Grand Committee
(10 years, 8 months ago)
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Health: Women and Low-income Groups
(10 years, 8 months ago)
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Baroness Manzoor
To ask Her Majesty’s Government what steps they are taking to reduce inequalities in health affecting women and low-income groups.
Baroness Manzoor (LD)
My Lords, I am delighted to have the opportunity to introduce today’s debate. I am also delighted that the subject has attracted such expert speakers and I very much look forward to hearing your Lordships’ contributions.
There have been three key reports on inequalities in health: the Black report back in 1980; the Acheson report in 1998; and, more recently, the Marmot review in 2010. Clearly, health is a key part of social mobility and, although the population has access to the NHS, there is a huge inconsistency in the problems faced by low-income and high-income groups, between men and women, and across ethnic groups. It is often said in international development circles that health is a human right. It is critical to income growth and poverty eradication. That applies just as much in inner-city Birmingham as it does in rural India. Health underpins access to employment, education, engagement with economic activity and quality of life. Low-income groups often report barriers to accessing health services, which drives poor health outcomes. Although life expectancy is going up, so too, unfortunately, is the gap between the rich and poor. The distribution of health and disabling health conditions across the population of England has been shown to follow a sizeable, persistent and incremental pattern: health outcomes generally worsen in line with greater levels of socioeconomic disadvantage.
An analysis by the Equality Trust has found that in the past 20 years alone, the gap in life expectancy for those in different local authority areas has increased by 41% for men and a staggering 73% for women. For example, there is now an 18-year difference in healthy life expectancy between women living in Richmond, where it is 72 years, and Tower Hamlets, where it is 54 years. This has real policy implications for fair and reasonable pensionable ages. Evidence also shows that women suffer more from poverty, gender inequality, gender-based violence and mental health problems.
Investment decisions based on women’s specific health needs are a practical and cost-effective way of delivering the NHS social inclusion agenda. For example, the cost to the NHS of violence against women and girls is estimated to be around £1.2 billion a year. Domestic abuse alone costs a further £176 million a year in mental health services. The return on investment in prevention is therefore significant. I would welcome the Minister supporting investment in the scale-up of dedicated outreach services for marginalised, low-income and hard-to-reach populations in the UK. Charities such as Find and Treat are excellent examples of organisations providing such services.
Reducing health inequalities is one of the NHS’s top five priorities, and rightly so. I welcome health organisations now having a statutory duty to have regard to the need to reduce health inequalities, and congratulate the Government on this. Therefore, health improvement is no longer the only success criterion; reducing differences in health between populations is also a welcome policy objective for NHS England and Public Health England. Not only does economic inequality affect health, but more unequal societies are more likely to experience poorer literacy rates, higher incidence of drug addiction and greater exposure to diseases.
Due to time constraints, I shall briefly touch on three issues: coronary heart disease, drugs and TB. I turn first to coronary heart disease. Collectively, as we know, heart and circulatory diseases cause more than a quarter of all deaths in the UK. Rates of premature death have been declining since the 1970s but this decline has not been reflected equally in all parts of our society. Tackling inequalities in heart disease should be hard-wired into the performance measures of the NHS and explicitly reflected in the quality and outcomes framework and the payment-by-results scheme for GPs, and should highlight gender differences in risk factors, screening and treatment needs. There is not sufficient evidence that this is being done.
Secondly, 1.2 million people are affected by drug addiction in their families, mostly in poor communities. The annual cost to society of drug addiction is £15.4 billion and this does not take into account the huge cost to families and end-users in their personal lives. An estimated 250,000 to 350,000 children who are affected by parental substance abuse face additional risk and harm, including neglect, being taken into care, involvement in drug abuse and poor mental health. Drug prevention can therefore be a mechanism for reducing inequalities and social exclusion. Drug treatment is an essential part of a successful drug policy and of reducing inequalities. However, evidence from the recent European Quality Audit of Opioid Treatment suggests that NICE and Department of Health guidance is not being fully implemented. The survey found that, although patients are ill informed of their treatment options, choice of treatment is often driven by patients. The UK has the second highest reported rate of patient relapse. Anecdotal evidence suggests that many patients may be relapsing and then re-entering the same treatment. Can the Minister say how the Department of Health and NICE guidelines are being implemented and evaluated, and whether that information is being disseminated to clinical commissioning groups?
My third and last area of health inequality is TB, which is a global disease of poverty. TB has killed more people than any other infectious disease in history. It remains the second deadliest infectious disease in the world, claiming 1.3 million lives each year. TB is airborne and infectious; in a world of globalised travel, it is no surprise that nearly every country in the world has TB. London has the highest rates of any capital city in western Europe. In 2012 there were nearly 9,000 cases of TB, nearly 10% of which came from just three London boroughs: Newham, Brent and Ealing. The first two of these are the London boroughs with the worst rates of overcrowded and temporary accommodation. This is not a coincidence. Although the number of cases has stabilised, rates in Indian, Pakistani and Bangladeshi communities are steadily rising. This is not a coincidence either. These groups are often marginalised and report barriers to accessing healthcare. TB in the UK is far from being under control and health inequalities are driving it forward.
Many poor people around the world suffer and die because they cannot afford to buy advanced medicines that are still under patent and often sold at a 50-fold, or even a 100-fold, mark-up. The NHS spends an estimated £8 billion every year on patented drugs. There are merits in other ways of incentivising important pharmaceutical innovations, such as a health impact fund, which Germany is actively considering. Would the Minister consider meeting the architects of the fund to see what benefits the UK could derive from it?
I end with five key points. First, it is time for action. How are the Government implementing the recommendations of the Marmot review? Secondly, there should be a joint narrative between the Department of Health, NHS England and Public Health England on what they are doing together to tackle inequalities and who is accountable for what. Like the King’s Fund, I believe that local authorities have a critical role to play, through their new public health duties, but the reduction in health inequalities cannot be delivered solely by them. Thirdly, Public Health England should show leadership and visibility by showing how it is supporting and, where necessary, challenging other government departments. Fourthly, all new government policies and services should be subject to health equality impact assessments, requiring policymakers and service providers explicitly to take health inequalities into account. Finally, I totally agree with the British Heart Foundation when it states that each of the four Governments in the UK should appoint a senior Minister with cross-cutting responsibility for tackling health inequalities and each government department should have an objective to reduce health and social inequalities.
Baroness Hayman (CB)
My Lords, the noble Baroness, Lady Manzoor, has given us the opportunity to cover a very wide canvas this afternoon on an issue that is so deeply rooted in deprivation and its results that it is difficult to do it justice in the course of an hour. I fear that I shall make the problem even greater by dealing predominantly not with inequalities in the UK but with those across the world, because some of the most stark and striking inequalities in health, particularly women’s health, occur globally. I should perhaps reassure the Minister that I will not expect a fully fledged, all-singing, all-dancing DfID response from her today. However, I would be grateful if she could pass on these comments to colleagues.
Whichever society one is dealing with and wherever in the world, ill health is both the outcome of deprivation—social, economic and educational—and itself a cause of deprivation. At its most stark, it is illustrated in life expectancy: there are those figures that the noble Baroness gave us of a healthy life expectancy for a woman in the UK varying from 54.1 years in Tower Hamlets to 72.1 years in Richmond-upon-Thames. There is a great deal to discuss but I shall concentrate on women’s health and those areas specific to women, pregnancy and childbirth, where men do not risk morbidity and mortality at all. We should remember that gender-specific risk starts early. For some, it starts with selective infanticide, while there is female genital mutilation and child marriage, which is not just a social ill but a health threat as well. A girl who gives birth while aged under 15 is five times more likely to die than one who is over 15, and so are her babies.
I should declare some interests. My international development interests are as in the register but, particularly, I am chair of the external advisory group at the Centre for Maternal and Newborn Health at Liverpool School of Tropical Medicine and, in the UK, a member of the General Medical Council. I am also grateful to Professor Gwyneth Lewis of the UCL Institute for Women’s Health, who has done so much work on maternal mortality in this country and abroad.
Maternal death rates illustrate the inequalities that exist in world health and between women all over the world today. In 2010—I think all my figures are from that year—287,000 women died in childbirth. One woman dies in childbirth every two minutes across the world. In the UK, where the maternal mortality rate of deaths per 100,000 is 11, every one of those deaths would be subject to a confidential maternal death inquiry. In sub-Saharan Africa, where the MMR is 500 deaths in every 100,000, that inquiry would be considered completely inappropriate and impossible to carry out. Many of those deaths may not even be officially recorded. The lifetime risk of dying in pregnancy is one in 20,000 in the United Kingdom; in Sierra Leone, it is one in seven.
Of course, these deaths are not the only consequence. For every woman who dies, perhaps 15 suffer morbidity. Neonatal rates are absolutely related to maternal deaths and yet perhaps 80% of maternal and perinatal deaths are preventable. It was said by Mahmoud Fathalla in 1988:
“Women are not dying because of diseases we cannot treat. They are dying because societies have yet to make the decision that their lives are worth saving”.
We can see in our international development programme that there are programmes that work, that are sustainable and that bring skilled birth attendance—perhaps the single thing that makes the difference to maternal mortality. Across countries in Africa, the Making It Happen programme, led by Nynke Van den Broek of Liverpool, is providing sustainable training and support for the maternity services so that they can improve their death rates. I very much hope that in the response to come from DfID we will get continuing commitment to such programmes.
Returning to this country, where we have one of the lowest death rates in the world, considering how good our recording is, poverty and deprivation still make it more dangerous to give birth in this country if you are from a lower social class or have less education. The statistic that stands out to me is that women, single or in partnership, in a family with no wage income are 10 times more likely to die or suffer complications in childbirth—10 times. The link between poverty and health continues in this country, as it does between countries.
Baroness Warwick of Undercliffe (Lab)
My Lords, I thank the noble Baroness, Lady Manzoor, for introducing this debate on this challenging issue. We know from the NHS, the Office for National Statistics and elsewhere that poorer people live shorter lives and that they live more of their lives with limiting illnesses. The Marmot review in 2010 highlighted the seven-year gap in life expectancy and the 17-year gap in disability-free life expectancy between those on the lowest incomes and those on the highest.
We also know that there is a significant difference in rate of diagnosis, treatment and outcomes for the five biggest killers depending on where you live. Last month, the ONS published its analysis of the health deprivation divide using the 2011 census and found that men and women aged 40 to 44 living in the most deprived areas are about four times more likely to have “not good” health compared to their equivalent in the least deprived areas.
In terms of gender, the most recent ONS figures, published at the weekend, show that women in the most advantaged areas can expect to live 20 years longer in good health than those in the least advantaged areas. Poor women spend only 66% of their lives in good health, compared to 83% of the richest. The richest women live nearly seven years longer than the poorest. Although women have historically enjoyed longer life expectancy and more prolonged health than men, that gender advantage is almost entirely eroded by social inequalities.
The Marmot review, Fair Society, Healthy Lives, made the simple point that reducing health inequalities is a matter of fairness and social justice, but tackling those inequalities and injustices is neither simple nor straightforward. Health inequalities result from social inequalities, so any action on health inequalities requires action across all the social determinants of health.
The Marmot review’s first and highest priority for action was giving every child the best start in life. I have spoken on this before, but it is a subject that I feel very strongly about. The evidence is overwhelming that investing in the pre-school years pays most dividends for health and well-being in later life. What happens during early years, starting even in the womb, has lifelong effects on everything from obesity, heart disease and mental health to educational achievement and economic status. That is why it is so important that we provide more parenting support programmes and that we have a well-trained early years workforce and high-quality early years care.
I will not dwell on that point but want instead to look at where we are four years on from the Marmot review. The Health and Social Care Act 2012 places a duty on the Secretary of State, NHS England and clinical commissioning groups to have due regard to reducing inequalities, and there have been some successes. The widespread adoption of high-impact interventions, such as prescribing cholesterol-reducing drugs and drugs to control blood pressure, and increases in stop-smoking services, have all shown an impact.
However, this sort of success has been uneven. A King’s Fund report tells us that the overall proportion of the population that engages in three or four of the four main areas of unhealthy behaviour has declined significantly, from around 33% of the population in 2003 to around 25% by 2008. However, people with no qualifications were more than five times as likely as those with higher education to engage in all four poor behaviours in 2008, compared with being only three times as likely in 2003.
So far, policy has focused on tackling individual lifestyle risks one at a time but this ignores the distribution of these behaviours. We need a more holistic approach to policy and practice that addresses the lifestyles of people showing multiple unhealthy behaviours. When your future prospects look hopeless and your life is lonely and miserable, there is little reason to make changes to your behaviour now in order to add years later. Will the Minister tell us what is being done to ensure a more integrated approach to behaviour change, which links to inequalities policy and focuses more directly on the Government’s stated goal to,
“improve the health of the poorest, fastest”?
Michael Marmot recently returned to the fray: last month he alerted us that the ONS plans to reduce the amount of data it collects which highlight the differences within local authority areas. My borough of Kensington and Chelsea has the highest average life expectancy in the country but there are pockets of extreme deprivation. One ward has a life expectancy of 71 years, whereas it is 92 in Knightsbridge. These are the data that should inform the commissioning of services. I hope that the Minister can reassure the House that these data will continue to be collected.
I welcome the recent launch by Public Health England of a national conversation on health inequalities. However, this conversation needs to take place at rather a higher volume than it appears to have done so far. Like the noble Baroness, Lady Manzoor, I ask the Minister what the Department of Health, NHS England and Public Health England are doing together to tackle inequalities. They need to be heard telling us how they will use their powers, not just calling the rest of us to action. We need a joint commitment. As NHS England is now the monopoly buyer of primary care, it needs to use that power to reduce health inequalities. Public Health England should share its expertise in health impact assessment with other departments so that they are able to take into account the health inequalities impacts of one potential decision versus another.
The task of reducing health inequalities cannot be left to local authorities to deliver solely through their new public health duties. We need to ensure that local authorities invest money and expertise to ensure long-term reductions in health inequalities. One of the values at the heart of the NHS constitution is that “everyone counts”. Our resources must be maximised for the benefit of the whole community and we must make sure that nobody is left behind.
Baroness Suttie (LD)
My Lords, I thank my noble friend Lady Manzoor for instigating this debate. It is a hugely important subject. I will concentrate most of my remarks on the growing problem of TB and, in particular, drug-resistant TB.
Overcrowding is perhaps the biggest risk factor for the transmission of TB. Anyone who has TB and is not treated will remain infectious, potentially passing the disease on to those who live with them. For those in temporary accommodation, TB is a threat to keeping their accommodation. TB is infectious and difficult to treat, and patients are often scared of losing their accommodation if they admit to having TB.
People with lower incomes are statistically more likely to experience drug or alcohol abuse problems, which reduce their immune response and heighten their risk of contracting TB and other infectious diseases. Cases in the UK are centred around big cities. London has an average rate of 42 cases per 100,000. As my noble friend Lady Manzoor has already remarked, two of the boroughs with the most severe problems with overcrowding and temporary accommodation, Brent and Newham, are also those with the highest rates of TB in the UK.
The problem becomes even more severe among the homeless population. The disease attacks people with reduced immune systems, so the impact of rough sleeping, poor nutrition and other factors associated with the chaotic lifestyles of the homeless can increase their chances of developing TB in the first place. In addition, the homeless community is less likely to present to primary healthcare when experiencing symptoms of TB or any other disease. That increases their likelihood of remaining infectious and transmitting the disease to others. It also increases the likelihood of them developing more severe and difficult-to-treat symptoms, due to the opportunity for the disease to progress further.
Homelessness was also found to increase the likelihood of developing drug-resistant strains of TB, including a much greater risk of developing multi-drug-resistant TB. It was also found that homeless people are a dozen times more likely not to adhere to treatment, which puts them at even greater risk of developing, and transmitting, infectious TB.
The central thread running through all this is a critical problem with housing. Once admitted, hospitals cannot discharge people without a home address. If the disease is not advanced and they have no other health complications, most patients will not be admitted. TB treatment is extremely long: the average treatment duration is 220 days and the average cost of a bed per night is £500. A patient who cannot be discharged can cost the NHS £110,000 in bed fees alone. Specialist hostel accommodation is available and needs supporting. One project that I visited just two weeks ago in Euston costs £60 to £80 a day, including all food, a room, training, language skills and social support for TB treatment.
Does my noble friend the Minister agree that a holistic package of care, if widely adopted by the NHS in high-risk TB areas, could save taxpayers millions and greatly improve treatment outcomes, as well as reduce the spread of the disease?
Lord Crisp (CB)
My Lords, I, too, congratulate the noble Baroness on securing this debate, and on the excellent way in which she laid out the issues at the beginning. These are important themes, which go beyond health and beyond the UK. I will not talk about international development, although I will say in passing that I identify completely with everything my noble friend Lady Hayman said on that issue.
I was interested to note recently that the European Strategy and Policy Analysis System, which advises all the parts of the European Union, has identified inequality as the most significant long-term challenge now facing Europe. As recovery is now under-way, there is what it describes as a “trend break” in inclusive growth; in other words, growth that is taking everyone with us. It is interesting that in our international development world we talk about no one being left behind in health, but we are not doing very well at that ourselves.
That report goes on to talk about the most vulnerable, the growth in unemployed youth and the so-called lost generation, and the impact on the most vulnerable and the ill of the reduction of public services, all of it indicating that we are building up health problems for ourselves for the future.
That theme of inequality is one that we will have to keep coming back to, and it is important that we do so. I absolutely agree with the noble Baroness, Lady Warwick, that we need to increase the volume. Not only does the Department of Health need to do that, but we all need to keep pressing the points that I suspect we all understand very well, and make sure that they are turned into reality.
We in the UK understand those issues better than most. We have had a great tradition of research into and evidence of the relationship between health and income since the Whitehall study, which was begun in 1967. It shows the clear relationship between them; within that, it also notes that while women have longer life expectancy, as we have already heard, low income can affect them worse, and that there is a greater discrepancy in the length of healthy lives. Therefore in a quarter of the boroughs in the UK, men have longer healthy life expectancy than women do. We also know that people from black and minority ethnic communities are particularly affected, because they are overrepresented in low-income groups and face some specific health threats. Therefore we know what the problem is.
The relationship between health and income is complex, and has at least four components, all of which have to be addressed. The first component is simply the material one: whether people are able to buy better health with better food, gym membership and so on. Then there is the psychosocial: we now know the biological mechanisms that show the way in which stress impacts on the body and affects health. We also know that there are links between people in low-income groups and risky life behaviours, as we have already heard from a number of noble Lords. The reverse is also true: poor health can cause low income and reinforce the whole cycle. All these issues affect women, but for women there is a double impact, because many of them are carers or involved in bringing up children, and the health of women affects other people profoundly.
The way to deal with this is equally complex. The WHO study on social determinants, already referred to, stressed the importance of taking a life-course approach to health inequalities, with interventions at every stage from birth to old age, while the study from Europe that I mentioned emphasised investing in citizens and having a focus on promoting well-being.
We have in this country many good specific examples, of which I will name just one: in Lewisham, where they are targeting women’s inequality and picking up across the entire borough the sort of issues that I am talking of. But we need strategic impact, as the noble Baroness, Lady Manzoor, said; she described it in relation to coronary heart disease, drugs and TB. We need a much more strategic and followed-through approach at a higher volume than is the case at the moment.
I would be very interested to hear the Minister’s response to the noble Baroness’s questions. I suspect that she will tell us that the ideas outlined here and in what other people have said are central to the Government’s policies. However, I hope that she will not just spell out the Government’s hopes for their policies but point to particular examples where those policies are in reality reducing inequalities and having a positive impact on health. We all understand that there needs to be a cross-government approach; health by itself cannot achieve many of the things that we are talking about. Could the Minister also therefore give us good examples of where this approach is happening; for example, where education is working with health to develop health literacy among children?
Finally, the reverse of this is also true: some government policies from other departments may have adverse effects on equality and on health. Can the Minister therefore tell us what the health department is doing to assess the impact of policy from other departments on health and reassure us that the Department of Health can intervene, and indeed has intervened, where there is a potentially negative impact?
Baroness Flather (CB)
My Lords, I, too, thank the noble Baroness, Lady Manzoor, for giving us this opportunity to express our views, which is very welcome. I turned 80 last month and I feel that I am on the last lap of life. I have only one passion, which is for poor women, mainly in Africa and India, who get forgotten. There are 1 billion women altogether in Africa and India and what their lives are like we cannot even imagine unless we have gone there and seen it for ourselves. I am not going to talk about that, because it is a huge subject and I have views on what we can do about it, but I just want to tell your Lordships one little story.
I have a Nigerian friend who is from a village in the middle of Nigeria. She said to me that when a woman in her village reaches the age of 40, they have a street party. It is a great thing to reach the age of 40. What does that make us feel? I shall give another, recent example. I had an Indian maid. She does not work for me any more, but she comes to me. She says that I am her mother. I keep telling her that she is not my daughter, but it does not seem to have any effect. She came to me in a terrible worry about some medication that she had been given for her blood pressure. She said, “Oh, it’s not the same as what I had before. I don’t know what they’ve given me. What is it going to do to me?”. So I just read the leaflet. It was blood pressure medication. It was not the same packaging—there are so many different ones.
I want first to say, therefore, that I am much more concerned with ethnic minority women. Secondly, I want to mention a big problem, which is ignorance. Obviously, not everything is available to everyone—we know that—but unfortunately we are not doing anything about improving the awareness and understanding of what is available. A lot of ethnic minority women do not know what is available. They do not understand it. What they can have has not been explained to them.
A report for the All-Party Parliamentary Group on Sexual and Reproductive Health in the UK, launched in 2012, showed the differences in the availability of help in different boroughs of London. The differences were huge. Every woman has the right to have access to family planning, not only for herself—because it affects her health, her thinking and her feelings—but for the children she produces. If you have too many children, you cannot give them the attention they need.
We also do not do anything in schools. We are ambivalent about sex education. We do not teach our children what they need to know about their own bodies and needs. People say, “Oh, they will become more promiscuous”. Well, they will be promiscuous if they want to be promiscuous, whether we teach them or not. Maybe they will be more careful; maybe they will use condoms. Let us do that; let us work towards trying to bring in proper sex education in this country, because that will help the next generation.
We have heard about TB and things like that. There should really be a testing process before people come here. Most countries have testing processes for illness. If you know that somebody has TB, you can still let them come but then you give them treatment right away. You do not wait for them to spread the TB around to other people.
The other thing that is specific to ethnic minority women is depression. They suffer hugely from depression. There was a Chinese Peer called Lord Chan who set up a group, of which I was a member, to look at suicides among ethnic minority women. We have the need for family planning. We have mental health problems in minority groups. People are not trained well enough to manage the bicultural aspect. We need to be aware of that. It is very difficult to treat somebody with mental health problems via an interpreter.
There are so many issues. The noble Baroness, Lady Hayman, quoted Dr Fathalla. Actually, it was in the 1970s, earlier than she said, that he said that we do not treat women—not because we cannot but because we do not think they are worth treating. He was saying how bad it was; he was not saying it for himself. It is true. If you go to African countries, women’s health is right down the agenda. Nobody cares.
FGM was mentioned. Do noble Lords know that if a girl has been cut, the family gets more money for her? We should bear that in mind because quite often some of these ills are perpetrated for financial reasons; child marriage as well—they sell the girl. I said to my friend from Nigeria, “Two goats will buy you a girl of 12”. She said, “No, one goat”. This is the kind of world we are living in and this is the kind of treatment women are getting, so let us not do it here.
Baroness Royall of Blaisdon (Lab)
My Lords, following on from the noble Baroness, it is my fervent hope that before I die PSHE will be a core part of the curriculum in every school in this country. That is what we must fight for. I add my thanks to the noble Baroness, Lady Manzoor, for enabling us to have this important and wide-ranging debate. The speeches have given us terrific—and horrific—facts and figures, and much food for thought.
Like other noble Lords, I woke on Monday morning to read articles about the report from Oxfam, A Tale of Two Britains, which showed that the richest five families are worth more than the poorest 20% of people in this country—that is, 12.6 million people, almost the same as the number who live below the poverty line. These figures are deeply shocking and proof of the profound inequalities in our society. The report also said that, for the first time, more working households were in poverty than non-working ones and predicted that the number of children living below the poverty line could increase by 800,000 by 2020.
We know that there is a direct correlation between health inequalities and poverty. Many of the solutions to health inequalities lie outside the health sector—for example, with housing, good employment and security. As in so many areas, it is women who suffer most from health inequalities, not just personally but because they have responsibility for the health of children, partners and elderly parents. The Joseph Rowntree Foundation comments:
“Health and poverty are intertwined—being trapped in poverty piles on stress that perpetuates the cycle and worsens health further”.
I know that the Government will say they have taken action in the Budget to reduce poverty, but it is the reality for millions of people in this country. Next month, when last year’s Budget adjustments are made, they will still be living in poverty while millionaires are thousands of pounds better off.
Housing has a huge influence over people’s health: temporary accommodation; overcrowded rooms; damp walls; inadequate cooking facilities in B&B accommodation; cold homes because there is not enough money for the meter; and the stresses and strains of struggling to pay exorbitant rents. The Government will also say that they are taking steps to make affordable housing more accessible with schemes such as Help to Buy. Those schemes may well help some people and I am glad, but they do nothing to help people who are desperate to rent affordable homes, either from the public or the private sector; they merely create the potential for a housing bubble.
I am sure that we all agree with the conclusions of Sir Michael Marmot’s review on health inequalities, one of which is to ensure a healthy standard of living for all. Yet obesity is the plague of our era, first because of lack of activity and secondly because of poor diet: 26% of adults and 30% of children are classified as obese, the fourth highest level in the world. In a terrific debate last night on the report of the Olympic and Paralympic Legacy Committee, speaker after speaker spoke with concern about the need for greater emphasis on PE in the school day and how high-quality PE and sports programmes can boost school attendance, challenge anti-social behaviour, improve academic performance and, of course, make children healthier now and improve their future health. What are the Government going to do about this issue, which is inextricably linked to health inequalities? Last year, the National Children’s Bureau found that children living in deprived areas are nine times less likely than those living in affluent areas to have access to green space and places to play and to live in environments with better air quality.
Alongside exercise, a healthy and balanced diet is also essential but, given that Britain has some of the highest and most volatile food prices in western Europe, this is becoming harder and harder for people struggling with the squeeze on their household budget. Poverty means that, even though parents might know that fresh food is healthier than processed food, tinned and frozen food is often cheaper and, if you live in a B&B with a single gas ring or you are simply exhausted because of the stresses and strains of life, fast food looks like the only option. The health of many women often suffers because they regularly deprive themselves of food when the choice is between feeding themselves or their children. Yes, they can resort to food banks but only on three occasions can they suffer that indignity. I was extremely disappointed by the complacent and patronising response from the Government at Question Time today. It demonstrated a complete lack of understanding of the realities of life for so many people. My noble friend Lady Whitaker, who is in her place, said that since food banks got going at their present scale hospital admissions for malnutrition have increased by 74%. In answer, the Minister said,
“we are working with business and others to encourage people to adopt a healthier diet”.
That is not the appropriate answer. It demonstrated no grasp at all and a total lack of empathy, as did the continued emphasis on charitable giving. I celebrate the work of charities; food banks do a fantastic job, but I abhor the poverty that drives people to them.
On Tuesday, I had the privilege of spending a few hours with a young woman whom I first met when she was an inmate in HMP Eastwood Park. Thanks to her own resilience and work in the soap enterprise in the prison, of which I am the proud patron, she has turned her life around and is now in employment and caring for her children. We talked about inequalities and the problems that lead to women’s imprisonment, as well as their health problems, specifically mental health problems. The figures are stark: 70% of female sentenced prisoners suffer from two or more mental health disorders, yet, as in the general population, there is no parity between mental and physical health care. She suggested that, in order to help the women avoid problems following sentencing and to reduce consequential costs, every woman should have a mental health assessment before beginning her sentence. This seems an excellent idea and I would be grateful if I could discuss it further with the Minister together with Maria Thomas of the Shaw Trust, who has done a lot of work on this. I look forward to the responses from the Minister to the excellent questions raised today.
Baroness Jolly (LD)
My Lords, I, too, am grateful to my noble friend Lady Manzoor for initiating this important debate. I thank all noble Lords for their excellent and informed contributions. I agree with the noble Lord who said that an hour is just not enough to do justice to the huge canvas of inequalities that there are not only in the UK but across the world. I regret, too, that in the time available I will not be able to answer all queries from noble Lords. I promise to write to all who have taken part in this debate to answer their queries and, I hope, to make them feel more reassured.
Health inequalities are a priority that is shared by this Government and Health Ministers across the whole UK. Worldwide, concern is high on DfID’s agenda and it has been very busy over the past few years implementing millennium development goals and thinking about what should follow on from them, particularly those areas surrounding women and children. For too long, health inequalities have denied many children a good start in life, prevented people realising their full potential and weakened communities. They are deeply rooted and a scourge on society, which is unacceptable. However, the tragedy is that, for the most part, they are avoidable. As the Secretary of State has said, we want to make them a thing of the past.
Health inequalities and the poor health outcomes that result are a focus for the health system, working with Public Health England and NHS England, and backed by new health inequalities duties under the Health and Social Care Act 2012. The Department of Health is ensuring that these bodies work together to overcome these inequalities. However, I have to give a warning that successes in any of these areas are not overnight. We have to be in this for the long haul, which is why strategy is so important. These organisations are barely a year old.
Our strategic approach is underpinned by the evidence in the Marmot review. The noble Baroness, Lady Warwick, was the first of several noble Lords to highlight the importance of the 2010 report, Fair Society, Healthy Lives. It highlighted that life expectancy is spread across a social gradient, a point highlighted by the noble Baroness, Lady Royall; namely, that the lower a person’s position, the worse his or her health. It recommended that action should be proportionate to the level of disadvantage.
Following on from that paper, our public health White Paper, Healthy Lives, Healthy People, accepted the review’s recommendations and we are sponsoring the UCL Institute of Health Equity, led by Sir Michael Marmot, to help implement them. We have adopted its approach. For example, on maternal and child health we are increasing by 50% the number of health visitors by 2015 and more than doubling the number of places on the family nurse partnership programme, which supports vulnerable, first-time young mothers.
Reducing health inequalities is a core Public Health England activity. It will be set out in its business plan to be published shortly, and its health and well-being framework in June. It will identify the action that many stakeholders—notably local government—can take. NHS England set out its proposed priorities in its December board paper Promoting Equality and Tackling Health Inequalities. In addition, NICE continues to provide evidence-based guidance, and the ONS will continue to publish much important data to support our efforts in reducing health inequalities. When I sum up, I will pick up on the issues around data mentioned by the noble Baroness, Lady Warwick of Undercliffe.
The noble Baroness will know of the importance of good health for women during and after pregnancy from her time at Bradford as a previous chair of Bradford Health Authority. Bradford is second only to Birmingham in the number of infant deaths. Responding to that challenge, Bradford established an infant mortality commission, drawing together partners from all corners of the city. Action in Bradford and elsewhere has had a national impact. The health gap in infant mortality was halved between 2004-06 and 2009-11, between the routine and manual group and the whole population, which shows that local focused action can reduce inequalities.
Different communities face different health needs, and it is for local areas to identify those needs. We have sought to empower local areas by transferring public health to local government, giving £5.46 billion of funding over two years. We have made it clear that local areas must take account of health inequalities as a condition of that funding.
Some of the most extreme health inequalities are found among the most vulnerable and socially excluded women, such as street-based sex workers. Open Doors, a Hackney organisation, and the TB team at Homerton Hospital carry out late-night outreach among these women looking for cases of TB and HIV—a fatal combination—and to provide support and care for them. The Homerton TB team also provides housing for homeless people with TB for the duration of their treatment because, as my noble friend Lady Suttie has said, homelessness helps spread TB. The £10 million Homeless Hospital Discharge Fund seeks to ensure safe discharge from hospital and to break the cycle of poor health and homelessness. Public Health England is leading on developing a national TB strategy, including tackling drug resistance.
The NHS is providing a hepatitis information and testing programme in Sheffield, which offers screening for at-risk communities, including the Roma communities, and in Leeds it is seeking to establish the needs of those communities and to improve access to their services. In Salford, the NHS is working with different groups to improve the uptake of vaccines such as MMR, focusing on BME groups where the uptake is low. In Hillingdon, a specialist health visitor and trained volunteers support Afghan and Tamil women on a range of physical and mental health needs, including domestic violence.
As noble Lords will know, access to services is crucial. Women living in deprived areas are less likely to attend for breast cancer screening or present with early symptoms, which leads to lower survival rates. We cannot meet our cancer objectives without reducing these inequalities through programmes such as the National Cancer Equality Initiative, and the work of local areas such as Southwark and Lewisham in reducing inequalities in breast cancer care, and Walsall and the Isle of Wight in promoting cervical cancer screening.
Obesity has a strong social gradient among women. We are encouraging and promoting action on obesity and better nutrition through the responsibility deal and through Change4Life. There is a threefold difference in smoking in pregnancy rates between London and the north-east. Sunderland and other north-east communities, Blackpool and Dudley have responded to these inequalities and are contributing to our national ambition of reducing smoking in pregnancy rates among all women from 15%—where it is now—to 11% by 2015.
We work—with Public Health England—across government to reinvigorate action on child poverty, raise educational attainment, support families and promote work as a route out of poverty. To pick up a point raised by the noble Baroness, Lady Warwick, a study by the Institute of Health Equity has shown that one of the best things that you can do for a child is to read to them daily. Not only does that raise their educational outcomes but it also raises their cognitive ability from a very early age.
Baroness Jolly
I understand that. I am sure that there are adult education programmes across the country. The noble Baroness shakes her head. Perhaps we can have a conversation about that outside the debate.
We have focused on outcomes rather than on targets to promote action and measure progress, including through the public health outcomes framework, in line with the Marmot review proposal for a national framework of indicators for local areas to draw on to meet their own needs. This strategic approach to reducing health inequalities will help guide local action that is practical, joined up across the causes of ill health, and delivered at a scale to make a difference and improve health outcomes for all our people.
In what time I have, I shall run through points that noble Lords have raised that I have not covered. The noble Baroness, Lady Manzoor, asked about cardiovascular disease, which we know affects millions of people and is one of the largest causes of death and disability in this country. The previous Government made huge strides in this area which this Government have carried on. During the past decade, there has been a 40% reduction in under-75 mortality rates, with a narrowing in the difference between the most deprived and the least deprived areas of England.
Domestic violence is one aspect of violence against women and girls; others include sexual violence, abuse and gang violence. We also heard today at Question Time about FGM, and the Government are working on that issue.
On international health inequalities, raised by the noble Baroness, Lady Hayman, the approach to tackling health inequalities in England is recognised internationally as leading edge. Professor Sir Michael Marmot has chaired the World Health Organisation’s commission on the social determinants of health. Based on the interim analyses of the first phase of this programme, it is estimated that, during the lifetime of the project, more than 9,500 maternal lives will be saved, more than 190,000 maternal disabilities will be avoided, nearly 10,500 new-borns will be saved and more than 12,500 stillbirths will be averted.
The noble Baroness, Lady Warwick, asked about the gap of 20 years in healthy life expectancy. I mentioned earlier that local authorities have been given a £5.4 billion budget to press on that.
I have been informed that I am out of time. I am sorry. I flagged up that I doubted that I would get through all your Lordships’ points during the debate, but I will certainly write to you and answer any outstanding queries.
Baroness Warwick of Undercliffe
Before the Minister sits down, it would just be quite nice to have a reassurance about the data.
UN: Technical Agencies
(10 years, 8 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Hunt of Chesterton
To ask Her Majesty’s Government what are the key objectives of United Kingdom delegations attending United Nations technical agencies in 2014; and whether they will report back to Parliament after the meetings.
Lord Hunt of Chesterton (Lab)
My Lords, United Nations agencies are responsible to national Governments, who are their members and funders. These organisations with specialised purposes, from health to meteorology to communications, were formed even before the League of Nations and United Nations were. In the United Kingdom, the Foreign and Commonwealth Office has an overall brief to ensure that the delegations to these agencies from various UK government departments and their semi-independent agencies represent UK interests effectively. Despite the strong and effective participation of the UK in these agencies, there is general concern that their profile in Whitehall and Westminster is not as high as it should be. It is obviously much lower than that of foreign affairs and international crises.
The United Nations Association, the voluntary body that supports the UN in the UK, works hard to raise the profile of UN bodies. These agencies have a vital role for key aspects of all countries of the world, both developed and developing; for example on health warnings, food safety, communications, aviation, weather forecasting and intellectual property. Sometimes Ministers attend the meetings of the UN agencies but fewer do from the UK than from other countries. I recall my noble kinsman Lady Bottomley attending the WHO meetings when she was Minister of Health, while Mr Meacher at Defra was an assiduous attendee of meetings at UNEP, the United Nations Environment Programme.
My first point is that the agencies need reviewing from time to time, in the light of urgent issues, but while the UN and national Governments always look at efficiency in these reviews, they seem reluctant to look at the fundamentals of their operation and the budgets allocated in relation to the urgency of the problem. I am pleased that the UK contribution to UN agencies is not dependent on its policies or particular decisions; nor is it subject to lobbying by commercial or political organisations, as US contributions are. My noble friend Lord Rea will talk about the WHO; yesterday I learnt that there are threats to the WHO from the United States about its policy that sugar levels should be dropped to the equivalent of one glass of Coca-Cola per day.
Water resources are currently critical but the United Nations programmes—for example in UNESCO and the World Meteorological Organisation, which is also responsible for hydrology—have very small budgets. In the case of the World Meteorological Organisation, it is less than 5% of the total while 95% is for meteorology. Although availability of water is one of the key objectives of DfID, this is a surprising situation. Sometimes new agencies are needed, as happened in the 1980s when the United Nations Environment Programme was initiated. UNEP did a good job on the ozone hole but it is not being directed in an effective way by member countries to co-ordinate and publicise the national, regional and global problems associated with atmospheric and marine pollution. That is of course very topical at the moment, particularly in Asia. Marine pollution is in fact to some extent a responsibility of the International Maritime Organisation, based across the river here in London, but it plays a limited role. Is Defra considering stronger co-ordination by UNEP in this general area of pollution, since UNEP is probably the UN body with the biggest responsibility?
My next point is that the United Nations bodies are generally open in their communications. They are not secret; all their minutes are published before and afterwards and the communications between the members are open. However, it is very important that the recent exposure of certain Governments spying on the confidential communications of diplomats from other Governments and non-governmental organisations does not lead to a loss of trust between countries and agencies working in the UN.
I tabled a Parliamentary Question and was told, more or less, “We’re not going to answer that question because we do not talk about those things”. The fact is that they exist and this is a real issue. I hope that the Minister, in replying, will provide something more than I got in response to my PQ.
My next point is that the Government review agencies, but in doing that they should also consider the benefits to the UK: for example, in dealing with flooding, where other countries have developed useful approaches and, in some cases, have better research facilities. The Food and Agriculture Organisation studies of GMOs in agriculture are surely important. The recent reviews by United Nations bodies of the UK’s health and housing are very useful, although they were very controversial and the Government were not very happy with them. That is the kind of UN activity that is really impacting on us in the UK, which we therefore need to consider in reviewing those agencies.
One way to ensure improved benefits to the UK from our membership of the UN is to involve UK stakeholders, in which I include parliamentarians, to a greater extent in UN agencies; for example, through regular pre-meetings, report-back meetings and wider participation of UK delegations as observers. I am president of an NGO, ACOPS. We have observer status at the International Maritime Organisation and the London dumping convention, and we can provide some expertise. For example, there are now regular consultations between the Met Office and certain parts of the private sector, which are very welcome.
However, generally, the United States is stronger in that respect and positively ruthless in using its delegations to promote US technology. They have told me that they will vote or not vote because they were told by their industry to vote for this or not vote for that. That is highly directed to promoting US technology and US business. The Chancellor was calling yesterday in his speech for the UK to have higher exports. Perhaps he might talk to the Foreign Office UN department to see whether it could be of some help in that direction. At the executive level, there are now excellent relations between some UN agencies and NGOs, of which GLOBE is an example on issues connected with climate and the environment.
My third main point is that the United Nations as a whole has broad targets. I believe that the millennium development goals were a tremendous step forward for the whole UN movement, understood at the level of the sustainability commission in New York and the General Assembly. That brought together lots of activities. There have also been the broad goals of reducing carbon emissions. I believe that there could be more specific targets for agencies or groups of agencies—for example, I just mentioned pollution. Those targets could be openly discussed by parliaments as stakeholders and progress or regress towards achieving them should be openly reviewed.
Of course, targets require data, which remains a great weakness of the UN system and, indeed, the international system. UN bodies could urge countries to be more systematic in gathering data and more open with them. For example, sometimes even the most basic data are not available in some countries, such as whether there is or is not a sewage plant in the capital city of an African country. In the case in point, the answer was no. A study in another African country showed that several organisations are collecting very useful environmental and health data which are not well co-ordinated. The study, in collaboration with those organisations, recommended the use of data centres. The whole world would benefit from that. DfID does not seem to understand or support that view very strongly.
In closing, which goals and targets should be emphasised and publicised? They should relate to recent crises. One of the greatest crises at the moment is the Syrian and, earlier, Iraq conflict. Surely we should be thinking more about technical methods of identifying combatants and their weapons, as happened last year with the question of gases. We must consider how we can provide improved humanitarian aid. Those are technical and organisational questions and we should have targets for them.
The Bangladesh factory collapse last year led to the deaths of many hundreds of people. There should now be improved targets for the International Labour Organisation on factory health and safety. After the floods in Europe and Pakistan and the droughts in California, the water programmes need more technical focus and bigger budgets, as I have already mentioned. We could also have targets to help co-ordinate international and regional programmes for pollution episodes.
We could have improved warnings and assistance before, during and after natural and artificial disasters. The United Nations organisation for disasters, the ISDR, co-ordinates but with more funds it could have more ambitious targets. For example, should we not have a target that, say, 30 years from now we should finally be able to detect earthquakes? There is a good deal of research going on—big objectives are appropriate. A meeting in Parliament this morning showed the need for FAO studies of future food and fish stocks, and how they are in danger from exploitation, pollution and climate change, to be more widely understood by world leaders. We need some clarity in this area.
I look forward to the Minister’s response to the issues raised. I declare my interest as a former permanent representative for the UK at the World Meteorological Organisation, when I was head of the Met Office; president of an NGO; and vice-chair of GLOBE, working with UN agencies.
Lord Rea (Lab)
My Lords, this short debate covers a very wide-ranging subject but it is regrettable that there are only three speakers. Perhaps this is something to do with it being on Thursday afternoon, but it is surprising. There are many people who are far more expert on the United Nations and the World Health Organisation—about which I shall speak—than I am. However, the noble Baroness, Lady Warsi, may be relieved that she has to answer only three speakers when the United Nations covers such a huge range of subjects.
In my short contribution, I will concentrate on the World Health Organisation, which is just one of some 20 United Nations agencies. Its membership covers every single country in the United Nations—194 at my last count—and it has representatives in 140 of them, collaborating with national health ministries. In some developing countries, a WHO team helps with developing the governance and administration of health services in various ways. Although the WHO has been criticised as cumbersome—even sclerotic—it has had some very able directors-general who have pulled it into better shape. The WHO has some significant successes to its credit, the best known being the elimination of smallpox and the near-elimination of poliomyelitis. It has had many more quiet successes, many of which are still going on, concerned largely with monitoring disease levels, particularly epidemic outbreaks. Until recently WHO has concentrated on infectious, rather than non-communicable, diseases but there has been increasing interest in looking at the origins and handling of the latter since Gro Brundtland’s reign as director-general. This is appropriate, since they now make up half the diseases affecting the developing world as well as nearly all the serious diseases affecting the developed world.
In the area of infectious diseases, the WHO collaborates with a number of other agencies. Some of these are its own offspring but receive separate funding and have devolved or different administration. I am thinking of UNAIDS or the Global Fund to Fight AIDS, Tuberculosis and Malaria. So in its governance it retains a considerable degree of democracy and accountability through its committee structure at different levels, with representation from member states meeting regularly. My noble friend mentioned the regular attendance of at least two of our Ministers.
Some of the most useful work of the World Health Organisation is done by its many expert committees, some of which are standing committees meeting regularly with permanent staff on subjects such as essential medicines and biological standards. There is one group that regularly reviews the guidelines the WHO issues fairly regularly on a variety of topics. My noble friend mentioned perhaps the most recent, which was on sugar intake and has ruffled some feathers in the food industry. Other expert committees are ad hoc on topical subjects and may meet only a few times, but the members of these committees are all internationally recognised authorities in their chosen field. They are selected from panels of experts held by the WHO. A sizeable proportion of these experts is from the United Kingdom. Will the Minister describe the process by which they are selected? When they are selected, do they make a declaration of interest before they are appointed?
Reports from these committees are widely respected, although not always welcomed by Governments, which is as it should be. Progress in public health often involves controversial measures not welcomed by vested interests making profits from the activity or product concerned which is deleterious to health.
I shall make a very few remarks on drugs. The UN Commission on Narcotic Drugs has rather laid down the approach internationally to the control of drugs. The emphasis has largely been on curbing supply with a prohibitionist stance. The director of the UN Office on Drugs and Crime has said that it is time for the UN’s stance on drugs to change from having a largely prohibitionist role to one more focused on the health impact of drugs and on reducing the harm they cause. Will the Minister say whether the Government have moved even a little in that direction?
Lord Bach (Lab)
My Lords, we should congratulate my noble friend Lord Hunt of Chesterton not only on securing this short debate but on once again, and single-handedly, raising the important issues surrounding United Nations agencies. I agree with the comment by my noble friend Lord Rea that it is a pity that there are not more speakers in this debate.
The truth is that this crucial part of UN activity is not discussed enough in either House of Parliament, and when it is discussed in your Lordships’ House it seems always to be at the instigation of my noble friend. Thanks are due to the House of Lords Library, which has prepared a briefing pack for today’s debate. In that we can read the Hansard for the debate on 22 November 2011, almost precisely 28 months ago, and be reminded of Parliamentary Questions that have been asked in both Houses and answered by various Ministers. These are of course helpful but I will ask some questions about how Her Majesty’s Government organise themselves in relation to UN agencies, about where costs fall between the FCO and other departments and whether there is enough ministerial oversight and parliamentary engagement with this issue.
Of course, in general terms, like the Government, the Opposition support the UK’s membership of, involvement in and activity in these agencies. As befits a country which played a leading part in the setting up of the United Nations, we are right to engage in the multilateral activity that is the basis for the running of and results from the agencies. Whether we serve on the executive of a given agency or attend its congress, there is obviously a need to be able to act as a team player and, at the same time, to look after British interests. No one has ever said or suggested that this is easy or necessarily comfortable at all times, but we strongly believe that the need for multilateralism in foreign affairs has never been greater; a statement of the obvious, perhaps, but worth putting on the record.
My understanding is that the FCO has a small section that oversees our membership of these agencies, but that individual departments with their own technical skills are involved in the UK involvement with the relevant agencies. I am delighted that the Minister is in fact the Minister in the FCO for the United Nations and thus for these agencies. I note that the questions that were asked in the other place over the course of the past year have been answered by various Ministers, which is no doubt the common way in which it is done.
My questions are not meant to be unduly critical, but are really for information and for Parliament. Does the Minister believe that she has satisfactory oversight of how any individual agency is functioning? Or is that responsibility passed on to, perhaps, another Minister in another government department that deals with day-to-day activity with that agency? Generally, is there sufficient ministerial oversight in any event? Or is there a danger that Ministers, whether in the FCO or elsewhere in Whitehall, with their heavy workloads, have really been forced to make this rather less of a priority than it should be?
What is the actual cost to the Government overall of our membership and participation in these UN agencies? How much of that total cost does the FCO contribute, and how much do other departments contribute? That leads on to the question of parliamentary engagement—reporting back to Parliament after meetings —which is one of those which my noble friend, in raising this issue today, is particularly concerned about: it is in the Question. Does the Minister believe that there is room for improvement in reporting back to Parliament? If there is, how could it be improved?
In the debate some two and a quarter years ago, to which I referred, mention was made of a possible ad hoc committee on international organisations. The Minister who responded on that occasion, the noble Lord, Lord Wallace of Saltaire, talked about an ad hoc committee,
“which might look at the how Britain relates to international agencies and which ones provide us with the best value for money”.—[Official Report, 22/11/11; col. 1039.]
Clearly, the 2011 multilateral aid review, the MAR, and its update in December last year are very good starting points for parliamentarians, as they are for the ordinary citizen outside. However, it is perhaps right to now look at whether Parliament should play a slightly more important role in looking at what these individual agencies actually achieve for this country and, of course, for the world.
I repeat that none of the questions I pose today is meant to be unduly critical. I do not think there is very much between the Government’s attitude to this issue and our attitude to it. However, I am sure the noble Baroness will agree that if improvements can be made, they should be. If the Minister would like some time to consider her answer to the questions I have put today, I am more than happy to receive a letter in due course. Meanwhile, I look forward to what she has to say in her reply to my noble friend’s speech.
The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi) (Con)
My Lords, first, I am grateful to the noble Lord, Lord Hunt, for securing this afternoon’s debate. All too often, issues in relation to the United Nations—certainly in this House but in the other place as well—focus on the headline-grabbing situations, where there is a crisis around the world and we are talking about Security Council resolutions. As the Minister for the UN, I have found that one of the areas of the job that is least publicised is the day-to-day meetings that we have with UN officials, whether in New York or when they are visiting here, about UN reform. As the noble Lord will be aware from his own experience, it is like an oil tanker in terms of changing some of what are seen as perceived norms, certainly within the UN system, which appear even more so when you look at the specialised agencies within the UN.
It is therefore important, certainly for me as Minister with responsibility for the UN, to make sure that we do not lose sight of how these particular specialised agencies benefit the United Kingdom and, indeed, the wider international world. They are vital, as the noble Lord said, for the smooth running of everyday things that our globalised society and economy depends on—everything from shipping to telecommunications. As the noble Lord mentioned, these agencies also play an important role in the greatest challenges facing us all, such as climate change, in providing aid to the victims of natural disasters and in the prevention of global pandemics. They therefore have an impact on almost all government departments across Whitehall.
The noble Lord, Lord Bach, asked about the organisation of UN agency responsibilities. The FCO has oversight of budgetary policy and of management reform for these agencies, but we co-ordinate UK positions with the lead policy departments depending on which specialist agency we are dealing with. We take the lead in co-ordinating the various government departments and agencies. Over the past 18 months, for example, we have hosted a quarterly UN reform group meeting which brings together all those officials across Whitehall from the different departments who represent the UK in the UN and we run workshops, seminars and more formal training to make sure that we all get the best out of what can sometimes seem like quite an opaque and difficult system.
We have also set up a dedicated web platform to provide officials with a virtual space where they can share knowledge, expertise and best practice in dealing with the UN’s specialised agencies. We continue to explore other, more innovative ways to ensure that the UK is even more co-ordinated, coherent and consistent in its dealings. Do we have enough oversight? Do I, as a Minister, have enough? The noble Lord was right to ask that question. The important decisions on the agencies are referred to Ministers. An example of that is that Ministers would be involved when dealing with the election of the agencies’ executive heads.
Another question that was raised was about where the costs fall in all this. The FCO pays the costs of the assessed contributions to the core UN budgets. Other government departments fund assessed contributions of specialised agencies according to their respective areas of activity.
The noble Lord, Lord Hunt, asked about the Government’s plans to report to Parliament on the outcome of meetings. As I said to the noble Lord in reply to a Question in January last year, it is for the lead department in each case to report on such meetings. The issues handled by the agencies are usually quite highly technical in nature, so it is the responsibility of each department that engages with them and that sits with the experts across Whitehall to report on them. I know that many departments already publish information about this work in their annual departmental reports or in thematic reports on specific policy areas.
Alongside government reports, UN bodies also publish a wealth of information about their work online, and I can reassure the noble Lord, Lord Hunt, that UK delegations enjoy positive relationships with agencies which are willing to share their knowledge and listen to our views. However, UN agencies need to get better at talking to each other, and the challenge of co-ordinating system-wide action will become even more important, for example, when the UN grapples with setting the sustainable development goals as a follow-up to the MDGs.
I hope I can deal with a couple of the areas that were raised today on the key objectives for the specialised agencies. The International Telecommunication Union and the Department for Culture, Media and Sport will pursue the goal of bringing the whole world online and enabling everyone to access the benefits of information and communications technologies. The noble Lord, Lord Hunt, made an excellent point about the running of collaboration between government, the private sector and civil society to reap the full benefits from UN agencies. The DCMS has created a partnership with UK businesses, including BT and Vodafone, academics and NGOs for that purpose. The ITU is an outstanding example of where open decision-making and bringing together 700 people from all sectors makes for better decision-making.
The Met Office was also referred to in the debate. It works with the World Meteorological Organisation to ensure that there is appropriate international infrastructure to support our national capability. It will also use international collaborations, commitments and relationships through the WMO to enable the delivery of the national capability in the most cost-effective way.
The noble Lord, Lord Hunt, also talked about DfID’s engagement. As the FCO Minister with responsibility for, among other areas, Bangladesh, I am especially pleased that DfID is contributing £4.8 million to the ILO to support improving fire safety and structural integrity, especially after the Rana Plaza disaster in Dhaka, and I hope that that kind of work will prevent the kind of tragedy we saw with the collapse of Rana Plaza and other buildings. The Government are also working with the ILO to make it more efficient and effective in offering country-specific solutions to employment challenges. I know it has worked on, for example, cotton picking in some central Asian countries.
This brings me to the FCO’s key objective for the UN agencies, and I feel it is right to push for a more joined-up UN system that delivers better outcomes for its member states and better value for money for the taxpayer when many Governments, including our own, are asking for more to be done with less funds. The UK and our international partners have strongly supported the efforts of Secretary-General Ban Ki-moon to strengthen the UN. Mr Ban has made some progress—for example, the new Department for Field Support, the creation of UN Women and the global field support strategy—but still more needs to be done. I spend quite a lot of time working with officials to try to work out what are our key priorities where we could support the Secretary-General and where we feel some progress could be made rather than just grandstanding statements.
On containing UN budgets, improving budgets by linking funding to results, prioritising mandates, effectively improving performance management and the better use of IT to streamline some of the back-office work which at the moment appears to be done in so many different ways in different organisations, I have opened up a dialogue with the Secretary-General and the executive heads of all UN bodies to seek their co-operation on these UK priorities, and we are currently considering a number of actions to take forward the UK’s agenda for change. I have formally written to the Secretary-General and the heads of the UN agencies. My officials will continue to work closely with the different government departments and agencies that represent the UK at the specialised agencies to ensure that they are giving the same clear and consistent measures that we are giving in terms of UN reform in general.
The noble Lord, Lord Rea, asked specifically about the World Health Organisation. We have a good relationship with WHO and work closely with the organisation on a broad range of public health and development issues. The Department for International Development’s multilateral aid review assessed WHO as being critical to the delivery of UK international objectives; for example, around polio and maternal health. The UK is the second largest contributing member state to WHO after the US, with an investment of about £220 million over the two years 2012 and 2013. The Department of Health leads on that relationship, and the UK will become an executive member of the WHO board from May of this year for three years. That will enable us to work even more closely.
The UK does not provide significant funding for HIV/AIDS. However, we contribute to the Global Fund to Fight AIDS, Tuberculosis and Malaria, which covers some of the areas that the noble Lord spoke about. The Department for International Development announced last September that the UK would contribute £1 billion to the Global Fund for 2014, 2015 and 2016. The UK also contributes about £50 million a year of core funding to the UNAIDS programme. In addition, the UK sits on the executive body of the global fund and UNAIDS.
The noble Lord asked how our experts to WHO are selected. I do not have that information, but I will certainly write to the noble Lord to give it to him. The noble Lord, Lord Hunt, will probably be disappointed by my response to his question on spying in the specialist agencies. He and other noble Lords are probably aware about long-standing HMG policy on such matters. Rather than provide him with a stock response, I am just going to say that I am unable to provide him with any more information than I have already provided in the PQ.
It would have been great to see more noble Lords taking part in this debate. This can sometimes be seen, certainly in my role, as a dry aspect of what usually happens at the UN. It is not the General Assembly; it is not the Security Council; it is not responding at times of urgency; but it puts in place the bricks and mortar for us to make a better world. It was therefore important that this debate should take place today and I thank the noble Lord for calling it.
The Government will continue to work closely with our international partners and civil society to ensure that the UN specialised agencies contribute to our work on key issues like development, prosperity and management reforms. Once again, I am grateful to the noble Lord for providing an opportunity to discuss these important issues.
Economy: Creative Sector
(10 years, 8 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Baroness Andrews
To ask Her Majesty’s Government what proposals they have to promote the role of the creative skills sector in the United Kingdom economy.
Baroness Andrews (Lab)
My Lords, I am delighted that so many noble Lords have joined me in this debate today. I am very grateful, especially since it is a Thursday afternoon and it is late—so thank you so much.
The skills policy has been described by one of the leading policymakers as “impenetrable” to the outside. Quite so. Given the complexity around the creative skills sector, I thought it wise this afternoon for me to focus on the creative and cultural sector and leave other experts to talk about digital and media. I shall also focus on just a few challenges in the short time that we have.
My long-term concern is about our entrenched failure as a country to commit to high status vocational training and skills or to understand the importance of creativity in the school curriculum, converged in the exam question that I was set recently by the Government of Wales. This was to make a report to the Welsh Government that would establish how the arts, culture and heritage, working collaboratively, could make a greater impact on reducing poverty and raising ambitions in Wales. It was not so much about new resources as about new ways of thinking. In fact, Wales is well ahead of the game in asking this question and in putting culture at the heart of the search for economic and social solutions to poverty, inequality and unemployment.
It is a hugely complex question, and there are no simplistic answers—but in the report that we launched last week I put forward some basic propositions as to how young people could better access the skills and jobs driven by the knowledge economy and the experience economy. That was a new term to me; by “experience economy” is meant the demand for cultural and performance goods. Among the recommendations that I gave some priority to was the need for a richer arts and cultural provision inside and outside school, joined to community provision as well as better training of teachers, so that they understand how engagement with the arts lifts and accelerates learning. We also need shared policy-making between culture, welfare and employment agencies and an all-Wales strategy for volunteering and apprenticeships across the creative and cultural sector.
The report is packed with examples of the different experiences of young people across Wales—whether they are working backstage or front of house for the National Theatre or an opera company—and how they are finding their own vision and voice as artists and musicians, taking over the museums and working with archives while developing the skills concomitant with that. In that context, I am very happy to pay tribute to the work of Creative and Cultural Skills in Wales, which has placed about 140 creative apprenticeships so far, helped by the very successful young recruits programme. It is more successful, I should say, than the Work Programme in England. The success of that programme shows that there is a buoyant demand for people who can run visitor operations, arts management, technical theatre and much more.
That confirms what the trend of the UK statistics shows—that the creative sector is growing at double the rate of other sectors, and there are persistent skill gaps. Indeed, according to CCS UK, some skill gaps are actually intensifying, not least due to the speed of digital change but also in areas such as management, marketing, sales, technical and craft-specific skills. So the demand for specialist and general skills can only grow. Equally importantly, the skills that are needed go far beyond the creative economy itself; they actually spread into and serve the entire economy because essentially they are about talent and capabilities. What is exciting about this is that, especially in areas of high youth unemployment, there is a greater opportunity in some ways for the non-graduate and the accomplished technician than there is for the graduate.
Getting skills training right across the sector is, as every noble Lord here knows, very challenging. The sector almost defies definition because it is so dynamic and diverse. We have about 30 idiosyncratic industries covering everything from fashion to special effects, and it is bound to be difficult to articulate common or even coherent structures, content, accreditation and qualifications. The Minister and I met a group of music industry apprentices the other day. I was struck by the fact that each of them had negotiated their own FE and employer training. In fact, many of them were engaged in business management law and marketing rather than music-making. The fundamental and urgent challenge now seems to be that although we know that the creative industries generate billions of pounds in added value and exports, the infrastructure is lagging light years behind our ability to take advantage of it. Putting the right levers in place is more difficult because neither the SMEs, which dominate the private sector, nor the cash-strapped public sector can plan strategically or to scale for skills training.
In addition, we have a labyrinthine architecture: two skills sector councils and each country in the UK doing things slightly differently. Having to negotiate and navigate that is proving incredibly complicated for everybody. There is good news. A lot is happening. Our Creative and Cultural Skills Council has placed 3,500 apprentices since 2009. It continues to articulate clearer vocational routes. It has created the National Academy for Creative and Cultural Skills as its delivery method and its programme, Creative Choices, has reached more than 1 million people. In the past year or two we have had the creative skill set, identifying 17 recommendations to boost skills. Recently, we have had the creation of the Creative Industries Council.
My first question for the Minister is: can he update us on the impact of that range of developments? What are the Government doing to support and incentivise those efforts? So far, so good, but it is not good enough, because throughout the system there is clearly a need for greater collaboration and dialogue, particularly in relation to education and employment. One sector leader put it to me that the cultural sector has always been perceived as marginal to education and skills policy-makers because there have not been any traditional non-graduate ways into work, so jobcentres and careers advisers are mystified by the sector. That is absolutely what I have found in Wales.
The priority is to demystify the sector and enable greater collaboration, to close the gaps which stop information about careers in the creative sector reaching teachers, parents, young people, careers advice programmes and employment strategies. Of course, we have to start with schools. An arts-rich curriculum can give young people the real skills that they need to get on in any situation: resourcefulness, thoughtfulness, fast and flexible thinking. Teachers as professionals need to know more about how engagement with the arts and culture accelerates learning, sustains motivation and opens up new choices and careers. We need them to be able to access that information because they are the most powerful advocates and agents to help young people into those career choices. Would that every teacher could visit Singapore to see how an arts-rich curriculum drives an economy.
I ask the Minister to report progress on the Henley report and to update us on discussions about the arts and the EBacc. Secondly, the dismantling of the Careers Service has been catastrophic. Careers advisers do not themselves always know how to go about getting never mind giving advice, because many of those careers are portfolio-based. How are the Government addressing that problem? How is the Work Programme being advised about the possibilities?
Thirdly, the Government need to address what I see as the failure of both leadership and policy integration. Neither the DCMS nor the UK Arts Council sees skills as its direct responsibility. The cultural sector has not historically engaged with FE. There needs to be a much better fit between employers, HE and FE providers, BIS and DCMS. They should all have an equal role in that because, frankly, there is no point in the Secretary of State for Culture banging on about how important culture is to the economy if DCMS takes no responsibility for the skills to sustain that. This is more urgent because the new Euro programmes make it imperative that the cultural sector engages with the need to drive up work opportunities for young people. Perhaps the Minister could take that message back to DCMS and tell us more about what is planned to make sure that we take advantage of the new Euro framework programmes.
Fourthly, the SMEs need more support to navigate complex funding systems without being overwhelmed. I am delighted to say that CCS again is showing real leadership and is looking at how best to bring together schools and careers advice with industry engagement, training and work experience. It is planning a place-based series of innovative and exemplary skills hubs set up around the CCS base in Thurrock, which are intended to form networks, pool resources and offer greater sustainability for small businesses. It is an excellent local model for local delivery, which is what we need to see to make clear how everything joins up in principle and practice. I hope that the Minister will lead a delegation to see how it is working.
Finally, the growth review included digital and creative industries as one of its six priority growth areas with justified and prioritised actions to support future growth. Surely that should include a more coherent and vigorous approach to skills training across the sector.
Baroness Bonham-Carter of Yarnbury (LD)
My Lords, I thank the noble Baroness, Lady Andrews, for this debate. I think that we all agree that the UK’s creative industries are one of our greatest assets. An IPPR report published last month states:
“The creative industries survive or fall on innovation and the discovery of new talent, so skills are critical”.
As the noble Baroness said, in this area we do not face a jobs problem but a skills problem. However, work is being done.
As the noble Baroness also mentioned, BIS and DCMS have established the Creative Industries Council, on which I sit. It is a joint forum attended by practitioners and government. It is an attempt to corral the very disparate members of the creative industries sector and focuses on areas where barriers to growth face the sector. We are hard at work on a soon-to-be-launched creative industries strategy, at the heart of which is establishing an education and careers system that inspires and supports the next creative generation.
In 2011, Ian Livingstone and Alex Hope published the Next Gen. report, which argued that our education system was not keeping up with the times, in particular the way in which ICT was being taught. The coalition Government listened and a programme of study for ICT including computer programming and a GCSE in computer science were introduced this year. Computer science is now part of the EBacc’s science strand.
Before the last election the Lib Dems produced The Power of Creativity in which we pledged to enable businesses to offer more apprenticeships. We have achieved that. A record number in the creative industries are now being government funded. In the Budget yesterday, funding was provided for more than 100,000 additional incentive payments under the apprenticeship grants for employers scheme and we hope that large numbers of these will be creative. According to Arts Council England, 81% of those surveyed who had taken up an apprenticeship are now employed in the creative industries. It is estimated that the 2011-12 apprenticeships will deliver net gains of £2.4 million to the UK economy.
I am sorry if I am speaking rather fast but I want to get to what I really want to talk about; namely, that it is clearly money well spent but that there is a major problem in the area of diversity. Last week Lenny Henry gave the BAFTA TV lecture. What he had to say was horrifying. He told us:
“Between 2006 and 2012, the number of BAME’s working in the UK TV industry has declined by 30.9 per cent. Creative Skillset conducted a census that shows quite clearly that Black, Asian and minority ethnic representation in the creative industries in 2012 was just 5.4 per cent—its lowest point since they started taking the census”.
As the noble Baroness, Lady McIntosh, will know as well as me, when it comes to the performing arts we should not be worried about just the lack of “front of camera”, it is the producers, the directors, commissioners and board members who set the scene. How is this for a fact? Of the key PSB bodies—Ofcom, BBC Trust, ITV and Channel 4—where the Government have some influence, 42 board seats are available, of which just one, a BBC trustee, is not white. All 15 seats on the BSkyB board are filled by white appointees. ACE and the BFI have just one non-white board member each.
The DCMS Minister Ed Vaizey has recognised the problem and set up a group, of which I am a member, alongside the noble Baronesses, Lady King and Lady Benjamin, and representatives from the industry, which meets monthly. We are determined not to be just a talking shop. Action is required and one of our priorities is data. To make people accountable, you need detailed and timely data.
What a waste. It is essential that the creative industries reflect the 21st-century UK: our vibrant, creative and multicultural country that attracts so many people from overseas because it is just that. The most important thing, as this debate highlights, is to ensure that we continue to create the creators, and in doing so we must stop excluding so much potential.
Baroness Young of Hornsey (CB)
My Lords, I am pleased to have the opportunity to speak in this debate secured by the noble Baroness, Lady Andrews, and to follow the noble Baroness, Lady Bonham-Carter, whose remarks I endorse—apart from the fact that actually we have masses of data about this issue, which has been campaigned on for 50 years. It is time for real action, again.
I do not wish to rehearse the facts of the contribution of the creative industries to the UK economy, although I will point out that if the fashion industry were a country, it would be seventh on the table of global GDP and about the same size as the economy of Canada. That is how big it is, so I am going to focus on the fashion industry again. I hope that noble Lords will forgive me for taking this opportunity to shift the focus from some of the more established notions of skills training and gaps on to creative skills and sustainability. This is timely as we approach the first anniversary of the collapse of the Rana Plaza garment factory in Bangladesh on 24 April. It is perhaps also worth noting that we are in the final year of the UN’s Decade of Education for Sustainable Development.
Since the exposure of the realities of not only building collapses but issues such as landfill and other forms of environmental degradation, more and more people are calling for a fashion revolution. Yet my sense is that the training and education of those who design, produce and sell garments has not really kept up with that kind of movement. The more we think about the challenges in producing fashion that retains its sense of fun, enables us to present our sense of identity, et cetera, the more important it becomes to make values and ethics explicit components of the training and education of creatives and makers in the fashion industry. Just as we train and teach our students and apprentices how to develop their craft and skills to produce high-quality creative content, so we should be teaching innovative approaches to internal and external threats, problems and opportunities, such as the environment and sustainability.
The Centre for Sustainable Fashion is, along with MADE-BY, among the leaders of the drive to ensure that students develop their creative skills and innovative talents in conjunction with an understanding of the need to develop different ways of working which emphasise that good fashion should also be sustainable. The centre’s staff provide the secretariat to the All-Party Parliamentary Group on Ethics and Sustainability in Fashion, which I chair—my friend, the noble Baroness, Lady McIntosh, is also a member of that group.
As the world faces environmental and social challenges, there is a greater need for innovation and creativity based not on single disciplines but on inter- and multidisciplinarity. Future creative graduates are going to need the skills to address sustainability and ethical challenges, which means that they must have the opportunity to engage with these issues throughout their education. I have used fashion as an example but the arts, cultural and creative sector as a whole has to develop much more sustainable practices and much more rapidly.
Currently the creative industries are not leading the charge on sustainability, which I feel is a missed trick, especially given the ability of the sector to engage with such a wide range of people in a fun and interesting way. Given the ability of these sectors to generate debate, joy, contemplation, reflection and so on, and given their highly developed creativity, I hope that the creative skills training bodies will make a decisive push in this direction, encouraged by leadership from the Government. Creative practitioners have the potential to make a real difference in the way that society as a whole faces these issues.
The Lord Bishop of St Albans
My Lords, I am glad to join in this debate and I thank the noble Baroness, Lady Andrews, for bringing this matter to our attention. I want to focus on a much more limited area this afternoon, if I may, by thinking a little about education and about the role that voluntary organisations play in this area. I shall use some illustrations from schools, colleges and universities and say something about the small role that the church plays in trying to do some of this.
On Tuesday morning, I made one of my regular visits to a school. I went to Sutton Church of England school near Biggleswade. It is a tiny rural school led by an excellent head teacher, Sarah Stevens, and it has been classed by Ofsted as outstanding. As I was taken around, I found myself in a corridor where a girl who was receiving a violin lesson gave me an impromptu concert. She was delighted and we all clapped. I noted that it was taking place in a corridor because there was nowhere else for it to happen but creativity was a key part of that village school. Indeed, many children there are learning musical instruments. Yet when I go into schools, I hear again and again about the pressure on the curriculum which is squeezing out some of the things that teachers would like to do creatively, which is surely one of the most important things.
I would guess that your Lordships, like me, can think back to their own schooling and to one of those inspirational teachers who not only spotted creativity but learnt how to draw it out. They helped the child believe that they could do something creative and offer it to others. Well, we have lots of very good schools which are working on that. I think, for example, in my own patch of Wootton Upper School and Arts College and Tring Park School for the Performing Arts. There are also excellent performing arts departments in the two local universities, which I know very well, of Hertfordshire and Bedfordshire. However, we need to find ways to recognise and celebrate what they are doing. They are providing the actors, producers and everybody else for the future of our theatres.
Britain also has a wonderful tradition of musical performance and singing. We play a little part in that with our heritage of music in our cathedrals, collegiate institutions and some parish churches. It is there that many of these young people discover not only that they have a voice but how to train it. This has nothing to do with schools or with government. Many professional singers started off in precisely these places and are now singing either in the classical repertoire or in popular music. I am thinking of Charlotte Church, Aled Jones and Gareth Gates, all of whom have made a real contribution to the economy. The recent “Sing Up” initiative by the Government has helped to reverse the decline of singing among children and cathedrals have been active in it. In my own cathedral, we have choristers taking part in the termly chorister outreach concerts organised by the Hertfordshire Music Service. Since 2008, we have welcomed 48 schools and nearly 4,000 children have been learning together and performing. This is at the point when they begin to grasp the idea of a creative way of living.
With relatively little extra financial help, much more could be achieved. For example it was in one of my parishes, South Oxhey, which is in a relatively poor area near Watford, that the local parish priest, Canon Pam Wise, persuaded a certain Gareth Malone to form a choir. That turned into a TV series and has raised self-esteem hugely in that area. I confess that it may not have made much of an economic contribution but it has certainly made a huge contribution to self-esteem and social capital. These are vital things. Our cathedrals are also particularly active in the commissioning of music and art, such as stained-glass windows and sculpture. We have just commissioned 12 new statues for our nave screen which will take craftsmen two years to complete. Cathedrals are one of the main employers of apprentice stonemasons; a recent project between the University of Gloucestershire and eight cathedrals has been on just that.
I believe that as well as having large national government initiatives and encouraging business, we need to think hard about supporting schools in developing creativity and about the voluntary organisations which want to be part of this, if we are to capitalise upon our long history and develop the creative aspect of our national life. It is from here that many talented and gifted young people come. They have the potential to make a significant contribution not only to society but to the economy.
Baroness McIntosh of Hudnall (Lab)
My Lords, along with everyone else, I am grateful to my noble friend for initiating this debate. I was struck by the contribution made by the noble Baroness, Lady Bonham-Carter, on the subject of diversity. It slightly made me consider whether to tear up what I was going to say and talk more about that subject, but perhaps it would be unwise given that we do not have much time.
I want to concentrate on the contribution made by arts organisations to the development of skills, both within the education system and outside it—that is, outside the formal education system—and not only in the creative skills sector and the creative economy but, as others have already touched on, in other sectors of the economy. I shall do that by shamelessly bigging up an organisation with which I am connected and of which I am extremely proud: the Roundhouse. In a way it is a microcosm of everything that the noble Baroness, Lady Andrews, and others have been talking about. It is in north London and is a famously beautiful building within which wonderful professional arts events take place. There is music, theatre, circus and all sorts of other stuff.
Underneath the main performance space at the Roundhouse is a suite of studios that are fully equipped with video and sound, giving opportunities for people to make music in a variety of ways and to make other things as well. A wide diversity of young people between the ages of 11 and 25 come through the door to use the studios. They undertake practical skills-based courses in all the things I have just mentioned. They can develop their interest in being performers, managers, technicians, DJs or whatever they want to be into a marketable skill under the supervision of experienced tutors who are also, critically, working professionals.
People learn skills in a variety of ways. Some are not particularly well served by or at home with a formal educational setting. They do better with other ways of learning. The Roundhouse provides many opportunities for people who perhaps have not done so well in the formal education system to re-engage with their own enthusiasms, sometimes to re-engage with formal education, and to acquire skills that they can go on to use. It is probably not surprising that many Roundhouse alumni are now themselves established professionals in the creative sector, working at every scale from the BBC down to small start-ups. I should say that every year two young people sit as full members of the Roundhouse Trust, and my goodness are they ever good; they certainly put us on our mettle.
The New Economics Foundation recently published some research on the impact of the open access programmes being run at the Roundhouse, into which young people come from a very wide range of backgrounds. Some of them are privileged while others come from deprived backgrounds, although they are committed to their education. Some have failed or been failed by the education system. These young people come together and work together. The foundation discovered in its research that the act of working together in a group—one that is ethnically and educationally diverse—in itself helps to create and embed a lot of what those young people are learning. I would just say to the noble Baroness, Lady Bonham-Carter, that that is where hope for the future lies. It is in programmes like those being run at the Roundhouse where people are given an opportunity, no matter what their background, to learn about themselves and to learn new skills—and then put them into practice with no sense of social, ethnic or any other kind of barrier. They are simply focused on what it is that they want to do.
I ask the Government to acknowledge that this kind of work is going on all over the place. The Roundhouse is a particularly fine example but other arts organisations are doing it too. They are doing it in the face of considerable difficulty. It would be very nice if the Government would acknowledge, at least, that this is not just nice-to-have stuff: it is really important stuff. It impacts not only on the creative economy but on the whole of our economy. If we could build it into our education system, how much better off we would be.
Lord Ahmad of Wimbledon (Con)
My Lords, before the next noble Lord speaks, please could noble Lords keep to time? This is a very time-limited debate.
Lord Clement-Jones (LD)
My Lords, I want to say a big thank you to the noble Baroness, Lady Andrews, for giving us all the chance to talk about our favourite subject this afternoon. After the recession and 2012, it is even clearer that our future in Britain lies with our imagination, creativity and invention. Enders Analysis’s Creative UK report, published only this week, demonstrates that the UK is experiencing a wave of business creation in the creative economy, higher than any other major OECD country.
So many of the creative industries are interconnected and have a wide economic impact. The CEBR report for the Arts Council last year demonstrated that arts and culture play an important role in supporting commercial creative industries. I am delighted that yesterday the Chancellor confirmed that 20% tax relief would be given to all qualifying theatre productions, rising to 25% for regional theatre. But the CMS Select Committee and, we have heard, the CBI and NESTA have all concluded that the creative and cultural industries face a number of pressing skills shortages, exacerbated by the growing inability to recruit talent from abroad. Skills deficiencies have been exposed by digitisation. Investment in training has historically been difficult to implement largely because of the prevalence of small and micro-businesses.
The creative industries—I absolutely share my noble friend’s concern about this—need also to be much more accessible to young people from diverse backgrounds if they are to attract the talent that they need, as a recent IPPR report, March of the Modern Makers, makes clear.
I have some brief comments, given the time available. In line with the Henley review, we need students going into the creative industries to be multidisciplinary. There has been a danger that EBacc poses a significant threat to the UK’s creative economy. Will the Minister reassure us that the new “floor standards”, which contain five EBacc and three other GCSE subjects, introduced last October, are becoming widely known and will ensure that progress is measured across a range of subjects including the arts? Will this arrest the slide in take-up of arts subjects?
Then we have apprenticeships. Traditionally, this has been a sector that has been very difficult for school leavers without connections to penetrate, and where unpaid internships have favoured the children of the better-off. The sector is improving. I looked at the Apprenticeships website and there is now a large number of apprenticeships, for example, in the creative and digital media. The All-Party Music Group recently heard about the launch of UK Music’s programme to deliver 200 new paid apprenticeship opportunities across the music industry. Under the noble Lord, Lord Hall, the BBC is making great progress. BSkyB, Channel 4, Channel 5, ITV, Sony and many others launched Creative Access in 2012 to provide opportunities to young people from the BME community. The Arts Council, of course, has its major creative employment scheme.
In higher education, we have some fantastic institutions, but the Creative Industries Council’s Skillset Skills Group, in its excellent report in 2012, made the point that too many courses lack industry-relevant skills. Creative Skillset’s Tick accreditation scheme for those courses, which arose from its recommendations, is therefore much to be welcomed. Post graduation, students need to learn business and entrepreneurial skills, and that is why I so strongly welcome initiatives such as those of the British Fashion Council’s NEWGEN programme. There is therefore considerable progress in the sector. There are clearly myriad different schemes at all levels, but we now need to do much more. In particular, we need to make sure that all the pathways to qualifications and careers in the creative sector are clearer than ever, with far better information to those at whom they are aimed.
Baroness Lane-Fox of Soho (CB)
I am honoured to talk in this debate introduced by the noble Baroness, Lady Andrews. She was instrumental in starting me on my journey into digital inclusion and I thank her for that as much as for prompting the discussion this afternoon.
I longed to work in the creative industries when I left university. I imagined myself as a great writer or, even better, as a renowned theatre director. In reality, I became a media and telecoms analyst. On getting my job, my boss told me that the telecoms industry was a fabulously interesting business filled with less interesting people, and that the media industry was a fabulously boring business filled with fabulously interesting people. It was 1994. Then a strange thing started to happen. During the following decade, these two sectors—media and telecoms—became more and more similar. The technology was moving so fast that the separation between content, distribution and customers was blurring. The internet had landed firmly in the middle and the definition of “creative” changed.
By 1998, I was running Lastminute.com, and the coders who lurked late at night on the top floor of the office were becoming the rock stars. They were the people in the team who were inventing the magic for our users. This trend has sped up. Now, the biggest stars on the planet, from will.i.am to David Hockney, are talking about coding and the power of tech. Creative people around the world are eulogising about the importance of learning to code. The geeks truly have inherited the earth.
Amazing and innovative ideas are emerging, such as the Creators Project, sponsored by Intel. It is one of my favourites, as it flushes out new digital artists. The ability to keep at the forefront of digital change will enable the UK to continue to lead the world in its creative sector, but there is much to be done. The introduction of better computer science in the curriculum and the mandatory teaching of coding in primary schools from September are very valuable. The UK has the opportunity to encourage a whole new generation of creators, but it is essential that the resources and training are given to teachers to make this change a success.
One aspect of the web that never fails to inspire me is the creativity that can be unleashed when people who have never before had access to it are shown how to use it. Jorge works with a charity that I chair, Go ON UK in Newcastle. Jorge came to the UK in late 1973 at the age of 16, having been forced to leave Chile following persecution by the dictatorship. He could not go back to Chile and reunite with his relatives and friends until recently, but earlier last year a friend suggested that he should get on the web and learn about digital media and self-publishing so as to write a book about his story. Jorge had never spoken of all those dark years in Chile but last year his book, Dear Chile, was published, and on the back of it he has just secured a publishing deal to write his memoirs.
Jorge had never used the web before this experience and he is not alone. Currently, 11 million adults in the UK cannot do four basic things online. How many more Jorges could there be among those 11 million—how many more people who never before have had the opportunity to become part of our wonderful and enriching creative sector? We need to build digital skills in all parts of our society to make sure that we have as wide as possible a pool of creative talent from which to draw.
Baroness Warwick of Undercliffe (Lab)
My Lords, I, too, congratulate my noble friend Lady Andrews on securing this debate and I am grateful for the opportunity to add my short contribution.
The importance of the creative industries to the UK economy is not in doubt. Despite the recession, the creative industries have been outperforming the rest of UK industry, growing by 15.8% since 2008 against a baseline increase of 5.4% for the UK economy as a whole. Other noble Lords have given figures on employment, added value and exports, and I certainly will not repeat them. Suffice it to say, our creative business is booming.
So I welcome the recent announcements about tax breaks for high-end TV, animation and video games further to promote the skills that the UK has to offer in these fields. Film, television and games production are the kind of innovative, creative industries at which we excel in the UK, and they deserve government support. I am delighted that there is now discussion about extending tax credits even further, to regional theatre, not least because theatre is the training ground for many of the creative skills areas in which we take such pride.
The point I want to make is that of course creative talent does not appear fully formed: it has to be nurtured and stimulated. That is done, above all, in our specialist institutions and universities. Higher education is the primary producer of the talent and skills that feed the creative industries, and it is an important source of research that informs new ideas, practices and business models that apply both within and beyond the creative sectors. As Nigel Carrington, the Vice-Chancellor of the University of the Arts London, has said:
“A creative education is an investment in the future of individuals and nations. Creativity powers innovation, challenges assumptions and acts as a catalyst for change. Our students and alumni are shaping the world”.
The creative industries rely on the supply of graduates coming through our schools and universities, as others have said. Starting with schools, that means that creative subjects—the arts—must be guaranteed a core place in the school curriculum. Or, as has been noted in the other place, we must put the STEAM into STEM subjects.
If we are to continue to produce the talent that underlies the success of these creative industries, we must improve the status of arts education in our schools, not allow it to disappear. Yet the introduction of the English baccalaureate as the gold standard for schools has placed further emphasis on maths, science and geography, at the expense of creative subjects. Take-up of art GCSE fell by 14% between 2010 and 2013, while subjects such as fine art and photography will be credited as just one GCSE rather than two in school league tables. This is short-sighted. Students must be encouraged and supported to develop their creative skills, so that they are equipped to go on to study at our universities and conservatoires. From there, the talent will flow into our creative industries. What assurance can the Minister give us that the strategic importance of those subjects which are not science-based but which nevertheless contribute significantly to the UK’s economic health will not be overlooked?
While we safeguard the status of arts education in schools, we must also ensure that we fund properly our specialist arts schools and conservatoires. I have spoken on this aspect before, but I would like to ask again for an assurance over the continued commitment of premium funding to our conservatoires to help cover the shortfall between the fees they can charge and the actual cost of providing the intensive, individual tuition needed. They nurture the very best practitioners and have the highest percentage of graduates in employment across the UK higher education sector.
The continued success of our creative industries requires that we do everything possible to promote their centrality to UK cultural, social and economic life.
Lord Berkeley of Knighton (CB)
My Lords, this is an important subject and I am very grateful to the noble Baroness, Lady Andrews, for concentrating our minds on it.
These are difficult times and we all have to take our share of the prevailing astringency—I have no illusions about that. However, as we have heard already, we must be cautious not to throw the baby out with the bathwater. The Government have rightly recognised that the creative industries—or, in my particular field of interest, the arts—bring huge dividends to the UK economy, our reputation abroad and our society.
I will turn to the creative skills sector more precisely in a moment. First, though, I must say that there would be no such sector without education. In that respect, I fear that the bathwater is gushing out. Music and drama have been severely cut in many schools, and that is where it all begins for so many. That is where the light is lit, where young string players can get their fingers round the instrument while their muscles are still malleable; where an ability to express pent-up emotions through the worlds of literature, dance, drama and music can lead to more stable and fulfilled personalities; and where confidence in self-expression is kindled.
We know that exposure to the arts—to the communion of singing in a choir, for instance, where you have to listen to your co-choristers—promotes teamwork and social cohesion. However, this must not be the preserve of the privileged. Despite what, for instance, the Yehudi Menuhin School might do for a young Nigel Kennedy, our aim must be to provide cultural nourishment to every child so that they at least have the opportunity to become part of the creative sector. You have only to see a child’s fluency on a computer to realise how quickly—shamefully, to those of my generation—they assimilate and master new technology, but they must have access to it in the first place.
As we move towards university, we still find the arts being downgraded in some areas. A few years ago I was given an honorary doctorate of music at the University of East Anglia. After the ceremony, we talked about future plans, and how the music department might grow and produce musicians of stature, as the creative writing course had produced Ian McEwan and Kazuo Ishiguro among many others. A year or so on, the vice-chancellor had to write to me to tell me that I was a doctor of music at a university that no longer had a music department. Pride turned to great sadness, not for me but for the young people who, so close to Benjamin Britten’s home, would be denied a top-flight musical education. How sad, too, that the paid choir of Llandaff Cathedral has been disbanded.
I am glad to say that my musical industry, at least, is doing something at the sharp, business end of things. As we have heard, UK Music launched a Skills Academy in 2013, which brought together different strands of skills and training to help young people get work in the music industry. Since the launch, UK Music has placed 30 young people into some of the UK’s top music companies. Apprenticeships have ranged from royalty administration to music publishing. The Government should consider extending the successful creative employment programme, possibly by rerouting funding from programmes with lower take-up rates. It has worked because it is targeted to a specific industry.
Understanding of copyright is also crucial and it should be taught as part of music, not just computing and IT. As Adrian Sterling, an expert, said the other day:
“Copyright is about a right in a copy, not a right to copy”.
This is an eloquent distinction, which we all need to understand if we want our culture and creativity to continue to flourish. I have been privileged to flourish in a wonderful world of creative endeavour. We must make sure that future generations have similar possibilities: much is at stake.
Lord Young of Norwood Green (Lab)
I apologise to noble Lords. I am speaking in the gap and must exercise compression techniques as I have got about one minute. I thank the noble Baroness, Lady Andrews, for an absorbing and fascinating debate. I am going to focus only on my favourite issue—apprenticeships—which has been given a good airing.
We have seen some good progress and I was interested to hear the noble Lord, Lord Clement-Jones, referring to the apprenticeship vacancy matching service, of which I am quite proud. It is one of the few computer systems I have introduced that has not, to my knowledge, fallen over or been hacked. We have recently seen some good examples. As the noble Lord, Lord Clement-Jones, said, the noble Lord, Lord Hall, has been a good influence at the BBC. With the Royal Opera House, he created the Thurrock opportunity, which creates apprenticeships in production, scenery design, et cetera. We need to engage locally, so I put it to the Minister that there ought to be a creative job opportunity strategy involving every local employment partnership.
Baroness Jones of Whitchurch (Lab)
My Lords, I am extremely grateful to my noble friend Lady Andrews for tabling this debate and for her excellent contribution. I also thank all noble Lords who have spoken. There was so much I wanted to say in the debate but in the short time I have I will limit myself to three quick points.
First, it is clear that the creative industries are already a success story but, sadly, they are an untapped source of considerable potential economic growth for the future. We have heard that there have recently been some piecemeal but welcome initiatives to boost skills in this area. For example, we hope that the creative employment programme, launched by the Arts Council and overseen by the National Skills Academy, will support thousands of new apprenticeships and paid internships. That is to be welcomed, as is the £16 million of funding to Creative Skillset to develop skills in film, TV, animation and games. A number of noble Lords have mentioned other initiatives. However, these initiatives are small-scale and disparate and serve to highlight the Government’s failure, across departments, to grasp and nurture our global economic potential and the human potential which lies behind it.
Secondly, as a number of noble Lords have said, nowhere is this inconsistency more stark than in the Government’s own education programme. Michael Gove has undoubtedly been allowed to sideline the teaching of creative subjects in the curriculum and the new league tables still put pressure on schools to drop drama, art, music, design and the other creative subjects. This is taking its toll: GCSE applications are falling across these subjects. I hope that the noble Lord will respond to that criticism.
At the same time, in education, we have seen the decimation of the careers service, so that young people have no concept of the wide range of work opportunities that exist in the modern creative sector. A recent report showed that teachers were so out of touch with what the job opportunities are in this sector that they just gave young people the same careers advice that they had been given at school. Noble Lords do not need me to tell them how far the world has moved on since then. Meanwhile, the government squeeze on the funding of undergraduate arts courses has seen creative and digital courses lose most of their teaching grant. Again, combined with the rising tuition fees, that risks damaging the supply of young qualified performers, writers and designers for the future.
Thirdly, much of the current government spending on arts and culture is badly skewed towards London and is failing to play its part in rebalancing our regional economic recovery. That has been compounded by the starving of funds to local government. As we all know, that has cut funding to community arts organisations, which in the past would have been the place where the next generation of artists had their first experience of participation. It is not clear how that vacuum is to be filled. Where will young people go to put their first foot before the footlights?
It is interesting that the recent IPPR report made a very imaginative suggestion, which is the idea of creative clusters around the regions, building on a local specialism; for example, Manchester could concentrate on fashion and games, Cardiff on TV and film, and Bristol on software and design. That is a very imaginative idea. With support from BIS and DCLG, such initiatives could play a vital role in wider regional regeneration. However, it needs the political will to drive an agenda such as this.
As the noble Baroness, Lady Bonham-Carter, made clear, the whole situation is made worse because non-white people and those from poorer backgrounds do not find any places in the limited training and careers opportunities on offer. There is a danger that we are sliding into dominance by a white, south-east urban elite in this sector, and nobody wants that.
It is a frequent mantra in these debates that we need more joined-up government, and I do not pretend that that is easy. However, I also know that DCMS does not have the funding or the clout to deliver radical change alone. I hope that the noble Lord will address those concerns in his response.
Lord Gardiner of Kimble (Con)
My Lords, I thank the noble Baroness for securing this debate, and thank all noble Lords for what has been a fascinating exchange. We all agree that the creative industries play an essential role in our national life. I am very conscious of the enormous experience that your Lordships bring to these matters.
As has been said, the creative sector contributed £71.4 billion to the UK’s economy in 2012—well over 5% of the total UK economy, and far outperforming the UK economy as a whole. In that year alone, 133,000 new jobs were created in the sector. While the sector is showing impressive growth here in the UK, we do not exist in isolation; our global competitors are working hard, too. The Government are fully committed to working with the sector as it develops its strategy to maintain our global competitiveness. I was particularly taken by the absolutely correct point made by the noble Baroness, Lady Young of Hornsey, that it is very important that the creative industries are very much alive to the importance of sustainability, particularly, as she mentioned, in the fashion world.
The noble Baroness, Lady Andrews, raised from the outset the importance of the commitment of skills and the support of the Government. That is why the Government set up the Creative Industries Council—I am delighted that my noble friend Lady Bonham-Carter is a member—to provide strategic focus for both industry and government. It has also put in place a range of generic and sector-specific financing measures, and fiscal measures such as the creative content tax reliefs. The film tax relief alone has helped to raise more than £1 billion in inward investment in British films. It provides funding for agencies such as the Arts Council, the BFI, Creative England and the Technology Strategy Board to invest in and support the creative industries. The Arts Council is investing £1.4 billion of public money in arts organisations and cultural programmes between 2011 and 2015, and the BFI is investing nearly £500 million over the same period.
I say to the noble Baroness, Lady Jones, that my understanding is that 70% of Arts Council lottery funding over the past three years has been invested outside London. Indeed, as I said earlier and as we all know, many organisations which receive funding that are based in London tour well beyond London.
Yesterday, the Chancellor announced further support for measures for the creative industries, with the European Commission approving the extension of our film tax credit and a new tax credit for theatre, to which my noble friend Lord Clement-Jones and the noble Baroness, Lady Warwick, generously referred. That will offer 20% tax relief for qualifying productions and 25% for regional touring from this September.
As the noble Baroness, Lady Andrews, emphasised, education and skills lie at the heart of any strategy to maintain our global competitive edge. We need to foster opportunities from an early age for young people from all backgrounds—what my noble friend Lady Bonham-Carter and the noble Lord, Lord Berkeley of Knighton, said about all backgrounds showing a breadth of career opportunities in the sector is vital. That needs employers, schools and colleges to work together.
I am conscious of what has been said about the National Careers Service. I have a very long note on the basis that it has not been decimated. In fact, the reforms to careers advice in England will be of immense help. Given the time, it may be helpful if I write to your Lordships in some detail about that. Indeed, in the area of education and skills, Creative and Cultural Skills, Creative Skillset and e-skills UK—all the skills councils for the sector—are using government funds to develop and deliver schemes.
The noble Baroness, Lady Jones, mentioned the £15 million creative employment programme funded by the Government and the creation of apprenticeships and paid internships. Much more will be done. We certainly recognise the potential; that is why the Government are committing £292 million up to next year on a range of cultural education programmes, including music education hubs, the BFI Film Academy, heritage schools and many more. Through the Skills Investment Fund, we will be supporting skills development in the digital sector context. I very much hope that the noble Baroness, Lady Lane-Fox, will approve of that and of our reform of the curriculum for computer science, putting greater emphasis on programmes for creativity. It is clearly important that we have teachers who know how to do that, and that is also part of the programme that I should like to write to your Lordships about.
The noble Baroness, Lady McIntosh, raised the issue of the gaining of skills and the wider benefits outside the sector, whether financial and life skills or health and social benefits. They are all part of what those industries can create for people of all generations. That is why DCMS is working on how better to capture the intrinsic benefits of the creative and cultural sectors.
I was very interested in what the report of the noble Baroness, Lady Andrews, on culture and poverty meant. I have a copy and I will read it. A number of your Lordships raised the matter of teaching arts in schools. There is so much to be said about that. Given the time I have, I ought to write in detail, because I think and hope that there is a misapprehension about that. As the Chancellor said, about £20 million of public money is going to help cathedrals. I want to refer to what the right reverend Prelate said about singing and what the noble Baroness, Lady Warwick of Undercliffe, said about conservatoires. We clearly need to make sure that music-making, which is such a key feature of national life, is encouraged.
I had a very interesting meeting yesterday with Channel 4. It spoke to me about its 4Talent scheme. I must mention the BBC and the Stephen Lawrence BBC training programme for young people from BME backgrounds, and many others.
I will be out of time very shortly, but I wanted to say that I have been briefed by members of many departments. Our thinking is very joined-up. The Creative Industries Council is jointly run. I have had briefings from DfE. The Chancellor has come in to help with the Budget yesterday. We should celebrate the creative industries, and I am very sorry that I do not have time to do your Lordships any further justice.
Pensions: Low-carbon Investments
(10 years, 8 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord Harrison
To ask Her Majesty’s Government what steps they are taking to help ensure that pension fund investments support the transition to a low-carbon economy.
Lord Harrison (Lab)
My Lords, we save for a pension to give us security in retirement. Climate change is putting that security at risk. It risks the financial performance of our pension funds, it threatens to destabilise the wider economy and it could compromise the quality of life of ordinary pension savers now and in decades to come. As the custodians of our savings for a secure retirement, the investment decisions of pension funds should help guarantee that security by mobilising capital away from fossil fuel extraction, which contributes to climate change, towards low-carbon investment opportunities, which can reduce the climate threat.
In this debate I want to outline the clear steps that the Government might take to facilitate this transition. We must give pension funds a stable policy framework. We must provide explicit legal clarity so that they can consider environmental factors in their decision-making. We must extend the rights of pension savers to know how their funds are addressing the risk that climate change poses to their savings.
In the early months of this year, flooding and severe storms brought misery to communities across southern England and Wales. Thousands despaired as floodwater inundated their homes. Hundreds of thousands spent days and nights without power. Experts at the accountancy firm Deloitte have estimated the clean-up cost of the floods at some £1 billion. The Prime Minister was echoing the concerns of many when he told MPs that he strongly suspected recent extreme weather events to be the result of climate change. The Met Office has warned that the UK should prepare for similar events in the future. The flooding showed how climate change is a real and present concern for ordinary people.
However, millions of those people have a stake in the very system that is helping to drive a potential environmental catastrophe. That skewed financial system must be a central part of the solution. UK pension funds account for some £2 trillion of assets. They invest in the goods and services that make our economy. As long-term investors and custodians of the retirement incomes of millions of ordinary people, they are uniquely placed to understand the climate risk. For those funds, that risk is indeed stark. Under every scenario, the effects of climate change on pension funds could be dramatic. If Governments do not introduce effective regulation to reduce emissions, the value of funds’ investments in fossil fuel companies and other high-carbon assets could collapse.
If climate change is allowed to advance unchecked, the effects of extreme weather and the growing volatility of food and fuel prices are likely to hit returns across entire portfolios. The noble Lord, Lord Stern, has estimated that if we fail to act, the total cost of climate change could be as much as 20% of global GDP. Climate change could also create economic and social instability, affecting the spending power of future pensioners and their broader well-being in retirement. Pension funds have a duty to act in the best interests of savers. Given the risk posed by climate change, they should seek to understand the investment implications. By reducing their exposure to high-carbon assets and by taking advantage of opportunities in the green economy, pension funds could help to guarantee the future security and prosperity of themselves and their beneficiaries, and hedge against that climate threat.
Certain barriers mean that this transition is not yet happening. The Government can remove those barriers. Pension funds often perceive low-carbon investments as risky and a significant reason for this is the confusion, and sometimes the infighting, that characterises government policy on tackling climate change. It makes investors uncertain when comments attributed to the Prime Minister describe green levies as “green crap”; it makes investors uncertain when the Treasury delivers a Budget where oil and gas explorers are given a £3 billion tax break to encourage drilling; and it makes investors uncertain when fossil fuel subsidies outweigh those for green technologies. In other words, at present, Governments are not only failing to do enough to promote green investments, they are actively keeping those investments uncompetitive by subsidising high-carbon alternatives.
Where there is currently uncertainty, the Government must provide stability and leadership. To remove this barrier to prosperity and to unlock a potential investment success story, they must make an iron-clad and cross-departmental commitment to catalyse the low-carbon transition. This means phasing out subsidies for fossil fuels and making an active and systematic commitment to developing and commercialising green technologies. As the Commons Environmental Audit Committee found, giving full borrowing powers to the Green Investment Bank by next year would decisively boost green investment and create jobs. That means putting low-carbon solutions at the heart of government plans for infrastructure and industrial strategy.
The type of infrastructure we build now will critically affect our ability to meet our carbon reduction targets in the future, so initiatives like the pensions infrastructure platform should demonstrate a clear direction of travel. As well as having low-risk opportunities to invest in the green economy, the law must allow pension funds to consider the wider benefits of those investments. The ShareAction charity has found that many pension fund trustees feel unable to take account of social and environmental factors such as climate change when making investment decisions. They often interpret their duty to act in the members’ best interests as a narrow requirement to maximise short-term gains.
Although the Law Commission recently stated that there was “no reason” for funds not to use environmental considerations, this position is often not reflected in practice. Investors need clarity and the Government can provide that by clarifying in statute that pension funds are not legally obliged to chase short-term profits at the expense of wider considerations. Will the Minister respond to that?
Savers’ security in retirement depends on how their funds address climate risk and the law should encourage them to take a broad and enlightened view of their members’ interests. Just as the Companies Act encourages directors to take account of environmental considerations and other wider factors in pursuing the success of their company, such a measure for pension funds would enable trustees to focus on long-term, sustainable wealth creation. Again, will the Minister respond to that?
To assess the risks of climate change, pension funds must also have access to high-quality information about the companies that they invest in. The introduction of mandatory greenhouse gas emissions reporting is welcome but this reporting must cover the full extent of a company’s activities and to be useful to investors, that reporting must be objective, reliable and readable. Is the Minister satisfied that the reports produced at the moment achieve the target of giving proper and measured information?
Will the Minister state clearly today that facilitating the transition to a low-carbon economy provides real business opportunities, especially to small businesses? Katja Hall, the chief policy director of the CBI, said this month:
“The UK’s low-carbon transition is already driving jobs and investment. Our green market stands at £120bn and has been growing throughout”,
the recession.
I conclude by saying this regarding the European Union. Criticism was made today by the Chancellor of the carbon trading scheme but if we could engage with our European Union friends on important issues such as the environment, the Prime Minister might be satisfied with a renegotiation which is positive in the way that it approaches these important matters, which affect pension funds and people’s prosperity.
Lord Whitty (Lab)
My Lords, I start by thanking my noble friend Lord Harrison for initiating this debate. I agree with every word that he said but that will not stop me saying the same thing in my own words. I declare a past interest as the chair of a public sector pension fund. That was at the Environment Agency and I will mention some of my experience there later on. However, I will start by focusing on the size of the problem.
As we all know—or as most of us accept—the world needs to reduce drastically its carbon emissions and greenhouse gases but, frankly, we are not doing at all well. The IPCC’s fifth assessment spells out that we are on course to exceed by some margin the safe level of a 2% rise in global temperatures, which is not that safe. I will take the measure of carbon intensity because the Americans like that better than some of the other targets. Between now and 2030, we need to reduce our carbon intensity globally by an average of 5% per year. The reality is that in the last five years, which were during a world recession, the carbon ratio fell by only 0.7% per annum so the world is well short of where we need to be. In fact it is the US that has done best, largely by substituting shale gas for coal, but in the emerging economies carbon intensity has actually increased by 5% and most western economies, including our own, have not done very well either. We increased our carbon intensity by 2.6% in the last reported year, which was to 2012, and the world as a whole did so by more than 2%.
As we are, we hope, coming out of recession we would expect the pressure and therefore the carbon intensity to increase rather than decrease. It is therefore a growing problem and to attempt to turn that round needs massive investment in greener technology: from the sources of energy right through to the appliances we use in our homes and on our roads, and from nuclear energy to how you power your own scooter or small car. Investment in those technologies can come from only three sources. The first is the state—as we know, states in most of the world are running through a period of austerity and shortage of funds. The second is the balance sheets of existing companies—we know that quite a lot of money is sloshing around on the balance sheets of many major companies. Unfortunately, that does not include European energy companies, whose balance sheets are not in a great state. We are therefore unlikely to see huge investment coming from that. It will therefore have to come, thirdly, from the markets. We know also that a large chunk of market investment nationally and internationally is deployed by people who, quite contrary to what my noble friend Lord Harrison was seeking, look very much at the short term. Many of the hedge funds and other investor funds around the world are not really likely to invest in technology which has a long-term return.
Pension funds on the other hand are by definition there for the long haul. While there has been a decline in certain types of the better pension funds, they are still deploying vast resources. The people who are dependent on pension funds have to take a long view of the benefit from them. People who are contributing now, in their 20s, to pension funds of all sorts could be receiving, or their dependants could be receiving, benefits relating to that contribution in 80 years’ time, well beyond the targets for the reduction in greenhouse gases.
There should therefore be some synergy between the decision-making of the pension funds and the need to divert investment away from high-carbon energy and high-carbon usage into greener technologies. Unfortunately, there are two problems with that. There is the culture of the pension fund sector on the one hand and there is the unreliability of Governments of all sorts in acting to facilitate this on the other.
On the culture of pension funds, they are risk averse, but they define risk in very conventional terms. They are a bit set in their ways; they are a bit traditional and slow to move. That applies to the trustees of most pension funds, who, as my noble friend said, tend to interpret their fiduciary duty in a rather short-term and narrow way; it applies to the administrators of those funds; it applies to the advisers to those funds, who tend to look at things in stock market terms and seek a relatively short-term return when they choose which equities, bonds or markets around the world they should invest in. It applies also to the actuaries, who have pretty substantial powers in telling funds whether they are viable—indeed, some of the regulations relating to that are pretty constraining of pension funds in terms of assessing their solvency. Actuaries are even more conservative—with a small “c”, I hasten to add—than the pension fund professionals. It applies also to the fund managers who are contracted by pension funds. They tend not to see long-term investment which has some risk as being an area for their investment—yet the greatest risk of all to everybody’s investment is climate change and the drastic effects that it could have on all sorts of investment and all sorts of property. It should therefore be logical that investment policies should be seen through the prism of how they are affected, or likely to be affected, by climate change.
Some pension funds are beginning to do this. It does not mean overturning everything that pension funds do; it means seeing everything through a prism. In investment in equities, it means looking at the type of activities that companies are engaged in; in government bonds, it means looking at the type of view that Governments take; and in particular projects or ownership of property or land, it means looking at agriculture or forestry that is on the greener end of activity. In the Environment Agency, we tried to do that, for everything from our own decisions and right through. It did not mean that we had a completely abnormal range of portfolios; it just meant that some companies were not invested in while others, which were giving a bigger return and some seriously green advantage, were. It is not rocket science for pension professionals to take on that role, and we should do so in all our operations. There needs to be a concerted effort to try to change the culture of the pension fund professionals and those who advise them. It is beginning. One of the papers circulated to us was the Green Light Report, which makes a number of very important suggestions as to how pension funds can conduct themselves. I do not have time to read them out.
The other constraint is Governments. There are some opportunities for Governments here, and some downsides. Two years ago the Chancellor called together some of the major pension funds to try to get them to invest more in infrastructure. I do not know the degree to which there was a green dimension to that, but there could have been. He was thinking of delivering £5 billion of investment almost immediately. I am not sure how well that went but there needs to be some consideration of using that model to bring together the big pension funds and point them towards greater investment in greener technology and low-carbon areas.
Of course, the regulatory framework is also a serious issue. Successive Governments have changed the regulatory framework both for pension funds and the development of green technologies. Just this week we have seen the Budget change rules in relation to money purchase pension funds, which will seriously destabilise investment in insurance companies and annuity providers. We had changes even yesterday in relation to the carbon floor price and therefore the way in which we see a return to green investment. We have a whole history of this—under both Governments, one has to say—with FITs and ROCs changing the rates. We cannot have a regulatory framework for the long term which changes every year, yet the past few years have seen serious changes. My plea to the Government is: let us have some stability and consistency, in relation to both pensions regulation and regulation supporting green technology.
Baroness Jones of Moulsecoomb (GP)
My Lords, I congratulate the noble Lord, Lord Harrison, on getting this debate on to the agenda because it is crucial to our future and our security as a nation. It is also a real pleasure to be in a debate where I did not say the words “climate change” first. It is great that more and more people are understanding how challenging this will be. Earlier this week, I was in a debate on fracking in which proponents of fracking said that we have to frack to deliver our carbon-reduction targets. Even proponents of fracking, which I think is the most disastrous anti-climate change measure, are using climate change as a big stick and something that we have to take into account in the future.
It has already been said that the local authority pension funds have a current market value of around £200 billion. That is a sizeable amount and if it can be manipulated and used in the right way, it can have a huge impact. There have been several reviews of pension fund rules, including the 2001 Myners report, but pension funds are still investing billions in tobacco, arms and fossil fuel companies. My work on this has been trying to encourage various pension funds to invest more ethically but also in a greener way. It is not easy. The noble Lord, Lord Whitty, mentioned that pension funds are risk-averse but the fact is that there is a huge risk if they do not take climate change into account. In fact, the green economy is growing at a steady 4%, with lots of promise, so actually it is not a bad investment.
The big problem is that pension funds could be exposed to what is termed the “carbon bubble”, in that they have invested very heavily in fossil fuel companies and similar, but those assets cannot be used if we are to avoid dangerous climate change. That is a real concern because those pension funds could plunge if that sort of carbon bubble becomes imminent.
The government Budget was depressing yesterday—business as usual, and less green than the previous Budget, if that is possible. I abhor that the Government seem unable to see this problem, which is happening in front of their eyes.
Last year I met with Edi Truell, who is the chairman of the London Pensions Fund Authority, and pressed him to make the authority more ethical, in the sense that it could be more transparent about policies and implementation. My concern was that the LPFA was acting like an absentee landlord, not looking closely at what the companies it invests in are doing: whether they pay the living wage, for example—which should be an automatic component of whether it invests—and, of course, whether those companies are ethically and even soundly run.
I also talked to the London Pensions Fund Authority about positive investments in areas such as energy infrastructure. The fund is currently looking into the possibility of raising £4 billion, with other pension funds, to fund a 620-mile-long cable to Iceland, which would enable us to share enough energy to power 2 million homes. Iceland could be the Saudi Arabia of renewable energy supplies.
For many years people have campaigned to get quite a lot of pension funds to invest more ethically. For example, East Sussex County Council has been lobbied many times. The fund is valued at around £1.9 billion and is one of the largest pension funds in England and Wales. It has been considering one of the three things that should now happen, which I will now propose to the Government.
First, pension funds should sign up to the UN principles for responsible investment. That is an elementary step. Secondly, the Government should require pension funds to disclose much more information; for example, their socially responsible investment policy implementation and performance monitoring. The people who get the pensions want money for their pensions—of course they do—but at the same time they want to feel that they are not raping and pillaging the rest of the world.
Pension funds should also try to make more positive investments. For example, Lancashire County Council’s pension fund has just invested £12 million in the UK’s first community-owned solar development in south Oxfordshire. That sounds like such a win-win situation. It is good for Lancashire and absolutely brilliant for south Oxfordshire.
As I have a little time left, I will give noble Lords the three tests of sustainability. I wrote these for Boris Johnson when he became Mayor of London; I stood over him and made him read them, which was absolutely pointless. However, I will read them to noble Lords. The first test is: does it ask everyone, at every level of society, to do something? It is not enough to expect the Government, or the local council, to fix our problems. We all, as individuals, have to do something, but the Government cannot expect us to do it on our own—everybody must do something.
The second test is: could it cause potential problems downstream? This is one where Greens are absolutely brilliant, because we are very good at spotting potential messes. A classic example is biofuels. People such as Richard Branson were saying, “Fine, I’ll fly all my aeroplanes on biofuels”. In fact, if you grow biofuels, you are cutting down virgin territory and forest, and taking land that could be used for food—and food supply will be an area where we will have huge problems in the future. You have to make sure that you do not create more problems downstream.
Finally, does anything claim to be “the” answer? There is no one answer. The problem of climate change is so complex and diverse that we need 1 million, or 2 million, solutions. As Al Gore says, there is no silver bullet, only silver buckshot. The problem is so complex, so we need complex solutions.
Doing the right thing now will save us money. It might feel expensive, but it will be a lot more expensive—exponentially so—in the future. Therefore anticipating, adapting to and mitigating climate change is absolutely urgent. Pension fund authorities have so much power through their investments that they should be exemplars of how to deal with it.
Lord Giddens (Lab)
My Lords, I congratulate my noble friend Lord Harrison on having initiated this debate, in which there seem to be as many chiefs as Indians, which is a bit of a shame. I have spent the past seven years of my life studying climate change, and I would like to take a somewhat more global view than speakers have taken so far, as climate change is quintessentially a global issue.
Not only in this country but across the world, pension funds occupy a peculiarly strategic position within the wider framework of financial markets. They are by definition long-term investors responsible for a far longer investment cycle than the vast majority of other funds. In a world of the immediate, pension funds are obliged to consider the long-term future. Following my noble friend Lord Whitty, that does not mean that they always do so in practice, but in principle they are obliged to do so. Generating a stable set of returns for 20, 30 or 40 years down the line implies having a broad set of ethical imperatives—in other words, the obligation to create stability through their investment decisions; to produce stability rather than just endorse it. I take it that that is really the theme of this debate as a whole.
Sustainability is all about enhancing such stability in a world that is creating huge problems of resource management for its future. In the European Union, pension investments amount to about €8.7 trillion, a gigantic sum of money. About half of that is professionally managed assets within Europe, the rest is public money. It makes complete sense to argue that sustainability—seeking to limit climate change in particular—should be brought to the forefront of pension fund investment. It is in principle a win-win situation as, as other speakers have said, if we are unable to limit the advance of climate change—increasing weather volatility and other changing climatic patterns—we will intrude on that very process of providing security for today’s younger people that it is the object of pension funds to generate.
The framework of emissions reductions set out in the EU’s 2020 programme and beyond provides plenty of inducements for pension funds to invest and, indeed, guarantees a level of long-term protection for that investment. It will be interesting to hear what the Minister thinks of the existing state of affairs within EU countries on that issue, not just in the UK. A number of substantial investments of pension funds have been made in, for example, Germany, Austria and Denmark with regard to environmental imperatives. Most of those, as one would expect, are from public pension funds. However, some more corporate models are emerging. They are interesting and should be studied here. Notable examples I would mention are the Nysted wind farm in Denmark and the proposed Anholt wind farm in the same country. In those cases, the pension fund and the industrial partners collaborate to share both risk and reward, and that would certainly be a viable model here. Denmark, as we know, is considerably in advance of the UK on many of these issues.
In this country, the Green Light Report does what its name indicates: it analyses how pension funds can safely and profitably enter that new territory. The report has a range of comments on the issue that my noble friend Lord Whitty raised. It seems a sensible document and contains a whole series of possible strategies.
I should like to ask the Minister three basic questions. One is simply to follow up on the speeches that have been made so far. It is obvious that public policy will play a key role in ensuring a greater connection between pension funds, sustainability and the limitation of climate change more specifically. What interventions are needed on the level of shareholding law to provide a platform for such long-term investment? Where is our existing legislation inadequate and how might it be improved?
Secondly, does the noble Baroness agree that there should be impartiality between younger and older savers in respect of pension funds and their output for environmental imperatives? That has brooked very large in some European countries, because it helps to structure the nature of the investments made. If the noble Baroness does agree, how can public policy help ensure that this is so?
On my third point, I differ significantly from the noble Baroness, Lady Jones, and from her contributions to the debate on shale gas earlier this week. I call myself an ungreen green: the prime issue facing the world is reduction in global carbon emissions, which overrides most other imperatives, although it does not eliminate them altogether. We have a lot of work to do on this compared to the United States. This has come, not so much from the report discussed on Monday, but from the Breakthrough Institute. This environmental organisation has shown, definitively, that over the past several years the US has reduced its carbon emissions to a greater degree than almost any other country. It has done so because the advent of shale gas has allowed the widespread closure of coal-fired power stations which, as everyone acknowledges, are the most lethal source of CO2 emissions.
Does the Minister agree with this analysis which, as was discussed on Monday, is resonant with implications? Does she agree that pension funds should, subject to strict and responsible environmental regulation, treat shale gas as an effective environmental investment, so long as some of the core issues—especially curbing emissions of methane—are effectively handled? As was said in the report discussed on Monday, this is important because it is relevant, not just to this country, but to the core issues of climate change. The US and China contribute some 42% of total global CO2 emissions. If we cannot effect a change, especially in China, we are not big enough to make a significant dent in this global issue. Shale gas can play an important role, alongside renewable energy, if it is used analogously to how it has been used in the United States.
This has been a worthwhile debate which can have practical consequences. We in the UK should not be too parochial about it. We should recognise its global significance and actively look at best practice in other countries—in the EU and elsewhere in the world—which have deployed pension funds in conjunction with industrial partners. In doing so, they have secured a breakthrough in showing that corporate capital can be harnessed to long-term environmental objectives.
Lord Hunt of Chesterton (Lab)
My Lords, I understand that I can speak in the gap, but there is no gap.
The City of London is clearly studying the fact that all the reserves of coal and oil in the ground cannot all be used if we are to meet our objectives. The question then is: will there be government compensation for these false investments? Probably not, but there could be different ways of using this material in the ground. As the noble Lord, Lord Giddens, has been saying, you can use gas from fracking providing that you do not subsidise the water clean-up like the United States. This may be better than burning the coal but, as Shell used to say 15 years ago, if you can change the coal in the ground you can turn it into a different kind of carbon fuel with much fewer emissions.
There are many strategies as you go from existing reserves to energy and they need to be discussed. It is not just suddenly turning off these reserves: they can be used in a variety of ways. This is the important point in any strategy.
Lord Grantchester (Lab)
My Lords, I, too, thank my noble friend Lord Harrison for initiating this debate and for his stimulating opening remarks.
Since the passing of the Climate Change Act, there has been no denying the size of the task before us, as my noble friend Lord Whitty said. In the past decade, wind and other renewables have grown to the extent that they now provide about 10% of UK generating capacity, with nuclear power generating 16% of electricity. Therefore, a quarter of electricity generation is now low-carbon. That highlights that there is still a long way to go. There is also no denying that it must be government that takes the lead, prepared to pump-prime heavy initial costs and to set the investment framework to ensure that the necessary funding is forthcoming.
Buildings emissions have fallen by 18% but transport emissions have made little progress and are about the same as they were in 1990. There is concern that carbon budgets will be challenging, to say the least, especially as a large element of the reduction in emissions has been due more to the recent economic downturn than to constructive initiatives. Instead of bringing forward increasing investment, this Government have unsettled confidence and overseen decreasing activity. Investment in green energy has fallen to a four-year low, from £7.5 billion in 2009 to £5.3 billion in 2013. Bloomberg figures for asset finance excluding small-scale development show investment falling from £7.2 billion to less than £3 billion and, worse, heading to less than £2 billion.
All speakers today have recognised the contribution that pension funds can make to building a low-carbon economy. There is a green finance gap, with investments currently running at less than half the level needed to deliver the decarbonisation needed to meet emission reduction targets. Pension funds are able to look at the long term for returns, even if they must also have a keen eye on cash generation to meet ongoing pension commitments. Green projects on sustainable energy sources and clean technology include multiple technologies at different stages of development and lengths of maturity. Pension funds have a wide range of investments available, such as equity, infrastructure funds and now green bonds, which are rapidly gaining interest as an asset class.
However, pension funds’ investment in green measures remains very low, at about 1%. The noble Baroness, Lady Jones, highlighted that pension funds have a long way to go regarding the ethical parameters to their operations and investments, but investors will not invest simply because it is green. Many green investments are currently uncompetitive because they involve developing new technologies and have to reach a scale to enable them to become commercialised. Investments usually bear high liquidity and volatility risks and are therefore suitable only for dedicated and sophisticated funds.
A further barrier is the perceived political risk, which is especially heightened internationally, where fossil fuel subsidies often outweigh those for green technologies, thereby keeping green investments uncompetitive. My noble friend Lord Giddens set out the global challenges to long-term security and the international challenges to investor law regarding best practice. It should also be recognised that there is often a lack of expertise and appropriate knowledge among the pension funds.
Government policies are vital to support the commercialisation of new technologies. First, government policies must be consistent, stable and maintained long enough to enable the long planning and gestation periods to mature. Investors need clarity on the development of regulatory decisions, timing and future direction, as my noble friend Lord Whitty said.
Government can encourage business and environmental footprint reporting. On companies’ annual reports and accounts, the Government have introduced regulations to include the requirement to provide information on the company’s environmental impact and how this will affect the performance and development of the company. New carbon reporting for companies could help investors understand carbon impacts and stimulate greater focus on these issues among customers and suppliers, in order to add pressure on companies to adopt more sustainable practices. This work needs to be developed further.
As my noble friend Lord Harrison highlighted in his remarks, ShareAction has questioned whether the duties on directors and trustees to consider acknowledging and thereby mitigating climate change are robust enough. Nevertheless, it is important that companies and funds factor those risks into their decision-making and consider the climate impacts of investments as part of their wider social and environmental audit and risk assessments.
Green infrastructure funds are also likely to be an important way for pension funds to pool resources and invest in a portfolio of green projects. In that regard, the establishment of the Green Investment Bank has been vital in using public money alongside the private sector. However, the Government must show clear determination to follow through policies with cross-departmental commitments. Although this Government have a dislike for targets, such targets could nevertheless demonstrate the Government’s commitment to make things happen and underline where corrective action may become necessary.
At the end of our debate on the statutory instruments to implement the Green Deal, I asked the Minister if she would share what success might look like on this very important initiative to enhance the energy efficiency of our homes. Although she would not commit to a figure, the Minister in the other place said that he would be having “sleepless nights” if fewer than 10,000 people had not signed up to the Green Deal within its first year. Just 1,221 households have signed up and only 746 measures have been installed.
Although it is good that the Green Investment Bank has provided funding for the Green Deal and its energy efficiency schemes, does the noble Baroness agree that the scheme urgently needs to be reviewed, especially in regard to the interest rates levied, and undertake corrective action? It is most important that the Government provide clear and consistent environmental policies which will fix market failures and give institutional investors the confidence to invest in green projects. Without these policies, climate finance from pension funds will not be forthcoming and we will all be having sleepless nights.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)
My Lords, I thank the noble Lord, Lord Harrison, for opening this debate and all noble Lords who have contributed. This important debate allows me to lay out what the Government are doing to ensure that we have in place an environment of certainty for long-term investment. Above all, we must strive for certainty for low-carbon energy policy, a certainty which allows all investors and pension investors in particular to fund energy infrastructure. The current low-carbon investment regime provides this certainty, which, in February this year, led to the manager of a pension fund owned by the state of Quebec acquiring a 25% stake in the 630-megawatt London Array offshore wind farm for £644 million.
There have been several other major pension investments in solar PV projects supported by the small-scale FIT scheme, notably by Aviva insurance. PensionDanmark has also made a number of UK investments in renewable obligation-backed projects. As we complete the much needed reforms to the energy market, we need to ensure that policy stability sustains and investments continue at pace.
The central ask of the pension community is long-dated, index-linked products which deliver stable returns from assets that are well understood and low-risk. Pension companies are not looking for a fast buck; when they invest they are in for the long haul. Our new contracts for difference are private law, long-term contracts which seek to remove the volatility risk associated with the wholesale energy market. The returns from these contracts will be index linked to ensure investments retain their real value.
We have also provided a back-up route to market through our off-taker of last resort provisions. This further reduces risks for debt and equity providers, and improves competition and liquidity in the power purchase agreement market. The transition from the renewable obligation to contracts for difference is being taken forward in a structured manner and our reforms will ensure that our targets are hit at the lowest possible cost to the taxpayer.
The Government have three objectives for energy policy: to keep the lights on, to keep energy bills affordable and to deliver our climate change goals. To achieve the necessary change, I was privileged to lead the Energy Bill through this House, and the Energy Act 2013 is now law. The Act provides the legal and financial mechanisms necessary to attract the investment that we need and at the right price—investment which could support up to 250,000 low-carbon jobs by 2020.
Noble Lords have raised a number of questions and points. I shall try to answer as many of them as I can. Where I feel that colleagues in other departments may offer greater detail, I will ask them to write to the Committee.
To the noble Lord, Lord Giddens, I say that I am pleased to be chief and extremely proud to be an Indian—so that ticks both of the noble Lord’s boxes. I turn to the more important points. The noble Lord, Lord Grantchester, touched on a range of issues which I think were covered in my speaking notes, but I remind him that the EMR, the biggest reform of the electricity market since privatisation, was done under this Government. We wanted to provide investors, particularly in the renewable, low-carbon sector, with long-term certainty. The previous Government, of whom the noble Lord was a supporter, had 13 years during which they knew that 20% of current electricity power generation would come off grid by 2020. They failed to address that issue and we must now, sadly, play catch-up in a range of areas. We have to accept that there are issues at stake.
To the noble Baroness, Lady Jones, I say, yes, of course, we all sign up to individual responsibility. This Government and the party opposite had complete consensus when we worked through the Climate Change Act 2008 to ensure that we as a country set standards and examples for the world to follow. However, we cannot do it at any cost; we have to see how it impacts on consumer bills. The noble Baroness gives a deep sigh, but I say to her that, when you are in government, you have to take a whole load of decisions. Some of those decisions may not be taken as quickly as we would like, but they have to incorporate consideration of their economic impact on all our consumers, not just a small section of them.
We will remain on track to being the greenest Government ever—that was a promise and a pledge that we made and the Prime Minister has reiterated it. We have through the Treasury set a levy control framework of £7.6 billion up to 2020. So I do not think that there is any lack of ambition on the part of this Government to deliver on low carbon if they are putting in that sort of up-front surety and investment.
Some of the more detailed points raised by the noble Lord, Lord Whitty, around pension funds will need to be responded to by other colleagues in more detail. I will ensure that the appropriate colleagues receive a note from me after this debate.
The noble Lords, Lord Whitty and Lord Giddens, mentioned other countries. I am pleased that China has taken some very big steps towards addressing its carbon emissions. We are seeing great progress in its building of offshore wind—it is building more offshore wind capacity than any other country. It has recently created its own renewable feed-in tariff for solar. Its manufacturing sector has significant wind turbine and solar companies. It is also investing heavily in new nuclear.
I turn to India. I read an article very recently on advice it took from us at DECC on the 2050 calculator. It has incorporated the 2047 calculator to see how it can address issues of introducing more renewable energy.
Lord Giddens
Would the noble Baroness agree that there is a massive possibility in China for the development of pension funds in relation to environmental issues? There are no pension funds in China: it is families who save. The country has to build a welfare system from the beginning and therefore, at least in principle, has the opportunity to circumvent some of the difficulties we find in western countries.
Baroness Verma
The noble Lord raises a very important point. We should be actively having this sort of discussion with all our global partners.
Since 2010, this country has seen £35 billion of investment in the renewable sector and there is £20 billion more in the pipeline. I would dispute with anyone who says that investment is not coming here. The noble Lord, Lord Grantchester, thinks we are not attracting investment. We have attracted more investment than did the noble Lord’s party when it was in government. It is not a competition. The noble Lord, Lord Boateng, did not speak in the debate but he may shake his head. We have significant investment coming through, with new nuclear as well as the renewable sector. We should be proud of being a country that people want to invest in and of offering an environment that enables the investment to come in.
I am always mindful of time. The noble Lord, Lord Whitty, also mentioned the National Association of Pension Funds—I think that it was the discussion around a national pension fund that the Treasury may have raised in 2011.
Lord Whitty
The Chancellor said he was bringing together the large pension funds to look at their investment in infrastructure.
Baroness Verma
My Lords, I am told that I have two minutes. We have made progress. A £500 million fund to be managed by Dalmore Capital will, hopefully, be unveiled and be available. I think that is the fund the noble Lord is referring to, but I will read Hansard and make sure.
The noble Lord, Lord Whitty, also mentioned the carbon floor price. We have to establish a price that sends a credible signal to help drive billions of pounds of investment in low carbon energy generation. However, we also have to put it against what is happening with our partners and member states. We cannot let our industries be at a disadvantage because we have not been able to reduce the burdens on our energy-intensive industries.
I have been told that I need to sit down very soon, but I would like quickly to touch on the reference made to the Green Deal by the noble Lord, Lord Grantchester. I remind the noble Lord, over and over again, that this is a very long-term programme. We did not come in singing it with bells and drums, but it has seen significant measures being put in place. We have seen over 500,000 measures installed under ECO. The noble Lord must be aware that some may have used the Green Deal bank but others may have their own finance.
House of Lords
Food Banks
(10 years, 8 months ago)
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Lord Beecham
To ask Her Majesty’s Government what assessment they have made of the number and role of food banks in the United Kingdom.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)
My Lords, there are no official figures for the number of charities providing food aid, including through food banks, in the United Kingdom. Food banks are a mostly community-led provision responding to local needs, and it is not government’s role to tell them how to run the services they provide.
Lord Beecham (Lab)
My Lords, Newcastle alone has eight food banks and seven low-cost food centres. Is it not time that the Government recognised that the growth in the number of food banks and in the number of people using them does not reflect a lifestyle choice but is caused by hardship and hunger? Will the Minister urge the Secretary of State for Work and Pensions to resile from his petulant refusal to meet the Trussell Trust, one of the major providers of food banks, and instead discuss with it how best to meet the need that is now palpable in communities up and down the country?
Lord De Mauley
My Lords, we do, of course, appreciate that some of the poorest people are struggling. The Government’s view is that the best way to help people out of poverty is to help them into work. The latest labour market statistics show employment up, unemployment down and workless households down. We operate a number of government initiatives aimed at helping families with food—Healthy Start, Change4Life, and the School Fruit and Vegetable Scheme—and we are extending free school meals. There are a number of other measures designed to help households in the wider context. These are the ways in which we are tackling poverty.
Baroness Jenkin of Kennington (Con)
My Lords, my noble friend may not be aware that the APPG on Food Poverty and Hunger is shortly to start an inquiry into the reasons behind food poverty, which will be chaired by the right reverend Prelate the Bishop of Truro and Frank Field. I am sure we all look forward to its findings. Does my noble friend agree that the flip side of this coin is the shocking amount of food waste in this country, estimated at £60 a month for each household—the equivalent of six meals a week?
Lord De Mauley
My Lords, I am aware of the APPG inquiry of which my noble friend speaks, and I am looking forward with great interest to what it comes up with. As my noble friend also knows, we have a number of initiatives dealing with food waste. As an example, WRAP’s Love Food, Hate Waste campaign aims to raise awareness of the need to reduce food waste and help people take action.
Baroness Whitaker (Lab)
Is the Minister aware that since food banks got going at their present scale, hospital admissions for malnutrition have increased by 74%? What are the Government going to do about that?
Lord De Mauley
My Lords, we are working with business and others to encourage people to adopt a healthier diet. Industry is making voluntary pledges to cut salt, fats and calories, increase uptake of fruit and vegetables and label nutrients and calories on packs in out-of-home eating places. Of course, there are a number of other initiatives to do with school food.
The Lord Bishop of Gloucester
My Lords, research by Citizens Advice shows that the main reason people are referred to food banks is delay in the payment of benefits and benefit sanctions; anecdotally, this is also the church’s own experience from its involvement in the many food banks it helps to run across the country. Will the Minister tell us whether the Government are persuaded by this evidence and, if they are not, will he share with us what plans they have to carry out their own research into the reasons leading so many people to seek food aid?
Lord De Mauley
My Lords, I very much acknowledge the right reverend Prelate’s question. While it is right to expect that claimants who are able to look for or prepare for work should do so, a sanction will never be imposed if a claimant has good reason for failing to meet requirements. If claimants demonstrate that they cannot buy essential items, including food, as a result of their sanction, they can claim a hardship payment. No claimant should ever have to go without essentials as a result of a sanction.
Baroness Royall of Blaisdon (Lab)
My Lords, food banks in the south-west gave emergency food aid to more than 40,000 adults and 20,000 children in 2013. Does the Minister believe that this is supply-driven or down to desperate, pressing demand caused by a cost of living crisis? If he is unsure, perhaps he would accept an invitation to join me on a visit to my local food bank, or perhaps to the one in Gloucester, to investigate.
Lord De Mauley
My Lords, I have indeed visited a local food bank near my home within the past few months. I was reminded that food banks are run by wonderful people and donated to by hugely generous folk. They perform a very valuable service, distributing food to people who really need it, and they tend to operate at a local level. Britain has a great tradition of charitable giving, and it would be a bad day on which we started to interfere with that.
Lord Palmer
My Lords, there was some confusion with the right reverend Prelate. I did in fact ask the Minister whether he agreed that it is surely a scandal in today’s society that food banks have to exist at all.
Lord De Mauley
I think I have just answered that, my Lords. Britain has a great tradition of charitable giving, and it would be a great mistake to interfere with that.
Baroness Parminter (LD)
Can my noble friend say whether the Government have any plans to commission any of the research indentified in the conclusions of his own department’s recent review of food aid in order to inform and support the voluntary groups providing food aid?
Lord De Mauley
My Lords, we are not proposing to record the number of food banks or the potential number of people using them or other types of food aid. To do so would place unnecessary burdens on the wonderful volunteers trying to help their communities. The report is a useful summary of evidence from providers and charities. The provision of food aid ranges from small, local provision through to regional and national schemes. The landscape is mostly community-led provision responding to local needs. It is not the Government’s role to tell them how to run the services they provide.
Baroness Farrington of Ribbleton (Lab)
My Lords, the Minister said that the answer to the problem of people using food banks is for them to be in employment. Without doing research, how on earth can the Minister justify that statement? So many people are working and using food banks—those on zero-hours contracts, et cetera. Is the Minister aware that, in many parts of the country, food banks cannot accept food that needs cooking because those using food banks have had their power cut off through poverty?
Lord De Mauley
My Lords, the noble Baroness raises a number of issues, and I am not going to have time to do them all justice. She raises the issue of the working poor, and she is right to do so. We agree, as I said earlier, that some of the poorest households in the country are struggling. That is why, for example, we are increasing the minimum wage and increasing the personal tax allowance, taking 3.2 million people out of income tax altogether. That is why we have frozen fuel duty and why we have helped local authorities freeze council tax.
Lord Tebbit (Con)
My Lords, would my noble friend not agree that there is always a near-infinite demand for valuable goods that are given away free? One can notice it even in the catering departments of this building. If food is given away at prices grossly below market value, more is used. Would my noble friend initiate some research into the sales of junk food in the areas where people are relying for their basic foods on food banks?
Lord De Mauley
No, my Lords, we will not. It might be worth adding to the debate that, as part of its 2014 report on social indicators, the OECD reported that in the United Kingdom there had been a decrease in the number of households reporting that they had felt unable to afford food over the past 12 months when compared to 2007.
Nuclear Management Partners
Lord Hoyle
To ask Her Majesty’s Government why the Nuclear Decommissioning Authority, rather than the Government, took the decision regarding the extension of the contracts of Nuclear Management Partners.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)
My Lords, the decision on contract extension was for the Nuclear Decommissioning Authority, in line with its duties and responsibilities under the Energy Act 2004. Ministers were consulted and endorsed the decision before it was announced. Rolling the contract forward represents the best way forward at this time, giving the opportunity for NMP to build on the progress made to date, to address weaker areas of performance and to make further real progress in the next five years.
Lord Hoyle (Lab)
The decision to extend the contract of Nuclear Management Partners was taken despite its poor performance, undue delays and the fact that the costs are spiralling out of control—it will cost £70 billion to decontaminate six square kilometres. It is well over budget, by £2 billion. When the original decision was taken to give NMP the contract, it was taken by Ministers, so why did Ministers dodge the issue this time?
Baroness Verma
My Lords, I reassure the noble Lord that we did not dodge the decision. We have taken advice through the work done by the NDA, and my officials were involved in the review throughout the process. The decision made by the NDA was to see this contract go for a further five years to build on the work that has already been done. I remind noble Lords that 90% targets have been reached by NMP in the past five years. It is an incredibly difficult site, as the noble Lord is aware. Of course, there are extremely difficult challenges facing it, and a lot of it has been due to long-term neglect.
Lord Teverson (LD)
My Lords, Nuclear Management Partners spends £1.6 billion of taxpayers’ money each year on the decommissioning process, yet it is in an area that is still one of the most deprived in the United Kingdom. What pressure are the Government putting on that organisation to make sure that it builds up local skills and supply chains to the benefit of the people of Cumbria?
Baroness Verma
My Lords, I absolutely agree with my noble friend. I assure him that the Energy Act 2004 requires the NDA to consider those very impacts on communities that live nearby. On the example of Sellafield raised by my noble friend, more than 10,000 local people are employed by Sellafield Ltd and there is more than £1 billion of spend. According to the 2011 figures, one-third of that was on local businesses and the supply chain in west Cumbria.
Lord Elton (Con)
My Lords, the letting and continuation of contracts is a highly sophisticated operation, which can have a huge effect on the amount of money needed to run an operation. Where does the Minister’s department get the skills to do this?
Baroness Verma
My Lords, I remind my noble friend that the skills in the department and the skills that we bring in from outside are hugely specialised in this area. We are gifted with having some of the greatest minds in the nuclear sector within this country, and we should be very proud of that. We have an absolutely fabulous regulator, which is seen in the world as one of the best. So I do not want to undermine the great skills that we have, but we draw on skills from outside the sector, too.
Lord Hunt of Kings Heath (Lab)
My Lords, clearly we have a lot of skills in the nuclear sector in the UK, but let us go back to my noble friend’s Question. The fact is that in recent years the performance of the Nuclear Decommissioning Authority has been very disappointing, particularly as regards Sellafield. The question is this: given that disappointing performance, should it not have been a question for Ministers as to whether the NMP contract was extended? Why did Ministers not take that decision?
Baroness Verma
My Lords, I will return to my first Answer. Ministers were cited after a full review by the NDA and my officials were in on that review; we have been kept informed at every juncture. The decision to go forward with this contract is absolutely right. We are building on the work that has been done. Noble Lords from across the Chamber cannot take lightly the challenges facing the Sellafield site. We are discovering things that were not properly characterised in the inventory and so we have to deal with new challenges as well as with the current ones. We are in a position to see, review and make sure that progress is being made.
Lord Cunningham of Felling (Lab)
My Lords, I had the honour to represent the constituency that included the Sellafield site for 35 years in the House of Commons. I agree with the Minister that these are very complex issues. However, is it not a sad reflection on the decline of our once world lead in civil nuclear power? Sellafield was the biggest single yen earner in the British economy. Now the lead partners in this whole programme—which is crucially important to west Cumbria and way beyond—are not British; they are American.
Baroness Verma
My Lords, the noble Lord is absolutely right to raise those points. However, I remind noble Lords that for a very long time there has been little certainty for the nuclear sector. At least this Government have taken that certainty forward.
Lord Avebury (LD)
My Lords, can my noble friend confirm that the NDA can sack Nuclear Management Partners at any time it chooses during the five years and that the NDA has to maintain the capability in taking over from NMP in managing contracts?
Baroness Verma
My noble friend is absolutely right. NMP can of course be sacked. We are looking at making sure that what is being delivered is performance-related. If no good, reasonable progress is made, then we will have to look at other options.
Female Genital Mutilation
(10 years, 8 months ago)
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Lord Dobbs
To ask Her Majesty’s Government what are the impediments to bringing prosecutions in cases of female genital mutilation.
The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD)
My Lords, the Crown Prosecution Service can consider prosecuting only those cases that have been referred to it by the police following an investigation of a number of significant factors affecting the reporting of female genital mutilation. Those include a lack of information from affected communities and the age and vulnerability of the girls and women, which prevents them from coming forward to report offences or to give evidence in court. However, your Lordships’ House should be in no doubt that the Crown Prosecution Service is working hard to bring a successful prosecution.
Lord Dobbs (Con)
I thank my noble and learned friend for the encouraging reply and initiatives the Government have been taking. However, he will understand when I say that these are not yet enough. Female genital mutilation is a crime. It is estimated that 66,000 women and children in England and Wales are victims, yet there has not been a single prosecution. Can my noble friend assure the House that, while we are rightly sensitive to the interests of minority cultures, the Government will never neglect our fundamental British culture, which deems that this practice is little less than butchery and must be stopped? While the Minister rightly emphasises the role that education has to play in stamping out this practice, will he accept that by far the best way of driving this lesson home and saving as many innocent women and young girls as possible is to ensure that those responsible are identified, prosecuted and locked away, where they can do no further harm?
Lord Wallace of Tankerness
My Lords, there is widespread frustration that there has been no prosecution, albeit that there has been legislation on the statute books since 1985. At present, the Crown Prosecution Service is considering or advising the police on 11 cases, four being re-reviews of cases that had previously been considered and where a decision was made that no further action should be taken. My noble friend is absolutely right: this is a crime. It is a very serious form of violence against girls and women and is a form of child abuse. I assure my noble friend that the criminal law applies to everyone, without exception.
Baroness Butler-Sloss (CB)
My Lords, ought not the Government look beyond the CPS at teachers in schools, and particularly the college of GPs, and ask GPs to check girls in certain minority communities to see whether or not they have been victims of this practice? This really needs to be done. It is not up to the CPS to do this; it cannot proceed unless it has the relevant evidence. We need to go to the core groups that deal with these children, particularly the college of GPs.
Lord Wallace of Tankerness
My Lords, the noble and learned Baroness is absolutely right: the Crown Prosecution Service can take only cases referred to it by the police. In turn, the police require co-operation and engagement on the part of those involved in schools, education, the health service, including GPs, and, indeed, the communities themselves. That is why there is a range of activities across government, agencies and the third sector to try to raise awareness and improve lines of communication so that cases can be reported with more confidence.
Baroness Smith of Basildon (Lab)
My Lords, the Minister’s answers are very clear, and I agree entirely with the noble Lord, Lord Dobbs, and the noble and learned Baroness, Lady Butler-Sloss. It is clear that legislation alone has not been an adequate deterrent. However, the French system works particularly well, whereby young girls who present to hospital are examined to see whether they are victims of FGM. We would not necessarily want to go down that route but, given that it has been successful, will the noble and learned Lord take on board the comments made by the noble and learned Baroness, Lady Butler-Sloss, but also look at other ways of addressing this issue, including involving hospitals and other agencies which could bring evidence to the attention of the CPS to ensure that we get a prosecution, as that will be the only genuine deterrent that will really make a difference?
Lord Wallace of Tankerness
My Lords, the noble Baroness mentions France. My understanding is that there is no specific crime of female genital mutilation in France. Nevertheless, I think that other issues are involved there which are somewhat different. However, I reassure the noble Baroness that the Crown Prosecution Service is looking at experience in different jurisdictions to try to get information on best practice. With regard to hospitals, which she mentioned, as from next month there is intended to be a reporting requirement from hospitals of cases which they discover, and a database will be built up. It is important to remind those involved that there is a legal obligation on NHS staff to safeguard children and young people and that, if they identify someone they consider to be at risk, or who has already undergone FGM, they must respond appropriately by involving the social services, which, in turn, can involve the police.
Lord Lester of Herne Hill (LD)
My Lords, this morning the BBC revealed that, since 2009, some 4,000 patients have been treated in London hospitals for the after-effects of FGM. Clearly, this is a very widespread and serious health problem. Will my noble and learned friend look at our own jurisdiction with regard to civil protection for forced marriages and consider whether, instead of relying only on the criminal process, with the difficulty of the burden of proof and all the rest of it, it might not be sensible instead to amend the law to ensure that civil protection orders can be imposed in the family courts, as in the case of forced marriage?
Lord Wallace of Tankerness
My noble friend makes an important point. Last month, there was a round-table discussion involving Ministers, the Crown Prosecution Service, the Director of Public Prosecutions and a whole range of government departments which have an interest in this issue. The fact that this matter goes across a number of departments has been reflected in the questions asked today. One of the action points to be taken forward by the Ministry of Justice is to seek views on how a civil prevention order might work alongside criminal legislation to protect potential victims because protection—preventing it happening in the first place—is vital, as well as prosecuting those who have perpetrated this offence.
Baroness O'Cathain (Con)
My Lords, I ask the Minister whether these girls have any access to confidential information. For example, we have ChildLine, Rape Crisis, services for battered wives, and all those areas where people can, if they are in positions like this, phone up and get some help and assistance. I have never heard of one for this bestial practice. Is there any charity that we could approach and ask?
Lord Wallace of Tankerness
My Lords, I can reassure my noble friend that the NSPCC has in fact initiated a helpline, in co-ordination with the Home Office. Perhaps one of the issues is the need for greater dissemination of that. Another recent initiative has been the issuing of a statement opposing FGM, of which 41,000 copies have been sent out in over 11 languages to raise awareness and to bring this issue to the attention of those who have been victims. One of the issues that has been looked at by the police and the Crown Prosecution Service is that, for those victims who do come forward, the appropriate witness protection is in place to give them reassurance and to help them. People obviously have been very brutally treated.
NHS: Bed Capacity
(10 years, 8 months ago)
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Lord Hunt of Kings Heath
To ask Her Majesty’s Government what action they are taking to prevent hospital patients being moved in the middle of the night to relieve pressure on beds.
Lord Hunt of Kings Heath (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and refer noble Lords to my health interests.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, moving patients between wards overnight should happen only for good clinical reasons, because it can be a distressing experience for them and their families. We have asked NHS England’s medical director, Sir Bruce Keogh, to write to all hospital trusts requesting that they minimise transfers that are not aimed at improving patient care. As the Government’s response to the Francis inquiry highlighted, listening to and learning from patients to improve care is a top government priority.
Lord Hunt of Kings Heath
My Lords, it is all very well the Minister’s telling the NHS not to do it any more, but does he agree that the real problem here is the pressure on hospital services, particularly on A&E services, which then leads to a desperate search for beds, which then causes patients to be moved in the night time, as this survey has reported? Do Ministers have a response to the more general issue of the acute pressures on our acute hospitals at the moment?
Earl Howe
My Lords, many hospitals have been under pressure, particularly during winter, as they always are. It is telling that if one looks at the tell-tale signs of pressure, such as bed occupancy, the rates have remained stable for a number of years. In fact we have more clinical staff on the front line, particularly in A&E, than we had a few years ago. There is no doubt that there are times when hospitals feel acutely under pressure. However, despite rising demand, average waits for assessment in A&E are around 30 minutes at the moment, compared with over 70 minutes in 2009-10.
Lord Laming (CB)
My Lords, would the Minister use his good offices to reinforce again with the National Health Service that all unplanned moves that are not determined by clinical need, be it during the day or at night, have the potential to cause disorientation to patients and considerable distress to their relatives?
Earl Howe
The noble Lord is absolutely right. That is why my ministerial colleague, Dr Poulter, has written to Sir Bruce Keogh. This issue lies at the heart of the NHS constitution: the patient’s dignity and shaping care around the needs and preferences of patients is absolutely at the centre of the constitution. This is why it is entirely appropriate for Ministers to make their views known and for Sir Bruce to ensure that all hospitals are aware of this principle.
Baroness Barker (LD)
My Lords, does the Minister agree that it is possible to discharge patients from hospital in the evening safely and that there are some patients for whom that is the best clinical option, but that hospitals are not good at ensuring that frail older people are discharged at the best time when they live on their own? Could he include that in the review carried out by NHS England?
Earl Howe
My noble friend is quite right. As she knows, there are far too many frail elderly people who end up in hospital in the first place. We must get better at the discharge arrangements for them and not keep them in hospital too long. This is the focus of much of the work going on in the department and NHS England at present concerning vulnerable older people. We will announce a comprehensive plan around this later in the year.
Baroness Masham of Ilton (CB)
My Lords, apart from distressing patients, is not moving them around bad for infection control, particularly if the beds are not properly cleaned?
Earl Howe
Yes, my Lords. As ever, the noble Baroness makes an extremely good point. It is heartening that infection rates have come dramatically down in hospitals over the past few years, but we can never be complacent and it is important that when a patient is moved the infection question is always considered.
Lord Turnberg (Lab)
My Lords, is it not the case that we have the lowest number of beds per head of population of any OECD country, bed occupancy rates of approaching 90%—a dangerously high level—and, despite all that, the shortest lengths of stay of any European country? Does the noble Earl agree that the idea of closing wards or hospitals can only worsen the situation, unless, of course, we are able to build up the community services before we do any of that?
Earl Howe
I agree with the principle that the noble Lord has articulated. Certainly, commissioners and providers of care should reduce beds only where it is clinically safe and appropriate to do so. The NHS is very experienced at flexing the number of beds it has available; it does this every year and every winter. As a principle, I would agree with the noble Lord but I come back to the point that bed occupancy rates have, in fact, remained stable over the past 10 years, fluctuating between 84% and 88% on average, and increasing slightly over the winter period.
Lord Geddes (Con)
My Lords, further to the question from my noble friend Lady Barker, is it mandatory for the NHS to advise next of kin before discharging frail patients?
Lord Hunt of Kings Heath
My Lords, can I come back to the point raised by my noble friend? The noble Earl will know that Monitor is requiring foundation trusts to make five-year plans ahead. My understanding is that almost all such plans made by acute trusts are predicated on reducing bed capacity in order to keep within the budgets that they are likely to have over that period. Can he assure me that as those bed numbers are reduced, community care and social care provision will increase in order to enable patients to be discharged appropriately?
Earl Howe
It is for that very reason that we are setting up the Better Care Fund as from April 2015, so that health and social care are more joined up, people are kept out of hospital and we can therefore safely reduce the number of beds. We have to take an all-systems approach to this; it is no good looking at one part of the system—health and social care have to be looked at together.
Employment
(10 years, 8 months ago)
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Lord Freud
That this House takes note of the level of employment in the United Kingdom.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, it is appropriate that we should be debating the labour market today after yesterday’s figures showing record numbers of people in work and unemployment down again.
I believe that we will benefit from having a frank and open discussion. We have seen exceptional progress in recent months, but we know there is more to do and we must not be complacent. Indeed, the performance of the labour market in the recent recession can be seen as something of a puzzle. Previous recessions saw dramatic falls in employment. Yet despite this being, on some estimates, a deeper recession than in the 1930s, we did not see the number of people in work fall anything like as much as the experts predicted. GDP fell by more than 7% but the number of people in work fell by only one-third of that. I have yet to see a full and convincing explanation for why employment did not see the fall expected. There probably is no single reason. Active labour market policies and the flexibility of our modern labour market, as well as the bitter experience of those who went through past recessions, may all have played a part.
The resilience of the labour market in the recession has been matched by robust improvement now that we are getting the economy back on track. There are 1.3 million more people in work since the election, and more than 30 million people are working—more than ever before. In fact, if you exclude full-time students, the employment rate is now back to the peak that we saw before the last recession, and we have had further good news, with the female employment rate now at an all-time high.
I am often struck by what appears to be a widening gap between the impression that people have about the labour market and the reality of these figures. Many predicted that the fall in public sector jobs would not be matched by an increase in the private sector. They were right, but not in the way they expected. The rise in private sector jobs has not just matched the fall in the public sector but has far exceeded it—up nearly 1.7 million, with total employment up by 1.3 million as a result. Recently, there were reports that most of the growth in private sector jobs since 2010 has been in London. When I asked my officials whether that was true, I received a surprising response. Using already published and easily accessible data from the Office for National Statistics, the true position is almost the complete opposite. Nearly 80% of the rise in private sector employment has been outside London.
We are regularly challenged on the rise in long-term unemployment, particularly among young people. Long-term unemployment is a scourge, and through the Work Programme and the Youth Contract we have put in place just about the most comprehensive response that has ever been seen. Yet what those who criticise our record fail to mention is that the previous Government hid long-term unemployment by artificially removing people from the claimant count. They shifted people about to become long-term unemployed on to training allowances or into short-term job schemes, taking them off benefit in the process. We have put a stop to those methods, so now the figures are a true count of the number of long-term claimants. What really worries me is that the Opposition’s proposed jobs guarantee would result in the exact same problem, with long-term unemployment misrepresented as people are shifted off the claimant count.
People are rightly concerned about the effect the recession has had on young people. However, if we are to tackle youth unemployment, we need to have an understanding of where the real problem lies. When people talk about a “lost generation” of 1 million young unemployed, they are including those in full-time education, who make up nearly a third of the total. In fact, one young person in every 10 has left full-time education and is unemployed, and this proportion is the same for all under-25s and for those from an ethnic minority. This means that youth unemployment remains significantly lower than after past recessions: 9% of young people have left full-time study and are looking for work compared with 12% in 1993 and 14% in 1984. When it comes to NEETs—young people not in any form of education or work—we are not where we want to be, with a higher NEET rate than in many other EU countries. This is mostly due to lower participation in education in the UK. Although the NEET figures are now improving, this is something that the Government will continue to address. The other side of the picture shows that, among 20 to 24 year-olds who have left education, our employment rate outperforms the US and the EU average, and that, of the large EU economies, we are second only to Germany.
I should like to move on to some of policy responses we are making to the main labour market challenges that this country has been facing. It is unheard of for inactivity to fall in a recession, yet that is what has happened. Excluding students, inactivity is currently the lowest on record. The number of people claiming inactivity benefits has fallen by nearly 350,000 since 2010. People are better off in work and we did not want to repeat past mistakes by allowing people to drift into inactivity. Maintaining an active labour market policy ensures that people do not become detached from the world of work and are well placed to benefit as the economy picks up. We are changing the culture. People who can work are expected to work and, with our support, employment is rising. But challenges remain. Although falling, there is still a working age inactivity rate of more than 22%.
We have been successful in getting lone parents into work and have a record lone-parent employment rate. Before November 2008, lone parents could claim income support until their youngest child reached 16 years of age. This child age threshold has been progressively reduced and now stands at age five, and we are introducing additional measures best to support parents to prepare for work when their child is old enough. As noble Lords will be aware, the Prime Minister and Deputy Prime Minister announced further measures to help hard-working families. These included bringing forward a childcare package that will provide tax-free childcare for almost 2 million families. This will help parents go out to work and provide more security for their families.
Our reforms to the benefit system are a key part of the Government’s long-term economic plan to build a stronger economy and secure a better future. Much of our effort has been focused on improving the support available for people who are on sickness benefit but able to work to enter or rejoin the labour market. We are not just writing off people on long-term sickness benefits, as happened in the past. We believe it is only fair that we look at whether people can do some kind of work with the right support—support offered by Jobcentre Plus, specialist provision or through the Work Programme. We need to ensure that the longer-term unemployed do not drift away from the labour market. That is what happened in past recessions, with worrying consequences. It is because we are not going to allow that to happen again that we are investing in the Work Programme. That is expected to provide personalised support to more than 2 million claimants over the life of the contract.
The Work Programme is the largest employment support programme that Britain has ever seen, with far more financial risks sitting with the provider. Payment is by results, with higher payments for getting those with the biggest barriers to employment into sustained work. The Work Programme is better designed than previous employment programmes and is supporting more people into sustained work. Industry figures show that the Work Programme has already helped nearly 500,000 people into work and, of these, more than 250,000 have escaped long-term unemployment and got into lasting jobs. While all contracts are on track to hit their contractual JSA targets, there is significant variation in performance. The worst performing providers are being tightly managed to ensure that they up their game. One contract has been terminated. For the first time, a government employment programme is harnessing the disciplines of the marketplace so that only those providers who succeed are retained to help claimants into work.
Of course, young people still face many challenges, particularly in making that important transition from school to work. Youth unemployment is falling but we need to continue working to bring it down in the aftermath of the recession. We need to ensure that young people have the experience and skills that they need to succeed in the labour market. The Government are raising the participation age so that all young people are now required to continue in education and training beyond the age of 16. We are also implementing wide-ranging policies to improve standards in schools, reform post-16 academic and vocational education and ensure that apprenticeships continue to meet the needs of a modern labour market. We have a wide range of programmes, including those funded by the European Social Fund, and the Youth Contract, to support young people who are NEET to return to full-time education, training or employment.
In a recent report commissioned by Tesco, 60% to 70% of young people said that they had concerns about lack of experience. Many said that they wanted more help from business and struggled with CV writing. That is why it is so important that, through Jobcentre Plus, young unemployed people are given the opportunity to be referred to a careers interview with the National Careers Service. They can also work with local employers who offer work experience and pre-employment training to give them the chance to build up their CVs and job skills.
Apprenticeships play a vital role for many young people, helping them at the outset of their working lives to progress their careers, and the Government offer a £1,500 grant to smaller businesses to take on their first apprentices. Yesterday, the Chancellor announced an extension of this scheme. The Government will now be making more than 100,000 additional incentive payments for employers to take on young apprentices aged 16 to 24, providing a major boost to their job prospects. Traineeships are a new programme to help young people aged 16 to 23 to develop the skills and vital experience that they need to secure apprenticeships and other sustainable jobs.
This Government continue to support economic growth across the regions and help to create the conditions for businesses to feel more confident in hiring more people. Private sector employment has been rising across the UK, and we need to ensure that this continues. To satisfy the recruitment needs of employers, Jobcentre Plus and Work Programme providers use their local labour market knowledge and expertise to improve claimants’ skills and readiness for work. Local enterprise partnerships, in England, provide the vision, knowledge and strategic leadership needed to drive private sector growth and job creation in their areas. Through our strong local offer, Jobcentre Plus district managers work with local enterprise partnerships to ensure that their strategic economic plans make the important link between growth, unemployment and social exclusion. In Humber, Jobcentre Plus and the local enterprise partnership have mapped local and national employment support services and identified where they need locally to plug the gaps.
Developing City Deals has provided a blueprint for working together and co-designing local initiatives. Cities are being given greater freedom to invest in growth and enterprise and being given greater powers, including the power to boost skills and jobs. In Leeds, DWP supports the city region to achieve its aim of being a NEET-free city. Its plan is to enable small businesses to provide apprenticeships when they would not normally have the capacity to do so. The aim is to deliver 680 apprenticeships over three years.
My 2007 independent report on the future of welfare, Reducing Dependency, Increasing Opportunity: Options for the Future of Welfare to Work, came on the back of a long-term aspiration to secure an employment rate of 80%. On the basis that the ONS now defines it—looking at those aged between 16 and 64 rather than between 16 and 59 for women—today this would be equivalent to an employment rate of around 78%. Clearly, a lot has happened since then, not least the deepest recession in nearly a century. Our first aim must be to regain the ground lost in the recession, which would mean a rate of 73% against the current level of 72.3%. It is interesting to speculate that, because most students are outside the labour market, rising participation in education makes it harder to achieve higher levels of employment. But, of course, it is no bad thing to see more young people in education. So, adjusted for that higher participation in education, that 80% employment rate probably translates today into a level some three percentage points higher than the 72.3% that we are currently looking at.
Lord Bates (Con)
My Lords, I understand that, by convention, the mover of the Motion is given the opportunity to be uninterrupted and then can respond to questions in the wind-up.
Lord Freud
My Lords, that is three percentage points higher than the figure of 72.3% that was reported yesterday. That gives a feeling of the factors that we have been looking at over the past seven or eight years. As I said, that extremely challenging outcome implies that any employment strategy would need to target all of the inactive groups. Noble Lords will be pleased to see that, since 2007, the number of people on inactivity benefits has fallen by around half a million. The economy is now recovering and creating new jobs, making this a once-in-a-generation opportunity to help those who have been trapped on welfare to return to work. It is in that light that I would ask noble Lords to view the Government’s welfare reform ambitions. I beg to move.
Baroness Donaghy (Lab)
My Lords, I thank the Minister for initiating this debate, and in doing so, I note that he is much admired for the way in which he steered the Welfare Reform Bill and the Pensions Bill—two of the most difficult Bills in Parliament—through this House. In fact, I think that he is more appreciated by this side of the House than he is by his own party. I say this because my contribution is not very supportive of the Minister’s claims and I wanted to place on record my admiration for him before I rubbished his thesis.
I understand why there is a great deal of celebration from the coalition Government about the level of employment. However, the increase in inequality, the way we treat our young people, the way we treat public sector workers, the increasing economic fragility of people’s lives and the experience of most women in terms of income and childcare mean that there is absolutely nothing to celebrate. The economy is nearly 2% smaller than it was at the end of 2007. Looking at the very short term, it is true that the number of unemployed actively seeking work has shrunk by 250,000. I accept that. However, there are still 770,000 more people unemployed than at the end of 2007—a total of 2.4 million. That represents little change from May 2010. Unemployment has averaged nearly 8% since 1980. So we have to ask how—or even whether—the economy can bring that level down to the 2% we had for 25 years after the Second World War. We had growth averaging 3% a year for more than 60 years. Achieving that over a period of time under current government policies is beginning to look unlikely.
Then we have low productivity. Firms have survived by shelving investment and paying their workers less. This might work in the very short term but it will not lead to growth. George Osborne knows that low productivity has slowed growth and will continue to do so. The Financial Times has used the Office for Budget Responsibility’s own model to show that the £85 billion deficit target in 2013-14 will actually be £111 billion.
The Government’s headline increase in apprenticeships is positive on the face of it, and of course it makes the unemployment figure look better. However, the reality is very different. The minimum wage rate for an apprentice is £2.68 per hour. Although it is a positive step to acquire skills and work experience, when the wages are under £100 a week before travel costs and bills, it starts to look less attractive—and if those apprenticeships do not lead to a job, it breeds cynicism and despair. Most of the new jobs in the service sector are filled by young, unskilled workers on short-term, part-time and zero hours contracts, which is a guarantee that low productivity will persist. The impact on young people is extremely worrying.
The latest survey from the Prince’s Trust confirms what some of us know already. Young people are having a tough time finding security and fulfilment—unless they come from a privileged background. Some 9% of respondents to the survey said that they had “nothing to live for”, and one-third of young unemployed people have considered suicide. Clearly, there are other factors such as an increase in homelessness, poor careers advice and the break-up of families, but we cannot be proud that in this country a large proportion of apprenticeships are just an excuse for cheap labour, or are of poor quality and short duration. The Government’s own research shows that one in five apprentices receives no on-the-job or off-the-job training, and 25% are paid less than their legal entitlement. The Work Foundation has found that, despite the range of skills that are deemed necessary for a career in social care, only around one-third of health and social care apprentices receive both on-the-job and off-the-job training, and one-fifth report receiving neither. It is no coincidence that most new claimants of housing benefit are working rather than unemployed.
A Manpower survey shows that job prospects are better than they have been for six years, in particular in the building industry, the utilities and large companies. If that leads to more jobs for skilled workers, it may help productivity, but if it represents more low-paid, temporary and unskilled work, it will disguise the real problem. The Government have made much of the fact that private sector jobs have increased by 1.5 million and that that has made up for the loss of jobs in the public sector. Even if we discount the tragic loss of skills and commitment to public service that that represents—a hollowing out of the Civil Service and local government, and unsustainable pressure on health service staff—the figures hide blatant exploitation of workers and the prevalence of low pay, particularly among women workers. Some 11 million people have had no increase in real earnings since 2003.
The Government have also made much of the increase in self-employment. Research by the Office for National Statistics shows that women have made up more than half of the 10% growth in self-employment since the recession began. If this represented an increase in business start-ups and thrusting entrepreneurs, we would all be cheering, but the reality for most is very sobering. According to HMRC, in 2011-12 the average income for a self-employed man was £17,000. Even taking account of the ability to offset a large proportion of costs and expenses if you are self-employed, that is still a surprising figure. The average for women, however, was £9,800—40% less than men. In almost every region apart from London, the south-east and Scotland, self-employed women earned less than £10,000 a year. This suggests a great deal of substitution from low-paid employment to low-earning self-employment.
A recent report by the Women’s Budget Group notes that much of the increase in women becoming self-employed is effectively because of precarious work and zero-hours contracts rather than because of the creation of new businesses. Scarlet Harris, a spokesperson for the group, said:
“Clerical, cleaning and caring work, which is predominantly carried out by women, has experienced some of the fastest growth in self-employment in recent years. These women, who already suffer poverty rates of pay, are now having to contend with the poor working conditions and complete lack of job security that self-employment brings. These shocking gender pay gap figures should end any delusions people have about the UK’s four million self-employed workers”.
A BBC investigation last month found that advisers are encouraging individuals on welfare-to-work schemes to become self-employed in order to move them from unemployment benefits to working tax credits. Has the Minister investigated this matter? If so, how does he plan to deal with it?
Not only is the gender pay gap widening for the self-employed, but ONS figures show that the gender pay gap as a whole in the UK widened in 2012 for the first time in five years, from 9.5% to 10%. The Chancellor of the Exchequer said that the recent Budget is for,
“the makers, the doers, and the savers”.—[Official Report, Commons, 19/3/14; col. 794.]
He should have added—“and young people and women can push off”.
Finally, I do not believe that we can win a race to the bottom. We need high-quality jobs, investment in manufacturing and good-quality training and careers advice. The World Economic Forum in Davos concluded that the biggest threat to prosperity in the next decade was the increasing gap between rich and poor. This Government are following a path that will ultimately fail, at enormous cost to people’s security and aspiration. It really is a case of, “Never mind the quality, feel the width”.
Lord Shipley (LD)
My Lords, I, too, thank the Minister for enabling us to have this debate because it gives us an opportunity to look at the levels and nature of employment in the UK, not least from the perspective of region and age. The context overall is one in which austerity, inevitably, is still with us, in that borrowing this year will be more than £100 billion. Government debt is still rising so there are limits on what the Government can afford to fund.
I listened very carefully to what the noble Baroness, Lady Donaghy, said. I will simply say in response to the list of criticisms of the Government—which was a self-selected list because it missed out a whole range of things that indicate a trend towards a higher rate of quality employment—one would think that the financial crisis had nothing to do with the Labour Government up until 2010. This Government have had to deal with a huge financial crisis in a very serious recession and the level of employment we have today is quite remarkable given the record of the previous Government and what this Government have had to do.
I say that otherwise one would be led to think that this was a story of entirely bad news and it is not. The green shoots of growth and recovery are there. Figures published yesterday by the Office for National Statistics show that the number of people in employment has risen to 30.19 million and that the level of unemployment has fallen again by 63,000 to 2.33 million in the three months to January this year. Compared with a year ago, the numbers in employment have grown by more than 450,000. That is a very encouraging figure. A higher percentage of the adult population in the UK is now in work than in the United States of America. Unemployment is down to 7.2%, falling well below its peak, and below the current levels in most European countries. The unemployment rate in the European Union is 50% higher than here at 10.8%. It is true that more women are employed now in the UK than ever and that 95% of all jobs created last year were full time. The trend data also show that youth unemployment is now falling and has already fallen to a level lower than when this Government came into office four years ago. That is a very important achievement, and we should say so. However, that is not to say that there is a lot of further work that needs to be done, because it is undeniably the case that youth unemployment remains far too high.
I join the Minister in saying that it is very important that we note the impact of the Budget. I realise there is a debate on this next week, but it is highly relevant to this debate, because yesterday’s Budget is a Budget for employment. It has been described in the media as very much a Budget for savings and pensions, and in one respect that is true, but actually it is a Budget for employment. There are several reasons why I think that is the case. First, it will help to drive exports even more, giving British businesses access to the most competitive export finance support in Europe, because the UK’s direct lending programme has been doubled in the Budget to £3 billion. Secondly, it is cutting energy prices for business, particularly for the most energy-intensive manufacturers, around 80% of which are based in the north of England, Scotland and Wales. There will be increased incentives for companies to return manufacturing from abroad to Britain. Thirdly, there is increased financial support, through the tax regime, for capital investment and for research and development. Fourthly, there is more support for apprenticeships, which I will look at in greater detail in a moment.
I noted the comments by the noble Baroness, Lady Donaghy, about childcare, but we should remember that it was announced earlier this week that as many as 1.9 million working families could benefit from a tax-free childcare allowance worth up to £2,000 per child, up to the age of 12. Taken together, all these measures will help business growth, increase the number of jobs and increase the number of people in work and able to work. The Office for Budget Responsibility has said that employment will rise to well over 31 million by 2018, which seems a reasonable prediction based on what we know today.
I will now focus on unemployment and what will happen there. Unemployment stands, as I said earlier, at 7.2%. I was very concerned early last summer when the Governor of the Bank of England said that the Monetary Policy Committee would look at the case for increasing interest rates when unemployment reached 7%. My concern was that 7% is an average UK figure and that parts of the country would be higher while others would be lower. Some parts of the UK have unemployment rates of over 10% and they need continued low interest rates to encourage investment. I was therefore very relieved when the Governor of the Bank of England revised his view and said that the unemployment rate should drop further before the Bank considers an interest rate rise. A substantial body of opinion thinks there is sufficient slack in the economy to permit this without impacting on the rate of inflation. It will certainly help to encourage growth in those parts of the UK with higher unemployment and will also help to secure more jobs for young people.
It is that issue that I want to take a more detailed look at. In official statistics, young people can be shown as employed full time, employed part time, employed and in full-time education, employed and in part-time education, unemployed, economically inactive, or not in employment, education or training. The detailed statistics can be complex to follow because the categorisations can vary depending on what you are looking at. What is not complex to follow—I agree entirely with the noble Baroness, Lady Donaghy, on this—is that too many young people are unemployed or underemployed. The trend, as I said earlier, is in the right direction and the Government should be praised for that, but I am grateful to the Local Government Association—I should declare that I am a vice-president of the LGA—for pointing out that 1.25 million young people are not working but would like to. Some of course are in full-time or part-time education, 760,000 are in work but would like more hours, and 425,000 are not working to their potential—for example they may be graduates in what are thought to be non-graduate jobs.
The Government are spending around £15 billion a year on young people and I welcome their ambition, which the Minister has explained to the House, to devolve skills and training to local enterprise partnerships and to local authorities and their partners. It is important because we need integrated employment services based on local labour markets. Only local networks can deliver that, as was highlighted by a number of City Deals, in which—as Members of the House might be aware—I have had an involvement.
Crucially, however, we have to remember the role of schools here. Schools have a statutory duty to provide a careers service, yet a few months ago Ofsted reported that three-quarters of secondary schools were not executing their statutory duties satisfactorily. This was followed by IPPR North’s report, published in January, which concluded that secondary school careers services were not equal to the task of helping students navigate the increasingly difficult transition from school to work. That report, entitled Driving a Generation: Improving the Interaction between Schools and Businesses, made a number of very helpful recommendations which I commend to the Minister because it proposed a means whereby schools and businesses could relate much better to each other. My point is that if the huge and worrying mismatch in skills is to be solved, the solution must be started in the place where young people learn in compulsory education, where they need to better understand the qualifications and skills required to enter an apprenticeship, particularly in science, maths and IT.
There is high demand from young people for apprenticeships, but there are still not enough employers coming forward to offer them. The average apprenticeship post receives 12 applications each, but in some sectors the level of demand is twice as high. I therefore welcome the extension in yesterday’s Budget of apprenticeship grants for employers, which will fund more than 100,000 additional incentive payments for employers who take on young apprentices. I also welcome the funding to support employer investment in apprenticeships at degree and master’s level. This will bring more employer engagement into the HE sector and expand apprenticeships at higher levels, where there are currently too few available qualifications.
I have two very brief points in conclusion. First, will the Minister and his colleagues look at the role of UKTI? In many respects it does a very good job. Its role in driving exports upwards is good, but it has a role in inward investment and no regional or sectoral targets to meet. It simply has UK-wide targets. It would help enormously if it actually had to produce an audit of where it has directed inward investment. My second point is about regional and local procurement. I have a constant concern that national procurement contracts are being driven by price and go to national companies headquartered in the south of England. I would like to think that we would always ensure, in all procurement by central and local government, that local people are employed, that local people are trained and that smaller local companies and social enterprises can tender for government contracts. I hope the Minister might be prepared to agree to undertake a constant audit of the outcomes of government national procurement policy and its impact on employment.
Lord Holmes of Richmond (Con)
My Lords, I thank the Minister for initiating this incredibly significant debate and for all the work that he has done across the work and pensions landscape, which has been ground-breaking and innovative. It is worth reiterating yesterday’s employment figures: there are more people in employment now than at any previous time; more people employed in the private sector than at any previous time; and more women in employment than ever before. Yesterday’s Budget was a Budget for jobs: employment is up; growth is up; the deficit is down by a third and by next year it will be down by a half. Could there be any greater evidence for that than the announcement this morning from Hitachi that it will base its global—yes, global—rail business in the UK?
It is one thing for employers to provide jobs; we also need to ensure that the skills and training are there so that our people, particularly our young people, are ready to take up those employment opportunities. To that end, I commend the work of my noble friend Lord Baker of Dorking with the university technical colleges and the work they are doing. All educational establishments should focus on not just a careers service but what is now known as employability. I suggest to the Minister that he should consider a potentially statutory obligation on schools, colleges and universities to the young people leaving them which would last until those young people enter the next stage of their journey, be it higher education, training or employment. In future, it should not be possible to have someone who is not in education, employment or training and who has nobody potentially looking out for, supporting and assisting them to take that next step—whatever the right step might be for them.
Working on the Olympic and Paralympic Games, we saw the opportunity to create hundreds of thousands of jobs, but also how there were gaps—particularly in the host boroughs—in finding people to fill those jobs and to drive employment in the local area as much as we all wanted. That will continue. When you look at iCITY, a brilliant redevelopment of the media centre in the Olympic park, there will be high-skill, high-tech jobs. We need to ensure that people have the right skills to be able to go into those jobs and to continue to work in their local areas. Similarly in terms of construction, there is the E20 village—the old athletes’ village—and the new plans at Ebbsfleet. In Scotland, there is the new town at Tornagrain. These will provide thousands of constructions jobs, engineering jobs and jobs across the economy. We need to ensure that people are ready, willing and able to take up those jobs. Similarly, across the massive infrastructure programme that we are rolling out under the careful eye of my noble friend Lord Deighton, there is again potential to drive economic growth and employment opportunities right up and down the country, but we need to have people ready, willing and able to take up those jobs.
UKTI has already been mentioned. Great work has been done but successive generations have relied far too much on the EEC, the EC and now the EU. Yes, Europe is a great market but it is not the only one. We have got nowhere near maximising our opportunities with the BRIC economies. When I was with the GREAT campaign down in Rio in 2011, I found that Italy exported many multiples more than the UK did to Brazil. Italy has no historical or language connection to Brazil but it has built up an effective, practical and meaningful trading relationship that has driven jobs, and not just in Brazil, for Italian businesses. We need to look at that, not just in terms of the BRIC economies but also the new MINT economies—Mexico, Indonesia, Nigeria and, not least, Turkey. Turkey is pretty much on our doorstep. To get a sense of the demographic there, take any western European advanced mature democracy and then turn that demographic on its head. That is the opportunity in Turkey. The majority of the population is under 25. Its economic growth is in double digits. Those people are purchasing and we need to ensure that they have the opportunity to purchase British stuff and so drive employment for our businesses right up and down the UK.
I turn to Scotland. Ultimately—in September—an incredibly significant decision will be made by the Scottish people, the most significant decision for the union in hundreds of years. It will not be simply a decision about their destiny, and it will not be considered only on the basis of Faslane. It will not be about oil, per se, and it will not be about the financial service industry in Edinburgh in isolation. It will be about jobs. It will be about employment. When Scottish voters put their cross in the box in September, I urge them not to think just about Scottish jobs; I urge them to think about English jobs and UK jobs, because that is what is at stake, and we will all benefit if we keep the union together.
In short, the Budget was about employment. It was about possibility. It was about potential. We are not out of the woods but we are on the right road. There is a long journey ahead of us. We need to drill into those employment figures, as has already been mentioned, and ensure that every area and region of the country is benefiting from this employment boom. We need to ensure that young people and disabled people are similarly benefiting and being enabled into employment. In short, we need to ensure, for all our sakes, that every person who is able to work is enabled to do so and that we provide real security for those who are not. It is in all our interests to drive this forward. What we should all be striving for is a high-employment, low-inflation, high-productivity, low-interest-rate, prosperous United Kingdom economy that is focused on and fit for the future.
Lord Giddens
My Lords, I, too, congratulate the noble Lord, Lord Freud, on having initiated this debate, and I congratulate him in a non-partisan way on his work on welfare and on other areas, such as mesothelioma, which has touched me and my family personally. I greatly appreciate his efforts in that discussion. He will be pleased to know that I do not propose to emulate my noble friend in trying to rubbish him, but I want to develop an analysis which is quite different from that which has been offered by noble Lords so far.
I shall argue that when considering the level of employment in the UK it would be a great mistake to concentrate only on the incipient economic recovery and the return of demand. As the Minister said, net new jobs are being created, and there is certainly a debate to be had, as my noble friend said, about what kind of jobs they will be, who will hold them, how many are part-time and so forth. However, I shall concentrate on much deeper structural trends which provide a much more sober picture than some of the portrayals being offered so far because some of these trends are utterly dramatic. They are absolutely profound in their medium-term implications. Even in the short term, recovery in the job market could be completely subverted by them, and these changes are accelerating in the here and now.
The changes I have in mind are driven by two convergent sources of technological transformation: computer technology and robotics. It has aptly been said that we are entering a second machine age, one that it is totally different from anything we have seen before. One of the most important features of this technological innovation is that in some areas these innovations—and it is amazing when you look at the details—are exponential, not linear, and they are resonant with implications for the future.
The two fields—computer technology and robotics—are tied together by digitalisation. As digital areas, they are truly global, not national in any sense. Only some 15 years ago, it was confidently said by experts in the field that there was a range of tasks that computers could never do, essentially because computers cannot be creative. These tasks included driving a car and translating a natural language. With the advent of supercomputers, all this has changed. Most noble Lords will know that the Google driverless car has gone for something like 400,000 miles without accidents. The only two accidents it had were when two human drivers crashed into the back of it. Supercomputers can now do translations of natural language sources, including, for example, translations of poetry, as well as human translators. That is quite an extraordinary transformation.
The same thing is happening in the area of robotics. About 15 years ago I went to the Sony media lab in Japan and talked to the head of Sony at that time. He said, “From now on, we are concentrating on robotics; this is going to be our main emphasis”. I saw some of the robots they had there. They could barely walk. They could not climb stairs. They could not do the most mundane tasks. This was 15 years ago. How things have changed. I will give you a couple of examples which sound trivial but are actually a bit awesome to me. A robot recently took on the world table tennis champion at table tennis. The robot was winning for most of the match. The human suddenly came from behind at the end, and in fact triumphed, but it will not be long before the conjunction of the computer and the robot will beat all human table tennis players. If you see someone playing table tennis at the top level, it is a completely amazing phenomenon. To think that a machine could be on the verge of beating the world champion is quite awesome.
There is also a robot stand-up comic. It is able to innovate, to tell stories, to tell jokes which the robot itself invents and, as it were, to play the audience just like a human stand-up comic. For example, the robot stand-up comic said, “I went out with an Apple gadget. It didn’t work out—she was always i-this and i-that”. The robot stand-up comic also has a way of deflating the situation when it does not get a laugh: it will say, “Oh well, I’ll have to do better next time”, or, “Hmm, that was not good enough”. It sounds trivial, but there is something awesome going on here.
The implications for work and jobs are huge. Many of my economist friends and colleagues are working intensely on them. Supercomputers will be able to take over a large number of professional and technical jobs. Jobs which only a few years ago it would have been inconceivable for machines to do are now lined up for destruction. They include jobs in the law, the medical profession, accountancy, finance and other areas. These are not low-level jobs, but at least medium-level jobs. We are talking not about the distant future, but of the next 10 years. Some of these changes have already happened. For example, machine translation is already replacing human translators in some of these areas; that is quite widespread.
One detailed analysis carried out by economists in the United States concludes that 40% of technical and professional jobs are vulnerable to takeover by intelligent machines. This is a level of job displacement not seen since the transformation of agriculture by industry. Agriculture used to employ 40% to 50% of the population, and it is now down to 2% or 3%. It is potentially a level of job displacement of that order. That is why it is hard to get one’s head around it. It is easy to dismiss and say that it is just hype about a distant future. It is not that at all, I assure noble Lords. These things are already happening. It is most advanced in the American economy, but it is happening in many other economies, too. So what we see when we go into a supermarket and we are more or less obliged to checkout by machine, or we go into a bookstore and find the same thing—or we go into other shops where there is a checkout machine—is at the lowest level of what will increasingly happen, and is happening, at a higher level. That is serious stuff for future employment.
Could the Minister reflect on or give me a response to three questions? On my first question, an easy or ignorant response would be to say, “Oh well, new jobs have always been created in the past when you have technological change”. We absolutely cannot say this with any certainty here, because we have never been in a position where machines have outstripped us intellectually and physically in this way. What work is going on inside the Government on that issue? This is quite different from the rosy picture and the debate about the immediacy of jobs; it is a surging trend that could be massively important for how we look at the future of employment.
Secondly, if it proves true that there is not enough work to go around in 10 to 15 years, we might have to be much more imaginative about the role of work in life than we are today. Many of my economist colleagues are thinking about this; an example in your Lordships’ House is the noble Lord, Lord Skidelsky, in his recent book. They suggest that we should return to themes that existed primarily in the 1960s of basic income and negative income tax. Is any thinking going on inside the Government about those issues, should those trends become exponential, as to me they will?
Thirdly, and finally, these trends are going along with a phenomenon that my noble friend Lady Donaghy mentioned—the large-scale displacement of wealth and large-scale inequality. It is driven in some part by these technological changes, as has been demonstrated in the United States, where there has been an absolute decrease in the amount of wealth taken by the majority of wealth-holders; almost all of it has gone to the top. A similar pattern is seen with income: the closer that you get to the very top, the greater the proportion taken. That is a really disturbing trend, and it is pretty similar here. We need some seriously new policies to produce a more equitable society in this world of high technological change. I conclude by asking the Minister: where are these policies?
Lord Bilimoria (CB)
My Lords, when the United States was formed in 1776, it took 19 people on a farm to produce enough food for 20 people, so most people had to spend their time and effort in growing food. Today, it is down to 1% or 2% to produce the food. So let us consider the vast amount of supposed unemployment produced by that. There was not really any unemployment produced; what happened was that people who had formerly been tied up working in agriculture were freed up by technological developments and improvements to do something else, which enabled us to have a better standard of living and a more extensive range of products. That is freedom—arguing against the race to the bottom. The noble Lord, Lord Giddens, talked about robots, but I have gone back to 1776. Nothing has changed in that sense.
I thank the noble Lord, Lord Freud, for initiating this debate. I have just a few points to make. First, the rise in the overall employment rate is real and is at record levels and, correspondingly, there has been a fall in unemployment. With the economic dominance of the south-east, there is a need to rebalance the economy by supporting manufacturing, particularly in the regions. Continued tax reform is also needed. The Office of Tax Simplification is an oxymoron; our tax system is getting more and more complicated.
UK unemployment has fallen by 63,000 to 2.33 million. The unemployment rate now stands at 7.2% of the population. As the noble Lord, Lord Holmes of Richmond, said in his excellent speech, employment has risen to a record of more than 30 million. The bad news is that the NEETs are still close to the 1 million mark; although the figure is falling, it is still above 900,000. The number of people claiming jobseeker’s allowance has fallen to 1.175 million. Over the year that number has dropped by 363,200, which is terrific. That is all really good news.
The new Governor of the Bank of England, Mark Carney—I say new, but he has been in post for almost a year—made a fundamental mistake in saying that he was going to give us forward guidance and that when unemployment fell to 7% the Bank would think of raising interest rates. That figure has been reached more quickly than thought, and he has had to back-track on the forward guidance almost straightaway. Interest rates are still at a record low of 0.5%. Just think: what got us into this financial crisis was what was then perceived as being the longest period of low interest rates for a long time—and they were then at 5%. Interest rates are 10 times lower than that, but still we cannot increase them, although the unemployment figures are near, or at, what the Governor of the Bank of England wanted them to be. They have been kept unchanged at 0.5%.
The real issue is public expenditure. Public expenditure used to be around the 40% mark. It was 42% of GDP in the early 1970s. Then under the previous Government it went up to almost 50% of GDP. By the late 1980s it was below 40%. We need to get that public expenditure down to 40%, because our tax-collecting ability historically has been around 38% to 39%. If we can get our public expenditure down to 40% we will have a balanced economy and will eliminate the deficit.
UK manufacturing is not dead, by any means. We are excelling in manufacturing. Our aerospace industry is the second largest in the world. Our automotive industry, of which I speak regularly, is flying. When Tata Motors bought Jaguar Land Rover in 2008, I spent a whole day at the Land Rover factory. Wow—it was impressive. I am due another visit, because my last one is already outdated. The company is now making more in profits than it paid for a business that nobody was interested in buying in 2008: that is how well it is doing. It is also exporting and creating employment.
We have heard the great news that Bentley is moving its 12-cylinder engine manufacturing from Volkswagen in Germany to Crewe in the UK. How wonderful is that? Rolls-Royce is manufacturing at Goodwood. Therefore, we have the best of the best quality—the best cars in the world—being manufactured here in Britain.
Our chemical industry is huge; our defence industry is huge; our electronics industry is huge; and so is our food and drink industry. I speak from my own experience. I mentioned yesterday that we were manufacturing a great deal in Europe. In fact, the majority of our production was in Europe some years ago and we decided to reshore to the UK because here we can produce world-class beer. We now produce in Burton upon Trent; we are winning award after award and exporting around the world. I am proud of that.
We have a plastics industry and a steel industry; we also have a textile industry, which we thought was dead but which is not dead at all. There are still almost 80,000 businesses employing 340,000 people and generating £11.5 billion of turnover.
What about the regions and the whole focus on London? We have a country where one big city is the capital and the financial capital and is much bigger than the second biggest city, Birmingham—let alone Manchester or anywhere else. If we look at a large country such as the United States, New York is big but you have Los Angeles, Chicago and lots of other big cities. If we look at another large country, India, there is Mumbai but also Chennai, Bangalore, Hyderabad, Calcutta and Delhi, which are huge cities in their own right. We have this one big city. I am very proud of London; it is the greatest of the world’s great cities. But how can we encourage business and employment in the regions? The answer is simple: we must encourage manufacturing. We cannot manufacture in London; we have to manufacture in the regions. That can create the jobs.
The Financial Times analysis tells a story in which the percentage of people on jobseeker’s allowance benefits dropped by more than 30% last year in places as varied as Oldham in the north, Stafford in the Midlands and the Suffolk coastal region. This is great news. If we can carry on in that vein, we will have growth and employment outside London.
Again, worries about lopsided economic growth are not new. The noble Lord, Lord Giddens, talked about developments 50 years ago, at a time when the economy was also recovering after a period of stagnation. The then Labour leader, Harold Wilson, complained in Parliament of a two-nations economy and said that,
“the Chancellor has to try to restrain the overheating which he sees in the South at a time when large areas in the North are still in the chill grip of his predecessor’s freeze”.—[Official Report, Commons, 14/4/1964; col. 285.]
Those were the comments of Harold Wilson on Reginald Maudling’s 1964 Budget speech.
We should look at the great signs of success. We have already heard that Hitachi is to move its rail business headquarters from Japan to the UK, and that Bentley is to move from Germany to the UK. Companies from Japan and Germany, the pinnacles of high-tech manufacturing, are moving to the UK. This is fantastic. Hitachi says its move will expand the number of rail jobs to 4,000, which is excellent. I have already mentioned Jaguar Land Rover and Bentley. The Chancellor has promised to cut the costs of manufacturing to boost growth, and he has done it. He predicts that energy costs will go down by £7 billion. Again, that is excellent.
Immigration is one area where I fundamentally disagree with the Government. Their immigration policy has sent out the wrong signals around the world to foreign students and academics. That affects not just universities such as Oxford and Cambridge, where 30% of the academics are foreign. For example, more than 30% of the academics at Birmingham University are foreign. As I say, bad signals have been sent out, and the number of Indian foreign students is now plummeting, but we should look at the contribution Indians make to our economy. On Friday, I went to the celebrations for the principal of West Nottinghamshire College, who has been made a dame. She is the first Indian-born dame in 83 years. She came to this country as a young bride unable to speak English but today heads the most successful further education college in the UK, and probably one of the most successful in the world. That is the power of immigration.
The statistics show that Indians make a huge contribution to our economy. In 2013, Indian men topped the ethnicity employment table in the UK and Indian women came second. Indian men had the second lowest rate of unemployment—and so it goes on. One in seven companies is founded by a migrant entrepreneur. Migrants make a huge contribution to our economy and create jobs. Migrant entrepreneurs have been a benefit to this country.
In looking at overall business performance, we must not neglect SMEs. The Minister talked about all the Government’s initiatives. I was on the National Employment Panel for eight years and on the New Deal task force before that. SMEs account for 59% of private sector employment and 48% of private sector turnover. Within SMEs, small businesses account for 79% of employment and 69% of turnover. We need to encourage these small businesses to grow, because the argument about big companies not paying corporation tax misses the point. Yes, we would like them to pay more corporation tax, but that tax makes up only 8% of our tax take. Most of our tax take comes from the tax that is generated by employment—more than 50% comes from PAYE and NI-paying employees and NI-paying employers. The more jobs we create, the more tax we will generate; therefore we should encourage SMEs to grow.
I have suggested to the noble Lord, Lord Young, that we should have a competition in this country to sponsor staff from 100 companies to attend the Cranfield School of Management business growth programme or the University of Cambridge Postgraduate Diploma in Entrepreneurship. It costs £10,000 to attend these programmes. The businesses that send people to attend those programmes will grow faster than other businesses because we will be training our entrepreneurs to perform better and grow their businesses.
We need to go further on national insurance breaks. Ralf Speth, the chief executive of Jaguar Land Rover, said that the secret of his company’s success was innovation. UK Trade and Investment was mentioned by the noble Lord, Lord Shipley. Exports are crucial. The further we go down the route that I am suggesting of training our entrepreneurs, encouraging manufacturing in the regions and generating jobs, the more exports will follow. I have mentioned my own experience as an example of that.
To conclude, what is the purpose of business? I think that, yes, you want to create a product that people love, but you also want to create employment for the well-being of the people whom you employ. In every survey that asks people what is most important to them, they say family. What else is important to them? They say health. What else is important to them? They say their working life. If people do not work, they are not going to be happy. A happy country is a country with, ideally, full employment. We will never get to full employment, but at least let us try.
Lord Monks (Lab)
My Lords, I add my thanks to the Minister for initiating this debate. He has every reason to be cheerful given the rise in employment that has taken place. It would be churlish not to welcome the fact that the British economy is in a better place than it has been over the past six years, and the rising employment rate is the best feature of that.
As the Chancellor recognised, there is a long way to go before we can say that we have a balanced and sustainable economy. I note that he was not quite as upbeat and positive as the noble Lord, Lord Bilimoria, about the prospects for the British economy. While I welcome the national fall in unemployment, it is not being felt in all areas of the country or all areas of the economy. In the north-west, my region of origin, the number of unemployed has risen by 22,000. That is the largest rise of all the regions in the country. As the Minister said, the figure that raises the greatest concern is the rate of long-term youth unemployment. For example, in south Warrington in the north-west, between May 2010 and January of this year, the number of unemployed young people increased sixfold. In Rossendale over the same period, seven times as many young people have been unable to find work. Further north, in Lancaster and Fleetwood, the number of unemployed young people has increased tenfold over that period.
The harsh facts are that fiscal austerity has slowed and weakened the recovery rather than led to it. Exactly the same thing has happened in the eurozone. Both of these are in contrast to the United States, which has bounced back more rapidly and powerfully than this side of the Atlantic.
Monetary looseness and quantitative easing has been a factor in the UK. It has helped the recovery, but it has also helped it to be rather unbalanced and, for that reason, fragile. One could say that the economy is still on life support while we have quantitative easing. We have been under the delusion, as the noble Lord, Lord Skidelsky, described it, that the policies which made the recession worse would be the same policies that made recovery possible. In fact, public investment is still down 35% from pre-crash levels. Resources still stand idle and must be mobilised in all parts of the country, not just in the relatively prosperous south-eastern corner.
That brings me to concern about the British economic model. Just over six months ago, it was said in the Economist that:
“The bones of Britain’s economy are rotten. Shoppers are consuming not because they earn more but because they can borrow more … Firms with cash … are hoarding rather than investing. New firms … find it hard to borrow: the banks will lend only against property. Britain still buys far more abroad than it sells, despite a weak currency”.
Things have moved on since then. They would not write the same thing today. However, I ask noble Lords to appreciate the fact that some of that is still very true.
The Chancellor recognises these structural weaknesses. He mentioned them in his speech on Tuesday. However, his prescriptions still fall well short of what is necessary to cure our problems. It would be so depressing to think that we are condemned to a future in which we might get a debt-fuelled property boom, particularly led again by the south-east, followed by another financial crisis, followed by another period of austerity. What can we do to avoid that? There are things being done in the banking system but it is important that this rebalancing of the British economy becomes a national priority.
Can we be bolder in this area? The noble Lord, Lord Heseltine, has certainly had a go and is very active in this field. With his report, No Stone Unturned, he pointed to lessons from our neighbouring countries on the eastern shores of the North Sea, including Germany, the Netherlands and the Nordic countries—lessons about decentralisation, skills and active public intervention to spur growth. These lessons need to be learnt here, along with other features of the more successful economies of our North Sea neighbours. These include: the equality of Scandinavia; the collaborative, long-term culture of Germany, with its voice for workers; the widespread, effective collective bargaining systems in all the countries that I mentioned on the other side of that sea; and the general excellence of their infrastructure, public services and welfare states. They did not follow the cult of deregulated labour markets being the route forward to prosperity, and they did not adopt the easy hire-and-fire policies that were largely pursued in the English-speaking world. Even in Germany, the Hartz reforms introduced by Gerhard Schroeder were, by our standards, rather modest and marginal.
Collective bargaining is a term that you do not often hear in this House and sounds quite quaint and historical to many here, although it is prevalent in most of our top companies, including those on the list that the noble Lord, Lord Bilimoria, mentioned as exemplars. It is still strong at a sectoral level in the countries I mentioned and has a major influence in pressing against inequality. After all, if you are the boss and you have influential unions, it becomes far harder for you and your colleagues to sustain a culture in which you tend to help yourself and give yourself the benefit of every doubt when it comes to sharing out the company’s income. If you have effective information and consultation arrangements, involving company councils and even workers on the board, then you strengthen the forces that seek a long-term perspective on company performance—not those who see companies as a bundle of assets to be traded in the City, where the hunger for deals and transaction commissions seems undiminished. That certainly runs counter to our need for a better-balanced, more sustainable economy. The approach of those North Sea economies has much assisted greater equality and better productivity as well as longer-term perspectives about the future of their economies.
I accept that there are many good things about labour market flexibility. When applied functionally it enables workers to respond flexibly, and we have seen some of that in companies through this recession, which has helped to keep employment levels up. Flexibility in skills is obviously important, too, and enables individuals and companies to flourish. In passing, I hope that the Government continue to support Unionlearn, the programme that has done a lot to promote a learning culture among the workforce in this country. It would be a false economy to cut it back. That is not the responsibility of the Minister’s department but is on the Government’s agenda.
Flexible working hours are clearly important for the future to employers and employees alike, but while labour market flexibility has good features it also has some much less good features, particularly where it benefits unscrupulous employers by letting them fire people without adequate consultation. It is a process that has been encouraged in recent months and years by the Government’s moves. It is therefore important to consider labour market flexibility in its different segments, and regulation sometimes produces better practice.
Perhaps the worst thing about labour market flexibility as it has been applied in the UK is the lamentable performance on productivity. Output per hour in Germany is 31% higher and in France it is 32% higher. These are pretty disastrous figures. If we are to keep up with other countries, never mind soar to become the economic leader that the Chancellor talked about on Tuesday, then productivity must become a national campaign. It must become something that we improve and we must all work together to achieve that.
The Chancellor was right to warn against complacency because things are getting better, but I believe that he is wrong not to reach for more ambitious plans—perhaps, for a start, applying some of the lessons that we can learn from the other side of the North Sea.
Baroness Eaton (Con)
My Lords, I add my thanks and congratulations to the Minister on initiating this debate but also on his very inspired work in his field.
I am certain that there is not a single Member of this House who does not recognise the value of employment to the well-being of individuals and their families. Times of unemployment are tragic for people and for the places where they live. Therefore, it is heartening to note that, as we have heard, the number of people in employment is at a record high; over the past year the total has risen and we now have 30.19 million people in work. I know that that has already been referred to but it is such a good figure that I need to say it again.
Even so, many of our major cities, especially those in the north of England, have on occasion suffered disproportionately as major industries have almost disappeared. Therefore, today’s news—again, already referred to—about Hitachi moving its operation to the north-east is very welcome. It is also an indication of the confidence that business has in the UK and its Government.
The closure of one factory can cause several hundred jobs to be lost, even overnight. One authority in the north of England, the metropolitan district of Bradford, where I am a councillor, was once one of the richest cities in Britain and the centre of the world’s wool trade. Over a number of years, the wool trade declined and so did much of the heavy engineering industry. This had a major impact on the employment opportunities for the people of the Bradford district.
In Bradford, for the 12-month period to September 2013, 217,500 residents aged 16 to 24 were in employment. Since September 2011, an additional 18,400 people have found employment. Employment growth in Bradford since 2011 has almost doubled the 4.7% increase seen in the Leeds city region as a whole and is more than four times the 2% increase across the UK.
Bradford’s working population is growing by 2,000 people per year. By 2021, there will be an additional 18,000 work-age people living in the district. Maintaining current levels of employment rates will require 10,000 new jobs. The Leeds city region econometric model forecasts employment growth at around 16,000 by 2020—an increase of 7.5%, which is higher than the increase of 6.5% forecast for the UK. The majority of new jobs will be higher-skilled, with around 6,000 requiring graduate level skills, while only 2,000 will be NVQ level 1 or below. The sectors likely to experience the biggest growth are health, transport, education, retail and professional and business services.
Bradford Council has implemented the rates rebate scheme as part of a package of measures funded by the Government’s successful regional growth fund. This scheme has been critical in persuading a number of prospective commercial tenants to commit to a large retail development project, which has in turn enabled the critical level of pre-letting required to trigger development obligations.
Bradford’s city centre growth zone, launched in 2012, is jointly funded by the regional growth fund and the council, the aim being to encourage private sector investment. Construction of the new retail centre, I am pleased to say, is now under way. The construction phase will create 1,500 jobs, with 2,500 permanent jobs in the completed contract, which is projected to attract 20 million shoppers per annum. The timeframe for the growth zone offer is crucial. The construction phase commenced later than anticipated when the programme was devised, and this creates a major issue. The delivery schedule and the regional growth fund funding period are no longer aligned, resulting in many priority activities falling outside the contracted delivery period.
The city centre growth zone is working in the case of Bradford. It is bringing real change to the face of the city centre—change that is lasting. The momentum for investment has been really positive. It is essential that such excellent government schemes always allow flexibility on timescales to enable local circumstances to be accommodated.
A project called Get Bradford Working has provided funding for unemployed people and has funded longer-term placements in business to provide people with skills and experience. Some 273 unemployed people have been helped into jobs created through the Employment Opportunities fund, and a further 245 unemployed people have been supported into work through the Routes into Work fund. In spite of changes in heavy industry, there are opportunities to train for manufacturing jobs in the district, which still has a larger than average percentage of manufacturing. There is a shortage of engineers—especially those with high-level skills—and there are examples of people working well past retirement age as there are not the people with the relevant skills to replace them.
Nationally, youth unemployment has been rising since the early 2000s, growing by more than a third during the 2008-09 recession, and it has remained too high ever since. It is, however, encouraging news that the latest figures show that youth unemployment has fallen by 29,000 this quarter and is 81,000 lower than a year ago. Some 8.7% of all young people who have left full-time education are unemployed. While this is unacceptably high, we should note that it compares with 12% in 1993 and 14% in 1984.
As we have heard, the Department for Work and Pensions works with young people on jobseeker’s allowance through jobcentres, and the number of young people on JSA has fallen for the 21st month running. The 18 to 24 claimant count peaked in December 2011 at over 480,000, but today it is 295,000.
Apprenticeships can be part of the solution to youth unemployment and aid the development of appropriate skills in manufacturing. There are many opportunities. The Chancellor is to be congratulated on yesterday’s Budget, recognising the value of apprenticeships and extending the apprentice grant for employers scheme, providing £85 million in both 2014-15 and 2015-16 for 100,000 grants to employers, as well as £20 million for postgraduate apprenticeships, as referred to by the noble Lord, Lord Shipley.
As I have said, apprenticeships create many opportunities for young people, but in too many cases young people have not been encouraged in school or by their parents to think of them as a credible alternative to higher education. We need to move young people away from the idea that anything other than a higher education degree is an inferior route to employment.
In many schools, as the noble Lord, Lord Shipley, ably pointed out, careers advice is woefully inadequate, with too little focus on the variety of routes into work and education. Many careers departments in schools do not have a good understanding of the employment trends or the skills required in their locality. Academy schools with business sponsorship do much to improve this situation. Too often, those leaving education are not seen as being ready to cope with the world of work. There can be issues around attitude, timekeeping and communication. Therefore, to some potential employers, school leavers can be much less attractive than those who have experience.
There is no magic bullet that resolves the issues of unemployment overnight. Her Majesty’s Government are to be commended on their economic strategies, which give confidence to investors, on their many schemes, such as enterprise zones and the regional growth fund, and on the support that they gave to businesses in many ways in yesterday’s Budget, which will have a major and positive impact on employment opportunities.
Lord Haskel (Lab)
My Lords, every Wednesday, John Kay writes an article in the Financial Times. Last week he wrote about economics and mathematics, and he came to the conclusion that numbers do not really reflect the world as it really is. Numbers have to be tempered with the realities of human life, as I think the noble Baroness, Lady Eaton, implied. While I welcome this opportunity to debate employment and I welcome the rising numbers in work, I am not sure that there is much to be gained in just debating the level of employment. The noble Lords, Lord Holmes and Lord Bilimoria, told us that the number in work is at a record level; I gently remind them that so is the population. I agree with John Kay. The numbers without the humanity can be meaningless.
I will give another example. In the normal course of events, every month some 30,000 people in Britain change jobs for a whole range of reasons; many of them are for personal reasons totally unrelated to government policies, yet they are all included in government figures. The level of employment has to be considered not just in terms of numbers but also in human terms, in its effect on people and on the fairness of our society. So I will look at the level of employment in this way.
There was a time when the Government were going to create employment by means of an industrial strategy, a strategy that would balance the economy and balance the country; it says so in the coalition agreement. This would mean high-tech growth, skilled jobs, advanced technology and a lower north-south divide. However, as yesterday’s Budget indicates, this has manifestly failed. As my noble friend Lord Monks explained, we have growth, but it is based on increased consumption and on a property boom. It is based more on trading in finance, which is a zero-sum game that benefits the few, and less on trading in goods and services, which benefits us all. Yes, the employment level has gone up, but in a way that reflects this rather disappointing industrial strategy.
The recent report from the Resolution Foundation makes it clear that some 5 million of our workers meet the definition of low pay set by the OECD. We have a higher proportion of low-paid jobs than most OECD countries. Of course, the low pay in many of these jobs is topped up by the Government through the tax system, so giving people a chance to make ends meet but also keeping up the employment figures. Instead of subsidising low pay, why do the Government not do more to encourage people to run their businesses better—by raising productivity so that they can pay a living wage? Yes, the Government are trying to raise skill levels and encourage people to gain qualifications, but if we are seeking to have a successful economy, a degree or a qualification is not necessarily a proxy for or even a means of getting a job. As my noble friend Lord Giddens explained, in that kind of world the economy pays you for what you can do with what you know, not just for knowing it. I would add that, in that kind of economy, success is increasingly a group endeavour that depends a lot on soft skills such as leadership, collaboration, adaptability and the ability to learn and relearn. Indeed, it is the absence of these skills as much as technical skills that concerns many employers today. Perhaps the biggest threat to our level of employment is the possibility of leaving the European Union. This would marginalise us economically because every day we hear from international corporations that our leaving would reduce their activity in Britain and jobs would go elsewhere. Thank goodness we now know that a Labour Government would remove this threat to our level of employment.
Then there is the matter of productivity, raised by my noble friends Lady Donaghy and Lord Monks. Did the Minister see the release on 20 February from the Office for National Statistics which gives the final productivity estimates? In case noble Lords missed it, I will give the highlights. Last year the output per hour in the UK was 21 percentage points below the average for the rest of the major G7 industrialised economies. UK output per hour and output per worker fell compared with the previous year. Our output per hour was 3 percentage points below the level of the pre-recession year of 2007. What this demonstrates is that this Government have maintained the high level of employment thanks to the high number of low-paid, low-skilled jobs that are needed in a low-productivity economy. That is a strong indicator that we are in a race to the bottom. Is this how we are going to pay our way in a globalised economy? Many of the people needed to do all these low-skilled, low-paid, entry-level jobs are the very immigrants that the Government are seeking to control. Is this how we are going to build up our exports to deal with our balance of payments and borrowing, which the Chancellor spoke about yesterday?
The Minister’s fine words about our level of employment does very little to deal with these issues, which are central to our economy. John Kay is right: take the numbers out of the human context and you get a completely different picture. Not only does this kind of employment do little for our economy, it also damages our society. There is more employment, but the unemployed are, more and more, overwhelmingly the younger generation. This is a problem all over Europe and there are EU social funds available to tackle it. Central to this funding is a job guarantee scheme, and the Government were wrong to scrap it. The Minister is wrong. The rising level of employment still leaves many young people needing to be rescued from long-term unemployment before the rot sets in.
Other noble Lords have spoken about the huge growth in zero-hours contracts and part-time work. Yes, this may raise the level of employment, but it also raises the number of people who live with insecurity, people about whom my noble friend Lady Donaghy spoke. My noble friend Lady Hollis, in her letter to the Guardian, pointed out that if you work 30 hours a week on a minimum wage split between, let us say, two 15-hour jobs, you cannot add the hours together to bring you into national insurance, so you end up with no state pension. It is playing on this kind of insecurity that enables employers to make unreasonable demands such as working people harder and paying them less, sometimes insisting on false self-employment, as other noble Lords have spoken about. I put it to the Minister that there is plenty of evidence that this is happening. The economy is growing, corporate finances are in good shape, executive salaries and bonuses are soaring, but ordinary wages are being squeezed. The number of people who are living precariously is on the rise.
We are told that average wages are going up. But the Minister may remember when he was being taught arithmetic at school, that a big increase at the top is enough to lift the average. Meanwhile, the median wage is static, leading to the rising inequality that concerns so many of us. Even with rising levels of so-called employment, is this the kind of leadership that inspires growth and innovation? Is this the kind of leadership that delivers a fair society? Successful leadership means that people have to believe that you believe in what they believe. If they think that all you care about is the numbers, you are in deep trouble. This kind of insecurity and inequality means social and economic trouble.
The level of employment must be in the context of an economy that works for all of us—not just the few who are doing well, but the many who have to make do with low wages and dehumanised working conditions. This level of employment does not create the society that I seek. This is not my vision.
Lord Soley (Lab)
My Lords, I thank the Minister for putting this debate before the House and I share his pleasure at the good news within the employment figures. However, my noble friend Lord Haskel—who, as usual, gives us the benefit of his experience of working in industry and being an employer in the past—is right to point to the dangers of low productivity and low wages. My noble friend Lady Donaghy also made some very forceful points. The Minister might have found her attack slightly critical but if he looks at the figures she produced, I think he will see that they bear further examination.
I say in passing to the noble Lord, Lord Shipley, that yes, the previous Labour Government have to accept responsibility for not regulating the banks and the finance industry much better than they did. However, I would be more respectful of that argument if every other political party, not just in Britain but throughout the western world, had argued for greater accountability of the banks and finance industry. If you strip out the effect of the banking finance collapse you will find that this country's economy has not been in a bad position for a very long time. We need to acknowledge that and get some of the rubbish out of this debate.
I want to focus my comments today on the difficulty that all parties share in addressing the problem of those, particularly young people, but not just young people, who have difficulty in finding a job or maintaining a regular work pattern. My comments follow the direction set not just by my noble friend Lord Haskel but also by the noble Lords, Lord Bilimoria and Lord Giddens, because the science and technology aspect is vital. Changes in science and technology have been a factor in driving the economy forward since the Industrial Revolution but such change is an even bigger factor now.
I do not usually bore the House with my own experiences in life but I should say that my own experiences are one of the reasons why I have always looked sceptically at the unemployment and training issues. I left school at the age of 15 in 1954 and with an appallingly low educational achievement. The first thing that the school’s job officer, as they were then, said to me was, “You look like a nice young man. Why don’t you work in an office?”. So I went to work in the solicitor’s office that he sent me to. The first thing I did was to make the tea and the second was to run messages. That went on for a year.
The great advantage of the 1950s, at that stage, was that there were still plenty of jobs, so after a while I got fed up with my first job and left. You could earn much more on building sites and in factories, and that is what I did. I am not sure that some of those building sites would be open these days after a visit from a health and safety officer. I was quite relieved to discover that one building I worked on in Essex was still standing some years later, although I have to confess that it has been knocked down since. I just hope that that had nothing to do with the young man who was mixing the cement. The reality was that there were plenty of jobs and you could switch around. However, some of the people I knew at that stage did suffer quite long-term unemployment. They were not getting into the job market. Often, it was because of a lack of educational skills.
Just over 100 years ago, in the middle and late 19th century, people became aware of the fact that the abilities to read, to write and to do basic arithmetic were not only good for them but, above all, good for the economy. Those skills enabled them to use the emerging new technologies, and to develop them very effectively. In no way do I want to undermine any attempt to ensure that people leave school with good educational abilities in reading, writing and arithmetic. However, it is a digital economy now, so we need to make sure that everyone who is struggling to get and maintain a job has those skills.
My main question for the Minister is: can we look rather more creatively at how we involve people—not just young people, but particularly young people—in digital training? I do not think that any young person who has had a history of uncertain employment—let us use that phrase rather than “unemployment”—should be allowed to go through the employment agencies without addressing the questions, “What skills do you have and what skills can we give you?”. The same applies to many of the other government departments and the organisations that work with government on this. The same questions should be asked. Do they have the basic skills? “Basic skills” does not mean just being able to use a computer. It does not mean just being able to search the internet. It means an ability to operate in a much more complex area, including the increasingly important one of coding.
I can give a simple recent example. Some youngsters I know who had literally just left school and did not have jobs painted T-shirts and shoes which they had bought and on which they then applied special designs. They sold them at school fetes and charities for anything up to £100. It was pretty impressive. They were certainly able to use computers and they knew how to use the internet but they did not have the digital skills to design a website where they could sell these items. We need to remember that many of the new industries can be run from home; it is much easier to do it now, but not easy unless you have those digital skills. With some basic training, could not those young people have done it? They had computers at home, so they had the technology sitting there, but they could not design websites and therefore promote sales in that way. That is one of the ways forward. I had a conversation the other day with the noble Baroness, Lady Lane-Fox, in which she drew my attention to an organisation called Go ON UK—which I know has been in contact with the Government. It is saying that that is precisely what we need to do. When young people—or older people, because we should not describe this issue only by age—go to a jobcentre or other government agency and their technical skills, such as coding, are assessed, training should be offered immediately to those who do not have the necessary skills.
I would go so far as to say, given the Minister’s involvement in the benefits area, that there ought to be a way that we can offer financial help or recompense—I would almost dare to call it a bribe—for such training. A lot of this is about a lack of confidence, which is particularly true of older people. If you do not have the confidence to use the internet well or to use IT to create, run or work for an existing business, the right training can give you the confidence. As I said, financial support might be needed to encourage that. We need to look much more creatively at this because, for all the reasons that the noble Lord, Lord Giddens, gave, we are looking at an economy which is much more driven by science and technology than ever before. Perhaps I may expand on my example of the late 19th century, when people began to recognise that reading, writing and arithmetic was good, and speculate that if we fast forward a hundred years from now, people will look back and say that we were only just becoming aware in the early 21st century of the importance of digital skills.
There is an opportunity here for Governments and for political parties of all persuasions to look at the way in which new technologies are used to enable people to earn an income wherever they are in life. I want my own party to look into this and it is very encouraging that it is doing so. We have got very much better at this with people with severe disabilities. There is now much greater help in this area. No person should get through an employment agency or some of the other agencies without us gaining some idea of the digital skills which that person has, what more could be offered to them and how they could be encouraged to take up those skills.
Lord Sheikh (Con)
My Lords, I pay tribute to my noble friend Lord Freud for introducing this subject and for his excellent speech. I speak as a businessman and as somebody who has employed many people through several business ventures. At the outset I take the opportunity to commend the Chancellor of the Exchequer on his Budget Statement. I hope to speak more on this subject during the impending debate next week but it is useful to note in this debate the measures that will boost employment.
I welcome measures announced in the Budget to support businesses, which include cutting the cost of energy bills for manufacturing and doubling the annual investment allowance to £500,000. The Chancellor also stated that we will have the most competitive export finance in Europe, by doubling government lending available to exporters to £3 billion and cutting the typical interest rate by a third. All these will provide a much needed financial boost to businesses and free up money to spend on employing more staff, among other things. This was a Budget that backed businesses and, as a result, backed employment.
It is my belief that this Government’s work on welfare and employment is one of their greatest achievements. I have spoken on this subject in your Lordships’ House previously. It has been stated many times in this Chamber, in the other place and elsewhere that the coalition Government inherited a dire financial situation—but we must not forget that this was not the only legacy that their predecessors left behind. This Government also inherited a culture of worklessness, one whereby welfare could and often did pay more than work and where generations did not work. Let us not forget that children and young people who live in households where adults do not engage in any form of employment are not only the most deprived in our society but also the most likely to follow this path once they leave full-time compulsory education. This generational cycle of worklessness was a key factor in the rising levels of welfare dependency and poverty in our communities. Alongside this, there were also vastly high levels of unemployment.
There are now 1.3 million more people in work than when Labour left office. Unemployment now stands at 7.2%, the lowest for the past five years. The number of young people in work has increased by 43,000 in the past three months and the employment rate has now hit a five-year high with a record 30.1 million people in jobs. The OBR has forecast that over the next five years a further 1.5 million jobs will be created, with real earnings growing every year.
It is however important that we remember that employment is not merely a matter of statistics. Every position filled means another family have the security of a regular pay packet. We must not forget that this pay packet is put back into the economy both in taxation and in consumer spending, supporting yet more jobs and growth. Nor should we forget the great benefit to the person’s individual well-being. I am sure noble Lords will agree that work gives people pride and confidence. As an employer, I know that people tend to work for two reasons. The first is to earn a living and the second is to get job satisfaction. On the contrary, being out of work sometimes creates depression and has an adverse effect on people. Work is good for people’s mental health, their physical health and their general well-being—benefits that have been demonstrated repeatedly. Dependency is not liberating. It constrains people and prevents them from achieving their ambitions. What is more, if we can get more people in work, some of them will receive salary progressions and improve their standards of living.
The Government deserve recognition for trying to ensure that we have a fair welfare system to support those in genuine need. Since benefits were capped, 9,200 households have moved into work or reduced their own benefit claim. Some 4,300 of these households have found jobs. We have heard many times that it is the Government's aim to reward those families who want to work hard and get on. Here we are seeing that, as a result, thousands of people are finding jobs and moving off benefits. It was not right that tens of thousands of households received far more in benefits than the ordinary hard-working family earns. We cannot underestimate the resentment and anger felt by hard-working families who saw others who made a conscious effort not to work being rewarded handsomely by the state. This caused tensions within our communities, which is understandable. To have people saying that they “could not afford to work” was absurd. Britain must be one of the few countries in the world where this was the case. Social security should be for people who find themselves out of work and are trying to get back into employment. Few people would disagree with these aims.
I pay tribute to those who offer people the chance of work. The rise in employment is not created by Government alone. It is being fuelled by businesses and entrepreneurs across the country. They should be congratulated. As the economy continues to improve they are feeling increasingly confident about employing more people. I have spoken many times in this Chamber and elsewhere on the importance of supporting small businesses. As has been said many times, SMEs are the lifeblood of the British economy. An ambitious and thriving small business sector is vital for steering the economic recovery in the right direction. None of the early signs of recovery that we are seeing today would have been possible without these small businesses. Their importance comes not only in the money they can make but also in the jobs they create. We must ensure that the systems are in place to aid them in doing this. The National Insurance Contributions Act, given Royal Assent recently, was one such measure. The employment allowance will give businesses and charities a much needed tax cut as a result of the Act. This will benefit over 1 million businesses, with almost 500,000 being taken out of paying national insurance contributions altogether. Businesses will, more often than not, spend these savings on their business—investing it, increasing wages and creating jobs.
Let us also not forget the smallest of businesses, those which currently have no employees at all. The allowance will create a strong incentive for sole traders and new and start-up businesses to hire their first employee. The number of self-employed people has risen. I hope that soon they will have more employees of their own, creating wealth and jobs through innovation.
Another welcome measure is the removal of the jobs tax on young people under the age of 21. As a result of this, employer national insurance contributions will be removed altogether on 1.5 million jobs for young people. Youth unemployment is falling, but it is important that more is done to get young people into work. We can see from the experience of previous generations that the longer the period spent out of work as a youth, the longer the time spent out of work later in life. I am pleased that, thanks to this measure, the future is looking brighter for young people in this country. This will also come as a great benefit to the businesses that employ them. A young, vibrant and skilled workforce is a benefit for us all.
We should also welcome the rise in the number of women in employment. As someone who has spoken many times about female empowerment, it is most welcome that the number of women in employment has reached a record high, with more than 14 million in work for the first time. The number has increased by over 500,000 since the election. Getting into employment should not be something that people are expected to do alone, particularly for those who have never worked before. It can be a daunting process. I am pleased that the Government’s Work Programme is helping people into work. Unlike the short-term focus of previous schemes, the Work Programme is geared towards not just getting people into work, but keeping them there. It is helping large numbers of people escape the misery of long-term unemployment and get back into real jobs. Through this scheme, providers are rightly paid according to results. They have the flexibility to design support systems that address the needs both of the individual and of the local labour market. So far the scheme has helped 208,000 jobseekers find lasting work, including 17,560 young people. This is evidence that there are jobs available, but we must work to ensure that all the measures are in place to get those who need jobs into them.
It is my belief that this Government are committed to lowering unemployment and helping people back into work. However, we must not be complacent. More needs to be done to increase employment and train people to fill the jobs. To enable us to achieve that, we should not rely on my business, which is financial services, but expand our manufacturing activities and undertake more business overseas. We must increase our trade with India, China, Brazil and Africa. There are considerable opportunities in Africa, where I was brought up and with which I still have connections. Given our historic ties with a number of African countries, we must promote more trade with them. Also, we should increase apprenticeships and train more people in different trades and businesses.
Baroness Turner of Camden (Lab)
My Lords, I should like to thank the Minister for introducing a debate on this important subject. He referred to growth, and many of us welcome that, but we have other concerns. What sort of growth, we must ask? What kind of work, and what is the effect upon many families struggling against poverty? The growth is clearly mainly in London and the south-east. The remainder of the country, particularly the north, is not doing so well. Unemployment in the north is around 10%, compared with 5% in the south-east. The parts of the country that are most affected are those that have faced deindustrialisation. The factories that once provided employment for the local population have disappeared. Many industries, like the steel industry following privatisation, have disappeared altogether. This is the process which was started under the Administration of the late Baroness Thatcher.
Concerns about the lack of balance in the economy have been voiced by many noble Lords in the debate. The Government seem to accept that rebalancing is necessary if growth is to continue, but obviously much more needs to be done. It is accepted that we need a more skilled workforce, and in that respect I support the efforts that the Government are making to promote apprenticeship training. Much more needs to be done in that direction for young people. Equally, more should be done to encourage young people into science and engineering studies. A number of years ago, when I was a member of the Equal Opportunities Commission, we ran the WISE campaign, which stood for Women Into Science and Engineering. We had some success in that regard and we could do with another campaign now. We need campaigns to generate more enthusiasm.
As to what work is like nowadays, again, there has been concern about the work that is available. There is talk of zero-hours contract work and of work that is low-paid. Sometimes individuals must take several small jobs because one job simply does not pay enough. This is particularly the case for women, because childcare is too expensive for many people. There was recently a TUC conference for women at which many stories were told of the treatment of people on zero-hours contracts, as well as appalling stories about very low pay. Concerns were expressed that the austerity cuts, from which everyone is expected to suffer, impact more heavily on women. Although there has been growth, wages generally seem to be stagnant. I am glad to say that there has been talk of raising the minimum wage, but it needs to rise by more than the amount suggested for it to be of real assistance. What we really need is the living wage to lift people out of poverty.
In discussions about employment in this House on previous occasions, it was suggested that people should “get on their bikes” and go to where the work exists. That is no longer a good idea because the problem is housing. In London and the south-east generally there is a housing crisis which has resulted in a shortage of social housing, and private renting is desperately expensive. All this indicates that although there is growth, particularly in the south-east, there are still major problems for many people, who face insecurity both in employment and on the housing front. The Government’s employment policies have simply added to that insecurity.
We have seen a series of measures from the Government designed to diminish or totally remove the employment rights that have been fought for over the years. It is now very difficult for a dismissed worker to claim for unfair dismissal. If, after coping with a series of bureaucratic steps he or she eventually gets to a tribunal, it will cost almost £1,000 in fees. Workers injured at work will find it more difficult to claim compensation because of changes to the law, and whistleblowers will now lose their protection if they attempt to warn about unsafe practices in the workplace.
There is also the government scheme of “shares for rights”. Employees are given shares in a company in return for surrendering all employment rights. I am glad to say that these schemes do not appear to have had much success, but all this indicates that the Government prefer to have a workforce with no workplace rights at all. This adds further to feelings of insecurity and of course encourages bad employers to behave even worse. In this House we defeated some of the proposals, but the Government later defeated our amendments in the Commons. I strongly believe that a well paid, well trained and respected workforce is far more likely to produce sustainable growth than an insecure one. After all, no one likes to feel that they are disposable.
As for training, the Government should not pay too much attention to what the media have to say about trade unions. I speak as a former trade union official. Unions are committed to the education and training of members. Unionlearn, the TUC’s education department, is highly respected for the work it does among people who missed out on training earlier in their careers. The automotive industry, which has been doing quite well, has involved the unions and has received their support. I gather that this is what happens in Germany. That was explained in some detail by my noble friend Lord Monks in his speech earlier.
There is some growth and some improvement in the employment figures, but clearly very much remains to be done. Again, I thank the Minister for his speech. It has given a number of us an opportunity to air our problems, and I hope that he will pay attention to what we have said this afternoon.
Baroness Sherlock (Lab)
My Lords, this is another wonderful debate. It is one of those times when it is impossible to be the opposition person responding because if I responded to all the things I wanted to today I would be here twice as long. I was beginning to wonder if it would be a job better suited to one of the robots my noble friend Lord Giddens told us about. If they can do stand-up comedy, I am sure that they can respond to a House of Lords debate rather better than the average human.
I have a growing list in my back pocket of noble Lords who I want to one day have a cup of tea with and pick their brains about things that are nothing to do with the subject under discussion. The noble Lord, Lord Shipley, puts more passion into exports than anyone I have ever heard. I would love to talk to the noble Lord, Lord Bilimoria, about beer one day or the noble Lord, Lord Holmes of Richmond, about the Olympics. He increasingly has a speaking style so engaging that I forget that half the time I disagree with him—sadly I do—but I commend him on keeping us awake while offering up subjects for disagreement.
The temptation at this point is for all of us to take the latest labour market statistics, cherry pick them nicely and then throw them across the Chamber in suitable fashion. Obviously, I will do a bit of that because noble Lords would be disappointed if I did not but I will try not just to do that. I want to try to pull out some of the ongoing problems that we all—I hope—accept and acknowledge across the House, on which, while we may disagree on the reason for them and the prescription, we are able to send a signal to those listening to this debate or reading about it outside that all of us in this House take seriously the challenges facing British workers and are committed to doing something about them.
I welcome the rise in the employment rate. It might be small but it is a positive move and one in the right direction, and I am glad to hear about it. However, I want to look a bit underneath that rise at some of the issues that remain. First, an unemployment rate of 7.2% means that 2.3 million of our citizens are unemployed. I thank my noble friend Lord Haskel for reminding us that behind these numbers are human stories—there are 2.3 million individual crises that we need to take seriously. We all need to guard against ever sounding complacent even as things improve. I am also conscious that the number of people unemployed for more than two years has risen and we need to think quite carefully about the question of long-term unemployment—of which more in a moment.
We also still have a serious youth unemployment problem, as highlighted by my noble friends Lord Monks and Lady Donaghy. Some 912,000 young people are unemployed. That is virtually one in five of all young people. The Minister offered up the caveat that that includes people in further education. At this point I am tempted to quote from the ONS footnotes which explain that, in accordance with international guidelines, people in full-time education are included in the youth unemployment estimates if they have been looking for work in the past four weeks—I will stop myself there not to bore the entire House. The guidelines are quite clear as to who is included. Even if young people in full-time education are excluded, and even though many of them may actually be looking for work, we still have the significant number of 628,000 unemployed 16 to 24 year-olds. It is really serious. The Minister said that we are not where we should be when we come to NEETs. A million young people are not in employment, education and training. That is a tragedy for our country. The number of young people claiming jobseeker’s allowance for more than 12 months has doubled under the Government, so we have a significant issue. Last year, long-term youth unemployment rose to its highest level for 20 years and there are still more than 226,000 young people unemployed for more than a year.
I, like many noble Lords, worry about the regional variation. I do not want just to look crude north and south but if I go down the road from Durham, where I live, to Stockton, the number of young people claiming JSA for more than 12 months has nearly trebled under this Government. However, it is not the worst. If I go down to Yorkshire or Lancashire, in Dewsbury and Burnley, long-term youth unemployment is 10 times what it was in 2010. It is not just a northern problem. In Wiltshire, the north of Swindon has seen long-term youth unemployment increase more than fivefold. There are areas where there is a really significant problem. If we cannot offer hope to young people then what do we have to offer them? It is a tragedy not just for the country, which misses out on all their gifts, but for each of those individuals. As the noble Lord, Lord Sheikh, described, the depression and mental challenges that can come from being out of work are very serious and we must therefore all take it seriously.
In terms of prescription, is the Minister ready yet to accept that it was a mistake by the Government to abolish the highly successful Future Jobs Fund, established by the previous Labour Government, which helped more than 100,000 young people into work? After all, his own department evaluated it positively, showing that it had produced net benefits of £7,750 a head after taking account of tax and benefit changes. What about the Youth Contract that replaced it? That was supposed to generate 160,000 wage incentive payments by the spring of next year. The scheme started in April 2012 and by last month there had been just 10,030 payments. Can the Minister tell the House what plans the Government have for getting the Youth Contract back on track? The mainstream youth Work Programme, which has been referred to by many noble Lords, is also having some fairly serious problems. New figures out show that just one in five people who has been on the Work Programme for two years finds a job. In fact, people are more likely to end up back in Jobcentre Plus than they are to end up in work.
As for the sick and disabled people that the Minister referred to, performance for people on employment and support allowance is pretty terrible. Today’s figures show that job outcomes at the 12-month stage are consistently around one in 20, or 5%. According to the Work Programme invitation to tender, that is what you would expect if there were no programme at all. Do we have a programme that is no better than doing nothing at all? Can the Minister tell us what the Government are doing to address that?
The second issue I want to focus on, raised by many noble Lords, is the state of the labour market and the rising insecurity faced by many of those who are lucky enough to be in work. Too many people are still stuck in temporary jobs or in short or zero-hours contracts that make it harder to get a mortgage or save for a pension. All these add to pressures on our social security system. My noble friend Lord Haskel mentioned the issue raised by my noble friend Lady Hollis about people in more than one job who cannot get into the pension system. When we debated the Pensions Bill last month the noble Lord, Lord Freud, indicated that there was some uncertainty around how prevalent zero-hours contracts were. Under pressure from the shadow Business Secretary, the ONS has now revised its figures and now estimates that there are 583,000 people on zero-hours contracts, up from 183,000 in 2010, which is a more than threefold increase.
I can confirm that the next Labour Government will outlaw the exploitative use of zero-hours contracts by banning employers from insisting that zero-hours workers be available even when there is no guarantee of work, by stopping zero-hours contracts that require workers to work exclusively for one business and by ending the misuse of zero-hours contracts where employees are in practice working regular hours over a sustained period anyway. We will put in place a new code of conduct for their use. Workers are feeling seriously insecure and I am sorry to say—as my noble friend Lady Turner pointed out—that government action has made them in practice less secure by watering down many of the protections workers have enjoyed in health and safety, against unfair dismissal and in other areas.
We then come to the point raised by many noble Lords: the cost of living crisis and the problems of low pay. This year marks the 15th anniversary of the national minimum wage, which I regard as one of Labour’s great policy successes—it boosted pay at the bottom without leading to a loss of jobs and it has wide support. I was talking to a couple of students in Durham recently over coffee, and when I explained about the days before the minimum wage, they were staggered. They had no idea that relatively recently you could just pay somebody whatever you wanted. They were amazed. In 15 years it has now become so commonplace that no one can imagine what happened previously. I know that the Government have changed their position, and I acknowledge that they have accepted it was a mistake to oppose the introduction of the minimum wage, but it is worth remembering that before the minimum wage people were being paid as little as a pound an hour. The Low Pay Unit found a worker in a chip shop in Birmingham being paid 80p an hour and factory workers earning £1.22 an hour. This was really serious. However, unfortunately, low pay has got worse under this Government. Working people have seen the value of their wages fall by an average of £1,600 a year, while the value of the minimum wage has fallen by 5%.
The challenge here, I suggest, is that the Government have not ensured proper enforcement of the minimum wage. Some 5% of jobs pay below the minimum wage, according to the Low Pay Commission, but only two employers in four years have been prosecuted. What are the Government going to do about that? Labour has called for a tenfold increase in penalties for companies that do not pay the minimum wage, and we want to see better enforcement, including giving local authorities new powers in this area. We have launched a review of low pay, led by Alan Buckle, deputy chairman at KPMG International. A Labour Government would encourage employers to pay the living wage through new “Make Work Pay” contracts, under which firms who sign up to be living wage employers in the first year of the next Parliament will benefit from a 12-month tax rebate of up to £1,000 and an average of £445 for every low-paid worker who gets a pay rise. In replying, could the Minister tell the House what the Government’s strategy is for tackling the problem of low pay in Britain? I would also be very interested to hear his response to the questions from my noble friend Lady Donaghy and other noble Lords on the gender pay gap and those from a number of noble Lords, including the noble Lord, Lord Giddens, on inequality.
We also have the problem of underemployment. Record numbers of people now want to work full-time but can get only part-time jobs. According to the latest statistics, 1.5 million people are approaching that position. That kind of insecure, irregular and low-paid work adds to social security bills, so that the Government are now on course to spend £15 billion more on social security and tax credits than they budgeted for in 2010. In particular, the total cost to the Exchequer of those working part-time but who want to be full-time is estimated to be £4.6 billion. While I am on techy numbers, I have another question for the Minister. I am sure that he, like me, has dug into some of the small print in the new labour market statistics. I would be fascinated to know what he thinks about the reasons for a couple of things. It seems that the number of hours worked by both full-time and part-time workers has fallen, but that the hours worked in second jobs have gone up. As far as I can tell, the increase in employment seems to be accounted for by self-employment. Could the Minister tell the House what he thinks that is telling us? Does it raise any alarm bells, either about people having to take second jobs to be able to feed their families or about the kind of drift to self-employment of the unattractive kind described by my noble friend Lady Donaghy in her excellent speech?
It would be reasonable to ask me to talk about what Labour would do instead, so I will finish by doing that. First and foremost, the challenge is to ensure that everyone who can work and should be working is in a job. The centrepiece of Labour’s economic plan is a compulsory job guarantee for young people and the long-term unemployed. Anyone over 25 who has been receiving JSA for two years or more, or anyone under 25 for a year or more, would get a guaranteed job paying at least the minimum wage for 25 hours a week and training for at least 10 hours a week.
As with the Welsh Assembly Government’s Jobs Growth Wales programme, we expect many of the jobs to be in small firms. Experience there has shown that once a company has invested six months in a new recruit, the chances are they will want to keep them on after the subsidy has ended. I was very interested by the speech made by the noble Lord, Lord Bilimoria, and I encourage him in a sprit of bipartisanship, given his own experience of entrepreneurship, to engage with us to think about how we can make this work best for small firms. I was very struck by the need to help young people as well to think about what their entrepreneurial skills could bring to the economy. When I sat on the commission on the riots, I met a number of young people who were in prison for riot-related offences. Many of them were very entrepreneurial indeed—just not in the way that we would want them to be. It was not directed. There is so much talent out there which we could capture and direct. It is important to give people a chance to be out there and to make sure there is a limit to how long they can spend disconnected from the world of work.
The investment in the compulsory jobs guarantee would be fully funded by repeating the tax on bankers’ bonuses—which, I note from the figures, are rising again—and by a restriction on pension tax relief for those on the highest incomes. We also need those young people to be able to move on and progress in the labour market, so Labour would take action to tackle the serious skills gaps that are holding back individuals and, indeed, our economy. A number of noble Lords made some very interesting points, including the noble Lord, Lord Shipley, and my noble friend Lord Soley about the skills challenge and how that is tacked in schools as well as in the economy. At its very simplest, almost one in 10 people on JSA does not have basic English and more than one in 10 do not have basic maths. If you do not have those skills, you are much more likely to make repeat claims for benefits and we need to do something about that.
I say to my noble friend Lord Soley that we do not have a problem just with coding skills but with IT skills as a whole—nearly half of those on JSA do not have even basic e-mail skills. If they are going to make job applications, not just online but to any employer, they need to have basic IT skills, and it is up to us as a country to make sure that we help them to do that. Labour would require jobseekers to take training if they did not meet those basic standards of English, maths and IT—not down the road when they fail to get a job but alongside their job search. I would also be interested to hear the Minister’s response to the broader and very important issues about productivity and skill levels raised by my noble friend Lord Haskel and other noble Lords.
There are some very serious issues here. We have some good progress being made, at least in headline figures, but some very serious problems in long-term unemployment and youth unemployment and in an economy with insecure jobs, poor pay and instability. We need to tackle these. Labour would pledge to get people into work, guaranteeing jobs for the long-term unemployed and the young unemployed. We will tackle the crisis in living standards and the scourge of low pay, address the skills gap and make work pay. We believe it is possible to get Britain working again, with decent jobs that pay enough to feed a family, not just at the top and in the rich areas but right across the country—in Stockton, Dewsbury, Burnley and Swindon. People deserve nothing less.
Lord Freud
My Lords, I have really enjoyed the debate. I thank noble Lords for the energy and effort they have put into some of these complicated issues. I particularly enjoyed the noble Baroness, Lady Sherlock, stealing the “Get Britain Working” slogan that we used in the last election, but that is a compliment. I enjoyed the first two sentences from the noble Baroness, Lady Donaghy, but the next sentence, about where my personal support lay in the Chamber, was incredibly dangerous so I did not like that. The rest of her speech I did not like at all.
To start dealing with the issues, at the core of what the noble Baroness, Lady Donaghy, and the noble Lord, Lord Haskel, said—the real attack on this—is, “Forget the quantity, feel the quality”. However, according to the figures, in the past three years, three-quarters of a million of the extra employment has come from managerial, professional and associate professional occupations. That is 70% of the rise in overall employment. The noble Lord, Lord Shipley, made a point about the importance of having quality jobs that come from the efforts on exports, having the most competitive export finance in the country and reducing the costs of energy. Those are the fundamentals and they create real business and quality jobs.
The noble Lord, Lord Monks, spoke about different parts of the country and the north-west in particular. Clearly, the Budget announcements work in that respect: the business energy package, for instance, helps firms in the north-west, including 27 CHP plants, while the SME package helps 481,000 SMEs in the north-west. The noble Lord, Lord Haskel, cavilled at the numbers going up, pointing out that the population is also going up, but the underlying employment rate is moving up to 72.3%. The most interesting thing is that, if the people in full-time education are taken out of the figures, we are now back in rate terms to the peak point that we reached before the recession. According to the projections of the OBR, we are now moving into new ground, at least on the quantity side.
I tried to go for the fundamentals in my speech and I think noble Lords might find it interesting to read it; it can be hard to take something in when you are listening to it. I was trying to say what was really happening. Productivity is really very interesting and I do not think we understand exactly what has been happening in our labour market in the past five years. We had a crash, the like of which we had not had in a very long time, so there are peculiar things happening. One of the things that was happening with productivity was that, clearly because of the impact on the financial sector, there were some odd moves. There are now forecasts from the OBR that productivity will pick up. Clearly, one of things that will happen as a direct result of that is that wages and take-home pay will start to move in the right direction.
The noble Lord, Lord Giddens, made a lot of interesting points, but one simple one was on income inequality. There is a figure, but the figure is the lowest now—as the Chancellor said—for 28 years. More fascinating were his technological issues and what we need to do about those if they happen. Clearly, as the noble Lord, Lord Bilimoria, said, there have been predictions like this regularly. The noble Lord, Lord Giddens, said that we were now really at a discontinuity, so perhaps it would be different this time. I think that was—in the jargon—such a shocking or disruptive event, however, that it is hard for us to expect the Government to sit down and be able to plan it through. When we see it really start to happen, we will have to work on it. We are getting jobs up, so we have not seen it yet. To respond to him, we have got, in universal credit, something effectively close to a negative income tax. We can actually make the adjustments. On the point made by the noble Lord, Lord Giddens, on the displacement of wealth, the interesting study that came out a few months ago from UBS showed that we were the only major country where the impact of the crash was seen evenly right the way along the income spectrum.
On the gender pay gap, there is a long-term downward trend for full-time employees, falling from 17.4% in 1997 down to 10% and it narrowed in all regions between 1997 and 2013. The noble Lord, Lord Monks, said youth unemployment was too high. On the other hand, it has been falling: the JSA claimant count has now been falling every month for 21 months: it peaked at 480,000 in December 2011 and is now at 295,000, so it is going in the right direction.
Turning to apprenticeships, the point raised was that demand exceeded expectations. That is why the Budget announced funding for more. As for the concerns of the noble Baroness, Lady Donaghy, about their low quality, all first-time apprenticeships will now involve a job and low-quality provision has been ended. My noble friends Lord Shipley and Lord Holmes said that we needed to ensure that youngsters were better equipped with career guidance by schools. Ofsted is also concerned that schools need to meet their duty better and it will give higher priority to guidance in school inspections. The effect of the increase in participation is coming through now and the latest data indicate that the proportion participating is still going up.
The noble Lord, Lord Haskel, simply said that I was wrong on the job guarantee, a point echoed by the noble Baroness, Lady Sherlock. I happen to have a pretty long memory about these schemes from various places. I can, and will, have a go at what is really wrong with that scheme, but I am more concerned about the people who are unemployed. We can help them—we know who they are—but we do not know about the youngsters who just disengage, who are called “inactive”. We all find it very difficult to do anything about that. It is probably where the most serious problem is, because if they are coming into the jobcentre, you have got them and can put them on any scheme you like. If they are not engaging, however, you have a problem.
The guarantee scheme—the one we have got hold of—is fine: it is very like the Future Jobs Fund, which I never liked at the time; instead, we put in work experience. The outcomes of work experience are virtually the same as those of the Future Jobs Fund and the guarantee strategy, but it costs one-20th, and that is how to waste money. Even then, on the sums that I can see, there is not enough money put aside. We cost this policy from Labour at £2.6 billion every year, and very considerably less has been put aside. I am not going to make the joke much about how often the Labour leadership has spent the bank bonus taxes. It spent them on reversing the VAT increase, it spent them on more capital spending, it spent them on reversing child benefit saving and it spent them on reversing tax credit savings. It says that it is not going to do any of that now—it is going to spend them on this. Let us see how long that lasts.
Lord Haskel
We can keep spending the bonuses because the bonuses keep going up.
Lord Freud
Not by that much—not by a factor of 30, or whatever it is.
The noble Baroness, Lady Turner, spoke of her concerns about childcare. We have also been concerned about childcare. Clearly, not only will she have seen the announcement yesterday about the money for taxpayers but she will have also spotted that within universal credit the rate will now be 85%. I know that she and a lot of other noble Lords will welcome that.
My noble friend Lord Soley mentioned skills. I am sorry, he is not my noble friend: I quite like the noble Lord, Lord Soley, but cannot call him a noble friend. On skills, our priority must be to get English and maths training first. One of the things we are doing with universal credit is ratcheting up the requirement for getting people to the basic level of digital involvement. We are doing a lot of work currently to work out how to help people to get to that basic level. The noble Lord is looking at a slightly higher level—into coding. That would be something separate.
Lord Soley
I understand what the Minister is saying. However, many people who are not good at reading, writing and arithmetic actually have quite good keyboard skills, but that does not get picked up. You can see that with kids. My noble friend on the Front Bench leading for the Opposition referred to ex-prisoners. If you look at their digital skills they are actually very good but they are not targeted in a way that enables them to do jobs.
Lord Freud
That is a very good point. I looked a couple of years ago at a scheme that went very specifically for youngsters who had failed in the conventional exams-based syllabus. They were given a chance by various companies to work on computers. Actually, some of them did very well and it was a new recruitment line because they were just tuned that way. There is something very real there that one could probably expand.
My noble friend Lord Shipley—he is indeed my noble friend—raised procurement. That is a matter for the Cabinet Office. I will not predict anything for the next year.
On zero hours, people are more likely to be satisfied than dissatisfied with their hours, mainly because the flexibility suits their current circumstances. While there has been an increase in the estimate, that does not mean there has been a recent increase over that period in the number—as the noble Baroness, Lady Sherlock, would accept. The implication is that, even using the very largest estimate, we are talking about only three in every 100 workers. We are looking currently at making sure that the zero-hours system is appropriate and not abused. That is in hand at BIS.
We accept the point on the enforcement of the minimum wage. Employers who fail to pay can now be publicly named and shamed. That is on top of financial penalties, and civil and criminal proceedings for the most serious offenders. The minimum wage will rise by 3% from October this year to £6.50. That will produce a pay increase for more than 1 million people—the largest cash increase in the minimum wage since 2008.
It is clear, as my noble friend Lord Shipley said, that the Government inherited a very damaged economy, with high levels of unemployment and inactivity. We are now getting back on our feet. The better news on the economy is feeding through to an improving picture in the labour market. As a result, the number of people in work has now exceeded 30 million. We have record numbers of men and women in work and the highest female employment rate on record. As I said earlier, excluding students, we are now at an all-time peak in the employment rate and inactivity is the lowest on record. Given the context of what we have been handling in terms of the recession, that is an extraordinary achievement.
Despite the difficult global economy, over 1.3 million people more now have a job than in 2010—600,000 more than at the peak before the last recession. There are 1.7 million more people working in the private sector. Despite contrary perceptions, the rise in employment—both over the year and since the election—has been dominated by full-time permanent jobs. Things are still looking up. According to the OBR, the economy is expected to grow by 2.7% this year and the number of people in work is expected to increase by 3.3% by 2018. That does not take us quite to the figures I was working with when I wrote my report in 2007, but it does not leave them that far short.
Parliamentary Privilege
(10 years, 8 months ago)
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Lord Brabazon of Tara
That this House takes note of the report of the Joint Committee on Parliamentary Privilege (HL Paper 30).
Lord Brabazon of Tara (Con)
My Lords, privilege carries connotations of social exclusivity or of favouritism, so it is important that occasionally we remind ourselves what parliamentary privilege actually is. We, as members of this legislature, are accountable to the people. We make laws. Our colleagues in the House of Commons approve taxation. We hold the Executive to account. To perform those tasks effectively and without fear, we need certain rights and immunities. We need to be able to regulate our own affairs without interference from government or the courts. Above all, we need to be able to speak and act freely in the course of our parliamentary work without fear of consequences. So the existence of some form of parliamentary privilege is a necessary precondition for a free and democratic society. It is not a special immunity that attaches to us personally. It is the freedom of the House itself, the foundation for everything that we, as parliamentarians, do here.
It is important to restate these principles, however self-evident they are, because at the time the Joint Committee which I chaired was set up they were being widely questioned. In early 2010, four parliamentarians—three MPs and one Member of this House—sought to persuade the courts that parliamentary privilege protected them from being prosecuted for false accounting in respect of parliamentary expenses. That case was still being heard at the time of the 2010 election, and the coalition agreement included a commitment to bring forward proposals to ensure that privilege could not be used by Members of either House to evade justice.
The case brought by the four Members was subsequently dismissed by the courts at every stage, culminating in the judgment of the Supreme Court in R v Chaytor. In that judgment, the Supreme Court reaffirmed something which the two Houses themselves have acknowledged for many years—that a crime is a crime and that Members of Parliament who have committed crimes enjoy no special protection from prosecution. I will quote briefly from the Supreme Court’s judgment:
“for centuries the House of Commons”—
the same applies to this House—
“has not claimed the privilege of exclusive cognizance of conduct which constitutes an ‘ordinary crime’—even when committed by a Member of Parliament within the precincts of the House”.
It follows that a false expenses claim knowingly submitted by a Member of Parliament is fraud, pure and simple—so the main rationale for the Government’s draft Bill had disappeared by the time it was finally published in spring 2012.
What we were left with was, frankly, a bit of a rag-bag. The fundamental question at the heart of the Green Paper, and at the heart of our report, was whether or not we in the UK should seek to codify parliamentary privilege by means of a comprehensive modern statute. That was the central recommendation of the last Joint Committee to consider these issues, chaired by the noble and learned Lord, Lord Nicholls of Birkenhead, in 1999. However, the Government were against codification and so, ultimately, were we.
There are arguments for and against codification. In its favour is the prospect of certainty and clarity. Against it is the inflexibility inherent in statutory codification and the loss of the possibility of evolution. Accordingly, we did not rule out legislation but regarded it as a last resort. If we ever get to a point where the courts or the Executive interfere with privilege to such an extent that freedom of debate in Parliament is compromised, then, and only then, Parliament may have no option but to legislate once again, as it did in 1689 in the Bill of Rights, to put privilege on a clear and unquestionable statutory basis. But we have not reached that crisis point yet, and I hope we never do.
I shall briefly outline some of the Joint Committee’s other conclusions before concluding by addressing the Motion in the name of my noble friend the Leader of the House, which is being debated jointly with this report. We were unanimous in rejecting the Government’s draft clauses which would have vested in the prosecuting authorities the power to waive the protection afforded by Article 9 of the Bill of Rights, thereby allowing parliamentary proceedings to be admitted as evidence in criminal prosecutions. As the Chaytor judgment clearly demonstrated, a crime is a crime, and membership of Parliament is no protection from prosecution. Privilege exists to protect not Members but proceedings themselves from impeachment or questioning in the courts, which is why witnesses before Select Committees enjoy the same protection as Members. Removal of that protection would have a disastrous chilling effect on free parliamentary debate. I am delighted that the Government, in their response to our report, have accepted our conclusion and abandoned their proposal to waive Article 9 in respect of criminal prosecutions.
Secondly, we considered the penal powers of the two Houses and, in particular, their powers to punish those who, either by refusing to give evidence to Select Committees or by giving false evidence, may be guilty of contempt. I do not intend to speak to this complex issue in detail—chapter 3 of our report speaks for itself—but I want to underline that the existence or not of these penal powers has rarely been an issue for Lords committees, which work best when they engage with willing and co-operative witnesses. I know there have been very rare occasions—one involving the Communications Committee comes to mind—when Lords committees have encountered difficulty, but our focus was very much on the Commons, and we will watch developments in that House with interest.
Thirdly, we considered judicial questioning of parliamentary proceedings. In some countries, judicial interference has been the trigger for legislation: in Australia in the 1980s, and currently, although for rather different reasons, in New Zealand. We are fortunate that in the United Kingdom our judges generally show the utmost respect for parliamentary privilege, just as we, in Parliament, show our respect for judicial proceedings by observing the sub judice rule. The noble and learned Lord, Lord Judge, the then Lord Chief Justice, gave particularly valuable evidence to the Joint Committee on this mutual respect. There have been some problems, particularly in judicial review cases, but we concluded that these were exceptions, rather than the rule, and that there was no need for Parliament to take action at this time.
Finally, before turning to the Leader’s Motion, I would like to mention the reporting and repetition of parliamentary proceedings, which is covered in chapter 7 of our report. This is the one area of significant disagreement between the Joint Committee and the Government. The Government say that they are not convinced by our conclusion that the vague wording of the Parliamentary Papers Act 1840,
“significantly inhibits press reporting of … Parliament”.
Instead, the Government believe that such reporting,
“has sufficient qualified protection under the common law”.
I cannot agree. The evidence of media witnesses was clear. Section 3 of the Parliamentary Papers Act 1840, as amended, refers only to extracts or abstracts of documents published or broadcast by authority of the House, terms which do not appear to extend to general media reports. As a result, the media are genuinely confused over the possible risks they may face in reporting parliamentary proceedings. This confusion was exemplified by the chaotic reaction to John Hemming MP’s disclosure in the House of Commons in 2011 that the footballer Ryan Giggs was the subject of an anonymity injunction.
I was therefore pleased to see that the noble Lord, Lord Lester of Herne Hill, had introduced a Private Member’s Bill seeking to give effect to the Joint Committee’s recommendation that qualified privilege should apply to all fair and accurate reports of parliamentary proceedings, a recommendation that we believe would resolve this anomaly. Unfortunately, the noble Lord has been unable to secure a Second Reading for his Bill, and I understand that in the next Session of Parliament he plans to introduce a much narrower Bill, whose scope will be limited to the repeal of Section 13 of the Defamation Act 1996, which allows Members of either House to waive the protection of Article 9 of the Bill of Rights for the purposes of a suit for defamation.
I would certainly welcome the repeal of Section 13, which has created a number of dangerous anomalies, but I regret that the noble Lord is not pursuing the more ambitious proposals contained in his current Bill. As our report indicates, successive Joint Committees —the 1999 Joint Committee on Parliamentary Privilege, the Joint Committees on the Draft Defamation Bill and on Privacy and Injunctions and the committee that I chaired—have concluded that the current blend of statutory and common law protection enjoyed by media reports of parliamentary proceedings is inadequate. I hope the Leader of the House will be able to tell us that the Government have had a change of heart and are ready to bring forward their own Bill in the new Session. In the mean time, I hope the Government will support the repeal of Section 13 of the Defamation Act.
Finally, I turn to the second Motion in today’s debate, which stands in the name of my noble friend the Leader of the House. I would like to put on record my personal thanks to the Leader for his willingness, as Leader of the whole House, to put his name to it. I shall briefly explain the background. Legislation has over the years created innumerable individual rights in areas such as employment, health and safety, data protection, clean air and so on. Businesses, schools, charities and other organisations across the country have to comply with such legislation, and as a point of principle both Houses, as responsible employers, and as custodians of this great palace, should similarly be bound by it. The problem is that, in 1935, in the case of R v Graham-Campbell ex parte Herbert, the courts decided that they were not. The result of the Graham-Campbell judgment, which was never appealed, was a mess. It came to be a common-law presumption that legislation did not apply to Parliament unless it expressly said that it did.
This presumption was reinforced by the fact that some legislation did expressly extend to Parliament. To give a current example, Schedule 1 to the Deregulation Bill, currently in Committee in the House of Commons, contains provisions relating to apprenticeships. New Section A7 in that schedule states expressly that it applies to parliamentary staff. That seems to me to be the right way to go about it, avoiding any doubt or ambiguity. The same approach was adopted in Sections 194 and 195 of the Employment Rights Act 1996, to which the Deregulation Bill refers.
As the noble and learned Lord, Lord Judge, told the Joint Committee, if in one place you say,
“this Act applies to Parliament”,
but in another place you say nothing about it,
“it will be assumed that it does not apply to Parliament”.
That, in a nutshell, is the problem. The Joint Committee therefore concluded that, as a point of principle, all legislation of general effect, covering such areas as health and safety, employment or fire safety, should be extended by means of express provision to Parliament. In fact, as the letter from the Treasury Solicitor printed in the appendix to our report shows, this position has also been government policy since 2002, although not always observed in practice. By adopting this resolution today, we will demonstrate the House’s strong support for this approach and, I hope, contribute to clearer and more consistent legislative drafting in future.
Before I finish, I should like to thank the excellent clerks we had from both Houses who helped us produce what I hope noble Lords will agree is a good report. We also had some very good witnesses. I have already mentioned the noble and learned Lord, Lord Judge, but I should also like to thank in particular the clerks of both Houses of the Australian Parliament, the clerks from the New Zealand and Canadian Parliaments and the former parliamentarian of the United States House of Representatives, not forgetting our own Clerk of the Parliaments and the Clerk of the House of Commons.
In conclusion, I repeat my thanks to the Leader of the House for putting his name to the second Motion, and I hope that the House will agree it without dissent. I very much look forward to the debate. I beg to move.
Baroness Healy of Primrose Hill (Lab)
My Lords, I was honoured to serve on the Joint Committee on Parliamentary Privilege. The report will be a valuable contribution to the ongoing debate. As it says:
“Parliamentary privilege is a living concept, and still serves to protect Parliament, each House, their committees, and all those involved in proceedings. Much has changed since the publication of the report of the 1999 Joint Committee: privilege evolves as Parliament evolves, and as the law evolves”.
Our committee, wisely chaired by the noble Lord, Lord Brabazon of Tara, was fortunate to have a membership, from both Houses, of great parliamentary and constitutional experience and expertise, and I, as a relatively new Member of this House, learnt a lot. We took evidence from a wide range of experts and practitioners in the UK and abroad, and were very ably served by the clerks of both Houses, to whom I am most grateful for their guidance and expertise. I am pleased that the Government have responded so warmly to the report and I welcome the reiteration that they have,
“always been clear that Parliamentary privilege is a matter for Parliament and it is therefore right for Parliament to have a proper opportunity to reflect on its continuing purpose”.
Our committee found that there was no strong case for a comprehensive codification of parliamentary privilege, to which the Government have now agreed, as the noble Lord, Lord Brabazon, explained so comprehensively. But it is important to stress again the committee’s belief that steps may have to be taken both by Parliament and the Government to clarify the application of privilege where appropriate in the future. As the report states:
“This does not mean that we reject all legislation; but legislation should only be used when absolutely necessary, to resolve uncertainty or in the unlikely event of Parliament’s exclusive cognisance being materially diminished by the courts”.
One area I would like to highlight is the reporting of parliamentary proceedings. Our predecessor committee—the 1999 Joint Committee—noted:
“Parliamentary privilege does not cloak parliamentary publications with any form of protection”.
This was decided in 1839 in the case of Stockdale v Hansard, in which the court held that parliamentary privilege did not attach to the publishers of reports ordered to be printed by the House of Commons. The Parliamentary Papers Act 1840, passed in response to this decision, established that no action could be brought in court arising from the publication of the Official Report or other documents ordered to be published by either House. It also provided protection for “any extract or abstract” from such documents made by others, provided that they were published,
“bona fide and without malice”.
Such protection for publications by order of either House is a matter of statute law, not privilege.
As the House will certainly recognise, media reporting has moved on since then. The 1999 Joint Committee defined an “abstract” as a “summary or epitome”, and thus media reports of what goes on in Parliament, even if they draw on documents published by order of the House, such as Hansard, do not generally enjoy the qualified protection afforded by Section 3 of the 1840 Act. This was confirmed by Sarah McColl, solicitor advocate in the BBC, in her oral evidence on behalf of the Media Lawyers Association. But such reports do enjoy privilege in common law in respect of defamation. If the whole debate is published, the protection is absolute; if only extracts are published, the protection is qualified.
The 1999 Joint Committee said that it would be surprising if the common law defence of privilege in respect of defamation was not available also to broadcasters. But our committee found a problem in that, outside the field of defamation, media reports of parliamentary proceedings, as opposed to extracts or abstracts, do not enjoy legal protection. The protections enjoyed under 19th century statute or common law do not meet the current situation, where modern technology means that increasing volumes of data are streamed live via the internet. Such data are subject to instant comment or reporting via social networking sites, and their re-use, for instance by combining them with other data sources, is actively encouraged under the terms of the Open Parliament Licence.
Witnesses called for far wider changes than those proposed by the 1999 Joint Committee to be made to the 1840 Act and to other relevant legislation. The Newspaper Society wished to protect all reports at any time in any form, and the Press Association suggested that absolute privilege should be afforded to all fair and accurate reports of proceedings in Parliament, including media reports of breaches of injunctions.
After careful consideration, our committee did not accept the argument that full freedom of expression in Parliament is dependent on a similar freedom being enjoyed by the media. As our report says:
“The fundamental purpose of affording absolute privilege to proceedings in Parliament is to protect those proceedings themselves, so that the democratically elected representatives of the people can engage in free and fearless debate on issues of public concern”.
On balance, therefore, our committee did not support extending absolute privilege to all reports, including media sketches and summaries, of proceedings in Parliament; not because, as some argued, Members might be used by the media to launder defamatory information—although we could not rule out such a risk—but because the existing protection of qualified privilege, which covers all fair and accurate reports unless they can be proved by the claimant to have been made maliciously, already provides a robust defence of press freedom.
However, our committee recognises that the media need clarity and certainty, and that the 1840 Act does not appear to cover media reports or editorial comment —only “extracts and abstracts” of parliamentary publications, including broadcasts. The wording of the 1840 Act reflects a time when the re-publication by newspapers of large verbatim extracts from Hansard was commonplace; and, although some may regret it, the style of reporting today is very different, to such an extent that the wording of Section 3 of the Act is largely obsolete.
When the Government argued in their Green Paper that they were,
“not aware of circumstances in which any media organisation has been prevented from publishing reports of parliamentary proceedings by doubts over the extent of the current protection in law”,
this was contradicted by BBC and Press Association witnesses. Mike Dodd of PA explained that,
“reporting Hansard verbatim requires a wait of a least two hours before the first draft comes out, whereas we have customers … who have seen something on Parliament TV and want it now or five minutes ago”.
The Government’s draft clause would therefore give no protection to a reporter who, on the basis of a live broadcast, transcribed words said in the House, and then sought to re-publish the words online. The words spoken would not enjoy any protection under the 1840 Act until the online version of Hansard was published some hours later. The committee deemed this indefensible, and therefore endorsed the recommendation of the Joint Committee on Privacy and Injunctions that qualified privilege should attach, in all circumstances, to fair and accurate reports of things said or done in Parliament.
Our committee also endorsed the recommendation of the 1999 Joint Committee that the Parliamentary Papers Act 1840 should be replaced by modern statutory provisions, and that one of these new provisions should confirm that the term “broadcast” includes dissemination of images, text or sounds, or any combination of them by any electronic means. The provisions should also include a delegated power, subject to affirmative procedure, which allows the Secretary of State to update the definition of “broadcast” in the light of further technological change, without the need for primary legislation.
Of special interest to this House is our recommendation,
“that the statutory provisions which we have proposed in respect of the reporting of parliamentary proceedings should also confirm, for the avoidance of doubt, that Members of either House enjoy the same protection as non-Members in repeating or broadcasting extracts or abstracts of proceedings in Parliament”.
I certainly hope that the Government will actively consider wholesale repeal of the 1840 Act and its replacement by modern statutory provisions that clearly establish that qualified privilege applies to all fair and accurate reports of parliamentary proceedings in the same way as it does to abstracts and extracts of those proceedings. The freedom to report parliamentary debates in the media is of vital importance in a democratic society.
Lord Bew (CB)
My Lords, like the noble Baroness, Lady Healy, I very much thank the noble Lord, Lord Brabazon, for the skilful way in which he chaired our Joint Committee. We have in this report shied away somewhat from the concept of comprehensive codification of parliamentary privilege. We thought long and hard about many of these questions, and we were right to do so.
None the less, in the remarks that I make today I will focus on those areas in which we advocate legislative change. In some ways we follow quite closely, as it were, arguments that were advanced in 1999 by the noble and leaned Lord, Lord Nicholls of Birkenhead, in the report of that year. I notice that the noble Lord, Lord Cormack, is in his place. As a Member in the other place, he sat on that committee. There were at least two very important aspects of that report which have seen no action in intervening years; our committee was disturbed by the failure to take action. I refer in particular to the repeal of Section 13 of the Defamation Act 1996.
The problems of and raison d’être of Section 13 arose out of a very particular, unique and, one might almost say, slightly bizarre case of the struggle between Neil Hamilton and the Guardian newspaper at that time, at a particularly difficult moment in parliamentary history and of the Major Government. There is a fundamental problem with the law as it currently stands, which the noble Lord, Lord Brabazon, touched on at the beginning of his remarks. Privilege is not an attribute of an individual Member; it is an attribute of the House itself. The law as it stands is compatible with the view with which I think that both Houses are uncomfortable—that it is in some sense the attribute of the individual Member. There is a strong case for us looking again along the lines of the report by the noble and learned Lord, Lord Nicholls, on this question. There is really no more fundamental misunderstanding in the public mind about parliamentary privilege as that it is a claim by individuals to some form of entitlement. That is not the view of Members of Parliament, but we none the less have the unfortunate legacy of this case. I feel very strongly that this should, if at all possible, be corrected.
There is another respect, too, in which we have followed in a significant degree the report of the noble and learned Lord, Lord Nicholls. Page 94 of the report says:
“The Joint Committee considers the protection given to the media by the 1840 Act and the common law itself should be retained. We consider, further, that the statutory protection would be more transparent and accessible if it were included in a modern statute, whose language … would be easier to understand than the 1840 Act. We recommend that the 1840 Act, as amended, should be replaced with a modern statute”.
Again, that is a recommendation of our committee.
It is clear from the Government’s response that they are not yet convinced that there are significant difficulties facing the media in reporting Parliament. However, on the basis of the evidence that we heard, I find that difficult to comprehend. It is to do partly with the speed at which the media need to respond to things that are said in Parliament. It is clear that in the context of how we have moved in a number of important ways in terms of the recently passed Defamation Act to improve freedom of expression and equality of expression in public debate in this country, it would be ridiculous to leave this as an anomaly.
There is, oddly, a similarity between the 1840 Act and the provisions that arose in the Defamation Act out of the Hamilton case. In both cases, the immediate backdrop in the public debate is bizarre and eccentric. There is something to be said for the 1840 Act; it is important not to throw out the baby with the bathwater—it has given the media certain protection. With any change that occurs, we should be concerned not to throw the baby out with the bathwater. None the less, it is very hard, in both cases, when the circumstances of the legislation are so peculiar, individualistic and bizarre, to argue that there is some case for maintaining in statute language that in both cases is inappropriate—particularly in the case of where privilege resides, where it is fundamentally misleading to the public.
I conclude by taking a slightly different angle of approach to another aspect of our report, while declaring an interest as chair of the Committee on Standards in Public Life. I have to declare that interest because that committee has addressed this area—the appointment of lay members to Select Committees, which is dealt with in chapter 4 of our report. Since 2002, the committee has been pushing for this sort of development of Parliament, with independent or external elements in its system of regulation. In this context, the Committee on Standards in Public Life has welcomed the addition of lay members of the committee as a further independent element of the House system of regulation. In the end, we have decided, after receiving very compelling evidence from the clerks, that there is no case here as such for legislation. However, I do not want it to be thought that the committee, while I think rightly accepting the very cogently argued evidence that we received on this point, did not also pay a great deal of attention and give respect to the letter that the noble Lord, Lord Brabazon, received from the right honourable Kevin Barron MP, the chairman of the Standards and Privileges Committee, who wrote to our chairman to support legislation granting lay members of the CSPL full voting rights, saying:
“I cannot overstate how important it is that lay members should be able to participate on the same basis that MPs do”.
Our proposals are without prejudice to that argument. It is worth drawing the attention of the House to that interesting discussion in chapter 4 of our report.
Lord Norton of Louth (Con)
My Lords, as the first Member to speak who was not on the committee, I welcome the report of the Joint Committee. It is a measured and persuasive report. I also welcome the response of the Government. Privilege is a matter for both Houses, but the Government have an important role to play in facilitating the recommendations of the Joint Committee, not least when legislation is involved. I was very pleased to see the constructive engagement by the Government. There were few issues on which the Government reached a different conclusion to that of the committee. On reporting proceedings, I incline to the view of the Joint Committee, for the reasons that the noble Baroness, Lady Healy, outlined; but on the other issues, for reasons that I shall develop, I agree with the Government.
The report accepts that the current position is not tenable. The assertion of privilege in respect of those summoned to appear before Select Committees has for some time been akin to admiring the emperor’s clothes. In practice, committees rarely have difficulty in securing the witnesses they wish to give evidence. For those summoned, it is often seen as a matter of some pride to appear before a parliamentary committee. It is normally in their interest to appear; they want their views to be heard. The occasions when there is a problem are few and far between, but it is on those occasions when either House may need to assert its powers to ensure that committees can fulfil their essential tasks. As the Joint Committee recognises, it is in the public interest that committees have the power to function effectively. As it records, each House needs to be prepared for when someone summoned tests the penal powers of the House. As it says at paragraph 61:
“It will be too late to consider these matters when a crisis arrives”.
The committee recommends against legislating to confirm Parliament’s penal powers. I think it is correct in arguing that the disadvantages of legislating outweigh the advantages. Legislating would bring privilege within the purview of the courts, not only to determine the scope of privilege, as they do, but also to determine whether a contempt has been committed. It would entail a significant reduction in the exclusive cognisance of Parliament, and give to the courts a role that I suspect they would not necessarily welcome. There is a powerful principled case for maintaining the concept of two constitutional sovereignties, and there would need to be a compelling case to move away from it. I do not believe such a case has been made.
The Joint Committee gets to the nub of what is needed in paragraph 77. It is essentially a test of institutional confidence. This House recently resuscitated its long-standing power to suspend Members. The fact that the power had not been used since the 17th century did not mean that it no longer resided with the House. As the Clerk of the House of Commons told the Joint Committee in respect of privilege, it is not a question of the powers but rather one of their enforcement. However, enforcement must comply with standards of fairness, ensuring that those appearing before committees know what is expected of them and providing a rigorous process, including recourse to legal advisers, should they be subject to a complaint of contempt.
I believe that the committee’s recommendation for a clarification of powers and setting out fair procedures is entirely appropriate. It addresses what is clearly a problem that needs resolving, but also provides the flexibility to meet changing expectations.
The need for flexibility is at the heart of the committee’s report. I wholly accept the argument that flexibility is preferable to a statutory codification of privilege. There is no need for such codification, not least given—as the Joint Committee records—that there is no persistent conflict between Parliament and the courts. The relationship has tended to be characterised more by comity than by conflict. There have been exceptions and on occasion judges have entered into territory that should remain barred to them. Pepper v Hart was designed to enable courts to look at the parliamentary record when there was an ambiguity that could not be resolved other than by examining what the Minister had said. It was not an invitation to pass judgment on what was said and done in either House, but some judges seemed to think that it gave them latitude for such commentary. However, those have been the exceptions, not the rule; and the courts generally have shown no desire to encroach on matters that are deemed to fall within Parliament’s sole jurisdiction. As the Master of the Rolls, Lord Dyson, observed in his recent Bentham Presidential Lecture, talking about judicial review, judges are,
“mindful of the … territory into which they should not enter”,
and in exercising their power, they,
“seek to uphold the decisions of the legislature and to secure the sovereignty of Parliament and the rule of law”.
Where there may be conflict or uncertainty, that is a case for dialogue rather than confrontation. The relationship tends to fit with what Alison Young has characterised as a “democratic dialogue”. As the Government response records in respect of the question as to whether the Register of Members’ Interests should be considered as a parliamentary proceeding:
“This is another case where closer contacts between Parliament and the Courts can mitigate the risks of misunderstandings and improve the consistency of decision making”.
It is important that means of maintaining such contact are developed. One of the many advantages of retaining this House as the highest court of appeal was that it provided a forum in which the Law Lords could appreciate the importance of Parliament and other parliamentarians could appreciate the role of the Law Lords. That relationship was entirely legitimate and indeed, in my view, served to provide some protection for the role of the judiciary against sometimes ill informed criticism by the Executive. Means are now being developed of ensuring that a dialogue can be maintained between the legislature and the judiciary.
Parliamentary privilege needs to be protected in order to enable Parliament to fulfil its functions. The stress is on Parliament rather than parliamentarians. As the noble Lord, Lord Bew, said, parliamentarians enjoy protection only in so far as it is necessary to protect the House of which they are Members. As the report notes, MPs and Peers do not enjoy the immunities accorded to Members of some other parliaments. I think that our approach is appropriate. Privilege should be for the benefit of the nation. It is not designed for the personal benefit of Members.
It is thus entirely right that Members are subject to prosecution for “ordinary crimes”, whether committed on the parliamentary estate or elsewhere.
Following the principle that Members should not enjoy privileges that are not essential to enabling Parliament to fulfil its functions, I agree with the Government that there should be no change to current requirements in respect of jury service. As the response notes, Her Majesty’s Courts and Tribunals Service will readily grant requests to defer jury service where necessary. I certainly see no grounds for arguing that Members should have a right of excusal from jury service in England and Wales, but officers of either House should not. The officers arguably are more essential to the fulfilment of the functions of each House than is any individual Member.
For the same reason, I agree with the Government in respect of the right of Members not to respond to court summonses. As the government response notes, it is a privilege not enjoyed by other public figures. As it says, there is no strong rationale for Members to be treated differently from non-Members in this area. Indeed, I think there is a danger of bringing Parliament into disrepute if a Member hides behind parliamentary privilege in order to avoid responding to a court summons. There is no compelling case that such immunity is necessary for Parliament to fulfil its functions.
On most other issues, the Government agree with the Joint Committee’s recommendations. I welcome the Government’s acceptance that there should be no disapplication of Article 9 of the Bill of Rights in respect of criminal prosecutions and that Section 13 of the Defamation Act 1996 should be repealed. Both are consistent with protecting freedom of speech as essential to enabling Parliament to fulfil its functions and maintaining the clear division between the legislature and the judiciary.
My principal question is directed to my noble friend the Leader of the House, and that is: what next? That question is especially germane in this House. As the report states at paragraph 79:
“If the House of Commons were to adopt our proposals on how its penal jurisdiction should be exercised, we would expect the House of Lords to adopt similar procedures, adapted to the conventions prevailing in that House, in due course”.
“Due course” is a rather imprecise indication of timescale and there is always the danger that, with no set timetable, there may be a tendency to defer any action. It would be helpful to know what steps are being taken to ensure that we do, as the Joint Committee recommends, build on its work, and when we may expect to see the fruits of the deliberations that take place. The report of the Joint Committee is very welcome. It is important that it does not gather dust. It is in the interests of the House that we act on it. Agreeing to the Motion tabled by my noble friend the Leader of the House is a start, but it is essential that we ensure that it is not both a start and an end point.
Lord Brown of Eaton-under-Heywood (CB)
My Lords, like the noble Lord, Lord Norton, I congratulate the Joint Committee on its work and its report and also the noble Lord, Lord Brabazon of Tara, on his crisp and clear introduction of this debate.
This is an admirable report: thoughtful, clear, incisive and readable. Although, as I shall indicate, I do not agree with quite all its recommendations, indisputably it provides a sound platform on which to consider and eventually come to decisions on the way ahead.
I certainly agree, as do the Government, with the committee’s conclusion that there is no strong case for a comprehensive codification of parliamentary privilege. I was one of the court of nine—my noble and learned friend Lord Hope of Craighead was another—in the Supreme Court, which heard the cases of Chaytor and two others late in 2010. We signed up to what I believe can be regarded as the magisterial judgment of my noble and learned friend Lord Phillips of Worth Matravers. I like to think that that decision solved what might otherwise have been seen as a number of doubts and tensions in the relationship between the courts and Parliament.
I agree with all that the noble Lord, Lord Norton, has just said about this, in particular the advantages of the flexibility of the present system and relying on the comity between the institutions involved. I share his regret at the banishment of the Law Lords back in 2009 across Parliament Square.
Of the various other conclusions reached by the committee I will focus on only four, and even then comparatively briefly. The first concerns judicial questioning of proceedings in Parliament. The starting point here is Article 9 of the Bill of Rights of 1689:
“That the freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament”.
The decision of the seven-Member appeal committee of this House in Pepper v Hart in 1993—just over 20 years ago—was a landmark decision which, for the first time, allowed the use of parliamentary material as an aid to statutory construction. However, this relaxation of the rule was made explicitly subject to stringent conditions: first, that the legislation was ambiguous or obscure or could lead to absurdity; secondly, that the material sought to be relied on to explain it was made by the Minister promoting the Bill; and, thirdly, that the statements to be relied on were clear.
Over the past 20 years, there has been a great number of occasions when counsel has explored and cited Hansard in an effort to bolster their contended for construction of legislation, but far fewer occasions on which they have succeeded in that aim. As the noble and learned Lord, Lord Mackay of Clashfern—the then Lord Chancellor—predicted in his lone dissenting speech in Pepper v Hart, the necessary researches in Hansard have in these cases resulted in a substantial increase in the cost of the litigation, and it may be doubted whether this has in truth been justified.
There is also the risk that Ministers promoting legislation may make statements which are specifically designed to assist government in the event of future disputes as to the proper interpretation of the legislation. As the noble and learned Lord, Lord Steyn, suggested in an Oxford lecture some years ago which doubted the wisdom of the decision in Pepper v Hart, courts should be inclined to use the relaxation of the rule—if at all—against government rather than in government’s favour. All that said, I am inclined to agree with the committee’s report, and the Government’s response to it, that at present no further action is needed.
On the linked questions of the disapplication of Article 9 in certain circumstances, and the repeal of Section 13 of the Defamation Act 1996, which qualified Article 9, there is not much that I want to add save that I wholeheartedly agree—as do the Government—with the committee’s recommendations. The proper honouring of Article 9 is essential to free speech in Parliament and, frankly, none of the envisaged exceptions to it begins to make sense. Indeed, Section 13 can itself be seen in hindsight to have been a serious mistake. Ironically, nobody will have seen this more clearly than Mr Neil Hamilton, in whose ostensible favour Section 13 was originally enacted. Your Lordships will recall—indeed, the noble Lord, Lord Bew, recollected this—that Mr Hamilton was originally thwarted in his libel claim against the Guardian newspaper in the cash for questions affair because, the newspaper being at that stage unable to use the parliamentary material as it wished to justify the publication, the judge inevitably had to stop the case. Once Section 13 was enacted, however, Mr Hamilton was able to pursue such a claim, but, of course, in the end it failed dramatically.
I wish to say a brief word on the registration of Members’ interests. I should note that currently I have the honour of chairing the Sub-Committee on Lords’ Conduct, which is a sub-committee of the Privileges and Conduct Committee of this House. In common with many others, I regard the first instance decision in the case of Rost v Edwards in 1990 as a curious aberration, which, if ever it becomes necessary to litigate this point in future, will not survive. Such matters as the register of interests seem to me plainly matters within Parliament’s exclusive cognisance.
I want to say a few words about jury service and witness summonses. It is on these two questions that I find myself in respectful disagreement with the committee’s recommendation, but therefore in agreement with the Government’s rejection of the committee’s proposals. I would not wish to legislate to exempt Members of either House from jury service, from which they are presently not excused, but I would wish to legislate to remove Members’ current right not to respond to witness summonses.
As to Members acting as jurors, the courts may be expected to continue to treat them with great consideration and to grant requests to defer jury service where it would otherwise lead to clashes with Members’ public duties. However, given the widespread sweeping away of exemptions from jury service, which includes that of judges at all levels of the judiciary, Members should not in my view seek to re-establish their own exemption. Indeed, to my mind, it should be quite the contrary. It seems to me enormously valuable that Members of both Houses should experience jury service, and thereby gain a real understanding of what it entails and the strengths and—I may add—weaknesses of the jury system.
As the noble Lord, Lord Blair, pointed out in a Question asked in the House only last week, Section 8 of the Contempt of Court Act 1981 currently prevents almost any research into the workings of the jury system. That section was, it so happens, included in the Act to repair a failure of my own when, as Treasury counsel in, I think, 1980, acting on behalf of the Attorney-General, I unsuccessfully prosecuted the New Statesman for contempt of court for publishing a juryman’s revelations of the jury’s deliberations in the Jeremy Thorpe trial. There was then no law against it. We relied, unsuccessfully, on the common law.
Judges who serve as jurors can now see how it all works in practice—so, too, should parliamentarians. As to witness summonses, again, Members should not be privileged. I agree with the noble Lord, Lord Norton, on this, too. Perhaps this is a matter rather more of perception than of substance. The reality is that, even assuming this privilege is removed, it will be perfectly possible to have witness summonses set aside, assuming they have been issued vexatiously.
On the separate Motion of the noble Lord the Leader of the House, I have nothing to add to what the noble Lord, Lord Brabazon, has already said, save only that I hope that one day some new AP Herbert will arise to find fresh anomalies in our law, and so keep the next generation of students amused.
Lord Davies of Stamford (Lab)
My Lords, it may seem a rather thankless task in life to spend many hours of one’s existence in a committee discussing parliamentary privilege. There are certainly no votes in the subject and there is absolutely zero public or media interest in it. Even though all colleagues in both Houses always say that privilege is enormously important, in practice not many of them are particularly motivated to follow the proceedings of such a committee.
Nevertheless, my participation in the committee was in fact not merely a duty, I suppose, and, no doubt, a privilege, but also a real pleasure. That was due entirely to the motivation and quality of my colleagues on the committee and to the extremely good tempered, fair and, indeed, often humorous fashion in which proceedings were conducted by our chairman, the noble Lord, Lord Brabazon of Tara. I pay tribute to him for what he did over the many weeks when we met.
The results of the committee’s proceedings have been discussed today. I will focus on one or two details. First, I endorse the comments of the noble Lord, Lord Brabazon of Tara, about the need to legislate to remove any ambiguity about the right of people—the media or anyone else—to reproduce parliamentary debates in their accounts of parliamentary proceedings. It is absolutely essential that people—not just newspapers or broadcasting stations—have qualified privilege in citing Parliament as long as they cannot be shown to have acted maliciously or to have perverted the quotation by exclusion or something of that sort. If they have given a fair and true account of what was said in Parliament, they should be immune from any legal proceedings. It is essential in a democracy that people can refer to the proceedings of their elected representatives, or in our case their non-elected representatives, without any inhibition. It is important that we legislate on that.
I find it quite extraordinary, as will every Member of the House and every member of the public, that at a time when the Government are saying that we must have more and more time off because we have nothing to do, they are also saying that there is no time to legislate on important matters such as this. I should be grateful if the Leader of the House would look again at his diary to see whether a Bill could be brought forward in the next Session so that we can deal with this matter as the committee recommended. No one has suggested that that is not a good idea or not an important priority for legislation.
I will deal briefly with a very important matter that was discussed in the committee and has already been referred to today—the issue of witnesses before Select Committees who may be tempted to refuse to appear or to try to deceive the committee when they do appear. That is a very real problem. We spent a long time talking about it. We came to the conclusion, as the House will have seen, that each House should assert its existing competence and sanctions to make it absolutely clear what the rules are and what will happen if someone breaks them. I am happy with that. However, we may find ourselves in a difficult situation if someone cynically decides that there is not much of a downside to refusing a summons or subpoena to testify or is less than straight with the committee when he or she testifies. We may have to come back to this.
There was some discussion in the committee about what we should do if we decided to legislate—whether we should act as the Australians have done and take powers ourselves in Parliament to inflict appropriate sanctions on those people who misbehave in this fashion or whether we should do what the Americans have done and make it a matter of statute law so that it is for the prosecuting authorities to pursue the matter through the courts. The Americans have done that very successfully and, I think, in contrast to the noble Lord, Lord Norton, without any damage to either the perception or the reality of parliamentary sovereignty in the United States. We may need to come back to that.
I was told in the course of proceedings—we had a session in which we took evidence from representatives of the US Congress—that that power has been used in the United States about 20 times in the past century, in some famous cases, such as the Hiss case, as well as in less celebrated cases. That has been enough to maintain the credibility of the system in the United States. No one sane rejects a subpoena to testify to a congressional committee or tells lies before Congress. The legal advice given, if one were to suggest such a thing, would be quite unambiguous in the United States. I am not sure that it would be so unambiguous in this country. We must keep an alert mind here and take the action recommended in our report—that the two Houses independently produce a resolution setting out the powers and sanctions as they currently exist. I hope that that will happen before too long.
Finally, I will comment on a matter on which I found myself in a minority in the committee. My disagreement with the majority of the committee is recorded in the proceedings. Here I also take issue with the noble and learned Lord, Lord Brown, whose views I listened to with great respect. It is the issue of the extent to which proceedings in Parliament can be cited in a court of law, a tribunal, a judicial inquiry or something of that kind. They cannot of course be impeached or questioned: that is quite clear in Article 9 of the Bill of Rights. However, in my view, they should be citable. I put the point to the noble and learned Lord, Lord Brown, who is a very distinguished jurist, that by definition proceedings in Parliament are surely a matter of public record, as they always must be in a democracy. Therefore, what is said and done here is not and should never be a mystery. In certain cases, what is said and done here—such as the passing of a Motion, or the proceedings and recommendations of a parliamentary Select Committee—may be extremely relevant to the subject which a tribunal or judicial review is looking at. It would be artificial if parties to that hearing, or members of that judicial tribunal, were inhibited by law from taking into account something extremely relevant, such as the recommendations of a parliamentary Select Committee on exactly the matter, or part of the matter, that they were reviewing. That would be absurd. It would not be a good day for democracy.
It is sometimes said that it would be unfair if the proceedings in Parliament that might be cited worked against one of the parties or witnesses before a tribunal, committee or other proceeding; that he or she would not be able to argue in his or her defence against the decision of Parliament because that would be in breach of Article 9 of the Bill of Rights. However, that is just a fact of life. If the wording of the statute law happens to be against the interest of one particular party, that party cannot argue about the merits of the law and say that Parliament made a mistake in passing it. It is a fact of life that must be accepted. Equally, if Parliament came to a decision on a particular matter, or a Select Committee came to a particular recommendation, that is a fact which cannot be challenged by a court or tribunal, and neither should it be. It should be taken into account. It is completely wrong that it should be somehow suppressed or that the judicial proceedings concerned should proceed in apparent, and perhaps false, ignorance of the existence of that particular fact. That is the point where I disagreed with some colleagues on the committee and continue to disagree. I am glad that this will be resolved, not by statute or by decision of this House, but by jurisprudence. I hope that, in a responsible and reasonable fashion, the Pepper v Hart tradition is continued and that it is possible for those taking part in proceedings to cite responsibly and in a way that is consistent with the Bill of Rights—not challenging or arguing the substance or that Parliament should not have done X, Y or Z, but simply being able to cite what actually happened in Parliament. It seems to me that, in a democracy, any other behaviour would be bizarre.
Finally, the Government have decided that they were wrong in suggesting the disapplication of the Bill of Rights in criminal proceedings. I and the committee were very glad that they had that conversion. However, there are two long-term lessons that we can draw from this experience and that I hope the Government will take note of. One is that in matters of the constitution, particularly, it is a great mistake to go in for reformulation if you do not intend to change the substance of the rule. If you just rephrase the rule—codify it or put the same rule in what you believe to be better words—you will not have contributed to legal certainty, which should be the duty of any legislator to contribute to. Instead, you will have contributed to uncertainty. That is because the courts will always say, “Parliament has used different words and must therefore have had a slightly different intention and we therefore cannot interpret this principle in exactly the same way as we would have interpreted the previous principle, as expressed and formulated in different words”. You create great judicial uncertainty and, had the Government’s initial Green Paper been implemented, it would have done that and it would have been a great mistake.
The final general lesson that I draw out of all this is that if you are going to legislate, you should never set out a general principle and then create a certain number of non-exhaustive, explicit derogations or exceptions from it. There you again create enormous uncertainty because you have set up a general principle; you have said, “These are exceptions”; you have not said, “These are the only possible exceptions”; and you therefore create a whole area in which there may or may not be exceptions. Again you have created great judicial uncertainty. It is what I called during the committee’s proceedings legislation by negative example. We should never do that in any context and I hope that, the lesson having been learnt on this occasion, it will be taken account of by those who formulate proposals for legislation.
Lord Hope of Craighead (CB)
My Lords, like others who did not have the privilege of serving on the Joint Committee, I congratulate that committee and all its members on an excellent and eminently readable report. I also thank the noble Lord, Lord Brabazon of Tara, for initiating this debate and providing me with the opportunity to contribute to it, which I greatly welcome.
I should like to concentrate simply on the relationship between Parliament and the judiciary. In R v Chaytor, the case to which reference has been made, the late Lord Rodger of Earlsferry said that an invocation of parliamentary privilege is,
“apt to dazzle lawyers and judges outside Parliament”.
I think that his point was sometimes simply that the invocation of the words is regarded as a sort of red light—“Keep off the parliamentary lawn”. However, as Lord Rodger noted, Lord Brougham, when he was Lord Chancellor, cautioned against that approach. His advice was that the courts should not accede to claims of privilege,
“the instant they hear that once magical word pronounced”.
The issue requires to be addressed with more care than that and with a greater regard to the context. Article 9 of the Bill of Rights must, of course, be respected. However, as Lord Brougham said, it cannot have been intended to apply to a matter for which Parliament, especially its individual Members, cannot validly claim the privilege of exclusive cognisance at all. That was indeed what Chaytor was about.
I have to confess that I was surprised to read in paragraph 32 of the Joint Committee’s report the proposition that the courts can only interpret and apply the law, and that making law is for Parliament alone. That, with great respect, is not entirely accurate. There are many areas of the common law that have been developed by the judges with which Parliament has not dealt at all. In those areas, as was explained by the then senior Law Lord, Lord Reid, in 1972, the judges do indeed make law. It is true that they do not have the last word. It is always open to Parliament to reverse the position if it thinks that the judges have got the law wrong, or if the law declared by the judges is not something with which it agrees. However, as the Lord Chief Justice, the noble and learned Lord, Lord Judge, said, ultimately it is Parliament that is sovereign. However, much of the law that is applied day and daily in our courts is law made by the judges. That is one of the great strengths of our legal system. After all, legislation is inevitably a rather blunt instrument. The virtue of our common law is that it can be adapted to fit precisely to the facts of each case.
Leaving that minor criticism aside, however, I welcome the way in which the report deals in chapter 5 with the important issue of judicial questioning of proceedings in Parliament. The Government refer in their response to what they describe as the continuing good relations between the judiciary and Parliament. The relationship is indeed a good one. I agree with the noble Lord, Lord Norton of Louth, that the atmosphere is one of comity rather than conflict. In my experience, both sides are careful to respect the boundaries between what is and what is not permissible. That is certainly so of the judges.
The case of R v Chaytor obviously helped a great deal in clearing the air on this subject, which was causing concern when the idea was promoted of engaging in this report in the first place. I had the advantage of sitting in the court, together with my noble and learned friend Lord Brown of Eaton-under-Heywood. We and, indeed, all members of the court were very conscious of the need to respect the privileges of Parliament, which the appellants—parliamentarians all of them—had invoked. In the event, it was relatively easy for the court to conclude that there was nothing in the allegations against the appellants that related in any way to the legislative or deliberative processes of either House or their Members. As the noble Baroness, Lady Healy, said, a crime is a crime. It was relatively easy to reach that conclusion and the court held that the prosecution in the ordinary courts for the parliamentarians’ crimes of dishonesty was not precluded by Article 9. It is worth noting, as my noble and learned friend Lord Brown said, that nine justices rather than the usual five sat in that case. That was in itself recognition by the court of the importance of the issue that it had to address.
Like my noble and learned friend, I believe that the Joint Committee was right, in a later part of its report at paragraph 229, to criticise the decision in Rost v Edwards. It is worth remembering that that case was decided as long ago as 1990. The judge in that case allowed questions to be put to the Member as to his reasons for not registering an interest in the Register of Members’ Interests. However, I agree with my noble and learned friend Lord Brown that this was simply an aberration. Quite a lot of water has flowed under the bridge since then, and I should have thought that it was now clear and beyond dispute that all questions as to a Member’s reasons for declaring, or failing to declare, an interest for the purpose of proceedings in either House must be a matter within the exclusive cognisance of Parliament.
It is worth noting that in paragraph 23 the Joint Committee says that it would expect the two Houses to intervene should such a case arise in the future. I should add a footnote to that important point. The absence of such an intervention was noted in the Chaytor case. It was also noted much more recently in the HS2 case, on which the UK Supreme Court delivered judgment on 22 January this year. The point was picked up by both the president, the noble and learned Lord, Lord Neuberger, and by Lord Reed. There would be no difficulty in making an intervention should the Houses wish to do so. The rules of the court enable any person with a sufficient interest to intervene in an appeal. The court itself, if so minded, can ask for submissions to be made, and it might take that step itself if it felt that it needed to know what Parliament’s position was if it was in doubt. However, it would be best, as the report suggests, if Parliament itself were to take the initiative.
Chapter 5 dwells on the question of whether reference to proceedings in Parliament for the purpose of judicial review of governmental proceedings could be damaging. The suggestion is that this could lead to a blurring of the constitutional separation between the courts and Parliament because it would seek to question what was said. That point is made in paragraph 132. I agree with a great deal of what the noble Lord, Lord Davies of Stamford, said. I see great force in the objection that he put forward because the risk of the courts going astray on this point is less acute than this part of the report suggests, although I should make it clear that I agree with the conclusion in paragraph 136 that legislation prohibiting the use of such material is not required. I agree with the noble Baroness, Lady Healy, that that should be resorted to only when absolutely necessary; and that situation has not arisen.
Perhaps I may say a little more about the HS2 case, which, because the judgment was delivered this year, was not dealt with at all in the report. Your Lordships may like to know that one of the questions raised in that application for judicial review was whether the Government’s decision to obtain development consent for HS2 by means of the hybrid Bill procedure in Parliament was compatible with the requirements for a strategic environmental assessment under the EU’s SEA directive. The Supreme Court asked itself whether it was appropriate for it to consider that question at all, as it would require an assessment of the effectiveness of the parliamentary procedure. Lord Reed, who delivered the leading judgment on this point, said that he was conscious of the importance of refraining from trespassing upon the province of Parliament, or of even suggesting that he should do so. The president, the noble and learned Lord, Lord Neuberger, too, was careful to say that he recognised the importance of the principle. As it happened, the court was able, in the performance of its ordinary duty of construing the legislation, to hold that it could and should decide the compatibility issue itself. It rejected the invitation that it should evaluate the quality of the consideration that Parliament was likely to give to the relevant issues under the procedure selected by the Government. That was because the directive, properly construed, did not require that particular evaluation to be carried out. I dwell on the point because I suggest that one sees in that very recent decision the system working as it should, as well as the respect due to Parliament and its procedures being properly accorded by the Supreme Court.
It is worth noting just a little more about what was said in the case of Wilson v First County Trust, in addition to the passage from the speech of the noble and learned Lord, Lord Nicholls of Birkenhead, quoted in paragraph 126 of the report. That case was decided in the early days of the development of our jurisprudence on the effect of the Human Rights Act 1998, and what was said in that case has never since been questioned. One of the questions was whether it was proper for a court to be referred to proceedings in Parliament when it had to decide a question of proportionality in relation to the convention rights. I take the liberty of referring to what I said, which was expressly agreed to by Lord Hobhouse of Woodborough. In my own speech, I said that a cautious approach was needed and that particular care must be taken not to stray beyond the search for material that will simply inform the court into the forbidden territory of questioning the proceedings in Parliament. As I put it:
“It is for Parliament alone to decide what reasons, if any, need to be given for the legislation that it enacts. The quality or sufficiency of reasons given by the promoter of the legislation is a matter for Parliament to determine, not the court”.
On the other hand, as I pointed out, proceedings in Parliament are replete with information from a whole variety of sources which are on public record, as the noble Lord, Lord Davies, said. The court would be unduly inhibited if it were to be disabled from obtaining and using this information for the strictly limited purpose of considering whether the legislation was compatible with the convention rights—that being a task which the Human Rights Act itself has given to the judges. The European court in Strasbourg might wish to do that, so our courts should feel able to do so when performing the task entrusted to them by Parliament, observing the boundary set by the case of Wilson.
I agree that questioning the conclusions of a Select Committee—that is, evaluating the quality of its conclusions or suggesting that they were in error—would be wrong. However, that is not what the passages in Wilson were contemplating. I suggest that, carefully read, that decision strikes the balance in the right place. I should add also for the avoidance of any doubt that the fact that the courts do not pay any attention to ministerial statements that the provisions of a Bill that they present to Parliament are compatible with the convention rights does not involve any infringement of parliamentary privilege. These statements in themselves are not questioned by the courts, nor is the extent to which, if at all, they are relied on in either House. They are simply disregarded as irrelevant to the task that the courts have to perform. The fact is that Ministers and the courts are performing entirely different functions, and it would be constitutionally improper for the courts to be told by the Executive what their decision on the compatibility issue should be.
For all those reasons, I welcome the Joint Committee’s conclusion that the problem is not sufficiently acute to require legislation. Of course, it is right that the freedom of speech in Parliament should be protected from judicial questioning, but I think that the risk of that happening is very slight. I think, too, that I can assure the noble Lord the Leader of the House that the justices in the Supreme Court are as anxious as anyone in Parliament that that should not happen. As for the Motion in the name of the Leader of the House, I endorse entirely what the noble Lord, Lord Brabazon, said about it.
Lord Hunt of Kings Heath (Lab)
My Lords, like other noble Lords, I am very grateful to the noble Lord, Lord Brabazon of Tara, for opening the debate and for his chairmanship of the Select Committee. Indeed, as the Select Committee says, parliamentary privilege is one of the special characteristics of our democracy that is crucial but often misunderstood. The Select Committee has gone a very long way towards clearing up many of those misunderstandings and has provided much-needed clarity about the freedoms and protections that each House needs to function effectively. As such, they are an essential bulwark of our democracy—hence the importance of the work of the Select Committee, which I think has been endorsed by every noble Lord who has spoken in this debate.
As the noble Lord said, parliamentary privilege very much came to public attention in the wake of the 2009 expenses scandal, when three former MPs and one Member of your Lordships’ House accused of false accounting over their expenses sought to argue that they ought not to be prosecuted because of parliamentary privilege. As we have heard, the matter was dealt with by the courts in, I suggest, a most sensible way.
I agree that, in the light of that judgment, the Joint Committee’s central conclusion is that,
“the case has not been made for a comprehensive codification of parliamentary privilege”.
I also agree that legislation should be considered only when it is shown to be absolutely necessary. I agree with the Joint Committee’s rejection of the Government’s original proposals in relation to Article 9, and I am glad that the committee has taken such a firm view on that.
My noble friend Lady Healy and the noble Lord, Lord Bew, spoke eloquently of the challenges of media reporting in the current age and of the need for those who are reporting to respond at speed. The noble Lord, Lord Brabazon, referred to the Bill proposed by the noble Lord, Lord Lester, relating to media reporting in Parliament. Given that the noble Lord, Lord Lester, has not been able to make progress in the current Session and given all the problems that we know Private Member’s Bills have in getting through the other place, as the noble Lord, Lord Hill, the Leader of the House, will be responding, I take the opportunity to ask whether the Government will offer time for that Bill to go through the other place.
My noble friend Lord Davies made the very important point that we are being sent away for what one might call obscenely long recess dates at Easter; there are rumours about Whitsun; and we are not coming back from the Summer recess until mid-October. I do not believe that the Government cannot find parliamentary time to enable that to happen. I would welcome some optimism from the Leader of the House either that the Bill of the noble Lord, Lord Lester, if introduced in the other place by an honourable Member, will be given all speed or that the Government themselves will bring forward some legislation.
On Select Committees, I was very grateful to the noble Lord, Lord Norton, for his interesting insight in relation to penal powers and the need for flexibility, which I strongly support. I agree with his conclusion on jury service, although I was struck by one of his comments. I think he said that officers were more valuable than Members to the Houses of Parliament. While we certainly have superb officers, I think that, as Members, we have some role to play.
Lord Norton of Louth
I said they were more valuable than any individual Member.
Lord Hunt of Kings Heath
I was trying to work out the difference between the collective of officers versus the value of individual Members. It reminded me of the “Yes Minister” episode about the National Health Service that concluded that the NHS would run enormously smoothly if patients were not to come through hospitals.
The substantive point on which the noble and learned Lord, Lord Brown, was very persuasive was the question of whether Members should be exempt from jury service. On this matter, the committee report recommends, in paragraph 253, that,
“the Government should bring forward legislation providing that Members of either House should be among those who have a right to be excused from jury service”.
I very much agree with the noble and learned Lord. Many of the previous exemptions have gone and I am sure it is right that all parts of society should expect to be called for jury service, including Members of your Lordships’ House and the other place. On this matter, I hope that we will not move to accept the committee’s report.
With regard to the Motion of the Leader of the House, it seems to be an eminently sensible approach, although I note that in paragraphs 37 to 39 of the committee report, some doubt is placed on the benefit of resolutions passed by both Houses. I ask the Leader: what is the effect of such a resolution? Is it simply a plea to individual departments to make sure, in drafting legislation, that they abide by the resolution, or does it have rather more strength? If the noble Lord could provide some reassurance on that, it would be helpful.
Overall, it seems to me that we are coming to a very satisfactory conclusion. The Select Committee’s report is very welcome. It has been very well written and argued. Apart from one or two areas about which I have doubts, I have no doubt that it has done a great service to your Lordships’ House, to parliamentary privilege and to the way that Parliament works in general.
The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford) (Con)
My Lords, although the subject matter of some of this debate may seem arcane—it certainly involved the application of a number of wet towels to my head to grapple with some of these issues—this afternoon’s debate has reminded all of us how important parliamentary privilege is and that it is a vital part of the underpinning of our whole system of parliamentary democracy. Like the noble Lord, Lord Hunt of Kings Heath, I want to say at the outset how grateful the Government are to the Joint Committee for its report and for its contribution to a debate that has lasted for many years and, I dare say, will continue for many more years, providing entertainment for law students in the future.
The Joint Committee’s report put its finger on all the key issues, came up with a number of helpful recommendations and succeeded in doing something which some noble Lords may think is even more noteworthy: it has got the Government to think again. So I would like to record my thanks to all noble Lords who were members of the committee, in particular to my noble friend Lord Brabazon of Tara for his expert chairmanship and for setting out the issues so clearly today. Indeed, the whole debate has served as a reminder, if one were needed, of the knowledge and experience of the law and of Parliament which is to be found in your Lordships’ House.
In some ways, parliamentary privilege is itself a slightly unfortunate term: as my noble friend Lord Brabazon said, it carries a suggestion of elitism, a hint of exclusivity and risks reinforcing the impression—false, I believe—of politicians who look out only for themselves. But in opening this debate, my noble friend was also absolutely right that the concept of parliamentary privilege helps to protect the rights of everyone in the country. It underpins the sovereignty of the people’s representatives in Parliament, it provides those representatives with an absolute and untrammelled right to say what they believe, and it allows anybody to speak to Parliament without fear of legal consequences.
As we have already heard, these “privileges” do not mean that individual MPs and Peers are above the law, as we all saw in 2010, when a group of parliamentarians tried to assert privilege to avoid prosecution for offences relating to their parliamentary expenses. The Supreme Court’s judgment in that case, R v Chaytor, confirmed that parliamentary privilege did not protect parliamentarians from prosecution for ordinary crimes under our criminal law, and quite right too. That point was set out very clearly by the noble and learned Lord, Lord Hope of Craighead.
Even so, the Government felt that it was right that we should take a fresh look at all aspects of privilege to see whether there was a case for change. As noble Lords know, that led in April 2012 to the publication of the Green Paper which the Joint Committee has so helpfully scrutinised. I am sure that everyone in the House would agree that, wherever possible, matters such as privilege should be approached in a consensual and cross-party way, so I am very pleased that the Government have been able to agree with most of the committee’s findings, most notably its overarching conclusion that a comprehensive codification of parliamentary privilege is not desirable. I listened with particular care to what the noble and learned Lord, Lord Brown of Eaton-under-Heywood, had to say in that regard. My noble friend Lord Norton of Louth stressed the importance of flexibility, which was a theme picked up by a number of noble Lords.
The Government believe that legislation should be brought forward only where really necessary—I think the noble Lord, Lord Hunt of Kings Heath, said that and I may hold him to it in a different context in other areas of political debate. For example, if the Chaytor case had gone the other way we may have considered it, but we agree with the conclusions of the committee that the potential consequences of comprehensive codification are impossible to predict. As the committee itself recognised, that conclusion does not, however, prevent Parliament taking steps to clarify the application of privilege where necessary. I will not try the patience of your Lordships’ House by going through the Government’s response to the report point by point, but I will touch on the most important areas, all of which have been raised by noble Lords this afternoon.
First, the Green Paper included a draft clause which would have enabled the protection of Article 9 of the Bill of Rights to be disapplied in the prosecution of criminal offences. The intention of that clause would have been to ensure that nobody accused of a serious criminal offence could use parliamentary privilege to avoid prosecution where the alleged offence was not related to the key elements of freedom of speech. The committee opposed the provision on the grounds that it would have a damaging effect on freedom of speech in Parliament. In addition to this principled objection, which was underlined by the noble and learned Lord, Lord Brown of Eaton-under-Heywood, it is clear from looking at the draft clause that the Government came up with, and the lengthy schedule setting out those criminal offences which would not be covered by the terms of the clause, that there would also be daunting practical difficulties in implementing such a proposal. The Government will not therefore be taking it forward, and I am grateful for what my noble friend Lord Norton of Louth said in that regard.
The Joint Committee also rejected a draft clause which would explicitly have applied parliamentary privilege to the House of Commons Committee on Standards, which has lay members, which was a matter first raised by the noble Lord, Lord Bew. The Government agree with the committee that such a provision could have cast doubt on the privileged status of other committees, particularly our own Committee for Privileges and Conduct, which also has lay members. It also seems undesirable in principle to attempt to apply parliamentary privilege to a specific Select Committee by legislation.
The Government also share the committee’s serious reservations, which we have heard this afternoon, about Section 13 of the Defamation Act 1996, which allows individuals to waive the protection of parliamentary privilege in defamation cases. This breaches the principle that privilege belongs to the whole House rather than one person. That was a point made very forcefully by the noble Lord, Lord Bew. Accordingly, the Government support the repeal of Section 13. I understand that my noble friend Lord Lester of Herne Hill, who cannot be here today, proposes to introduce a Private Member’s Bill to deal solely with this small but important change. The Government are in principle supportive of this measure to make that clear, and we look forward to seeing if it can make progress.
I should say a few words about the applicability of legislation to Parliament—in other words, the extent to which the activities of Parliament itself are bound by the laws it has passed. Over the years there has been a measure of uncertainty and disagreement on this point and while the Government do not agree with the committee that it is necessary to legislate in this area, we do agree that it is important for parliamentary counsel and the authorities of the two Houses to discuss whether relevant provisions in Bills, case by case, should apply to the activities of the two Houses. That is why the Government’s response agreed to ensure the correct application of the Treasury Solicitor’s 2002 guidance which asked departments,
“to consult the respective House authorities … on whether any proposed legislation that is to apply to the Crown, or its servants, should also apply to the two Houses and to instruct the draftsman accordingly”.
The Government also welcomed the proposal for a Motion which sets out the importance of Bills making express provision where necessary. Following discussions with my noble friend Lord Brabazon of Tara, I tabled the Motion which noble Lords have seen in my name on the Order Paper. I believe, as a number of noble Lords have agreed, that it offers a practical way forward. The key for it to work will be good communication on a case-by-case basis and I can certainly commit the Government to engaging with the parliamentary authorities in a completely constructive spirit on that. Assuming that the Motion is agreed to, my understanding is that the Leader of the House of Commons will move something similar down the other end.
Let me say something about the issue of reporting and repetition of parliamentary proceedings, about which a number of points have been made and to which my noble friend Lord Brabazon drew particular attention. The noble Baroness, Lady Healy of Primrose Hill, also devoted many of her comments to this. As we have heard, the committee concluded that the uncertainty around the Parliamentary Papers Act 1840,
“significantly inhibits press reporting of the work of Parliament”,
and called for its wholesale replacement by modern statutory provisions. As we said in our response, the Government agree with the committee that the 1840 Act lacks clarity and does not fit well with modern modes of communication, a point developed by the noble Baroness, Lady Healy. We also agree that the burden of proof where reporting is alleged to be malicious should be reversed such that it falls on the claimant rather than on the defendant. While we are not as convinced as the committee that the current legal framework significantly inhibits press reporting of Parliament, we understand the need to modernise the law. We will certainly continue to consider whether we can find, and how we can find, an appropriate legislative vehicle to achieve this important aim.
Lord Davies of Stamford
I am most grateful to the Leader of the House for giving way. Would not a suitable vehicle be the reintroduction of a Private Member’s Bill by the noble Lord, Lord Lester, or another private Member, of the kind that has just been referred to?
Lord Hill of Oareford
Obviously that would be a matter for my noble friend Lord Lester. I believe that the focus of the Private Member’s Bill that my noble friend is keen to bring forward is on the repeal of Section 13 of the Defamation Act. I think that that is his priority and that he is keen to have a clear and focused approach on that. But obviously it would be open to other noble Lords to pursue this issue through that route.
The committee also looked at the sessional orders which have traditionally called on the Commissioner of the Metropolitan Police to prevent the obstruction of Members in the streets leading to the two Houses. The Government do not intend to push for the revival of the sessional order in the other place but I thought that I would take the opportunity to put on the record that, so far as this House is concerned, we will continue to support the passing of the sessional order in the House of Lords at the beginning of each Session. I also remind the House that in looking at that issue, the committee referred with approval in the report to the “appropriate and proportionate” legislative provisions governing amplified protests in Parliament Square. What the committee did not say was that the situation was, at that time, much less clear in the areas around your Lordships’ House. Since then, an amendment to the Anti-social Behaviour, Crime and Policing Bill—now an Act—passed in your Lordships’ House has applied the Parliament Square system to this end of the Parliamentary Estate. I very much welcome that because I was keen that it should be done. I am sure also that all members of the Joint Committee will welcome it.
I am grateful for the points raised by my noble friend Lord Norton of Louth and by the noble and learned Lord, Lord Brown of Eaton-under-Heywood, about jury service, and I agree with the noble Lord, Lord Hunt of Kings Heath, that we should not re-establish the exemption that was removed. On the interesting debate about the penal powers of Select Committees, on which both the noble Lord, Lord Davies of Stamford, and my noble friend Lord Norton of Louth concentrated, I think we all agree with the committee’s recommendation that the existing powers should be clarified. That is the right way forward rather than the legislative route. It is for the other place to lead on this, which I think was the recommendation of the committee. My understanding is that it is being taken forward down the other end, but I agree that we need to keep an alert mind on these issues.
Parliamentary privilege is a precious inheritance which we must safeguard, but that does not mean that it should be immune to all change. It needs to reflect the world as it is today, a point that was forcefully made by the noble Baroness, Lady Healy of Primrose Hill. That is why I am so grateful to my noble friend Lord Brabazon and his colleagues in both Houses for their important report. It has enabled us to look at things anew and it upholds the key principles on which parliamentary privilege and parliamentary democracy are built.
Lord Brabazon of Tara
My Lords, I am grateful to my noble friend the Leader of the House for his positive response, and to everyone who has spoken in what I think has been an interesting and informative debate. I hope that this report does not suffer the same fate as the 1999 report, about which I think absolutely nothing has been done. We have at least taken a step in the right direction today because one of our recommendations is being acted upon right now. With that, I commend the report.
Lord Hill of Oareford
That, in the light of the recommendations contained in paragraphs 226 and 227 of the report of the Joint Committee on Parliamentary Privilege (HL Paper 30), this House resolves that legislation creating individual rights which could impinge on the activities of the House should in future contain express provision to this effect.