Grand Committee

Thursday 20th June 2013 Grand Committee

Thursday, 20 June 2013.

Social Mobility

Thursday 20th June 2013 Grand Committee

Question for Short Debate

14:00

Asked by

[Baroness Tyler of Enfield]

To ask Her Majesty’s Government what action they are taking to promote social mobility, and what assessment they have made of the impact of factors such as character and resilience on individuals’ prospects.

[Baroness Tyler of Enfield]

My Lords, social mobility is part of a fair and just society. The belief that children from poorer families should have the same opportunity to succeed in life as children from wealthy families is something that rightly unites politicians across the political spectrum. Yet social mobility in this country is at least flat-lining and, although statistics in this area are always open to interpretation, many commentators believe that it has gone into reverse.

To illustrate this point, the first politician I am going to quote—and this may surprise your Lordships—is Michael Gove, who said recently:

“More than any other developed nation, ours is a country in which your parentage dictates your progress … those who are born poor are more likely to stay poor and those who inherit privilege are more likely to pass on privilege. For those of us who believe in social justice this stratification and segregation are morally indefensible”.

For me, nothing demonstrates this more starkly than the fact that although just 7% of pupils are privately educated, they account for 59% of our Cabinet Ministers, 45% of our senior civil servants, 15 out of 17 of our Supreme Court judges and heads of Division, and 54% of our country’s leading journalists. While one in five children is on free school meals, this can be said of just one in 100 Oxbridge entrants.

Since what has been called the golden age of social mobility, starting in the post-war years until the 1970s, things have fallen into decline. As the recent report by the Social Mobility and Child Poverty Commission shows, our leading universities may be some of the best in the world but over the past 10 years they have become less, not more, socially inclusive and increasingly the preserve of the elite. I am sure that other noble Lords will want to comment on this point.

The gap between the rich and the poor does matter. The influence of parental income on the income of children in Britain is among the strongest in the OECD. Parental income has more than one and a half times the impact on male incomes in Britain compared with Canada, Sweden and Norway. We also know that income inequality in Australia and Canada is similar to the UK, but they have significantly higher levels of social mobility, on a par with Sweden and Norway.

So what is going wrong? It is to the credit of this coalition Government that they have made social mobility a central plank of their social policy, and I welcome the efforts already made to tackle the barriers of disadvantage. I strongly welcome the Deputy Prime Minister’s announcement of the social mobility business compact to help ensure that all young people have fair access to job opportunities; the recent increase to the pupil premium budget to provide extra support to the most disadvantaged children; the extended access to early years education for disadvantaged two year-olds; and the additional help to get young unemployed people back into work or learning through the youth contract.

What more could and should be done? The All-Party Parliamentary Group on Social Mobility, of which I am vice-chair, has sought to shine a spotlight on some critical areas of debate that are all too often overlooked. The APPG report, 7 Key Truths about Social Mobility, set out the key issues on which policy should focus, looking at the unequal opportunities that start in the earliest years of life and too often persist and widen in later life. These truths cover the importance of the early years in the home; the critical importance of education, including both the quality of teaching and extracurricular activities; the pivotal role of access to universities, including part-time study; and the need for other pathways to mobility, such as apprenticeships.

The final truth, which I want to focus on, is that of character and resilience, something the All-Party Parliamentary Group saw as the missing link in the chain. Character and resilience are somewhat amorphous terms, which some might choose to dismiss as fluffy or cosmetic soft skills. In fact, the very term “soft skills” strikes me as something of a misnomer. Far from being fluffy, developing character and resilience is about developing the fundamental drive, tenacity and perseverance needed to make the most of opportunities and to succeed in life, whatever the obstacles. It is about self-esteem, self-discipline, aspiration and expectation. In everyday language, it is about believing you can achieve, understanding the relationship between effort and reward, sticking with the task at hand and bouncing back from the knocks that life inevitably involves.

Recent survey evidence from the Prince’s Trust tells us that young people from affluent backgrounds are more likely to be told by their family that they can achieve anything, and that one in four young people from poorer backgrounds felt that people like them do not succeed in life; if they have, for example, failed an exam or been turned down for a job, they are more likely to feel that they have already failed. There is also a growing body of evidence showing the link between developing the social and emotional skills and doing well academically and in the workplace. Research by the IPPR indicates that personal and social skills have become 33 times more important in determining life chances, while soft skills have become 10 times more important in determining future incomes in a single generation. Paul Tough’s recent book, How Children Succeed, also illustrates the ways in which character skills contribute to cognitive ability along with the American Nobel prize-winning economist James Heckman, who found that character traits are just as predictive of academic or job success as more traditional cognitive skills and, indeed, that the two are very much linked.

The really good news from all this research is the evidence that these character or personality traits are not innate. They can be taught and developed through life. Heckman has shown that investing early in these skills, particularly with disadvantaged children, generates strong economic returns. Looking exclusively at earning gains, returns to cash invested can be seen to be as high as 15% to 17%. These so-called “soft skills” can lead to hard results.

In the light of this evidence, the All-Party Parliamentary Group, with generous support from the Open University, hosted a character and resilience summit earlier this year. Whether hearing from Tony Little, the headmaster of Eton, on how he teaches his pupils about dealing with failure, or Camila Batmanghelidjh, the founder of Kids Company, about working with some of the most deeply traumatised children in the country to rebuild their basic self-worth and faith in life, the summit confirmed to me that, for those who care about social justice, developing character and resilience is essential. As Alan Milburn, chair of the Social Mobility Commission, who was present on the day, emphasised, it is not ability that is unevenly distributed, it is opportunity. In order to overcome this disparity, what he describes as the “Berlin Wall” between state and private sector schools needs to be broken down.

We heard about some great work going on in state schools, too, with examples of volunteering in the local community, outdoor activities which put pupils outside their comfort zone to develop their resilience and a really wide range of imaginative extracurricular activities. Indeed, we heard schools saying that developing such traits is now their core business and that, for employers, these less tangible skills of sticking at it, not giving up, empathy and teamwork are precisely what they are looking for in potential recruits. Overall, the message that we heard from academics, head teachers, employers and charity leaders alike is that, whatever qualifications you might have, where you are on the character scale will have a big impact on what you achieve in life.

Successive Governments’ efforts to narrow the gaps between the rich and the poor have largely focused on exam results. However, as the stark trends I outlined earlier show, just more of the same will not be enough. It is necessary, but it is not sufficient. That is why I call on the Government today to take more account of this growing evidence surrounding the role of character and resilience in improving social mobility and to start putting it into practice.

I have a few ideas to offer. More could be done in early years, working with health visitors and children’s centres, linked to the expansion of free early years education. To break down that so-called “Berlin Wall” between the state and independent sector schools, practical incentives are needed to encourage sharing of approaches and good practice. I would like to see schools being able to allocate greater space in the state curriculum for volunteering, sports, drama and music to help to bridge the gap, as well as using PSHE and citizenship to the full. I would particularly like to see the pupil premium being used directly to develop character and resilience and the identification and spread of good practice. Teacher training should include models for effective teaching of character and resilience. Because we all know what really drives behaviour in schools, I would like to see the Ofsted framework developed to include the importance of character and resilience to learning outcomes, and that reports and inspections say how effectively this is being addressed. These are just ideas, but I would welcome an assurance from the Minister that these and other ideas will be taken seriously as policy is developed.

I conclude by asking why this matters so much when in economic terms the case is clear. Studies suggest that reaching international benchmarks on social mobility could be worth around £150 billion a year in the UK, or the equivalent of a one-off increase in GDP of 4%. However, socially and morally the case is overwhelming. Someone who has overcome disadvantage, persevered in the face of adversity, and shown real strength of character is surely the one who deserves the opportunity to succeed and share in the rewards that society has to offer. Surely that is what a just society is all about.

14:10

[Baroness Perry of Southwark]

My Lords, I welcome this debate and I congratulate my noble friend on her excellent speech. Most particularly, I welcome her emphasis on character and resilience as factors in any individual’s prospects. Although Governments have a role in ensuring that any barriers to mobility are removed and that opportunity is open to all, no Government can determine how any individual will live his or her life. Upward mobility comes from individuals grasping opportunities, working hard against the odds, leaping over barriers, setting themselves high goals, and often swimming against the stream of their own community and background. These things are done through character and resilience.

Although I rarely speak in personal terms, today I want to illustrate why I believe so strongly in the response of individuals to opportunity by telling a personal story. I am immensely proud of the women of my family across three generations before me. My great-grandmother, the first of the three, was a working-class girl from Sunderland. She was widowed while still a young woman and was left, as I understand it, almost destitute. Too proud to seek charity, she turned her hand to taking in washing to support her family.

Despite this, she was determined that her daughter, my grandmother, would have an education. Each week she would put a penny of her hard-earned income into a tin on the mantelpiece to pay the fees for the Dame School her daughter attended. My grandmother proudly told my sister and me that although she was only a little girl, she realised both that her mother could ill afford the weekly fee and that she was needed at home to help with the huge barrels of washing, which were the family’s business. Therefore, she told us, she worked really hard to complete the work for her school leaving examination and graduated, as they say, at the age of 10 instead of 11. Incidentally, despite the short spell of her education with an unqualified teacher, my grandmother wrote beautifully in an elegant script with perfect grammar and spelling, and read newspapers and books voraciously until her death at the age of 87.

The second of these women, my grandmother, had clearly inherited the character and resilience of her mother and was determined that her daughter, my mother, would have an even better education. Facing up to the prejudices of her husband, who said, “What’s the point of education for a girl? She’s going to get married, isn’t she?”, my grandmother’s fight was with him to ensure that my musically gifted mother won a scholarship to grammar school, stayed on for the sixth form, and gained both her teacher’s certificate and musical qualification from the Royal College of Music.

So we come to my gifted, passionate about education, aspirational mother, the rightful heir to her two female forebears. My earliest memories are of her 12-hour days spent teaching, marking, preparing lessons, cooking, cleaning and caring for her husband and two daughters. She coached us in our schoolwork and cheered us on to succeed at whatever we chose to do. I am for ever grateful to her.

These splendid women had strong characters and enormous resilience. They had little help from the state, but grasped every opportunity that came their way. They are, I believe, a paradigm for the determinants of social mobility. Governments of course have a duty to ensure that opportunities are there to be grasped and that the barriers of prejudice, injustice and low aspiration are removed. This Government are working to do just that, but ultimately it is people, women and men of determination who take their destiny into their hands and move from deprivation to aspiration. Such individuals shape not only their own destiny, but in so doing they move the whole of society forward.

14:14

[Lord Knight of Weymouth]

My Lords, it is a pleasure to follow the noble Baroness. Listening to her stories, I commend to her Alan Johnson’s memoir of his childhood, which tells a similar and brilliant story. I say at the outset that I have just started working for Brent Council, chairing a commission on social mobility, which reflects on the achievement in their schools, which are now outperforming the national average but with no impact on social mobility or poverty. The council wants to understand that. That reflects my interest in community social mobility as much as individual social mobility. I very much welcome the debate and the way in which it was introduced by the noble Baroness, Lady Tyler.

By happy coincidence, today is also marked by Ofsted publishing its excellent report, Unseen Children: Access and Achievement 20 Years On. It is a welcome return by the Chief Inspector of Schools, Sir Michael Wilshaw, to focus on outcomes for disadvantaged pupils in England. Ofsted has found that underperformance is no longer dominated by areas with concentrations of deprivation. There is an explicit acknowledgement of the success of Labour’s London Challenge, set up by Stephen Twigg MP and then taken over by the noble Lord, Lord Adonis, the subsequent Manchester Challenge, overseen by the noble Baroness, Lady Hughes, and the Black Country Challenge, which I looked after. Those challenges used data to shine a light on underperformance and to identify top-performing leaders who could then support and challenge those schools and leaders who needed it most. The report therefore points to the importance of collaboration and to Governments taking a strategic approach to focus attention where improvement is needed.

I very much welcome the message from Ofsted that the rest of the country can learn from London. If Hackney, Newham and Tower Hamlets can raise results for free school meal pupils by 20% over five years and be 15% to 20% better than the national average, then anyone can. In the same period, my home county of Dorset managed only a 2% improvement for free school meals children, remaining 10% below the national average for those poorer pupils. It is high time that we shook schools in rural and coastal areas out of any complacency and used data to expose the underachievement of those who need good education more than most.

If we solve those problems in school, would we solve the problems of social mobility? Sadly, we need to do more. As the noble Baroness, Lady Tyler, said, we need to build resilience, to build the capability of all of us to deal with mistakes, to take risks and to learn from failure, to celebrate that failure, to have the traditional stiff upper lip but with empathy. That resilience is being strategically built in London boroughs such as Newham and Islington at both community and individual level. Alongside Every Child a Reader and Every Child Counts, Newham has Every Child a Musician as a programme and, as a council, has a huge volunteering programme for 7,000 elderly people. Elsewhere, organisations such as the Transformation Trust and Future First are doing a great job in offering after-school activity and state school alumni programmes which mirror some of the success of the private sector.

If we build resilience, will that do the trick? Another great obstacle remains. That is the poverty trap. I cannot see how children can get the support that they need at home, working with schools, or a richness of aspiration when they are burdened by acute poverty. Growing numbers of families, in Devon as much as Durham, are dependent on food banks to feed their families. The shortage of affordable housing to rent or own is common across rural and coastal areas and leads to overcrowding and very difficult study environments for children. Free-school-meal children need free school meals, but they are being cut. Rising debt leads to relationship breakdown. All of those features of poverty are getting worse. We need a welfare state that is not about managing poverty but more about helping people get out of poverty.

The Government are making life very uncomfortable for people dependent on welfare, but lack of time prevents me giving your Lordships anecdotes of the stories I have heard by those affected by the single-room rate and the benefit cap in Brent. The poverty trap is deepening, and increased homelessness, criminality and child poverty is the natural consequence. That in turn will further damage the social mobility and our country will continue to pay the price in a tragic waste of talent.

14:18

[Baroness Sharp of Guildford]

My Lords, I thank my noble friend Lady Tyler for introducing the debate and apologise to her and other Members in the Chamber for my being a few moments late. It was one of those annoying times when the first train was cancelled and the second got stuck outside Waterloo. I do apologise.

I very much appreciate the degree to which, by having this debate, my noble friend has focused our minds on the work of the APPG and, in particular, the report, with its seven key truths about social mobility. I was particularly struck by the commonsense definition of social mobility: the extent to which where you end up in terms of social class is different from where you started. It pointed out that that means that sometimes, people go down as well as up. It is also linked with a sense of happiness and well-being. You need to have aspirations—this comes out in character and resilience—and to have aspirations you need to be able to see a better future for yourself.

I want to concentrate my remarks on the universities as a key determinant of later opportunities. Great strides have been made in widening participation over the last two decades. For those in the socio-economic bracket of the lowest 20%, the difference in participation has gone from 9% in 2004 to 14% in 2011-12, which is very significant. For the bottom two quintiles it is now up to almost 20%, but that compares to 45% for the top quintile. It is therefore interesting that whereas the introduction of tuition fees has seen a 2% to 3% fall-off in application rates from the top quintile, this is not true of the bottom quintile. Those in the lower socio-economic brackets have actually maintained their participation rates rather than falling off. Equally, it is still three times more likely that if you come from the top economic group, you will go to university—and disproportionately so if you go to a private rather than a state school.

The publication earlier this week of the Social Mobility and Child Poverty Commission’s Fair Access Challenge in relation to universities, which reprised a report that it published last year, reminds us that while the general feeling in relation to universities is positive from the lower socio-economic groups, in the top Russell group universities the participation from those bottom groups is far lower, and fell during that same period of 2004 to 2012. Much of this, as the Seven Key Truths report makes clear, is because state school pupils do not achieve the required entry grades. This is why it is so important to improve the quality of teaching and teachers in state schools. As the noble Lord, Lord Knight, indicated, this is possible. The position of the London boroughs shows so well what can be achieved.

However, the conundrum is that there are still something like 3,700 or so young people who achieve the required grades but do not apply. This suggests that the widening participation message is not reaching them or, perhaps more significantly, their teachers. The message to the Government from this is that we most not relax the widening participation agenda, whether it is through pressure from OFFA or HEFCE’s funding towards widening participation.

I should like to flag up two very important issues. First, on information, advice and guidance, there has been an almost complete collapse of careers education in schools and it is absolutely vital that young people get good and relevant advice. Secondly, the national scholarship programme needs reform. Most of the funding for this comes from the universities themselves, some of which use it for fee remission and fee waivers. Research has shown that this is much less effective than such things as supporting summer schools and outreach programmes. We need to be much smarter in using this money.

14:23

[Lord Northbourne]

My Lords, in the time available I shall attempt to make only one point. There is no doubt in my mind that upward social mobility in our society—funnily, nobody ever speaks about downward social mobility—can be unfair to individuals and a lack of it can impoverish society. In spite of the withering critique by Civitas in the report that was published for this debate, I still believe that there is an extraordinarily strong case for encouraging upward social mobility. Like other noble Lords who have spoken, the Sutton Trust focused on the link between poverty and lack of social mobility. I recognise that that is extremely important, but we should by no means be perceiving it as the only cause or problem. There are other causes. The Government have done a lot to intervene and to support parents when their relationships break down or when their family falls apart. In my view, however, I question whether they are doing nearly enough to prevent these things happening in the first place. There is a real opportunity for prevention by doing more in schools to prepare young people for the challenges, responsibilities and opportunities of adult life.

There is a particular window of opportunity during adolescence around key stage 3, when most young people are eager to know more about the adult world they see looming ahead of them. In the best schools they get well trained teachers helping them to discuss and work out their hopes and problems—to think about and discuss the opportunities, challenges and responsibilities they will meet in the adult life that lies ahead of them.

Sadly, in the vast majority of schools, little or nothing is being done today to give pupils the help they need, while all the time commercial pressure and the media are doing their best to mislead them. Why are we not helping young people more?

There is a nominal entitlement to PSHE at key stage 3, but the recent Ofsted reports make it perfectly clear that in most secondary schools today, if PSHE is on the agenda at all it is delivered by teachers who have no specialist training in this subject. This is a seriously missed opportunity.

Help at that stage could bring two things. It could help the young people themselves to live better and fuller lives throughout their life. And it could also lead to their future children to have more stable and supportive environments in their families as they grown up.

I beg the Government to do more to help and lead young people to think more about the adult lives which lie ahead of them and to learn how to cope with the inevitable problems they will have to face from time to time. I beg the Government to set aside a little money—at least just a little money—to fund some of the teacher-training universities, so that they can research and develop programmes for that kind of teacher training. I know one that would be interested.

14:27

[The Lord Bishop of Derby]

My Lords, I want to remind us of the context that a number of us have mentioned. Since the mid-1970s, there has been an increasing gap between those at the top and those at the bottom. That is the pole that we are talking about in terms of social mobility. We have three big groups now: those who are doing well; those who are surviving; and those who are dropping below the radar—that is the point made by the noble Lord, Lord Knight, about the poverty trap.

As other noble Lords have mentioned, social mobility between those poles implies the reality that some people are going down. I want to focus on that briefly, alongside the proper aspiration to help people go up. People will always be going down as well as up. If the measure is an economic and occupational one, we will struggle. We need other measures really to go for what I would call social inclusion. We should not talk about social mobility without talking about social inclusion, so that we reach out to those who are going down.

We know how easy it is for people to fall out of being included. There are emphases on particular skills or educational models which some people cannot access. We have a winner-take-all mentality, so we discard people quite easily. Sadly, the media and public attitudes are quite harsh towards those who are poor and in the poverty trap. There is a great deficit of compassion in our society. That is why the linking of this with character and resilience is so important. That is where we can be inclusive socially, whatever is happening economically or occupationally.

It was very inspiring to hear the family story of the noble Baroness, Lady Perry because resilience and character are not individual things; they are relational. One of the things that must be part of this mix is government doing all it can with others to support resilient families—like that of the noble Baroness—so that that can be a base for character and resilience in individual lives.

I want to give two brief examples from my own context. I am the Bishop of Derby, and Derby College works with the Prince’s Trust Team Programme. I have had contact with and heard the stories of people with Asperger’s syndrome, dyslexia, impaired vision or family breakdown—all the factors that get someone down and put them out of the loop. Through simple mentoring programmes and plenty of encouragement, character and resilience is built up, and there are many inspiring stories of people getting back into the game.

The charity JET is situated right in the middle of Derby. It is all about jobs, education and training. It brings together youngsters from testing environments and their schools recommend the programme for them. Through the mentoring and work experience that is available through engaging with this scheme, on average these youngsters’ exam grades go up fourfold. Simple things being done by small organisations can complement the family and give people character and resilience.

The point I really want to make is that character and resilience are not important simply so that someone can be more economically active; more important, they are the stuff of citizenship. We need the FE sector and charities like JET in Derby to build up the character and resilience of citizens so that when they are going down, as will happen, they have the qualities and resources to engage and get back up again.

I want to end with a number of questions for the Minister. Will he comment on the issue of social inclusion for those who are pushed downwards by the fact of social mobility? Could he also comment on the role of FE colleges and voluntary sector organisations in this? How can the Government support the formation of resilient families? Lastly, as young people build character, how can they develop a portfolio that they can carry around with them to show employers in the same way they show their exam results? How can we help young people to demonstrate that they are team players and are willing to turn up regularly? How can they show that they are characterful and resilient citizens? We need some kind of award, which would be a way of accepting and applauding the development of those skills.

14:31

[Baroness Miller of Chilthorne Domer]

My Lords, I warmly thank my noble friend for enabling us to discuss this important issue. I think I subscribe more to the idea of equality than to that of social mobility for the reasons that the right reverend Prelate has just set out so well. It is gone into in depth in the book, The Spirit Level: Why Equality is Better for Everyone, and pursued by the work of the Equality Trust. Nevertheless, I recognise that character and resilience are very important, but perhaps noble Lords will dwell for a moment on how much character and resilience a child can have if they come to school without having had any breakfast and with perhaps just a Mars bar for lunch. Obviously, it does not mean that a child will not have any character, but the fact is that the child’s body will be in a much less good state for learning.

I have the privilege of chairing the All-Party Parliamentary Group on Food and Health. We have heard from a number of academics over the years about the impact that diet has on children’s ability to learn and on their life chances. Many noble Lords have spoken in this debate about the importance of education, and indeed my noble friend in her excellent introduction said that it is critical. If children are not able to learn because their diet is too poor, they are crucially disadvantaged for their entire life.

I can give some specific examples of this, one from Professor Andrew Scholey, the director of the Human Cognitive Neuroscience unit based at Northumbria University. The study he presented to our group compared the cognitive effects in children of two different breakfasts. One had a high glycaemic load—Coco Pops—and the other a low glycaemic load—All-Bran, but it could have been porridge. He found that the low GI breakfast is much more effective in protecting against a decline in performance. Other work on this has been done jointly by Nuffield College and the University of Essex showing effects on memory and attention span. Indeed, a survey by the Local Authority Catering Association found that snack foods that are high in sugar and fat produce problem behaviour. We can definitely say that a healthy diet improves children’s behaviour and academic performance. Of course, if you are badly behaved in school to enough of a degree, you end up being excluded, at the worst end of the spectrum, or possibly on Ritalin, because your diet means that you are on a permanent sugar high. There has also been much national and international research into the effect of vitamins, minerals and other compounds, such as amino-acids, on brain chemistry. Among the nutrients known to affect mood and behaviour are zinc, essential fatty acids, vitamins B5 and B6, calcium and magnesium.

I am sure that when the family of the noble Baroness, Lady Perry of Southwark, was going through that tremendous educational attainment, the diet may have been more basic but would have been more likely to contain the nutrients I have mentioned than the diet of today’s children. So the first problem is diet. The second problem is the lack of breakfast clubs. My final question to the Minister is: will he encourage Sir Michael Wilshaw at Ofsted to address this issue and not belittle the role of food in attainment?

14:36

[Lord Bilimoria]

My Lords, the claim that social mobility in Britain has been falling is made regularly. On the other hand, a lot of the research on class mobility does not support this. Lots of studies have found that, if anything, relative class mobility—the probability of a working-class child getting into the middle class and a middle-class child ending up working class—has been rising since the 1950s. There is no question about it, however, there is a relationship between inequality and earnings elasticity. The Gini coefficient—a measure of inequality—has been rising over the last 20 to 30 years, particularly in countries like the United Kingdom and the United States, but also in Australia and Canada.

There is no question that there is a relationship between earnings and the benefit of going to university. On the other hand, there is a correlation between higher spending on higher education and higher levels of mobility. The reality is that we underinvest in higher education compared to the United States, compared to the EU average and compared to the OECD average. We do not invest as much in higher education as we should.

Despite this, however, our universities are doing a good job. Universities UK has shown that there has been a 30% increase in the proportion of young people from our most disadvantaged backgrounds entering universities since 2004. Progress is therefore being made. Are the Government are aware of a fabulous programme called GEEMA, the Group to Encourage Ethnic Minority Applications, at the University of Cambridge started in 1989 and in which I have taken part? It is a wonderful programme whereby the ethnic minority undergraduates at Cambridge take a week off during the summer and state school children from ethnic minority backgrounds, whose families invariably have never had a background of education in their history, come to spend a week in Cambridge and experience a week in the life of Cambridge University. This programme has a phenomenal effect on creating aspiration among these children, many of whom end up going to Cambridge itself. The programme has helped increase the number of BME undergraduates from 5.5% to 15%. Could the Government roll out this sort of programme in more universities around the country?

Our academies are doing a great job, but as somebody born and brought up in India who came over here to be educated like others in my family for three generations, I believe that the biggest mistake this country made was getting rid of the grammar schools. We have deprived so many of our bright children of their ability to progress. I know that this is a controversial subject, but I strongly believe this.

I thank the noble Baroness, Lady Tyler, for leading this debate. She spoke about character and resilience. The headmaster of Eton College, Tony Little—and I declare an interest; my older son is there—has noted that boarding schools are the nation’s untapped asset. He has said that children learn more from each other than from adults. They learn more from outside the classroom than from within. There are so many ways in which we can learn from schools in the private sector—as the noble Baroness said they make up 7% of the total and they produce so much excellence—but unfortunately they are not available to everybody.

I conclude by saying that I have seen with my own eyes the change in this country from when I came as a student in the early 1980s, when there was no aspiration but there was a glass ceiling. That glass ceiling has now been shattered and there is the ability in this country for anyone to get anywhere, regardless of race, religion or background. That culture is so important because those people’s success creates inspiration; inspiration creates aspiration; aspiration creates achievement; achievement creates inspiration. It is a virtuous circle.

14:40

[Baroness Sherlock]

My Lords, this has been a great but very short debate. I am so sorry that I have only four minutes in which to respond, so I cannot possibly comment on the many wonderful speeches. However, there was some clear consensus around the Committee today. First, we all think that social mobility is good. We must also acknowledge that if we allow inequality to continue at the current level, it is inevitable that social mobility will require some people to go down as well as up, and perhaps go down quite a long way. Perhaps I can tempt the Minister to depart from his brief briefly and look at the way that someone like John Rawls might have encouraged us to think about the circumstances in which, given a choice of an equal or an unequal society, but with no way of knowing where we might end up in the distribution, most of us would come down firmly in favour of a more equal society. What might that tell us here?

With the possible exception of the noble Lord, Lord Bilimoria, there was also a recognition that social mobility is in trouble in Britain. After my first visit to the United States, I came away both impressed and shocked, feeling that I had come across a country which had very low social mobility but believed passionately in very high social mobility—hence the American dream. As my right honourable friend Ed Miliband said in a speech last year on this subject, the reality is that if you want the American dream, go to Finland. One of the challenges we have in Britain is that our social mobility is pretty poor by OECD standards, and slowing. We therefore have a problem; so what do we do?

I think we have all agreed that education is crucial. I will not repeat the many interesting ideas that have been put forward there. Most of us would agree that early intervention is also crucial. The previous Labour Government were very committed to this, as I am sure noble Lords will accept. We created Sure Start and invested in thousands of children’s centres. We also provided support for early years education and for disadvantaged pupils, and the attainment gap narrowed as a result. I worry about some of the changes in recent years. I am concerned at moves such as the scrapping of education maintenance allowance and the closure of children’s centres, and what that might mean down the track for opportunity.

I was pleased to hear both my noble friend Lord Knight of Weymouth and the right reverend Prelate the Bishop of Derby draw attention to some of the really severe barriers at the bottom where, with the best will in the world and even with lots of character, there are some pretty huge hurdles to overcome if one does not even get enough to eat, never mind having the kind of support that comes in other homes. That point was also made by the noble Baroness, Lady Miller. I, too, was hugely impressed at the great lineage that has produced the noble Baroness, Lady Perry. That clearly explains why we see such a force of nature here among us today.

I was also very interested to hear about the question of character because, aside from all the other questions, character and resilience are clearly important. I did a stint on the Riots, Communities and Victims Panel, which was set up to look into the 2011 riots. One thing we found was clear evidence that as well as enabling young people to take advantage of opportunities, character and resilience could mean that when a split-second moment of crisis came and someone had to make a choice that could be life changing, they would be enabled to make a good choice at that moment and not a bad one. It has real benefits both ways round. Given the comments made by the noble Baroness, Lady Tyler, to whose work and that of her All-Party Parliamentary Group I pay tribute, about the formation of character being as important—if not more important—than the acquisition of knowledge or other things, do the Government feel that that is reflected in their approach to the curriculum? I would be interested in the Minister's response on that.

I am with the right reverend prelate the Bishop of Derby on this: we need to be quite careful of being overly utilitarian. If we want to invest in character in order to get certain results, there is a slight danger that that is like trying to become happy, when it is by doing other things that one becomes happy. In that respect, in preparing for this debate I looked at various sources, including the Lexmond and Reeves 2009 report for Demos. I was childishly thrilled to find that they began with Aristotelian ethics. It was a fascinating notion. When Aristotle wrote about ethics, he was trying to set out the ways in which people could become better or pursue the good. However, they also told us that the closest translation of ta ethika was not, in fact, “ethics” but “matters to do with character”. In other words, character represents a set of life skills, not a moral disposition.

That tells us something quite exciting, I would suggest. It takes us to a view of character as a shorthand for a set of personal capabilities that research shows to be linked to a range of interesting positive outcomes. The report describes it as well-being. As the right reverend Prelate the Bishop of Derby said, that needs to be understood as well-being in its broadest and deepest sense of human flourishing. If we have people who are flourishing, we will find people who are more likely to succeed, make the right decisions at crisis points, do better in exams and get more fulfilling jobs, but they would also be better people and would build a better society. That is the prize really worth having.

14:45

[Lord Wallace of Saltaire]

My Lords, we have had a really good Moses Room debate. As I have experienced on several occasions, it is something like an academic seminar, from which one learns a good deal. I thank the noble Baroness, Lady Tyler, partly because I should have been reading a lot of this stuff before and she made me read it. We have had a very interesting and informative debate in which I have to say that the speech of the noble Baroness, Lady Sherlock, was one of the most interesting and inspiring. I hope that we will now go away and start arguing about this more actively in our parties and groups to take it forward.

I have a speech with a whole range of statistics on what the Government are doing about social mobility, but I want to concentrate on character and resilience, which is the bit that has not been as emphasised in dealing with social mobility as it should have been.

I was originally a bit of a cynic about the big society, the national citizen service and community organisers, until I went to see a national citizen service scheme in Bradford last summer and spent a long afternoon with children from what I know to be some of the roughest schools in Bradford, when I was asked to teach them how to give a speech. It was fascinating, because I realised that I was dealing with people who thought that they could not do things, that they could never stand up in front of others and perform. I managed to persuade three of them to do so. I began to see that that course gives you that much more confidence to believe that you can do things which before you thought that you could not. I am now a strong proponent of national citizen service. We are expanding its coverage this summer. Of course, it is only one of the many elements that we need, but it is giving children at different levels more opportunity to realise: “I can do that”. It teaches them how to volunteer and to take part in community activities. That is exactly the sort of thing that helps.

Similarly with the community organisers’ scheme. In Yorkshire, I see the problems of social mobility most of all in the big, almost entirely white estates in Bradford and Leeds—and occasionally in Sheffield and Hull. There is very high unemployment, a lot of intergenerational unemployment and a deep sense of grievance that the local authority does not look after them, but they do not actually look after themselves very much. There is a high incidence of Staffordshire bull terriers. There is a sense that nothing much is being done for them. The community organisers’ scheme tries to get them back into the habit of thinking that they could do some things for themselves with themselves, the local authority and local voluntary organisations. That is how you start to rebuild a community, because, as the right reverend Prelate said, the collapse of local community is part of the problem here. Your nonconformist church, your established church or whatever gave you a lot of those skills as you grew up within it. Sunday schools were not just about learning the number of books in the Old Testament, there were a lot of other things as well. That part of what the Government are doing is useful.

I declare an interest. For the past seven years, I have been chair of a musical charity. I was bounced into it by some young men who have been choristers at Westminster Abbey a long time after me, who decided that they were going to set up not only a choir but something that would bring music into primary schools. Two weeks ago, as they took over a church in the City of London, the right reverend Prelate the Bishop of London and I watched the Hackney Youth Children’s Choir performing. Evidently from their clothing, they were children from deprived backgrounds, standing up and performing in front of us and really enjoying themselves and therefore getting a sense that they can do things.

I believe that music in schools, as well as sport and getting people out learning to volunteer, is a very important part of building self-confidence. One of the reasons why the Parliament Choir is so good is that music teaches you two of the basic political skills: one, standing up in front of other people; and two, projecting your voice. Of course, that suggests that not everything we do on character and resilience needs to be done by government, let alone central government. A lot of this can be done by volunteers, by non-governmental organisations and by government—locally and centrally—and civil society working together.

A number of people have talked about early years and talking to small children. I have another personal interest in that I watch my two-and-a-half year-old grandson and am deeply conscious that the amount you talk to a small child comes right back at you over the months, and that those whose parents do not talk to them are a long way behind by the time they are three. In spite of the attacks in the Daily Mail, I am strongly in favour of local authorities and voluntary organisations providing parenting class incentives, explaining to young parents in particular what they can do for their children before they go to school, such as breakfast clubs and children’s centres. My figures suggest that actually the reduction in the number of children’s centres has been extremely small in the past two or three years. There has been a certain amount of merging and so on. We all recognise that this is a very important part of the mix of things that we need to do.

Moving on to what one does in the later years, I find it very depressing as I go around Yorkshire and ask people in pubs, restaurants and hotels why they employ so many Poles, Slovaks, Lithuanians and so on, and the answer is almost always, “Because they turn up for work on time, they do not take sick leave, they dress smartly and they want to get on”. Unfortunately, the children from these big inner-city estates tend to take a lot of sickies and often do not really want to work the hours that they would have to. We should be motivating them to think, “Actually, this is quite fun” and that living in Upper Wharfedale or wherever it may be for a bit might be also quite fun. It is not just a matter of forcing people to work and showing them what they can do but showing them that they can follow their own careers and that work cheers you up.

The noble Lord, Lord Knight, asked how we get people out of poverty. The best way to get people out of poverty is to get them into work—I think we all agree—and that is partly where character and resilience are needed to motivate all these people who are growing up, sitting around and complaining. I am conscious that I am caricaturing a little—but not very much. I have a vivid memory of an afternoon in Armley jail in Leeds talking to the “popos”—the persistent and prolific offenders—and thinking that these people actually had the talent to do things if they had only been directed and encouraged in the right way.

A number of other points have been made about state schools and public schools. The question of public benefit is clearly one that we need to revisit. I know that a number of public schools are sharing their excellent facilities with local state schools. That needs to be encouraged. It is something that they should be doing on their own anyway. They can certainly help with volunteering and getting out in local communities, and that is something that we should be taking a good deal further.

Universities and access were mentioned. Again, I have an interest to declare. When I taught at the University of Oxford, every year I used to take children from sixth forms in Wandsworth around Oxford. It was a disillusioning experience, I have to say. I did it because my children were at state schools in Wandsworth. The culture clash between many of the working-class children from Wandsworth and the admissions tutors at Oxford colleges was sometimes far too wide to be able to bridge. It is excellent that the Sutton Trust and others are doing a great deal with summer schools and access programmes. Partly re-educating the admissions tutors is a road we need to go down.

Apprenticeships help a great deal, particularly as we move towards keeping people in school until 17 and 18 and discouraging people from dropping out of education altogether. Giving people practical and directed work experience with apprenticeships is highly desirable. The number of apprenticeships has been rising over the past two years and we wish to take it a good deal further. Volunteering of all sorts—the Girl Guides, the Woodcraft Folk and all those other things—used to provide opportunities for this. We have to build that back in. As has also been said, this is all part of citizenship. It is not an accident that those big, working-class estates only provide a 15% turnout at local elections and about 25% at general elections. They feel completely disengaged, so we need to rebuild the local community for all these activities.

We have heard about a wider range of issues from my noble friend Lady Miller, the noble Baroness, Lady Sherlock, and the right reverend Prelate the Bishop of Derby on a more equal society and moral climate, which go wider than we can go on this occasion. We recognise that part of what went wrong over the past 25 years has been that we have become a much more atomised society, which valued wealth for its own sake and in which inequality has risen. Part of the argument that we all need to be making about taxation, personal reward and what companies and banks pay is that a society which is too unequal becomes a society which is very difficult to hold together. One loses a sense of common interest and community, locally, regionally and nationally. The banking commission hints at that in one or two places, but does not quite get sufficiently explicit on it; that sounds to me like a good role for the Church of England to take further in its contribution to the public debate.

Having made those comments as a wind-up to this seminar, I thank again my noble friend Lady Tyler for introducing this subject and for encouraging me to read a number of things which her All-Party Parliamentary Group has produced; I very much look forward to seeing what it produces from now on. I know that the Deputy Prime Minister and others are actively interested in the work of this group. We recognise that social mobility and inclusion are extremely complex areas. There is no single factor but a whole host of factors that come into play. I hope that we are all committed to building a more socially inclusive and coherent society.

14:45

[The Deputy Chairman of Committees (Baroness Gibson of Market Rasen)]

My Lords, we will now have a short break. The Committee stands adjourned until 3 pm.

Sitting suspended.

Financial Services

Thursday 20th June 2013 Grand Committee

Question for Short Debate

15:00

Asked by

[Lord Dykes]

To ask Her Majesty’s Government what measures they are taking to support the contribution of the United Kingdom financial services sector to the economy.

[Lord Dykes]

My Lords, I very much welcome this debate and thank the Minister for being in attendance to answer the important points that I hope will be aired. Inevitably, I must deliberately leave out some items. There is so much to cover. The Minister and others in the debate will be delighted to learn, I am sure, that I am not going to try to cover everything. It would be a great mistake to do so.

I begin by congratulating the Minister and his colleagues on the agreement on the markets in financial instruments directive that was reached in the EU the day before yesterday. As the FT said yesterday, this was a good day for Britain in Europe,

“protecting the City of London against discrimination—proof that Britain’s interests are best served when the government sits at Europe’s top table rather than outside the room”.

That is an important lesson for the future.

The Parnassian beauty of this debate is that everybody more or less has the same time—nine minutes for every speaker, I think—as a result of our modest but high-quality list, including my old friend from the City, the noble Lord, Lord Flight. We changed the phraseology of the Question because I did not want the old Question concerning the City of London to obscure the obvious reality that there are many financial institutions elsewhere in the UK, from the West End of London to Edinburgh and other great cities. That is a fact of decentralisation, which is also a good thing.

The overall background is also the vital factor of our membership of the European Union, and I am inevitably going to cover some points about Europe. Membership of the EU is crucial for Britain and I think that the madness of leaving is dawning more and more on sensible people, even some of the more old-fashioned of our colleagues represented by an uncomfortably large group of rather right-wing Tory MPs in the other place. The latest House of Commons Foreign Affairs Select Committee report spells it out loud and clear, although it wisely steers clear of the immaturities implicit in hysterical referendumitis. I welcome the elegant but firm rap on the knuckles for inexperienced British Ministers set out in paragraphs 26, 27 and 28 of the committee’s conclusions and recommendations. I also welcome the bulk, but not all, of the evidence given to the committee by Business for New Europe, which sets out a solid enthusiasm for our continuing membership of the EU for practical reasons.

I declare an interest as a former member of the Stock Exchange and of a large institutional stockbroking firm in the City for many years, and other City interests. Those of us who are proud of the good side of the City of London and its immense contribution to Britain over the years, including assisting the general public in myriad ways with practical financial instruments, were heartened by the flattering words in January of the Swedish Minister for Finance, Anders Borg, who said that for Sweden,

“keeping Britain in the EU is a very high priority. We have a big banking sector and a lot of work goes through the City of London. If the UK leaves the EU it could create a lot of problems”.

A balance is also needed between excessive adulation of the City, which is wrong, and unfair criticism. I hope that my own references to this in the debate that I opened in Grand Committee on 22 April on the dangers of UK isolation in Europe, at col. GC 290, in the last but two paragraphs at the end of my speech, caught that balance. We also need to grasp the fact that the other member states have some hesitations on the bad or toxic side of City financial activities, which came to their monstrous conclusion in 2007-08 and onwards.

Indeed, I detect that some of the right-wing comics that masquerade as newspapers in this country are less keen to say that brilliantly talented spivs who are good at fund management speculation and excessive risk-taking using other people’s money here will go abroad if we deny them lavish and unjustified bonuses or force them—horror of horrors—actually to pay conventional UK income taxes. If they insist, say I, let them go abroad.

Coming back to the positive aspects of our financial services sector, we can indeed be proud of what has been achieved here over the years on a secular growth basis. As we know all too vividly, this country usually has a large and uncomfortable physical trade deficit with most other advanced countries in the world with the possible exception, depending on the latest figures, of the United States, which is also a rather inefficient and heavy importer. Just as Germany is immensely proud of its industry—particularly its motor vehicle industry, which is one of the wonders of the world—we admire our own financial services sector for what it achieves in a non-visible surplus for us in direct and indirect investments, insurance, shipping and, of course, banking and fund management forms.

When government is called on to “protect” a valuable sector, I trust it will always be in the sense of upholding the single market rather than seeking artificial propping-up exercises, which would not be justified. Happily, our present coalition Government have always upheld the principles of transparency, free and open markets—with a genuine single market—and robust competition. The Prime Minister has moved away, thankfully, from calls for what seemed to be special unilateral privileges, as in the bizarre antics of December 2011 in Brussels, to asserting rightly the equality of conditions philosophy. I think that will now persist.

At this stage, I would particularly welcome it if my noble friend the Minister could bring us up to date on government thinking on the eurozone’s proposed financial transactions tax and our most recent responses, since it seems to have stalled somewhat as a formal proposal among some inner core member states. Even if talks resumed soon, I doubt whether it could commence before 2015-16 at the earliest. I assume meanwhile that the City of London Corporation is maintaining its strong opposition, although many foreigners are puzzled when, after all, we have a pretty onerous stamp duty system on quoted investments and property purchases in this country.

However, we remain highly integrated with financial markets within other EU members. I believe we account for three-quarters of foreign exchange trading in Europe, some 85% of all hedge fund assets and well over two-thirds of all interest rate derivatives, despite the fallout from the world crisis in the previous decade—a crisis which, we need to remember, started in the USA, apart from the Northern Rock debacle of the previous year. Just as official circles in the UK quite rightly hammer home the primordial need for the single market to develop more deeply in every sphere so that, EU- wide, consumers of goods and services can benefit from equal conditions in the theoretically perfect market set-up, so the other member states are justified in insisting that Britain remains a good member of the club and accepts freely agreed EU-wide legislation for market conformity in all spheres. The general public interest surely demands this in commonsense terms.

The mid-May ECOFIN meeting in Brussels highlighted some of these imperatives for, as usual, a raft of new Commission objectives in draft legislation were discussed to gain some progress in complex fields. I have already mentioned the markets in financial instruments provision; my thanks again to the Minister for what he has achieved there. There is the latest text of the market abuse directive, the mortgage credit directive, directive IV on capital requirements and the legislation drawn up to deal with money laundering. The amended text of the savings tax agreement with third countries and the Council draft for the EU savings directive were also discussed briefly at that meeting. If my noble friend the Minister has time today to refer to some of these, I will be grateful. I will understand if he is unable to cover them all.

In other large areas, does my noble friend have time to refer to the Government’s responses to the need to return RBS and the other taxpayers’ emergency stake in Lloyds Bank Group to the private sector and to shareholders, how the other leading banks are faring in returning to giving adequate support to UK industry and commerce and, if he has time, what position the Government take on the Co-op Bank crisis, which is a sad development? Finally, if he can deal even briefly with official attitudes to the latest developments in the attempts by the LSE and other leading bourses in Europe to achieve synergy and modernisation, I would be most grateful.

Perhaps it would be reasonable at the current state of play to ponder the future in a wider sense. I believe that the impact and success of the British financial services industry will continue, both as a great national asset and as a solid contributor to the overall strength and cohesion of the Union’s single market. What is disturbing, however, is the way in which subtle and sometimes not-so-subtle elements are creeping into this overall scenario which, particularly at times of severe socio-economic austerity in many parts of the EU, are in danger of increasing irredentism and fissiparous pulls among traditionally friendly allies within the 28, weakening the single market philosophy. We need to acknowledge that the others really and profoundly want us to stay as members, but seemingly not at the price of conceding to us anything other than the normative and steady moderations of the Union’s acquis, which for them is constant reform, and most definitely not the old-fashioned notion of reform that has been expressed in some parts of the other place in recent months.

It is never a weakness in framing sensible policies to appraise what the others think of us. They were not impressed at us being the odd man out so often in recent times. They were contemptuous when we failed to join them in the eurozone when it first started, and of course we were slow to offer them real support when their crisis over a smallish number of weak member states began in 2008. That is now water under the bridge and it is time for us to work together. We are taking the lead, I hope, in pursuing the tax evasion problem, particularly with France, Germany, Italy and Spain, which will also oblige us to deal at long last with our many island tax havens from the old Empire.

Finally, I would just add a reminder. Professor Pauline Schnapper, the leader in British studies at the Sorbonne Nouvelle University, reminded us recently that the EU has actually been evolving in a rather British direction over the past 15 years, showing greater pragmatism and empiricism alongside enlargement. That should help us even more to shun isolationism in the coming years. As I believe the euro will remain and in the future will be an even stronger international currency, I hope that one day we will regain our nerve and even join the eurozone.

15:11

[Lord Flight]

My Lords, first, I declare my interests as set out in the register, but which amount to 43 years in the investment management industry. Although I want to talk specifically about the initiatives in this year’s Finance Bill, I should say that when I started my career, I remember someone older than me asking, “Why on earth are you coming into this? London is too big and it only services the UK economy. It has lost all its international business”. He could not have been more wrong. One of the things that I am proud of over my career has been to see London return to being the major financial capital of the world, earning somewhere between £60 billion and £70 billion a year in invisibles that help to pay for so many of those cheap Chinese imports. Although the City is certainly subject to criticism, to regulation, and even to a Government policy that led to the banking crisis, it is an incredibly valuable asset to this country. For those who say that it is too big, I would just point to Hong Kong where the financial services industry is a far larger proportion of the economy, but because it got its financial regulation and economic policy right, it has never been a major problem. Rather than contract the City, let us expand other areas and get its regulation correct.

I want to speak about the initiative in this year’s Finance Bill which will set up the UK investment management strategy, a Treasury paper published back in March. I greatly welcome this. It is there to try to get more foreign fund management businesses to come to this country. That might obviously benefit those who work for them, as well as the lawyers, accountants, regulators and even HMRC because they would provide another source of income. By the way, I think that the total fund management industry represents around 1% of GDP, some £12 billion per annum, so as a sub-section it is pretty significant.

Thirty years ago, when my noble friend Lord Lamont was the Financial Secretary to the Treasury, I tried to persuade him to remove taxation on funds, then unit trusts, and put it firmly on individual investors in order to stop Luxembourg taking masses of new business which could rightly have come to London. The Revenue would not accept the argument, and so Luxembourg emerged with its huge industry of today, but at the time it did not exist. At last HMRC has got the message that this is an industry worth having in this country.

There is a level of serious commitment within the Government’s measures. First, there is the commitment to abolish the stamp duty reserve tax, of which there has been criticism for many years. Secondly, there is a commitment to make sure that the tax status of non UK-domiciled funds will not be affected if they are obliged to appoint a UK AIFM. I look forward to working with TheCityUK and the new Financial Services Trade and Investment Board to come up with an agenda of what I would call constructive proposals which might be politically possible, and I am glad to see that the IMA is coming up with good initiatives aimed at creating greater cost transparency in terms of the amounts charged by various funds.

There are obviously two key factors. One is tax; the other is regulation. The tax regime needs to be attractive for funds. It also needs to be attractive for the staff who might work for them; it needs to be competitive. Regulation needs to be, first and above all, good; and, secondly, it must not be too expensive or over-bureaucratic. Otherwise people will want to go to other places.

On the tax front, I remember some 12 years ago when I was seeking to drum up support for the Conservative Party in the City, one of the major world banks said to me, “We are totally happy as long as income tax remains at 40%, as introduced by Prime Minister Blair, and, secondly, as long as the pension plan arrangements aren’t interfered with”. Well, sadly, both of those have been lost. They were then boasting to me about the numbers of staff they transferred from Paris and Frankfurt to London. Do not forget that individual tax matters as well as the tax on the operations themselves.

I know that the Government are concerned because probably the largest fund management group in London has recently started shipping staff and a lot of its new business off to Luxembourg. I have explored that and it is really not about the taxation of funds; it is about the taxation of individuals. In particular, it is about what I think was a very unwise and aggressive taxation of non-doms relating to their property ownership, which for many will involve a 7% per annum mansion tax. For funds and the fund management business, broadly the tax regime over here is fine; and as corporation tax comes down to 20% for fund managers it becomes an attractive tax regime.

Again there is some very interesting data here in the Government’s paper. The volume of funds managed has risen from £2.7 to £5 trillion in the past six years. Where this paper is slightly mistaken is that while it initially focuses on the volume of funds managed in the UK, which is what matters, it also focuses on the domicile of funds. In fact, managing the funds—irrespective of where they are domiciled—is where employment and revenues come. It is much more important to keep the UK an attractive place to manage funds that are not actually domiciled here. There is a slight error there.

The second mistake is that the paper suggests that the new AIFMD regime may be good for the UK as it will encourage funds to be domiciled here. I think it is serious bad news for the UK and will lead to a significant loss of business. It is very expensive and very hasslesome. Anyone who is managing funds which are not to be marketed to the EEA and EU are going to move elsewhere and, indeed, are starting to move elsewhere—predominantly to Singapore and Hong Kong.

I am no great liker of hedge funds and have never invested a penny in one, but there is a great misconception in Europe that hedge funds caused the financial crisis, whereas it was money being easy for too long, bad regulation and so forth. It was really the banks and not the fund management industry that led to the trouble. In terms of regulations, the FSA as it was had become unnecessarily hostile to the fund management industry. Many reputable businesses said to me that they did not want to raise their criticisms of certain regulatory initiatives because they were frightened of retribution. There was a breakdown in communication. However, in Luxembourg, again, they virtually embrace you with both arms and offer you all manner of inducement and attraction if you will come and bring your business to them. I am pleased that the Treasury is “in discussions” with the FCA on that territory.

London obviously has a huge amount to offer: lots of people with high skills, a wonderful place to live, wonderfully international and so forth. However, I think that there is one danger of undermining all these attractions by an increasing nightmare of regulation. It is not just an AIFMD; the threat of the transaction tax would be a disaster for London and the trickle-down effect means often that it would turn out to be at least 1%. I hope that the Government will go to extreme measures to stop it happening—although I am hopeful that Merkel wants to give it up once the election is over We will now have to put up with EMIR. The Government have done quite well on MiFID II but are still somewhat protectionist towards third country suppliers. We have ESMA wanting to take over regulation in this country. Candidly, I have never known a more exhausting time of masses of excess and useless regulation, particularly the AIFM report. No one will read it—it is so voluminous and completely unnecessary.

Contrary to my noble friend Lord Dykes’s extolling of the situation, the main threat to the UK fund-management industry is the regulation coming from the EU. I end by saying that it was a great mistake of the previous Government to surrender sovereignty on financial regulation to the EU. We are inevitably vulnerable because some 70% of all financial transactions for the entire EU are done in London. I do not particularly blame Paris and Germany for thinking that they would like to have a bit of the cake and to encourage measures which might lead to that. As someone in the industry, I see that as the biggest threat.

15:20

[Baroness Goudie]

My Lords, I thank the noble Lord, Lord Dykes, for arranging for this debate. Like the noble Lord, I say that it would be a great mistake for Great Britain to leave Europe. We should not consider this at all. I hope that, in the long term, it will not happen.

On the issue that Europe matters today, we have to move on from the disaster of 2008. We cannot look back at what it was; we can never go back so we have to move on. The key issue is that the prospects for the financial services industry are good. Last year’s Kay review on equality markets and the recent report of the Parliamentary Commission on Banking Standards demonstrate that the UK is leading Europe in the debate on the direction of domestic and international financial reforms. Negative perceptions of the industry remain largely based around the lack of diversity, both in terms of gender and ethnicity, as well as remuneration, on which the Government have published a report of the Commons committee. No doubt we will debate the whole question of diversity, women on boards and equal pay in the next year. I do not need to go down that road today, but economies cannot prosper if half of the population is behind. Research from the World Economic Forum in 2012 said that women now represent 40% of the global market force, which is a little higher in this country, and that more than half of the world’s university students are women—again, it is higher in this country. For a functioning economy, its full potential of women’s skills and talents is very important—including the export and import of those who are educated here and who then go back home. The GDP they bring to those countries is vital for a stable world.

Coming back to this country, across the domestic and international activities, financial and professional services have contributed more than £200 billion to the UK economy since 2012. In aggregate terms, the contribution of the financial services industry represents some 15% of UK GDP. Exports made up a substantial share of the contribution, of up to 40%, of the financial services to the GDP, arising from the sector’s exports and those services provided to overseas clients. We should also be aware that when people require something we sell, like law and education, our financial services are very much sought-after in the Middle East and other countries. That is one of our soft powers that we should be looking to.

The trade surpluses of the financial and professional service sectors are roughly the same as the combined services of all other net industries in the UK. Some of our specific contributions are that our insurance business is the best and largest in Europe. We have 251 or more different banks working in the UK, including those based here. The UK has the second-largest pensions industry in the world, with total investments of £1.9 trillion. That is a huge sum of money; it is inconceivable, but it is vital to Britain. In 2012, the UK private equity and venture capital sectors managed assets of £200 billion.

UK private equity funds invested in more than 800 companies. People talk about hedge funds and different instruments of finance, but they do not realise that without them and that investment, we would not have the companies we have, because no longer do the real banks want to invest. The real problem we are having is for SMEs, 40% of which are now run by women, employing men and women, which are having great difficulties. Although the banks have promised to lend to them, they have not been able to get funding. That is not because they do not have order books or money coming in, it is because they just need that extra couple of hundred thousand pounds to tide them over for a year, but there is no one to talk to, because you do not have banks any more. Metro Bank has started up locally in the high street, but we do not have our usual banks to go to.

I know that this is old-fashioned, but some people need to talk to someone, not a call centre but somebody to talk to. Standard Chartered, for example, which is working in Asia, has people in middle management there to meet you and to offer to look after you. It is the same in Hong Kong and Singapore: if you want to go to the bank, there is someone to meet you who wants to talk to you. Whatever deal we finally do with the Royal Bank of Scotland and Lloyds—we do not know what will happen with one or two others yet; I hope nothing—if they will not open places, which cost money, there should be the availability to talk to somebody, because talking to a call centre or an individual who does not know you or your industry and has never been to your factory is not the same. That is vital to today’s economy. Those of us who live in London or Scotland know that the back-office industry there is huge, but in the middle of the country, there is nothing. There are no banks, there is nowhere for people to go to talk to someone. We must encourage building societies and those other banks to open up, even if they are opening up in a mall, so that there is a place where people can make an appointment to see someone. They do not have to be there permanently, but people need to be able to make an appointment to come from wherever they are working.

For our economy to function, we need to use the full potential of women’s skills—coming back to SMEs—and they need someone to go to talk to. We do not want them going to get the money, not from payday loans, but from other companies which will lend money to SMEs at high interest rates. Those companies are too big to take microfinance. We know that microfinance, because it loans the money from the banks, is charging higher interest.

I hope that the Government will consider those ideas and what we have managed to tackle together since 2008, and move forward. We must move forward to take our place in the world, and enable the potential of people in university and in school and ensure that they are not left on the heap.

15:28

[Lord Bilimoria]

My Lords, in 2011, the financial and insurance services sector contributed more than £125 billion to the GVA of the UK economy. That is more than 9% of our total GVA. London itself accounted for 46% of the total GVA of the finance and insurance sector in 2009. The contribution to jobs approaches 4%. The other point is that trade in financial services contributed huge amount to the trade surplus that the UK has in services. The banking sector alone contributed £21 billion to UK tax receipts in corporation tax, income tax and national insurance. The OBR has shown that in 2007-08, the effective tax burden from corporate and income tax as a share of the GVA was the highest for the financial intermediaries. That is partly because of the relatively high profits that the sector makes compared to its contribution to GVA. Again, according to the OBR, in 2010-11 the financial sector accounted for around 7% of government receipts once the bank payroll tax and bank levy were included.

It is a huge sector. As the noble Baroness, Lady Goudie, said, the financial services sector accounts for 9.6% of GDP, but if you add the professional services—a further 4.9%—it makes up almost 15%. Relative to other countries, the financial services sector is very important for Britain. It is much higher than in the United States, where it is just over 7% of the economy, and it is more than double a percentage of our GDP compared with countries such as Japan, France and Germany.

Of course, we then come on to the question of whether we have a balanced economy. I thank the noble Lord, Lord Dykes, for initiating this really important debate at this time. The noble Lord, Lord Flight, mentioned the importance of the City of London. The joke is that the Lord Mayor of London—and the City—makes the money and the Mayor of London, Boris Johnson, spends the money. I do not think that this bizarre situation exists anywhere else in the world, where you have power and finance in a square mile of a huge city. Do we have the balance right? Do we have the relationship right? Does it need to change? I am not suggesting for one moment that it needs to, but I would be very interested in the Government’s opinion on this very important relationship.

The noble Lord, Lord Dykes, spoke about the European Union. One of the UK’s great advantages, particularly when it comes to financial services, is that we are not only at the top table of the European Union but we are seen by countries such as India as a gateway to Europe. As a founding chairman of the UK-India Business Council, I know how important this is for Indian companies. It is crucial that we stay at the top table of Europe, although I completely agree with the noble Lord, Lord Dykes, that any talk of a tax on financial transactions would be a disaster. We need to keep the balance right and thank God we do not belong to the euro.

Another advantage that London has is AIM. The Alternative Investment Market started in 1995 and is coming up to its 20th anniversary. It is a huge success but to this day, AIM shares are not allowed to be included in ISAs. I declare my interest as the senior independent director of the Booker Group. When I joined the board nearly six years ago we were an AIM company. We then graduated to the main list and are now a FTSE-250 company. I find the situation so difficult to understand. I believe the Chancellor said in the Autumn Statement that this would be looked into and that consultations would start in 2013. They still have not started and AIM shares still cannot be included in ISAs. So we are not really encouraging investment in these shares as much as we could. AIM is a crucial market in encouraging entrepreneurship and growth companies, not just for the UK but I know how attractive an AIM listing is even to companies from India. Perhaps the Minister could talk about the importance of AIM, in particular AIM in ISAs.

When I used to promote Britain when doing business with India, I would always speak with pride of our light-touch regulation and of what Margaret Thatcher did in the 1980s in opening up Britain and the City of London with the big bang, and how this gentlemen’s club and closed shop opened up into being a meritocracy, and the world’s greatest financial institutions flocked to London, and London has flourished. But later, after the financial crisis, my colleagues abroad would say, “Ah, what happened to your light-touch regulation?”. I would speak with pride about the independence of the Monetary Policy Committee, one of the best things that Gordon Brown did when he was Chancellor.

However, in 2007, when this country was hit by the subprime crisis that became the credit crunch, that became the financial crisis, that became the great recession, that turned into the sovereign debt crisis, that turned into the eurozone crisis, we realised the mistakes that we had made. The Treasury, Bank of England and the FSA, which in all the good times leading up to this crisis were a happy merry-go-round, suddenly turned into this great blame-go-round. I remember taking part in the debates on the Bill to nationalise Northern Rock in early 2008. Northern Rock went bust in September 2007 and was nationalised within six months; it cost £26 billion to bail out a company—the biggest bailout of any one company in the history of the world. We are now talking about RBS and Lloyds. It has now taken six years to come up with our new financial supervision regulations which will be much more robust. Perhaps the Minister could talk about that.

We get into problems and are attacked because of our tax system and companies not paying enough tax. Well, the GAAR—the anti-abuse regulations—have been brought in, but will not stop the Starbucks and Googles from what they are doing. This brings me to the point of perception and reality. I chaired a meeting of the Industry and Parliament Trust. Sadly, the public’s trust in business is 16%, and in government it is 17%. Shockingly, in a poll after the Olympics which asked, “Are you proud of Britain?”, the vast majority of the public were. When asked, “Are you proud of British business?”, only 4% were.

Earlier this week, I spoke at Oxford University for the reputation executive leadership programme at the Centre for Corporate Reputation in the Saïd Business School. It is clear there that the finance sector, and bankers in particular, have a terrible reputation at the moment. There is a lack of trust. On brands, which I spoke about, the financial sector, London and the City are a brand. What is a brand? I know about brands from my own business, Cobra Beer. A brand is what a brand does. The Harvard Business Review recently published a survey of 25,000 companies over 40 years. It identified the companies that were successful over a sustained period and called them miracle makers. They followed three principles: first, they followed “better before price”; secondly, “revenue before costs”; and thirdly, only those first two principles mattered. “Better before price” is all about quality. The City has fantastic quality, our financial sector has amazing quality and our professional services have the best of the best in the world.

“Revenue before costs” is about whether we are growing enough. Are the Government committed to growing the financial sector? I hope that with the arrival of the new Governor of the Bank of England—a Canadian, of which I am proud; it shows our openness as a country and an economy—not only will we target inflation but GDP growth. Will the Minister confirm that? It would promote growth in our financial sector.

I conclude that, while we may not have an empire any more, one of the legacies of the biggest empire that the world has ever known is the City of London and our great financial sector. It is one of the jewels in the Crown of our great country.

15:37

[Lord Davies of Oldham]

My Lords, it may well be one of the jewels in the Crown, but it is somewhat tarnished. I congratulate the noble Lord, Lord Dykes, on raising this issue at this time, which is of the most profound significance for the nation—wider, I think, than the agenda that he addressed. I agree with him about aspects of looking at the financial transaction tax. I have great reservations about that being proposed in Europe. If there is a possibility of such a tax, endorsed by the Americans, which would help to ensure that the finance capital, the City of London, and other centres across the world repaid the colossal debt they owe to wider society as a result of their mismanagement of the financial sector, that is only right and proper.

It is inconceivable that we return to the age of light regulation. Light regulation brought this country to its knees. We have more than 2 million people unemployed; we have 1 million young people unable to obtain jobs. We have a colossal problem with the cutbacks in public services, which are felt as a massive cost for all but particularly those who are very dependent on them for benefits and support. What is more, what does it amount to that each and every man, woman and child in this country has paid out £19,000 to the financial sector to create the bailouts to get out of the colossal mess that we are in?

Of course, I have no doubt that comments will be made about “the Government of light regulation”. The Conservative Party points the finger and says that Labour was in power at the time, as indeed we were, and was guilty of not having taken sufficient note of the impending crisis, but the Conservative Party was carrying down exactly the norms of light regulation that have been expressed today. What the country is demanding, however, is answerability. Of course we must create a base on which the financial services flourish, but it is demanding that they flourish within a framework where we never again see a crisis like the one we have had these past four years. Why not? Because we may well be in the greatest depression for a century and it may take us more than a decade to recover from it.

Already, current living standards are considerably below what they were in 2007. That is the price which the nation is paying and it ill behoves those who argue that the financial services need to be respected—of course they do. How could you do anything else with a sector of the economy which, as noble Lords have identified, amounts to such importance in it? The noble Lords, Lord Bilimoria, Lord Dykes and Lord Flight, all identified the importance of the City to the economy. Nobody is underestimating how significant that is, because we all know the figures.

However, the Prime Minister said that we must rebalance the economy. What does he mean by that? He must, at the very least, mean two things: first, that overdependence on the financial services industry makes the economy vulnerable, as it certainly did in 2007; secondly, that the vast majority of employment in the financial sector is within 20 miles of this Building. It is in London or the south-eastern counties, and if you talk about rebalancing the economy you have to look at areas where people are grossly underemployed at present and where capital is at low levels, such as the north of England, the north-west and elsewhere. A balanced economy will require those issues to be addressed. That is why it is necessary for the Government to spell out the position that they are going to adopt. They will have that opportunity on numerous imminent occasions.

It is important that the Government address themselves to the fundamental problems of our economy at present. I give them all credit for the way in which they have addressed the banking issue. I am not enamoured of the stance on banking but I congratulate the Government on recognising that we had to have banking legislation to clear up the mess of the past. Where I and my party have our reservations, which will be voiced as we consider the banking Bill, is that the question of sanctions seems to be rather marginal. For instance, the Government do not seem to think that there is much more to do than the Vickers fencing-off of the position of the banks, rather than the direct separation that may be necessary. After all, we have one instance before us at present in the Royal Bank of Scotland. What are the Government going to do about that? Should they not, at the very least, consider whether there should be a separation between the retail and investment arms of RBS as a solution to that position? Would that not also indicate that the legislation ought to consider that dimension?

I come briefly to the question of the financial transaction tax, which the noble Lord, Lord Dykes, raised. I agreed with his sentiments that there is much merit in it. The merit in it is quite straightforward: it potentially raises vastly more than stamp duty raises at present. It is also necessary that the financial services sector meets the obligations in terms of proper payment, particularly against a background where the country is scandalised that at the peak of the crisis, absolutely unjustifiable bonuses were being paid out to leading figures, and where not just incompetence but the depth to which finance had descended in terms of morality was being revealed. You cannot look at the LIBOR issue and the immorality of the terrible risk-taking with other people’s money without recognising the old adage of, “My word is my bond”. The morality of the City needs to be restored because what has been going on is untenable.

The financial transaction tax is an important concept. I recognise that Britain certainly could not go forward with it if the United States remained hostile to the position. We could not have New York not being a part of it. However, if the American Administration began to see the merits of the tax, and the European countries—11 at the moment and more to be added to the list—lend their support to the concept, it would be appalling if the British Government did not recognise those merits as well. That is not to endorse what is before the Government at present, and I acknowledge entirely their resistance to what is now on the table. However, I would argue that it is the concept that ought to be worked on, thought through and improved.

The Committee will be aware of the fact that I am grateful for this opportunity. It has come a little prematurely because I had expected it to be in response to a Statement in the House, which unfortunately we did not get yesterday. After all, the Commission on Banking Standards has pointed to a significant way forward. We are all desperately eager to get the Government’s definitive response to the crucial issues raised by the commission. We did not have a chance to consider a Statement yesterday, and I do not think that we will get to the banking Bill in real terms for some time. I am therefore grateful to the noble Lord, Lord Dykes, for giving us a chance at least to make some contribution today.

15:46

[The Commercial Secretary to the Treasury (Lord Deighton)]

My Lords, I thank my noble friend Lord Dykes for giving us an opportunity to discuss this important question. I think that some very interesting issues were raised. I am not sure that there is much disagreement over principle; on practice and implementation, there may be some more. Everyone gave their own measure of how important the financial services sector is to the UK economy, and the obvious implication of that is that we need to nourish and protect it, and to use it as an engine for our future growth; I think that everybody accepts that. My own numbers demonstrate that the financial services sector represents 10% of our gross domestic product, 12% of our tax revenue and half of our trade surplus, and employs over 1 million people—two-thirds of whom are outside London. It was very helpful to hear reference being made to the broader industries involved, such as the pensions industry. I was at a meeting recently with the Indian finance Minister, who asked us to help train India’s whole actuaries sector, such is the respect with which our pensions industry is regarded.

I am also very persuaded by the soft power arguments in support of our law and education expertise. Every time I travel with the aim of trying to bring money into the UK or help UK businesses overseas, there is a British law firm that is regarded as the leading light in virtually every territory. It is an extraordinarily good example of soft power. It is a similar case with our education system. The countries in which we are most effective are those where the current ruling elite were educated in the United Kingdom. What worries me is that when I look at the next generation, a smaller proportion have been educated here. However, it is a very powerful base from which to develop relationships that help us to win business.

As well as being a major employer, the role of the banking sector in particular as a provider of credit and financial services to businesses and consumers is critical. What we are really talking about in most of this discussion is how we can build a safe and secure system, repair the damage that was caused during the crisis, and put it on a sound footing in order to deal with all the issues.

I was slightly worried that the tone of the comments of the noble Lord, Lord Davies, meant that he was looking for a fight around regulation. I am not a fan of light regulation like my noble friend Lord Flight. I am a fan of very good regulation and this Government have been the leader in devising the architecture and the systems that are now being put in place to make this system better. We are absolutely in agreement. It is good regulation we want, not lots of bureaucracy, and that is a critical distinction to make. We all accept that the financial crisis was in part caused—certainly exacerbated—by certain practices within the banks and we have to get that corrected to ensure that it does not happen again and we do not leave taxpayers with the bill.

This is probably a good time to follow up on what my right honourable friend the Chancellor talked about in the Mansion House speech last night: the plan going forward for RBS and Lloyds in particular. There are three key objectives in the plan to restore them to good health: first, that they can play a strong role in their support of the economy; secondly, that any transactions that result in the sale of shares represent excellent value for money for the taxpayer; and, thirdly, that we will do whatever we can in restructuring and working with the banks to return them to private ownership. As the Chancellor announced, Lloyds is a lot closer so it is being prepared for a sale of shares to institutions; RBS is still some time away. With regard to the noble Lord’s suggestions, one of the restructuring options being looked at is the so-called good bank/bad bank split, which is pretty consistent with dividing it into a retail and wholesale bank. Certainly something that will be evaluated quite carefully is whether that is the better structural option.

My noble friend Lord Dykes referred to the Co-operative Bank and the surprising speed with which that problem was revealed. The bank is working very well with the regulators to ensure that its capital position is being addressed. It is being addressed without recourse to the public purse, which is a good step forward in terms of how these resolution processes take place. However, the Government continue to support mutual structures, building societies, et cetera, so that really is an important part of competition in the banking sector.

We have had quite a discussion about rebalancing, which is a very popular word that is applied to almost every aspect of our lives these days. In terms of making the banking sector less crucial to the UK economy, I am much more interested in growing other industries than in shrinking the banking sector just for the sake of it. It would be sensible to shrink it if it was too engaged in risky businesses, but I do not think our objective should be simply to reduce the scale of the banking business. The focus needs to be on ensuring that we have a healthy business. As was pointed out, Hong Kong has a bigger relative financial sector than we do. The focus needs to be on our broader economic strategy to help support other businesses, particularly those that can bring jobs and growth to the economy outside the south-east of England, where the financial services jobs are predominantly based.

One of the proactive things that we are trying to do as a Government to ensure that the financial services sector is protected is to ensure that the way in which we regulate and tax the market and all the infrastructure services we provide to the City of London continue to allow it to be the most effective, successful, dynamic financial sector in the world. That should be our objective. That is how we bring business in. That is why banks and other institutions want to come here. We should also support very clearly our own institutions as they develop their interests overseas; we have talked about insurance companies, for example, and how effective and successful they can be overseas. We have to get our financial regulation right. Finally, we have to incentivise banks to lend to the real economy, and other markets and forms of disintermediation have to work so that we can get key parts of the economy financed. I take on board the noble Lord’s comments about AIM. I accept that ISAs cannot be included for the time being. We will follow up with noble Lords when those proposals become clearer later in the year.

I note that the Government announced the creation of the Financial Services Trade and Investment Board—really as a promotion body to help push the City forward. Historically, we have generally left the City to its own devices because we thought it was so successful, but this is a body with some very good people from the Government involved to work through what we can do to support the industry and to make it successful around the world. My experience of working quite intensively with both the lord mayor and the mayor has been that this works quite well in tandem. We also, of course, have the Treasury as a third strand of the Government promoting the City. It had been suggested to me in the past that we should share the role by having both a day mayor and a night mayor—noble Lords can choose which one they would like to put in which category.

The board is up and running and it is doing very well. The kinds of things that are on its agenda are, for example, helping us to be the leading centre for the internationalisation of the renminbi and, talking of India, to help us to be well positioned as the rupee is eventually internationalised so that we can capture that business. My noble friend Lord Flight gave a very eloquent exposition of the UK investment management strategy, demonstrating that, in general, it is a good thing. We need, however, to be careful about how it is regulated—again, we are back to good regulation. The abolition of stamp duty reserve tax, which was a big step forward, was really aimed at making our industry the best one in the world. As an example of what followed, we have seen Santander choosing London as the base for its world-wide asset management business, which is a great step forward. In March, we also established an Islamic task force to try to establish the UK as the preferred choice for the Muslim world to invest in and do business with. These are the kind of new initiatives.

We have talked a lot about the EU and the interesting challenge around being the major financial centre in Europe but not a euro country, and some of the issues and challenges which that throws up. The general sense I got from this debate—which I certainly share—is that noble Lords do not read very much in the papers about when the UK has pushed legislation so that it actually gets the right outcome, not just for this country’s interests but in the market’s interest—and MiFID was a wonderful example of that. Of course, the EU-US free trade agreement should be another example; financial services will be a very big part of that.

We talked a little bit about tax. I agree that the GAAR—the anti-avoidance measure—may be limited. As we saw in Northern Ireland, however, with the G8 meeting, the only real way to address these tax issues is through international collaboration. I am delighted that our Government are taking a lead on tax and transparency and really setting the pace to help to improve those things. We have talked enough about Vickers and what is coming there.

On the comments on diversity, I could not agree more that there would be nothing healthier for some of these financial institutions than to have a broader and more diverse group of people working in them, particularly at the senior level. My own example is that I joined a US investment bank when I left university because I did not feel comfortable in a merchant bank because I had not been to public school. I can only imagine how a woman feels on the trading floor of a US investment bank, because it is a distinct male environment. It would benefit from that diversity. I am an absolute supporter of that. All my experience in professional life has demonstrated the enormous power that comes from that diversity.

I should address the financial transaction tax. The noble Lord is absolutely right. If applied equally around the world, it is certainly a runner, but the way that it is structured now it just will not work. I think that our case is being very effective in persuading countries who were on the fence to see that perhaps it may not be in the market’s interest.

In closing, we have heard how important the sector is, how we are reforming it, how we are making sure that it addresses the problems of the real economy, but also what an important sector it is for the future of this country. I appreciate the comments of noble Lords in what was a very useful and interesting debate.

First World War: Commemorations

Thursday 20th June 2013 Grand Committee

Question for Short Debate

16:02

Asked by

[Baroness Young of Hornsey]

To ask Her Majesty’s Government what steps they are taking to ensure that the contribution of people from Africa, Asia and the Caribbean to British efforts in the First World War is recognised in the forthcoming commemorations.

[Baroness Young of Hornsey]

With the announcement of a significant programme of activities and commemorative events next year, more than £50 million of government funding being made available—and many arguments about the scale, nature and purpose of marking this anniversary—historians, other scholars, politicians, culture commentators and members of the general public have all joined the fray, making for a fascinating and lively debate.

Of course, commemorative events are nearly always contested and throw up all sorts of unexpected and, indeed, unintended consequences. In 2007, many of us were involved in commemorating the abolition of the slave trade on British ships and there was certainly plenty of controversy there. But reasoned, vigorous discussion is a healthy sign and I welcome the public debate that continues to develop about how we mark—or not—the triumphs and tragedies represented by and flowing from World War I.

In 2007, one of the key issues to arise was how the stereotyping to which many of us are subjected today springs from assumptions and misrepresentations embedded in British history centuries ago: we have been defined by stifling categories, with our histories in this country and elsewhere all but ignored.

In the 1980s, when I first conducted sessions with school students on historical figures of African descent from Roman times through to the Second World War, a young boy of Caribbean ancestry told me that we were making it up. If what we said was true, he argued, then why were there not books and television programmes on the subject? I am pleased to say that over the past 40 years, certainly in terms of scholarly works, there has emerged an ever-growing body of books and learned essays that continue to add to the sum of our knowledge about our presence and agency in British history. The Black and Asian Studies Association has been one of the key organisations in this regard, with innovative research and website materials by the Runnymede Trust most welcome too.

We should bear in mind that it was only as recently as 2002 that the tremendous effort of colonial troops from African, Asian and Caribbean countries was finally officially recognised with the creation of the memorials on Hyde Park Corner. I am delighted to take this opportunity to salute the diligence of my noble friends Lady Flather and Lord Bilimoria for their unstinting hard work on that project, as well as the noble Lord, Lord Sheikh, and the noble Baroness, Lady Howells of St Davids, for contributing to debates and Questions and thus making sure that our place in history is not forgotten.

Although we have moved on from the 1980s, there is still so much ignorance. I have noticed recently how well educated, intellectually curious people react when I speak about the subject of our debate today. They are amazed and often want to know more, but even if they do not intend to follow up the matter, they usually say something like, “Why were we not taught about this at school?”. If we look for a moment at the scale, we must wonder why so little of this history is known. Some 1.5 million volunteers came forward from India and were in action on the Western Front within a month of the start of the war. India’s contribution was not confined to the army or to combat. The Royal Indian Marine and the Indian merchant services had equally crucial roles. From the African countries of Nigeria, Gambia, South Africa, Sierra Leone, Uganda, Kenya and what were then Rhodesia, Nyasaland and the Gold Coast came the 55,000 men who served in combat and the many hundreds of thousands more who served as carriers and auxiliary troops.

From the Caribbean islands came vocal and financial support for Britain’s war effort. Ambulances, maintenance costs and approximately £2 million—£60 million in today’s money—were given to the British Government. More than 15,500 men of the British West Indies Regiment served with the Allied Forces. We should remember that it is not just in terms of military and support services that sacrifices were made. Food and other forms of production were disrupted in those countries and the safety and security of their populations were jeopardised.

Thanks to their commitment to education in the broadest sense, museums, other cultural organisations and the voluntary sector are expert at examining these less well known histories through a variety of analytical prisms. For example, the Imperial War Museum is conducting a research project funded by the Arts & Humanities Research Council entitled “Whose Remembrance?”, which will investigate how local communities are addressing the colonial experience during the two world wars.

As a commissioner with English Heritage, I am pleased to say that English Heritage has grant-aided the repair of the grade 2 listed Muslim Burial Ground at Woking, where Indian troops who died in the Indian Military Hospital at the Brighton Pavilion were laid to rest. This complements the grade 2 listed Chattri memorial in Brighton, erected where Hindu and Sikh soldiers who died in the war hospital there were cremated. A further designated memorial to Indian troops is at Barton on Sea in the New Forest, where a grade 2 listed obelisk commemorates a convalescent depot for Indian troops. English Heritage has also funded investigative work on the SS “Mendi”, the troopship carrying more than 800 members of the South African Native Labour Corps that sank off the Isle of Wight in 1917 with the loss of more than 600 lives. A meeting of interested parties has recently been convened to discuss ways in which the “Mendi” dead might be remembered and the site appropriately managed. Research is also ongoing at Orford Ness in Suffolk regarding the sea defences constructed there by a Chinese labour battalion; again, it is worth noting that most of the 140,000 men who came from China to work for the French and British actually did so on the Western Front.

Now here is the difficult part: there are plenty of challenges as well as opportunities. Simply pointing out how heroic the combatants from what were then British colonies were is not, on its own, enough. To gloss over the racism and discrimination that manifested itself in a variety of ways, for example in the division of labour and the allocation of resources for fighting, would be to hide the truth. Although racism still permeates our society and there is still much work to do on this issue, to say that nothing has changed would equally be to deny reality. Relevant here is that the Armed Forces have been striving for many years to demonstrate in practical terms their positive approach to equality of opportunity and diversity in their institutions.

I believe that most, if not all, noble Lords present here today understand the need to ensure that our citizens, particularly the younger ones, from every cultural and ethnic background have a firm grasp of the complex ways in which our heritage and histories are interwoven. A sense of belonging must be predicated on the keen sense of how we and our ancestors have all contributed to the making of contemporary Britain.

I have noted that a number of government responses to questions about the commemorations have emphasised the educational dimension. There are aspects of the programme that suggest some exciting opportunities to engage young people with the human stories behind the historical headlines, which I welcome. There are several references to activities in partnership with a range of Commonwealth countries and the Commonwealth War Graves Commission, which I again welcome. However, while the concept of the Commonwealth may make sense to us here, that is not necessarily the case for many young people. I thank the Minister for our helpful conversation earlier this week. Will he tell us how the Government intend to ensure that the material that they will be generating resonates in a profound way, encouraging analysis, critique and, yes, perhaps some uncomfortable conversations with young people—especially, but not exclusively, those of African, Asian and Caribbean descent? Of course, the most obvious way of effecting this would be in some way to recognise this material in the national curriculum.

We are not talking here about what some insist on calling “political correctness”, a term which is particularly unhelpful in this context but which was used recently to justify the removal of Mary Seacole from the national curriculum. After a petition signed by more than 35,000 people, she was restored to her rightful place. I hope that sequence of events was a clear demonstration of the importance of this issue of the recognition of the role in British history played by African, Asian and Caribbean people.

Finally, one Indian soldier, doubting that he would survive the conflict, consoled himself in his writing with the thought that his name would be,

“written in letters of gold and inscribed in the list of the brave”.

I hope that, whether that man survived or not, at least symbolically we will acknowledge him and all those women and men from across the world who played their part in that most difficult, desperate and often tragic theatre of war.

16:11

[Lord Desai]

My Lords, we are grateful to the noble Baroness, Lady Young, for proposing this topic for us to discuss. I agree with her that every such commemoration raises a lot of controversy, but it also exposes a lot of ignorance at the same time. Someone, perhaps to take a radical stance, has called it a “European civil war”. That may sound like brave talk, but it was not just a European civil war. A lot of the rest of the world was fighting on one side or the other in the war.

We need to be reminded of the history, at the top as well as the bottom, of how the war was fought. One of the most unique aspects—certainly it was not repeated in the Second World War—was the formation of the Imperial War Cabinet. The fact that it was formed, including people such as Jan Smuts from South Africa and Satyendra Sinha—who later became Lord Sinha of Raipur, the only hereditary Peer of Asian origin—representing various parts of the empire and deciding about the war, is not very well known. We ought to be able to commemorate that as a constitutional innovation as well as an historical event.

It is true that this practice was not followed in the Second World War. Despite that, the empire as it then was—or the Commonwealth—contributed to the Second World War. As the noble Baroness said, on the Indian side perhaps up to 2 million people participated in the war. As noble Lords know, throughout the history of the British Empire in India, the Indian army was paid for by the Indian taxpayer; it was never paid for by the British taxpayer. In the First World War, not only was all the additional recruitment paid for by the Indian taxpayer, India alone raised £2 billion—I think. I will check; I have written it in my own book, The Rediscovery of India, so I can check that. I do not know whether India was ever repaid, but we will pass over that.

One really ought to recognise that when Britain was fighting the First World War, and indeed the Second World War, there was a tremendous contribution from the rest of the empire in terms of soldiers and resources. India was an especially big supplier of raw materials and resources for fighting the war, and that contribution was vital to that effort. I am really pressing for recognition of the efforts of the top as well as at the bottom, because one ought not to forget that the institution of the Imperial War Cabinet was a remarkable constitutional innovation and we ought to commemorate that.

That said, although the celebrations will not go on to what happened after the war, the First World War had a profound influence on the British Empire. The movements for national liberation got a great fillip from the soldiers who had come to Europe and fought the war. When the soldiers saw that their masters were just about as good as they were in fighting, and not a superior race, they realised that humanity is much more alike than not. That message was carried much more thoroughly by the war into the minds of ordinary soldiers who had come from agriculture or other industries. We ought to recognise that that was in some sense a creative contribution from what was a destructive war.

16:16

[The Lord Bishop of London]

My Lords, I, too, am very grateful for this initiative on the part of the noble Baroness, Lady Young of Hornsey, because she has drawn attention to a really vital theme of the commemorations next year. It is particularly good that in the plans already announced by the Government, the Commonwealth element is very pronounced. The commemorations will begin just after the Commonwealth Games in Glasgow, and there is a firm emphasis there. I was with the Gurkha association just over a week ago and I was forcefully reminded of the fact, which has already been stated, that there was a huge contribution of people from the Indian subcontinent both at the top and right the way through the war effort. It was very large indeed.

The theme plays in very different ways in different places. The First World War was a vital element of nation-building in some parts of what is now the Commonwealth. In other places, it was an episode of colonial oppression; we had some very helpful lines from the noble Baroness, Lady Young, on that. I have had the privilege of conducting a service at the Memorial Gates, which she has already mentioned, every year for the past 10 years. The establishment of those gates is, as the noble Baroness said, down to the initiative of my noble friend Lord Bilimoria and, especially, the noble Baroness, Lady Flather. I am very sorry that she is not here to make a contribution because it has been an extraordinary experience, year after year, to be reminded of the huge contribution made by people from the Caribbean, especially, and from Africa as well as India. The annual observances at the Memorial Gates are on Commonwealth Day itself, somewhat before the August celebrations or commemorations. Can the Minister say whether there are any plans to use that location in August for acts of remembrance?

It is absolutely clear that, in contemporary Britain, we are now in the process of developing a truthful narrative that weaves in the contribution of many different communities to the history and flourishing of this country. This is a huge opportunity because, of course, so often we try to involve the young in the values and ethos of our society by mentioning the great universals such as tolerance, courage and respect, and all those things that we absolutely believe in. But unless they are embedded in convincing narratives and in communities, they do not have the power to transform lives. It is in that context that the remembrances and commemorations of next year will be very important as we develop the narratives and identify and celebrate the communities that play such an important part in the evolving story.

Churchill’s Britain no longer exists. There is an evolving story of these islands, and that will be an important part of developing that narrative. I declare an interest as a patron of Remember WWI, a consortium of community organisations seeking ways of stimulating grass-roots participation in the centenary. We cannot change the past, but it is a serious responsibility how we choose to remember it, because that remembering is itself extraordinarily creative and has an impact on the present. The theme of World War I is so large and the suffering involved so great that, as well as the proper emphasis of the noble Lord, Lord Desai, on life at the top, it is important to balance the great events with getting behind the columns of what Siegfried Sassoon memorably called “these intolerably nameless names” on thousands of war memorials. All sorts of resources are being developed to rescue those names from anonymity. We ought to look at that in relation to Commonwealth memorials as well. The faith communities internationally—because these are all international connections—are well placed to contribute to such an initiative.

In conclusion—I imagine that there is total unanimity among your Lordships on this—I hope that at no point in the commemorations will we seek to obscure the present urgent need to strengthen our links in a very new world with those who were fighting on the other side. It would be appalling if this was an occasion of ramping up any kind of animosity against, for example, Germany. In London, we have a special link with Berlin, and I have accepted an invitation to be there for some of the days in August 2014, as one tiny way to try to ensure that the commemoration does not turn in that adverse direction.

16:22

[Baroness Howells of St Davids]

My Lords, I am delighted to take part in this debate, which was introduced so eloquently by the noble Baroness, Lady Young of Hornsey. I will concentrate on the Caribbean and introduce the subject of World War II. One cannot overstate the enthusiasm and willingness of individuals from across the Caribbean to play a key role in Britain’s two world wars. To them, Britain was their mother country; to them, it was part of their heritage. Their collective loyalty to Britain manifested itself in many, many ways. Thousands risked their lives in service, some so anxious to serve that they lied about their age, often undertaking the most demanding and dangerous jobs against the elements of a climate truly alien to them. This loyalty was unrelenting.

Donations, which came despite communities’ own severe hardships, included aeroplanes and ambulances. Villages across the islands took down the gates and railings that protected their homes and contributed them to what was then known as the war effort. Women’s groups and schoolchildren knitted caps, gloves and scarves to keep the service men and women warm. To date, the sacrifices of those men and women have never truly been recognised—not with any tangible acknowledgement of their contribution. They are not even allowed to march as a group to the Cenotaph on Remembrance Sunday, something for which they have been fighting for a very long time.

History has shown us how these people were treated with shameful hostility. It is not within the capacity of this debate to fully appreciate the extent of the racism they encountered. I am reminded of the front page of the People. It showed a black man, calypsonian, with a blonde on one arm and a brunette on the other, with a caption reading, “Would you like your daughter to marry one of these?”—an insult to those who risked their lives and are still risking their lives for Britain. We are talking about those who gave everything to protect the values that too often we take for granted, that we share as an intrinsic part of this country’s heritage. Today’s Question is important because when the UN declared 2011 the International Year for People of African Descent, the Minister’s response to my Oral Question showed that Britain was not prepared to make any effort to recognise their contribution. His answer said absolutely nothing.

During the Queen’s Diamond Jubilee celebrations, the Government completely ignored Caribbean nurses, the 16 to 20 year-olds who came to serve in the National Health Service. They were the pillars of the NHS. It was left to a voluntary organisation to make representations to Buckingham Palace directly. Her Majesty willingly gave her consent and medals have been struck for the best of the bunch. I declare an interest as a patron of that organisation.

Finally, I encourage people to take their children to the Museum of London in Canary Wharf. It tells the story of the marvellous contribution that was made. Some of your Lordships will remember that Mr Peel was responsible for setting up the police force. However, the Thames River Police was the first force, which was set up in the docks on the backs of the Caribbean enslaved. When the ships came in, the cargos were looted by the people of the East End. The magistrates set up the police force, and that is the foundation of today’s police force in England.

I look forward to the Minister’s response giving me some hope that the injustices suffered will be rectified by including those who are still alive and still hurting in the celebrations. I am sure that everyone here would like to participate in the plan.

16:27

[Lord Taylor of Warwick]

My Lords, I add my thanks to the noble Baroness, Lady Young of Hornsey, for securing this timely debate. My grandfather was one of the 15,601 men and women of the British West Indies Regiment who served with the Allied Forces in the First World War. He was a Jamaican; indeed, Jamaica contributed two-thirds of those West Indian volunteers. Others came from Trinidad and Tobago, Barbados, the Bahamas, British Honduras, Grenada, Guyana, the Leeward Islands, St Lucia and St Vincent. More than 1,200 of those Caribbean servicemen were killed or died, while more than 2,500 were wounded. Eighty-one medals were won for bravery and 49 men were mentioned in dispatches. My grandfather said very little about his First World War experiences, describing them only as “horrific”.

My father was not deterred and joined the Jamaican Army. He was then transferred to the British Eighth Army, fighting in Italy in the Second World War. Again, my father was very reluctant to talk about what he saw of combat. But his medals, which he left to me after his death, spoke volumes. Ironically, although my father became experienced enough in the British Army to train white soldiers to become officers, because he was black he was not allowed to become an officer and attained only the rank of sergeant.

I pay tribute to the British and Caribbean Veterans Association, which tries to keep the memories of these brave men and women alive to this day. It has a simple mantra, but it is one that says it all: “We were there”. The King’s African Rifles were the largest force of African troops in British Africa. First formed in 1902, the force saw action throughout the continent during the war, especially in east Africa. The West African Frontier Force, formed in 1900 was comprised mainly of African troops and consisted of the Queen’s Own Nigeria Regiment, the Gold Coast Regiment, the Royal Sierra Leone Regiment and the Gambia Regiment. Much like the descendants of the West Indian Regiment, descendants of the African regiments who fought in both world wars today form the bedrock of membership of Britain’s black-majority churches.

On 11 October last year, the Prime Minister said that the objectives of next year’s anniversary are as follows: to honour those who served; to remember those who died, and to ensure that the lessons learnt live with us not as a monument to military glory, but as a record of toil and sacrifice. After all, the good book does say, “Blessed are the peacemakers”. Ultimately it has to be discussion and diplomacy, not wars, that move our world forwards. I am glad to hear that the Government intend to use a variety of means to achieve these objectives next year, but I echo the noble Baroness, Lady Young, when she says that these issues need to be on the national curriculum.

Much has been said about Britain’s disaffected youth, and in particular black youth. It is my personal view that part of that disaffection is a feeling of not belonging to Britain, and I suspect that the majority of these young men do not know that their ancestors played a full part in the First World War and the Second World War. That is why young children need to know about their own heritage, and that those valiant soldiers were not only white. As the years pass by, it becomes increasingly important that the Government’s initiatives should ensure that the contribution of people from Africa, Asia and the Caribbean to British efforts in the First World War is recognised.

16:32

[Lord Parekh]

My Lords, I begin by thanking the noble Baroness, Lady Young of Hornsey, for introducing this debate. I am sure that noble Lords have seen the mural in the Royal Gallery by Daniel Maclise. In the mural a black man is pointing to one of the marines who shot the great admiral. Only a few inches away is an Arab gentleman on Nelson’s ship. This is simply to point out that blacks, Asians and Caribbeans played an important role not only in the First World War and the Second World War, but in the Napoleonic wars. I cannot produce the facts and figures, not because they are not available, but because this is not the time. The history pre and post the Napoleonic wars shows that the role played by Africans and Indians was very considerable. This would seem to suggest that the liberty and democracy that this country rightly enjoys are things to which other communities have contributed.

During the two world wars, which is what we are here to discuss, some 5 million Indians, Caribbeans and Africans participated. More than 130,000 people died, and 42 of them fought so gallantly that they were awarded the Victoria Cross. As my good and noble friend Lord Desai pointed out, it was not just a question of people dying, it was a question of how money was raised and loans were made, as well as the ambulance corps and voluntary groups to which Indians contributed in large numbers, including Mahatma Gandhi. He was opposed to war, but because he had benefited from the British empire, he felt an obligation to help in any non-violent way he could. Let us not forget that.

In the light of all that, I want to raise three questions. What are we commemorating? Why are we commemorating, and how should we do it? I am not entirely sure that we are clear about our answers to any of these three questions either today or through the monuments that we have built. Let us take the First World War, whose centenary falls next year, and to which the right reverend Prelate the Bishop of London rightly referred. In my view and that of many historians, the First World War was unwise in its conception, incompetent in its conduct—ordinary soldiers said that it was like lions being led by donkeys—and the post-war settlement was brutal, leading to the Treaty of Versailles and what happened after that.

It shook the European consciousness so deeply that it discredited Europe in the eyes of lots of people, including those in India and elsewhere. They thought, “If Europeans can engage in that kind of brutality and that kind of war, they are not entitled to talk of European civilisation”. It also disillusioned large numbers of people within Europe about the kind of society that they had created and led to interwar movements that paved the way for the Second World War.

What are we commemorating? In my view, we should be commemorating the fact that war is not the answer to many of our intractable problems; that it should not be romanticised, because it involves an enormous amount of suffering; that, wherever possible, there has to be an alternative way than violence of dealing with conflicts; and, equally importantly, that our political leaders can be extremely incompetent and are not always to be trusted. A recent example is that it has taken them 10 years to realise that the Americans should be talking to the Taliban. Hundreds and thousands of lives could have been saved if something that many of us have been talking about had been realised earlier. Just because this happens to be a life on the other side of the world, they think that they can gamble, take things for granted and continue to make mistakes.

For me, the most important message of the First World War is that our leaders are not as bright as they think they are. They are capable of more stupidity than ordinary human beings. In fact, if any manager of a company had handled his affairs in the same way as some of our Prime Ministers and presidents have handled the great affairs of their countries, they would have been sacked a long time ago. That, to me, is one of the important lessons of the First World War, along with many others.

So why should we be commemorating those things? It is for three reasons. First, so that we can do justice to the victims; secondly, so that we do not repeat the mistake and so that these things are burnt into the consciousness of ordinary human beings; and, thirdly, that we recognise the solidarity of the Commonwealth because it has contributed substantially to the exercise.

How should we commemorate? I am not entirely keen on statues, monuments and memorials. We walk by statues. What do they tell us? Statues are mute and do not tell the story. The story has to be told. Therefore, I should have thought that the commemoration could take a form such as a national day of reflection on what happened and why, and which we should get our schoolchildren to recognise through the school syllabus. There could be an annual televised lecture which becomes a national event, where people talk about these things in their hearths and homes. There could be an essay competition in schools. As the right reverend Prelate rightly said, we should help to construct a new national narrative in which the Commonwealth contribution is fully appreciated. More importantly, for me, as we are talking about the Commonwealth contribution, how can we link up with other Commonwealth countries to commemorate this? It is not just about commemorating what they did for us but, rather, doing it jointly.

Finally, I recognise that six out of seven speakers so far this afternoon are from within the Commonwealth and only one is British, in the colour sense—that is, white. That tells us something. If we value the Commonwealth contribution, I should have thought that people in equal proportion across the colour boundaries would have joined in, but it is only one versus six. Therefore, it is important that we take the subject far more seriously than we seem to have done.

16:39

[Lord Bilimoria]

My Lords, I am grateful to speak in the gap. As it happens, our elder daughter is on a school visit from Wellington College to Ypres in Belgium as we speak. I thank the noble Baroness, Lady Young, for initiating this debate and for her excellent speech. I emphasise one of the points that she and the noble Lord, Lord Parekh, made, which is that our students must learn and must know.

For six years, I was privileged to be the chair of the commemoration committee of the Memorial Gates, which were founded by the noble Baroness, Lady Flather. I am sorry that she is not here, because it was thanks to her that those gates were erected, and they are a memorial to the contribution of the 5 million volunteers from the Indian subcontinent, Africa and the Caribbean who served in World War I and World War II. In the First World War, 1.5 million men from the Indian subcontinent served, and 70,000 made the ultimate sacrifice. As the noble Lord, Lord Taylor, said, I do not think that our children realise that in the First World War, the Indians were not allowed to become officers.

The only Indian officers were the doctors. It was only after the First World War that people such as my grandfather, the late Brigadier Bilimoria, was allowed to be commissioned at Sandhurst. In the First World War, even my tiny community, the Zoroastrian-Parsee community, had doctors who served; doctors like Captain Baputi Chenoy and doctors like Major Ravenshaw Kapadia, who was given the Military Cross.

In the Second World War the contribution from the Indian subcontinent was even greater. It was 2.5 million volunteers—the largest voluntary army the world has ever known. My own late father, Lieutenant-General Faridoon Bilimoria, was from the 5 Gurkhas. The uncle of the right reverend Prelate the Bishop of London served in the 5 Gurkhas and made the ultimate sacrifice in the Second World War. My father’s battalion 2/5 Gurkhas was awarded three Victoria Crosses.

All I would request is that the Minister takes the message that our children must realise that we would not be enjoying the freedoms and all the benefits that we have today without the service—without the sacrifice—of the millions of volunteers from south Asia, the Indian subcontinent, Africa and the Caribbean. Our children must learn; they must remember; they must appreciate; they must be inspired; and they must never ever forget.

16:40

[Lord Stevenson of Balmacara]

My Lords, I thank the noble Baroness, Lady Young, of Hornsey, and all who have spoken in this debate for making it a very special moment. It has been a wonderful short debate, dealing with very important issues and it has been very moving to listen to all the points that have been made. I also thank the Library for a very good research note, which has obviously influenced a number of people’s contributions and indeed has worked into mine as well.

When the British Government declared war in 1914, they did so on behalf of the empire and not just of the UK. It is right that the forthcoming World War I celebrations recognise the voluntary participation of so many people then living in the empire and the considerable sacrifices that were made throughout the war. In the words of the noble Baroness, Lady Warsi, “Our boys weren’t just Tommies—they were Tariqs and Tajinders too”. Of course, they were not just boys either, although that is another story.

As many noble Lords have said, the figures are not well enough known. As my noble friend Lady Howells said, some contributions are still not being properly acknowledged. There were some 1.5 million men from the Indian subcontinent. It is worth pointing out, as has been mentioned, that participants from the Indian subcontinent won 13,000 medals, including 12 Victoria Crosses. The Caribbean supplied 15,000 soldiers who made up the British West Indies Regiment and there were around 55,000 soldiers from Africa who mainly fought in that continent. As the right reverend Prelate reminded us, there were Gurkhas, as always. When people go to the major war graves in the Low Countries, the lasting memory that we have in these endless fields, beautifully maintained as they should be, is the moving sight of the rows of crosses, but search harder and you can find the memorials to the 47,000 troops from the Indian subcontinent who died on the Western Front. There are Sikh memorials, Jewish and Muslim graves, as well as the grave markers of members of the Chinese Labour Corps.

The centenary that we are commemorating must engage with many national and international levels. It is hoped that—as the noble Lord, Lord Parekh, said—there will be activity in many places around the Commonwealth. In our own country, given the diversity and the challenges that exist in the moment, we should use this commemoration to bring every one of Britain’s communities into some form of discussion and knowledge about the event because so many of their forebears were involved in the First World War.

Having said that, it is important that the First World War be remembered for more than the industrialisation of death that it caused. I hope that the Minister will accept that it will be important to ensure that the commemoration of the centenary is respectful, thoughtful and reflective, without in any way glorifying the nature of the war and the appalling human sacrifice that took place; a commemoration, not a celebration.

There is a huge opportunity here if we can but grasp it. The Imperial War Museum will play a pivotal role; the National Army Museum and local museums will play their parts. In addition, the Heritage Lottery Fund will give £6 million to projects marking the centenary. So it would be really good if the majority of those funds could be reserved to help local areas and communities explore their history and heritage so as to better understand the war’s impact on their communities—to create a truthful narrative, as suggested by the right reverend Prelate the Bishop of London.

The Government have laid out three themes for the commemoration: remembrance, youth and education. That seems to be about right, but I hope there will also be an opportunity to reflect on why the war was waged and to recognise, as the noble Lord, Lord Bilimoria, said, that we would not have freedom today had it not been for the courageous sacrifice and service of those brave individuals then. It is important that we understand why so many Tariqs and Tajinders, as well as Tommies, were prepared to make the ultimate sacrifice for that ideal, and what the significance of that coming together of the empire means today and in the future.

As the noble Baroness, Lady Young, reminded us, much has been achieved in terms of knowledge and understanding of the contribution made by people from Africa, Asia and the Caribbean to the British effort in the First World War. As she also reminded us, there is much more to discover and understand about the impact of all this not only in the trenches and on the battlefields but in the outposts of empire. The human and political strands must be woven into the commemoration. I look forward to hearing how that will happen from the Minister.

16:46

[Lord Gardiner of Kimble]

My Lords, first, I add my own thanks to the noble Baroness, Lady Young of Hornsey, for securing this debate and for giving us the opportunity again to discuss these important commemorations.

The First World War is integral to our history. The Government are committed to commemorating its centenary appropriately. The scale is overwhelming: over 16.5 million deaths, military and civilian, with 1.25 million from Britain and its then empire, colonies and dominions alone. Let us not forget, either, the many more who returned home physically and mentally wounded. More countries were involved in the war than not, from the vast Indian subcontinent to the small island of Nevis. All should be remembered for the part they played, and I assure your Lordships that they will.

Those contributions were as diverse as the countries involved. Many countries provided not only troops but porters, engineers and medics, among others. The noble Baroness, Lady Howells, particularly mentioned the Caribbean. I found out that men travelled from there at their own expense to enlist. In Africa, Asia and the Caribbean there were significant financial contributions both centrally and from citizens who raised large amounts, at a time when they were already feeling economic hardships at home. I think it was the noble Lord, Lord Desai, who referred to the Indian Army being paid by Indian taxpayers. He also mentioned the donations in kind, as did a number of other noble Lords, with each country giving what it could. Whether wood, fruit, sugar, rum, aeroplanes or whatever it was, those were great contributions.

Remembering these contributions is not new for us. I am particularly sad that the noble Baroness, Lady Flather, is not with us today and I wish her a speedy recovery. As the noble Lord, Lord Bilimoria, said, she had so much to do with the Memorial Gates, as did he. That inscription on the Memorial Gates on Constitution Hill is in memory of the 5 million volunteers from the Indian subcontinent, Africa and the Caribbean. It is as meaningful today as it ever was, while the nearby pavilion includes the names of 23 gallant men from those regions who were awarded the Victoria Cross in World War One, alongside those from the Second World War. I am sure that the gates will be used over the four years of commemorations. I rarely part company with the noble Lord, Lord Parekh, but these memorial places are not necessarily there for their stone but because they are a focal point for people to gather in a meaningful way.

The centenary gives us a new opportunity to mark these important contributions. Commonwealth representatives will be invited to stay after the closing ceremony of the Commonwealth Games to attend a service of commemoration at Glasgow Cathedral on 4 August next year. It was right that the right reverend Prelate the Bishop of London referred to this, because it will be followed by a wreath-laying service at the city’s cenotaph.

The nearly 230,000 deaths among military personnel from countries now within the Commonwealth are well documented. However, the speed with which some of them entered the battlefield was extraordinary, as the noble Baroness, Lady Young of Hornsey, mentioned, for the British Indian Army arrived in France on 26 September 1914 and was engaged in fierce fighting at Ypres the following month. Their heroic exploits are rightly commemorated at Neuve Chapelle, where a memorial stands as an enduring testament to the men from the modern-day sub-continent who also served with distinction at places like Gallipoli and Mesopotamia. Indeed, we heard from the noble Lords, Lord Bilimoria and Lord Taylor of Warwick, of their own families’ service. Men from across the African continent contributed, whether it was the Egyptians helping to guard the Suez Canal, then British Nigeria contributing to the German surrender at Duala, or the South Africans seizing Delville Wood with great loss. There were many more occasions such as this across the Commonwealth.

Turning to the Caribbean military contribution, the British West Indies Regiment’s actions in Palestine caused General Allenby to note that:

“All ranks behaved with great gallantry under heavy rifle and shell fire and contributed in no small measure to the success of the operations”.

The names of those from all parts of the Commonwealth who died at the Western Front and beyond are recorded in those immaculately tended cemeteries and memorials of the Commonwealth War Graves Commission, one of our invaluable partners in this programme of commemoration. Funded proportionately in relation to war casualties by its member nations, our Government provide some 78% of the commission’s funding. Many of its cemeteries will provide a poignant backdrop to centenary events around the world, and they are also providing wise counsel to us.

What the noble Lord, Lord Parekh, said about Commonwealth partners was important. It is essential that the entire Commonwealth plays a full part in the centenary commemorations. The Prime Minister’s special representative, Dr Andrew Murrison, has held a number of meetings with the Commonwealth high commissions in London to share our plans and invite their involvement. There are plans for a plenary session involving all high commissions in the autumn, and there have also been discussions with groups including the Commonwealth Secretariat.

It was absolutely right that the noble Lord, Lord Stevenson, referred to my noble friend Lady Warsi. As part of her energetic efforts to highlight the contributions of the Commonwealth, she visited the Grootebeek military cemetery and the First World War graves of soldiers from her parents’ home village in Pakistan. Similarly, we can all be inspired by the First World War centenary to gain a greater understanding of our roots. Indeed, one of the key aims of the battlefield visits project in England, and now in Scotland, is that pupils are given the opportunity to learn about the role of the Commonwealth and former empire countries which fought in the war.

The noble Baroness, Lady Young of Hornsey, made some particularly poignant comments about history and its teaching. It has also been said that education and youth are absolutely key to our efforts. What the noble Lord, Lord Bilimoria, said about that was equally moving. Even before the recent launch of the small community grants scheme, the Heritage Lottery Fund is playing a key role in connecting communities with their First World War past; the noble Lord, Lord Stevenson of Balmacara, mentioned this particularly. They have given early support towards a number of projects which highlight the role played by the African, Asian and Caribbean Commonwealth soldiers in this critical phase of British history. The right reverend Prelate mentioned nation building. This was important for that reason as well.

Through measures like the battlefields visits programme and the HLF-supported projects, not only will we gain a better understanding of our past but, collectively, a strengthened feeling of national identity in today’s Britain, whatever our cultural or ethnic background. There is no doubt that this country could not have prevailed in the First World War without the support and sacrifice of the Commonwealth countries. As we came together then, so the centenary will give us an opportunity to come together again to reaffirm our shared values. The noble Baroness, Lady Howells of St Davids, spoke movingly about them. Those values have been forged through experiences that will not be forgotten and they should bind us together inseparably. Recognition of the important role that men and women from Africa, Asia and the Caribbean played is an integral part of the Government’s plans for an inclusive commemoration.

The commemoration will not gloss over the horror of the First World War or, indeed, who won. I think I would need an hour to digest and satisfy the noble Lord, Lord Parekh, in his questions around what, why and how, but they are particularly important as many people discover things about that war through listening to different historians—I have yet to meet historians who take the same line, and no doubt we will hear a lot from them. We will also want to come to our own judgments, and that is why the Government are not planning anything along one theme. It is for people to discover for themselves and it is why the battlefield visits are going to be so important. Over the next four or five years, two pupils and a teacher from every secondary school will go and see the Western Front for themselves. I would also like to reassure the right reverend Prelate the Bishop of London and all other noble Lords that the Government approach the commemoration in a spirit of reconciliation, acknowledging that loss and suffering recognise no national boundaries and that those who were once our adversaries are now our partners in building a better world.

Committee adjourned at 4.56 pm.

House of Lords

Thursday 20th June 2013 Lords Chamber

Thursday, 20 June 2013.

11:00

Prayers—read by the Lord Bishop of Liverpool.

Violence Against Women

Thursday 20th June 2013 Lords Chamber

Question

11:06

Asked By

[Baroness Howe of Idlicote]

To ask Her Majesty’s Government what is their response to the report Deeds or Words? by the End Violence Against Women coalition.

[Baroness Northover]

My Lords, the Government are fully committed to preventing and combating violence against women and girls. Our national campaigns try to encourage teenagers to rethink their views about abuse. Government-funded community activity challenges so-called “honour crimes” and new legislation against stalking and forced marriage sends a strong preventive message. However, as this report highlights, there is much more to do. Our updated action plan strengthens our preventive approach, responding to a number of the End Violence Against Women coalition’s recommendations.

[Baroness Howe of Idlicote]

I thank the Minister for that very useful list of activities. However, in view of the report’s considerable concern that the Department for Education has substantially reduced spending in this whole area, how will the Government ensure that every child receives age-appropriate information in schools—for example, about the harmful effects of pornography—not least since a report from the Children’s Commissioner for England, entitled Porn is Everywhere, also underlines the urgent need for such guidance?

[Baroness Northover]

This report emphasises that we face a wide cultural challenge, which needs to be tackled at every level by everybody. The quality of teaching in schools is very important. The Department for Education is providing funding for the PSHE Association to work with schools to support them in developing their own curricula and improving the quality of teaching, which is clearly key. In addition, from September 2014, the new computing curriculum ensures that, for the first time, pupils aged five to 11 will be taught about online safety, including issues such as sexting and cyberbullying.

[Lord McColl of Dulwich]

My Lords, as people generally seem very reluctant to believe the extent of the abuse, is it not time for the Government to broadcast the figures in more dramatic terms? For instance, they could say that millions of men are smashing up millions of women and that millions of men are sexually abusing millions of children. These abusers are normally distributed throughout society, which might account for the fact that so few prosecutions occur.

[Baroness Northover]

It is, indeed, a widespread problem. Last year, 88 women were killed by a partner, 60,000 women were raped and 400,000 were sexually abused. The report talks about a “watershed moment” in relation to child sexual abuse and other violence against women and girls, as shown by the concern about the Savile investigations, and so on. We have to make sure that it is indeed a watershed moment and that things start to improve.

[Baroness Smith of Basildon]

My Lords, the noble Baroness will be aware of the value of women’s refuges, which allow women to remove themselves from immediate danger of physical or sexual violence towards them or their children. A number of refuges are reporting serious financial difficulties at the moment. Will the Government consider carrying out some kind of review of the impact of local government cuts and of stopping the ring-fencing of financial support so that we can assess that impact and see what can be done to ensure that these refuges have the finance that they so desperately need?

[Baroness Northover]

Across government, we are determined to make sure that we do everything we can to protect the victims of domestic abuse. I know that colleagues across government have looked at this issue. If the noble Baroness has more specific information, I would welcome receiving it.

[Lord Marks of Henley-on-Thames]

My Lords, there is a clear link between domestic violence and sexual abuse and women’s offending, with between 50% and 80% of the women in our prisons being victims. Is this not a sound reason for devoting more government resources, as this report demands, to education and to campaigning in the community to help to bring an end to this dreadful scourge?

[Baroness Northover]

We recognise the challenge posed by female offenders and the fact that they themselves are often at risk of violence and have specific rehabilitation needs, as well as often having high levels of mental health problems. Many of them have indeed suffered domestic violence. The Ministry of Justice has just set up a cross-departmental advisory board on women offenders, chaired by the Parliamentary Under-Secretary of State. This group will be looking at more provision in the community, more rehabilitation, a review of the prison estate to raise the profile of women offenders and the factors associated with offending that my noble friend has just pointed to.

[Baroness Gale]

My Lords, does the Minister agree that the level of domestic and sexual abuse towards women and girls in our country is an absolute disgrace? Does she further agree that the daily displays of semi-nude women in the popular tabloids help only to build up disrespect among boys and young men in their formative years? Therefore, will she join me in congratulating the No More Page 3 campaign? More than 106,000 people have already signed its petition, including me. If she agrees to endorse that campaign, perhaps she could sign the petition herself, as I believe that it is one way of combating the disrespect that can build up among boys and young men.

[Baroness Northover]

Yes. On Monday, on the subject of women on boards, I described a company as being outdated for having no women on its board. I would describe what the noble Baroness has portrayed as also being outdated. Personally, I would indeed endorse the campaign and I am astonished that we are still fighting this battle a number of years down the track. That said, of course we support freedom of speech, but I think it is about time that we made very clear what we find acceptable and what we do not.

[Lord Elystan-Morgan]

My Lords, domestic violence is clearly a loathsome feature of our community. Does the noble Baroness agree that, as so much domestic violence is founded on the exploitation by men of their relative superiority in strength, physically and economically, over women, there is a strong case for either legislation or sentencing guidelines to be considered regarding domestic violence as an aggravated form of violence, to be dealt with, where appropriate, by condign punishment?

[Baroness Northover]

I am sure that the group that I mentioned earlier will be looking at exactly that.

[Lord Avebury]

Does my noble friend think that the leniency shown to Mr Saatchi when he half-strangled his wife set the wrong tone?

[Baroness Northover]

I cannot comment on a particular case. However, I am struck by the media reaction, which is really very interesting. I am struck by the support and sympathy for people who find themselves in such situations and by the fact that these problems go through every level of society.

Unemployment: Young People

Thursday 20th June 2013 Lords Chamber

Question

11:15

Asked By

[Lord Roberts of Llandudno]

To ask Her Majesty’s Government what action they are taking with other European Union member states to tackle youth unemployment.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, the Minister for Employment attended a ministerial meeting on youth unemployment in Madrid yesterday under the European initiative for growth and jobs. The Secretary of State for Work and Pensions will attend a follow-up in Berlin on 3 July. Youth unemployment is on the June agenda of both the European employment and social policy council and the European Council, and UK experts are members of the team reforming the Greek public employment service.

[Lord Roberts of Llandudno]

I think I thank the Minister for his Answer. He is telling us what is going to happen, but does he agree that with nearly a quarter of under-25s in the European area unemployed, the only way we can solve this is on a European-wide level? To tackle this crisis, should he not join Lib Dem MEPs and others who have called for the UK to make the most of the €6 billion EU youth guarantee scheme, which ensures that all under-25s receive continued education, a job, apprenticeship or traineeship? How would the Government use the money that would come from this European initiative?

[Lord Freud]

My Lords, clearly there are various initiatives. Some €6 billion across Europe is not a huge amount, and we are spending a great deal on our youth unemployment issues with the youth contract. If it emerges out of these meetings that one of the aspects of the European scheme is to encourage SMEs to take on youngsters by offering loans, clearly that is something that we will look at.

[Lord Barnett]

My Lords, does the noble Lord accept that talking to others might be helpful, but that generally they are pretty useless, especially in summits? Will he also accept that 1% growth at best over the coming years will be no way to help to increase employment among young people or anybody else?

[Lord Freud]

My Lords, perhaps I should not comment on the uselessness or otherwise of summits.

One of the most interesting things about this current recession, or slowdown in growth—

[Noble Lords]

Oh!

[Lord Freud]

We have had a recession and we are now having slow growth. One of the most interesting things is how the effects on employment have been nothing like what we have seen in previous recessions. One reason is the effectiveness of active labour market polices, particularly those that address youth unemployment, which has been coming down in the last year in particular in a way that it probably would not have done in previous recessions.

[Lord Tebbit]

My Lords, will my noble friend remind the noble Lord, Lord Roberts, that money that comes from Europe is our money, which has gone to Brussels, has had a large amount sliced off for its own purposes and waste, and has then been graciously returned to us? Can he also explain to me, because I do not understand, why so many young people are unemployed here but so many young people can come from Poland, the Czech Republic, Slovakia, and find jobs here without any trouble at all? What is the explanation for that?

[Lord Freud]

My Lords, the blunt explanation for that is that we have a welfare system that traps people in inactivity and makes it very difficult for them to pick up some of the jobs that other people find it easy to take. That is why we are reforming the welfare system root and branch, in particular why we are bringing in the universal credit, which will get rid of that trapping effect of our benefit system.

[Lord Martin of Springburn]

In the coming year, will more young people be taken on as apprentices in the Government’s apprentice scheme?

[Lord Freud]

My Lords, one of the recommendations of the Wolf report, which, as noble Lord’s will remember, I am very enthusiastic about, is to underpin the importance of apprenticeships and vocational training. In the latest year for which I have a record, 2011-12, we had more than half a million apprenticeships—520,000. That is up 86% on the two years before. Clearly this is one of the most important ways in which to get youth back into the workforce in a sustainable way, and it is something that we are pursuing aggressively.

[Baroness Sherlock]

My Lords, the Minister might not realise that one consequence of our very, very slow growth is that 1 million young people are out of work. In the north-east, where I live, a quarter of young people are out of work. We now need something really radical. May I make a suggestion? Labour’s job guarantee would mean that any young person out of work for a year would be guaranteed a job and would have to take it. Will he match that?

[Lord Freud]

My Lords, we have a huge number of programmes in our youth contract to encourage people into work. One thing I need to emphasise is that we have a long-term problem of disengaged youth, which we had right through the longest boom we have ever had. The real measure here is people not in education or work. In 2001, that figure stood at just shy of 1 million and it rose through the boom period. Since the election, we have pulled it down by 60,000. The figure currently is 1.3 million. It is a real problem that cannot be brought down with short-term programmes; it is brought down by fundamentally restructuring how youngsters are supported—through vocational education as a key underpinning to get these kids into meaningful long-term work.

Turkey

Thursday 20th June 2013 Lords Chamber

Question

11:22

Asked by

[Baroness Falkner of Margravine]

To ask Her Majesty’s Government what is their assessment of the political situation in Turkey.

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

My Lords, Turkey is a democracy with multiparty elections and a democratically elected Government. We are following events in Turkey closely. There have been disturbances in Ankara and Istanbul. The Foreign Secretary and the Minister for Europe have spoken to their Turkish counterparts about the protests. As friends of Turkey we hope to see the issues raised by the protesters resolved peacefully through dialogue. A stable, democratic and prosperous Turkey is important for regional stability. Turkey remains an important foreign policy partner and a NATO ally, and the UK will continue to support its reform agenda.

[Baroness Falkner of Margravine]

My Lords, does my noble friend agree that the resilience of a democracy is tested through how it responds to internal dissent? The clampdown in the past three weeks on not just protesters but also on medics, hoteliers and simple bystanders who were only helping the wounded as well as on the media demonstrates an authoritarian strand. Does she agree that this can assist only those who argue against Turkey’s entry into the EU on the basis of the Copenhagen criteria? Is she working with European partners, as well as Turkish authorities, to help solve this?

[Baroness Warsi]

My noble friend raises important points and we have raised our concerns exactly in the way that she has described. Of course, she will accept that Turkey is on a positive path to reform. A huge amount of economic and constitutional reform has been effected. As regards Europe, we are concerned about countries that are raising concerns about not opening up further chapters on accession; however, we must also remember that before these protests there were many countries which for the past three years have objected to opening up any chapters on further accession.

[Lord Anderson of Swansea]

There is proper concern at the increasing authoritarian tendencies by the Turkish Government and certain Islamic tendencies. However, should not the Turkish Government be given credit for their opening up to their Kurdish minority and their far greater reconciliation than any previous Government, not only in Turkey, particularly in the south-east provinces, but also in relations with the Kurds in northern Iraq?

[Baroness Warsi]

The noble Lord makes an important point. As well as reform of the constitution generally that has assisted the Kurdish peace process, progress in that process has meant that Turkey has been heading in the right direction, and we must support and congratulate it on that.

[Baroness Hussein-Ece]

My Lords, after the terrible scenes that we have seen over the past few weeks of how the security forces and police have responded to these demonstrations, does my noble friend share my view that Turkey’s huge economic success in the past decade now needs urgently to be matched by democratic reforms to ensure an anti-authoritarian, inclusive society that the younger generation in particular, who are educated, middle class and secular—I include women in this—are demanding? I declare that I have family and friends who have been involved and caught up in this, especially women’s groups with whom I work. Does my noble friend also think, as has been touched on, that the UK and the EU now need to engage more than ever with Turkey? As has been mentioned, fundamental chapters have been closed, such as Chapter 24 that would force the reform of justice, freedom and security, and Chapter 22 on regional development.

[Baroness Warsi]

My noble friend makes an important point in relation to Turkey’s economy. It has enjoyed 5% growth on average over the past 10 years. It is effectively one of Europe’s strongest-growing economies. We must congratulate Turkey on that. Britain has seen success on the back of it, but I take the noble Baroness’s point in relation to further European accession. It is because Turkey continues its path towards European accession that it carries on making these reforms and we must therefore encourage rather than discourage it.

[Lord Hylton]

My Lords, I welcome the noble Baroness’s response in regard to the Kurdish question that is long outstanding in Turkey. Does this not include work on a new constitution and can our Government be helpful through our experience of devolution within the United Kingdom?

[Baroness Warsi]

We always stand ready to support Turkey in whatever way we feel that we can add value.

[Lord Triesman]

My Lords, I share the view that the Minister has expressed about the importance of Turkey, to this country, its own region and potentially the European Union. I would like to return to one of the points made by the noble Baroness, Lady Falkner, because it is important to get a precise answer. The attacks on doctors and nurses in the course of these demonstrations, and on hospitals to where people injured in the demonstrations have been taken, seem to raise profound questions about the way in which we work with the World Medical Association and other competent medical authorities. How do the Government propose to do that? Plainly it cannot be the case that those who are assisting the injured and seriously injured are left to fend for themselves.

[Baroness Warsi]

It is important for noble Lords to understand slightly more the complexity of what led to these protests. What started off as concerns about a Bill on the use and sale of alcohol became an environmental dispute about the development of a shopping mall in Gezi Park, which has stood for 60 years. This then became a broader political dispute. It is important for us to remember that there are different things happening with the different groups in Turkey, but I completely take the noble Lord’s point in relation to making sure that these matters are resolved peacefully and by a political dialogue, and that Turkey continues to be aware of its international obligations in dealing with these protests.

[Lord Dykes]

Will my noble friend make specific representations about the large number of journalists and lawyers who seem to be languishing in Turkish jails, which is an affront to democracy?

[Baroness Warsi]

I will see that we raise that in bilateral discussions.

Armed Forces: Redundancies

Thursday 20th June 2013 Lords Chamber

Question

11:29

Asked By

[Lord Touhig]

To ask Her Majesty’s Government what are the implications of the most recently announced redundancies in the British Army for the United Kingdom’s defence capabilities.

[The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)]

My Lords, the Chief of the General Staff and his team assess that the size and the structure of the Army set out in Future Army 2020 will deliver the level of capability agreed in the October 2010 SDSR and the associated national security strategy. The Army’s element of the Armed Forces redundancy programme is a consequence of the size of the Army being delivered under Future Army 2020 and as such there are no implications for the UK’s defence capabilities.

[Lord Touhig]

My Lords:

“There’s never been a better time to be a soldier, to get qualified and have a career”.

That is on the Army website at this minute. It further states that,

“there will be even more opportunities for people who want to enjoy the challenges that come with being a soldier”.

That is a sham. If there were any justice the Government would be prosecuted for issuing a misleading prospectus. The Minister is well regarded in this House, deservedly so, and perhaps he is here with a heavy heart today, but how much longer will the Government go on sacking highly trained, highly skilled, highly motivated soldiers who have been trained at great expense to the taxpayer and have served our country well, and, at the same time, spend an absolute fortune on advertising for, recruiting and training their replacements? It is a total waste of taxpayers’ money and is harming our defence capability.

[Lord Astor of Hever]

My Lords, no Government likes making these kinds of redundancies. While reduced recruiting and fewer extensions of service will account for some reductions, a redundancy programme is needed to ensure that the right balance of skills is maintained.

[Lord Craig of Radley]

My Lords, is it not the case that more than 80% of those who are on the redundancy programme this time are volunteers? If so, what does that say about morale in the Armed Forces, particularly in the Army?

[Lord Astor of Hever]

My Lords, the number of applications for redundancy is not a good indicator of the state of morale because the Army has deliberately set out to maximise applications. Additionally, it should be noted that only 30% of those who were eligible applied for redundancy.

[Lord Palmer of Childs Hill]

My Lords, will the Minister expand on his Answer in relation to reductions in the Army to include reductions in the Royal Air Force and the Royal Navy? The proposals were for 5,000 reductions in the RAF and 5,000 in the Royal Navy. Can he tell the House the timing of those reductions and what progress has been made? Following on from the previous question, what is the state of morale in the Armed Forces if voluntary redundancies are of the extent about which we have been told?

[Lord Astor of Hever]

My Lords, I think I covered the question of morale in my previous answer. As to redundancies in the Royal Navy and the Royal Air Force, in tranche 1, 2,800 personnel—just over 1,000 Royal Navy, 920 Army and 920 RAF—were selected for redundancy, of which 62% were applicants. In tranche 2 of the Armed Forces redundancy programme, 3,760 personnel—165 Royal Navy, 2,880 Army and 750 RAF—were selected for redundancy. Achieving the reductions required to bring the Regular Army to a strength of 82,000 is expected to require a further redundancy tranche, which may also include medical personnel of the Royal Navy and the Royal Air Force. However, at this point, no decision on this has been taken.

[Lord West of Spithead]

My Lords, the Minister is aware that the Chief of the General Staff and the Secretary of State for Defence are both on record as saying that any further cuts would dramatically impact on our military capability. All of us who have any knowledge of the MoD know that there is insufficient funding for Future Force 2020, to which the Minister referred. Notwithstanding this and assuming that there will be further cuts, have we conducted a detailed analysis—rather like the highly regarded global strategy paper that was produced—looking at the true impact of these forced reductions on our Armed Forces’ ability to conduct the military operations that our nation has a right to expect of them?

[Lord Astor of Hever]

My Lords, on the first part of the noble Lord’s question, as he would expect, I agree with the Secretary of State. On the issue of detailed analysis, as the noble Lord knows there are some very bright people in the Ministry of Defence and I can assure him that endless meetings are taking place to discuss the way forward.

[Lord Forsyth of Drumlean]

My Lords, could my noble friend very gently point out to noble Lords opposite that none of this would have been necessary had the previous Government not made such a mess of the defence procurement programme and a mess of our economy?

[Lord Astor of Hever]

My Lords, I have done this on numerous occasions, and not always in a gentle fashion.

[Baroness McIntosh of Hudnall]

Would the noble Lord be kind enough to return to the Question he was originally asked by my noble friend Lord Touhig and address the recruitment campaign? I do not think I heard him answer the implied question. Why are we still recruiting when we are making redundancies?

[Lord Astor of Hever]

My Lords, even while reducing in size, the army must continue to recruit new talent to replace those who are promoted. It needs to develop its own leaders. It cannot bring in people from outside to leadership roles without the necessary military experience.

[Lord Selkirk of Douglas]

Will my noble friend say a word about the injured and the wounded, bearing in mind the very worthy tradition that wherever possible they were absorbed back into the armed services as soon as they were in a position to give of their best?

[Lord Astor of Hever]

My Lords, all personnel who have been graded permanently below the minimum medical retention standard were exempt from redundancy and, where appropriate, will be medically discharged in due course. Every case of wounded, injured or sick will be assessed individually. No one will leave the Armed Forces through redundancy or otherwise until they have reached a point in their recovery where leaving is the right decision, however long it takes.

[Lord Davies of Stamford]

My Lords, is it not disingenuous and absurd to suggest that you can reduce the Army from 102,000 to 82,000 with no reduction in the nation’s defence capability? Will the noble Lord set out the figures clearly and frankly? What was the maximum military force that we were able to sustain over a number of years—for example in Iraq or Afghanistan—with an Army of 102,000, and what will be the maximum military force that we can deploy on a sustainable basis under the new arrangements for an Army of 82,000?

[Lord Astor of Hever]

My Lords, this was not being disingenuous. This level of capability was agreed by the SDSR and the National Security Council.

Care Quality Commission: Morecambe Bay Hospitals

Thursday 20th June 2013 Lords Chamber

Statement

11:37

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

My Lords, with the leave of the House, I shall now repeat a Statement made in another place yesterday by my right honourable friend the Secretary of State for Health on Morecambe Bay Hospitals. The Statement is as follows.

“I wish to make a Statement about today’s independent report into the CQC’s regulatory oversight of University Hospitals, Morecambe Bay. What happened at Morecambe Bay Hospital is, above all, a terrible personal tragedy for all of the families involved. Before saying anything else, I want to apologise on behalf of the Government and the NHS for all the appalling suffering they have endured and, in that context, I know that the whole House will wish to extend our condolences to every one of them.

Joshua Titcombe’s tragic death was one of 12 serious untoward incidents, including five in the maternity department. His family and others have had to work tirelessly to expose the truth—and I want to pay tribute to them for that—but the fact is that they should not have had to go to such lengths. As we saw with Mid Staffs, a culture in the NHS had been allowed to develop in which defensiveness and secrecy were put ahead of patient safety and care. Today I want to explain to the House what the Government are doing to root out that culture and ensure that that kind of cover-up never happens again.

The independent report was commissioned by the new chief executive of the CQC, and the new team running the organisation has made it clear that there was a completely unacceptable attempt to cover up the deficiencies at the CQC. The report lists what went wrong. Unclear regulatory processes, reports commissioned and then deleted, lack of sharing of key information and communication problems throughout the organisation. Most of the facts are not in dispute. All of them are unacceptable. They have compounded the grief of the Titcombe family and many others.

The role of the regulator is to be a champion for patients, to expose poor care and to ensure that steps are taken to root it out. It must do this without fear or favour. It is clear that at Morecambe Bay the CQC failed in that fundamental duty. We now have a new leadership at the CQC and we should recognise its role in turning things around. David Behan was appointed chief executive in July 2012. One of his very first acts was to commission the report that we are now debating. David Prior was appointed the new chairman in January this year. He has rightly insisted that this report be published as soon as possible. Those two outstanding individuals have never shrunk from addressing head on the failings of the organisation they inherited and are wholly committed to turning the CQC into the fearless independent regulator the House would like to see. While I do not underestimate the challenge, I have every confidence in their ability to undertake it. David Prior will now report back to me on what further actions the CQC will take in response to the report, including internal disciplinary procedures and any other appropriate sanctions on individuals.

Working with the CQC and following the Francis report into the tragedy at Mid Staffs, the Government are putting in place far-reaching measures to put patient care and patient safety at the heart of how the NHS is regulated. The CQC is appointing three new chief inspectors—of hospitals, social care and general practice. This will provide an authoritative, independent voice on the quality of care in all the providers that the CQC regulates. The commission has already announced the appointment of Professor Sir Mike Richards as the new Chief Inspector of Hospitals and on Monday the CQC launched a consultation, “A New Start”, which outlines its new much tougher regulatory approach. This includes putting in place more specialist inspection teams with clinical expertise. It will include Ofsted-style performance ratings so that every member of the public can know how well their local hospital is doing, just as they do for their local school.

The Government will also amend the CQC registration requirements so that they include an emphasis on fundamental standards—the basic levels below which care must never fall, such as making sure patients are properly fed, washed and treated with dignity and respect. Failure to adhere to these will result in serious consequences for providers, including, potentially, criminal prosecution. The revised registration requirements will also include a new statutory duty of candour on providers that will require them to tell patients and regulators where there are failings in care—a failure that was identified clearly in today’s report.

Finally, we are putting in place, through the Care Bill, a new robust single failure regime for NHS hospitals. This will provide a more effective mechanism to address persistent failings in the quality of care, including the automatic suspension of trust boards when failings are not addressed promptly.

The events at Morecambe Bay, Mid Staffs and many other hospitals should never have been covered up, but they should never have happened in the first place, either. To prevent such tragedies we need to transform the approach to patient safety in our NHS. The Prime Minister has therefore asked Professor Don Berwick, President Obama’s former health adviser and one of the world’s foremost experts on patient safety, to advise us on how to create the right safety culture in the NHS. He and his committee will report later this summer.

In addition, later this year we will start to publish surgeon-level outcomes data for a wide range of surgical specialties. Most of all, we need a culture where, from the top to the bottom of NHS organisations, everyone is focused on reducing the chances of harming a patient in the course of their care, and a culture of openness and transparency to ensure that, when tragedies do occur, they are dealt with honestly so that any lessons can be learnt. Our thousands of dedicated doctors, nurses and healthcare assistants want nothing more than to be allowed to make this happen. We must not let them down or the families who suffered in Morecambe Bay”.

My Lords, that concludes the Statement.

11:44

[Lord Hunt of Kings Heath]

My Lords, I am grateful to the noble Earl for repeating the Statement, and I declare my interest as a consultant trainer with Cumberlege Connections and as chair of the Heart of England NHS Foundation Trust. Yesterday’s report will have left your Lordships shocked. The noble Earl began with an apology and we on this side of the House echo that apology. Of course, it is a sad fact of life that mistakes will be made. What is never acceptable is when people or organisations try to hide those mistakes. Sadly, this is what appears to have happened in this case.

The report covers a four-year period up until autumn 2012 and deals with failures in regulation, but also with subsequent attempts at a cover-up. It was only published thanks to the efforts of James Titcombe and his family, and I echo the tributes that the noble Earl has paid to him. It is essential that he and all the other families affected in Lancashire and Cumbria get the answers they are looking for. We on this side of the House are fully committed to making sure that this happens.

The most shocking revelation in this report is that in March 2012 an instruction was given by a member of senior management at the CQC to delete the findings of an internal review. Today’s report says:

“we did find evidence of the apparently deliberate suppression of an internal CQC report … and the alleged decision to suppress it … may constitute a broader and on-going cover-up”.

When one considers the context in which this takes place, it is truly shocking. At that time, we were almost two years into a public inquiry into the failings at Mid Staffordshire. That followed an earlier independent inquiry, also led by Robert Francis, following which all parts of the NHS had committed to full openness and transparency. It came after failings at other trusts, most notably Basildon and Thurrock, had been made available, which led to the Opposition calling for an in-depth look at hospitals and a new assurance that they were safe. That is why yesterday’s report is so hard to comprehend. It raises serious questions for the CQC and the Government, which I will take in turn.

On the question of the CQC, I agree with the noble Earl’s assessment of the quality of the new leadership team at the CQC. I commend the new chief executive, David Behan, for commissioning this report. However, yesterday the chair, Mr David Prior, said that he wants to draw a line under the issue. Does the noble Earl agree with me that that line can be drawn only when further questions about the report are answered?

On the cover-up, paragraph 1.17 of the summary of the report says, as I said earlier, that the order to delete,

“may constitute a broader and on-going cover-up”.

Will the noble Earl address this point directly and tell the House whether he is confident that this cover-up is no longer happening? Is he satisfied that the CQC is taking all appropriate steps, and does he have full confidence going forward, or does he believe that a further process of investigation is necessary?

More specifically, is anybody who is involved in the decision to delete that report still working at the CQC or elsewhere in the National Health Service? If they are, I think the public will find that very hard to accept. Given that accountability is essential, does he agree that the public would find it very hard indeed to accept data protection laws standing in the way of this? Will he therefore review the decision to shield the identities of those involved?

The noble Earl will probably have heard the Information Commissioner, speaking today about the use of the Data Protection Act, saying, as I understand it, that there is no blanket ban under the Data Protection Act that would deal with a situation like that, and that if there is an overriding public interest in the names being in the public domain, the Data Protection Act should not be prayed in aid.

I know that the CQC is now seeking further legal advice, and that is welcome. In the end, does the noble Earl agree that sometimes organisations have to override legal advice and do the right thing? I hope the CQC will do that and do it quickly.

Turning to the noble Earl’s department, can I just have it confirmed that the decision to delete the report was taken solely by senior management at the CQC? Can he confirm that officials in his department were not aware of that deleted internal report and were not involved in any discussions between the CQC and the department about it?

Yesterday, at Prime Minister’s Questions, the Prime Minister said that there should always be support for whistleblowers, and he was right. However, there are serious doubts about whether that happened in this case. Concerns about the CQC were raised by a whistleblower, but I understand that she was then subject to attempts to remove her from the CQC board. The noble Earl will recall that I raised this in the House, and he very kindly took action on the matter. It has been reported that the same whistleblower told the CQC board yesterday that she raised issues internally first and then within the department, including directly with the then Secretary of State, in a meeting. Is the noble Earl prepared to release the minutes of those meetings?

We note the important work of Mr Don Berwick, but should we not be getting on with implementing the recommendations of the Francis report in this regard? The Care Bill, which is now in your Lordships’ House, is an ideal vehicle for implementing Francis but is remarkably light on clauses relating to Robert Francis’s recommendations. His report emphasised the need for openness, transparency and candour. Openness will enable concerns and complaints to be raised freely and without having questions to answer. Transparency will enable the truth about performance and outcomes to be shared with everybody with an interest in it. Candour will ensure that any person harmed by the provision of a healthcare service is informed of that fact and an appropriate remedy offered.

Francis made specific recommendations, including that a statutory obligation should be imposed to observe a duty of candour. He wanted healthcare providers who believe or suspect that the treatment or care provided to a patient has caused death or serious injury to inform that patient, or a duly authorised person, of that fact as soon as practical. He said there should be a statutory duty on all directors of healthcare organisations to be truthful and that it should be made a criminal offence for any registered medical practitioner to knowingly obstruct another in the performance of the statutory duties that he wished to see enacted, to provide information to a patient or nearest relative intending to mislead, or to dishonestly make an untruthful statement. However, the only offence in the Bill is a corporate one of providing “false or misleading information”. That is not a duty of candour, so I was very surprised to see the Secretary of State say yesterday in the other place that there would be a duty of candour in the Care Bill. It is not in the Care Bill and I do not think that secondary legislation is sufficient.

Does the noble Earl also not agree, in the light of what happened at the CQC, that it is perverse that the duty not to provide false or misleading information applies only to providers? It does not apply to the CQC; to the other regulator, Monitor; to NHS England; or to his own department. Is he prepared to agree to amendments to the Care Bill on Report to extend this duty to the organisation that has been found so grievously to suppress information that it found itself uncomfortable with?

There is clearly a real problem about the approach that the CQC has taken to hospital regulation. Is the noble Earl willing to have a lengthier debate about regulation? I wonder whether we are just putting too much responsibility on regulators and not enough on the people who actually provide those services. I particularly worry about what he says about the introduction of Ofsted-style ratings into the health service. He will have seen evidence from a number of medical bodies, which are concerned that this is going to be too simple a process when judging something as complex as a hospital.

A hospital may be given a 1 rating—an outstanding rating Ofsted-style—but inevitably within a large hospital, although overall it may be a category 1 there are likely to be services that are not so good. My worry is that a hospital, because it has been given a 1, will not then be reinspected for a number of years, which is the Ofsted style, and its weaknesses will go undetected. When at some point a real problem with patient care comes into the open, it will undermine the whole credibility of the exercise undertaken by the CQC.

We know that the CQC has really been pushed into this by the Government and the Prime Minister. I hope it will be given the flexibility to come up with a more sophisticated approach. We do not want to set the CQC up for failures in the future. I am very fearful that a simple grading of 1 to 4 is almost guaranteed to do that. Overall, I am glad the Government have brought this Statement to Parliament. It is very important indeed that the messages and lessons are learnt. However, we need a much wider debate about the role of regulation in the health service and about whether the practicalities of this can be taken forward effectively by the CQC.

11:56

[Earl Howe]

My Lords, I am grateful to the noble Lord, Lord Hunt, for his measured comments, and I am the first to agree with him that the report we now have is very deeply worrying. It sets out conclusions about the CQC’s leadership and operation during the period in question that are very shocking. What happened was totally unacceptable.

The CQC today is a different organisation and I was glad to hear that the noble Lord recognised that. Its board and management team have been completely overhauled. A new chief executive and chair are in post. A powerful new Chief Inspector of Hospitals has been appointed, an appointment that has been welcomed widely. The new leadership, as the Statement said, commissioned and published this report to make sure that the events of the past are exposed and that lessons can be learnt from them.

I am very pleased that the CQC will now be overseeing the production of a report within the next two months to provide assurance that any cover-up has been fully exposed and stopped and that the mistakes made by the CQC in regard to Morecambe Bay hospitals are being put right. That will ensure that the organisation’s structures and procedures are such that these shocking events cannot be repeated.

The noble Lord referred to what I agree with him is the troubling issue of the anonymisation of names in this report. Our clear understanding from the CQC was that its legal advice was that the report had to be anonymised prior to publication to comply with data protection legislation. We asked the CQC to consider this further and to provide advice on whether it was possible to release the names. Yesterday, it gave a commitment to do just that. It has now done so and my understanding is that it will later today publish the names of certain individuals currently anonymised in the Grant Thornton report.

The noble Lord asked whether the Department of Health had seen the report prepared by the CQC, which was then withheld. We have extensively asked officials throughout the department. There is no evidence to suggest that anyone in the department knew that the CQC had commissioned a report into its handling of Morecambe Bay and subsequently withheld it, still less that anyone actually saw it.

The noble Lord raised the issue of the whistleblower, Kay Sheldon. Her concerns about the CQC’s capability were considered alongside a range of other evidence as part of the DoH performance and capability review that was carried out between October 2011 and February 2012. The issues she subsequently raised have been considered along with other information as part of the department’s ongoing oversight of the regulator. The appointment of David Prior as chair of the CQC in January and David Behan as chief executive last July, combined with a strengthened board and the CQC’s new strategy, puts the organisation in a good position for the future.

When Kay Sheldon approached the department she was asked to raise the issues with the CQC board, and DoH officials also raised the issues with the CQC team in line with our normal approach to operational issues. The noble Lord asked whether we will release the minutes of the meeting with Kay Sheldon and the Secretary of State. I am happy to take that request away and I will let the noble Lord know whether that will be possible.

The noble Lord rightly raised the issue of culture in the NHS. The overriding message from the document that we published, Patients First and Foremost, which arose out of Mid Staffs, is that the culture of the NHS governs the quality of everything it does. We are clear that radical transparency, excellence in leadership, clarity of accountability and consequences for failure are together necessary if we are to maintain in the NHS the focus on quality and safety and for concerns to be identified quickly and acted upon.

Transforming culture is a complex challenge that will be different in each organisation. We believe that a combination of the steps that we have set out, such as ratings, which we will debate during the course of the Care Bill, a Chief Inspector of Hospitals and a failure regime that puts quality on a par with financial failure will contribute to making a real difference to the experience of patients. I look forward to the debate on ratings because I know that the noble Lord has concerns about the idea.

The noble Lord referred specifically to the duty of candour. In our response to the Francis report we said that we would introduce a new statutory duty of candour on providers. We agree that it is essential that providers of health and social care must be open in their dealings with patients and service users. We intend to introduce an explicit duty of candour on providers as a CQC registration requirement. That will require providers to ensure that staff and clinicians are open with patients and service users where there are failings in care.

As with all requirements for registration with the CQC, our intention is that the duty of candour will be set in secondary and not primary legislation. I am sure that my right honourable friend the Secretary of State would not mind me saying that he made a slip of the tongue yesterday. He meant to say that a statutory duty of candour will be put in place. However, I emphasise that the duty will have the same legal power in secondary legislation as it would in primary legislation.

The noble Lord made a number of powerful points on false and misleading information. The Care Bill will make it a criminal offence for care providers to give false or misleading information where information is required by a legal obligation. We will specify through regulations the type of information within scope of the offence. However, a failure to provide information would be a breach of the relevant legal requirement to provide it and would be subject to appropriate action.

In determining the scope of the false or misleading information offence, our current focus is on information supplied by providers who are closest to patient care, in which inaccurate statements can allow poor and dangerous care to continue. We need to give further consideration to the events highlighted in the Grant Thornton report and to reflect on whether a false or misleading information offence should apply to other health bodies such as regulators.

12:04

[Lord Patel of Bradford]

My Lords, I welcome the Statement made by the noble Earl, particularly in respect to the CQC’s new focus on being a champion for patients, putting safety and care at the heart of the system and having more specialist teams. I am particularly pleased that David Behan has been appointed as the new chief executive. However, I am extremely concerned that another scandal is looming round the corner. There are very strong warnings. I am extremely concerned that mental health patients detained under the Mental Health Act are very poorly served at the moment. To put this in context, the CQC was formed from three organisations: the Healthcare Commission, the Commission for Social Care Inspection, and the Mental Health Act Commission. The Mental Health Act Commission was not an inspectorate—it was a visitorial body, and looked after the care and treatment of detained patients. It did so by employing a number of commissioners with specialist expertise, not only in understanding the issues faced by mental health patients but also in mental health law, which is so important.

[Noble Lords]

Question!

[Lord Patel of Bradford]

I am coming to the question.

As the former chairman of the Mental Health Act Commission, I was assured when those organisations merged that the CQC would keep the focus of those commissioners, those skills and that methodology, and that specialist focus and attention would be given. That is legally required under the Mental Health Act, but it has not happened. Over the last few years the expertise of Mental Health Act commissioners has been eroded. Can the Minister assure me that this focus will be renewed, and the focus of Mental Health Act commissioners returned? Will the Government consider having a chief inspector of mental health? That was one of the original ideas when it was formed.

[Baroness Northover]

I remind noble Lords that brief questions are allowed. As the Companion states, this is not the occasion for an immediate debate. I note that many noble Lords want to speak, so the briefer the better, please.

[Earl Howe]

My Lords, I recall the noble Lord, Lord Patel of Bradford, making those points very powerfully some years ago when we debated the Bill that created the CQC. He makes an extremely important point. I think that we can take it from the statements of David Prior yesterday that the decision taken in 2009 to take a generalist approach to inspection was a mistake. The CQC’s inspectors are in one sense specialist inspectors who are trained and supported to carry out their role, which they do to the best of their ability. However, requiring inspectors to have oversight of a wide range of service types from slimming clinics to acute hospitals, and indeed mental health establishments, has spread expertise too thinly.

We are clear that we must now work with the CQC to create a much more specialist approach to inspection, including on mental health. I think that the three new chief inspectors we are appointing will help to do that. It is not the whole answer, because they need to be supported by clinical expertise and by the people who are experts by virtue of their experience in care services. However, I will take away the noble Lord’s idea of a chief inspector of mental health. I must be honest with him that we have not discussed this, but I am sure that we now should.

[Lord Mackay of Clashfern]

My Lords, I wonder if my noble friend would take account of the suggestion of the noble Lord, Lord Hunt of Kings Heath, that legal advice can sometimes prevent people from doing the right thing. I was very sorry to hear that. I think that good legal advice should in fact produce the result of people doing the right thing. The second point I want to make relates to the claims against the health service for negligence. These have been quite substantial over the years. Could the CQC look at that area and examine the grass-roots standard of care given to patients?

[Earl Howe]

My Lords, the deputy Information Commissioner is quoted as saying that confidentiality and data protection issues should not stand in the way of disclosure where disclosure is clearly in the public interest. I completely agree with that. That is why our instant reaction yesterday, when we were told by the CQC that legal advice had said that the names of the individuals had to be kept confidential, was to challenge that. I am pleased that that decision is to be reversed and the names will be released.

On my noble and learned friend’s second point, most certainly yes: the CQC should take a view about matters relating to negligence. However, I would add that apart from the CQC, we now have the new Healthwatch bodies, part of whose function will be to make sure they provide good soft intelligence on what is happening in NHS and social providers in their local areas. The Healthwatch bodies can then act as the eyes and ears of the CQC, which, with the best will in the world, cannot be everywhere at once. In terms of the future—this is clearly a longer-term agenda—I hope we will have a system that is better equipped to pick up this kind of incident should it ever occur again.

[Lord Blair of Boughton]

My Lords, I welcome the idea of a statutory duty of candour and all the other means of regulation being discussed, but what appears to have happened here—and obviously it is just an allegation—is a simple case of malfeasance in public office. One of the things that seem to have happened over scandals such as Stafford, or even LIBOR, is that the ordinary criminal law of the United Kingdom has not been considered. I assume that the CQC is a public body. It is certainly paid for by public funds, and therefore its officials are subject to the common law.

[Earl Howe]

My Lords, clearly it is a matter for the police to investigate criminal offences and for the Crown Prosecution Service to consider whether the test for prosecuting individuals has been met in this case. It is too early to reach a conclusion about whether this case highlights a gap in the law but if it does, I can assure the noble Lord that we will pursue it. We keep the criminal law under review. It is too early for me to say—I am not a lawyer—whether he is right, but I am sure that his comments will resonate strongly with the House.

[The Lord Bishop of Liverpool]

My Lords, chaplains occupy a unique position in hospitals in relation not just to patients but to staff. Will the Department of Health keep under review the role of the chaplain in relation to both patients and staff, especially when a culture of carelessness and intimidation emerges?

[Earl Howe]

The right reverend Prelate makes an extremely important point. The Government have been very supportive of the concept of hospital chaplains, who play an enormously important role in supporting not just patients but staff. I am concerned because I have heard anecdotally that in some hospitals there are moves to dispense with hospital chaplains. I am in touch with one of his right reverend colleagues about this. Once again, we have a mechanism—if I may call them a mechanism—that could be deployed to good effect in this context.

[Baroness Pitkeathley]

The Government’s support for the current leadership and the newly launched New Start consultation will be welcome to all those of us who know the current people. Can the Minister assure the House that the Government will stand firm in this support when the tabloid press starts calling, as it surely will, for more heads to roll? Will he further assure the House that he believes that the last thing that the CQC needs is more change at the top?

[Earl Howe]

I agree fully with everything that the noble Baroness has said. We have in the CQC the right team to take it forward. They are very clear that there needs to be a complete refresh of the senior team where doubts emerge about the individuals concerned. We are already seeing a complete refresh of the board. I share her worry about the tabloid press and calls for heads to roll. Nevertheless, it is appropriate, in the particular context of Morecambe Bay, for there to be a close look at the role of certain individuals: exactly what they did, what they knew, when they knew it and whether what they did was either wrong morally or against the law.

[Baroness Emerton]

My Lords, I wish to refer to the introduction of a new, robust, single-failure regime for NHS hospitals. This will provide a more effective mechanism to address persistent failings in the quality of care, including the automatic suspension of trusts. As a nurse, I was trained to look at prevention rather than cure. Ought we to be looking at, and including in this, the preparation of trust boards, as well as the staff, looking across the consensus of the trust rather than concentrating on targets? It is often mentioned in reports that they do not look at the quality. We need to see a much more cohesive trust report.

[Earl Howe]

My Lords, this is one of the reasons why the previous Government introduced quality accounts, which are becoming more and more sophisticated and which focus the minds of a board on quality of care. It is easy to give the impression that we want to introduce a punitive culture into the NHS: we do not. However, there should be sanctions in the background to back up any serious failings of care. That is broadly what Robert Francis was driving at in talking about fundamental standards below which no care provider should fall. The CQC will be consulting on those standards later in the year, but I take the noble Baroness’s point about trust boards. It remains within the powers and competence of Monitor to suspend trust boards, either in whole or in part, where concerns arise over the governance of an organisation. That is a drastic power to invoke and they can take measures which fall short of it where appropriate.

[Lord Hamilton of Epsom]

My Lords, am I alone in being surprised that it should be necessary to have legislative change to secure a duty of candour? Does this mean that, in the absence of this change, the CQC has the right to tell lies?

My other question is on the inspection regime. I understand that a generic system used to work in the past, whereby somebody whose expertise was in dentistry was sent off to inspect an A&E department. Who was responsible for the decision to run the inspection regime in that way?

[Earl Howe]

My Lords, there has never been a right to tell lies, either professionally or in statute. My noble friend is right that we should be shocked that it is necessary to put in legislation that there has to be a statutory duty of candour. Candour has been part and parcel of the ethical framework for professionals in the health and care sector for many years. It is a sad reflection on those involved in the events at Mid Staffs and Morecombe Bay that we should be thinking in these terms at all, but we must, because unless we do we lay ourselves open to matters being brushed under the carpet, as they have been in these cases.

The inspections themselves have not been generic: it is the skills on the part of the inspectors that were considered to be adequate as those individuals were deployed generically. That decision was taken very early on when the CQC first came into being in 2009. We now think, as does the CQC, that that was wrong and that skills should be altogether more specialist.

[Lord Clark of Windermere]

As someone who lives in the catchment area of Barrow-in-Furness hospital, I have followed the story very closely. Does the Minister agree that, while we are discussing the cover-up by the CQC today, it in turn was investigating shortcomings by what was presumably the previous management of Morecambe Bay hospitals? Did he see the very pointed quote yesterday in the other place by the MP for Barrow-in-Furness, John Woodcock, who has done so much in this? He quoted the report as saying that there could be a “broader and ongoing cover-up”. Can he give the House an assurance that any investigation will not stop at the CQC but will look at the main cause of the disturbance and Mr Titcombe’s complaint initially?

[Earl Howe]

My Lords, I can give that assurance. In part, we have the answers in the Grant Thornton report commissioned by the CQC on the actions that the CQC took or did not take. As I said in answer to the question asked by the noble Lord, Lord Hunt, it is reassuring that the chief executive of the CQC has undertaken to produce for the department within the next two months a report to provide assurance that any cover-up has been fully exposed and that we will learn fully not only the facts but the lessons that we can draw from them.

[Baroness Wall of New Barnet]

I thank the noble Earl for repeating the Statement. It has caused quite a stir. My worry is two-fold. First, we had a big reaction to what happened at Mid Staffs, and now we have this. I would want us to be very careful not to become desensitised by some of these things—I do not mean in this House, but elsewhere.

I will pick up on the comments of the noble Baroness, Lady Emerton, and agree with her totally. As chairman of Barnet and Chase Farm Hospitals NHS Trust, I find it bewildering that, never mind any cover-up at the CQC, the board was not aware of those tragic deaths of mothers and babies. Certainly, in my trust that would absolutely be reported, both through the quality and safety committee that deals with what are called SUIs, or serious untoward incidents, and from the board itself. It would be helpful, as has been suggested, that the inquiry goes a bit further than just the CQC.

[Earl Howe]

I am grateful to the noble Baroness. In fact, the trust has taken significant action in response to the concerns raised by the CQC and Monitor. In addition to responding specifically to the three warning notices issued by the CQC, there have been significant leadership changes at the trust. Sir David Henshaw was appointed as interim chair and Eric Morton as interim chief executive. The trust appointed four new non-executive directors and a new chief operating officer and recruited a new obstetric consultant and additional midwives. There have been other appointments as well. It has established a programme management office, as requested by Monitor, to oversee the implementation of programmes of work to bring about lasting improvements across the trust—and it has recruited a number of posts to the programme office to take that work forward. So I am encouraged that it is taking the position as seriously as it should in the circumstances and that, again, there is a refreshed team at the top of that organisation.

[Baroness Cumberlege]

Very often, when we have these inquiries, they are initiated not so much by the people who work within the trusts but by members of the public who feel very concerned about the quality of care being given within a hospital or service. Very often, those people who bring up these concerns, who are dubbed colloquially as whistleblowers, get very victimised by other people within the population but also within the hospital. Is there any support or help that we can give those people who bring to the attention of the NHS some of the problems that exist?

[Earl Howe]

My noble friend raises a key issue, which successive Governments have wrestled with. We all know how life works. Whistleblowers are treated badly because their message is often very uncomfortable. That is why local Healthwatch could potentially be a very important part of the puzzle here, by ensuring that people have a place to go to that they can trust and that can raise concerns without necessarily naming the person who has initiated those concerns.

More and more, we need to encourage providers of care to take ownership of their performance. They have to be candid with themselves and accept criticism where it is laid. Boards of directors have to look systematically and regularly at the complaints made against them—whether rightly or wrongly—to make sure that they are as open as possible with themselves. Only by instilling a culture of that kind can we move forward.

[Lord Campbell-Savours]

My Lords—

[Baroness Northover]

I am afraid we are out of time.

Schools: Bullying

Thursday 20th June 2013 Lords Chamber

Motion to Take Note

12:26

Moved By

[Baroness Brinton]

That this House takes note of the level of education support and mental health provision available to children who are severely bullied at school.

[Baroness Brinton]

My Lords, I am very honoured to be able to move that this House takes note of the very difficult problems facing severely bullied children, particularly of how they are able to learn and to get help with any mental health issues they face as they recover. I look forward to contributions from noble Lords today, many of whom have considerable knowledge and interest in this area. I am particularly looking forward to hearing the right reverend Prelate the Bishop of Truro as he makes his maiden speech. I declare my interest as the co-chair of the All-Party Group on Bullying and as a patron of the Red Balloon Learner Centres, a charity that works with severely bullied children.

Any head teacher who tells you with confidence that there is no bullying in his or her school is deluded. Bullying, as with any abuse of power, will always be with us. What we need to do as parents, educators, friends and family is to be alert and work with both bullies and the bullied as early as possible to recognise the bullying as it starts, and to work to change behaviour.

I am sorry to say that many people think that too much fuss is made of bullying and that children should just learn to cope with it. Today’s debate is not about the minor tiffs that all children go through, learning about relationships, power and listening to each other. It is about the children who are so severely bullied that it is having a catastrophic effect on their lives—to the extent that some children kill themselves—and about what we do as a society to respond to this problem.

First, let us clarify what we are talking about here. The definition of bullying is aggressive behaviour that is intended to cause distress or harm, involves an imbalance of power or strength between aggressor and victim, and commonly occurs repeatedly over time. Children severely affected by it miss school for long periods of time, often self-excluding due to the trauma caused by the bullying.

This image of self-excluding may seem odd to those who do not know about it. I will tell your Lordships about a time when I was standing in a primary school playground with a head teacher. We had talked about her early recognition and intervention techniques, but she wanted to show me the practical effect of bullying on a youngster. This child, no more than eight years old, was standing on the edge of the playground. He refused eye contact with any of the children and, when their play moved near him, he sidled round the edge of the playground as far away as he could. The head told me that he had arrived from another school and was finding all social relationships very difficult following bullying elsewhere. He did not want his parents to intervene with the school because every time they had reported it in the past, the bullying had got worse. Even worse for him, his previous school had told him that he was behaving like a victim. This head understood that he needed intensive support, which she had put in place, including staff members keeping an eye out for him and a safe place inside if he felt he could not bear to be in the playground. This child was heading towards a classic downward spiral. His concentration had gone; understandably, he was not learning; and it was going to take many months to start building him up again. At least he had parents who had taken action and a new school that understood the problem.

For too many children, help comes too late. Ayden Olson took his life aged 14 earlier this year. His mum, Shy Keenan, wants action to ensure that it never happens again. She said:

“Our wonderful 14 year-old son Ayden died on the 14th of March 2013—his spirit defeated, he was bullied to death at school and driven ... out of pain and despair ... to take his own life. We miss him so much. Our hearts just ache for him and as we try to adjust to a life without him, we have committed to carrying his dreams of bully free schools ahead with Ayden’s Law”.

Her campaign, with the charity BeatBullying and the Sun newspaper, is an outstanding example of how we need to change the culture surrounding bullying. Otherwise, even more children will die. However, Ayden is not the first; nor, indeed, is this the first campaign. Other recent tragedies include Aaron Dugmore. He hanged himself at home after relentless bullying. At nine years old, he is Britain’s second youngest suicide victim of bullying. Other cases are Natasha MacBryde, who jumped in front of a train because she was being bullied about her parents’ divorce, and Sam Leeson, whom internet bullies drove to suicide because of his taste in music and love of fashion.

Research already shows that more than 16,000 children a year are so severely bullied that they cannot face school, and it is estimated that a shocking 44% of suicides of children aged 10 to 14 have occurred at least in part because of bullying. I support much of what Ayden’s law seeks to achieve, including compulsory family intervention and children, teachers and social workers all having anti-bullying training. The model, Jodie Marsh, who was herself severely bullied at school, has worked with anti-bullying campaigner, Alex Holmes, to celebrate the good practice at some of our schools. She went to Springwell College in Staveley, Derbyshire, which has 25 anti-bullying ambassadors. They are now spreading that work to other schools. A TV programme broadcast a couple of months ago showed what they were doing with Carlton Community College in Barnsley to make sure that children themselves change the culture.

We need to really look at our schools and at educational support for these badly bullied children. One child described how,

“actually going to the school campus was terrifying”.

They want to learn, to have friends and to be in school, but it is literally too dangerous for them even to try to go and learn. How do schools handle children who refuse to go to school? Believe it or not, some are sent to specialist alternative provision known as pupil referral units. These units are designed for children whose behaviour is so unacceptable that they cannot remain in their mainstream school, and so often they are the bullies that these children desperately need to get away from. I shall say briefly here that we also need to address the behaviour of bullies, and I know that my noble friend Lady Walmsley will cover this in her speech.

When schools are in denial about bullying, they will not pay for alternative provision that may cost more than the school receives for educating that pupil. I am afraid that they often keep the child on the school roll—and therefore receive the government funding for that child—and say to the parent that the family could educate the child at home until things get better. Many parents do not feel that this is the right route for them, especially if they have to give up work to do it, thus costing the state even more.

Often, children need specialist support for only a limited period, and organisations such as Red Balloon have an excellent record in getting bullied students back into mainstream education. In Red Balloon’s case, it is 95%. Will the Minister make it absolutely clear that severely bullied children will receive the funding required to recover and continue their education, and that the schools will not keep the money if a pupil transfers to alternative provision or sits at home for months on end?

One young student I know from Red Balloon arrived there aged 13, having been bullied about the death of her single mother. That is shocking. She was unable to concentrate on anything, and her reading age was estimated at nine years. However, within two terms, she was reading—and enjoying—Great Expectations on her own. The intensive therapy alongside excellent education transformed her life but, for most, many schools do not even recognise that these children have special needs.

I remind the House that the definition of special educational needs is having learning difficulties that make it harder for children to learn or access education than most children of the same age. Surely severely bullied children fit that description. They need this formal label to help to create the package that is going to help them to return to their mainstream education, whether it is in school or college. It is evident to those who work with these children that severe bullying is, at the very least, a temporary special educational need that will persist and worsen without intervention. Will the Minister consider specifically adding severely bullied children to the category of those with special educational needs?

The Government are rightly concerned about the achievements of children who fall through the net. Students who end up in pupil referral units do not perform well. Less than 1% gain 5 A* to C GCSEs. That should be compared with specialist intervention at places such as Red Balloon, where the figure is 75%. Therefore, I further ask the Minister to ensure that alternative provision for bullied children is made available that compares performance not with the mainstream education system but with other children who also face major difficulties, whether the comparison is with pupil referral units or even with the data for looked-after children. It is not fair to set a benchmark for these children that does not recognise the trauma they are facing.

The reality of what these children and their parents have to deal with is stark, especially when schools refuse to face up to their responsibilities. A 13 year-old boy in year eight was threatened by his school and the education welfare team, which said that he had to come to school despite severe bullying because, if he did not, his mother would be taken to court and might go to jail. That is shockingly cruel. Schools should have to be responsible for the consequences of bullying in exactly the same way that employers have to provide a safe working environment for their employees.

Mental health problems are exacerbated when these children are made to feel that it is all their fault and that they are letting down their families. Giving them special educational needs status will ensure that schools can more easily work with GPs and specifically with child and adolescent mental health services. The latter is already very difficult to get referrals to, but a statement will provide the key to unlocking that urgent help.

The National Union of Students has surveyed school students, and its mental distress survey illuminated a lack of support and advice opportunities for students: 64% of respondents said that they did not use or have access to formal services for advice and support in relation to their mental distress; and 26% did not tell anyone about their feelings of mental distress. Evidence from this survey shows that levels of educational support and mental health provision are a concern not only in schools but in colleges and universities.

Bullying and harassment are demonstrable sources of mental distress for further and higher education students, too, and opportunities for support and advice are either unavailable or, worse, inadequately signposted. Can the Minister reassure the House that signposting for support and advice for school, and education beyond, are clear and evident to any student and their family in distress?

During this speech, I have referred to a number of different types of bullying. I have not touched on cyberbullying, which is a growing and insidious form. It needs to be part of the debate we are having as a nation at the moment about the use of the internet and social networking. It is all too easy to post something on Facebook that can cause lasting damage, and the viral nature of social networking means that things can escalate out of control very rapidly.

Reasons for bullying seem to grow. Schools pride themselves on their equality and diversity policies, yet race, homophobic and disability bullying remain. Schools must tackle the unacceptable culture that even thinks it is okay to taunt, let alone bully, someone because of their race, disability or sexual identity. There is also a disturbing increase in physical attack and even rape as a part of bullying.

It is our duty in society to help these 16,000 children who fall through the cracks in our education system. By giving children a statement and proper funding, we are investing in a transformation of their wrecked lives, even if it is only at very few of the schools in our country. Many are becoming inspirational champions as they recover. Let us hope that they become future leaders. We need to empower those schools that do not understand this to help build a network of support for severely bullied children. The country has instilled its trust in our ability to restore hope to these children. We cannot allow success so far to impair our ability to make our country a better place. We must ensure that there is not one more wrecked life; not one more suicide. Imagine if it were your child or your grandchild. You would want better.

12:40

[Lord Lexden]

My Lords, it is both a pleasure and a privilege to make a short contribution to this debate, initiated with great skill and in the most moving fashion by my noble friend Lady Brinton, who speaks with such tremendous authority on this grave social and educational issue—authority drawn from her patient, dedicated and successful work in combating it in practice on the ground.

School bullies are sad individuals, cowards every one of them, who gain satisfaction and pleasure from showing unkindness to others—a reversal of the right and proper order of things. Unkindness leading to persecution can be such that, in some cases, it leads—as we have heard—to suicide. My noble friend spoke particularly movingly on that point. For far too long, indeed over generations, there were in our country too many weak and callous teachers in uncompassionate schools who did little or nothing to tackle the disfiguring phenomenon of bullying in their midst. Today, however, they can no longer evade their basic responsibilities, which have been clearly defined in law, endorsed by all political parties and by successive governments.

This Government have shown themselves to be particularly sensitive to widespread concern—reflected in my noble friend’s important Motion today—about the extent of bullying prevalent in our schools. That is underlined by the deeply disturbing facts and statistics that my noble friend referred to. The Government have consistently shown their responsiveness to well founded anxiety. In 2011, they brought up to date the anti-bullying advice drawn up to enable all schools to tackle bullying effectively. Teachers have been given new powers to tackle the hideous new phenomenon of cyberbullying, for instance by searching for and, if necessary, deleting inappropriate images on mobile telephones. Very importantly, the Government have laid a requirement on Ofsted to take account of behaviour and well-being, including the incidence of bullying in schools. Most recently, funds have been made available to enable four specialist organisations to work with schools in exploring new, innovative ways of tackling the scourge of bullying. These points, I hope, bring some measure of comfort to my noble friend, while also underlining the need for her continuing commitment to securing further progress.

The Government deserve great credit for extending and enhancing the national framework through which bullying can be confronted and reduced. However, particularly after hearing my noble friend’s speech, we all now yearn for results—for tumbling rather than rising statistics. That can be the only truly satisfactory measure of success.

I will illustrate the point by turning to an aspect of the issue that has always been a particular concern and anxiety to me personally: homophobic bullying. Last year, Stonewall published results of research carried out on its behalf by Cambridge University, involving a survey of some 1,600 lesbian, gay and bisexual young people in our schools. Some 55% had experienced homophobic bullying in schools and 99% had heard homophobic language. It is not surprising, and confirms the other evidence that my noble friend has given us, that this bullying had a marked adverse effect on young people’s attainment, health and well-being. Three in five bullied pupils said that it had a negative impact on their schoolwork. One in three bullied gay young people had considered changing their future educational plans because of the bullying. Nearly a quarter of gay young people had thought of attempting suicide. More than one half had harmed themselves. Polling of more than 2,000 primary and secondary school teachers by YouGov, published in 2009, showed a similar picture. Nine in 10 secondary school teachers said that they had witnessed homophobic bullying. Worryingly, half of secondary school teachers who were aware of homophobic bullying said that the vast majority of incidents go unreported. There is a further important point to be made in this connection. Stonewall’s research into homophobic hate crime in 2008 found that three in five hate incidents are committed by people under the age of 25, highlighting the transition from homophobic bullying in schools to homophobic hate crimes in local communities.

In this area, as in others, the Government have shown commendable resolution and determination. They made tackling homophobic bullying a priority in both the coalition agreement and the 2010 schools White Paper. They have strongly encouraged schools to seek advice and support from Stonewall. Ofsted inspectors are advised to ask pupils about the use of homophobic language in their schools and whether or not they learn about gay people in the curriculum.

Perhaps the Government will now consider taking further steps. For example, through the National College for Teaching and Leadership, they could seek to ensure that high-quality training on preventing and tackling homophobic bullying is part of all teachers’ initial training. They could help schools further to share best practice and to learn from each other in this area, in particular encouraging academy chains to provide such opportunities among their schools. The Government could also ensure that free schools and new academies recognise the importance of combating homophobic bullying and supporting gay young people when establishing policy and procedures. As president of the Independent Schools Council, and its former general secretary, I also recognise that action in these matters should not be confined to the maintained sector. It is needed in all our country’s schools.

Bullying in schools causes serious, sometimes terrible, problems, both social and educational, for those who experience it at the hands of the cowards who practise it. The harmful effects can last a lifetime. Our duty is clear: to do all that we can to help extirpate it.

12:48

[Baroness Massey of Darwen]

My Lords, I thank the noble Baroness, Lady Brinton, not only for calling this debate but for her brilliant and comprehensive speech, as well as her efforts on behalf of children. She drew together many of the issues which we all believe to be a terrible, often hidden, problem for many children. Any bullying can become severe bullying. Prevention, as well as dealing with the issue, is vital. I also thank the noble Lord, Lord Lexden, for his passionate plea to combat homophobic bullying.

I have just come from a meeting to launch the All-Party Parliamentary Group for Children’s new report on an inquiry into what opportunities children think they should have. I declare an interest as the chair of that group. In that inquiry, during which we consulted children and those who work with them, children’s rights came across very strongly. This debate reminds us that the children we are discussing are having their rights eroded in a very sinister way.

Many years ago, as a teacher, I was aware that some children were not only being discriminated against but were being bullied. I recall how difficult it was to identify the problem and to deal with it. Bullying is very difficult to prove and it is very difficult to change the behaviour. I recall that children might be bullied perhaps because they were clever, not clever enough or had a physical feature such as an accent, a limp or red hair. The schools I taught in had a proportion of children who were black or Asian, which could be a factor.

It is even worse now with e-mails, texts and so on. It is clear that there is the same old problem. Many children—I believe that now it is about 28%—do not want to talk about being bullied either to their parents or the school. Parents and schools often are in denial about children who are being bullied or children who bully. I believe, as I suspect do many people, that bullies also need help and that they exhibit behaviour that may damage their lives. All that is even more terrible when there is severe bullying. The All-Party Parliamentary Group on Bullying states that children who have suffered severe bullying may develop temporary special educational needs, which was referred to by the noble Baroness, Lady Brinton.

In schools, teachers also may be victims or perpetrators. We are now going back an awful long way but I have never forgotten a friend of mine at school who was picked on—that is what it was called—by a teacher because she was overweight, middle class and very clever. She said that she thought many times about ways to kill herself. The problem was resolved because I and other friends told another teacher.

Extremely severe bullying, as has been said, can have tragic consequences in the deaths of young people. Today, I am very grateful for the many organisations which exist to combat bullying and improve the lives of young people. Many of these organisations send us their experiences and their concerns. It is also gratifying that Ofsted now comments on bullying in schools.

From what we know and continue to learn, it is clear that bullying has an impact on the physical and mental health of children—the more severe, the greater the impact. It is also clear that bullying may have a profound impact on achievement in school and on the whole life of a child both immediately and in the future. The noble Baroness, Lady Brinton, spoke of the Red Balloon Learning Centres group, which estimates that 16,000 young people may be absent from school at any one time due to bullying. That is a shocking figure and these children may be treated as if they are just truanting. What impact on the self-worth of a child must bullying have? Without self-worth, attendance and academic, as well as social, competence may be severely affected. The Anti-Bullying Alliance reports that more than 61% of children reporting to child and adolescent mental health services are being bullied. The NSPCC’s Childline estimates that 38% of young people have been affected by cyberbullying.

I want to dwell mainly on what can be done to either prevent bullying or tackle it before it becomes dangerous. Parents are key. The National Centre for Social Research points out that children being bullied at the age of 14 or 15 were much less likely to be bullied at 16 if parents had reported the bullying. But, as I have said, and as we know, parents often do not know what is going on and friends—if the child being bullied has friends—also find it difficult. Bullies can be very powerful, particularly when they are in a gang.

I want to look at how we can prevent bullying in schools, starting with the importance of immediate action. I have to say, and the British Association for Counselling and Psychotherapy reaffirms this, that having a school counsellor is one of the most immediate and accessible ways of offering support. Sadly, provision of school counselling services is not universal. It should be and I wonder whether any schools are using the pupil premium to supply such services. That would be money well spent. Perhaps I may ask the Minister how many school counsellors there are working and by what means they are paid.

I move on, inevitably, to personal, social and health education in schools. When will the Government accept that every child, in whatever type of school, should be entitled to protection and encouragement from a solid programme of personal, social and health education? That would be much less difficult than the Government think. We have had this debate before and no doubt will have it again. A school policy on behaviour and bullying is part of PSHE. Many schools have such policies, although Kidscape asserts that some schools are reluctant to discuss their policies. I cannot think why: perhaps they do not have one.

In a school where I was a governor, the children helped to develop the policy. School councils can help to monitor behaviour policies. Class representatives on school councils often know what is going on before a teacher and may have suggestions to repair the damage. One school, Goose Green in east London, came to speak to the All-Party Parliamentary Group for Children. The teachers and children spoke eloquently about their experiences of personal, social and health education and of a friendship system where a child can go to another child for help and support, which is just brilliant. I wish that Mr Gove could have been there.

Personal, social and health education is not just a woolly concept about being nice; it should be rigorous with structures and policies to help children gain information at the appropriate age, develop the skills and confidence to use such information, and develop respect for themselves and others. I hope that the Government will provide a more encouraging lead on this. I believe that there are others in the Chamber today who think the same way.

School policies support a positive school ethos and are not just about mistreating others. Personal, social and health education is about what happens not just in science lessons where reproduction may be taught, even if it is not human reproduction, but also in English lessons, history, art, sport and so on where children can discuss relationships and reflect on their behaviour. PSHE may happen in lessons on topics that are not necessarily carried out by teachers but by special visitors, such as St John Ambulance, the school nurse, scouts and guides, the police, parliamentarians and so on. There do not have to be specialist teachers but the school has to be organised to make use of such visitors. I know of one school which invited a school counsellor and a child who had been bullied to a lesson to talk about their experiences. It was a very powerful experience for all those people in the classroom.

That is preventive work. If a school discovers bullying, the staff policy must kick in fast. The incidents need to be analysed, solutions sought and, if necessary, help found. It is not enough simply to punish. As I said earlier, an elected school council may be able to help, as well as counsellors, parents and a strong school ethos. There clearly is a problem here. For children who are bullied, it is disruptive and a terrifying problem. I have suggested two things that could help schools to help children; namely, school counsellors and a programme of personal, social and health education. I look forward to the Minister’s comments.

12:58

[The Lord Bishop of Truro]

My Lords, I am honoured to be here and I thank noble Lords for their welcome. I also thank Black Rod and his staff for their marvellous help and support. I regard it as a privilege to be a Member of this House and look forward to playing my part. I thank in particular the noble Baroness, Lady Brinton, for initiating this debate, and for her powerful and passionate speech. I am very grateful to be able to make my maiden speech in this debate.

As Bishop of Truro I am fortunate to work across the county of Cornwall and the Isles of Scilly. Last week I was on the Isles of Scilly visiting the Five Islands school, which is an all-through age five to 16 school. I spend a lot of my time across the diocese visiting schools and always enjoy engaging with staff and students. It is helpful for a bishop in the Church of England sometimes to be in places where the majority of people are relatively young.

As I am sure that your Lordships are aware, Cornwall is a beautiful part of the country. If this were not my maiden speech, and therefore non-controversial, I might have gone further and said that it was the most beautiful part of the country, but I will refrain. I am sure that noble Lords are also aware that it is one of the poorest parts of the country, with areas of real deprivation and facing major problems of rural isolation, low wages and, sadly, among many of the young, low aspiration. Bullying and mental health concerns can be compounded by living in rural areas.

I am delighted to say that much of my work is responding to invitations from the wider community to visit and learn more about what is happening right across the county. In this regard I am always concerned to hear of areas of life where there are real pressures. I know, sadly, that many people in the county suffer from various forms of mental illness and do not always have access to the support structures and services that they need.

As well as being the Bishop of Truro—here I declare an interest—I am chairman of the trustees of the Children’s Society. Many noble Lords will know that this is a national charity, caring for the most deprived young people across the country. I will reinforce a point made by the noble Baroness, Lady Massey. One of the key features of our work is that we listen to the voice of children and young people.

In this debate I want to make the point that it is essential that we advocate for those who are often unable to advocate for themselves. Children who are either affected by mental health conditions or are being bullied are not in a good place to have their voice heard. It is important that we find ways to do just that. As is evident from the report by the All-Party Parliamentary Group on Bullying, many children who are bullied feel isolated from their peers. This can have a profoundly damaging impact on their well-being at that time and over the rest of their lives.

There are two points that I would like to make about children who are particularly vulnerable to bullying. First, children living in poverty face a number of issues with bullying. This can be due to lacking things that their peers may have, such as not being able to go to the cinema, or to a friend’s birthday party because they cannot afford a present. I underline what the noble Baronesses, Lady Brinton and Lady Massey, said about understanding child poverty in terms of the children’s own understanding of what it is like to live in poverty. Children can miss out on school trips, or not have the same basic material goods that other children have. This will have an impact on a child’s sense of self-worth. They are therefore more vulnerable to bullying and socialised isolation than their peers.

If not administered correctly, things such as free school meals can serve to highlight differences between children. In many schools children on free school meals are not easily identifiable, which reduces the risks of stigma. However, I am concerned that nearly half of secondary schools do not have cashless systems, meaning that those on free school meals may be singled out. My first point is to highlight the need to listen to the voice of children in poverty and note the implications on their lives of being bullied.

My second point relates to young carers. The latest census statistics reveal that there are 166,363 young carers in England, compared to around 139,000 in 2001. This is likely to be the tip of the iceberg, as many young carers remain hidden from official sight for a host of reasons, including family loyalty, stigma or indeed bullying. As well as having the potential to suffer stigma and bullying, young carers are particularly vulnerable because their caring responsibilities can have a severe impact on their school life and long-term outcomes.

We know that one in 12 young cares is caring for more than 15 hours per week. Around one in 20 misses school because of their caring responsibilities. Young carers are more likely than the national average to be not in education, employment or training—one of the NEETs—between the ages of 16 and 19. That is why I welcome the Children’s Minister’s announcement last week that the Government will be looking at how the legislation for young carers might be changed so that rights and responsibilities are clearer to young carers and practitioners alike.

It is important that the Care Bill that covers the adults’ legislation around social care, and the Children and Families Bill, work together to better identify and support young carers and their families. Schools and teachers can play a vital role in doing this. Schools also play an important role in promoting positive attitudes towards young carers and their families to help mitigate the impact of stigma, discrimination and bullying. It is important that children who struggle in school get the support and help that they need, and this includes mental health support. I fear that the provision of mental health support and the structures in place are not sufficient for the needs of young people and children.

I also want to ask if it is right that we should allow young people to be carers, which inevitably limits their childhood and opens them to a range of potential problems, not least bullying and missing out on education. These put added strain on their mental health. I dare wonder whether society is in danger of being the bully in allowing young people to be carers. What about the rights of the children and young people themselves?

In conclusion, I welcome this debate on such an important matter. I am glad to be able to speak as a bishop and as chairman of the trustees of the Children’s Society. I am especially concerned about children living in poverty who are vulnerable to bullying and to mental health concerns and who need advocates on their behalf. Equally in need of advocates are the young carers, who again are open to being bullied. I question whether we should not take more seriously the issue of whether we can do more to allow such children and young people to have their right to a childhood. I look forward to the contributions of other Members and hearing from the Minister about the work that Government are doing to support those children who are indeed being bullied at school.

13:08

[Baroness Jolly]

My Lords, I, too, thank my noble friend Lady Brinton for the opportunity to debate this difficult issue. Mental health problems in school have been on the radar of the NHS for well over 15 years. Similarly, bullying, once thought of as a brutal rite of passage, has become a major concern for schools and society at large.

Before I develop my thoughts, it gives me enormous pleasure to congratulate the right reverend Prelate the Bishop of Truro, my own bishop—Bishop Tim as he is affectionately known in Cornwall—on his maiden speech. I know that he does not shun challenge or difficult issues. I welcome another voice in your Lordships’ House to speak up for Cornwall, where a chocolate-box image often seen by the majority hides real poverty and inequalities. I would expect him, as chairman of the Children’s Society, to be well informed on this issue and I was not disappointed. I welcome his concern for child carers, and at some time I will talk to him about adult carers for children, because there are similar issues to be concerned about there.

I also congratulate the right reverend Prelate on his Google footprint. I came to do the speech following his quite late, so needed to find out more about him than I knew—and which perhaps he would not want to be shared with the rest of the House—in a hurry. I resorted to Google. His footprint is almost non-existent, and there few in public life who can say that. I had to resort to Cornish contacts.

He is universally liked and respected for his commitment to working with the sizeable Methodist community in Cornwall. He has a liking for ham and eggs and is the doting grandfather of twins. One thing I learnt that really surprised me is that the right reverend Prelate the Bishop of Truro was schooled in Devon—and not only Devon but Plymouth, over the Tamar. However, that secret was well kept and I shall not revisit the boundary debates of a year or so ago.

The links between mental health and bullying can go in two directions. There is evidence that children who have mental health problems are often bullied, and children can be so consumed by bullying that they develop mental health problems. It goes both ways. Both problems need dealing with in school, as others have spoken about in detail.

I will address the issue of health interventions, whether through the NHS or through other services. Before children and young people can get support and help—I am talking about the whole age range in schools—they need to be identified. Current statistics suggest that one in 10 children and young people aged between five and 16 suffers from a diagnosable mental health disorder. That is three children in every class.

Schools need to train staff in how to identify those with mental illness and those who are being bullied. This is a priority for all schools, whether they are academies, private schools, free schools or maintained schools. I would be grateful if the Minister would indicate in his reply the proportion of schools that ensure that their staff are given training in identifying signs of mental health problems in children.

The lifetime cost of a single case of untreated childhood conduct disorder is approximately £150,000. Early intervention for young people with emotional, behavioural or social difficulties can help prevent mental health problems becoming more serious or developing in the first place. Early intervention saves money but, as we have already heard, it also saves lives.

A survey conducted for the Red Balloon learning centres found that 18% of school absences arose from bullying. The number of young people aged 11 to 15 who were away from school was estimated by the study to be around 16,500, for which bullying was the main reason. Bullying can lead to a child suffering from myriad psychological issues such as post-traumatic stress disorder, eating disorders or obsessive compulsive disorders, all of which can result in extreme anxiety and social avoidance.

According to YoungMinds, the Department for Education message to schools is that their focus should be on educational attainment; it does not consider health and emotional well-being as one of its core priorities. Over the past year we have seen what has happened to hospitals, and their patients, which have concentrated on targets to the exclusion of all else.

Having identified and had diagnosed a mental health problem, treatment can be difficult locally. However, the coalition’s localism and decentralisation policy initiatives have allowed many heads to use their new-found autonomy to commission their own mental health services, which, in combination with the voluntary sector, have helped deliver early-intervention mental health support for young people in schools. I would be interested to know how many head teachers have used those freedoms to do that. If the information is not readily available, I would be grateful if the Minister would write to me.

The coalition has recognised this as a problem and last year announced extra investment in the Children and Young People’s Improving Access to Psychological Therapies project, which works with existing CAMHS in the NHS, the voluntary sector and others to help improve and change mental health services and make them better for children and young people. The Deputy Prime Minister, Nick Clegg, and former care Minister, Paul Burstow, announced that the ambitious Children and Young People’s IAPT programme will receive an extra investment of up to £22 million over the next three years. This is in addition to the £8 million a year for four years that had previously been secured. These new resources will be used to extend the geographical reach of the collaboratives and to extend training to two further therapies that address depression, eating disorders, self-harm and conduct problems with ADHD. This is to be welcomed. The focus of the project is to help build upon more collaborative relationships between children, young people, families and therapists through the use of frequent outcome monitoring, extending participation in service design and feedback.

Additionally, Care and Support Minister Norman Lamb has just announced an investment of almost £2 million in Children and Young People’s IAPT sites to buy handheld computers such as laptops, tablets and iPads. This equipment will be used in existing IAPT sites to enable young people, parents and practitioners to record session-by-session outcome monitoring, allowing instant feedback to be used in therapy sessions.

Acting early to help children with mental health problems can prevent a lifetime of suffering, as half of those with lifelong mental health problems first experience symptoms before the age of 14. This technology helps children and young people see how their treatment is progressing and, where treatment is not going as well as it could, practitioners can change their approach to get the best results. Children and young people have said how much it helps them to see how their treatment is going. It is interesting here to reflect on the generational change. Young people welcome these kinds of interventions, but their parents and grandparents possibly would find them threatening and not of help.

The Red Balloon centres and Kids Company do wonderful work with children in inner-city settings—all of which is welcome—but this is not yet available all across England. Rural areas fare particularly badly. In the moorlands of the north-west, the north-east and the south-west, services are remote and access is difficult. Will the Minister tell the House the latest estimate of children and young people who are not yet reached by NHS child and adolescent services, and what is the percentage reduction across England since 2010?

We now recognise the problem, which when I trained to teach some 30-odd years ago we did not, and we now know how to address the problem, which 15 years or so ago we did not, so, in part, we are doing really well. We know that funds are tight but, until every teacher has received training in recognising mental health problems and every bullied child receives some level of mental health support as appropriate to their need, we not only fail them but we lay down trouble for the future and we fail society, too.

13:17

[Baroness Howe of Idlicote]

My Lords, I, too, add my thanks to the noble Baroness, Lady Brinton, for this debate on bullying and the extent, or lack, of educational support that still exists for children who are severely bullied at school. I also congratulate the right reverend Prelate the Bishop of Truro. I am particularly glad that he mentioned not only carers but school governors and their important role, because I think there should be someone on a governing body who keeps an overall eye on bullying.

Like one or two other speakers, I wish to concentrate my remarks on the importance of a high-level preventive strategy for this damaging and growing phenomenon, which has become a far too obvious part of each individual’s life, whether they are a child at school or an adult in a job. As we have heard already, it is the most vulnerable members of the community who are most likely to be targeted.

As I said, the title of the debate points to the level of educational support provided for those who are severely bullied at school, with the implication that it is probably inadequate. I am sure it is, even though we are all beginning to be much more aware of the need. In any event, is there not a necessity for rather more than the required support? Should it not be the Government’s responsibility, if necessary by education, to see all schools not only providing support for those being bullied but having a strict policy to ensure that there is no bullying?

Five years-old is the official age at which a child is required to attend school, so that is clearly a good time to insist on acceptable and respectable behaviour not just of pupils towards their teachers but of children towards each other. I suspect that there are already a number of examples of good practice of how this is being achieved in our schools. The only problem is that they are insufficiently publicised. I remember attending a meeting several years ago when one such successful example was being discussed. Where better to start than at the moment when a child arrives in school? What unfolded seems a pretty good way to provide an early intervention exercise that would have an excellent chance of working. In this group of schools, every new pupil is given a slightly older mentor whose duty is to settle the child into its new surroundings and environment. How well the child does will affect the number of brownie points that the mentor gets, so both the new pupil and mentor gain.

Another area where a clear need has been shown, and has been mentioned many times, is in Red Balloon’s work with children who have special needs. I congratulate the noble Baroness, Lady Brinton, on her involvement with that organisation, which does some incredibly good work. I thought the case studies that they included—I had a few moments to scan some of them yesterday—were extremely interesting. Quite clearly it is not only at the very beginning of your life and at school that problems occur that can lead to bullying and huge periods of isolation. Those case stories showed a high level of success when places such as those provided by Red Balloon offer support to cope with this situation. It would have taken some time to establish what was really required in those cases, but at least it was established, whereas in other situations in other parts of the country I am afraid the local authority did not want to know, nothing was done and two or three years went by before any notice was taken. That is horrendous because that really is the end of the possibilities for that child.

Somebody also mentioned the importance of learning about the background and history of that family. Again we come back to the early intervention side. I wish we could encourage really effective, early intervention. Frank Field and all our experts have educated us for so long on this issue. Yes, everybody has accepted it, and yes, everybody has contributed something, but I am afraid it needs far more resources to make it work really effectively and begin to show results.

I hope I will be encouraged by what the Minister tells us, but I really do think that a national strategy is what we need as a way forward.

13:24

[Baroness Walmsley]

My Lords, I add my voice to all the requests my noble friend Lady Brinton made to the Government in her excellent speech. I declare my relevant non-pecuniary interests as an honorary fellow of UNICEF and as a patron of Red Balloon, and I pay tribute to Carrie Herbert and all her staff for the wonderful work that they do in getting children back into education.

I will start at the very beginning, which is a very good place to start, especially with bullying, because if there were no bullies there would be no problems with the education and mental health of bullied children. There would be no bullied children. I will therefore address the issue of prevention. Why do children bully others, and how can we stop them before they even start, because all severe bullying starts with mild bullying?

In my view, a bully is often someone who needs help himself or herself. In some cases, the bully has been a victim himself or is simply replicating learnt behaviour. A violent child often comes from a violent home. A child demonstrating inappropriate sexual behaviour may well have been abused. So while we are looking at the causes of bullying and how we can help the bullies to stop doing it, we are of course not ignoring bullied children; we are making life better for them by nipping it in the bud.

Learnt behaviour is a big factor, which is why parents should always be involved by schools dealing with bullies. However, I think many children bully because they lack self-confidence in some area of their lives, so they make up for it and make themselves feel better by making someone else feel worse. They feel powerless so they try to take power over others.

A guide from the Department for Education a few years ago suggested how children might react to bullying. It says:

“stay calm … and … confident … be firm … tell the bully to stop”.

That is easier said than done, but it becomes easier when children have developed their own self-confidence and a belief in their own self-worth. How do they get that? Ofsted identified the answer and published it in its 2012 report No Place for Bullying. It found that the schools that were most successful in preventing and tackling bullying were those that,

“identified the links between personal, social and health education, citizenship, religious education and other curriculum areas”,

and their anti-bullying programme. It is obvious to me that PSHE courses that build up children’s self-confidence and self-esteem will help the bullied students to “stay calm and confident” and will help those who might become bullies not to need to fill the gap in their own self-confidence by belittling others.

Ofsted also pointed to the need for good-quality teacher training and CPD to help staff to deal with situations that might arise. That is quite right, but it is important that staff identify bullying as a child protection issue, not just in relation to the bullied child but so that they will look at the underlying issues in the life of the bully. Domestic violence at home, drug and alcohol problems, neglect and a poor relationship with their parents can all be contributory factors. The child may never have developed the ability to empathise with others, possibly because of attachment problems early in life. For reasons to do with his background, he may have great difficulty forming relationships. Perhaps he has never been loved.

So, apart from good quality PSHE in all schools, which noble Lords know I always advocate, I recommend a programme that has had a great beneficial effect in all the schools that have used it, so much so that it is rapidly spreading across the country, particularly in Scotland. It is called Roots of Empathy and was developed in Canada by a wonderful woman called Mary Gordon, who ought to get an honour. As Mary herself says:

“Roots of Empathy is an evidence-based classroom program that has shown significant effect in reducing levels of aggression among school children while raising social and emotional competence and increasing empathy”.

Her aim is to change the world one child at a time. If a child has empathy, why would he ever bully another child? The strong evidence from schools is that this programme improves behaviour and reduces bullying.

The first Roots of Empathy classes in England began in October last in 14 primary schools in the south London boroughs of Lewisham and Croydon, although it had been going for some time in Scotland. The classes are co-ordinated by the Pre-school Learning Alliance, with support from the WAVE Trust and funding from the Big Lottery. How does it work? The basis of it is that, following preparation by the teacher, a mother or father brings his or her young baby into the primary classroom and the baby becomes the “teacher”. Indeed, he wears a cute little T-shirt that tells us he is the teacher. The children sit around the baby in a circle and are asked to observe his behaviour, interact with him and comment on how he is feeling. The whole thing is very structured and there is plenty of cross-curricular follow-up work. By interacting with a tiny vulnerable child in a controlled environment, the children go back to the beginning and learn how to empathise with others, understand their own feelings and why they sometimes feel sad or uncomfortable. All aggression is taken away and it is often amazing and very touching to discover what the children reveal about themselves and their home backgrounds.

The programme also gives the children a model of parenting which some of them never see at home. In Scotland, the programme is so popular that I believe it has now been introduced in two-thirds of all primary schools. The programme has now been extended to the early years and is called Seeds of Empathy. It is being piloted here in Lewisham, although it has been operating in Canada since 2005 and is being evaluated there. Seeds of Empathy, apart from helping children develop their social and emotional skills, also helps them develop positive attitudes to reading. It does not teach reading as such but uses stories to explore feelings, such as feeling grumpy or happy, and helps the children to be comfortable about expressing how they feel. The children observe how the baby’s capabilities develop from week to week and consider why his or her moods change and how that relates to their own moods.

Mary Gordon believes that the programme helps children develop their executive functioning skills, dealing with impulse, self-control, flexible thinking and decision-making. In this way, these toddlers are being prepared to benefit from their formal education a little way down the road. Having seen these programmes in action, it is hard to believe that any of the children will develop violent or disrespectful behaviour towards their peers. Respect is, of course, a key word in relation to bullying, and there is another programme that is highly successful in developing this, the UNICEF Rights Respecting Schools programme, about which I have spoken before. It is logical, is it not? If a child understands his own rights, he learns to understand that the other children in his school have the same rights and that these should be respected as much as he would wish his own rights to be respected. Therefore, a school that fosters this mutual respect usually does not have a major problem with bullying and has a structure for dealing with it, if it does arise.

Finally, I would like to mention counselling, as was mentioned by the noble Baroness, Lady Massey. When I visited a primary school in Beijing, I was surprised to be told that all Chinese primary schools have access to a school counsellor. Why should we not have that here too? I think that we need it since our children are often under great stress and really need help. Children need someone to talk to who will not be judgmental but will help them work out their own problems or direct them to other help. Some great organisations do this, such as Place2Be. If children are listened to, they feel valued. We know that if children do not feel valued, they sometimes strike out and that is what we want to avoid. It is striking that most of these counselling services help both the bullied and the bully. However, I know that schools struggle to find the money to introduce these programmes, so will my noble friend the Minister confirm that they could legitimately use some of the pupil premium money to do so as long as they can show that the programme helps to underpin the learning of children who attract that money to the school? Of course, I believe that it does. A child in fear is not a learning child and neither is a child who is angry, so again the same service helps both the victims and the perpetrators. Is not that unusual?

This matter boils down to the culture of the school and its duty of care to bullied children to ensure they get an education, but also to its duty of care to bullies to stop them ruining their own lives as well as those of others, because nobody loves a bully.

13:34

[Baroness Jones of Whitchurch]

My Lords, I am very grateful to the noble Baroness, Lady Brinton, for tabling this debate. I also pay tribute to the passion and commitment she has shown in raising awareness and campaigning on these issues and to her forthright leadership of the all-party group.

I also congratulate the right reverend Prelate on his maiden speech. I am grateful for his emphasis on the stigma that can attach to children living in poverty and to young carers. He made powerful points on those issues. He has shown enormous compassion and wisdom on these issues and I hope he can be persuaded to join us in speaking up for young people’s needs in future debates.

I think we all share a common purpose in raising this issue. Anyone who has read the case studies and the media stories cannot help but be moved and saddened by the dire consequences for the happiness of young people if bullying is allowed to carry on unchecked. The fact that at a low level it appears to be so prevalent in schools—which should, after all, be providing a secure and nurturing learning environment—should be a wake-up call for everyone involved in education.

The Department for Education report which showed that 47% of children report being bullied at 14, 41% at 15 and 29% per cent at 16, is truly shocking. Many of those reported that bullying was not just a one-off incident but was ongoing, and for some of them it was an everyday occurrence. The noble Lord, Lord Lexden, rightly raised concerns about the prevalence of homophobic bullying, which, as he reported, is widespread. It is also distressing to hear that children with disabilities and special educational needs are three times as likely to be bullied, with verbal, emotional and physical bullying again being prevalent.

Meanwhile, as a number of noble Lords have commented, the dramatic rise of cyberbullying is finding new victims, with new vulnerabilities and opportunities for exploitation and abuse. Recent research has shown that nearly one in five young people have been victims of Facebook, internet or mobile phone bullying, with girls affected more than boys. Many of these children will slip under the radar. Their plight will never be drawn to the attention of anyone in authority and they will develop coping methodologies to survive, and as a result will never know the full impact on their confidence, self-worth and sense of well-being as they progress into adulthood.

We know that bullying is not a harmless rite of passage or an inevitable part of growing up but can have long-term consequences into adulthood. A recent study at the University of Warwick showed that children who are exposed to bullying during childhood are increasingly at risk of suffering psychiatric disorder in adulthood, regardless of whether they are the victims or the perpetrators. Victims display a higher level of agoraphobia, general anxiety and panic disorder, whereas bullies show a tendency to develop an anti-social personality disorder. The noble Baroness, Lady Walmsley, rightly identified the need to break that cycle of bullying at an early age and the factors that lead children to bully. I was very interested to hear about the Roots of Empathy programme that she described in detail, which should be encouraged.

It appears that the problem is growing and that the onus on schools and local agencies to have a clear, firm policy in place is ever greater. So what needs to be done? At the outset, schools need to have a zero-tolerance policy towards bullying. There are simply too many examples of children or parents who have reported bullying to a teacher or head teacher but who then find that nothing is done or that the child is disbelieved or the problem minimised—or, worse, that the child being bullied is further isolated or removed to another class, rather than those who are doing the bullying. Schools need to have an active anti-bullying policy that is backed up by staff training and regularly reviewed. They also need to take responsibility for what happens at the school gates and beyond.

The noble Baroness, Lady Howe, rightly made the point that mutual respect should be learnt from a very early age. My noble friend Lady Massey made a powerful case again for the role of PSHE and also for the role that school councils can play in empowering young people to tackle the bullies.

However, there also needs to be a much clearer strategy for those children who are so traumatised that their behaviour, school attendance and mental health are beginning to be affected. We have some evidence of the problem from research by the National Centre for Social Research for the Red Balloon Learner Centres. As we have heard, it has calculated that more than 16,000 young people at any one time refused to attend school because of bullying. Given the parental, legal and educational pressure on young people to attend school, it is also fair to assume that there is a much greater number suffering severe health problems arising from bullying who remain trapped within the school and without adequate support.

What provision should we make for these young people? First, given that they are the victims of bad behaviour by other children, I hope we can agree that any alternative education and support should be at least as good as that which they would have received in mainstream education. Secondly, as the noble Baroness, Lady Brinton, highlighted, consideration should be given to those young people accessing temporary SEN status, which would allow them to fund and access individual support.

Thirdly, as many of these young people have complex needs, there should, as is fairly obvious, be a range of support packages available. These might include counselling facilities and in-school specialist units. As has been pointed out, however, we need to be aware of the limitations of these options. PRUs often do not address the child’s trauma of going through the school gates, remaining on the same site as the bullies or dealing with the staff who they feel have failed them in the past. Sometimes, as we have heard, it is expected that they will be taught side by side with other children with a range of other behavioural problems, including the very anti-social behaviour often displayed by bullies that they fear. All too often the units do not have the quality and range of teaching available in the rest of the school.

Fourthly, although local authorities have a duty to provide suitable education for children who are unable to access mainstream education, the reality appears to be that there is little funding available and that provision is patchy. Local authorities are quick to pass the problem back to the school or, as we have heard, in cases where children refuse to attend, they consider prosecuting the parents for their child’s non-attendance rather than tackling the root cause of the trauma.

Fifthly, it seems that government and educators are becoming much more proactive in addressing the physical health of young people through, for example, providing sport and tackling anti-obesity. However, there is not the same drive or expertise to tackle the equally pressing mental health issues of young people in education. There needs to be much better awareness and training for staff on effective strategies for addressing mental health issues. The noble Baroness, Lady Jolly, quite rightly raised the patchy provision of support for mental health in schools since the funding has been devolved.

Finally, we should promote the benefits that specialist trauma recovery units can provide. Like others, I am very impressed by the successful work carried out by Red Balloon to provide a safe sanctuary for bullied children combined with strategies to help them back into mainstream education. Many of the children they help are academically bright and it is crucial that they are not lost permanently to the educational system. It seems a great shame that these units, or an equivalent, are not available on a more extensive basis for traumatised young people.

These issues seem to come down to issues of quality and money, so I would be grateful to hear from the Minister what guarantees he is able to give that bullied young people will receive the same quality of education as their peers. Will he consider our proposal to make SEN status available on a temporary basis to bullied young people, thereby giving them access to much-needed additional support? What external inspection mechanisms are in place to ensure that specialist in-school units, such as PRUs, provide a comparable quality of education as that available on the remainder of the school site? What funding is available to ensure that local authorities provide quality education for young people not attending school? What inspection regime exists to ensure that proper standards in these alternative provisions are met? Finally, what funding mechanisms could be put in place by the department to allow delivery of a more comprehensive availability of such specialist units as Red Balloon which are, as we have heard, so successful?

We have had a thoughtful and probing debate this afternoon and I know that the Minister shares many of our concerns. I hope that in responding he will be able to offer some comfort and commitment to the many thousands of young people who are being bullied in school, and who continue to be bullied as we speak.

13:45

[The Parliamentary Under-Secretary of State for Schools (Lord Nash)]

My Lords, I should like to thank my noble friend Lady Brinton for raising this important issue and for her excellent and moving speech. I should also like to thank noble Lords for their contributions. It has been an insightful and productive debate. I should particularly like to congratulate the right reverend Prelate the Bishop of Truro on his maiden speech. His wide experience, including as chair of the Children’s Society, will bring very valuable insights to our debates in future.

I am grateful for the opportunity to set out again the Government's vision in the context of this important group of children. One of the really nice things about this job is that, although we inevitably disagree from time to time on the precise mechanisms for delivery, I know we agree entirely across this House on the determination to provide an excellent education for all pupils, irrespective of background or personal circumstances. This is vital for the success of our young people and it is vital for the success of our country.

The Government have sent a clear message to schools that bullying for any reason is absolutely unacceptable and should not be tolerated in our schools. We will not hesitate to continue to reinforce that message. Schools should tackle bullying at the earliest opportunity and not allow it to escalate, so that pupils suffer emotional or physical distress. Every school is required to have a behaviour policy which includes measures aimed at preventing all forms of bullying among pupils, both in school and, as the noble Baroness, Lady Jones, said in her excellent speech, beyond school as well. My noble friend Lord Lexden referred to some of the measures we have introduced.

I have personal experience of bullying in a number of ways. It is a particularly nasty and pernicious piece of behaviour which can become all the more relentless with the use of modern technology. I can assure the noble Baronesses, Lady Massey and Lady Howe, that we will exhort schools at every opportunity to have a clear vision that emphasises, among other characteristics, compassion for and consideration of others. They must have a clear PSHE policy, which includes an anti-bullying policy, and emulate what good schools do, as my noble friend Lady Walmsley mentioned.

In our drive to tackle bad behaviour and bullying, we have changed legislation to strengthen teachers’ powers to enforce discipline and promote good behaviour in schools. Our guidance published in 2011 sets out schools’ legal duties and powers in relation to bullying. Teachers can search pupils and delete inappropriate images on electronic devices potentially used for cyberbullying. There are now plenty of examples across the country, including in many sponsored academies, where behaviour has gone in a relatively short period of time from being, frankly, pretty awful to good, thanks to strong leadership, a clear behaviour strategy, and the strengthened powers that we have given to teachers.

We believe that the balance is now about right between a statutory framework that requires schools to address behaviour and bullying and is clear about the powers at their disposal, but which also allows schools freedom as to how they tackle bullying. I will come to Ayden’s law shortly. But along with freedom comes accountability. As a number of Lords have mentioned, Ofsted now clearly holds schools to account on how well they deal with behaviour and bullying. Since January 2012, inspectors must consider pupils’ freedom from bullying, harassment and discrimination. The department has also provided £4 million for four anti-bullying organisations to work in schools.

Section 19 of the Education Act 1996 places a duty on local authorities to provide full-time education for children of compulsory school age who, due to illness, exclusion or any other reason, including bullying, may not otherwise receive suitable education. That is what we define as alternative provision education. The Government have shown the importance they place on providing a good quality education to these pupils by asking Charlie Taylor last year to review alternative provision. He stated that it was,

“a flawed system that fails to provide suitable education and proper accountability for some of the most vulnerable children in the country”.

The Government have agreed to all Charlie Taylor’s recommendations and acted swiftly to improve the quality and range of alternative provision by giving existing providers more autonomy through conversion to AP academies and by encouraging new providers such as AP free schools. We now have 14 AP academies and 32 new AP free schools either open or approved. They are providing a range of alternative provision and include such excellent providers as the Bridge Academy, the Complementary Education Academy and Everton Free School.

We are also enabling schools to have greater responsibility and funding for commissioning alternative provision. We have set clear standards for this provisioning and, since September 2012, Ofsted has shone a bright light on mainstream schools’ commissioning of AP. We have asked Ofsted to conduct detailed thematic surveys of this every three years. As part of the wider school funding reforms, since April this year we have ensured, for the first time, that all maintained alternative provision providers such as PRUs, AP academies and AP free schools receive essential core funding of £8,000 per pupil. Top-up funding will then be paid depending on local frameworks agreed between the provider and the commissioner. Schools and local authorities are best placed to decide the appropriate provision for their pupils and, as such, responsibility for commissioning and funding AP has to be at the local level.

We are also trialling a new approach, the “exclusion trial”, built on excellent work previously pioneered in Cambridge, under which schools maintain responsibility for excluded pupils—who stay on their roll—including for placing them in AP settings. This gives a real incentive to schools to intervene early to address behavioural problems before they become entrenched. It also means that schools will ensure that the AP they commission is of high quality and results in pupils achieving good qualifications. The trial includes 11 local authorities.

For the first time, we are utilising effective practice in AP by involving pupil referral units and AP academies in teacher training. Trainee teachers will now be able to teach and gain qualified teacher status in PRUs and AP academies. Eight PRUs are working with 21 trainee teachers for their initial teacher training with seven initial teacher training providers.

I turn now to the mental health support available for children and young people who are bullied. Good head teachers know the importance of supporting young people who are unhappy, unwell or struggling with their family life. Ofsted evidence shows that schools whose pupils do well academically recognise this. In July last year, the cross-government No Health Without Mental Health implementation framework was published. It describes the role that schools and local authorities should play and recommends that schools and colleges have a whole-school approach to this. In his AP review, Charlie Taylor said that the interface between CAMHS and schools does not work as effectively as it should. We are looking at this in some detail.

I can confirm, as requested by my noble friend Lady Walmsley, that my department’s investment in the pupil premium enables schools to invest in pastoral support, therapists and counselling—as in my own school, which has an extensive inclusion programme of therapists and counselling, run by our SENCO. As my noble friend Lady Walmsley said, these are complicated issues and home circumstances often play a very big part. Pupil premium funding is driven by the number of economically deprived pupils, who are more likely to face mental health issues. We also fund a £3 million two-year grant with the Better Outcomes, New Delivery consortium, or BOND.

Helplines also provide a vital source of support and advice for children who are bullied. We have awarded the NSPCC a grant worth £11 million for investment in ChildLine and the NSPCC helpline. In addition, we have awarded a £1.3 million contract to YoungMinds to deliver a helpline for parents whose children are having mental health difficulties. We have also extended the Coram Children’s Legal Centre funding for a further two years to March 2015 and fund Family Lives and Contact a Family. All provide advice and intensive support for parents in relation to bullying and SEN.

As the noble Baroness, Lady Jolly, mentioned, a key strategy for improving services for children and young people is to improve their access to good mental health services, such as the Department of Health’s Improving Access for Psychological Therapies programme. IAPT is a service transformation project, aimed at embedding the best evidence-based practice. It trains CAMHS and other professionals in evidence-based therapies. The programme is being rolled out gradually but, by the end of 2015, the Department of Health estimates that 60% of under-19s will be in an area served by the programme.

The Government have also invested £54 million in the Children’s and Young People’s Improving Access to Psychological Therapies programme to transform mental health services for children. We hope that the service will particularly help children at risk of suicide. The Government have underlined that commitment with a specific reference to IAPT for children and young people in the NHS mandate.

Clearly, a highly trained and qualified workforce is also crucial to providing good outcomes for children with SEN, including those with mental health problems. The school SENCO has a critical role to play in this. Every school, including academies, must have a qualified SENCO. He or she has day-to-day responsibility for the operation and co-ordination of specific provision to support pupils. This could include children who are experiencing psychological distress and who are affected by bullying.

Since 2009, the department has funded more than 10,000 SENCOs to complete the national award. We continue to invest in their development and will support a further 800 SENCOs this year. The department has also made a significant investment in educational psychology training of around £5 million per year since 2010. A further £16 million will be made available to support existing trainees to fund their courses and to support two more cohorts starting this year and next.

These principles drive the Government’s reforms but can succeed only if we allow schools, medical practitioners, local authorities and other professionals the freedom to exercise their professional roles, working closely with parents to seek the best outcomes for each child.

The noble Baroness, Lady Brinton, gave examples of particular cases of child bullying leading to suicide. These cases are tragic. With regard to Ayden’s law, we believe that the behaviour and disciplinary framework that schools are required to have in place should be sufficient to cover most cases of bullying and we are wary about suggestions to make bullying a criminal offence. It is difficult to define, could put head teachers in an invidious position and would risk classifying young people as criminals.

Many noble Lords mentioned the Red Balloon organisation. I have had the opportunity of discussing Red Balloon’s work with my noble friend Lady Brinton. Its outcomes sound most impressive. I have not yet had the opportunity of meeting Dr Carrie Herbert, the chief executive, but I hope to do so soon. I hope that it will be able to make a successful application in September under the free schools programme to expand its provision. However, to do so, it will need to demonstrate value for money, demand from schools and local authorities, and clearly demonstrable outcomes.

I was asked about adding bullied pupils to the SEN category. SEN tends to be a long-term issue and we hope and intend that the consequences of bullying can be resolved quickly. However, the definition is deliberately broad and it must allow local professionals the freedom to make those judgments. I understand the points raised by my noble friend Lady Brinton about the need to provide rapid support for children and young people who have become deeply troubled as a result of bullying. Local authorities can issue a short-term statement or make an emergency placement. Education, health and care plans are intended for longer-term, more complicated needs and can take up to 26 weeks, although we are reducing that to 20 weeks.

A number of noble Lords referred to cyberbullying, which is a particularly insidious and harmful form of bullying. We are working closely with anti-bullying organisations such as Childnet International, social networking sites and other internet companies. We included wide search powers in the Education Act 2011 to give teachers stronger powers to tackle cyberbullying and CEOP has also developed an excellent resource for teachers.

My noble friend Lord Lexden referred to homophobic bullying. The coalition Government have made it clear that tackling all forms of bullying, including homophobic bullying, is a key priority. Stonewall has found that 98% of young gay pupils hear the word gay used as a form of abuse at school. Such language is offensive and unacceptable. I expect teachers to react to this in the same way as an offensive racial slur. My noble friend also made the point about the national college enhancing training. I will investigate what it does now and what more can be done and I will write to him. I will certainly send a message to free schools and academies about inspection and the importance of eliminating homophobic bullying.

The noble Baroness, Lady Massey, and my noble friend Lady Walmsley talked about school counselling. England does not collect data on the number of schools offering counselling. A recent survey conducted by the British Association for Counselling and Psychotherapy estimated that between 61% and 85% of English secondary schools provide access to counselling. School-based counselling is one of the most widely delivered forms of psychological therapy for young people in the UK. The Department for Education has a two-year grant with Better Outcomes and there are some excellent voluntary and community organisations. My noble friend Lady Walmsley mentioned Place2Be, an organisation I know well and been involved with for a number of years.

The right reverend Prelate the Bishop of Truro made an important point regarding advocacy for young carers and children in poverty. The Department of Health has recently started training school nurses to champion young carers and, as he knows, we are working with the Children’s Society to develop policy. He also mentioned child poverty. This Government’s education reforms are driven very much by the needs of children in poverty. As we all know, the best way out of poverty is a good education.

The noble Baroness, Lady Howe, mentioned early prevention. Schools should excel at this by inculcating a culture of respect rather than a rules-based system so bullying is tackled at an early stage and does not develop. This Government have thought hard about early invention, recognising the importance of boosting our children’s social and emotional capability. We have done this through a range of measures such as Graham Allen’s review, the Early Intervention Foundation and George Hosking’s work with Sally Burlington on the needs of children up to the age of two. They identified the importance of evidence-based programmes and practice, such as the internationally acclaimed Roots of Empathy programme mentioned by my noble friend Lady Walmsley. I am very pleased to hear that the Roots of Empathy classes were launched in 14 primary schools in Lewisham and Croydon and I will be very interested to hear about their progress.

I hope I have been able to reassure noble Lords that bullied children are very much not forgotten by this Government and are very much factored into our education reforms and that every reasonable step has been taken to support them and to end bullying in our schools. I restate the Government’s position and the principle that drives these reforms—all children, regardless of circumstances or setting, must be allowed to thrive and prosper in the education system and receive a good education.

[Baroness Jones of Whitchurch]

May I push the Minister on the issue of whether bullied children can access SEN facilities temporarily? He quite rightly made the point that SEN facilities normally are for longer term ailments, but is there any reason in principle why we could not amend either the existing legislation or the Children and Families Bill to allow for that temporary access? I wonder whether he would look sympathetically at an amendment along those lines when the Bill comes before us later this year.

[Lord Nash]

I am certainly happy to discuss this with the noble Baroness and see what can be done in this regard.

14:04

[Baroness Brinton]

My Lords, I thank your Lordships for a moving and interesting debate on this very serious issue. I particularly want to offer my congratulations to the right reverend Prelate the Bishop of Truro on an insightful contribution on children in poverty and the risks that they face from bullying. I thank the noble Lord, Lexden, for highlighting homophobic bullying; the noble Baroness, Lady Jolly, for focusing on mental health problems; the noble Baroness, Lady Howe, for talking about the importance of pupil mentors; the noble Baroness, Lady Walmsley, for focusing on empathy and helping bullies—reducing the number of bullies will solve bullying—and the noble Baroness, Lady Jones of Whitchurch, who talked about the long-term consequences of bullying and also helped to list what needs to be in place to support severely bullied children and to move towards their recovery.

I am particularly grateful to the Minister for his responses to virtually all our questions—we did throw rather a lot at him—and to his confirmation of the Government’s commitment to reducing bullying. As the noble Baroness, Lady Jones, said, I remain concerned about the issue of short-term statements and I have warned the Minister that I am likely to be laying down some amendments when the Children and Families Bill comes before the House. In the mean time, if the dedication and commitment from everyone who spoke in this debate are replicated elsewhere in the country, we can really start to remove the scourge of severely bullied children and help them to recover.

Motion agreed.

[Baroness Garden of Frognal]

My Lords, as this debate has run slightly short and we are still missing one or two of the speakers for the next debate, I suggest that the House do adjourn during pleasure until 2.20 pm.

14:06

Sitting suspended.

Business

Thursday 20th June 2013 Lords Chamber

Announcement

14:20

[Baroness Anelay of St Johns]

My Lords, as Government Chief Whip, it falls to me to apologise to the House on behalf of the Government Whips team. In trying to assist Back-Benchers who were about to take part in this debate they mistakenly adjourned the House during pleasure. I do not think that any noble Lords were upset by that—perhaps I am the only one to be aware that it is perhaps unfortunate that it was done. Clearly it is a practice and procedure of this House to proceed cleanly from one item of business to another. It is the duty of Back-Benchers who are taking part, as well as Front-Benchers, to be sure of the start time of the debate.

There are no fixed times on a Thursday, so when the first debate was clearly running a little short in time because those taking part were a little more succinct than expected, the doorkeepers, at our request, very carefully put on the annunciator the normal green sign, which gave ample notice that the following debate in the name of my noble friend Lord Lester of Herne Hill was going to begin in short order. That is the sign that noble Lords should have been waiting for; indeed, they should have been here as soon as they saw that the Minister, the noble Lord, Lord Nash, was winding for the previous debate. It was therefore regrettable that there were two Back-Benchers who were not present, and in trying to be courteous one of my colleagues, who is one of the best of our Government Whips, took advice and felt that it was perhaps better to adjourn. I have advised her that in being kind she was perhaps too kind. This is not something we will seek to repeat.

As soon as a debate begins, all those taking part, with the owner of that debate, my noble friend Lord Lester of Herne Hill, are expected to be present for the opening speeches, the winding speeches, their own speech—I would hope—those from noble Lords either side of them, and as much of the remainder of the debate as they may attend. Of course, if colleagues do not attend opening speeches, they may not speak—I am looking very carefully for one who is still not here—and they will be advised by their Chief Whip that if they were to proceed it would be discourteous to the House.

I have now given two full minutes for those absent to arrive. On that basis I conclude my apology, and I certainly hope that the following debate will be both informative and enjoyed, a characteristic of our Thursday debates.

British Bill of Rights

Thursday 20th June 2013 Lords Chamber

Motion to Take Note

14:22

Moved by

[Lord Lester of Herne Hill]

That this House takes note of the report of the Commission on a British Bill of Rights.

[Lord Lester of Herne Hill]

My Lords, I am very grateful to my noble friend for reminding us that this House has decent standards. On this occasion I am able to plead not guilty.

I am delighted to have the opportunity to initiate a debate on the report of the Commission on a Bill of Rights, of which I was a member. I am also glad that two of my fellow commissioners, the noble Baroness, Lady Kennedy, the noble Lord, Lord Faulks, and so many other distinguished Members will take part. I look forward especially to the speeches in reply to the debate from the noble Lord, Lord Bach, with whom I worked when I was an unpaid independent adviser to Jack Straw under the Brown Government, and from my noble friend Lord McNally. I have mentioned those taking part in the debate; I am also glad to say that Sir Leigh Lewis, the noble and learned Lord, Lord Browne-Wilkinson, the noble and learned Baroness, Lady Butler-Sloss, and the former Attorney-General of India, Soli Sorabjee, are all here to witness the debate.

We were nine commissioners: eight white QCs, one woman and two Scots, with the distinguished former civil servant Sir Leigh Lewis as chair. As I said, he is here today to witness our debate. Sir Leigh had Solomon’s wisdom and the patience of Job. In attempting to secure a unanimous report he endured, like Job, much undeserved suffering. In the current polarised political climate of hostility to Europe’s political and legal institutions, well reflected within the commission, it was a thankless task. However, the report was and will remain important and its quality owes much to the dedicated able staff who supported us. I hope it will be read when the time is ripe for much needed coherent and enduring constitutional reform.

There are two main reasons in favour of a modern constitutional Bill of Rights: a good reason and a bad reason. The good reason is that, instead of relying upon a European treaty to define and protect our fundamental civil and political rights and liberties, we need a home-grown constitutional measure based on our constitutional and legal heritage that will command widespread public confidence beyond the courts and the legal profession. The bad reason is that a home-grown Bill of Rights would enable us to withdraw from the European Convention on Human Rights and the ability to seek redress from the European Court of Human Rights where our courts are unable to provide a remedy. According to this view it would enable the Human Rights Act to be scrapped and replaced by a measure that gave more power to the Executive and Parliament to restrict or limit our civil rights and freedoms.

Many of those who would agree that there are good reasons in theory in favour of a modern Bill of Rights fear, with good reason, that its adoption would result in our withdrawal from the European system for human rights protection and would strengthen state power at the expense of individual freedom and the protection of minorities against what John Stuart Mill called the “tyranny of the majority”. It was that well founded political anxiety that led to dissent by two of the commissioners appointed by the Deputy Prime Minister, the noble Baroness, Lady Kennedy, and Professor Philippe Sands, whose distrust of the Tea Party tendency in the current Conservative Party made them refuse to support a new Bill of Rights in the current Eurosceptic political climate. I fully respect their view.

I set out my own position in a separate note in the report at pages 231-33. My position—and I believe that of commissioner Sir David Edward, the distinguished former judge of the European Court of Justice—is that we favour carefully considered constitutional reform if, but only if, it strengthens rather than weakens effective protection, and if, but only if, the UK remains bound by the convention and the judgments of the European Court of Human Rights. Every one of the 47 member states has made the convention rights part of their domestic law.

Any move towards a UK Bill of Rights would need to be made carefully and sensitively after wide public consultation within each country of the United Kingdom and across the nation as a whole, in the context of the constitutional debate that is bound to occur, whatever the outcome of the Scottish independence referendum and the debates in Northern Ireland about whether additional protection is needed there.

The present Government have been no more capable of achieving coherent and ensuring constitutional reform than their predecessors, despite the reforms made under the Cook-Maclennan Labour-Liberal Democrat agreement, in which my noble friend Lord McNally and I took part. Opportunities have been botched, not just by this Government but by the Brown Government. However, whatever the outcome of the Scottish referendum, we will need to rethink devolution and whether, for example, it should be replaced by a federal system in which this House becomes an indirectly elected senate with some appointed members. If so, there would definitely be the need for a federal Bill of Rights to be read and given effect in accordance with our international and European legal obligations. There is also the long-standing pledge in the Belfast agreement to introduce an additional Bill of Rights for Northern Ireland. It would be sensible to create a broad-based constitutional commission to clarify the options for the next Government, but only if it had the support of all three main political parties. That, regrettably, seems unlikely.

The elephant in the Chamber is of course the Strasbourg court. The European court and its judges are subject to constant unfair attacks, personal and political, by the Mail, the Telegraph and the Express, among others, which campaign to end what they call the “Human Rights Act farce”. They are commercially self-interested, because they wish to be free to invade personal privacy without the limits imposed by the convention. They do not acknowledge the way in which the Strasbourg court has strengthened the protection of freedom of speech and freedom of the press in this country. Examples of this include the cases of thalidomide, Goodwin, Tolstoy, Spycatcher, Max Mosley and the Mirror Group Newspapers case on unfair cost rules. Indeed, one of the main purposes of the Defamation Act 2013 that we recently passed is to make our archaic and oppressive libel law compatible with Article 10 of the convention, by striking a fair balance between free speech and the protection of good reputation. My noble friend Lord McNally of course gave superb leadership to accomplish that end.

The English print media attacks, supported by too many MPs who should know better, have included gross and offensive criticism of the distinguished former president of the Strasbourg court, Sir Nicolas Bratza. These attacks may be partly responsible for the absence of any senior British judicial candidates to replace him on the European court. Another factor may be the uncompetitive nature of the pension and other arrangements for British judges joining the Strasbourg court, moving family and home to Strasbourg only to face abuse from the media and politicians for their pains. The pension arrangements for new judges are significantly worse than for judges serving in the UK. I hope the Minister will confirm that this gap will be addressed for future appointments.

The fact that our senior judges will no longer serve on the Strasbourg court, and are unlikely to do so unless the Ministry of Justice introduces incentives, is very bad news for those of us who cherish our common-law system and want to promote its virtues within the European system. It is also bad news for those of us who are friends of the Strasbourg court. We are fortunate to have Judge Paul Mahoney on the court, but it is essential for his successor to be a powerful and experienced jurist with a thick skin.

I was in Strasbourg two weeks ago. Diplomats, judges and civil servants all told me of their profound mistrust of our Government and its real objectives, as the Prime Minister, the Home Secretary and the Minister of Justice threaten no longer to accept the court and its judgments and to tear up the Human Rights Act. There is deep despair and a serious loss of British influence. Churchill, Macmillan and Maxwell-Fyfe, who led the European Movement and the creation of the convention system, would be appalled and ashamed at the way the tabloid press, swivel-eyed Tory Tea Partygoers and UKIP now call the tune. How can the UK claim to uphold the European rule of law when a former Lord Chancellor for whom I worked, the right honourable Jack Straw MP, boasts in his memoirs of refusing to give effect to the Strasbourg court’s judgment in the Hirst case? He and David Davies MP, then the shadow Home Secretary, went to Strasbourg to remonstrate with the court’s president, Sir Nicolas Bratza, about the court’s case law. I find that completely unacceptable.

The Minister of Justice also wears the robes of the Lord Chancellor. The noble and learned Lord, Lord Mackay of Clashfern, the great holder of that office in the Thatcher Government, has no doubt that the UK is in breach of its international legal duty to give effect to the Strasbourg court's judgment in Hirst. However, the right honourable Chris Grayling thinks the court has overreached itself and that Parliament must have the last word. He does not appear to be concerned about the effect of his approach in undermining our reputation as a rule-of-law country. Ministers have a duty to comply with international law and treaty obligations, as is made clear in the Ministerial Code, proclaimed by the Prime Minister when he took office in 2010. It states:

“Ministers of the Crown are expected to behave in a way that upholds the highest standards of propriety … The Ministerial Code should be read alongside the Coalition agreement and the background of the overarching duty”—

I repeat, the overarching duty—

“on Ministers to comply with the law including international law and treaty obligations and to uphold the administration of justice and to protect the integrity of public life”.

Jonathan Fisher QC, a Conservative member of the commission, suggested last week in the Times that the Government should campaign to persuade the Committee of Ministers of the Council of Europe to refer the UK’s refusal to implement the Hirst judgment back to the European court, because the court has exceeded its jurisdiction. There would be no sympathy at all for that idea. No doubt, in a bid for the support of the media and English nationalist voters, the next Conservative manifesto will promise a British Bill of Rights to replace the Human Rights Act and the role of the Strasbourg court. I hope and believe that the British people will reject that proposal when they realise that it would weaken protection against the misuse of state power. It would certainly be rejected in the Celtic nations of the UK.

Whatever the outcome of the Scottish referendum, the next Government will need to review our constitutional system. The celebration of Magna Carta in June 2015 might be the occasion. A future coalition not beholden to UKIP should seek to strengthen the Strasbourg court. We need new arrangements to ensure that British judges may be seconded without being worse off financially. The system of election of Strasbourg judges needs to be reformed, as was promised in the Brighton declaration. There are other practical proposals that also need to be implemented. The court does not have enough funds to clear the backlog. The registrar of the court has written to the Committee of Ministers pointing out the problems that need to be addressed.

Ministers need to rebut the myth that the Strasbourg court is a “foreign” court and constantly overturns the decisions of the UK courts. In 2012, of more than 2,000 UK applications decided by the court, only 12 resulted in a finding of a violation. The present politically divided coalition Government, which is also divided on this issue, are unlikely to address these issues effectively. We must hope that the next Government will use the ideas in the commission's report to strengthen the effective protection of human rights at home and across the European space, for the sake of the peoples of our nations. I beg to move.

14:38

[Lord Faulks]

My Lords, I begin by congratulating my noble friend Lord Lester of Herne Hill on securing this debate. I also congratulate him on his enormous contribution to the cause of human rights over the years. I should declare an interest as a member of the commission, though I came relatively late to the party, joining as a replacement for Michael Pinto-Duschinsky. On leaving the commission he expressed his views firmly and widely on where he thought the discussions had gone wrong. During my period at the commission there were certainly vigorous debates about a number of issues, as is apparent from the range of views expressed in the report. However, the process of arriving at our conclusions was a civilised one, made easier by the skilful chairmanship of Sir Leigh Lewis.

There was a majority view, as your Lordships have heard, in favour of the creation of a UK Bill of Rights that incorporates and builds on our obligations under the European Convention. That was the answer to the question contained in our terms of reference when the commission was set up by the Deputy Prime Minister. However, it seemed to at least two of us that the commission had not been asked to consider the key issue: namely, how the United Kingdom should respond to the judicially activist approach taken by the European Court of Human Rights in its interpretation and application of the convention in the past 30 years—in particular, whether the United Kingdom should consider withdrawal from the court’s jurisdiction, or at least renegotiate our terms of membership.

Jonathan Fisher QC and I were responsible for a paper entitled Unfinished Business, which is incorporated in volume 1 of the commission’s report. It reflects our views and, I venture to think, the views of others outside the commission. I respectfully suggest that those views are not restricted to what my noble friend described as the “Tea Party” tendency in the Conservative Party. I will not repeat now what we said but will make a few observations that arise from the commission’s report.

In talking of human rights, it is easy to approach matters at a level of abstraction. However, what does a human rights case actually look like at domestic level? Here I must declare a further interest as a practising barrister who, since the enactment of the Human Rights Act, has devoted a considerable amount of time to defending public authorities against claims arising directly or indirectly from the Act. Fascinating though these cases have been, I have been far from convinced that most of them have very much, if anything, to do with what people would once have meant by the expression “human rights”.

The courts in this country have, for the most part, strained to follow Strasbourg case law and its often rather creative interpretation of the convention. Supporters of the Human Rights Act tend to extol the wording of the convention, which contains a perfectly acceptable summary of human rights. However, as Jack Straw, former Home Secretary and Secretary of State for Justice, said in the debate on prisoner voting,

“the problem is not the plain text of the convention, but the way in which it has been over-interpreted to extend the jurisdiction of the European Court ... the problem has arisen because of the judicial activism of the Court in Strasbourg, which is widening its role not only beyond anything anticipated in the founding treaties but beyond anything anticipated by the subsequent active consent of all the state parties, including the UK”.—[Official Report, Commons, 10/2/11; cols. 501-02.]

In a way this was all very predictable. Lord Denning was a judge who was once highly regarded as a legal thinker. His judgments are cited much less often in the courts now. He wrote a great deal about the European convention. It was relied upon in courts before the Human Rights Act was enacted. He said in the case of Ahmed v Inner London Education Authority in 1978:

“The Convention is drafted in a style very different from the way we are used to in legislation. It contains wide general statements of principle. They are apt to lead to much difficulty in application; because they give rise to much uncertainty. They are not the sort of thing which we can easily digest. Article 8 is an example. It is so wide as to be incapable of practical application. So it is much better for us to stick to our own statutes and principles, and only look to the Convention for guidance in case of doubt”.

I suggest that there was much wisdom, indeed prescience, in what he said, albeit that his views are often dismissed as insular.

One aspect of the debate that has not sufficiently been emphasised is the extraordinary cost of human rights. Before I became a member of the commission, I asked a Written Question of the Minister as to whether the commission would be considering as part of its report questions of cost. The reply was that this was a matter for the commission. On arrival at the commission, it was apparent that the membership did not consider cost to be within its terms of reference. On 7 March 2013, I asked the Minister here in the Chamber to tell us whether the Government could give us any figures for how much human rights were costing us. His answer was that he could not do so. He described respect for human rights as being,

“a prize beyond cost”.—[Official Report, 7/3/13; col. 1614.]

All noble Lords value the protection of human rights, but, with great respect, that does not mean that the question of cost becomes a no-go area.

The LASPO Act made some widespread changes in the cost of litigation. Many were timely, in particular those that effectively implemented the Jackson reforms. I was somewhat less enthusiastic about the alterations to legal aid, which had the potential to deny representation to some with genuine claims and limited means. However, the Minister was reassuring as to the alternative and cheaper ways in which ordinary citizens could seek appropriate remedies. One exception to the cost-cutting exercise appeared to be cases involving the Human Rights Act. No figures were given to Parliament as to how much such cases were costing or would cost in the future. Were the Government concerned that denying legal aid to any claim involving the Human Rights Act would put them potentially in breach of Article 6 of the convention?

Claims involving the Human Rights Act continue, whether as claims for compensation or as the basis for judicial review. The sums awarded are often trivial. The cost, however, is not. The cost of the Abu Qatada litigation is said to be in excess of £1.7 million. It seems to be absolutely crucial that the Government should at least make some attempt to calculate what the HRA has cost in terms of legal fees generated by litigation. The cost does not end there. Public authorities have conscientiously attempted to ensure that their policies and practices are human rights-compliant. This is a very difficult exercise because it depends on trying to second-guess what view the Strasbourg Court, and thus our courts, will take of a particular situation. We need to know about these costs in an area that has much in common with our overreaction to the requirements of health and safety or even the Data Protection Act.

I have another substantial question for the Minister. I appreciate that he may have difficulty in answering some questions, in view of the well understood difference of opinion between the Liberal Democrat Party and Conservative Party in relation to the Human Rights Act, but I hope that he can answer this one. Do the Government agree that in leaving the ECHR, if that course were taken, we would also have to leave the European Union? This was the somewhat surprising view recently expressed by Judge Dean Spielmann, the president of the ECHR. My understanding of the position is that EU treaties do not provide that adherence to the European convention is a formal requirement of continued membership of the EU, even if membership may be regarded as a benchmark in terms of respect for human rights.

Such respect is something that unites us all, but if we were to leave the Strasbourg Court and indeed the Council of Europe, this respect for human rights would not diminish. Before the Act came into force, this country had a proud, albeit not unblemished, record for the protection of human rights through its domestic law. We are, of course, bound by a plethora of international obligations from which we would not be relieved were we to leave the Strasbourg court. Any noble Lords who wish to be reassured about our contribution to the protection of human rights and democracy all over the world should read the 2012 Foreign and Commonwealth Office report published in April this year. It is a remarkable tribute to the work of the FCO. If I highlight in particular its work in relation to sexual violence as a weapon of war, that does not in any way diminish the other aspects of its work.

The JCHR, of which I am a member, would still have important work to do even if the Act were to be repealed. The EHRC, set up pursuant to the Equality Act, would continue to have an important role. Above all, Parliament can legislate to protect human rights on a more targeted and nuanced basis, rather than having to perform somersaults to reflect actual or potential decisions made here or in Strasbourg.

The question is therefore not whether we should be protecting human rights but whether the Strasbourg court is the best or even the preferred method of defining or enforcing human rights standards. It is said by some that we would be a pariah state were we to cut our links with the Strasbourg court. The human rights records of some counties subject to the jurisdiction of the European Court suggest that membership is hardly a guarantee of the protection of human rights.

It is important not to demonise the Strasbourg court. It does not have the same regard for precedent, and the jurisprudence in this country, post human rights, can make difficult reading, as judges try to impose some sort of taxonomy—because of our courts’ respect for precedent—on a jurisprudence that lacks such respect. As my noble friend Lord Lester said, some of the decisions from Strasbourg have been profound and influential. However, if we were to leave the convention it would not mean that we would ignore such decisions any more than we would ignore influential decisions from elsewhere in the world.

My noble friend said that the European convention was the work of distinguished Conservative politicians and referred to Sir David Maxwell Fyfe as one of those responsible for its first draft. This is true but social historians, particularly having regard to his response to privacy and gay rights issues, tend to the view that it is most unlikely that he would have approved of the way the Human Rights Act developed and has been interpreted.

In conclusion, I remain passionately committed to the cause of human rights, but retain deep reservations about the Human Rights Act. Above all, I am concerned that human rights can get so easily lost in the law and the language of lawyers. Whereas law should be the servant of human rights, it has become their master.

14:51

[Lord Goldsmith]

My Lords, I need to start with an apology to the House and to the noble Lord, Lord Lester of Herne Hill, for arriving after the start of the debate. I can pray in aid a little bit of confusion about the starting time of the debate, and I know very well the views of the noble Lord, Lord Lester, from over the years so I can predict some of the things that he would have said.

I therefore hope that the House will permit me to make a few brief observations on this very important topic. In doing so, I declare an interest as a practising lawyer. I have been involved in human rights work, in the sense that a lot of the work that I did when I was Attorney-General involved vetting and approving—and occasionally not approving—legislation or executive action on the grounds of compliance or non-compliance with our Community obligations and arguing cases on behalf of the Government either in this country’s courts or, from time to time, overseas, including in Strasbourg. I have some experience of how the European convention and the Human Rights Act work. I was also the Prime Minister’s personal representative in negotiating the European Charter of Fundamental Rights, which was set up following the Cologne and Nice summits to try to draw up a charter for the institutions of the European Union rather than its member states. I am therefore familiar with the debates.

The principal point that I want briefly to make is that I am despondent and unhappy about the turn which has been taken in the debate on human rights, and I am therefore unhappy about the commission’s report. I am concerned about a proposal that would not just put in place additional protection in a British Bill of Rights but, at least in the view of some members of the commission and some members of the Government, replace the European Convention on Human Rights with something else. There are three reasons why that would be a retrograde step.

The first reason is the universality of human rights protection that the European convention gives rise to. It gives rise to universality across the European countries which subscribe to the Council of Europe and the European convention. This does not mean that it is interpreted or applied in exactly the same way in every country, nor should it be. There are different social conditions and the principles—the so-called margin of appreciation—provide an opportunity for different countries to be allowed a chance to apply the rules and rights in the European convention in a way which suits the social and economic conditions of that country. Otherwise, it means that all the countries which subscribe share the same fundamental values and are subject to the same fundamental restrictions on how they deal with people within their territories.

I am really worried at the prospect of the message it would send if the United Kingdom were to leave the European convention. The noble Lord, Lord Faulks, talked about the UK becoming a pariah state, but that is not quite what I have in mind. He also rightly described the very proud and important contribution that this country has made to human rights protection in many parts of the world. However, once it became clear that the view of the United Kingdom was that it could go its own way and no longer needed the European Court of Human Rights or to follow the European convention, I would worry about the example that we were setting. There are countries in eastern Europe—I will not name them but noble Lords can identify them very easily—that already find it difficult to comply with their obligations, and if they felt that they had the liberty to produce their own Bill of Rights and their own protections they would move in a very different way.

Secondly, the convention provides for a permanence of protections. It is not an immutable convention: it is open to member states to change. It is more often changed by the addition of rights through the agreement of new protocols but it is not impossible for member states to agree changes. However, it differs very much from parliamentary legislation in that it is not open to a single state to say, “We do not like the decision that the court has just made therefore we are now going to amend the right that is at issue”. I would be very worried if the protection of human rights in this country depended only on a statute of this Parliament, for which I have enormous respect. It would still mean that it would be capable of amendment, variation, revocation or removal if there were a parliamentary majority for that to take place. I am concerned that there is a risk that something as important as the protection of our fellow citizens could be subject to short-term political issues or the pressures of newspapers.

My third concern is the detail: the devil is always in the detail. I see from the commission’s conclusions that:

“The majority are agreed that such a Bill should have at its core the rights currently in the European Convention on Human Rights … That does not necessarily mean, however, that they would have to be written in identical language”.

I had exactly that issue when negotiating the charter. The question then was whether we should write the relevant rights and obligations in the same terms used in the European convention or use different language. As soon as you use different language, any lawyer will find a difference in the meaning intended. I do not know how it is to be done because we do not know what the detail of a new Bill would be, but there is a real risk that the rights written—allegedly not in non-identical language but protecting the same rights—would not actually be protected. When I was in office and debated the European convention with my opposite numbers I used simply to ask which of the rights in the convention they did not agree with: the right to a fair trial, the freedom of speech, freedom of association, the prohibition of torture, the prohibition of inhuman and degrading treatment. When one analyses that—given that the rights concerned are basic rights, rightly put into place following the horrors of the Holocaust—it is difficult to rewrite this in a way which does not risk removing those rights in some respect. If that is not the intention I do not see the point of rewriting it, and that worries me a great deal.

My final point is that I share the views of those who have said that it would be very good if more could be done to try to explain how the Human Rights Act and the European convention work. There are myths and misconceptions; we came across a lot of them in the time that I was in office. For example, there was the allegation that an escaped burglar was provided with food when he escaped because of his human rights, when it was nothing at all to do with that. In fact, it was not food but drink; it is a jolly good way to get somebody down from a roof, to ply him with a lot of drink—non-alcoholic drink, of course, although maybe with alcoholic drink it would have been even faster. Lots of stories were promoted, and came across in the newspapers about events said to have taken place, but they were simply not the case. There is a huge amount of misconception.

I worry about the things that the present Government say that do not illustrate a complete understanding of the Act. This is not the first time that I have said this, but I was troubled by what the right honourable Mr Grayling, the Lord Chancellor, said in relation to the prisoner votes debate—that it was open to this Parliament to ignore a decision made in a case to which the United Kingdom was a party. Under the Human Rights Act it is perfectly true that, when it is a decision in relation to another country, our courts are required only to have regard to the decisions. However, none of that takes away from the obligation that this country has, having entered into an international obligation, to follow the decisions of the court when they are made against us.

Others will speak with more authority about the work of the commission, but I am grateful to noble Lords for listening to me.

15:01

[Lord Maclennan of Rogart]

My Lords, I am the first non-practising lawyer to contribute to this debate, but it is the case that I had an oversight of some of the legislation, notably that of 1998, which was the third stage in the development of international protection of human rights. The first was the ratification of the convention in 1953; the second was giving the right of petition to individual citizens in 1966, in this country; and the third was the so-called incorporation of the convention.

I am bound to say that I have been disturbed by the attitudes expressed by a number of Conservative Members of both Houses about the underpinning of human rights. It seems to me that the division of opinion was reflected in the commission itself, and I understand clearly why the noble Baroness, Lady Kennedy of The Shaws, and Professor Philippe Sands were reluctant to advocate any change in the status quo at this time. There are good reasons for considering whether the scope of domestic protection of human rights should be enlarged. However, I would think that it could not be done entirely on the basis of the commission’s report.

My noble friend Lord Lester of Herne Hill deserves laurels from the nation not only for his participation in the work of this commission but for the strong defence that he has made over the years of the enlargement of the practical protection of human rights. I am very grateful to him for opening the debate as he did.

Many aspects of our constitution are developing gradually, but without necessary regard to their impact on other aspects. At this time, not least because of the Scottish dimension and the definite possibility of a referendum on independence, we will have some difficulty in considering this in isolation from these other constitutional considerations. I would hope, however, that in pursuance of one of the recommendations of the commission, namely that of making the public more widely aware of the importance of the protection of human rights—of what the Human Rights Act does and where it is, perhaps, limited—we could establish some kind of convention, not just on the protection of human rights, but more widely. Speaking as a Scot, I do not think that the people of Scotland should think that their choice is between independence and the status quo; there should be a possibility of development towards a more federal system of government internally in this United Kingdom. If that proposal were to be taken up by the Government, I hope that it would be considered with great care—and it has been considered by the Graham Allen-chaired committee in the House of Commons. There would be an opportunity to involve not just interest groups or politicians but individual citizens and to spread a greater understanding of the importance of the protection of human rights. One possibility is that we might seek to extend effective protection by taking account of other conventions to which we have signed up but not necessarily given effect, such as the UN Convention on the Rights of the Child.

I believe that we have in the past been an exemplar of the protection of human rights, and that should remain our goal. I agree very much with the noble and learned Lord, Lord Goldsmith, in his strictures about opting out of the work and jurisdiction of the European Court of Human Rights, for the reasons that he gave. At this perilously fragile time within the European Union—but not only within the European Union—there would be a great danger in our giving an example of withdrawing from the broadly expressed rubrics of the convention on human rights.

One issue that has emerged in this debate is around the language of the protection of human rights, which has always been cast in very broad and general terms. If you go back to the Bill of Rights of 1689, you will find similarly broad expressions. I do not think that it would be at all sensible to narrow the effectiveness of those broad rights by having greater definition; certainly there could be extension, but not tighter definition. That is why the judges should have a balancing role in our constitution. I am very unhappy about the principle of sovereignty of Parliament, if it is judged as being something capable of being used to produce results contrary to the history of our country and values that we have, over many centuries, embraced and become more particular about. Consequently, I take the view that the position of judges in this country is important.

I note what has been said, and clearly action needs to be taken. I hope that the Minister may be in a position to give us some indication of what action can be taken to strengthen the European Court of Human Rights, in the light of the backlog of cases and the cost of sweeping up this backlog, and whether he believes that the Brighton declaration might lead to greater international harmony on reaching agreement about the appointment of judges and so forth.

Nevertheless, the system as it is is so much better than it was, and I very much hope that we take our time to consider how to enlarge this and to involve the public and the constituent nations of the United Kingdom. Northern Ireland is a special case because it has been given some indication that we might be ready to do something about its protection of human rights. Scotland and Wales are in a fragile—or, at least, indecisive—position at the moment. The coalition Government should therefore not seek to come to a quick conclusion about how we are going ahead, but the direction seems to be clear. We need a Bill of Rights against which we can judge the appropriateness of executive action and, indeed, the conformity of legislation with the fundamental values that we, as a nation, have embraced and wish to continue to embrace.

15:11

[Lord Brown of Eaton-under-Heywood]

My Lords, I hope not to detain your Lordships too long. Indeed, had I appreciated in advance what a wealth of legal and constitutional expertise was to be available to the House in this debate, I doubt that I would have troubled your Lordships at all.

I speak as one who, over the 13 years since the convention became part of our domestic law, has probably been involved in at least as many cases dealing with convention rights as any other judge in the country. The main reason I speak is to try to save my successors in the courts from what I believe would be the nightmare of implementing the majority’s central recommendation in this report; the nightmare of having to wrestle in the courts in future not merely with the complexities and uncertainties of the convention and of the vast body of jurisprudence that it has spawned but with those of a new UK Bill of Rights superimposed on it. I say “superimposed” because it is, of course, a given of the majority’s case in favour of a domestic Bill that it would in no way detract from the existing rights and freedoms under the Strasbourg convention. Rather, as the report states,

“such a Bill would incorporate and build on all of the UK’s obligations”,

under the convention.

The report presupposes the,

“UK’s continuing adherence to the European Convention on Human Rights and to the European Court of Human Rights as a given”.

It follows inescapably from this that the baseline of any future challenge would be whatever rights already exist under the Strasbourg convention and case law. Inevitably, it would be necessary to explore all this in full and to establish that baseline before the court proceeds to consider whether the UK domestic Bill enlarges upon that right.

Of course, I recognise that the position would be different in respect of any discrete rights that the UK Bill might introduce, such as specific environmental rights, or what are called socioeconomic rights, or, indeed, rights to a jury trial in certain cases. However, the introduction of those would be highly contentious and fraught with all sorts of difficulties, and in any event could be enacted entirely independently of the sort of full-blown UK Bill which I understand the majority of the commission to envisage.

What I understand to be the core justification in the eyes of the majority for restating all existing convention rights in different language in a new United Kingdom domestic Bill of Rights is what the report calls,

“the need to create greater public ownership”,

of the rights. According to the report, the majority suggest that this could be achieved if the Bill,

“was written in language which reflected the distinctive history and heritage of the countries within the United Kingdom”.

I pay tribute to the noble Lord, Lord Lester, for securing this debate, and indeed to his huge contribution over many years to the wider human rights debate. In his characteristically thoughtful personal explanatory note as to why he is prepared to join the majority view, he states:

“it calls for a restatement of civil and political rights and liberties in terms that respect our constitutional and legal heritage”.

With the best will in the world, the process that I sought to describe earlier of first having to ascertain the position under Strasbourg law and then seeing whether the claimant’s case can be advanced by reference to some additional rights under the UK Bill—I interpolate that the respondent’s rights could never be improved because there is no question of detracting from the Strasbourg rights—could never hope to persuade the public that we have somehow now come to own these rights.

The sad fact is that in whatever instruments and whatever language minority rights are enshrined, certain judgments which courts are on occasion required to give are bound to be deeply unpopular and to be misleadingly, and indeed mischievously, portrayed by some in such a way as can tend to alienate the public from the whole notion of human rights. Paragraph 82 of the report rightly refers to,

“the highly polemical way in which these issues tend to be presented by both some commentators and some sections of the media”.

Later, it quotes a witness speaking of,

“the climate of disrespect surrounding it”—

that is, the Human Rights Act—

“created and perpetuated by political and public figures and the media”.

In short, the convention, the Strasbourg court and in turn our own judges are all too often maligned. But ‘twas ever thus and regrettably it always will be. We do not, and indeed must not, outlaw unpopular minorities—prisoners, asylum seekers, immigrants and so forth—and we must not outlaw even the wicked. However, judgments in their favour often attract great hostility from the majority, and it is all too tempting for that majority, and even on occasion for government, then to blame the judges. Indeed, on one occasion in the Supreme Court I recall that we were shown Home Office minutes expressly recognising the impossibility of the Government’s position under established human rights law and yet suggesting that the Home Office should maintain its stance and,

“let the judges take the hit”.

No UK Bill of Rights is going to cure that sort of problem. Let us stay with where we have got to and try gradually to improve that situation.

I acknowledge the contribution made to the wider debate by this report, but for my part I would align myself with the minority.

15:19

[Lord Gold]

My Lords, I start by thanking the noble Lord, Lord Lester, for initiating this debate. I acknowledge his tremendous contribution in the area of human rights.

The Human Rights Act was regarded as the UK’s Bill of Rights and was described as such on its introduction into law. Nevertheless, by a majority, and after referring to many difficult issues, not least relating to Northern Ireland, Scotland and Wales, the commission supported the proposal that the UK should have its own Bill of Rights.

So why are we now considering having another UK Bill of Rights? Is there something wrong with the first one? Does it go too far? Perhaps it does not go far enough. If I understand the report correctly, and as the noble Lord, Lord Lester, confirmed in opening the debate, the main reason appears to be that we are lacking right now,

“public acceptance of the legitimacy of our current human rights structures, including of the roles of the Convention and the European Court of Human Rights”.

The majority of members of the commission accept Liberty’s submission that,

“there is a lack of public understanding and ‘ownership’ of the HRA”.

These same members believe that that applies equally to the European Convention on Human Rights and the European court, so that many people feel alienated from a system they regard as European and not British. The majority also believe that public perceptions will not change even if there is better public education of the Human Rights Act and its structures. Therefore, their answer is to support the creation of a UK Bill that incorporates and builds on all the obligations prescribed by the European convention. Merris Amos, a senior lecturer at Queen Mary College, argues that,

“starting again with a UK Bill of Rights, containing identical or better human rights guarantees, might overcome these difficulties”,

of acceptance and perception,

“and create more of a sense of ownership amongst the general public”.

There is no evidence that that is correct. It is a hunch, and a very expensive one at that. Assuming that Parliament is persuaded by the force of this argument, before any UK Bill of Rights could be introduced it would be necessary to consult widely. We would also have to find a solution to the difficulties identified by the commission and mentioned by the noble Lord, Lord Lester, and others, notably relating to Scotland, Northern Ireland and Wales. All that will take time, will be very expensive, and inevitably will not happen before the next election.

It seems that the main complaint with the present system is that we have to pay regard to decisions made by the European Court of Human Rights in Strasbourg. It has been mentioned by several of your Lordships this afternoon. Some people see this as interference by a foreign body in domestic matters. For example, the court’s ruling on prisoner voting has angered many people, as have the difficulties experienced in seeking to deport non-citizens found guilty of serious crimes.

In the well considered paper headed Unfinished Business, written by my noble friend Lord Faulks QC and Jonathan Fisher QC, appended to the commission’s report, there is reference to the inefficiency of the court and the quality of some of the judges there, as well as to the fact that the court has so far failed to heed calls for reform. The noble Lord, Lord Lester, mentioned the need to improve matters in that court. Their answer is to support the proposal of this UK Bill, although they accept that the problems,

“posed by a judicially activist court could be resolved if effective reforms were agreed and implemented by the Council of Europe”.

The commission submitted proposals for reform of the court in an interim report issued on 28 July 2011. A meeting of the Council of Europe was held in Brighton in April 2012. Despite the UK pressing for reform, this was rejected. My noble friend Lord Faulks and Mr Fisher conclude by supporting the idea of a UK Bill and canvass the possibility of the UK leaving the convention.

I respectfully disagree. In my view, it would be a backward step for us to turn our backs on the convention. Even if we went ahead with our own Bill of Rights, it would risk giving a very bad message as to the UK’s commitment to human rights and would likely spur on the critics seeking to make capital in relation to every change of language in the UK Bill.

I believe that there should be a different approach, recognising that there has been a little progress. English judges have been moving away from the notion that they are strictly bound by the jurisprudence of the European court. While respecting the boundaries of the convention, the Human Rights Act recognises and encourages the development of independent domestic rights jurisprudence. The English courts are taking the jurisprudence of the European Court of Human Rights properly into account, but are not necessarily bound by its decisions. I believe that for the present we should make a concerted effort to win over public confidence in the European convention by making the British public more aware of what the English courts are doing. I am not persuaded that we should embark now upon the costly, time-consuming and difficult task of proceeding with a UK Bill. As I have said, I do not believe that cogent evidence is available to show that that would be better supported by the British public. Instead, and despite the considerable difficulties, which I acknowledge, we should seek again to reform the European court, as has already been proposed and attempted. The Prime Minister should add this to his agenda when he begins negotiations for wider reform.

15:26

[Baroness Kennedy of The Shaws]

My Lords, I, too, thank the noble Lord, Lord Lester, for securing this debate, and I join with others in paying tribute to him for his life’s work in supporting human rights here and around the world.

The public would be right to ask the question, “Whatever happened to that commission?”, because, of course, the commission’s report was published six months ago and we have not heard very much about it since. This is perhaps best answered by the fact that the commission was really set up to answer a political problem. Here was an issue on which the parties to the coalition were deeply divided. Some Conservatives hold strongly that the European Court of Human Rights and the European Convention on Human Rights are an abomination and that we should be putting an end to them as soon as possible. Other Conservatives may take a more sensible view. The Liberal Democrats are deeply committed to human rights and to the whole framework for securing respect for human rights throughout Europe and the world. So there was this division, this problem of hostility to the Human Rights Act and commitment to abolishing it within the Conservative Party, and, on the other hand, the commitment of the Liberal Democrats to the very opposite. That is why the commission was set up.

I pay tribute to the fact that the Liberal Democrat end of the appointment process decided to make a broad church and invited in a judge from the European Court of Justice, who is not politically aligned, myself—a member of the Labour Party who sits on these Benches—and the noble Lord, Lord Lester, an academic and practitioner. There was a broader church on the Liberal Democrat end than I think there was on the Conservative end. We gave consideration to these issues over some 18 months.

Sensible Conservatives know that the European Convention on Human Rights has nothing to do with the European Union. However, I am afraid that there is a large number of the membership of the Conservative Party who do not seem to know that. Perhaps when we talk about doing some public education, we should start there.

Secondly, many sensible Conservatives know that it was, of course, Conservatives who drafted the European Convention on Human Rights. They should feel proud of that. I listened to the noble Lord, Lord Faulks, saying that those who drafted it would be concerned about the rather activist way in which law has developed. However, I would say to him that that is the nature of law. Society changes and develops, and so it is right that courts should take account of the way in which our societies evolve. Sensible Conservatives know that it is to Britain’s global credit that we are one of the leading nations promoting human rights. To in any way sacrifice that would be folly.

It has already been referred to that Philippe Sands and I were part of a minority who did not go with the general view of the commission that there should be a commitment to a British Bill of Rights. In fact, the word British, which was used when the commission started, was abandoned when it was pointed out to those who thought this up that a British Bill of Rights would send rather unsatisfactory messages to certain parts of the United Kingdom which prefer to be referred to under the rubric, United Kingdom. We changed the title of the commission to one looking at a UK Bill of Rights.

We entered into it, as the noble and learned Lord, Lord Brown, mentioned, on the understanding that there was a baseline, which was to accept and to build upon the European Convention on Human Rights. All I would say to the noble and learned Lord is that if one takes a closer look at the publication that was produced, one will find that reference to that baseline somehow gets lost in the writing up of the report, and that a number of people are not prepared to accept the European convention as a baseline.

Philippe Sands and I have written about this matter in a number of journals, including the London Review of Books. We started out with an open mind as to whether a UK Bill of Rights was needed and whether it was a good thing. We ended up with very strong views as to why we could not sign up to it. The main reason was that the case was not made. The evidence we took showed that, beyond the Daily Mail, the Daily Telegraph and the activist sections of the Conservative Party, up and down the country, particularly in the devolved nations, there was a great deal of support for the European Convention on Human Rights.

We also received a great deal of evidence. In fact, we had consultations on two occasions. After the first, there was the suggestion, “If you don’t like the first consultation’s answers, let’s have another one”. The second consultation reached the same conclusions: namely, that the general public, when invited to express their views, were supportive of the Human Rights Act and of being part of this greater fabric across Europe of protecting human rights.

We also took the view that we could not support this because the timing was absurd. A decision had just been made to have a referendum in Scotland on whether there should be independence for Scotland. To be rocking the boat and talking about, first, a British Bill of Rights, and then a UK Bill of Rights, did not seem an appropriate or sensible thing to be doing at this moment. Indeed, dependent on the outcome of that referendum, it may be that we will embark on a set of constitutional changes that would involve us having to look at all our arrangements. That might be a time when we could look at this again. It certainly is not timely at the moment.

The third matter for us was that there was very little thinking of the long-term implications constitutionally or, indeed, legally—as has been described so powerfully by the noble and learned Lord, Lord Brown—and of what it would mean for judges trying to interpret the law. We also felt very strongly, as the noble Lord, Lord Gold, powerfully explained, about how this would be seen around the world and read internationally.

I emphasise that as the commission continued with its deliberations, we became aware of the real motivations of some of our number: namely, that they feel so strongly about being part of the European system protecting human rights that they want to remove themselves from the European Court of Human Rights and the European convention, and that creating a British or UK Bill of Rights is a Trojan horse in order to have something in place in order to decouple from Europe.

Arguments were made about this being a rebranding exercise and that a new UK-type Bill of Rights would explain to the public better in language that they would know that it was nothing to do with Europe and was all about us. We were not persuaded that that was necessary. One only has to read a wonderful report from the British Academy on this subject to see why this is not an avenue down which we should go.

It was a convenient means to reduce rights, and a way of casting off Europe and returning to some delusional idyll of an earlier age of sovereign authority, unconstrained by obligations set out in international instruments. That was behind some of the motivations. We did not want to be party to that and lend our name to a document that was not going to be declaring its purposes as openly as it should.

The fault lines in the commission were real and deep. They related to the failure to grapple with the content of such a Bill and with what its real purposes were. The underlying desire was to decouple the United Kingdom from the European convention and the jurisprudence of the European Court. We were not prepared to go along with it. We see no benefit in creating a superficial consensus, which was why we made our separate entry in the report. We were also concerned that there was not enough emphasis on the benefits of the European convention. These benefits are important for Europe as a whole and for the United Kingdom. Individuals in 47 states can now take challenges to abuses of public power to an international court in Strasbourg. We should feel proud of being part of that.

At home, the convention has brought great benefits. For example, it has reinforced our commitment to due process in court proceedings. It has advanced children’s rights and the rights of the elderly in care homes. It has advanced freedom of expression and assembly, and protected individuals from unfair extradition. Perhaps most powerfully, it has reinforced the ban on torture and served as a source of international inspiration, which again are things that we should be so proud of.

We should keep in mind the way in which disregard of judgments flies in the face of the rule of law. For our Government to be talking about doing that is shameful. In the business, for example, of prisoners’ voting rights, the margin of appreciation meant that that could have been dealt with easily by providing the right to a postal vote to those on very short sentences. That would have satisfied honour in the European Court, but it is not how it is presented to the public in our tabloid press.

This is about a set of attitudes. At the heart of the differences on the commission were distinct beliefs about the reach and purposes of human rights. We were very separate. It was about the relationship between matters local, national and international. A UK Bill of Rights may seem harmless on the face of it and attractive at first sight, but alarm bells should be ringing for everybody who cares about human rights. For us, human rights are about working not just within our own country but with other countries to improve the human condition, engender respect for all individuals, protect those who are vulnerable and create the conditions for the delivery of justice and peace internationally.

To remove the glue that holds us together with other nations is dangerous. Our criticisms of the European Court should galvanise us to reform it, not cut ourselves off from it. I would say to the Liberal Democrats that the lesson for them is that there are some areas where you cannot do business with the Conservatives without selling your souls. That is what this commission has taught you. The message to you must be: here is the big divide. It should be the message to our nation as a whole. Human rights matter. They matter to all of us. Even to contemplate decoupling from this important way in which we join with Europe and the world in protecting human rights would be folly in the extreme. That was why Philippe Sands and I proudly distinguished ourselves from the rest of the commission. You cannot sign up for this, because it is about diminishing rights for the people who need them most.

15:39

[Lord Woolf]

My Lords, I too warmly congratulate the noble Lord, Lord Lester, on his wisdom in selecting this subject for debate. I also acknowledge the contribution he has made to the development of human rights principles in this jurisdiction. He has been indefatigable in his efforts. He is part of the explanation for why we are in a situation today where the human rights principles that we have developed in this country are working reasonably satisfactorily, although there are undoubtedly problems.

It is a testimony to the noble Lord’s efforts that I can remember well the time when, appearing as an advocate and not in his role today, he educated the judiciary of this country as to the approach to human rights, which was not in accord with the way we traditionally used to approach legislation in particular. This was true of his advocacy in the highest court in the land, which, of course, at that time was part of this House.

I congratulate the commission on the report it has produced. It has been the subject of criticism by some but I venture to say that that criticism was not meant to detract from the fact that the commission is exemplary in the way it has conducted the process of consultation. It is also exemplary in the way that it has clearly explained the different opinions that its members hold and the way in which the issues are regarded by different parts of the community.

I have found it very difficult to decide whether I should agree with the majority opinion or the minority opinion and I am glad to say that today’s excellent debate has helped me in that matter. The report sets out the arguments against and in favour very clearly, but to hear them debated in the House in this way brings a new realism to me which I did not have before.

I see a situation where, excellent though the commission’s work is, there are serious dangers in approaching the matter in the way the majority have indicated in the report. That does not mean that the work of the report has been wasted. On the contrary, it is very important that the position of human rights is elevated into proper public debate. In saying that, I am not referring to some of the debate that takes place in the media for understandable reasons.

It is important, however, that the thinking public have an opportunity to see where the truth lies. I am not surprised that the attempts, when they are made, to assess the public’s opinion show that the position is rather different than a reading of the media, popular or otherwise, might lead you to believe. As often happens, the public are not so foolish as to think that a new Bill of Rights could achieve a position where we could disregard the European Convention on Human Rights, to which this country has adhered as far back as 1950.

It is important to understand that human rights are different from rights set out in ordinary legislation. They are fundamental to the way of life of this country—indeed, I would go so far as to say of all countries that purport to or do adhere to the rule of law. What is special about the rule of law is that when it talks of that subject it is, in my understanding, talking about those rules which should govern societies in general. The way they are applied and interpreted in different jurisdictions does not mean that they are better observed in one jurisdiction than another or less observed in one country than another. The rule of law requires that a society adheres to basic principles—principles which are the source of the European convention and many other conventions. They are the source of justice, the source of fairness, the source of proportionality and the source of many other matters that make our society one that up to now has been respected in many parts of the globe.

I have had the good fortune to be called upon to make two reports in regard to the European Court of Human Rights and can say I am fairly familiar with the standards it has adopted. This country, together with the Council of Europe, invited me to make a report when I ceased to be Lord Chief Justice, one of the first activities I had at that stage. In the course of it I interviewed individually most of the judges on that court, looked at various procedures and was well aware of the huge backlog of cases that they had. I found that the more I talked to those judges, the more impressed I became. I was convinced that they were concerned about the same things with regard to justice that I would expect a British or United Kingdom judge to be concerned about. Within the confines of a system they were called upon to administer, they did their very best to achieve the results which they were required to achieve in order to honour the principles set out in the European convention. Of course some of the decisions would be popular and some unpopular. I am afraid that that is true of a judge’s job. It has certainly been true of my period as a judge, when some of the decisions I made were extremely unpopular.

[Lord Spicer]

The noble and learned Lord is talking about basic principles. Does he have on or off his list retrospection as practised by the legal profession during the expenses affair in the Commons?

[Lord Woolf]

I am afraid I find it difficult to fit that in with what I am going to say as it is not on my agenda this afternoon. I hope the noble Lord will forgive me if I do not try to deal with that although I can see why he raises the matter. The issue of those expenses and the way they were dealt with—the principles of general fairness, honesty and integrity—are the sort of matters which human rights can reflect.

Taking up where I left off, the recommendations which I made on that first occasion were adopted by the European Court which did its best to do what it could with them. The second commission—and bearing in mind that I was on it, it was probably misappropriately described as the commission of the wise men—consisted of 10 people from different jurisdictions. I mention it to declare an interest, but more importantly to point out that although those 10 members were drawn from different nations, they all struggled to work together to produce results that would be beneficial to the court. They could not complete their task in so far as they were not in a position to provide an answer to all the problems. Those problems remain although they have been helped by what happened in Brighton recently and the declaration made there. The important point is that, despite the load of problems that the court has, the situation is better today than it has been for a long time.

I listened with great care to what the noble Lord, Lord Faulks, said about cost. I wish to mention two things. The judges to whom I talked in that court were at one in saying that the very best advocates who came before it were drawn from the United Kingdom legal profession. They were unstinting in their praise of our advocates who they said were so good at understanding the real core of human rights. However, they added that the cost of those advocates was totally disproportionate when compared with that of advocates drawn from other jurisdictions. Indeed, our advocates, of whom we are proud, are 10 times more expensive. Therefore, we need to be rather sensitive about criticising other countries’ costs.

We also have to be cautious about criticising the costs of the European Court, which deals with cases very economically. It is the quantity of cases that generates the costs. I have not done it but if you were to work out the cost of a case before a court here and the court in Strasbourg, I am afraid that it would reflect adversely on this jurisdiction. That is why we are introducing new methods of tackling costs in this jurisdiction because, unfortunately, our costs are so large. Therefore, I do not see that we can justify criticising the European Court on the ground of cost.

I apologise but I want to say one or two words more. If your Lordships will bear with me, I will deal with them as quickly as I can. My belief is that we must work towards obtaining the public’s confidence. The only argument in favour of a British Bill of Rights is that it would improve the public’s confidence in this area. If we do not succeed in doing that, the future of human rights in this country will be at risk. It is at risk at the moment and we must do everything which is practical and possible to ensure that the British public take possession of human rights and regard them as singling this country out as being pre-eminent on issues of fairness and justice. If they recognise that this is a relevant issue, this country has hope for the future. If they do not, this country is very much at risk of relinquishing its legal excellence.

15:55

[Lord Judd]

My Lords, as one who was at school with the noble Lord, Lord Lester, I can share with this House the fact that there was absolutely no doubt whatever among his contemporaries as students, or indeed the staff at the time, that he was going to make a powerful contribution to the future of this country. The fact that he has made it in the context of the realm of human rights is something from which a lot of us take a great deal of joy and satisfaction.

I have just indicated and underlined my age. At the age of 13, my father took me with him to an international conference he was organising in Geneva. At that conference, I had the privilege of meeting Eleanor Roosevelt and I had the pleasure of listening to Eleanor Roosevelt. As I listened to this debate and the anxieties that have been expressed, I reflect on the huge gap between life as it is today and life as it was in the immediate aftermath of the Second World War. There was a passionate conviction which gave her her strength and power, together with all those working with her, that human rights were not just a moral option in the way you organised your society. With all the searing experience of the human suffering of the Second World War, human rights were an absolutely essential and indispensable pillar of a stable and secure society. We have somehow lost that underlying basic philosophy and conviction. Discussion is all about the management of human rights, the operation of human rights law and the rest. We cannot repeat that conviction too often.

If I am allowed to draw on personal experience, as someone who has no legal qualifications whatever, but as somebody who has spent most of his life working in the humanitarian sphere outside this House, I can say that pretty well every month of every year in my practical work, I have seen again and again the crucial importance of human rights to the cause of improving the well-being and potential of our fellow human beings across the world.

I declare an interest as a member of the advisory board of the London School of Economics Centre for the Study of Human Rights. I think, and I say this sometimes at meetings of the board, that we have to take seriously the criticism that is sometimes loosely used about the human rights industry. To some people, there is a perception which we have to examine that there is a human rights industry—the chance of academic prowess and postgraduate degrees, a preoccupation with much legal discussion about it all, and the rest. It seems to me that we need to reconnect—that has come across in this debate very well—the whole cause and indispensability of human rights to real experiences and the real lives of people. That is an argument for a Bill of Rights which cannot just be dismissed. As I understand it as a layman, the strength of law at its best is when it underpins an ethic which is broadly there in society. It will never bring everybody on board, but an ethic is substantially there among people instinctively that this is the kind of society in which they want to live. This law underpins that reality and helps those who want to distort or abuse it to be dealt with.

It seems to me that a gap has developed here because people do not feel they own human rights law. They see people, as it were, operating downstream in the context of the human rights law that has been created. It is very important to go back to source and reargue the case for human rights and their indispensability. We have to look at that, of course, in the context of our educational system and elsewhere, and look at how seriously we are taking discussion and debate about human rights, and why they are so important, in our educational system. As the noble Lord, Lord Lester, will remember, we were both involved in the Council for Education in World Citizenship in those days. It was a very lively body of sixth-formers across the country with the whole cause of preparing for citizenship. Taking these things seriously was central to our preoccupations. The Christmas holiday lectures were packed. I am talking about the enthusiasm, commitment and integrity of someone such as Eleanor Roosevelt and the passion that she brought to this because of her experience of the war years.

I apologise if I am reminiscing too much, but this is important because these were the formative years. I recall that, slightly precociously, we had a youth parliament in the constituency in which I lived as a youngster. In that youth parliament, by our own choice, we took the Universal Declaration of Human Rights and set about deciding and discussing how we would put it into action in our own society. These things were vivid in the culture at the time. There has been a certain amount of subjective interpretation about history, even in this debate. I can remember that there were Conservatives then who shared this concern and passion every bit as strongly as I did as a member of the Labour League of Youth. As the noble and learned Lord, Lord Woolf, emphasised, there seems to be a real need to regenerate this cause of human rights and to highlight their indispensability for society.

There is another issue. If I have come to one conclusion in the course of my life, it is that the first reality for all of us is that, from the day we are born, we live in a totally interdependent global community. I worry about any action on our part in this country that undermines that understanding and reality. It seems very important, in a realm as crucial as human rights, that we have objectives, aspirations and convictions towards which we try to encourage all our fellow citizens across the world community to strive. If we start a process which begins to suggest that human rights are things that you look at in a national context and put first into your national culture, I wonder how far we are helping the world to face up to this reality of interdependence and making a really constructive and imaginative contribution to the emergence of a better society and better values.

The noble and learned Lord, Lord Woolf, talked about the rule of law and its importance. As a layman, I know that I want to live in a society which observes the rule of law. However, there is a huge debate about what that law should be. It seems to me that what we are all seeking is justice. What matters is how we strengthen the debate about what justice is and how justice should be reflected in the law—it is not just about having a rule of law, it is about ensuring that the rule of law reflects the cause of justice, of which human rights are a part. Sometimes I wonder whether we have to use the term “human rights”—which has become so stereotyped—and to what extent we are really not just talking about justice.

I am afraid that you cannot look at this debate, and the possibilities for change, without examining the context of the dynamic in which it takes place. It would certainly be very naive to try to do that. If I am allowed to make so bold, noble Lords in this debate have been a little cautious about facing up to some of the crude realities here. I wonder whether people in years to come will see it as altogether a coincidence that, at a time when we have the reassertion of rather crude and unpleasant nationalist populism, there is debate about whether we could have a Bill of Rights for Britain.

Are the dynamics surrounding that exercise going to be about justice and the cause of humanity, and how far are they going to be about “Let us run Britain in a British way”—whatever we mean by Britain and a British way—with which everyone is expected to conform but which does not necessarily represent the realities of our society and the creative potential of our society as a multicultural society? This is a huge debate and we should not drift into it inadvertently. Debates like this are absolutely indispensable and I thank the noble Lord for having initiated it.

It has been a privilege for me to listen to so many wise speeches. I am a great friend and ally of my noble friend Lady Kennedy. I hope she will forgive me saying that I was not really very happy with her seeming to imply that there were no Conservatives who care about human rights and the things I have been talking about every bit as much as I do. In the noble Lord, Lord Gold, we have a classic example of a Conservative who not only feels these things but feels them so sincerely and deeply that he can express himself very well in a debate of this kind, in a way that is quite challenging to a lot of other people.

[Baroness Kennedy of The Shaws]

That cannot go unchallenged. I think that my noble and very dear friend Lord Judd, when he sees my remarks in Hansard, will see that I referred all the way through to the sensible Conservatives who recognise the value of human rights and realise that they are different from the European Union. I paid tribute to them all, and indeed paid tribute to the noble Lord, Lord Gold.

[Lord Judd]

My Lords, I am sure that the noble Baroness and I will continue this discussion in many places for long weeks ahead because we are very good friends. I certainly accept her qualification about the words she used. She also suggested rather that it was the Conservative Party with which it was impossible to do business. The society I want to live in by definition is one in which the Conservative Party is as committed to the things I am talking about as anybody else. We should be strengthening the elements within the Conservative Party who share our convictions and speeding the day when we can all speak together. Again, I say we should all be grateful to the noble Lord, Lord Lester.

16:07

[Lord Bach]

My Lords, I thank all noble Lords who have spoken in this debate, particularly, of course, the noble Lord, Lord Lester, for securing the debate and for attracting a stellar cast to speak, even rather late on a Thursday afternoon in the middle of June. I am certainly not one of those stars. I have comparatively little history, either as lawyer or politician, with regard to the Human Rights Act or the convention. However, it is an honour for me to speak from the opposition Front Bench on this occasion and I, too, pay tribute to the noble Lord, Lord Lester, for his well deserved reputation, mentioned by many noble Lords, in this field.

I start with a quotation from another memorable debate in your Lordships’ House, held exactly 25 months ago on 19 May 2011, when my noble and learned friend Lord Irvine of Lairg led a debate on the ECHR, with many of the same cast as today, and answered, as today, by the noble Lord, Lord McNally. The noble Lord, Lord Thomas of Gresford, ended his contribution with these words:

“I consider the Human Rights Act 1998 to be the outstanding piece of legislation of the previous Labour Government”.

He went on to say, and we must give him allowance for this,

“next to the Government of Wales Act 1998. I congratulate the noble and learned Lord, Lord Irvine of Lairg, not simply on introducing the debate but on being the architect of an important piece in the structure of justice in our country”.—[Official Report, 19/5/11; col. 1501.]

That was a generous but well merited comment from the noble Lord, and a well merited compliment to my noble and learned friend as well.

This year marks the 25th anniversary of the establishment of Charter 88, many of the aspirations of which were adopted by my party in the early 1990s and then put into effect by the Government from 1997 on. Who says that pressure groups cannot achieve results? According to Professor Bogdanor the constitutional achievements of the Labour Government, ranging from the Human Rights Act to devolution, freedom of information, the creation of the Supreme Court, and much more, represent a formidable list. He may go too far when he says that it was an era of constitutional reform comparable to that of the years of the Great Reform Act 1832 or the Parliament Act 1911. However, even more impressive is the amount of power that was given away by some of these measures by that Labour Government. For example, the Human Rights Act gave power to individuals, the national states were given power by devolution and the judiciary was given power by the difference between the role of the Lord Chief Justice and that of the Lord Chancellor and by the creation of the Supreme Court. Professor Bogdanor went on to say that no British Government since World War II had dispersed power to the same extent.

Speaking from the Opposition Front Bench, I am proud of that record. It made our country a fairer, more open and better place to live. We were supported in all this—certainly for the most part—both in argument and votes by the Minister’s party, the Liberal Democrats. Both party manifestos for the 2010 general election talked about support for the Human Rights Act; the Liberal Democrats’ manifesto talked about protecting the Human Rights Act. It is therefore hardly surprising that when the Liberal Democrats found themselves in a coalition Government they had to think hard and quickly about how to prevent the Human Rights Act and the ECHR behind it being savaged by their coalition partner during the course of this Parliament.

Make no mistake: both before 2010 and since being in power, of course not all Conservatives but many of their leaders have regularly and systematically tried to trash both the convention and the Human Rights Act. They have often used language—perhaps sometimes to placate their anti-European supporters—that has sometimes, though not always, been a disgrace to a great party.

Rather unusually for me, I will pay a compliment to Liberal Democrat Ministers in this Government, and not least—in fact, probably for the most part—to the noble Lord, Lord McNally, for the manner in which he, along with others, has successfully prevented the Conservatives from carrying out constitutional mayhem during this Parliament. I do not know whose idea a commission on the Bill of Rights originally was, and who put together the personnel. However, if the aim was to kick these proposals deep into the long grass, it appears to have succeeded.

I pay tribute to all members and staff of the commission, particularly its chairman, for giving up so much of their valuable time to its work. Many of its members were busy and distinguished Queen’s Counsel, while others had other important obligations. They deserve our thanks; not least the chairman, who has already been described in Job-like terms and whose distinguished career in public service must have helped him in an almost impossible task. However—and I suspect that the House might have expected a “however” at this stage—it is surely fair to ask whether it was really worth all the time and effort to produce two large volumes of a report in effect to solve a political problem?

Where do the various and myriad conclusions lead us? What is the value of the so-called majority view, when it includes a number who clearly and honestly objected to the terms of reference and want us to be free of the convention? I admit that I do not completely understand the position of the noble Lord, Lord Lester, who is himself one of the architects of the Human Rights Act. When reading the 31—

[Lord Lester of Herne Hill]

I am grateful to the noble Lord. I wonder whether he agrees that it is core Labour Party policy since 1993 that a Human Rights Act is the first step, and a Bill of Rights the second. That was agreed by Labour in 1993, and as far as I am aware it is still Labour Party policy.

[Lord Bach]

As I understand it, the Human Rights Act is considered by some to be a British Bill of Rights in any event. However, I do not want to take issue with the noble Lord. I am here to praise him rather than criticise him. As I was going to say, when reading the 31 pages of the overview of volume 1, one can almost physically feel the strain in the language as it attempts desperately to find consensus where there is none. The majority view has been described as representing,

“a fragile coalition of views united around conceptions of a domestic Bill of Rights so different from one another as to render any consensus wholly illusory”.

These are the words of Mark Elliott, a reader in politics at the University of Cambridge, whose article is entitled, A Damp Squib in the Long Grass. This is perhaps a little harsh, but I think one senses what he is getting at. No wonder Professor Fenwick at the University of Durham described the document, perhaps rather generously, as “odd”. For me, the paper In Defence of Rights, by my noble friend Lady Kennedy and Professor Sands, is more persuasive. It destroys the confused majority view with a pretty well argued, moderate and sensible position.

The commission report has of course effectively stymied any change until after the 2015 general election. It is only when we know the result of that election and what will follow from it that we can realistically move forward. I would expect the Liberal Democrats to be every bit as robust in their defence of the Human Rights Act as I hope my party will also be.

I want to end on a perhaps rather less consensual note. I am afraid that the Liberal Democrats’ effective defence of the Human Rights Act and the convention is in marked contrast to the feebleness and lack of concern for the individual citizen evident in their acquiescence to—and sometimes even welcome for—some of the more reactionary measures that Her Majesty’s Government have recently taken. I of course refer to the restrictions either passed or proposed on judicial review, the no-win no-fee policy, and the position that private firms doing public work on public contracts may be exempt from freedom of information. Above all, I must say, it is evident in the decimation of social welfare law by taking it outside the scope of legal aid. It is no answer to say that citizens are still able in theory to go to law, because the reality is that without free legal advice, the poor and the marginalised in practice cannot go to law. Human rights exist outside the Human Rights Act. By limiting and restricting the ability of the citizen to take on the state, the Liberal Democrats are colluding in particularly anti-liberal acts.

I conclude by saying to the Minister that he has nobly protected the Human Rights Act in very difficult circumstances and that his part of the Government deserves great credit for that. Now is the time to protect the interests of individual citizens who need to take on the state. They, too, like those protected by the Human Rights Act, are an essential part of those who live in a free society.

16:20

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

My Lords, they say that they never come back, and yet there is the noble Lord, Lord Bach, back on the Front Bench in fine, feisty form, taking on a kind of Dame Nellie Melba role in the number of questions that he asks. He has also tabled a Question for me to answer in a few days’ time. The rather emotional goodbyes that I bid him a few months ago were perhaps premature. Although some of his closing themes were familiar from our debates over the past two years, I shall not follow him down that path, because we will have other opportunities to do so.

I was grateful for the tribute that the noble Lord paid to the Cook-Maclennan reforms. Certainly, the success of that first Labour Government from 1997 to 2001 owed very much, as my noble friend Lord Lester said, to that blueprint setting out much of the constitutional reform during that period. I believe that when future historians come to review that period, they will agree that that burst of quite extraordinary reform started to peter out only when the Government departed from the Cook-Maclennan blueprint and began increasingly to rely on ideas usually prepared on the back of an envelope by the noble and learned Lord, Lord Falconer, and the noble Lord, Lord Prescott.

This has been an excellent debate. The noble and learned Lord, Lord Goldsmith—the late Lord Goldsmith—posed the question, “Which human rights are you planning to repeal?”. It is a legitimate question to ask those who seek change. The debate was made all the healthier by the noble Lord, Lord Faulks, who produced with characteristic clarity what I would call the case for the prosecution. He asked specifically whether membership of the EU and membership of the European Convention on Human Rights were compatible—whether we could withdraw from one without affecting our membership of the other—particularly given the ECHR case to which he referred. My officials advise me that this is a moot point. I find it to be an extraordinarily moot point, because I have always understood that one of the qualifications for membership of the EU was observance of the European Convention on Human Rights.

In recent years, I have had the opportunity to visit a number of countries that, in working towards membership of the European Union, have been set high hurdles by the EU in terms of human rights observance. One of the great triumphs of the EU is how, by insisting on those high hurdles, it has moved human rights eastwards across Europe. On 1 July, we celebrate the latest addition to the European Union, Croatia. After a terrible war, it has been the European Union and its insistence on high standards in the rule of law that have prepared Croatia for its rightful place in the European family, a family that is resting on the ECHR.

I understand the points about how human rights have suffered by appearing to delve into trivialities. However, as a number of speakers have pointed out, the media often attribute to human rights reasoning and causes that have nothing to do with the actual Human Rights Act. This is rather like health and safety and data protection legislation, which I also support. When the media talk about a pancake race that has been cancelled by health and safety rules, I like to count the number of deaths that have been prevented on building sites by those rules. That is when these rules bite. Similarly, we only have to open the newspaper every day to realise how important data protection rules are in a modern society.

I welcomed the spirited exposition of the noble Lord, Lord Faulks, which stimulated responses in others, and I will try to cover a number of the issues that were raised. I was extremely grateful for the intervention of the noble and learned Lord, Lord Brown of Eaton-under-Heywood, because he counterpointed the noble Lord, Lord Faulks, in warning us of the complexities of trying to write a UK Bill of Rights. There is always a danger that, if you make a speech that is slightly out of step with your party, everybody else praises you, so I hope that it does not do the career of the noble Lord, Lord Gold, too much damage to say that I found his intervention extremely helpful with its warning of a backward step and reference to the problem of public understanding.

The noble Lord, Lord Bach, and the noble Baroness, Lady Kennedy, both seemed to imply that there was some secret about the origins of the Bill of Rights commission. This Government were formed as a coalition between two parties that have, in recent years, taken a different view about the Human Rights Act and the part that the European Court in Strasbourg, and the European Convention on Human Rights it interprets, should play in our national law. The response of the new coalition Government was twofold. We established the commission, of which the noble Lord, Lord Lester, was a distinguished member, as was the noble Baroness, Lady Kennedy, and the noble Lord, Lord Faulks, and we embarked on a programme of reform of the Strasbourg court that culminated in the Brighton declaration.

I have also said that I do not consider the Human Rights Act to be a precious vase, to be kept on a high shelf, never to be taken down or examined for fear of breaking it. I agree with the noble and learned Lord, Lord Woolf, that well informed debate about human rights is extremely healthy. I welcome, particularly in this House, our periodic examination of human rights and their place in our society—the noble Lord, Lord Bach, referred to the one such review led by the noble and learned Lord, Lord Irvine of Lairg, a couple of years ago.

I hope that the House will keep on returning to this subject, because, like the noble and learned Lord, Lord Woolf, I remain confident that such an examination invariably concludes with a reaffirmation of human rights as something deep in the political DNA of the British people and of our history. The noble Lord, Lord Lester, reminded us of the relevance of Magna Carta, the 800th anniversary of which we celebrate in 2015. That linkage between our history and the growth of the concept of human rights was underlined, as the noble Lord, Lord Judd, reminded us, when Eleanor Roosevelt launched the UN Declaration of Human Rights and called it a,

“Magna Carta for all mankind”.

The world needed no explanation of what she meant. She was part of that “never again” generation who had experienced the horrors of when state power goes unchecked and human rights are subjugated to the power of the state or some perverted political doctrine. The noble Lord, Lord Judd, is right: that generation, whether it be the noble Lord, Lord Healey, or Ted Heath, or others who came back from that war, had a “never again” determination that impacted on the legislation that they brought forward and the themes that they espoused.

Let us be clear that human rights and civil liberties are not some foreign invention. They are deeply rooted in the history of the people of this country. Upholding them should be a source of national pride. As the noble and learned Lord, Lord Goldsmith, and the noble Lord, Lord Gold, pointed out, too many people do not fully comprehend the impact of human rights on their daily lives, and myths and misreporting about human rights are often accepted as fact. If we look beyond the sometimes skewed perceptions, we see that the Act is a measured piece of legislation when understood and used properly. The noble Baroness, Lady Kennedy, cited some very good examples of human rights in action and I could give others. As the noble Lord, Lord Faulks, said, human rights are not a matter of abstractions; they are about realities. It is not an airy-fairy notion reserved for philosophy seminars but the practical interaction between the state and its agencies and those they should serve.

The message from this debate is that it is your human rights, my human rights, our human rights. Perhaps that could be no better illustrated than by the fact that, when the Daily Mail felt that it was under attack by Lord Justice Leveson, the editor cited his human rights in protection. For me, it proved that there must be a God.

While reflecting on judgments, we should note our actual Strasbourg record. As the noble Lord, Lord Lester, reminded us, the number of applications involving the UK that resulted in a judgment by the European Court of Human Rights is small. In 2012, there were only 10 judgments finding violations against the United Kingdom out of over 3,300 applications. Our record on implementation of judgments is generally good: from March 2010 to May 2013, the United Kingdom completed the implementation of 82 judgments, with just 22 outstanding. One highlight of my ministerial career was when, in May 2012, I sat in front of the United Nations Human Rights Council in Geneva being held to account for the UK’s human rights record.

The UPR mechanism offers the Government real opportunities to consult civil society organisations and our national human rights institutions. Through open discussion with them, we build an understanding of where we should focus our efforts on key human rights issues; this dialogue allows them to monitor our progress. We have also gone digital. On top of stakeholder events, everyone now can send us online submissions via our website. All this ensures that we remain connected to, and aware of, human rights issues as they affect real people. We aim to use the information gathered from our engagement with civil society and through online submissions to help to shape how we respond to the United Nations in our mid-term review next summer. This approach pays dividends in engaging people in human rights. It helps us to focus our efforts and enables civil society to monitor our progress. Generally, our approach to the review was one of openness, celebrating success where we can but being receptive to challenge. We have had very positive feedback from civil society organisations in the UK on our engagement strategy.

Also in May, the United Kingdom was examined against our obligations under the United Nations Convention Against Torture. We will consider the recommendations carefully before responding. That was a point made by the noble Lord, Lord Faulks. It is not just a matter of the ECHR. In a world of interdependability, we are part of a whole range of conventions and commitments, by which we test Governments’ behaviour.

As I said, undergoing such scrutiny is necessary and proper to ensure that the United Kingdom is fulfilling its obligations under the Human Rights Act and that the Act itself is fit for purpose. It was with this in mind that the Government put forward plans for the Commission on a Bill of Rights. On behalf of the Government, I express thanks once again for the dedicated work of all those associated with the commission, culminating in the publication of its final report. Like others, I pay particular tribute to Sir Leigh Lewis, as chairman of that commission. My view is that the only job that he is otherwise qualified for is leading the Liberal Democrats in the House of Lords, because he has all the same attributes, as we have seen today—he had some fairly big personalities to keep in check.

I remind the House of some of the commission’s key conclusions. A majority of the commission concluded that there is a strong argument in favour of a UK Bill of Rights. However, that was on the basis that any such Bill would need to incorporate and build on all the UK’s existing obligations under the European Convention on Human Rights and that it would provide no less protection than is currently contained both in the Human Rights Act and in the devolution settlements. Both the noble and learned Lord, Lord Brown, and my noble friend Lord Gold made powerful arguments about whether that was the right way forward. This finding was in line with the commission’s terms of reference. The majority saw the current lack of public ownership of the Human Rights Act and the European Convention on Human Rights as the most compelling reason in favour of a new Bill of Rights. However, as my noble friend Lord Gold reminded us, even if it were to be carried through, it might not solve this problem of public understanding and acceptance.

Some of those in the majority who favoured a Bill of Rights felt that any new Bill could usefully define the scope of some rights more clearly and adjust their balance. However, as the noble Baroness, Lady Kennedy, has told us, she and Philippe Sands concluded that the commission’s consultations and its deliberations had failed to identify any real shortcomings either in the existing Human Rights Act or in the way in which it is applied to the domestic courts. They were concerned that any move towards a Bill of Rights would lessen the rights protection that is currently available and would potentially be a first step towards the United Kingdom withdrawing from the European Convention on Human Rights.

Although the commission was unable to reach agreement on all its conclusions, it identified and reported issues that would need careful consideration before any changes were made to the UK’s legal framework for human rights. I disagree with the noble Lord, Lord Bach, and some of the distinguished academics. I think that any political party looking forward and working on its policy on this issue, and any Parliament looking at it, will find the commission’s work an exercise in ground-clearing and testing of arguments that will stand us in good stead for the future.

My noble friend Lord Maclennan reminded us, as did the commission, of the background against which this discussion is taking place. Next year we will definitely have to make a very clear decision about the future of this United Kingdom. The evidence showed—and there was unanimity on this—that to discuss any changes to the Human Rights Act before we have made that fundamental decision about the union would not be very sensible or constructive.

It is interesting to note in passing that, although we think that perhaps the other place is more hostile and more populist, when a 10-minute rule Bill to repeal the Human Rights Act was put forward in the other place by Richard Bacon MP last December, it was defeated by 195 votes to 75. I just do not believe it is true that there is some great populist seething hostility to the Act. I think the more that people understand it and the more it is put to them in positive terms, the more support there is for it.

My noble friend Lord Maclennan and the noble and learned Lord, Lord Woolf, both mentioned the Brighton declaration. I am very proud of what we did at Brighton—I think that we addressed some very real problems. The noble and learned Lord, Lord Woolf, mentioned his own work in suggesting ways in which the effectiveness and efficiency of the court could be improved. I hope that there is good news for him. Better late than never, at the recent meeting in Strasbourg the court accepted a number of the recommendations in the noble and learned Lord’s report. I would not presume to suggest that the legal system sometimes moves very slowly, but it gets there in the end. On Monday, our ambassador in Strasbourg will, on behalf of the UK, sign Protocol 15 to the convention, which implements the amendments to the convention agreed in the Brighton declaration. We are continuing to press for reforms of the Strasbourg court in a way that we think will give it better credibility and lead to greater efficiency. However, I entirely share the opinion of the noble and learned Lord, Lord Woolf, that this is a matter where we can achieve change and improvement, although this is work in progress.

Looking forward, as I said, I do not believe that this Government or this country have anything to apologise for in their record on upholding human rights. Nor do I think that at heart there is fundamental disagreement on the need to uphold human rights and the rule of law. I tend to agree with the noble Lord, Lord Judd: I do not want to pin party labels on this matter. We have, as I said, concepts of human rights that are rooted deep in our history and deep in our national psyche. Let us not be afraid of debating human rights with vigour and candour. However, let us do so in a way that also takes account of the very real leadership role that we play in this area. The world does look and listen when we debate these issues, so let us be sure that we are sending it the right messages.

I applaud the way in which the Foreign Secretary has used soft diplomacy and consistency of message to promote and support human rights around the world. Both my noble friend Lord Faulks and the noble and learned Lord, Lord Goldsmith, referred to the fact that we carry weight and influence in these matters. The Foreign Secretary can promote human rights because our own reputation for observing and promoting human rights still stands high. However, observing and upholding human rights is always work in progress.

In his closing remarks, my noble friend Lord Lester referred to the 800th anniversary of Magna Carta in 2015. Although she is not in her place at the moment, a few weeks ago the noble Baroness, Lady Ramsay, reminded me of something that was a surprise to me. Those gentlemen up there who look down on our deliberations are the Barons of Runnymede. They remind us of the 800-year journey that this country has taken in setting limits to the power of the state and the responsibility that we all bear to uphold what the late Lord Bingham referred to as the spirit of Magna Carta. I think that that is what we have been doing today and I thank my noble friend Lord Lester and all noble Lords who have taken part in what has been a debate of great quality in the best traditions of this House.

I am extremely proud to be the Human Rights Minister in this Government. I work very closely with my colleague Damian Green on this matter. This has been a healthy debate. I suspect that the next stage of it, as far as any legislation is concerned, will depend on the outcome of the next general election—it will be incumbent on all the political parties to take their views on the Human Rights Act and its future to the hustings. I think that I know where we will be and I look forward to this ongoing debate.

16:44

[Lord Lester of Herne Hill]

My Lords, it is customary to thank all speakers who have taken part in a debate of this kind. I must say that I found this a most remarkable debate that will be read abroad as well as in this country. It will be remembered, I am sure, in the future, as will the report of this commission.

For me, one of the most ingenious excuses for arriving late, on which I congratulate the noble and learned Lord, Lord Goldsmith, was that it did not matter because he knew exactly what I was going to say as he had heard it all before. Alas, that is probably true. I worked for 30 years to accomplish the Human Rights Act and I am hardly likely to be one of those who would advocate tearing it up.

However, I will ask the conservatives, with a small “c”, in this debate—which was most noble Lords, I think, except the noble Lord, Lord Judd—to think about one thing. We are the only country, among the 47, that uses a European treaty rather than a domestic constitutional instrument to protect our basic rights and freedoms. For us the question is, is something incompatible with the European treaty? For the rest of Europe and most of the Commonwealth, the question is, is this incompatible with our constitutional rights? The question that the report poses, and that has been debated this afternoon, is whether we command more public confidence by relying on the European treaty, or whether, as the Labour Party agreed in 1993, the first step should be incorporating the convention by statute, but that that should be followed by the second step of a constitutional instrument? As I think everyone has said, that question can only be answered after the Scottish referendum. I hope that in June 2015, two years from now, when we mark the anniversary of Magna Carta and its Scottish equivalent, we will strive to ensure that it will be an occasion to celebrate what has been achieved and to build on those achievements, not to weaken them. I am grateful to all noble Lords.

Motion agreed.

National Health Service (Direct Payments) (Repeal of Pilot Schemes Limitation) Order 2013

Thursday 20th June 2013 Lords Chamber

Motion to Approve

16:47

Moved By

[Earl Howe]

That the draft order laid before the House on 22 April be approved.

Relevant document: 1st Report from the Joint Committee on Statutory Instruments.

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

My Lords, in 2009 we debated piloting direct payments for healthcare as part of the wider personal health budget pilot programme. Personal health budgets allow people to have choice and control over the care and support that they receive. A care plan is drawn up between individuals and their healthcare professionals, which is person-centred and designed to allow them to access care that works in the best way for them. It is already possible to offer personal health budgets where the money is held by the NHS or by a third party, but direct payments would allow personal health budgets to be held by the individual in the form of cash sent directly to their bank account, albeit one separate to their own personal funds.

Direct payments—and, indeed, personal health budgets more widely—are new to the NHS and we wanted the pilots to explore whether they would be beneficial. We wanted to find out which people and services were likely to benefit most and how we should implement them in order to get the best results. The pilot programme ran from 2009 to 2012 and I am delighted to report that the independent evaluation of that programme supports the wider use of direct payments in healthcare.

I will spend a few minutes talking about what the evaluation and the learning from the pilot programme tell us about direct payments for healthcare and personal health budgets more widely. The evaluation demonstrated that personal health budgets were most beneficial for people who had higher levels of health needs. In particular, it identified benefits to people with long-term physical or mental health conditions and disabilities who access the NHS most frequently. For these people, having real choice and control over how to manage their budget to meet their individual needs is a key factor in how they handle their own condition and improve their quality of life.

The most important element of our debate today is the discussion around whether we should take a step further and allow direct payments for healthcare as a new option for people who have or want personal health budgets, building on the success of the pilots. If the House agrees with the principle, secondary regulations, which will be laid before the Summer Recess, will set out the rules for the making of direct payments for healthcare.

The current debate focuses on direct payments for healthcare because this is the only part of the personal health budgets policy that requires legislative change. The other two ways to manage personal health budgets, where money is held by the NHS or alternatively by a third party, are currently lawful. However, direct payments for healthcare are a great deal more than money in lieu of NHS services. They are designed to allow people more flexibility and control over how their health needs are met.

The pilot programme showed that the success of direct payments for healthcare is dependent on good-quality, personal, holistic planning. The secondary regulations set out that individual care plans must be agreed before a direct payment can be approved. Importance is placed on the development of the plan being led by the individual or their carers, or a collaboration of both, using the right information and support. It should bring together their knowledge and experience of what works for them alongside clinical knowledge and expertise. The role that healthcare professionals play is still vital, but the conversation between the individual and specialists involved in their care should be a different, more real partnership.

So where does the NHS constitution fit into all this? It is vital, as we are absolutely clear that the budget must meet the full cost of the care and support agreed in the plan. NHS care provided through a direct payment for healthcare remains comprehensive care, free at the point of delivery, based on need rather than on ability to pay. This means no top-ups.

In the vast majority of cases, direct payments for healthcare will continue to be used on traditional care and support. However, a personal budget will give people the freedom to set arrangements that work for them. For example, people will be able to employ their own carers. In these circumstances, they will have greater control over who comes into their home, when they are scheduled to come and what tasks care staff perform. This can make a real difference to people’s lives and to their families’ lives by encouraging them to organise care that is more appropriate for their needs and the lifestyle they wish to lead. It is crucial to note, however, that direct payments for healthcare are not about new money; they simply allow people to use money already being spent on their care in a different way.

The NHS provides a huge range of care, support and treatment, and it would not be appropriate to include all NHS services in direct payments. Secondary regulations will set out what services should be excluded from a direct payment for healthcare. These will include, for instance, GP services, as we believe that disruption to the holistic care currently provided by a GP would be detrimental.

In addition, we do not think that it is appropriate to include the costs of unplanned care in a direct payment for healthcare. This would include things such as a visit to accident and emergency or admissions to hospital. However, it is important to point out that the evaluation of the pilot programme suggests that people with personal health budgets use secondary care services less. We are therefore confident that there is merit in giving people budgets to help them access care and support which works for them and prevents their unnecessary admission into hospital. Everyone will be able to reap the benefits as individuals will experience a more infrequent need for acute care and the overall cost of care for each individual will decrease, meaning an overall saving to the public purse.

Another area where we do not think that the use of direct payment for healthcare would add value is payment for medication. Deciding what medication an individual requires is a core responsibility of GPs and it should remain that way. This is currently dealt with using a two-stage process whereby a GP gives a prescription and pays for the cost of the medicine, and the individual then contributes with their prescription fee. We do not believe that direct payments should be used for either stage, or for any other area where NHS charges apply.

There may be concerns surrounding the proper or improper use of funds, or people’s needs not being met. In order to monitor this, there will be periodic reviews to ensure that the care and support being delivered are meeting the individual’s needs. In the case of direct payments for healthcare, these reviews will include a financial review to ensure that the money is being used appropriately. The details of what the review should entail will be set in the secondary regulations and explained to the individual as part of the care-planning process.

The evidence from the pilot programme suggests that people spend their money as set out in the individual care plan. What is more, they were happy to give money back if it was not needed. However, safeguards will be written into the secondary regulations to ensure that action can be taken where there is an excess that people are reticent to return, or where fraud has occurred.

In implementing direct payments for healthcare we are keen to ensure that integration between health and social care is taken into account. There are a few differences between direct payments for healthcare and direct payments provided by local authorities to fund social care. For example, the latter rely on means-testing, whereas direct payments for healthcare do not. Nevertheless, where possible the policy and regulations for direct payments for healthcare mirror those for social care. This will help to facilitate integration across health and social care. In future, it is intended that adults who have both health and social care needs could have a joint plan and budget.

I will now turn briefly to the issue of who should be able to have a direct payment for healthcare. We do not believe that such a payment would be appropriate for everyone who uses NHS services, or for all the services that an individual may use. The founding principle is that there needs to be a benefit from having a direct payment and that this should outweigh any additional costs. The evaluation suggests that those with higher health needs and inevitably larger budgets benefit most.

I make it clear that direct payments for healthcare will always be voluntary. No one will be forced to have one or be asked to take more control than they would find comfortable. However, where they add value and the individual is interested in using them, the right information and support should be made available so that people can make informed choices about how they wish to proceed. The need for information and support is intrinsic to this entire process, and this will be set out in the secondary regulations.

The pilot programme and the evaluation that followed provided evidence that the concept of direct payments for healthcare is beneficial and cost effective if properly implemented. Nevertheless, we accept that there is still much to learn and that we are only at the beginning of the journey. Therefore, it is important that direct payments for healthcare are introduced gradually and in a way that guarantees the sustainability of the programme. As of April 2014, people receiving NHS continuing healthcare will have a right to request a personal health budget and direct payments. It is thereafter anticipated that this progression, allowing more and more people the opportunity to have direct payments, will continue into 2015 and beyond.

In conclusion, I trust that I have demonstrated how the draft order removing the pilot scheme limitation will enable direct payments for healthcare to be made to patients using the NHS in England, and how secondary regulations will clearly set out the details of how they will be implemented. I commend the draft order to the House.

17:00

[Baroness Wheeler]

My Lords, I thank the Minister for his comprehensive explanation of the background and purpose of the order. We recognise that it is a technical amendment, but this is nevertheless a good opportunity to be updated by the Minister on the consultation on the extension of direct payments for healthcare and how the learning points from the pilots are to be translated into the revised regulations. Labour is fully supportive of extending personal health budgets, having pioneered them in social care through our personalisation and transformation of social care agenda, and set the ball rolling into 2009 on the PHB direct payments pilot.

It was also right to focus on exploring the use of PHBs and direct payments where people had the highest needs, such as those with long-term health and mental health conditions and who access the NHS most frequently. The pilot group covered CIPD, diabetes and long-term conditions, mental health and stroke and patients eligible for NHS continuing care. Labour was particularly concerned that PHBs do not stop at physical health but also include people with learning disabilities.

The national rollout target for PHBs to be extended to 56,000 people by April 2014 is challenging but is necessary to boost the take-up of PHBs across the country, as is the NHS mandate provision for every patient who will benefit to have the option of a PHB by 2015. Is the Minister confident that in the current circumstances, the resources will be available to support achieving these targets?

The pilot evaluation concluded that the majority of budget holders and their carers reported positive impacts of PHBs on patients—on health and well-being, care and other support arrangements for family members. As we know, PHBs have the potential to improve quality of life and satisfaction for both patients and carers, including psychological well-being. Helping patients design packages of care and support from clinicians, primary and secondary care and community health services also helps to provide joined-up integrated care, as the Minister pointed out, and in many instances has led to a reduction in the number of hospital visits. This is exactly where we need to be in terms of future service provision.

As a member—like many Members on all sides of both Houses—of the Westminster Health Forum, I recently chaired a specialist conference on PHBs which was attended by staff, providers and practitioners from across health and social care. The forum conferences are a valuable exchange between experts and staff on the ground including, in this case, those who are part of the multidisciplinary teams supporting and delivering PHBs. There was strong support for PHBs but it is clear, as the Minister said, that we are still very much in a learning process about their development. As usual, as you would expect, there were many questions and answers about some of the implementation, monitoring, accountability and evaluation issues.

I should like to finish by asking the Minister three questions on the issues that arose. First, there were widespread concerns at the conference that the evidence on the impact and effect of PHBs needed to be sharpened up in the future evaluation process. The pilot evaluation showed that there did not appear to be an impact on health status per se. Can the Minister explain whether there are plans in the rollout to assess possible measurements of health improvements, although of course we recognise that these can be hard to achieve in long-term health conditions?

Secondly, a number of GPs at the conference spoke about the challenge of getting wider GP buy-in to PHBs. Can the Minister update the House on discussions with the Royal College of GPs and the BMA on addressing this important issue? The college’s guidance on PHBs was especially commended by conference participants.

Finally, there was widespread concern about how PHBs will be taken forward by commissioners, health professionals and service users. Can the Minister update the House on advice planned or issued by the Department of Health in this respect?

[Earl Howe]

My Lords, this is most definitely one area of policy where all sides of the House are at one and I am grateful to the noble Baroness for her comments. She is right that the pioneering work on social care budgets was carried out during the previous Administration and gave us—and her own Government in 2009—sufficient confidence to institute these pilots for healthcare. I am pleased that she is as gratified as I am that the pilots have been a success, although as I emphasised earlier, we still need to feel our way in rolling them out.

The noble Baroness mentioned specifically people with learning disabilities and I agree with what she said. Although the number of people with learning disabilities involved in the pilot was small, it is clear from their stories that people with learning disabilities and their families benefited from the flexibility and control offered by personal health budgets. As the final report on Winterbourne View identified, personal health budgets have the potential to improve commissioning for people with complex needs and challenging behaviour. Many people in out of area placements, or who are at risk of such placements, are funded entirely through NHS continuing healthcare or have some NHS funding. These groups could be offered personal health budgets as the basis for a person-centred approach, meaning that they could have more control over where they live and the care they can access. It is that kind of intangible benefit—the noble Baroness asked about health benefits—that is very difficult to capture metrically, but it is nevertheless an important factor.

The noble Baroness asked me about resources and whether they will be available. As I mentioned earlier, personal health budgets are not about new money, they are about using existing money more effectively. Funding for budgets will need to be found from within normal NHS allocations and how that is done will be a decision for local CCGs. The personal health budget toolkit contains learning from the pilot programme on this and more information will become available during the early rollout phase as Going Further Faster sites consider sustainability issues. NHS England will be publishing guidance to help CCGs consider how to introduce direct payments for healthcare and personal health budgets on a local level in a sustainable way.

In answer to the noble Baroness’s question about health outcomes, it might be helpful to run through some of the findings from the pilots, which I think show that we can hold our heads up and say that they benefit people. First, we are clear that personal health budgets are cost-effective. They improve or maintain outcomes and reduce costs or are cost-neutral. These results are particularly true for people eligible for NHS continuing healthcare and people with mental health problems. When personal health budgets are implemented so that the person has choice over services and how they receive the budget, the cost-effectiveness increases. People can choose to meet their needs in different ways through lower-cost interventions, for example by training their personal assistants to carry out some health tasks, such as changing dressings. This means that people’s needs can still be met but in a different way, and perhaps in a way which is less stressful for them.

Personal health budgets also clearly resulted in an increase in the quality of life. The study found that effects were greater when people had budgets of more than £1,000, and this generally applies to people who have higher levels of health need, as I mentioned earlier. People benefited more from personal health budgets when there were fewer restrictions in place around what they could spend the money on and how they received the budget—that is, having a choice of a direct payment, a third-party budget or a notional budget. I hope that that is helpful to the noble Baroness in answer to her question.

In answer to the noble Baroness’s further question, I can tell her that the review will include a review of whether the budget is meeting the individual’s needs. That is clearly an important factor. We need to make sure not only that the money is adequate but that the plan itself and the money that goes with it are in step with each other. As regards the Royal College of General Practitioners and wider GP buy-in to personal health budgets, we have been very careful to engage with the royal college at all stages. We met them in conference last week to discuss their role going forward. It is important, as the noble Baroness stressed, that we engage GPs in this process, and I hope that we can continue that active co-operation with them.

Motion agreed.

Justice and Security (Northern Ireland) Act 2007 (Code of Practice) Order 2013

Thursday 20th June 2013 Lords Chamber

Motion to Approve

17:09

Moved By

[Baroness Randerson]

That the order laid before the House on 14 May be approved.

Relevant document: 1st Report from the Joint Committee on Statutory Instruments.

[The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson)]

My Lords, this order brings into force the code of practice for the exercise of powers in the Justice and Security (Northern Ireland) Act 2007. The 2007 Act provides a range of powers to the Police Service of Northern Ireland, including stop and question, stop and search for munitions and wireless apparatus, and entry of premises. It also gives the police the power to seize items found during searches of people, premises and vehicles. While a number of the powers in the 2007 Act are primarily for use by the PSNI, the Armed Forces also have powers under the Act which they can use in support of the police.

Amendments to the 2007 Act made by the Protection of Freedoms Act 2012 introduced an authorisation procedure for the exercise by the police of stop-and-search powers in relation to munitions and wireless transmitters. The purpose of this code is to set out how the powers at Sections 21, 23 and 24 and of Schedules 3 and 26 to the 2007 Act should be exercised by the Police Service of Northern Ireland. It also sets out the fundamental principles which underpin the use of the powers. The purpose of Annexe C of the code is to set out the general principles for the use of the powers at Sections 21 to 28 and Section 30 of the 2007 Act by the Armed Forces in the exceptional circumstances in which they may be exercised.

The code of practice has been developed to provide guidance on the use of these powers, particularly to ensure that they are used with regard to proportionality and necessity principles. Effective controls on police powers are essential if we are properly to protect civil liberties. Noble Lords will wish to note that there was no requirement to develop a code under the 2007 Act. The Act simply allowed the Secretary of State to make one and my right honourable friend the Secretary of State decided to do so following the changes to the powers made by the Protection of Freedoms Act 2012 to ensure that they were used proportionately, recognising that they are extremely valuable to the PSNI but that we must ensure that they are used properly. We believe that the amended powers and accompanying code of practice strike the right balance between enabling the police to protect the public while ensuring that there are robust safeguards to ensure that the powers are not abused or used excessively.

I recognise that some of these powers, such as the power to stop and search without reasonable suspicion, can be controversial. It is essential that the powers under the 2007 Act must be used only when it is proportionate and necessary to do so and this code of practice will assist police officers in ensuring that these powers are used appropriately.

This code applies to police powers in the 2007 Act, which are specific to Northern Ireland. It does not cover any other police powers in UK-wide legislation or other legislation applicable to Northern Ireland only. It does not affect the operation of other codes of practice, including the Police and Criminal Evidence (Northern Ireland) Order 1989 codes and the Code of Practice (Northern Ireland) for the authorisation and exercise of stop-and-search powers relating to Sections 43, 43A and 47A of, and Schedule 6B to, the Terrorism Act 2000.

In December 2012 my right honourable friend the Secretary of State for Northern Ireland launched a 12-week public consultation seeking views on the code of practice. The consultation closed on 6 March and a total of four formal responses were received. All four broadly welcomed the introduction of the code of practice as drafted. The comments were carefully considered and amendments to the code were made. The draft code was close to being finalised when the Court of Appeal issued its judgment in a judicial review—the case of Canning, Fox and McNulty—that challenged the Police Service of Northern Ireland’s use of stop-and-question and stop-and-search powers in the 2007 Act.

17:15

The Court of Appeal found that, without a code of practice in place for the use of these powers in the 2007 Act, the powers were too broad and lacked adequate safeguards. Noble Lords will wish to note that the judgment related to the powers in the 2007 Act prior to the amendments made by the 2012 Act, which brought in the safeguard of an authorisation process for the stop-and-search power. However, following the judgment and subsequent legal advice, the PSNI suspended its use of stop-and-question and stop-and-search powers until a code of practice was in place. Due to the risk to public safety if these powers were not available to the PSNI, it was considered necessary to bring in the code of practice under an urgent procedure, as provided for by the 2007 Act. With the approval of the Secretary of State for Northern Ireland, the code of practice was brought into force on 15 May and the PSNI was able to resume use of these powers, which are an essential tool in ensuring public safety. This urgent procedure allows the code to remain in force for 40 days. This period ends on 3 July. In order for the code to become permanent, it must be debated and approved by both Houses.

The Independent Reviewer of the Justice and Security Act, Mr Robert Whalley CB, reviews the operation of Sections 21 to 32 of the 2007 Act and considers the views of those who use or are affected by these sections. In his most recent annual review the independent reviewer found:

“The operational indicators clearly point towards the continuation of the JSA powers for a further year … my judgment is that the Justice and Security Act powers should continue unchanged for another year”.

The context for these powers is crucial to the debate. Your Lordships will all be aware that the threat level in Northern Ireland remains severe. It is vital that the Police Service of Northern Ireland continues to have available the powers in the 2007 Act. The powers in the Act are not terrorism powers per se; they are powers for dealing with public order situations, including, but not restricted to, terrorism. The powers are an important tool for maintaining public order and were exercised by the PSNI during the recent flags dispute. However, given the current situation in Northern Ireland, these powers are often used to protect the public from terrorist attacks. The PSNI has demonstrated that these powers are necessary and effective in dealing with Northern Ireland-related terrorism. They have prevented attacks, saved lives and led to arrests and convictions. I commend the order to the House.

[Lord Bew]

I thank the noble Baroness for introducing this statutory instrument and broadly offer my support. Since the Court of Appeal’s ruling in May of this year, it is clear that this matter has acquired a degree of urgency and I understand why the Government want to move so quickly. Broadly speaking, I accept her words when she says that the right balance has been achieved between civil liberties and the need to preserve public security.

However, I have one slight reservation. Paragraph 8.4 of the Code of Practice for the Exercise of Powers in the Justice and Security (Northern Ireland) Act 2007 states:

“The use of these powers can protect people’s rights under the European Convention on Human Rights, such as Article 2 (the right to life) by preventing serious harm posed by use of unlawful munitions and wireless apparatus. However, if these powers are exercised there may be some interference with other rights under the Convention, such as the right to private life, and this should be borne in mind when officers judge it necessary to use these powers”.

This is under the part of the code dealing with search for and seizure of munitions and transmitters. My slight problem with that phrasing is that it seems to say that there are two rights. It does not do so explicitly but it leads into it. One is the right to a private life and the other is the commitment that the police must have, under the European convention, to protect life. Following the Court of Appeal ruling, we are putting this problem back with the officers on the ground, and it is probably reasonable to make it clearer. I think that Parliament properly believes that the right to life, in certain circumstances, trumps the right to a private life for a person who might be under investigation. There is just an element of equivocation in the drafting there, which suggests an apparent equality of rights. I accept that it does not actually equate those rights but it certainly does not prioritise one right over another.

Noble Lords will remember that we have expected officers in the last few days, in the lead-up to the G8 summit, to protect world leaders who are in Northern Ireland. They might have been in a situation of trying to intercept ammunition that was being moved around Northern Ireland. I cannot imagine that it would be enormously helpful for them to have to have in mind that they must, on the one had, weigh up their views on the right to life—we all have the right to life but in this case it is the lives of some very important people—and at the same time have to bear that in mind that they might be interfering with the private life of the person driving the car. There is a real problem of balance here and I just think that the drafting is slightly too glib. I am not in any way going to push this point but think it is worth registering. Broadly speaking, I accept the reason for the statutory instrument and accept entirely the defence that has been offered this afternoon by the Minister.

[Lord McAvoy]

My Lords, I, too, thank the Minister for the clear exposition of the powers outlined in the code of practice. There is a very wide range of powers affecting the Police Service of Northern Ireland and the Armed Forces and it is right and proper that there should be a well thought out code of practice governing the exercise and use of those powers. We all know the situation in Northern Ireland, where the authorities, the police and the Armed Forces have to be seen to be absolutely foursquare in their application of those powers. This code of practice builds in safeguards for the use of the powers for all in the community.

Security in Northern Ireland is of the utmost importance to all noble Lords in this House and we are united in our commitment to ensuring that people in Northern Ireland are safe and secure. The men and women officers of the Police Service of Northern Ireland do their jobs with bravery and dedication. The measures in the Act play a hugely important role in combating terrorism and protecting communities in Northern Ireland and it is very important that they are overseen by rigorous, independent scrutiny. That is encompassed in the code of practice, which is vital to maintaining public confidence in Northern Ireland in the exercise of these powers. We on this side of the House are happy to lend our support, in the best traditions of bipartisanship, and understand the reasons for the urgent nature of the measure. I would like to place on record that Her Majesty’s Loyal Opposition give their full support to this order.

[Baroness Randerson]

I thank both noble Lords who have participated in this brief debate for their support and I will do my best to respond to the points raised. I thank the noble Lord, Lord Bew, for his broad support. He referred to paragraph 8.4 of the code and read an extract from it. I hope noble Lords will bear with me if I read some further extracts in response to illustrate my point.

The noble Lord referred to the balancing of the two rights. If you read the code as a whole you will see that it acknowledges the supreme importance of the right for one’s life to be protected and the obligation to protect life. There was a long consultation on this code and changes were made to it as a result, so it has been fairly thoroughly looked at. If you look further in the code, paragraph 8.6 says:

“Officers should exercise consideration when entering and searching premises. If entry is forced, officers should endeavour to cause as little damage as possible … officers must ensure the building is left secure”.

Paragraph 8.8 makes the point that:

“Where practicable, officers should seek the co-operation of any person in the dwelling”.

Paragraph 8.9 says:

“Officers should exercise their powers courteously and with respect for persons and property”.

So it goes on.

When the code deals with the need to enter premises—which may be a building but could be a field or vehicle—it acknowledges that you have to recognise that people, as well as having the right to have their life protected, also have a right to a private life. It goes on to explain that one right has to be exercised with a view to the other. I believe the code of practice enshrines the right balance.

I thank the noble Lord, Lord McAvoy, for his support. He referred to the importance of the code building on safeguards. He paid a very important tribute to the PSNI. The police service in Northern Ireland is a devolved issue, but the code was developed in very close collaboration with it, and my right honourable friend the Secretary of State for Northern Ireland keeps very close links with the PSNI. Its involvement in the drafting of this code is essential to its smooth operation in the months and years to come. Finally, the noble Lord referred to the importance of rigorous scrutiny and put his finger on the key point. A process of rigorous scrutiny provides the transparency that ensures the integrity of the process. I hope the noble Lords will feel able to support the order.

Motion agreed.

Payday Loans

Thursday 20th June 2013 Lords Chamber

Question for Short Debate

17:29

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what assessment they have made of the alternatives to the payday lending industry available to consumers.

[Lord Kennedy of Southwark]

My Lords, I am delighted to have secured this debate today. I am looking forward to all the contributions from noble Lords, in particular from the most reverend Primate the Archbishop of Canterbury. I am delighted that he has found time in his very busy schedule to take part in this afternoon’s debate.

We are in a very desperate and difficult situation. The payday lending industry is making a small group of people very rich by lending to people who struggle to get access to reasonably priced financial products to meet their needs at the most exorbitant and outrageous rates of interest. As the most reverend Primate told the House when he spoke during the passage of the Financial Services Act, this is nothing more than usury. A loan becomes usurious because of the excessive or abusive interest rates applied, and the payday lending industry does just that.

I am extremely disappointed that the Government have done next to nothing on this issue following the cross-party agreement on an amendment to cap interest rates which was passed in this House last year. Will the noble Viscount tell the House why the Government have done so little on this issue? Yes, we are living in tough times, but I get the feeling that for some people times are tougher than for others. I do not feel that we are all in this together. Rip-off Britain is alive and well. The payday lending industry is one of the worst examples of exploitation of the poor and the vulnerable, and we all need to do something about it. Government, Parliament, banks and other financial service providers, the Office of Fair Trading, other regulators, the Church and civil society all need to say, “Enough is enough. We are not going to let you treat people like this any more”.

The Government should be doing a number of things and should use their influence to get others to take action as well. We find ourselves in a situation where the alternatives to the payday lending industry are few, and the alternatives that exist need active help and support to grow in strength to be able to deliver and provide real and effective choice for consumers.

The Government have had plenty of advice, seen plenty of studies, and lots of work has been done to identify the problem for them, but so far their response has been poor. Some of the worst practices of this industry include poor lending checks—when there is no proper assessment as to whether the applicant for a loan has enough disposable income to repay the loan in full. Payday lenders often roll over loans without checking whether they will be affordable, even though rollovers should be seen as a clear indication that the borrower may be experiencing financial difficulties. The Office of Fair Trading noted that payday lenders have a strong incentive to roll over loans, making as much as half of their revenues this way.

Multiple loans are also a key indicator of acute repayment problems and should ring alarm bells—but they do not. The misuse of continuous payment authorities has seen situations where money is taken from people’s accounts, leaving them with no money to cover food, housing and other essential bills. Default interest and charges make the cost of rollovers very expensive for borrowers, who cannot repay their loan on time. Again, this is another huge source of revenue for payday lenders.

The aggressive targeting of students and young people is wrong. I was horrified to learn of young people using their smartphones to get a payday loan to buy another round of drinks on a Saturday night. I could go on with this list of bad practices and horror stories but I am sure that other noble Lords will have further examples that they will want to share with us. I will speak about some of the things that could be done to regulate the industry more effectively and get it to act responsibly.

I invite the Prime Minister to call a summit at No. 10 to get the leaders of the payday lending industry, the banks and other financial services providers, including credit unions, the churches, the regulators and the representatives of civil society to sit down together to come up with an agreement on what is acceptable and what is not, what can and what cannot be done and, if need be, to enshrine that in law.

When I joined this noble House just over three years ago almost every Minister who spoke from the Dispatch Box told us that the answer to most of our problems was the big society. Today we never hear the term mentioned, as if it had been banished from the book. If the concept ever meant anything, surely it means people coming together, supporting their community and the most vulnerable, working together, opposing injustice and unfairness, and not letting people be ripped off. What happened to the big society? I hope the noble Viscount will be able to tell the House how this concept is helping people in financial hardship.

What can we do? At a minimum, we could create a situation where no one is struggling to pay off multiple payday loans. No one should owe more than £500 in payday loans. Lenders recovering payday loans should never leave borrowers without the means to meet basic expenditure such as rent, food and council tax. The use of continuous payment authorities should be stopped, and replaced with payment authorities that are controlled by the customer only. If that is not possible because the type of basic bank account the customer has will not allow that, the bank should change the rules and permit it. If a customer notifies the payday lender that they are in financial difficulties, then default charges and interest payments should be stopped for at least 30 days while they get help to deal with their debts. The default charges and other punitive charges should never exceed 30% of the original loan.

Every payday lender on the high street should be required to provide details of where people should go for debt advice, and online lenders should also provide similar information. I would like to see all payday lenders carry a health warning on their advertisements in whatever medium. These warnings should be about 20% of the size of the advert. Similar rules used to apply for cigarette companies, before they were banned from advertising. Payday lenders should tell customers where to go for debt advice, and notify them that cheaper alternatives are available.

For all those measures, other measures are being introduced by payday lenders. We need a plan, and we need to support the alternatives to the payday lending industry. Credit unions have a role to play, and noble Lords will be aware of my active support for the credit union movement over many years. However, only the biggest credit unions will be in a position to provide immediate help. The London Mutual Credit Union, one of the biggest in the country and the biggest in London, has taken up that challenge. The legislative reform order the Government passed on credit unions was very welcome, as is the Treasury’s recent announcement of a rise in the interest rate cap.

The credit union expansion project is good news, and on many occasions I have praised the Government for their work here, but a £35 million fund is not going to provide the solution to our problems. It is a drop in the ocean, and much more needs to be done. In this House I have previously called on the banks to actively support the credit union movement. They must do so not only with a bit of sponsorship or small sums of money, although that would be welcome, but by making a commitment to build these organisations and make them financially robust. Banks should use the skills and expertise of their own staff, working on long term secondments to help the credit union movement grow and develop. The aim is to build what we see on both sides of the border in Ireland and in the United States of America: financially robust institutions, owned by their members, which deliver locally tailored financial products at a reasonable price.

We also need the support of the wider business community, and in fact every employer in the public and private sector. Simply advertising the availability of their local credit union to staff and allowing them to save with it through check-off would be a big step in the right direction. Some of our biggest companies and the Government should take a lead in this with an advertising campaign in support of the credit union movement.

It would also be very helpful if local government as a whole took a proactive role in supporting local credit unions. There are some fantastic examples in places such as Southwark, Islington and Sandwell, to name just three. We need the whole of local government to play its role. If every local authority pledged to deliver a place on the high street for their local credit union, what a welcome sight that would be.

I was surprised to learn how basic some basic bank accounts are. In an age where you can get a payday loan on your smartphone in minutes, some of these accounts do not allow people to get cash back at a supermarket when going shopping, forcing them to use cash machines. If your local bank branch has closed and taken its cash machines away, you are left with the corner shop where you have to pay to use the cash machine. These machines charge £2 or £3 to get out a £10 note. Why can the banking industry not look at some sort of basic loan of up to £500? That could make a huge difference here. Why can the Government not work with banks to provide them with protection and support if they work to help people get away from the payday lending industry?

The point I want to make in this debate is that if whole communities are abandoned then they will become the victims of the payday lending industry. To stop that, there must be a full range of financial products available. We must ensure that you are not discriminated against because of where you live or because you are poor. There need to be viable alternatives to payday lenders. Credit unions are part of the solution, but not all of it. Other financial providers need to step up, and civil society as much as government needs to say that enough is enough.

I thank all noble Lords who are about to speak in this debate. I look forward to their contributions and to the reply from the Minister.

17:39

[Baroness Wilcox]

My Lords, 23 years ago, in 1990, I chaired the National Consumer Council. We brought out a book called, Credit and Debt. With the permission of the House, I will read one or two lines from its foreword, which states:

“People have always needed or wanted things that they cannot immediately afford. And there have always been people on hand with the money to lend to them—at a cost”.

The book added that in the previous few years:

“Consumers enormously increased their use of credit. New types of lending grew quickly, older ones declined ... Most people have been able to make good use of these new opportunities, but there has, too, been a worrying increase, for whatever reason, in the number of credit casualties … The change in economic conditions … has reminded us that credit is a risky business. It is risky for lenders, of course, but it is risky for borrowers, too. Taking on credit means mortgaging your future in a large or small way. And none of us can be certain about the future. Today’s rising casualty rate raises anxieties about the greater potential for damage in an expanded market … Many people are still forced by necessity to borrow—sometimes on contracts they do not understand, and at rates that, realistically, they may not be able to afford … Information and education are important keys. They are at the heart of a truly competitive and healthy credit market”.

I read that and some of the rest of the book just to remind myself that I seem to stand up quite often in this House when the noble Lord, Lord Kennedy, stands up, and we are usually talking about credit unions. Some of the ideas that he has mentioned made me think that there is hope and that there may be new ways for us to go in.

However, the credit unions are all about saving, being prudent and putting something aside. The sort of lending that we are talking about here is very often for people who are borrowing in a panic, borrowing instantly, and want to go straight into the high street. We have seen more and more of such lending. Credit unions might not solve this issue, but some of the other suggestions are certainly worth listening to.

We have a Government committed to curbing unsustainable lending, and the report commissioned from Bristol University and the OFT’s final report on payday compliance demonstrated clearly that the high-cost credit market, particularly the payday lending market, is not functioning in the consumer’s interest. The Government have set out how they and regulators together will tackle the concerns in the payday lending market. The OFT now, and the FCA from April 2014, will clamp down on irresponsible practices, and in some cases blatant non-compliance, by lenders. The OFT is consulting on a provisional decision to refer the payday lending market to the Competition Commission. The Government will begin immediate work with industry and regulators to clamp down on the advertising of payday loans, and they are strongly pressing for the industry to improve compliance with payday lending codes. The FSA has committed to considering whether there are gaps in the regulation of payday lending that need to be addressed by the FCA from April 2014.

All this is good news for the consumer and consumer groups such as the National Consumer Federation, Consumer Focus, Citizens Advice and Which?. All are calling for better affordability checks, more transparent information, preventing lenders from levying excessive charges on borrowers in financial difficulty, and other measures. I and many noble Lords have received e-mails and letters from new lenders with many suggestions for alternative ways of lending.

Credit is therefore a popular consumer product. Most people in Great Britain handle it well, and I was reassured to read the foreword written by the Minister for Consumer Affairs, Jo Swinson, in the Government’s response to the Bristol University report, who stated:

“The Government does not believe that a cap on the total cost of credit would be the best solution now to the problems that have been identified by the Bristol report and the OFT payday compliance review”.

However, she added that a “cap might be appropriate” at some time. Here is the point of my concern and my reason for speaking today.

I hope that we can avoid capping at all costs. Germany and France cap at about 25% and they have a very narrow lending market. My worry, and that of consumer groups, the previous Government and this Government, is that capping will restrict access to the credit market, making it unavailable to the poorest and most vulnerable in our country: the disadvantaged consumers. They would undoubtedly lose access to the legal market and be forced into the hands of loan sharks and illegal lenders whose terms and methods cannot be easily controlled or monitored. All Governments and consumer groups are concerned that when it went wrong, the borrowers would be afraid to seek help from the very organisations that are set up to assist people taking panic-borrowing and to sort out their debts. They would find it hard to find these people until it was too late.

I was brought into this House to speak for the consumer, particularly for the disadvantaged consumer, and I hope I am doing that today. After all, a consumer is you and me; a consumer is somebody who buys or uses goods or services, whether publicly or privately provided; a consumer is empowered by having choice, by having access to that choice, by having the right information on which to make that choice and by having safety, equity and redress. Taking away access to a market—in this case, capping the lending market—is giving a disadvantaged consumer no choice other than the black market. As I have already said, capping would mean that the most vulnerable could not make a choice, thus stopping them getting equity, redress and help.

Achieving access to credit for all in a free, well regulated and open market should continue to be our goal. Government will regulate the market better. Schools, churches, families and lenders should, and if encouraged will, all play their part. However, 23 years on, I still believe that education and information are at the heart of a truly competitive and healthy credit market.

17:47

[Lord Hollick]

I thank my noble friend Lord Kennedy of Southwark for giving the House the opportunity to discuss and debate this important topic. High-cost lending is a booming business. The demand for short-term payday loans and longer-term high-interest loans is being driven by the crushing impact that the very tough economic climate is having on personal and family budgets. The fall in real incomes and the above-inflation increases in the price of essentials such as utilities and food are leaving many people short of the money they need to make ends meet, so they turn to the payday lenders.

The Bureau of Investigative Journalism recently published a report on high-cost lenders, which showed that they had enjoyed a 30% growth in turnover over the last 12 months and were achieving 30% profit margins on that turnover. Harsh economic circumstances might be the driver of demand, but the secret of the high profit is the mix of simple and instant loan availability, lax regulation, the absence of competition and eye-watering interest rates. Desperate borrowers—and it is estimated that there could be up to 5 million such customers—many with poor or no credit histories, can get instant cash, often without credit checks, documentary evidence or, as the noble Lord, Lord Kennedy, said, checks on affordability.

The lenders’ business model is to recruit borrowers and then to increase the number of loans, thereby maximising the yield per customer. So begins the awful debt spiral that traps so many payday borrowers. For the lenders, the high bad-debt experience, estimated at up to 25%, is more than compensated for by the stratospheric interest charges.

Unsurprisingly, this booming sector has caught the eye of international investors, most notably from the United States. The expansion of the payday loans industry in the US has been curtailed by the growing clampdown on high interest rates by state regulators, with some states going so far as to ban payday loans completely. Others, such as Pennsylvania, have capped interest rates on short-term loans at 30%. Similar initiatives are under way in other states.

The vanishingly light regulatory environment here in the UK is a big incentive to US investors, many of whom also take advantage of aggressive transfer pricing to ensure that, like Google and Amazon, the bulk of their profit is made in a tax haven. This combination allows investors to make spectacular tax-free or very low-tax returns at the expense not only of our most hard-pressed citizens but of our taxpayers generally. Could the Minister confirm that that is indeed the outcome of the coalition’s policies and its failure to put in place serious regulation to curb high interest loans, a measure that is commonplace in most developed countries?

Such a lucrative market would typically see high levels of competition, which would benefit borrowers with lower interest rates, but that is not the case, one reason being the complete absence of the major UK banks from this market place. That is all the more surprising, since the one thing that every high-cost borrower must have is a bank account to receive the money borrowed and to pay the interest and repay the principal by direct debit or similar arrangement. The millions of payday borrowers are all existing customers of our major banks, with known financial profiles and transaction histories. Yet the banks have failed to provide small loans to their existing creditworthy customers on terms that would almost certainly be substantially less expensive to the borrower than those currently available while being very profitable to the bank itself. To compound this failure and add insult to injury, it is reported and widely understood that the banks actually downgrade the credit rating of customers who take out payday loans.

The failure of our major banks to provide products to their existing customers is part of their wider failure to meet the demands of their customers generally. Despite the exhortations of the Government and the provision of low-cost funding for lending by the Bank of England, loans to SMEs have shrunk in each of the last three years, and loans to individuals are difficult to obtain and often prohibitively complex. Although the banks do not lend to their existing hard-pressed customers, they are happy to participate in this lucrative market by providing funds directly to the high-cost lenders. The Royal Bank of Scotland and Barclays have lent substantial sums to a range of payday lenders that are often secured on the very loans made by these lenders to the customers of the very bank providing the funds. This perverse behaviour speaks volumes about the banks’ lack of concern for the needs of their existing customers, their general lack of business acumen by failing to seize a business opportunity right on their doorstep, and their very confused attitude to corporate social responsibility.

The Chancellor has been keen to intervene in the affairs of the Royal Bank of Scotland and Lloyds to the point of becoming meddlesome. Could the Minister tell us if the Chancellor, or any other Minister, has asked either of these banks—RBS and Lloyds—to explain their failure to offer their individual customers loans at reasonable rates and thus provide competition to the rapacious payday lenders? Could he please also explain why it is acceptable for banks owned by the public to fail to lend to their creditworthy customers but acceptable for them to make loans to high-cost lenders?

I want to end on a happier note. Not all high-cost lending is actually high cost. Indeed, if you are the right borrower, the terms can be very attractive. An example of this is the Arbuthnot Banking Group, which owns high-cost lender Everyday Loans, which typically charges between 50% and 200% interest. However, Arbuthnot has made a loan facility of £5 million to the Conservative Party at the very attractive rate of 3.5%. I have no doubt that all the appropriate steps were taken by Arbuthnot to satisfy itself as to the creditworthiness of the Conservative Party. Then again, it probably helps that Arbuthnot is run by Mr Angest, a former Conservative Party treasurer and major donor to the party; so it is who you know that matters.

17:55

[Baroness Kramer]

My Lords, I congratulate the noble Lord, Lord Kennedy, on obtaining this debate, particularly because it focuses on alternatives to payday lenders. I will not go through the routine of describing the evils of many of the high-interest lenders; that has been well done by others in this debate. However, I will take issue with the noble Baroness, Lady Wilcox, on the point that these are impulse loans for something frivolous—the noble Lord, Lord Kennedy, gave the example of a student buying beer. I think that is the exception.

We have here a group of people on modest incomes. They have some income—otherwise they are of no interest to the payday lender—but find themselves under stress and have nowhere to turn other than to the payday lender or to the illegal market. That, to me, is not choice. The issue that I want to raise and focus on is the absence of choice in this market.

I say in passing that I hope very much that the OFT and the new regulator, the FCA, will use the considerable powers that have now been given to them—many of those amendments were moved in this House—to bring the payday loan industry to heel. Indeed, I join those who call for a cap on payday lending. It may mean that we first have to make sure that there are alternatives in the market, but that is a challenge to which I think we ought to rise.

The noble Lord, Lord Kennedy, talked about credit unions. Obviously, they play a very important part in trying to provide an alternative, as do the co-operative banks and the mutuals. For all of them it is quite difficult, because they cannot put the kind of spend into sexy advertising and affectionate granny puppets that payday lenders can. However, it seems to me that, with the proper support, they can make a very big difference in this market.

I will talk about another area where I think we have been missing a trick, and I take my example from the United States. It is the concept of community development finance institutions. There are relatively few of these in the UK, but in the US they are common. Indeed, many of the states that are now capping payday lenders are able to do so because the CDFIs offer the alternative that some in this Chamber have talked about. CDFIs have a mission to provide financial products and services to people and communities underserved by traditional financial markets. They are sometimes banks, sometimes credit unions, sometimes loan funds and sometimes venture capital funds. Indeed, they account for a lot of the early start-up capital for new businesses in the US.

However, it is their commitment to distressed communities that sets them apart. For example, while a traditional credit union serves its members, a community development credit union is specifically targeted at a disadvantaged community. CDFIs are local institutions serving their local community, and members of the community usually serve on the boards. They are typically funded by outside investors. These could be social investors, who are seeking either no return or little return in financial terms but are looking for social and environment return. In the United States, they are frequently able to access capital from the Government. However, they are required, as they function, to be self-sufficient and to operate on commercial principles.

Your Lordships will be aware that we will soon know more about where the big high-street banks in the UK are actually lending their money and what types of loans they are making, be they small business loans, mortgages or unsecured loans. We will know it by bank and by postcode once a voluntary agreement, which is now in negotiation, is completed between the Treasury and the banks. We hope that the first data disclosures will be available before the year end. As noble Lords will remember, the Government promised to get this disclosure after the issue was forcefully raised in this House through proposed amendments to the Financial Services Bill. The Government promised this House that, if such a disclosure agreement could not be reached voluntarily, it would be mandated through an amendment to the banking reform Bill. However, it now looks as though that will not be necessary and that a solid and sound voluntary agreement will be in place very soon.

Those data should tell us whether the high-street banks are neglecting communities and, if so, which communities they are and where they are. If we identify vacuums, it strikes me that they will be the perfect space into which to introduce CDFIs. In the US, major banks that fail to lend in areas where they take deposits can, as it were, amend the situation by investing in a CDFI to do the job which they, the high-street banks, are reluctant or not equipped to do. That seems to be very right, as at least a part of banking is surely a utility service, and that can be recognised in the terms of the banking licence.

I anticipate that local authorities, charities and social enterprises could move into this CDFI space, supported by investment and technical know-how from the major banks. As I said before, a growing breed of investors—we see them becoming increasingly active in the City of London—are seeking not just economic returns but social and environmental returns for their money. This is a way for them to begin to participate in this kind of benefit to disadvantaged communities. I am very pleased that some of this is recognised in the report from the Parliamentary Commission on Banking Standards.

The CDFI world in the United States has assets under management exceeding $30 billion. It is a massive sector, stretched across the country. In the UK, we have just a scattering of institutions. However, they lent some £200 million in 2012, so they certainly have a foot on the ground, and they had some 33,000 customers. Many of those customers were social ventures but they were also micro-businesses and individuals. So far, they have been helped to the tune of some £60 million by the regional growth fund. The high-street banks have agreed in principle to refer to the CDFIs small businesses whose loan applications they have rejected, although I do not think that the referral system is working terribly well at the moment. However, there is the beginning of a relationship and a network between the existing banks, the major banks and the existing CDFIs, and we can start to build on that. It is crucial that we find ways to bring disadvantaged communities into the economic mainstream, as that will enable people to empower themselves in their lives and contribute to the economy.

The period of banking reform that we are going through at the moment comes together with new regulators, who have a new attitude. Both the FCA and the PRA have taken up the cause of diversity and competition in a way unheard of in the past. All these things have created a window of opportunity. However, if we do not seize that window and try to make sure that over the coming years we create the necessary network to provide banking services and credit to all the communities in our country, we will lose it, because there are plenty of naysayers who are happy to write off both disadvantaged individuals and disadvantaged communities.

I am therefore arguing for a concentrated effort to accelerate the growth of CDFIs, and credit unions are a part of that. I echo the call of the Parliamentary Commission on Banking Standards to the Government to look at tax incentives and other mechanisms to boost investment in these bodies. If we find from data disclosure that the high-street banks are essentially neglecting certain communities, it seems to me that the moral case is made for those banks to step in voluntarily, support CDFIs and make sure that no one falls through the cracks. If they will not do it voluntarily, let us do it by making sure that it is done under the terms of their banking licence.

18:04

[The Archbishop of Canterbury]

My Lords, I, too, am grateful to the noble Lord, Lord Kennedy, for instigating this debate on alternatives to payday lending. It is something that he has studied for many years, and he is an acknowledged expert in the field.

The payday lending industry has grown at a vast speed, as we all know, and alternative sources of credit are few and far between, particularly for those who have had their applications for credit turned down by a high-street bank. It is very easy to see, as we have heard already—the noble Baroness, Lady Wilcox, spoke to this very clearly and powerfully, as ever—that it is going to take a long time to provide alternatives. However, the fact that we cannot do something now does not mean that we should not start doing it now or that it should never be done. The noble Baroness, Lady Kramer, spoke very powerfully on that.

Payday lenders lead to people being assured, through impressively slick marketing campaigns and targeted advertisements, that the process of taking out a loan is quick, simple and safe. However, once the loan has been taken out, it is difficult to get out of the cycle. With the rates offered, simply paying off the interest becomes a struggle.

The noble Lord, Lord Kennedy, spoke already of the problem of rollovers. I do not want to repeat that. I will, however, pick up the comment about interest rate caps. I very rarely dare to disagree with the noble Baroness, Lady Wilcox, but on this occasion I will take my life in my hands. A cap does not mean 25% or 30%. It is not any figure. The Financial Services Act provides for a study of the consequences of a cap to be looked at and then for the cap to be brought in at an appropriate level. Caps are needed at a sensible level that does not choke off supply and send people into the hands of loan sharks. I have seen the effect of that when working in Toxteth. Caps are there to prevent usurious lending. The noble Baroness said that caps should not be introduced at any price. The trouble is that the interest rates are at any price, typically more than 2,500% on an annual basis. We need to look at reasonable limits that cut out legal usury from our high streets.

This is not a problem faced only by the very poor. Some 5 million people in this country use payday loans and, apparently, one in four Londoners. The situation is becoming too big to ignore. I hope that the Minister will let us know whether the Government will consider seriously the exercise of its powers in this area under the Financial Services Act.

However, simply dealing with that does not deal with the long-term question. It is quite clear when I look at what is happening on the high street and in our local communities, particularly in the most deprived areas, that—as the noble Lord, Lord Kennedy, explained—alternatives are very few and far between. My own group, the church, can play a part in the development of credit unions up and down the country. There is a role to be played by local institutions. We have, so to speak, branches in every community—16,000 branches in 9,000 communities, even more than the banks. If we wish to see the development of alternatives to payday lenders in all communities, we must use all the institutions in all communities—churches, post offices, and even, if I dare say so in the presence of the Government, the Co-op. The Post Office is an institution that is playing an increasingly important role. That is clearly something warmly to be encouraged.

The church is in a unique position up and down the country. For the credit union movement to be successful and sustainable, and other forms of local finance to develop, we need a bottom-up movement of local organisations working to change the sources of supply. It will take many years—10 to 15 years—but it must start now. The new institutions must develop flexibility in order to demonstrate their ability to meet the new needs. As the noble Baroness, Lady Wilcox, pointed out very clearly, they are not the needs that were present when credit unions first began. People want quick access to money. They want to be able to get it now.

We can use local institutions that have places of work and skills that can be brought in through volunteers. Church members—not just those in the Church of England—give more than 23 million hours of volunteer time every month outside the regular work of the church. Volunteering comes naturally to us. Unlike some other things, it is something that we are very good at. Many who sit on the pews each Sunday have expert knowledge in finance, human resources, communications, marketing, debt counselling and all sorts of areas. We need a regulatory environment that makes it possible to have flexibility of provision.

If we are to have good regulation—huge improvement was made through the Financial Services Act, and we were grateful to the Government for the many amendments they introduced—equip alternative sources of finance with outlets that can be used in areas that need them and give them the capacity to exercise their location effectively, we also need to communicate the sources of alternative finance widely in the United Kingdom. Two-thirds of the population of Ireland are members of a credit union, but take-up and use of credit unions in the UK is still woefully low.

A mixed economy of geographically based credit unions and professional ones, and other forms of finance such as CDFIs, as the noble Baroness, Lady Kramer, said, will give the best chance of developing good, alternative sources of finance that will take away the need for caps because essentially they will compete the high-rate lenders out of existence. There is a very long way to go.

Recently in my diocese, I came across a painter-decorator who was made unemployed two years ago. For two years he sought a loan to start his own business. He was looking for £200. At the end of two years, through a third-sector organisation in the area, he was able to borrow £200. When I last heard, his book of orders was full for nine months and he paid off the loan in about three weeks. A finance system that in an area of poverty cannot provide £200 is dysfunctional and we need to pay attention to that. We need good, viable alternatives.

I warmly welcome the call by the noble Lord, Lord Kennedy, for a summit to deal with some of these areas. Will the Minister review the recommendations on basic bank accounts, which are also hidden in the depths of the Parliamentary Commission on Banking Standards—they are well hidden—in order to influence the banks, which indirectly he largely owns, to make better provision in the mean time before alternative forms of finance develop?

I am very grateful that we have had the opportunity to think creatively about alternatives. My hope is that a thriving alternative credit movement will one day mean that payday lenders simply are not necessary.

18:13

[Lord Glasman]

My Lords, I echo the sentiments of gratitude to my noble friend Lord Kennedy for initiating this debate and for his work over many years. He knows the realities and speaks plainly about them. It is also a tremendous honour to follow the most reverend Primate. I believe that the last archbishop to take a very strong stance against usury was Archbishop Laud and I say to the noble Baroness, Lady Wilcox, that we know what happened to him. I consider it a tremendous act of courage to stand in favour of the cap. It is an interesting story: the church resisted the increasing demands, but in the end, in the time of the Long Parliament, it was decided that politics should have no role in the setting of interest rates. It is wonderful that the voice of the church, Catholic and reformed, is heard once more on this issue.

I declare an interest: I worked for many years for London Citizens and the Industrial Areas Foundation. The noble Baroness, Lady Kramer, spoke excellently about the community development funds. An aspect that may be of interest to the Government is that the seed money was provided by President Nixon. It is not the case that Conservative Governments are hostile to the conditions of the urban poor. The interesting thing was that the initial seed money was £9 million. The assets of the urban development funds, looked at as a mixture of venture capital, urban development and loans, are now well over £1 billion. I have worked with them and looked closely at that in terms of Baltimore, and the effects that this has had there.

That is very inspiring, but we have nothing like it. We have no such framework; no initiatives have been taken. This speaks to the heart of the issue. I here put my head on the block in relation once more to what the noble Baroness, Lady Wilcox, said. My noble friend Lord Hollick spoke about Barclays: it made a loan of £120 million to the Money Shop six weeks before Christmas. I believe that the rate was 7%. The rate that was lent at to people was 4,000%, and now Barclays discriminates against its own customers and will not give them loans. This is completely out of order. The conditions of the working poor and the debt in which that they have to live are, as they say on the 73 bus where I come from, bang out of order. People cannot find access to money. They do not earn enough; they cannot find a decent, meaningful and honest way out of the poverty wages that they receive. Yet there are no new institutions in the banking sector that address this issue.

I am involved in a conversation with Salford about establishing a bank of Salford, working on the credit unions. An interesting addition to the suggestions made, which the Government should look into, is that if you put the payroll through the new institutions of local government or city governance, it transforms the financial status of those institutions, and suddenly they are able to lend. That is one important issue. We need to notice that there has been no innovation in institutions relating to the banking system.

We must go back to 2008 and assert sadly that none of us is innocent. Between 1997 and 2007, of the £1.6 trillion invested in the British economy, 81% was in mortgages and financial products. Family and personal debt exploded. People cannot find a way out of that debt. It is not outlandish to say, as we did in 2008, that 5% of the bailout should be used to establish regional banks, as part of this story. Why is quantitative easing going through the same failed banking institutions that are refusing to lend to local businesses and the working poor? It is important to stress that the overwhelming loans owed to these payday lenders are not from those on benefits. They are from working people who do not earn enough and cannot discharge their fundamental responsibilities to their loved ones and their absolute obligations to pay their taxes and rates. Overwhelmingly, the money goes on food.

I conclude by saying another thank you. This is the most fundamental issue that we face. Debt is exploding. We have not moved to value—we still have debt. We need to look at community development funds and the decentralised way in which they work, and the way in which they are controlled by local people. I worked with the Industrial Areas Foundation. To ease the concerns of the noble Baroness, Lady Wilcox, let me say that when the interest rate cap was set in Maryland, because of access to the alternative finance system there is no evidence that it led unavoidably to loan sharks. That is not the case. There were alternative financial institutions, and many were set up by a partnership between churches and local unions.

There are many creative ways in which we can deal not only with the issue of the working poor but by which we can reactivate the civic institutions to a common purpose, which is value. We need to move absolutely from debt to value in the economic system. We must stop subsidising, bankrolling and giving all the perverse welfare incentives that we had to the banking institutions that are not fulfilling their role. We must create new institutions that have local people’s ownership and control, people who serve their own interests. This debate is a wonderful opportunity to investigate the genuine opportunities to bring some credit to the starving people of our country.

18:19

[Lord Mitchell]

My Lords, I, too, thank my noble friend Lord Kennedy of Southwark for securing this important debate. Both he and I share a passion for this subject and both of us are determined not to let the issue die. We both see the misery and hopelessness that is caused by payday lending and other forms of loan sharking. We see it on our high streets, on-line and advertised on our London buses.

I would like to recreate the mood that existed in your Lordships’ House last November. I had introduced an amendment to the Financial Services Bill which we had discussed in Committee. On Report, I was fortunate enough to secure as co-sponsors of my amendment the noble Baronesses, Lady Howe of Idlicote and Lady Grey-Thompson. In addition, the then Bishop of Durham, now the most reverend Primate the Archbishop of Canterbury, also sponsored the amendment. By any measure, we had strong support.

Imagine my surprise the day before the debate, just as I was about to enter the Tube at Westminster station, when I received a call from the Treasury Bill team. As noble Lords will readily appreciate, this does not happen too often, especially to mere mortals. The gentleman in question told me that the Government wanted me to withdraw the amendment the next day. I was more than a little surprised. I told him that we were going to defeat the Government, so why should I withdraw. “Because”, he told me, “we know you’re going to win and because the Government have totally reversed their position and now want to support you”. “But”, he went on, “we want to improve the wording and make it much more effective”. I staggered into the station hardly believing what I had heard.

The next day the Government were true to their word. They announced that at Third Reading they would introduce a tougher, more comprehensive amendment. So it was with great joy and a sense that right had prevailed that I withdrew the amendment. The revised amendment was introduced at Third Reading, in the name of the noble Lord, Lord Sassoon, for the Government, and I added my name to it. It went through on the nod, was confirmed in the other place and went on to the statute book.

To capture the mood at that time I would like to recount the words of the noble Lord, Lord Sassoon, who was the Treasury Minister at the Dispatch Box. He said:

“The Government are, like all of us, concerned about the appalling behaviour of some firms in this sector and the harm that vulnerable consumers suffer”.

He continued:

“Our objectives here are the same: they are to ensure that consumers of financial services have access to credit when they need it and at a price they can afford; and to ensure that the regulator is under a clear obligation, and fully empowered, to ensure that consumers are protected”.—[Official Report, 28/11/12; col. 215-16.]

I must emphasise the noble Lord’s words—“at a price they can afford”.

It was a government U-turn, to be sure, and it was of monumental importance; but to their credit, it was one that the Government made with good grace. Very soon, however, the mood music changed, and from statements coming from various government Ministers it became obvious to many of us that the Government’s heart had gone out of the matter. They were retracting their position.

Following the OFT’s report on payday lending companies, I tabled an Oral Question in March asking whether the Government were now reluctant to place caps on interest rates on these loans. The noble Lord, Lord Popat, who is in his place, replied:

“A cap will reduce access to credit and will mean fewer lenders”.—[Official Report, 12/3/13; col. 133.]

The noble Lord carefully avoided the fact that interest rate caps operate successfully in Japan, France, Italy, Germany, Slovakia and in many states in the United States. I do not know how this succession of events appears to noble Lords today but to me they sound like another U-turn. In four months the Government have performed a spectacular double U-turn—such athleticism and so devastating.

Of course, the amendment is now law and the FCA’s powers will become effective next April, but authorities are sensitive to what the Government say, and I am sure that they will see that heat has been taken out of the matter—that the Government no longer seem to care. I therefore want to ask the Minister three very simple questions to start with. Do the Government accept that it is reasonable for London buses to be driving around advertising loans that bear an interest rate of 4,200%? Will the Government state unequivocally that usurious interest rates are morally wrong and should be made illegal? Will the Government state emphatically that they will support the FCA in word and deed in its efforts to curb all the abuses of payday lending?

I would like to add just one more point before I turn to credit unions. In previous years loan sharks were very obvious—muscular men, probably with tattoos on their forearms and oozing menace. Their companion of choice? A pit bull terrier. Their message was crystal clear: if you don’t repay on time, you know what will happen. Today payday lending has become 21st century cool—iPhone apps, slick websites, high street offices with smiley people and flowers on the desks. They can disguise it any way they like; the fact is that they are all loan sharks. Some are legal, some are not, but they all peddle the same usury.

Fortunately, some organisations are choosing to distance themselves from these lenders. I am pleased to say that Bolton Wanderers Football Club no longer wants to be associated with QuickQuid. Unfortunately others have not been so responsible. It is a shame that great clubs like Newcastle United and Blackpool have chosen to be sponsored by Wonga, although individual players—to their credit—have bravely refused to wear its logo. Can it be that individual ethical institutions, such as the Wellcome Trust, are listed as one of Wonga’s shareholders? Following my noble friend Lord Hollick’s statement about Mr Angest, I believe that Mr Adrian Beecroft, also a major shareholder in Wonga, is similarly a major donor to the Conservative Party. I will say no more.

Let us move on to the alternatives. The noble Lord, Lord Kennedy, has been a champion of the credit union movement and has spoken eloquently on this subject a number of times. The combination of the excesses of the recession and the reduction in government benefits has made life doubly painful for many people in our society. More than ever it is necessary to have viable alternatives to legalised loan sharking and payday lending.

In April I saw a vivid example of this. I joined up with the Movement for Change and the Fair Credit Commission and I went to Kilburn. There I walked along the high road along with local residents. Today the street has at least 13 payday lending shops on it. It mirrors the situation in many other parts of the country. Local residents told me about members of their community running up unpayable debts. In one instance, a woman with disabled children told us how she now owed around £3,000. In another, a man with quite obvious serious learning difficulties told us how his unpaid bill with Vodafone had been sent to debt collectors when he was unable to pay. There the payday pattern of interest swung into effect—the amount outstanding rocketed as massive interest rates came into play. There are thousands upon thousands of heart-rending stories like this around the country. Some talk of suicide.

One of the more positive stories was that of a man who, like his father in Dublin, had set up a credit union in Kilburn after arriving there as a teenager. As noble Lords will be aware, the credit union movement in Ireland is particularly strong, with almost half the population using their services. It is a vivid example of their potential to expand here. This is especially needed as historically what credit unions provide reaches beyond just savings and credit to financial advice, encouraging a culture of saving. This week Glasgow Council announced plans to open a credit union account for all children starting secondary school. It is a particularly interesting step in that direction.

This kind of financial advice contrasts sharply with the growing evidence about how payday loan companies are operating. Noble Lords will also be aware of the ministerial statement last week that credit unions are now able to charge a maximum interest rate of 3% a month, a rate of interest that strikes me as just about spot on. It bears a stark comparison with the 38% charged by Wonga and others where there is no legal maximum. I hope that credit unions will be able to offer their services to more people and to run on a more secure financial footing. I also hope that they will be able to take advantage of new technology to improve their provision of low-cost credit to the people who need it. This was recommended in an ABCUL report on credit unions, and by Gillian Guy, of Citizens Advice, who wrote an article in the Financial Times this April which encouraged different providers to use modern technology to deliver financial support to those who need it. This leaves me with a thought on how to go forward—why does your Lordships’ House not set up a committee to investigate this industry?

I would like to ask the Minister some further questions. Will he confirm that the Government will continue to support credit unions, and in so doing carry on the good work of the previous Government? Will the Government reiterate their previous support for capping interest rates, confirm their support for the banning of advertising for these loans, and, finally, give their support to planning rules that would stop our high streets being completely overrun by payday lending companies?

18:30

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)]

My Lords, I welcome the opportunity to set out the Government’s position on payday lending and to explain how we are tackling some well recognised problems and promoting alternatives for consumers. I am grateful to the noble Lord, Lord Kennedy, for tabling this debate, and indeed for his work in this whole area, and to noble Lords who have raised important points today.

In line with the coalition principles of freedom, fairness and responsibility, the Government believe that people should be free to borrow. However, we also want more people to take responsible decisions about their finances. The Government recognise that not all people who use high-cost credit can get credit elsewhere. The Bristol University report on high-cost credit found that just over three-quarters of payday customers had no access to alternative credit. We therefore agree that finding different solutions to short-term, high-cost finance is important.

Payday loans are a relatively new phenomenon. They should be used only for an emergency short-term fix and never for longer-term debt problems. For some, payday loans can be a way of managing a short-term cash flow problem—for example, a sole trader who needs to buy supplies for the next job before being paid for a previous job, or someone who needs to pay their MoT simply to get their car back on the road so that they can commute to work or perhaps for the painting and decorating fraternity in the most reverend Primate’s diocese.

The spiralling cost of credit is not the main crux of the problem. Problems arise when people take out this kind of short-term, high-cost loan when it is not suitable for them and they cannot afford to repay. As the strength of the evidence shows, part of the issue is, first, that lenders are not always conducting adequate assessments of potential borrowers’ ability to afford the loan. This was a key finding of the OFT’s payday compliance review. Secondly, as the Citizens Advice payday consumer survey found, there is poor compliance with the voluntary codes implemented by lenders last November and 82% of loans did not meet the commitment to,

“treat customers sympathetically if in financial difficulty”.

Thirdly, the Bristol report found that 60% or more of payday customers felt that it was too easy to borrow in this way and that more than four in 10 customers showed signs of financial distress. Here I echo the opening comments of the noble Lord, Lord Kennedy, that these reports show that the payday market is not functioning in the interests of consumers. The Government are therefore deeply concerned about the scale of consumer detriment identified, the speed and ease with which loans can be accessed, the frequency with which loans are rolled over, the grave financial and social problems arising from defaults, and the calling in of such repayments. I hope this goes some way to reassuring the noble Lord, Lord Mitchell, that the Government are taking these matters extremely seriously.

Since the last significant debate on this issue in this House, we have begun to tackle these problems; my noble friend Lady Wilcox touched on this. In March, the Government and regulators announced a joint action plan to tackle the key problems, taking tough enforcement action against unscrupulous lenders and ensuring a strong robust regulatory framework for the future. Also since March, the OFT has begun clamping down on irresponsible lending practices across the payday industry as an enforcement priority. First, they have given no less 50 firms 12 weeks each to change their business practices or risk legal requirements or loss of their licence. Two firms have already surrendered their licences. Secondly, the OFT has revoked the licences of three payday lending firms and has three further investigations open. Thirdly, the OFT has consulted on referring the sector to the Competition Commission for market investigation and expect to announce a decision soon.

A further point is that the new regulator from next April—the Financial Conduct Authority—will have tough new powers to tackle early signs of consumer detriment and is looking at additional regulation on payday lending. The FCA will have powers to make binding rules, such as banning products or specific product features. It will have tougher sanctions, including imposing unlimited fines on firms and ensuring that customers can recover their loss. We will also have a more stringent bar for market entry.

The essence of this debate is the alternatives to payday lending. The Government have committed to further investment of up to £38 million to March 2015 to support and expand the credit union sector. Credit unions are community focused, and to this extent touch on the big society ethos. They are also non-profit making. Members share a common bond and often save before borrowing. The investment will enable them to provide financial services, including affordable credit, for up to 1 million additional consumers on lower incomes. Our ambition is to save low-income consumers up to £1 billion in total in loan interest repayments by March 2019. I am most grateful to the most reverend Primate for his generous support for community-based solutions, including the use of volunteers both in the church and outside.

As my noble friend Lady Wilcox so eloquently put it, an underlying issue is that we still have a culture of people wanting and expecting to be able to buy items on credit when they cannot afford them. Better financial education, raising awareness and signposting to sources of advice are key to helping people understand the alternatives to payday loans. That is why we set up the Money Advice Service to promote financial capability and to provide the tools that customers need to make informed decisions about their money. In 2013-14, the MAS is retaining its spending on debt advice provision at £27 million to maintain its target of helping around 150,000 people. In addition, MAS research found that industry invests around £25 million annually in 36 programmes, most targeted at the under-18s. The MAS is also actively engaged with the Department for Education in promoting financial education—a most important point.

The introduction of a single monthly payment of universal credit should also support the Government’s aim of encouraging people to live within their means and to take personal financial responsibility. We are working closely with the MAS and consumer advice groups to ensure that universal credit claimants are able to access budgeting support services.

Wider government work to reform the consumer landscape and to strengthen consumer rights and protections is also important. The consumer reforms that we have been bringing forward since 2010 will help markets work better, improve consumer protection and give greater clarity about where consumers should turn for help and advice.

A large number of questions were raised by noble Lords, and I will attempt to answer them all. The noble Lord, Lord Kennedy, raised an important point about concerns about payday loan advertising. The Government are also particularly concerned about the advertising of payday loans. People should not be lured into taking out a payday loan when it is not right for them. We have also commissioned additional research to look at the effect of payday lending advertisements on consumers’ borrowing decisions. This will report by early autumn. From April 2014, the FCA’s strong new powers will enable it to restrict the form and content of advertising. My department, BIS, is commissioning research to inform the FCA’s thinking on that.

The noble Lord, Lord Kennedy, asked why banks cannot provide low-limit loans, backed by government support. I agree and want to see banks provide alternatives to payday loans—a point that was made by other noble Lords. However, banks have said that there is no profit in short-term loans—a point that we might all be aware of. The risk premium is high and the costs associated with lending to high-risk customers and giving them small-value loans are such that it is not profitable, so the banks say. I agree with the noble Lord, Lord Hollick, that banks shy away from customers who have taken out payday loans. I had that very conversation with a senior retail executive a couple of days ago as part of my research.

The noble Lord, Lord Kennedy, asked what the Government are doing to address the lack of ATMs in localities. Again, that is a very fair point and the Government share the noble Lord’s concerns about restricted access to ATMs. Although such decisions are operational ones for banks, so the Government do not seek to intervene, we will continue to monitor the situation closely.

My noble friend Lady Kramer raised some very interesting points, focused particularly on the opportunity for us in this country to introduce community development finance institutions, a model that I understand comes from the United States. The co-operatives consolidation Bill was announced by the Prime Minister in January 2012. Work on drafting the legislation has begun and it will be introduced in December. Although it will not contain any new legislation, it will put all legislation relating to industrial and provident societies, or co-operatives, in one place, making it easier for an IPS to be set up. We are also looking at introducing a package of measures to strengthen the co-operative sector, including increasing the withdrawable share capital limit and introducing insolvency procedures for co-operatives and credit unions. This was announced in the Budget 2013.

My noble friend Lady Wilcox, in a speech largely devoted to the issue, expressed concern at the prospect of a cap on the total cost of credit. She said that it would push the poorest and most vulnerable into having no access to credit at all. I thank my noble friend for giving an interesting historical perspective on the credit market and agree with her that a cap is not the solution for the payday market at this time. The Bristol report indicated a range of unintended consequences and risks which would harm customers rather than help them, such as a reduction of access to credit, lending charges being added outside the cap and, generally, less sympathy for those in financial difficulty. However, the Government have ensured that the FCA will have the power to cap in the future, if it is needed to protect consumers at that point. The FCA will start analysis on whether to use the new power from April 2014.

My noble friend Lady Kramer asked about the government commitment to disclose banking data on a postcode-by-postcode basis. It looks as if this will be delivered on a voluntary basis. The noble Baroness referred to the voluntary agreement that the Treasury is seeking to negotiate with lenders on disclosure of postcode-level data. I, too, am confident that such a deal will be struck and I commend the noble Baroness on her sterling work in this particular area.

The most reverend Primate the Archbishop of Canterbury raised the issue of the need to cut out “legal usury” from our high streets in a general comment at the beginning of his speech. It is a most interesting comment but I do not believe that it is the Government’s role to stop or ban payday loans. As I mentioned earlier, such loans serve a purpose. They can provide emergency cash for those who can afford to repay it. In line with coalition values, we want people to remain free to make their own choices, as my noble friend Lady Wilcox said, about whether and how to borrow, if it is right for them. However, in contrast, I would say that there is a duty on government to control, regulate and curb irresponsible lending, to empower consumers to make the right choices and to protect vulnerable consumers where that is needed.

The noble Lord, Lord Hollick, raised points about including international investors and about payday lenders making profits off the most vulnerable consumers. These were interesting points. It is important to remember that payday lending is a relatively new phenomenon, as I said earlier. The market has doubled in size in just four years but is still relatively small. To put it into perspective, it is worth between £2 billion and £2.2 billion, which is less than 5% of the total credit market.

However, we must bear in mind that those affected are the most vulnerable, as I said earlier. This has meant that there is very little evidence of the problems and causes, but we now have a better evidence base, including the Bristol report and the OFT compliance report. Consumer groups have also been adding to the evidence base. That is why we announced strong action plans in March to tackle the serious problems that were highlighted very broadly in today’s debate.

My noble friend Lady Kramer mentioned the lack of alternatives. That is not a reason not to cap. It just means that we also have to work on this as well—a point she spoke passionately about. I understand the attractions on the face of it, but, as I mentioned earlier and I stress again, we do not believe a cap is the solution at the moment. The Bristol report indicated a range of unintended consequences and risks, harming the consumers we want to help.

The noble Lord, Lord Kennedy, said the figure of £35 million—I say it is £38 million—funding for credit union expansion was a “drop in the ocean”. I welcome the noble Lord’s support for recent government initiatives such as the legislative reform order, increasing the interest cap and the credit union expansion project. The project aims to help 1 million people on low incomes, to enable credit unions to reduce costs and to reduce the need for further government funding by making them more sustainable.

The noble Lord, Lord Kennedy, and the most reverend Primate asked whether the Government would host a summit on payday lending. The strong action plan announced in March by the Government and regulators, which we are taking forward, also includes discussions to see whether we can work in concert with industry and consumer groups to look towards a summit.

I have run out of time. I regret that I do not have time to answer the few further questions that were raised, but I will most certainly write to all noble Lords. In conclusion, our assessment of the alternatives to payday lending is that it is about not just improving access to more affordable credit but about making a fundamental change in our culture, so that consumers can take personal financial responsibility, borrow responsibly and live within their means. It is also about ensuring adequate support for the vulnerable who need it. We believe that the Government’s initiatives will help address these problems.

House adjourned at 6.47 pm.