moment, but they will come as no surprise to the Minister. Without this sounding too much like a love-in, we should acknowledge the Minister’s personal commitment to bringing forward this legislation, which I can well understand has involved difficult discussions with the insurance industry, which in times past has resisted such arrangements.
We must also take this opportunity to pay tribute to those who have campaigned tirelessly for those whose lives have been blighted and shortened by exposure to asbestos and other occupational poisoning, not least the trade unions and the Asbestos Victims Support Groups Forum. Doubtless the campaigns will go on, but their efforts have not been in vain.
Mesothelioma is a particularly pernicious disease of malignant cancerous cells in the mesothelium, creating great suffering. It is caused by exposure to asbestos, as we have heard, and is invariably fatal. Life expectancy post-diagnosis is between nine and 13 months. As we have heard, mesothelioma is a long-latency disease that might not be diagnosed until 30 or 40 years after exposure to asbestos.
As the Minister has explained, the passage of time between exposure and diagnosis might mean that the negligent employer cannot be located or might have gone out of business and, as important, that the employer’s liability insurance policy that should have covered the employee cannot be identified. Such individuals are currently thrown back on statutory schemes and benefits for support.
It is, then, entirely reasonable that the insurance industry, which has had the benefit of the premiums over the years, collectively funds by way of a levy a scheme that supports those who cannot make a civil claim. We have not seen the detail of the scheme and look forward to draft rules being available in Committee, together with some detailed indicative figures of payment values and the construction of the tariff, and indeed details of the technical committee.
However, on the basis of explanations given so far, we have some concerns and disappointment with the Bill. The suggested levels of compensation at around 70% of average damages awarded by the civil courts are too low and unfair; we reject the “careful balance” proposition. Coverage is inadequate; not all asbestos-related or other long-tail diseases are covered. The cut-off date for the scheme at July 2012 is too restrictive. And the prospect of the insurance industry running the scheme gives rise to possible conflicts of interest: on the face of it, insurers have been able to negotiate a proposal that excludes half of asbestos victims, liability for claims before July 2012 and a 30% discount on compensation levels. This must be challenged.
We should also like to see the insurance industry, through the scheme or otherwise, continuing with an earlier commitment to fund ongoing medical research into cancer. The ABI reminds us that in recent years the insurance sector has contributed some £3 million to the British Lung Foundation. Was the prospect of ongoing funding part of the negotiation surrounding the arrangements in the Bill? We make common cause with those who believe that the industry should commit to a further round of funding research.
The Government seek to justify setting payment levels at some 70% of average damage levels awarded by the civil courts. They argue that the level of the award should be below the 100% level as a means of encouraging claimants to seek to trace an employer or employer’s liability policy that could lead to higher compensation. We challenge this analysis, and certainly wish to examine in Committee the effect of using a tariff based on average civil compensation. The process for a claimant to establish exposure to asbestos and a relevant employment nexus and to seek to trace an EL insurance policy would be necessary for entry into the scheme, just as it would be for making a civil claim. Indeed, would not both have to go through the same portal in future?
That aside, though, it is surely indefensible to pay compensation at 30% less just because someone cannot identify an employer’s liability policy—a policy that existed but now, through no fault of the claimant, is lost or destroyed. As the briefing from the Asbestos Victims Support Groups Forum points out, reduced scheme payments are an invitation to individual insurers to see the scheme as a cheaper option. Why pay full individual compensation when you can pay 70% of average compensation? We will seek to get some improvement to the proposed compensation levels in Committee.
We support the imperative of getting the scheme for those diagnosed with diffuse mesothelioma in place as quickly as possible, and recognise that, in a way, the fact that the awful consequences of a disease that is invariably fatal must have been caused by exposure to asbestos and negligence, when an employment is involved, creates a scenario that makes for some administrative simplicity.
However, there is no moral reason why the scheme should just be limited to mesothelioma. For the future, the tracing office, ELTO, will improve access to compensation, although it is by no means yet perfect, but it will be a long while before it covers long-tail diseases. In Committee we will examine why the scheme cannot be extended to all asbestos-related and long-tail diseases, and at least see why the Bill does not provide for an extension of the scheme in future in a way that does not hold up the current proposals for sufferers of mesothelioma. Can the Minister say—I think he did in his opening remarks—whether the Bill currently precludes such an extension, and if so why, particularly as the technical committee can be expanded to cover diseases over than diffuse mesothelioma?
The Government have set the start date of the scheme as 25 July 2012, for the reasons which the Minister outlined, which is more than two years after the close of the February 2010 consultation. During that period, another 600 people will have died from this awful disease without them or their dependants receiving proper compensation. We will argue for an earlier commencement date but not an open-ended commitment. There are, of course, other things going on in this area. The ABI makes clear that it sees the pre-action protocol, fixed-cost arrangements, the central mesothelioma claims gate or portal, and improvements to ELTO as an intrinsic part of the overall arrangements.
Clearly, only a part of this package is before us when considering the Bill, so it is difficult to evaluate the overall effect. However, concerns have been expressed about whether the pre-action protocol might make matters more difficult for claimants by imposing a more onerous burden in upfront disclosure rather than streamlining the claims process. Can the Minister say how the emerging process will improve on the current civil litigation fast-track process operated by Senior Master Whitaker? Can he also say whether the Government see these other components as an intrinsic part of an overall package and how the terms of the support scheme might have been modified because of them?
Concerns in this area have been heightened generally by the Government’s tightened attitude to compensation for workplace injury, displayed by the denial of future claims of strict liability and breach of statutory duty for health and safety failures. The Bill allows for the scheme to be administered by the Secretary of State or for this to be undertaken by another entity. Our briefing sets out that the insurance industry itself is setting up a body to run the scheme, and this might have timing benefits because it can be developed while the legislation is proceeding through Parliament. This might be so, but we need to examine possible conflicts of interest as the scheme administrator is supposed to help claimants or their dependants to bring and conduct proceedings against insurers.
Moreover, the ABI expects the technical committee to be set up by ELTO, which has itself been set up by the industry. The technical committee will consider evidence of whether or not a particular insurer will provide cover. Its decisions in this regard are binding on insurers—active and in run-off—and claimants are subject to review and arbitration. Can the Minister say whether it is agreed that ELTO will set up the technical committee? We will want to test the balance of power in all this where the ABI expects that the insurance industry will administer the support scheme, has developed ELTO and expects to run the technical committee, and is developing and expecting to run the portal.
It is shocking to think that in this rich and sophisticated country of ours more than 2,000 people each year will continue to die from this terrible disease, which is a consequence of past negligent employer health and safety practices. It is also important to recognise that the problem has not gone away. We need to support the HSE and others in current awareness campaigns. Despite some misgivings, this Bill is a welcome step forward. It will get compensation to some 300 sufferers of mesothelioma or their dependants each year who previously could rely only upon support from the state. It will enable benefit recovery for the Government of some £50 million net. We will work with the Minister to seek to improve the scheme where we can but will do nothing to frustrate its speedy passage on to the statute book.
Lord German
My Lords, first, I congratulate my noble friend the Minister on bringing the Bill forward in this form today. If noble Lords read the response to the consultation from the insurance industry, they will see an almost opposite view to that expressed within the Bill. I congratulate my noble friend on turning the British insurance industry around to support this Bill. It builds on a voluntary code and the consultation. I also echo the tribute to the noble Lord, Lord McKenzie, who has been steadfast in bringing these matters forward. I see this as a continuation of his work.
There are issues where this Bill needs questioning and we need to develop our understanding further. However, the other important factor resulting from this Bill is that the process will be speeded up. Where a civil process now takes perhaps two years, we should see a much more speedy process in place for all claimants of around four to five months when it is put together. That is the ambition of this Bill and the opportunity that arises from the portal.
Unfortunately, we need this Bill for a longer period. It may have a finite lifespan but that may be 30 years or even more. The British Lung Foundation suggests 30 years but it may well be that this Bill needs to be in place longer. For that reason, it is important that Parliament maintains its connection with the scheme. There will undoubtedly be inevitable changes and tweaks over the coming decades as the scheme beds in and the initial detail on the implementation will require careful scrutiny to minimise the potential for future change and to maximise certainty as far as possible. Therefore, it is a little strange to see that Clause 1 makes no reference to Parliament when we know that there is much detail still to be determined. I hope that my noble friend Lady Thomas’s Delegated Legislation Committee will be able to report on this matter before we reach the later stages of the Bill.
There are some scoping issues which need discussion. First, there is the date of implementation. It is inevitable that some sufferers and their dependants will fall outside the timeframe for involvement in the scheme. We have already heard that from the noble Lord, Lord McKenzie, and my noble friend the Minister. I understand, of course, that the insurance industry had to be brought onboard with these proposals and it was essential to attain its commitment to the funding levy. However, with average claims coming in at £150,000 plus costs, it is a bitter blow to those who may fall just outside the dateline for the new scheme. I would be grateful if my noble friend the Minister could inform your Lordships’ House of the balance of issues which led to the choice of 25 July 2012 as the starting date for this new scheme. It is, of course, the date on which the Government announced their intentions in respect of the scheme but that in turn was more than two years after the department’s consultation had ended.
I listened very carefully to my noble friend’s explanation about other diseases and I very much appreciate that mesothelioma is a unique disease that has a long tail and is virtually always fatal but there are some similarities with other industrial diseases, not least pneumoconiosis. This scheme could therefore act as a model for others. Indeed, the Association of British Insurers said:
“If it proves successful then the Secretary of State can make provisions to extend it to look at other disease types”.
Does my noble friend the Minister support that view, and can he give an indication as to whether a new scheme would require primary legislation?
The second issue referred to is the 70% threshold. We need to understand how this figure has been arrived at. Why is it not 75% or 80%? I understand the need for a tariff-based system, but surely this would keep the incentive to go through the solvent employer/known insurance route even if it was higher. There is a curious statement from the Association of British Insurers on why this level was set:
“As the payments will be made based on a straightforward tariff, some people will receive more compensation under the scheme than they would have received in civil compensation, and the aim is to set the tariff at a level that means this will only happen in a small number of cases”.
This indicates that the overall level of the tariff in the proposed scheme, expressed as a percentage of civil claims, will always be set at a level where very few claimants will get more than a civil claim. Would it not have been better and fairer to raise the percentage value but to put a cap on the amount which would have kept it at or below a civil-system payment? I am told that the current average payment under the existing system is in the range of £150,000 plus costs. A 70% tariff will mean that the average payment under the proposed scheme will be £105,000 to £108,000. Surely that is far more of a differential than what is required simply to avoid claimants taking this new scheme course, rather than following the solvent-employer or known-insurer route?
There are some issues relating to legal matters. Although my noble friend the Minister said that they were not interdependent, they are closely related. Two of them involve information that noble Lords might need at this stage. One concerns up-front costs. Legal costs are not a part of the Bill, but the MoJ is about to make an announcement on its proposals. However, the successful outcome of a claim under the current system is virtually certain of having an award of costs with it. Implicit in the new scheme is support from a solicitor. The very helpful diagram from the ABI of how this will all work actually puts the instruction of a solicitor into the structure. Given that there is always a cost to instructing a solicitor, it would appear that this scheme structure is an encouragement to participation by no-win no-fee lawyers.
Secondly, will the level of evidence needed be the same as in civil proceedings? Cases do not always succeed and the Court of Appeal ruled in 2007 that workers making a civil claim for compensation for mesothelioma must first prove employer negligence. I would be grateful if my noble friend the Minister could tell me whether that judgment has been overturned subsequently by the courts. If not—and more generally—proving employer negligence where neither the employing company nor the insurer are traceable will certainly be a more difficult task.
The British Lung Foundation points out the appalling record of investment into research into this terrible disease prior to 2010. Four insurance companies then put money into a three-year scheme investing £3 million in total. Now, with that scheme near its end and the four insurers saying it is unfair that this research funding is spread so thinly across so few insurance companies, surely my noble friend would agree that it is time for a rethink. Naturally, the insurance industry will say that the Government must play a big part but the Bill provides a new impetus for insurers to work collectively in the broader public interest. A small annual contribution from each would secure consistent and long-term research into this dreadful disease and its consequences. Perhaps it is time to add a small top-up levy to secure this fundamentally humane objective.
This is a milestone Bill. It provides the architecture for an end to the current compensation process, which is rather like a lottery. It provides a response which is the sign of a compassionate and caring society. The architecture of the Bill is correct. The direction of travel is absolutely correct. I commend my noble friend the Minister for bringing it before us.
Baroness Taylor of Bolton
My Lords, I think—I certainly hope—that every speaker in the debate will welcome the introduction of the Bill. I acknowledge and pay tribute to those who have worked so hard to get us to this stage, including the Minister and, obviously, my noble friend on the Front Bench, who has campaigned for so long, but also those outside this House, the trade unions and campaign groups, who have been unhappy with compensation arrangements for many years. I regret the fact that industrial diseases and compensation for them are always recognised only slowly, usually very late and often tragically late for many of those who are involved. We should acknowledge that one of the drawbacks in what we are trying to do is the insurance industry being so much stronger than the other interested parties.
I will say a word on the previous Labour Government and what they did. I am proud of many things that the previous Labour Government did, and we should shout about them and apologise less. However, I am sorry that more progress could not be made on this issue. I am pleased that my noble friend Lord McKenzie was able to do so much of the groundwork for the Bill, and glad that the Minister acknowledged that in his opening remarks.
My interest in this subject stems in part from my former constituency of Dewsbury. A number of people worked in Leeds at Turner & Newall. I knew quite a few people with family or friends who had been affected by asbestos-related diseases; they had either suffered themselves or known people who had. I also know what a difference compensation could make to the peace of mind of those who were afflicted in that way.
It was also a coal-mining area. We therefore had quite a lot of contact with the schemes for compensation for pneumoconiosis. Something that strikes me from working with people over those years is how important it is that people who are entitled to compensation not only receive it, but receive it in full. I recall the sterling work that my good friend the late Lord Lofthouse undertook in this House to ensure that he could stop solicitors taking a huge cut out of the compensation claims of miners who were clearly entitled to it, and who still suffer because they lost a chunk of the money. I was interested that the noble Lord, Lord German, made this point: I am still concerned that when you type the words “asbestosis” or “mesothelioma”, or the name of any industrial disease, into a search engine, the first thing that comes up is a list of lawyers wanting to act on your behalf on a no-win no-fee basis. We must be careful that we make sure that people know how to access compensation when they are entitled to it, and do so without having to pay fees in that way. In the debate in the other place the other day, my honourable friend Kevan Jones, who had been a trade union legal officer, talked about how he had to fight for compensation and how that could be done.
Going slightly further back, in the 1970s I was involved with the campaign to try to get compensation for those affected by byssinosis which, as the noble Baroness opposite will know, is the cotton-dust disease. I mention this, although it perhaps seems a slight diversion, because it illustrates how government, industry, society and insurers have never really acted together as they should. Our record as a country on compensating people with industrial diseases is not good. Compensation for byssinosis started in the 1940s—only for men, only for those who had worked for 20 years and only for those who had worked in a very specific part of the cotton industry, in carding. Bit by bit, although every bit was a struggle, it was extended first to women, then to a 10-year limit, then to other branches of the cotton industry and eventually to everybody who worked in it. It was piecemeal because of all the barriers that came down from the industry, from insurance, from problems with record-keeping and from legal difficulties. Although Labour Governments made very significant headway in health and safety throughout that time, I do not think that any Government have fully acknowledged the need for a totally comprehensive approach to industrial diseases. There is still a shame—a record that we cannot be proud of because we should have been acting much more quickly on all these issues.
The Minister outlined some of the difficulties that he can see, and some of the difficulties in the piecemeal approach to this particular disease. That could give us a case for a no-fault compensation scheme, but while that could avoid many of the barriers and delays, it is a bit late for that in this context, and now is not the time to argue that.
I welcome the Bill and congratulate the Minister on getting to this stage. However, as my noble friend Lord McKenzie said, there are deficiencies and issues that we will want to address as the Bill progresses. Questions have already been raised as to why this particular date was chosen. I understand where the Minister is coming from but we will have to look at that again, because to have that kind of cut-off and affect so many people’s lives so significantly is a very severe decision.
The 70% compensation figure was also mentioned. I feel some attraction to what the noble Lord, Lord German, said about perhaps having a different approach, and if there is a problem there, having a cap on the figure rather than an automatically lower figure than people might get in civil courts.
On the question of why other similar diseases, such as asbestosis and so on, cannot be included, I understand that the Minister wants a simple and streamlined scheme, as I think he called it. However, having a simple and streamlined scheme and extending the process to other diseases are not mutually exclusive. We could have an incremental approach so that this comes into force as soon as possible but the door is left open for other diseases to join this scheme in the future. Other people will be worried, and I do not see why they should have to wait and suffer the diseases that they have at the moment, and perhaps in the future.
I also hope that the Minister can give some assurances about the other point that my noble friend made about awareness campaigns through health and safety, and an increased emphasis on medical research. The Minister said that a balance had to be struck, and I think we all accept that that is the case. However, in Committee we have to ask ourselves whether this is the best balance possible, or whether we could make some improvements.
As others have said, we are talking about a horrible, debilitating, deadly disease caused by the workplace environment. We are talking about people whom the Government, in their current parlance, would describe as strivers. These people worked hard and deserve the best we can give them. While we want the Bill to have a swift passage, I hope through both Houses, we have to try to improve it for their sakes and for all that they have suffered so far.
Baroness Masham of Ilton
My Lords, I will say just a few words in support of this Bill. Mesothelioma is not an easy disease to diagnose. The earliest signs of the disease are quite vague. The most common symptoms are breathlessness, chest pain, fatigue and weight loss. This occurs as a result of an effusion, when fluid accumulates in the pleural cavity, the space between the two layers of the pleural lining. The patient will often visit their GP at this stage. The cancer can spread to different parts of the body.
Mesothelioma is a cancer caused by exposure to specific types of asbestos, which are present in many homes and workplaces but no longer used for any purpose. On average, people do not develop symptoms for 30 to 40 years after exposure. Few people survive for more than two years after diagnosis. The majority of victims today are former industrial workers who were exposed before 1980. Around 2,400 people a year die from mesothelioma. Around 56,000 people are expected to die in the next 30 years unless a cure is found. No change in lifestyle will help them.
Until recently, very little was spent on research into mesothelioma in the UK. If there is to be progress and hope in treating mesothelioma, there will have to be an increase in research. I am told that the insurance industry leaders would like to see their industry continue to fund research, but it is felt that the long-term funding solution needs to see the burden shared more widely.
I hope that this Bill will pass through Parliament quickly and that the Government will accept my noble friend’s amendment when he moves it. Also, with such a devastating disease, and the rising costs of everything, I sincerely hope that the Government will not reduce compensation by 30%. In these changing circumstances, it should be increased.
Baroness Donaghy
My Lords, I congratulate the Minister on his commitment to the Bill and thank him for promoting it—I expect against considerable odds.
I understand the reasons for the severe limitations, and I believe it is important that the Bill becomes law as soon as possible. We will have the opportunity in Committee to examine some areas, which have already been raised by noble Lords, to see whether those limitations can be stretched. I am interested in trying to extend the eligibility date and the coverage, and genuinely do not understand why compensation would be less than 100%, rather than the 70% figure.
My reasons for being interested in this Bill are threefold. First, one of my sisters-in-law died of mesothelioma. She was a nurse and would push trolleys through the basement of Scunthorpe Hospital. In the 1950s and 1960s, hospital basements were probably among the most dangerous places to be. The mother of a colleague also died of mesothelioma. She did not work in a hospital but washed the overalls of someone who did. So this is about very personal tragedies.
Secondly, I became interested in this disease when I conducted my report into construction fatalities and found out how many construction workers were affected. My third reason is that, as a former trade unionist and president of the TUC, I witnessed the tireless and continuing efforts of the trade union movement over decades to claw, inch by inch, some concessions for affected workers, despite the strongest possible resistance from employers, the insurance industry and some in the legal profession. It was as recently as 1968, only 45 years ago, that the British Medical Journal suggested that mesothelioma was a primary cause of death rather than a secondary cancer. This is not an area, as my noble friend Lady Taylor said, in which we can take pride in the UK, and we know that the worst is yet to come.
I will concentrate on the administration of the proposed scheme and the potential impact of Ministry of Justice streamlining of the overall claims procedure, as it affects mesothelioma suffers. If the administration of the scheme is to be contracted out, I ask the Minister what safeguards will be written into the tender to ensure absolute independence and integrity. This would apply in particular if the insurance industry were to be the scheme administrator. The conflict of interest would be obvious, even if we were looking at an industry with a benign record. However, we are looking at one more commonly characterised by delaying tactics, spurious arguments and obfuscation. The Bill allows for the scheme administrator to,
“help a person to bring relevant proceedings (for example by conducting proceedings or by giving advice or financial help”.
Surely it would be unacceptable to allow this particular fox into the chicken run.
A comment in the departmental briefing indicated that the insurance industry,
“is currently to set up a body, at its own financial risk, that could deliver the functions of the scheme”.
If the industry satisfies the DWP’s requirements,
“we would be able to start making payments more quickly than if DWP work to establish the scheme following Royal Assent”.
That is beginning to sound like a done deal to me. I am very concerned about the implication that any other scheme administrator might be slower at paying out when we know that time is of the essence for these sufferers. Why not put it out to tender without delay? If it is a done deal, what guarantee will there be that awards will not be cash-limited? I appreciate that the department will remain responsible for overall performance, financial accountability and oversight of the scheme, but I wonder what it will mean in practice if the department does not have the resources to carry out that responsibility.
I understand that the scheme will be funded by a levy on remaining insurance companies. We do not know the total sum of money available. How can we be sure that the cost will not be met by the insurance companies making considerable savings elsewhere? I appreciate that this area is not under the direct purview of the Minister, but will he give an assurance that nothing in the MoJ’s “streamlined” procedures will be allowed to worsen access to compensation or increase the administrative burden on claimants and their families? Will he ensure that the insurance industry will not receive its payback in this area?
We should remind ourselves that, as the Minister said, it is only 14 years since the retention of information by insurance companies was introduced. Although tracing has improved, it is still unimpressive. Insurance companies should not be allowed to profit from their own incompetence. Neither should they be allowed to slide out from under the extremely efficient and effective procedures in the Royal Courts of Justice, presided over by Senior Master Whitaker, as my noble friend Lord McKenzie mentioned. Insurance companies collected the premiums that were meant to cover,
“all bodily injury and disease”.
Their record in honouring this cover is a disgrace. They consistently resisted efforts to centralise information to improve the success rate for tracing, using business confidentiality as their reason.
As I said, we do not yet know what the total cost of the new scheme will be. The impact assessment indicates the possibility that the industry might pass any extra costs on to customers, and that premiums might increase by 2.24%, although the impact assessment stated that this was unlikely. One way of preventing this would be to cash-limit the awards. I am not in favour of this and I remain concerned about a scheme that is financed and administered by the insurance industry.
On a separate matter, the impact assessment refers to an independent NIESR feasibility study, and the fact that the full report and survey findings will be published in the summer of 2013. Will there be an opportunity to benefit from the report’s findings before the Bill completes its stages in the House? I mentioned the impact assessment on a couple of occasions and make the point that it is a very substantial piece of work. Of course it contains assumptions and uncertainties, but I congratulate the department on its thoroughness.
Finally, despite my concerns and questions, I feel sure that the whole House will agree that this is a very important piece of legislation, and will be a fitting tribute to the Minister when it becomes law, as I sincerely hope it will. I look forward to the rest of the debate and to Committee.
The Earl of Courtown
My Lords, I admit that this is not the sort of area that I would normally speak about in your Lordships’ House, but there are a number of reasons why I decided to speak tonight. I have had the experience in the construction industry of dealing with demolition work that involved the safe removal and disposal of asbestos insulating board and corrugated sheeting. Another reason that hit me harder was the death of the former MP, John MacDougall, whom I knew well and counted as a friend. Only after he had died did I hear that he was certain that he had contracted cancer in his past career in the shipyards of Rosyth. At this point I pay tribute to his daughter, who after his death set up a charity in support of mesothelioma sufferers.
The Bill, as ably described by the Minister, is intended to help sufferers who are unable to trace any insurance cover that might exist—or, in certain cases, their past employer—after being exposed to asbestos. As I understand it, the disease may take many years to develop and be diagnosed. As other noble Lords said, diagnosis does not occur until the latter stages of the disease.
In describing the Bill, the Minister outlined the two key measures: first, to establish a payment scheme to make payments to those with mesothelioma; and, secondly, to create a technical committee that will make binding decisions where there is a matter of dispute over whether an insurer was providing employer liability cover at the time of the negligent exposure to asbestos. As I understand the Minister, the technical committee will have the ability to speed up many proceedings that can get bogged down in the courts, such as decisions on an employer’s liability cover and on disputes over the existence of such cover. I was glad to see that the committee’s decision may also be used in future court cases. As such, the existence of the committee will lead to greater parity around standards of proof in relation to employers’ liability. This should result in more people being able to bring cases to court.
Having looked further into past compensation claims concerning mesothelioma, I am informed that case law refers to a considerable number of cases concerning this disease. As I understand it, the main problems associated with this have been the difficulty of proving negligence by the employer, the difficulty of proving that the mesothelioma was contracted as a result of the negligence of the employer, and the length of time it can take such cases to be settled. I was also glad to note that the Bill states that claims will be also considered from eligible dependants. It is so important when people are suffering from this fast-acting disease that their dependants can also claim some form of compensation.
In addition, I have noticed that my noble friend’s department will bring forward draft scheme rules in Committee. Will he tell the House whether these rules will be included in the Bill? I also understand that they will apply to the compensation tariff. Will this be included in the Bill or form part of secondary legislation? Will the Minister also tell the House how any changes to the tariff and the scheme rules will be managed in future?
Many noble Lords have expressed criticisms and concerns about the types of cancer that will not be covered by the scheme. However, due to the unique nature of diffuse mesothelioma and the often short period of life expectancy after diagnosis, it is very important that we have a simple and fast way of helping sufferers and their families.
I have also noted concerns about the insurance companies’ actions in this situation. We would not be where we are unless we were actually able to speak to the insurance companies in the first place. We are also looking at concerns about how the insurance companies will set up the company to administer the scheme themselves. I understand the concerns, but the Government have the final say, should these matters not work out. They can actually reclaim the scheme to work in-house or put it out to other people to run. I am looking forward immensely to many other speeches that will be made before the end of this debate and especially to the Minister’s response.
Lord Giddens
My Lords, I should like to begin by expressing my heartfelt sympathy to anyone who has, as I have, lost a loved one to this horrendous disease. It is essentially a death sentence for anyone who contracts it. I would like to correct my noble friend Lady Taylor, who is not in her place. It is not always contracted in the workplace. You can contract the disease in other contexts too, and that is true of the person in my family. It is important to say that. It is relevant in this debate not just to concentrate on this country but to look around the world at the eccentric, problematic and tortured history of this disease and the response to it of the legal system and the building and insurance industries. There is a lot to learn here that is relevant to our debate.
Asbestos was originally called a “magic dust” and it was used extensively with that in mind in all sorts of installations around the world, where, of course, it still remains. There is still an enormous amount of asbestos in many buildings in very many countries across the world, especially developing countries, where it is still in a lethal state. There is a very interesting book on this and—my noble friend just referred to this—on the resistance of industry and government to accepting liability. It is by Geoffrey Tweedale and has the appropriate title Magic Mineral to Killer Dust. That is what it is today. As noble Lords have said, it can take 20 to 50 years to appear, and in that sense tracks to some degree the history of tobacco, the diseases from which also take a long time to come out and took a long time to identify. It just makes me wonder what other lethal diseases might be lurking out there in the world, a point I will come back to later on, because we now eat so many foods with additives that no one has ever experienced before and we ingest all sorts of substances from the air that have never existed before because they are new forms of synthetic materials. It just makes me wonder what lies in store elsewhere if diseases like this take such a long time to come out and therefore to identify.
It is difficult to establish the aetiology of diseases that come to light after many years. Tracking the history of mesothelioma is really intriguing in this respect because there was enormous resistance at first to identifying it as a single syndrome or disease, and secondly to identifying its causation. Again, this tracked the tobacco industry. The disease was known in some sense since just after the turn of the century, but it was not until the 1960s that a vital set of researches was published in South Africa that changed the consciousness of the medical profession, and then, quite a long while after that, the other authorities involved.
As often with these sorts of things, publicity was gained for mesothelioma by the fact that the film actor Steve McQueen died of it. He worked with racing cars and he apparently ingested asbestos from their brake linings. That brought it to the public consciousness in America, but it is important to stress that there was very strong resistance from the building industry, from the asbestos industry and particularly from the insurance industry in most countries. They just picked apart the research in much the same way in which the tobacco industry tried to pick apart the research on lung cancer. Hence, in all countries, it was a long time before either business or Governments accepted any liability at all. In most countries, there was an endless turmoil of lawsuits, which meant that most people who brought the cases got no benefit from them at all, and neither, often, did their dependants. I am sure noble Lords know that in America there was a complete bottleneck of such cases. That is in nobody’s interest. It is partly for that reason that I join other noble Lords in welcoming this legislation and congratulate the noble Lord on his part in it.
However, I worry a lot about the cut-off date. It is clear that the scheme must have some kind of limitation, but I just worry that it is a recipe for bitterness because it has a wholly arbitrary element to it. I have seen someone at close hand dying of this disease. If you also consider that the cut-off date is 25 July 2012, it is clear that it is purely a date on which the Government responded to their consultation. It is an administrative date; it bears no relation to suffering, and there is terrible suffering from this disease.
I join other noble Lords in suggesting that, at least at some point, a further exploration with the insurance industry is surely warranted. Mesothelioma is not like the whiplash industry: there is no element whatever of moral hazard in it. However, we know that there are large areas like that in the insurance industry with lots of problematic claims. You could argue that mesothelioma sufferers are paying for this grey area of the insurance industry with this arbitrary cut-off. I hope the Minister will give some attention to the impact that that might have on a family before simply going ahead with it in other parts of the discussion of this Bill. If the Minister has not read it, I recommend reading Geoffrey Tweedale’s book. It is a salutary tale of resistance to regulation and the devious practices that can be involved in it.
In conclusion, I have two questions for the Minister. First, will the Government at least give some attention to the moral and psychological impact of a cut-off date of this sort? Could they see whether there is any way in which it could be neutered for the sufferer? As I said, it bears no real relation to the awful depth of suffering, not just for the person but for the dependants of that person. Secondly, will the Minister consider working proactively with the insurance industry to scan similar problems in advance? This is where I come back to the point I made at the beginning: that there might be lots of potentially lethal diseases stored up in our environment, so it would seem sensible to try to develop a kind of proactive response to this. I do not know whether the Minister has any scheme in mind or whether the insurance industry, the Government and medical research could work together. We do not really want this sad and sorry tale repeated elsewhere, because next time it could have even more devastating consequences.
Lord Howarth of Newport
My Lords, I, too, thank and congratulate the Minister on bringing the Bill to the House. He is a good man who has fallen into bad company. He has had to present a number of pretty miserable policies to the House. However, we should recognise that he has worked long and hard to develop this scheme and today he brings us, by his standards, very good news indeed. We should also express measured appreciation of the insurance industry and the ABI. Goodness knows, the industry has been grudging and obstructive in the past, but it has established the Employers’ Liability Tracing Office and is willing to go along with this scheme. It is, however, a scheme that needs improvement.
Credit should certainly be given to the previous Government for the preliminary work that they did. The Minister was rightly generous to my noble friend Lord McKenzie, who published the consultation document in February 2010 on accessing compensation. Credit should also go to this Government for pursuing the process, and I think that means that credit should go to the permanent Civil Service. Credit should, of course, also go to the campaigners. It is right that we should do all we reasonably can to support those who are victims of the horrors of diffuse mesothelioma because of their employers’ negligence. This long-latency illness incubates for perhaps three to four decades but at the end inexorably causes great suffering and death. It is right that we should do what we can to support the dependants of people who contract the disease. It must be grim for all of them in the circumstances that follow diagnosis to struggle to achieve compensation. I am not convinced that that process will be much eased given that the new scheme is a scheme of last resort, but at least it will yield better financial outcomes for more people.
I also ask why the scheme is to be limited to mesothelioma alone. Other asbestos-related diseases of the lung and the pleura caused by the inhalation of asbestos fibres ought surely to receive equal consideration such as asbestosis, diffuse pleural thickening, pleural plaques, pleural effusion, rounded atelectasis and asbestos-related lung cancer. With all these illnesses, employers’ liability is equally disputed and equally hard to trace. Natural justice tells us that people who suffer from this range of asbestos-related illnesses should be treated alike. They all have in common that they suffer from their employers’ negligence in relation to asbestos. The Minister said in his opening speech that these problems also need to be addressed but he thought that if they were addressed straight away too many cases would spoil the scheme.
I echo the question asked by the noble Lord, Lord German, because I am not clear whether the Long Title allows the flexibility to introduce under this legislation further schemes to support people suffering from other asbestos-related diseases. If it does—I understand why the Minister is unable to proceed with introducing schemes in relation to other diseases now—will he indicate when he expects to do so? If the legislation does not permit it, and is not susceptible to amendment to enable it to do so, will he pursue his mission and introduce further legislation? As my noble friend Lady Taylor said, we need a comprehensive approach. In the mean time, we must address the project that the Minister has placed before us.
The Government have said that their overarching aim is to ensure that employees who are injured or made ill in consequence of their employment should not be denied fair compensation. The scheme, in providing compensation where the employer or the insurer cannot be identified or traced, goes a long way to achieving that objective but does not go far enough.
I would like to probe the Minister on a number of points. I would be grateful if he would clarify the position on legal costs which I do not understand very clearly. The Government’s aim in the Legal Aid, Sentencing and Punishment of Offenders Act 2012—the LASPO Act—was to remove personal injury from the scope of legal aid. On that basis, legal aid would generally not be available to a person diagnosed with mesothelioma who seeks advice from a solicitor, as he or she is bound to do.
Part 2 of the LASPO Act implements the Jackson reforms to no-win no-fee arrangements. However, the Government have deferred implementation of the measure in relation to mesothelioma claims pending the findings of a report which they have commissioned. When will we have the findings of that report? If Sections 44 and 46 of LASPO are applied in mesothelioma cases, as I understand it, lawyers acting under conditional fee agreements will be able to charge a success fee payable from the damages. Does the Minister think it is appropriate that that should be so in mesothelioma cases?
How does the new scheme that this legislation enacts take account of the new position on conditional fee agreements? The 2013 impact assessment assumes that a scheme payment would include an amount to cover legal costs in making an application. The 2012 impact assessment estimated that would be £7,000 for a successful case and £9,000 for an unsuccessful case. The overall legal costs for the scheme are put at £24 million to £27 million. As with civil actions, will they be paid out of the scheme award, which is already reduced to 70% of the level of civil damages, or will they be paid by the scheme over and above that 70% award? Will the payment take account of a personal injury solicitor’s fees incurred for work prior to the application being made to the scheme? Who decides these matters? As far as I can see from Clause 1, the Secretary of State does. There will be no legal aid for appeals to the First-tier Tribunal following the review scheme decision, unless they are exceptionally to secure the claimant’s rights under the ECHR or under European Union law. Are the Government content with that situation? Are the Government going to control the fees that the lawyers charge? The statement by the Minister for Employment, Mr Mark Hoban, on 13 May indicated that the Ministry of Justice is going to consult about a fixed-cost regime for mesothelioma claims. It would be helpful if we could be told what he has in mind. It would also be helpful if the Minister could give us, either today or in Committee, a clear statement in relation to what, if any, legal costs incurred under the new arrangements by claimants, either pursuing their own case against an employer or an insurer or claiming from the scheme, will be met under the arrangements that he has designed.
The interaction of the scheme with the benefits regime will warrant careful consideration. The Bill would permit the Secretary of State to recover benefits and other sums from scheme payments. The impact assessment tells us that the Government expect to recoup a net £69 million after the first year. However, in their briefing to us the ABI has stated:
“We have suggested that mesothelioma sufferers should be able to access financial support in addition to the benefits they are entitled to.”
What benefits will continue in payment after an award has been made? If an award under the scheme is to average £87,000, as we are advised it will, what benefits will be left for the claimant? Will income support and housing benefit be swept away? What will happen to industrial injuries disablement benefit, which is a major benefit, and very important in the budgets of such families? Is it correct that the payment of benefits would not be affected during the first year after an award? That is the case, I understand, where civil compensation is concerned. Would it still be the case with this scheme? Is pension credit to be ignored indefinitely? What will be the developing position under universal credit?
It would also be helpful if we could be told whether lump sums, payable for example under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979, or the diffuse mesothelioma scheme under the Child Maintenance and Other Payments Act 2008, will be recovered where payments have already been made. Or will it only be the case that someone who receives an award under the scheme will no longer be eligible in the future for such payments?
Schedule 1 contemplates the recovery of benefits on a scale such that the whole award could be negated. However the schedule amends the recovery of payments legislation to permit, but not to require, the Secretary of State to claw back payments. What does the Minister intend? What scope is there for discretion? For example, will the DWP refrain from clawing back any payments that have been made in relation to pain and suffering? Is he able, and will he be prepared, to limit to a certain percentage the amount of benefits to be denied or recovered? Will he take a lenient view of the treatment of carers under the benefits regime in these circumstances? Past practice has been to an extent discretionary and compassionate. I am quite sure that the noble Lord will want to be as compassionate as he can in the appalling circumstances that these families face. I hope he will err on the side of generosity in relation to both benefits and legal aid.
I had hoped to have time—but I have gone on too long on these subjects—to say that I, too, can see no justification for the limit of 70%. I will just briefly say that it cannot be right to discriminate against claimants where employers and insurers have lost or destroyed the documentation. It is no fault of the claimant that the employers and insurers are in that difficulty. If all claimants are to go through a single portal to be followed by a rigorous search to trace the documentation, then surely all claimants ought to be treated equally. There will be a temptation for the industry not to trace the documentation if failure to do so means they will only have to pay 70% rather than the full amount of compensation they anticipate the court will award, so there is a real risk of the industry being conflicted here. Certainly employers’ liability insurers are not in a position to plead poverty. They did very well for decades. Up until 2008 they even kept the lump sums that were awarded by the tax payer, aggregating to over £20 million a year to offset the cost to them of compensation. We can be sure, notwithstanding what the Minister has said, as sure as eggs is eggs, just as soon as market conditions permit, the insurance industry will pass on the additional cost to them of this scheme by way of increased employers’ liability premiums.
So, pragmatism and practicality, as he said, are very important, but I am not convinced that the Minister has struck the best bargain that he could in the interests of mesothelioma sufferers and their dependants in agreeing to limit payments under the scheme to 70%.
Lord Avebury
My Lords, perhaps I may begin by mildly disagreeing with the noble Lord, Lord Howarth. The Minister is in excellent company because he has built on the work done by the noble Lord, Lord McKenzie, and I thank both of them for their excellent work, for the processes which have led up to this Bill and for the actual construction of the Bill by the Minister. We owe them an enormous debt of gratitude for what has been an extremely long and arduous task.
The Bill allows the victims of this horrible disease, contracted as the result of working in environments that contained asbestos many years ago, to recover compensation even if the former employer, through whose negligence the patient was exposed to the asbestos, has gone out of business and the employer’s liability insurance, which would have covered a claim against the employer, cannot be traced. This is partly because the insurers irresponsibly destroyed policies taken out by firms that went bust, even though it was known right from the start of employers’ liability insurance in 1972 that mesothelioma has a very long latency period. A pamphlet entitled Asbestos Kills by Nancy Tait, which I published in 1976, quoted evidence going back to the 1930s to show that asbestos causes a wide range of diseases and that some of them have a latency period of as long as 30 or 40 years after exposure. There is absolutely no excuse whatever for what is now being euphemistically termed “market failure”.
The Minister referred to work being undertaken by the Ministry of Justice on a range of measures, which include a pre-action protocol, and several noble Lords have referred to the work being done by Senior Master Whitaker. Will the Ministry of Justice examine that work carefully because the administration of these mesothelioma cases by Senior Master Whitaker, his practice direction and his use of the “show cause procedure”—whereby once a claimant has established that he was exposed to asbestos in breach of the employer’s duty, the evidential burden shifts to the defendant to produce evidence to demonstrate that it has a real prospect of success in its defence—have been major causes of accelerating the progress of these cases through the courts. Rather than having a pre-action protocol, I wonder whether it might not be best to allocate a special court for the conduct of these cases, where the experience and wisdom of Senior Master Whitaker could be developed and extended to other judges.
Of course, the scheme does not go as far as the Asbestos Victims Support Groups Forum UK would have liked. I shall refer to two of its main concerns. It was unfortunate that the forum was not invited to any of the consultations held over the two-year period during which the scheme was being negotiated, and I would be grateful if the Minister could explain why the forum was not allowed to have its say. As I am sure he knows, the forum would have preferred a scheme like the one that applies to the motor accident victims of uninsured drivers. Representatives of the forum say, as every noble Lord who has spoken so far has also remarked, that it was wrong to apply the scheme only from 25 July 2012. As has been mentioned, it was a purely arbitrary date, although I imagine that that would have meant squeezing more money out of the insurance industry. The Government have decided to go for the best settlement they could get the industry to agree to voluntarily, and inevitably that was bound to be less than perfect.
The same applies to the 30% reduction, which, again, all noble Lords have condemned, from the average compensation paid to claimants of the same age who can identify the relevant employers’ liability policy. It is not clear how the 30% figure was determined, although I understand that it was intended to be a disincentive to claimants opting for this scheme when they could have identified the insurer and made a claim accordingly. I agree with the noble Lord, Lord McKenzie, who said that this was manifestly absurd—those were not the exact words he used, but that was their meaning—because the claimant who is unable to pinpoint the relevant insurer has no option but to apply to the Employers’ Liability Tracing Office, whose remit is to conduct the search, so the matter is entirely in its hands. A litigant cannot enter the scheme without ELTO being involved, a point to which I shall come back later.
I turn to the Bill itself. I do not believe that the scheme should be left to the unfettered discretion of the Secretary of State, as my noble friend Lord German has already said, but rather that it should be subject to approval by Parliament, as should any amendment, replacement or abolition of it. I have a couple of questions for the Minister. In Clause 2, is the definition of “relevant employer” intended to make a claim possible against any pre-1972 employer on whose premises it can be shown that there was asbestos? Is negligence to be assumed in these cases, irrespective of the circumstances in which the victim now finds himself? How can you establish negligence when the employer has gone out of business and there is no direct evidence of what he was doing in the period before 1972?
In Clause 4(2), is the age referred to the age at the date of diagnosis or the age when the claim was submitted? They may not always be the same. In Clause 4(3)(a) in what circumstances is it envisaged that conditions would be applied to the payment? I was advised that what may be in mind is a situation where the payment falls to be made to the trustees of a dependant who is a child or mentally disabled, but if that is the case, should that not be spelt out in the Bill rather than allowing the Secretary of State to impose any conditions whatever at his absolute discretion?
It is just a small point, but Clauses 11 and 12 appear to be superfluous because they merely repeat parts of what is already in the schedules. On Clause 13, the Government have found it necessary to defend themselves against the potential criticism of the levy as an infringement of the property rights of the insurers under Article 1 Protocol 1 of the ECHR. One would have thought that securing the agreement of the Association of British Insurers to the scheme would protect it against litigation by an individual insurer. One of the factors which they say is relevant in considering whether transferring to the insurance industry the cost of remedying the market failure to keep adequate records is that the compensation is limited to a percentage of the amount that would have been payable if the records had existed. In order to remedy this market failure comprehensively and restore mesothelioma victims to the position they would have occupied if the insurance records had existed, the figure would, of course, have had to be 100%. Would my noble friend consider aiming for a lower reduction—as all noble Lords who have spoken so far have recommended—than the planned 30%, preferably with the industry agreeing to an increase in the levy to fund the difference? I am advised that the Financial Services Compensation Scheme pays 90% compensation in a situation where the negligent employer is no longer trading and where the insurance company for the defunct company is also no longer trading. The FSCS is authorised by the Financial Conduct Authority and, so far as the asbestos-related disease claims are concerned, FSCS coverage is not limited to mesothelioma. Is this not a model for the scheme that is to be launched under this Bill?
Mesothelioma is an excruciatingly painful disease, and the struggle to get fair compensation for those who are struck down by it has been excruciatingly slow, having taken 40 years so far. As my noble friend Lord German said, the Bill is a milestone, but it is not the end of the road either for the beneficiaries of this scheme or for those who suffer from other asbestos-related diseases.
Lord Jones
My Lords, I am glad to follow the committed remarks of the noble Lord, Lord Avebury. Nowhere in the Bill, nor in the Explanatory Notes, can the awful consequences of this disease be adequately described. One might read the entire Bill, one might read the helpful, detailed Explanatory Notes, one might have visited a Turner & Newall factory in the north-west, but the sheer human impact of the disease on the sufferer and the sufferer’s family is virtually impossible to place on the public record.
I welcome this measure and wish its speedy enactment as delineated by my noble friend Lord McKenzie. In this instance, we can see a positive trail. The Gordon Brown Government began consultation; the coalition Government carried matters forward to today’s second reading. I thank the Minister for his comprehensive introduction of the long overdue legislation because employers and insurers are not the easiest people to deal with in compensatory matters. The victims of this dreadful disease and their families surely deserve both justice and generosity. In my noble friend Lord McKenzie the victims have had a most reliable champion who remains their friend to this day. I acknowledge his detailed, industrious, conscientious and successful ministerial style. He had compassion and capability and got things under way. The noble Lord, Lord Freud—a parliamentary midwife perhaps—has brought matters very patiently to a head. His departmental Bill team must be very pleased with events today.
The Asbestos Victims Support Groups Forum UK—Messrs Whitston and Gordon—supplied a timely and cogent brief to Members of your Lordships’ House. It was helpful. My wish is that, before long, their proposals to embrace those excluded from the Bill might be acknowledged positively by the coalition. There are, for instance, quarrymen in Wales who may still seek claims and may yet get some help. We are not dealing with huge numbers and this dastardly disease is, literally, accompanied by death—there are reasons for moving quickly. In yesteryear, as this disease was stealthily advancing, there were still great British manufacturing industries. In steel, shipbuilding, railways, defence and defence-related industries, the construction industry and many more, asbestos was in use. The power stations and steel works always had their laggers. Asbestos products even entered our schools and hospitals.
In Grand Committee, we have annually debated orders relating to this asbestos-related cancer and similar orders. I recollect in Grand Committee describing the miserable happenings in a Hebden Bridge factory. The workforce had compressed deadly blue asbestos particles and proceeded to play snowballs on the factory floor, innocently and unknowingly. Such was the state of health and safety matters in the then industrialised British state of the late 1960s. This happening was described to me in the Commons by my fellow Front Bench colleague and occasional mentor, the late Harold Walker MP, who became Chairman of Ways and Means and then Lord Walker. He was from the shop floor. He was both a Minister and an opposition spokesperson.
The root of this helpful legislation lies in two Administrations in the 1970s: that of Prime Minister Harold Wilson and the one that followed it, that of Prime Minister James Callaghan. That is something to be proud of. I am glad to have served in their Administrations and to have helped. At that time, the Secretary of State for Employment, the late Michael Foot, successfully presented two Bills, which are the root of our discussions today: the Employment Bill and the Health and Safety at Work etc Bill. Despite much opposition and minuscule government parliamentary majorities, these Bills were, in the end, passed and enacted, with the help of a deeply committed TUC. The two Acts had a considerable impact on the economic, political and social history of Britain. That remains the case today, I am glad to say.
With this Bill, the Minister presents a long-awaited and much needed measure. Health and safety is, today, self-evidently a prime responsibility of every major company in the country. Those companies wish to have good health and safety measures and it is because of those endeavours by those Prime Ministers and Cabinet Ministers in those Administrations that I have talked about. There is no going back. Much has been gained but there is more work to be done. This measure is long overdue. Let us improve it. It might also be described as an historic measure.
Lord Monks
My Lords, I am pleased to add my voice to those congratulating the Government on moving forward. Some of us intend to ensure that this movement goes forward a bit more. Correctly, generous tributes have been paid to the Minister and to my noble friend Lord McKenzie. As my noble friend Lord Jones mentioned, others have been involved over many years in the battle to combat the damage that asbestos has done: people from the trade unions, the media, the medical and legal worlds, as referred to by the Minister, and many in this House and the other place.
I would have preferred the Bill to go further than it does and to address more purposefully some of the concerns raised by noble Lords tonight. I live in hope that we can make some improvements in Committee and that perhaps we will get some assurances about action in the future. My concerns are those of others—I will not labour them at this time of night. Limiting the Bill only to mesothelioma excludes 50% of those who suffer from asbestos-related diseases. I understand it would cost about 20% to 25% more if the levy included those and I do not think that this is an impossible ask—if not now then shortly in future.
The more immediate problem is the cut-off date of 25 July 2012. Comparing the treatment of someone who is diagnosed the day before with that of someone diagnosed a day later seems a sheep and goats distinction, which will be hard for some people. If the date is pushed back, then because of the short life expectancy of many sufferers, the problem will be a little easier. I hope that this will be a problem we can discuss.
My third major concern is about this 70% limit. It is unfair discrimination, as my noble friend Lord Howarth so ably put it, against people who cannot find their employer or insurer. Maybe it will be in the interests of some of the less scrupulous insurers to hide a bit and not volunteer all the information that they might. In those circumstances, to discriminate in the compensatory award against the individual concerned is not right. Fourthly, the insurance industry has helped a little in funding research into the treatment of these diseases and I hope that the levy on them will include provision for them to help research even further into the treatments available.
I worked in a brake lining factory more than 40 years ago and was one of the lucky ones. I worked there for six weeks. Many of my contemporaries are not around now. Male life expectancy in the ward where the factory was located was only 59 in 1993. That shows the pernicious effects that this substance has had. Congratulations on continuing the battle against it and let us go a little further than we are at the moment.
Lord Alton of Liverpool
My Lords, in his opening speech, the Minister benchmarked our knowledge of mesothelioma to 1965. In that year, the Sunday Times reported on how an epidemiological investigation by Newhouse and Thompson for the London School of Hygiene and Tropical Medicine had shed light on the origins and nature of mesothelioma, finally laying to rest the scepticism of some pathologists who had until that time disputed its existence or its long period of hibernation, although more than three decades earlier, in 1930, the Merewether report had warned of a latency for asbestosis of some 25 years. Therefore, no one can reasonably claim that the industry, the Government or employers did not understand the risks that workers faced, although, scandalously, insurers routinely destroyed records during that period. That was not market failure—the phrase used by the noble Lord, Lord Avebury.
The 1965 report to which the Minister referred found that the interval between exposure and development of the fatal tumour ranged between 16 and 55 years. One case highlighted the fate of a woman who had died after brushing the white asbestos dust off her husband’s dungarees and work clothes when he returned from work every night. In 1965, it was discovered that even very brief exposure to the dust could prove lethal.
That was 50 years ago and despite assurances that research would be undertaken, there is still no cure. As we have heard in today’s debate, most people die within two years of diagnosis. As the noble Lord, Lord Jones, reminded us, by 1970 Britain led the world in asbestos regulation, yet the British mesothelioma death rate is now the highest in the world and has yet to peak. As we have all said, it is a horrible disease, and all those who have seen it will confirm that it leads to great suffering.
Just over a year ago in March and again in April I divided your Lordships’ House on the Legal Aid, Sentencing and Punishment of Offenders Bill on whether those suffering from mesothelioma should lose up to a quarter of their compensation to pay lawyers’ fees, arguing that victims could not be regarded as part of the compensation culture. Eighteen of your Lordships also joined me in a letter to the Times, in which we insisted that the Government’s claims that the proposed legislation would,
“deter frivolous and fraudulent claims is, frankly, risible as far as dying asbestos victims are concerned”.
We contrasted the Government’s proposals with the failure to deal with increasing road traffic accident claims and alleged whiplash claims, with whiplash alone costing a staggering £2 billion annually.
Your Lordships will recall that the late Lord Newton of Braintree, in his last major contribution in the House, gave his support to my amendment. In response to a Question I put to him at that time, the Minister told the House:
“I am spending considerable time on mesothelioma currently and I hope to sort out the real problem, which is the large number of people suffering from the illness who are getting no compensation at all because they cannot trace who was insuring them”.—[Official Report, 23/4/12; col. 1549.]
This Mesothelioma Bill is a down payment on that promise. Like others, I pay tribute to the Minister, the noble Lord, Lord McKenzie, and the officials who have worked with them, who have invested considerable time and effort in trying to deal with mesothelioma victims who have been unable to trace their insurers. As we have heard, it is a down payment rather than a comprehensive solution; for instance, it does not include the many victims of other asbestos-related diseases. At the briefing meeting, the Minister confirmed to me that the title of the Bill prevents any other categories being included at later stages.
Like the noble Lord, Lord McKenzie, my reservations about the Bill are that average compensation payments will be reduced by approximately 30%—a point also made by the noble Lord, Lord Howarth—and that only mesothelioma sufferers diagnosed after 25 July 2012 will be eligible to apply for a payment. The Bill excludes all those diagnosed prior to 25 July 2012. At the very least, the three-year limitation period in law should apply. I hope that we will consider this in Committee.
This Bill addresses the needs of victims who cannot trace their insurers. As we have heard, that is about 300 a year, but what about all the other victims who know who their insurers are? Given that the consultation by the Ministry of Justice, which does not predicate this Bill but is certainly influenced by and connected to it, commences in July, I would be grateful if the Minister can tell us the timescale on which he envisages further changes being made, whether he can assure us that nothing will be done that will place additional burdens on the victims of this fatal disease and whether the Government see this Bill as a template that is likely to be extended.
The Mesothelioma Bill has been inextricably linked to the Ministry of Justice proposals, principally a mesothelioma pre-action protocol, which I understand that the Association of British Insurers wrote for the MoJ and which the ABI says will reduce the time of settling a claim to three months. Considerable scepticism has been expressed about the ABI claims, and I wonder whether the Government have tested those claims.
What really cut through the foot dragging, as the noble Lord, Lord McKenzie, said, was Senior Master Whitaker’s ground-breaking practice direction, and court procedure which gets liability resolved in most cases very quickly. Surely it would have been better to fund those specialist courts and have a more effective approach using those courts than allowing for delays inherent in the proposed protocol.
I was also surprised and disappointed that although the industry has been fully involved at a formal level with the Minister in drawing up these proposals, the victim support groups were not. Many will share their view that 100% compensation—that is the full age-based, average compensation—should be paid, although I know that the Minister will insist that 70%, which it has to be said is worth more than £300 million during the next decade, is better than no payment. I have some sympathy with that, but remember that for decades it was asbestos victims who bore the burden of untraced insurance and insurers have saved hundreds of millions of pounds avoiding liability for insurances that they wrote. For decades, the taxpayer has funded the government lump-sum payments for those who could not trace their insurer, and they have recovered those payments only when an insurer was found since 2008. Prior to that, insurers recovered all government lump-sum payments which offset the compensation they paid, worth hundreds of millions of pounds.
Let me turn to my final point. As well as adequate compensation, should we not be spending more of our time and money, as was alluded to by the noble Lord, Lord Monks, in finding a cure to prevent the ravages of this fatal disease? In 2011, the British Lung Foundation invested £1 million in research, the rest of the voluntary sector invested £400,000 and the Government invested nothing at all. These are scandalously small sums to spend on a disease which kills so many people. Let us contrast the £0.4 million from the not-for-profit sector spent on mesothelioma research with the £22 million for bowel cancer, the £41 million for breast cancer, the £11.5 million for lung cancer and the £32 million for leukaemia. Indeed, there are 17 other forms of cancer for which far more research resources are reserved than for mesothelioma. Mesothelioma is literally at the bottom of the list. In 2011, the voluntary sector invested £5 million in myeloma research and £5.6 million on malignant melanoma—the cancers immediately above and below mesothelioma in the table of mortality figures. Yet, even with such limited funds there have been some exciting developments, including the creation of the world’s first mesothelioma tissue bank for researchers, a transatlantic collaborative study of the genetic make-up of mesothelioma and work on overcoming resistance to drugs used to treat the disease. It shows what can be done with the right investment. This Bill offers an opportunity to create a sustainable fund for mesothelioma research to help ensure that future generations do not have to suffer in the same way that so many have in the past.
I have today given the Minister a letter, which will be circulated in your Lordships’ House tomorrow, which has been signed by 20 Members. They include the noble Lords, Lord Avebury, Lord Bach, Lord Crisp, Lord German, Lord Harris of Peckham, Lord Howarth, Lord McColl, Lord Monks, Lord Pannick, Lord Patel, Lord Tugendhat, Lord Turnberg, Lord Walton of Detchant and Lord Wigley, the right reverend Prelate the Bishop of Hereford, the noble and learned Baroness, Lady Butler-Sloss, and the noble Baronesses, Lady Greenfield, Lady Masham, and Lady Thomas of Winchester. Since the letter was written the noble Lord, Lord Kakkar, and the noble Baroness, Lady Morris of Bolton, have also indicated their support. The letter underlines the breadth of support throughout the House for an amendment which will be tabled for Committee stage on 5 June and which enjoys the support of the British Lung Foundation. It involves a small administrative or membership fee for those companies in the scheme and would raise £1.5 million annually. It would have no cost implications for the public purse, although I hope that the Government would consider providing match funding. It is, after all, receiving millions of pounds from the new scheme.
This Bill is a down payment in honouring the Government’s promise to respond to victims of mesothelioma. I welcome that, but I urge the Minister to see what more can be done within the scope of the Bill to bring justice and hope to those who are blighted by a disease that was none of their making. The truth is that we cannot eradicate all asbestos from our homes, schools, hospitals, factories and offices, but we can act justly towards those who have been afflicted by mesothelioma. The one certain way to prevent deaths from mesothelioma is to find a cure.
Baroness Whitaker
My Lords, when I worked in the Health and Safety Executive, mesothelioma was recognised as the most dread of all occupational diseases. It is as yet incurable. There is no safe threshold, so that the smallest exposure to crocidolite or blue asbestos could produce it. There are many cases on record of a few weeks’ work or less in which the tiny fibres lodged fatally in the lung cavity, producing a lingering, miserable death in breathlessness and pain. A little girl contracted it simply from being around her grandfather’s work clothes. It was diagnosed when she was in her 40s.
Almost worst of all, although the toxicity of asbestos generally was recognised at the very beginning of the 20th century, effective preventive regulations had to wait until the 1970s. The import and use of blue asbestos was not banned until 1985, after many hard fought legal battles. As it is a disease with a long latency period, those dangerous conditions from before the ban are still now producing cases of mesothelioma.
The disease is now recognised to be so clearly linked to occupational exposure that there have been arrangements for compensation for some time, but there are obvious difficulties when an employer or the employer’s insurer goes out of business. Any improvement on the present system, where invalids not infrequently die before their case is settled, is an important step forward.
The Government’s proposals are therefore welcome. While there are aspects of the Bill that could, and I hope will, be improved in the time-honoured way in which your Lordships’ House deals with legislation, I, too, congratulate the Minister on bringing the Bill before us.
As other noble Lords have said, we shall need to look at the rationale for making the cut-off date for diagnosis as of last year and for setting the compensation cap at 70% of the average. Both will result in arbitrary and inequitable decisions. Some victims of occupational exposure with an equally valid claim will not be covered, as my noble friend Lord Howarth of Newport explained. There is much to tease out in the proposed system itself. I look forward to the Minister’s further answers to these points. I hope that he will offer the possibility of adaptation in the interests of fairness.
Lord Wigley
My Lords, I welcome this Bill as a major step in the right direction but one that needs some aspects clarified and perhaps strengthened at later stages. I join the number of noble colleagues who have paid tribute to the Minister for his genuine commitment in these matters. I think that is recognised by everyone. I also want to put on record a tribute to the trade unions for the work that they have undertaken in this area. Very often, that is overlooked. The trade unions have played a major role over the years in trying to improve standards and safeguard people from such diseases.
Noble Lords may be aware from the debates last year of my interest in these issues. I had some involvement as an MP for a slate quarrying area in the 1979 Act, which is relevant to some mesothelioma sufferers. I represented an area that had a Turner & Newall/Ferodo factory that used asbestos.
As a number of noble Lords have stated, it can take decades for symptoms of this horrendous disease to surface, and it almost always develops as a result of exposure to asbestos. Those who contract mesothelioma are overly represented in construction and certain industrial sectors, although people can contract the disease, as has been stated by a number of noble Lords, by undertaking renovation work on buildings or even washing the clothes of those who work with asbestos. It has been stated that even teachers and pupils may have had an exposure from the decaying fabric of school buildings where asbestos was in the middle of walls and had become exposed.
The disease is notoriously difficult to diagnose, so it is often in its advanced stages by the time a diagnosis can be made. After diagnosis, however, the progress of the disease is usually rapid and the average life expectancy after this point is only two years, as has been said. Since the symptoms can take decades to develop, frequently employers have gone out of business by the time the sufferers are in a position to seek compensation and insurers’ records often have been destroyed, making it difficult to trace which insurer the employer was registered with.
Since the Employers’ Liability (Compulsory Insurance) Act 1969 came into effect, most employers have been required to obtain insurance to cover their liability for any bodily injury or disease acquired by their employees as a result of their employment. However, that did not solve all the problems by any means. The Pearson commission on civil liability and personal injury considered these matters, particularly that of no-fault liability. It is a shame, as the noble Baroness, Lady Taylor, suggested, that greater progress was not made during that time.
Eventually, the 1979 pneumoconiosis Act provided rough justice for a number of industrial lung diseases, including mesothelioma, that were not otherwise covered by the compensation provision. I would be interested to know how the Minister sees the compensation tariff levels provided by this new Bill compared with those provided under the 1979 Act. Can we perhaps have, for Committee, the draft scheme rules and an outline of draft orders indicating the levels of age-related compensation which the Government have in mind?
I am sure noble Lords on all sides of the House will be glad that progress is being made. However, the Mesothelioma Bill is narrower in its scope that some of us would ideally like to see. It offers recourse to those suffering from diffuse mesothelioma only—and eligible dependants, of course—and it is available only to those diagnosed on or after 25 July 2012. The Bill makes provision for a scheme that will make payments to these persons provided that they have brought no action against an employer or that employer’s liability insurer because they were unable to do so. Surely that date, as has already been suggested, should be three years earlier, in line with the three-year limitation period in law. That is an objective basis on which to make a change. I hope that we will have an opportunity to return to that point in Committee.
I draw to the Minister’s attention the fact that conditions excluded from this Bill’s provisions, presumably because of the difficulty of proving causation, have already been included in an administrative scheme that pays compensation to all asbestos victims at Turner & Newall asbestos factories. If they can do it, why cannot the Government do it?
Alongside this, the Ministry of Justice is, I understand, planning to consult on changes to the legal process for mesothelioma claims, including the introduction of a compulsory online gateway and other somewhat controversial measures. No doubt we will have an opportunity to return to this in Committee, as we shall to the implications of Schedule 2, where I fear the wording may inadvertently exclude persons who should still be included in the purview of the 1979 Act.
The proposed mesothelioma support scheme is the central plank of this new provision. Although it is of course welcome that the Government are making progress for many sufferers of this debilitating disease, a number of concerns have been raised by organisations with expertise in the field. The scheme has been criticised for having been drafted without consulting claimants, support groups and relevant trade unions. The fact that support will be limited to those suffering from diffuse mesothelioma has also been highlighted, in contrast to the Employers’ Liability Insurance Bureau proposal by the previous Labour Government in 2010. Thompsons Solicitors have also pointed out that hundreds of people have unnecessarily lost out on compensation due to the delay of more than two years between the 2010 consultation closing and the present scheme being announced in July 2012.
Most controversially, I think, and as the Association of British Insurers has recognised, the scheme will pay only approximately 70% of the average value of claims.
That is surely an injustice. If the suffering justifies the 100% figure, on what possible basis can a lower figure be offered in settlement of the liability? The insurance industry’s rationale for allowing this injustice to occur is apparently that it will maintain an incentive for people to attempt to trace insurers so that claims will be brought to this scheme only once all other avenues have been exhausted. I suggest that paying only 70% shows a flagrant disregard for the highly distressing and incapacitating symptoms that sufferers experience at a time when they are likely to be seeking compensation, as well as the very short life expectancy of these people. Expecting sufferers to exhaust all other avenues before bringing a claim to the scheme makes it quite likely that the person in question will have died before compensation is gained, and will put increased pressure on terminally ill people. I urge the Government and the industry to reconsider this aspect of the proposed scheme.
I would be grateful to hear the Minister’s thoughts, if not now then at a later stage, on comments that have been made by representatives of the insurance industry that the Recovery of Medical Costs for Asbestos Diseases (Wales) Bill currently under consideration in the National Assembly for Wales may undermine the provisions included in the Mesothelioma Bill. The Assembly Member under whose charge the asbestos Bill was presented has written to me stating that his Bill would have no adverse relationship with the legislation now under consideration. I would welcome the Minister’s comments on this matter and would like to know whether any discussion has taken place with Welsh government Ministers in Cardiff on the most worrying aspects of the interrelationship of the two Bills. Having said that, I welcome the step being taken.
Lord Browne of Ladyton
My Lords, it is a pleasure to follow the noble Lord, Lord Wigley. Characteristically, despite how late his contribution has come in the debate, he has identified fresh points that have not been raised by other speakers. That has added significantly to our consideration of the Bill and challenges me to do the same. I shall try to approach the next few minutes in a way that is not repetitive, but I start by joining the Minister in his generous words of praise for my noble friend Lord McKenzie of Luton and his consistent contribution to advancing the cause of mesothelioma and other asbestos sufferers—indeed, to health and safety law in general.
I couple the Minister in that praise, because I know from my own experience what challenges he faced in trying to deal with the insurance industry over this very issue. For a short time in 2003, I was the Minister for Employment and had responsibility for health and safety. I came into the job at the beginning of a summer when there genuinely was a market failure in relation to compulsory employer’s liability insurance, and I know exactly the nature of the challenge that he faced with the insurance industry over this insurance. I pay tribute to him for getting the Bill before us in this fashion.
Having said that, though—taking on board all his entreaties that there are challenges of pragmatism and speed, the fact that we must bear in mind the nature of this filthy disease and its effect on people, the fact that there are people out there who are waiting for justice and have been for some time, and that any delay will mean that people will die before they get it—we still have an obligation to be fair. Fairness and justice are important considerations in what we are doing with this legislation. Having listened to the debate thus far, I think that there is a very strong thread running through it: the judgment as to whether a payment scheme such as this, as opposed to a compensation scheme, serves justice has to be seen in a much broader context than those challenges, with respect to the Minister and the papers that are before us. It has to be seen in the broader context of what can be done to improve the ability of people to get full compensation through our courts.
That leads me to a point that I cannot resist the temptation to make, just because of the Minister’s initial words in introducing the Bill. He said in an early sentence—indeed, it may have been the second sentence that he uttered—that where a person is injured by negligence or a breach of statutory duty, that person should be compensated by their employer. I agree with them. I regret that that statement of principle did not inform the provisions of the Enterprise and Regulatory Reform Act, which we passed this year and which broke the link between breach of statutory duty and compensation by an employer. I invite the Minister to reflect on those words in a broader context, rather than just in relation to the matters before your Lordships’ House this evening.
The question of whether we are being just has to be seen in the context of why we need to address this issue in this way, at this stage. I do not intend to repeat the words of other noble Lords, including the noble Lords, Lord Alton of Liverpool and Lord Avebury, and my noble friend Lord Giddens, who pointed out in short that, for decades, employers, and indeed Governments, knew exactly what the risks of using this substance were and did nothing about them but spent a lot of effort resisting justice for those who were being afflicted by the substances they were deploying and using extensively throughout the country.
In relation to the long latency of this and other asbestos-related diseases, I do not think that we can describe what the insurance industry did in recklessly—and I am being kind in using that word—destroying its records as inconsistent record-keeping. These were deliberate acts. I cannot go so far as to say they were designed to have the consequence that they have but they were calculated to do so. If we had not had this combination of deliberate acts over an extensive period, we would not be facing the problems that we face now.
I share the concerns of many noble Lords about the arbitrary nature of the anticipated payment of 70% of average compensation and the cut-off date that will be very brutal to certain people who have suffered greatly. I want to make two points in particular, which I think will be additional arguments at least, if not completely new points in the debate. The first relates to the recovery of benefits. I accept the constraints that have been in place in these negotiations and because of that I am willing to accept that a payment scheme, as opposed to a compensation scheme, is the way forward, at least in the short term. However, that is entirely inconsistent with the approach that the Government plan for the recovery of benefits. My noble friend Lord Howarth of Newport asked a series of very detailed questions about benefits, to which I am sure the Minister will be able to reply. I can tell my noble friend that the answers will be extremely disappointing. It is very clear that the Government intend to recover benefits paid to those who have suffered. That may not affect continuing benefits because of the way the compensation recovery system works, but it will certainly be a significant injustice to people who have received benefits and find them clawed back from their payment.
I draw the attention of noble Lords to the Government’s impact assessment. I accept that this is an excellent document but it is also a quarry of very interesting information, as impact assessments always are. I refer particularly to paragraphs 13 and 14 of the impact assessment signed by the Minister on 2 May 2013. They set out in short how the compensation recovery scheme works. Paragraph 14 states:
“In a civil case, where an individual receives compensation from an employer or insurer, the government … recovers the social security benefits and lump sum payments it has made from the compensation paid”.
That is how it works, I agree with it and there is a justification for it, as the Minister explained: you cannot be compensated twice. However, as he is at great pains to explain, those who will get payments out of the scheme are not being compensated. This is a payment scheme, not a compensation scheme. It is not designed to compensate people for their loss and if it were these benefits would be restricted to the part of the loss that relates to income, not the part that relates to pain and suffering, because that is how the compensation scheme works otherwise. Therefore, there is an inherent unfairness in this. With respect to the Minister, the Government cannot have it both ways. This cannot be a compensation scheme for the recovery of benefits paid to those who have been paid out of it, but only a payment scheme for the nature of the compensation. Someone recently said to me in an argument that if you cannot ride two horses you should not be in the circus, but that is not a good enough answer to this issue.
Briefly, I believe that this scheme will end up in the same place as the Motor Insurers’ Bureau scheme, which on its website says that it is,
“a central fund to provide a means of compensating the victims of road accidents by negligent uninsured and untraced drivers”.
It goes on to say:
“The ultimate cost falls to law abiding motorists via their insurance premiums”.
Inevitably, that will happen to this scheme. That is what the impact assessment says. I draw noble Lords’ attention to paragraph 97; effectively, the research shows that that is the industry’s intention, while the impact assessment stands itself on its head and concludes the opposite in the last part of the paragraph. I draw these two issues to the Minister’s attention. I hope that he will either address them now or at some stage in the debate.
Finally, I repeat the words of my noble friend Lord Jones, who said that no words are adequate to describe the nature of the suffering and the anguish that this awful disease has generated. Our obligation is to respond to those pleas of anguish. We have only words to do it, but surely we can translate those words into some form of fair legislation.
Lord Whitty
My Lords, like other noble Lords who have spoken, I welcome the Bill and will not seek to delay it. Having said that, the Bill is deficient. It needs to be strengthened, either in Committee in this House or through secondary legislation. I hope that that happens.
My basis for speaking is that I have been involved in this field for nearly 40 years. In the early 1970s, when I was a trade union health and safety officer, I sat on the first HSE drafting committee on the asbestos regulations. Of course, as the noble Lord, Lord Alton, has said, by that time the scientific knowledge was clear on blue asbestos and pretty clear on white and brown asbestos as well. However, it took a long time for the government machine to get in place. Of course, employers were still in denial. My union, the GMWU, had significant membership in Turner & Newall itself, and frankly some of them were in denial as much as the management. However, the reality was that they were dying.
We also had a group of workers who liked to call themselves thermal insulation engineers, or laggers, who stripped off asbestos from machinery in shipyards, steelworks and royal government dockyards. There were some fantastic leading figures among that group of workers, almost all of whom were dead in their 40s from asbestosis. Many of those who survived came to suffer from mesothelioma as well.
As my noble friend Lord Jones and others have said, this is an utterly horrendous disease. I am pleased that, belatedly—50 years on from the scientific knowledge being here—we are finally getting to grips with it. The previous Labour Government did a lot in relation to other asbestos-related diseases, and the noble Lord, Lord McKenzie, started the ball rolling on this one against considerable opposition from the insurance companies and, be it whispered, from the Treasury.
However, we still do not yet have a sufficiently effective Bill. Others have pointed to the deficiencies in relation to those it excludes because of the date. Frankly, many are excluded by that date, given the life-expectancy after diagnosis. Given the exclusion of other long-latency diseases and mesothelioma, which can generally be ascribed to asbestos, although the causal association may be slightly weaker, and to the whole structure of compensation, it is true that those who get through this system, or their dependents, will belatedly get a very significant sum. That is what, rightly, the civil courts have awarded in individual cases which have been through the court system. I find it pretty disgraceful that the average that comes out of that system will now be discounted by a whole 30%.
When one stands back it is not only that there are normally scanty records that employers have disappeared, and that individuals kept changing their employer in many of these sectors, but, as my noble friend Lord Browne of Ladyton just deftly hinted, there was some degree of destruction of records involved here as well. That is the responsibility of the insurance industry, and one they should face up to. His analogy with the motor insurance bureau is also apposite. After all, in the motor industry insurance is compulsory on motorists, as employer’s liability is compulsory on employers. Therefore, despite the greater difficulty of proof, the analogy holds. In that situation, rather than have a sifting body, possibly interpreted by a technical committee, and then the DWP looking at it, or whatever body the DWP eventually devolve this scheme to, effectively the insurance industry faces up to its responsibility and pays effectively the proven 100% of the claim. That is not a complete analogy, but compared with that 100%, a 70% figure seems very difficult to justify. There is a higher risk on the insurers and an increased administration cost on them. I think it was the noble Lord, Lord Avebury, who said that maybe 90% in other analogies is perhaps appropriate, but any person would regard 70% as excessive.
I commend the Minister on getting this Bill to this stage, and no doubt having the equivalent arguments with the Treasury to get it to this stage. However, on the negotiations, I dealt with the insurance industry on flood defence and with some of the Minister’s colleagues in Defra who are in the current Government. The insurance companies are tough negotiators. They live for negotiation, even more than trade unionists do, and at times are rather more successful than the trade unionists. We could afford to be a bit tougher in this respect, in particular in relation to the discount. We have a significant exclusion on the basis of the date, another on the basis of the non-mesothelioma diseases, and on top of that the insurance industry has somehow come out with a 30% discount. I suspect that they went home and thought that was a result. The Government could get a better result. I am not sure whether we will manage to get a better result in the course of this Bill. I hope that some of those anomalies can be addressed; for example, the Minister ought to be prepared to accept an amendment that allowed him or a future Secretary of State to add the other diseases to the Bill. I would have thought that that ought not to be a great difficulty for the Government. I hope that when we debate the regulations that might stipulate the 70% or something like it, a little bit of give in an upward direction would be forthcoming from the Government.
Having said all of that, I welcome the Bill. We need to make sure that, for the reasons the Minister spelt out at the beginning, it gets a speedy result within this House and gets on to the statute book. At the end of the day, the people we are helping have gone through horrendous difficulties, and their nearest and dearest have watched them do that. We have a responsibility to ensure that at least the majority of those people get adequate compensation as rapidly as possible.
Baroness Sherlock
My Lords, this has been a very rich debate, suffused with not only the expertise but the passion and compassion for which the House is widely celebrated. It has been a privilege to hear personal stories about people who have been affected by mesothelioma: to hear of lives cut short and ending avoidably in terrible suffering. I am grateful to all noble Lords who were willing to share those experiences, as well as for the knowledge that they brought.
I acknowledge once again what an extraordinary range of people we have in this House. I pay tribute to all those who in many different ways have been part of bringing the story to this stage of its development: to those who campaigned in Parliament, such as the noble Lord, Lord Alton, who has done so much to raise the issue, and the noble Lord, Lord Avebury; and to those who have been Ministers, such as my noble friend Lord McKenzie in recent times and, in times gone by, my noble friend Lord Jones, whom I thank for such a passionate speech and for bringing us back to the point of remembering what this means for those who are going through such pain and suffering at the moment.
I pay tribute also to my noble friend Lady Donaghy and other trade unionists for reminding us of everything the trade unions have done, and to my noble friends Lord Whitty, Lord Monks and others who have been part of the story of trade unions getting behind efforts to try to change this country’s attitude that nothing could be done and prove that perhaps it could. I pay tribute also to the Minister for his personal commitment and—I suspect that my noble friend Lord Whitty was right about this—for conducting some pretty tough negotiations. We hope to give power to his elbow so that he can go back and make them more successful still.
There has been an extraordinary unanimity round the Chamber on almost every Bench on what the top issues will be on which the Minister will have to convince us as the Bill goes through its remaining stages. In true Eurovision style, the top three are already predictable. The first is the scope of the Bill. I understand the pressures that may have led the Government to settle where they have landed. The Minister argued that the Bill’s focus on mesothelioma was based on the fact that it is a terrible disease that is almost always fatal, and that is exclusively caused by exposure to asbestos. That much is uncontested. However, the fact that mesothelioma sufferers will have a case for compensation does not mean that others do not also have such a case, and does not take away from the fact that there are still too many victims of other long-latency asbestos-related conditions who should be entitled to compensation but cannot find either an employer or an insurer to pursue. Of course, their claims would need to be tested, but I see that the Government are not minded to go down that road.
I understand the attractions of clarity and moving forward with the support of stakeholders, but I hope that the Minister has heard the breadth and strength of feeling from all around the House that the Bill needs not only to address this pressing problem but, as my noble friend Lord Browne put it, needs to be fair. It will not be perceived to be fair if it cannot at least set out the way in which the Government will move forward. If the Minister feels that the Bill is not the route forward for that, I hope that he will be able to tell us what the way forward will be, so that by the time we conclude these proceedings we will be able to give some comfort to those who may otherwise feel that they have been unfairly ignored in the process.
I also hope that in Committee we will have a chance to discuss what can be done to try to make the process of moving on in other areas more systematic. I was very struck by the point made by my noble friend Lady Taylor about the piecemeal way in which steps were taken in the past. It would be very helpful if we could set out a way forward that did not involve constantly being dragged step by step into solving problems that will one day have to be solved anyway. Perhaps this time we could be the House that breaks through that way of doing things and tries to find a more systematic way of planning for the future.
The second question on which there is almost total unanimity is why the cut-off point is fixed at 25 July 2012. This point was raised by many noble Lords. Suggestions were made that it could be set at February 2010, when the consultation opened, or May 2010 when it closed. The Asbestos Victims Support Groups Forum suggested that a three-year rule in law should be applied. Whatever the Minister comes forward with, it would be helpful if he would take the House carefully through his reasoning for July 2012, and against having an earlier commencement date. From the reaction of noble Lords around the House, it would seem that simply feeling that one could not leave it open-ended was not enough of an answer to the question: why this, why now and why only then?
The third big question is the crucial question of the proposed nature and level of compensation. My noble friend Lord Browne of Ladyton raised some important questions about the way in which damages are constructed. I hope the Minister can set out some more information for us on the record about that, about how he came to this space—in particular, the question of why compensation is likely to end up being set at 70% of the average damages being awarded by the civil courts. I confess I have not yet heard a persuasive argument for that. I understand that the Minister seemed to be saying—and it is certainly what the briefing said—that the rationale is that an incentive of some sort is needed to ensure that this is genuinely a scheme of last resort. However, my noble friend Lord McKenzie raised the telling question: since claimants can by definition access the scheme only if their former employer’s insurers cannot be traced, and since the body will actually have an obligation to help people trace an employer, why is any incentive needed? The door is only open to people who meet this condition, so they surely do not need to be bribed to step through it as well—or in this case, rather than being bribed, they are facing a hefty financial penalty if they are unable to identify a provider of employers’ liability insurance through no fault of their own, a point made very tellingly by many noble Lords.
There is then the question of who runs the scheme. A number of noble Lords have made the point that concerns are being heard abroad that it might be the insurance industry itself that will run the scheme. The Bill, of course, carefully sets out two options: one of having the scheme run in-house, the other run externally by a scheme operator. However, it is clear in the briefing that the plan is that the insurance industry should run it. It is, we are told, already in the process of setting up a scheme in anticipation of the Bill becoming law, which could then be up and running right away on day one, on the assumption that the scheme meets the criteria set out by DWP. However, as my noble friends Lord McKenzie and Lady Donaghy and others have pointed out, there is a potential conflict of interest here if the same industry that has to fund successful claims not merely underwrites but administers the compensation scheme. Aside from the actual conflict, is the Minister not concerned that the perception of a conflict may be a cause of concern to victims and their families? Have the Government done any research to find out how claimants would view such a provision, having the scheme run by the very industry with which they have to join battle?
In particular, could the Minister tell the House whether he considered any alternatives? Would it not have been better, perhaps, to have had an arrangement like that for the FiSMA bodies, such as the Financial Ombudsman Service—and I declare my interest as a non-executive director of that body—or the Financial Services Compensation Scheme, mentioned by the noble Lord, Lord Avebury? Both of those bodies are set up in statute and funded by levies on the financial services industry, but they are administered by independent scheme operators overseen by boards. The job of the board is to guarantee the independence of the scheme, both from consumers and from the firms that underwrite the scheme. Therefore, I would be grateful if the Minister could tell me whether he looked at that as an alternative, and, if so, why he rejected it.
Moreover, I would be very interested to hear the Minister’s response to the matters raised by my noble friends Lord Howarth of Newport and Lord Browne about the question of benefits. Why do the Government see this position as analogous to that of a compensation payment, an interesting point made by my noble friend Lord Browne, who did indeed manage to introduce additional material very late in the day? Also, my noble friend Lord Howarth asked whether there would be any caps on the amount that can be clawed back, what particular benefits are in that situation—will it be all benefits, including carers’ benefits?—and what happens to the way in which the money is treated? Finally, there was the very important question of research, raised by the noble Lords, Lord Alton and Lord Monks, the noble Baroness, Lady Masham, my noble friend Lord McKenzie and others. I very much hope that we can return to that in some detail in Committee.
I do not want to detain the House any further at this time. This is a Bill whose purpose we support fully, as one would expect, since the previous Labour Government in the person of my noble friend Lord McKenzie started the consultation process which brought us at last to this point. Action has long been demanded by victims, their families and the organisations that have supported them over many years. We owe it to them to act swiftly, but we also owe it to them to get it right. We owe it to the people who depend upon this fund to scrutinise this legislation as well as we can to ensure that it is robust and that the redress it provides will meet the needs placed upon it. Furthermore, I think we should take a moment to reflect on the terrible consequences of a failure to take seriously the health and safety of workers and, indeed, citizens, a point made by my noble friend Lord Giddens, to whom thanks are due for a very interesting exposition of how we came to this point. I was very taken by his suggestion about the idea of a pro-active scanning forward. I would be interested to hear the Minister’s response to that. How do we learn not just from what has happened but learn lessons for the future?
There is a great temptation in modern life to complain about health and safety as though somehow it is there solely as a means for bureaucrats to stop any of us having any fun. The next time any of us is tempted to complain about there being too much health and safety, we might remember the legacy of the days when there was precious little of either health or safety in too many workplaces.
Lord Freud
My Lords, I have been in this House long enough to have an expectation that this would be a high-quality debate. I can confirm that my expectations have been exceeded. This was a very good debate which showed that noble Lords have focused on the issues and is the precursor to a valuable process being undertaken as we go through Committee and subsequent stages of the Bill.
Clearly, the Bill deals with what I called a very damaging historic market failure. Various noble Lords, such as the noble Lords, Lord Avebury, Lord Alton and Lord Browne, implied that it might have been rather more than that. Indeed, it was implied that there might have been reckless behaviour. Observations have also been made about the way in which the paperwork was dealt with. To be blunt, many people in the insurance industry would admit that that was the case.
This is not the Bill I wanted to bring to the House. I will explain why that is the case because it is very important that noble Lords should understand that. I wanted to find a way of allocating responsibility to the companies that had engaged in the relevant business in the year in question so that we could levy a specific charge on those companies for the business for which they were responsible over the relevant period. We would thus have allocated the responsibility where it should lie. I spent a lot of time and, indeed, some of the DWP’s money, researching that proposition. However, I came to the conclusion that such a course of action was legally too risky in a most litigious environment. Therefore, we have moved to a second-best position, the implications of which are driving many of the shortfalls that noble Lords have pointed out vigorously tonight, because it is one thing to say that there is a moral imperative to look after the individuals suffering from this terrible disease and their dependants but it is another to pin the responsibility on companies which, frankly, had nothing to do with it. We are looking to insurers in the employers’ liability market to fund this provision through the levy and we are looking at the appropriate level of levy in that marketplace when direct blame cannot necessarily be attributed. That is why the scheme is designed in the way that it is and why various constraints are in place.
I think that I heard support for the principles of the scheme. We can get money to the sufferers regardless of whether the insurance records have been lost. In general terms it is right that we look to the insurance industry to provide this support, not least because this situation is a horrific blemish on its reputation which it will, and does, want to correct and mitigate.
We need to help the insurance industry to impose this levy. It cannot do it on a voluntary basis, which would have been the ideal position and the one which I would have preferred. It needs the legislative support because it is a disparate industry with very many different players in it.
We are clearly going to spend a lot of time going through the detailed questions raised. As I will be going through them in Committee, I do not intend to spend a lot of time going through everything now, but I will try to pick up the main themes. I need to add something that I omitted to do earlier, my thanks—which several Lords have mentioned—to the victims’ groups and the trade unions for all the work they have done and for which I am personally most grateful.
Before I get into the drier stuff of this, I must add that many noble Lords talked about the human stories. Nearly all of us will know someone who has gone through this, and there is an awareness here that in many ways this is one of the worst diseases to get. I acknowledge that. The noble Lords, Lord Giddens and Lord Monks, and many other noble Lords made that point and told us some stories to remind us.
One of the key issues raised by virtually all noble Lords—too many to mention individually—was about setting the figure at 70%. There was a real juggling act about what the right level of levy is, and that is something we can spend more time in Committee debating. If we set the levy too high, in practice what will happen is that it will just raise the amount to be paid and the insurers will pass on virtually all of it to British industry, which is something I was very keen not to see. There is a lot of economics around this, but if you set a small level in a reasonably competitive market, most of it will probably be absorbed by the insurance industry, which should do so, rather than by British industry, which should not be required to absorb it. There is a real balancing act in the amount of money that it is sensible to raise this way to get to the victims, and that is the main driver here. It is not, I want to emphasise, the behavioural incentives that have been floating around. That is not what we are doing here. We are trying to get a balance of funding.
The second issue is, because we went early—theoretically one can start doing a levy like this only at the time at which it becomes law—we have gone from the date of the formal announcement, from which point the insurance industry can start to reserve. However, one of the issues coming from that is that in the first year, we effectively have to make over three years’-worth of payments, and noble Lords will see the problem instantly. There is suddenly a very large levy in one year of the kind that is very difficult to absorb. That is the reason that we have worked to smooth that first year over four years, so that we do not get these sudden large amounts, but it is a constraint. I shall not go into the detail tonight of how difficult all this is to do, although perhaps in Committee I could be persuaded to open my heart a little about particular Treasury rules, levies that are treated like taxes and why the Treasury, which collects taxes, should give the DWP any money to make payments.
Lord Howarth of Newport
Even before the noble Lord opens his heart to us in Committee, will he look again at the question of the start date in the light of the figures we have been given? We have been told that the life expectancy of a mesothelioma sufferer following diagnosis is perhaps two years. We are told that around 2,400 people die each year, and that the insurance history can be traced in more than 50% of cases, which means that more than half are able to pursue their case against the insurer. That leaves around only 1,200 people who would benefit if the noble Lord were simply to remove the start date. I would have thought that that ought to be affordable and that the insurance industry ought to accept that quite limited extension of its responsibility. I hope that the noble Lord will think about that and perhaps even amend Clause 2 himself and not just leave it to us.
Lord Freud
Virtually all noble Lords mentioned the start date. The trouble is that, in principle, this is a sheep and goats situation. Any date, wherever it is set, as the noble Lord, Lord Monks, mentioned, is always arbitrary at one level. To pick up on the point made by the noble Lord, Lord Howarth, this concerns dependants as well, so if there was no start date and the date went back indefinitely, we really would be talking about a huge amount of money. We will spend a lot of time talking about this, but let us flesh out the areas of discussion.
I think that we might look in Committee at the point made by my noble friend Lord German and reinforced by the noble Baroness, Lady Taylor, about a cap or a different structure. Noble Lords can see my constraints, but we can look at shaping the structure in different ways. The noble Baroness, Lady Donaghy, asked when we would have the report on payments. It will be ready in the summer. In response to my noble friend Lord Courtown, I will say that we will have the scheme rules ready to be looked at by the time we reach Committee.
Extending this to other asbestos-related diseases was the other big issue of concern to virtually all noble Lords. The point about mesothelioma is that if you have it, you will essentially have contracted it doing a job in which there was negligence, and that it is fatal. You can fix a figure with a tariff level and you can go very fast. The objective is to reach a point within five months as compared with a typical period now of two years. Noble Lords will be conscious of the meaning behind those periods, given the prognosis of survival for up to 15 months. Getting something this quickly is really important. There may be schemes for other types of asbestos-related illness, but they could not be set up within this structure. We would have to look at something else; it could not be a simple extension.
My noble friend Lord Avebury and the noble Lord, Lord Alton, asked how many meetings have been held. Out of amusement, I counted them. There were 15 meetings with representatives of the insurance industry, of which seven were held in quite a tight period. You can imagine that they were being held during a time of heated negotiation. A total of 11 meetings were held with representatives of victims’ groups, lawyers and members of the all-party parliamentary group. It is not a complete balance but I took on board as much as I could as we built this.
I will not spend a lot of time tonight on the MoJ process. We will have time to do a bit more. The fundamental point is that the MoJ will launch a consultation shortly. It will go through all these issues and then come up with a scheme on the balance, taking on board all the responses. This is a major process and we will just wait for it to happen.
The noble Baroness, Lady Donaghy, raised the question of the scheme administrator. We are in control of this scheme and the DWP will drive the scheme rules. The scheme administrator will therefore be answerable to the Secretary of State, who will monitor whether it is doing the job that needs to be done. It is not a done deal with the ABI at this stage, though it is setting up a shadow company. If it does this successfully and if it is the administrator, it means that we can go very fast, but it is open at this stage.
My noble friend Lord German raised a key point about the assumption of negligence. What distinguishes mesothelioma from some of the other diseases is that there is no reason for it other than being exposed to asbestos in employment. There has been a general acceptance that if you were exposed to asbestos in the workplace it would be through negligence. The decision has typically been made on a balance of probabilities. We will spend more time in Committee on the important legal context of why one can do such a straightforward and rapid scheme.
I have had good warning from the noble Lord, Lord Alton, that I will get an amendment proposing that some of this levy should effectively go into research. I cannot tell the noble Lord how hard I have tried to produce that result for him. I have failed to do it and we will spend time on this in Committee. There are some really complicated technical reasons why that cannot happen, mainly because, formally, a levy is a tax and it cannot go to anyone but the victims. I have tried every single route round this. If noble Lords are cleverer than me and can work their way through it differently, I will be delighted.
Lord Alton of Liverpool
I am grateful to the Minister, who is obviously coming to a conclusion, for giving us a lot of his time in replying. Has he noticed that the British Lung Foundation proposal is not asking for money from the levy? It is suggesting a membership scheme for every insurance company, who would then contribute £10,000 as part of that scheme. This would raise £1.5 million each year. He will also recall that I made a point about the amount of money coming into the Treasury as a consequence of the proposals before your Lordships tonight.
Lord Freud
My Lords, if it was done on a voluntary basis by the insurance industry itself, that would be one thing. If it is done through legislation that is another thing and that is the problem, but I have not given up on research. There are quite a lot of issues here. The Government do not spend a lot of money in this area and there is a kind of chicken and egg situation because we commission research only if it is of high quality, yet if there is nothing to encourage it you do not get the bids. There is lots more and I am working with my noble friend Lord Howe on trying to get more there. The noble Lord is pushing on an open door, which I am afraid someone else has slammed in all our faces.
I will close by saying that the Bill is a really positive opportunity. It means that we can provide financial support to the sufferers who cannot bring a claim for civil damages. We can do it quickly, with the creation of an industry-supported payment scheme. I am grateful to hear that noble Lords may try to amplify the Bill in different ways but that the determination of the House is to not see a delay. If we achieve that collectively, and pass the Bill in 2013, we can set up the scheme in April next year and get the first payments to people in July, with 300 people receiving, each year, an average of about £100,000. It is an important and essential piece of legislation and I commend the Bill to the House. I again thank everyone who has contributed, in the very high-quality way that noble Lords have, to this debate and ask the House to give the Bill a Second Reading.