House of Lords

Wednesday 26th March 2014 Lords Chamber

Wednesday, 26 March 2014.

15:00

Prayers—read by the Lord Bishop of Chester.

Middle East: Syrian Refugees

Wednesday 26th March 2014 Lords Chamber

Question

15:07

Asked by

[Lord Selkirk of Douglas]

To ask Her Majesty’s Government what steps they are taking to co-ordinate with the Governments of Jordan, Lebanon, Turkey, Iraq and Egypt the arrangements for the long-term resettlement in the region of refugees from Syria.

[Baroness Northover (LD)]

My Lords, the UK has allocated £292 million to support refugees in neighbouring countries. We are working closely with Governments and partners in the region to make sure that the needs of host communities are incorporated into our programmes. We will now complement this aid to the most vulnerable and at-risk refugees by providing sanctuary in the UK, where this is the only realistic option.

[Lord Selkirk of Douglas (Con)]

I thank the Minister for her reply. Will she accept that there are now more than 1,311,000 children among the refugees in countries next to Syria and that their families are very anxious that their children should not become part of a lost generation? In view of this, will the Minister give support to policies such as the Jordanian Government’s national resilience plan, which involves focusing on areas with a high number of refugees to provide better access to education and healthcare, and to improved water supplies, sanitation and other basic services?

[Baroness Northover]

My noble friend is right. An estimated 1.3 million Syrian children are now refugees in the region. Under the No Lost Generation initiative, the UK has allocated £30 million to provide protection, trauma care and education for children affected by the crisis. We are working with Jordan to support the host communities and we welcome the Jordanian Government’s national resilience plan as part of an ongoing process of prioritising needs.

[Lord Judd (Lab)]

Does the Minister agree that the scale of this refugee problem is having profound implications for the populations of the countries concerned, where people see a great concentration on the refugee community, while the deprivations from which they suffer are consequently accentuated? Does she further agree that this presents a very considerable threat to stability in the Middle East and has implications for the durability of any peace settlement between Israel and Palestine? In that context, is it not essential to have a regional approach to policy as well as pragmatic work with countries one by one?

[Baroness Northover]

The noble Lord speaks from a great deal of experience and he is absolutely right. This is indeed creating a huge amount of instability right across the region, which is why we are looking at it in that light. That is why we are channelling so much support to the neighbouring countries in the region that are hosting so many Syrian refugees. We are acutely aware of the effect on their populations.

[Lord Chidgey (LD)]

My Lords, more than 2.5 million refugees have registered in neighbouring countries, and the number of internally displaced persons in Syria now exceeds 6.5 million. Taken together, that is a total of more than 40% of Syria’s pre-conflict population. More than half the refugees are children, as noble Lords have mentioned. In the absence of progress towards a political solution, the UNHCR predicts that this refugee population is set to become the world’s largest. Yet, is my noble friend aware that, so far, less than 4% of the refugees have sought safety in Europe? How do the Government therefore intend to respond to the UNHCR’s call for “much stronger international support”, clearly well in excess of the vulnerable persons scheme that began yesterday?

[Baroness Northover]

My noble friend is right about the scale of the challenge here and about the fact that most refugees have stayed in the region. Many of them, of course, wish to return home when it is safe to do so. That is why pursuing the peace process is the most important element here and why, in the mean time, we have to make sure that we provide as much humanitarian aid as possible. He will know that we have taken in, as of yesterday, refugees from the most vulnerable categories but, clearly, trying to tackle the crisis as a whole has to be our main strategy.

[Lord Wright of Richmond (CB)]

My Lords, now that it appears that the Syrian Government are increasing their control over much of the country, have we or our partners had any discussions with the Government in Damascus exploring the scope for refugees to return to their homes?

[Baroness Northover]

It seems to me that a few steps will be needed before we reach such a situation. The first thing is to try to get the Syrian Government to allow humanitarian access and to respect the UN Security Council resolution on humanitarian access. There are many steps that the Government of Syria can take to try to ensure that security in their country is greater and therefore that refugees would be keener to return.

[Lord Collins of Highbury (Lab)]

My Lords, the refugee crisis is now in its third year, and certainly we are in it for the long term. The impact on host countries is severe, as my noble friend mentioned, and in particular on the political stability of countries such as Lebanon. Does the Minister agree that longer-term funding for host Governments’ authorities is necessary to ensure that their national infrastructure and indigenous populations do not suffer further?

[Baroness Northover]

The noble Lord is right. As I mentioned earlier, that is why we have a programme for supporting those countries; we recognise the instability caused by hosting all these refugees.

[Baroness Uddin (Non-Afl)]

My Lords, given the large-scale dispersion, how easy or difficult is it to support those who have been victims of rape as a weapon of war?

[Baroness Northover]

The noble Baroness will know that my right honourable friend the Foreign Secretary has emphasised this in terms of how we are approaching the Syrian crisis. We are doing a considerable amount—and it is new work—in trying to support those who have suffered sexual violence in this conflict. That is so often the case in such conflicts, and this is one of the first times we are seeing whether we can gather evidence systematically so that cases can be taken and, in the mean time, supporting those who have suffered in this way.

[Lord Avebury (LD)]

My Lords, is it true that when choosing the refugees who are to come to this country, priority is given to those who are at present located in Egypt and Lebanon, and that Jordan will perhaps not have a share of the numbers? Can my noble friend say any more about the mechanism for selecting candidates to be brought to this country?

[Baroness Northover]

I am not going to comment on where the refugees are coming from. It is extremely important that they are accorded privacy and that their recovery is aided. My noble friend will know that we are prioritising women and children, particularly those who have suffered sexual violence. I am happy to supply further details of the categories. Therefore, we are looking at the cases on their merit and we will not reveal where these people have come from or where they are going at the moment.

Disabled People: Blue Badges

Wednesday 26th March 2014 Lords Chamber

Question

15:15

Asked by

[Lord Touhig]

To ask Her Majesty’s Government how they plan to ensure that people whose mobility is not impaired solely by physical disability, and their carers, will continue to have access to blue badges for their vehicles when they need them following the introduction of the Personal Independence Payment to replace Disability Living Allowance.

[The Minister of State, Department for Transport (Baroness Kramer) (LD)]

My Lords, people who receive a personal independence payment because they cannot walk further than 50 metres will automatically be eligible for a blue badge. However, people who do not meet this criterion may still apply directly to their local authority to see whether they meet any of the other eligibility criteria. Whatever their disability, they may be eligible if it causes very considerable difficulty in walking.

[Lord Touhig (Lab)]

My Lords, I declare an interest as vice-president of the National Autistic Society. People with autism are having great difficulties in obtaining blue badges as a result of changes to the eligibility criteria associated with the personal independence payment. Will the Minister look at the guidance given to local councils on blue badges, so that we can ensure that people with cognitive impairments can park near the services that they need? Will she also agree to meet representatives of the National Autistic Society, other noble Lords and me, so that we can further this discussion?

[Baroness Kramer]

My Lords, I say to the noble Lord, Lord Touhig, that I would be very pleased to meet, so we will make sure that that goes into the diary. Your Lordships will be aware that, as the DWP is reassessing DLA claimants for the new PIP benefit, those who do not qualify under the relevant PIP can retain their existing blue badge until it expires so that there is a time period to get into the new programme by applying to the local authority. The department is clarifying its guidance, which is being written at the moment, to make it clear to local authorities that any permanent disability can be physical or otherwise. In other words, it need not be physical. The test is that it causes very considerable difficulty in walking; that is the qualification for a blue badge.

[Baroness Seccombe (Con)]

My Lords, blue badges are a very precious privilege. For my husband, they were a life changer. Does the Minister agree that there is nothing so irritating as seeing a young, fit person using a blue badge to park illegally, and is there any more that can be done to stop that illegal practice?

[Baroness Kramer]

My noble friend is absolutely right that abuse of the blue badge system is thoroughly despicable, and we are determined to stamp down on it very hard. This House has played an important role, as my noble friend Lady Thomas of Winchester brought through the House the Disabled Persons’ Parking Badges Act 2013, which enables enforcement officers to operate in plain clothes and to seize badges that are being misused by any person. That is a very significant difference. We have introduced a nationwide database so that enforcement officers can check all UK blue badge details and download a photograph of the holder at the roadside on handheld devices. There have also been a number of other regulatory and administrative changes, all of which strengthen enforcement. At this point in time they are sufficiently new that I do not have figures to indicate how effective the scheme has been, but anecdotally local authorities are informing us that it has greatly strengthened their hand.

[Lord Wigley (PC)]

Does the Minister realise that the person who is walking away from a car may be the parent or carer of a disabled person who has that need, and should not be subject to that judgment? Does she agree that parents and carers of children with autism or a learning difficulty, who in some cases lack awareness of the dangers of a road, should also benefit from the blue badge scheme?

[Baroness Kramer]

I have to confess to being slightly confused by the noble Lord’s comment if he is suggesting that carers can use the blue badge when they are not with the person who has the need. The relevant test would be that the person who is in need of the blue badge is indeed there. That is possible thanks to the new mechanisms which have been provided. I am sure that the noble Lord will join me in saying that misuse cheats everyone who needs and deserves a blue badge.

[Lord Davies of Oldham (Lab)]

My Lords, I am sure that the Minister will agree that the introduction of the PIP has been carried out somewhat chaotically, with people waiting for ages for a decision on their application. Have the Government yet found time to identify the possible number of those who were eligible for a blue badge but who are unlikely to qualify under the new scheme?

[Baroness Kramer]

I do not have those numbers yet because this is sufficiently new. Currently, more than 2.5 million people hold blue badges and the vast majority of them will qualify under PIP. I should say again that local authorities will make determinations on a case-by-case basis of those people who apply for a blue badge under other eligibility criteria. We will have the information eventually, but the answer is not available at this point in time.

[Baroness Hollins (CB)]

My Lords, is the Minister aware of the difficulties that the carers of autistic adults face when trying to access regular facilities like shops and doctors’ surgeries if they cannot park anywhere near them? It may be that their son or daughter looks just like any other fit adult.

[Baroness Kramer]

The guidance that has been provided to local authorities, which will be looking at the applications, makes it clear that eligibility is not limited to physical constraints but can be broadened to include mental health or learning difficulties as the justification. The test will be someone’s ability to walk, and that is a fairly broad terminology.

[Baroness Browning (Con)]

My Lords, I refer to my interests in autism charities as set out in the register. I was encouraged by the reply given by my noble friend to the noble Lord, Lord Touhig, but can she confirm that the legislative link between the higher rate of DLA and the blue badge has now been broken as far as autistic people are concerned? In renewing or revising the guidance to local authorities, can she confirm that no autistic person will be put at a disadvantage under the new scheme as compared with the old one?

[Baroness Kramer]

I have to say to my noble friend that the scheme is different, because the test is now related to walking rather than to the benefit that underpins it, except for the, frankly, fairly substantial category of people who are eligible for PIP and who cannot walk for the relevant 50 metres. It is different in character, but it will be for local authorities to identify where the difficulty in walking exists. As she will know, there are some autistic people for whom this is not an issue, while there are others for whom it is. Making the distinction will fall to local authorities.

Energy: Green Deal

Wednesday 26th March 2014 Lords Chamber

Question

15:23

Asked by

[Lord Greaves]

To ask Her Majesty’s Government what progress is being made with the Green Deal.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)]

My Lords, more than half a million homes so far have received energy efficiency improvements as a result of the coalition’s pioneering Green Deal and the energy company obligation programmes. We expect this figure to grow substantially as the programme progresses and the Green Deal market continues to expand.

[Lord Greaves (LD)]

My Lords, most of those improvements have come from the ECO scheme. By the end of February, some 163,000 Green Deal assessments had been made, but only 1,754 Green Deal work plans were either in progress or had been completed. That is a take-up rate which my right honourable friend Ed Davey has described as “disappointing”. Do the Government agree that the Green Deal is too complicated, is being poorly promoted, and is beset by the number of cowboy operators who are hovering around it pretending to carry out government schemes? What are the Government doing to get this scheme off the launch pad?

[Baroness Verma]

My Lords, I disagree with my noble friend that the scheme is not working. He will be aware that this is a 20-year programme and that we are learning more as it rolls out. We have listened carefully to industry and consumers, and as a result we have streamlined the Green Deal. We have brought in some online home energy tools to better guide consumers and we are providing advice through the Energy Saving Advice Service to help people find local offers. Further, we have supported the Green Deal Finance Company in its work on simplifying the financing process. There is a lot going on, so I disagree with my noble friend that the scheme is not working. It is just taking a little time to ensure that people understand the benefits of the Green Deal.

[Lord Forsyth of Drumlean (Con)]

My Lords, has my noble friend seen the announcement this morning by SSE, one of the major utilities, which has decided to implement the declared policy of the Opposition and freeze electricity prices to 2016? Would she like to comment on the consequences, which are the loss of 500 jobs and the cancelling of a number of investment projects? Is that not a glimpse of the future were we to get a Labour Government: lost jobs, lost green projects and lost investment in our country?

[Baroness Verma]

My noble friend makes some important points. He raises the fact that energy companies, if we work with them, will recognise that competition in the marketplace is driving them to adjust the way they price. If we listened to the party opposite I think we would have even fewer than six companies.

[Lord O'Neill of Clackmannan (Lab)]

How much have the Government spent on promoting the Green Deal, to the satisfaction of 1,754 people as of the end of last month?

[Baroness Verma]

My Lords, more than 500,000 measures have taken place. The noble Lord, Lord O’Neill, expects a 20-year programme to produce an overnight success. This Government have decided to adopt long-term plans. Unlike the party opposite, which for 13 years refused to invest in the energy sector, this Government have a plan and have introduced the Energy Act, which has put renewables and low-carbon fuels on an equal footing alongside fossil fuels.

[Lord Teverson (LD)]

My Lords, does my noble friend agree that energy efficiency, particularly in households, is the best and most cost-effective way forward for reducing carbon emissions and lowering energy bills in the longer term, and that it is therefore important that the Government stick with the Green Deal, make it work, learn and make it happen?

[Baroness Verma]

Absolutely. My noble friend is right to raise that issue. Energy efficiency measures are there to ensure that we reduce costs to the consumers. I come back to the point that this Government have taken some major steps to ensure that there is investment within the sector and in energy efficiency measures. I would like to know what the party opposite would do. Would it put back the £50 that this Government have taken off?

[Baroness Worthington (Lab)]

My Lords, it is clear that, even in opposition, we are setting energy policy. Government statistics show that in February only 33 new finance deals were taken out. The problems with the Green Deal are getting worse, not better. Does the Minister agree that it would be helpful if the Prime Minister, rather than using instability in Ukraine to talk up shale gas, were to put more effort into promoting energy efficiency via the Green Deal, which can immediately reduce our demand for gas?

[Baroness Verma]

My Lords, the party opposite really does not get long-term investment in the energy sector. To bring Ukraine into a Green Deal question is a little far-fetched.

[The Countess of Mar (CB)]

My Lords, does the noble Baroness agree that the homes that would benefit most from the Green Deal are largely owned by elderly people who do not have a long-term view because they are probably not going to live long enough to make the repayments? How are they going to deal with that problem?

[Baroness Verma]

My Lords, energy efficiency is for everyone, old and young.

[Viscount Ridley (Con)]

My Lords, has my noble friend shared the same experience as me at the weekend: the telephone ringing at lunch time and an automated message telling me that the Government want to give me money to prevent climate change through the Green Deal?

[Baroness Verma]

My Lords, wherever information is coming from, it is a really good deal and I suggest that my noble friend take it up.

[Baroness Farrington of Ribbleton (Lab)]

My Lords, would the Minister accept some gently given advice that Question Time is for questioning Ministers, not for Ministers to question the Opposition?

[Baroness Verma]

My Lords, I know what Question Time is for, which is why I come very prepared to answer the questions.

Higher Education: Student Loans

Wednesday 26th March 2014 Lords Chamber

Question

15:30

Asked by

[Lord Foulkes of Cumnock]

To ask Her Majesty’s Government what action they propose to take over the potential impact on university funding arising from lower than expected repayment of student loans.

[Lord Ahmad of Wimbledon (Con)]

My Lords, government reforms mean our universities are now well funded, and this has been sustained through the recession. Overall, university income continues to increase, with a high-quality student experience. As has always been the case, estimates of loan repayments will continue to take account of the latest macroeconomic forecasts. It is noteworthy that application rates for 18 year-olds and, in particular, those applying from disadvantaged backgrounds in 2014 are at an all-time high.

[Lord Foulkes of Cumnock (Lab)]

My Lords, I do not think that the Minister has answered my Question. Will he not accept that university funding is now in some disarray? We have a former special adviser to David Willetts, the Universities Minister, confirming that there is a huge funding gap—just as we warned the Government, when they increased the fees, that they had overestimated the repayments that they would get. On the one hand we have David Willetts, who will not rule out a further increases in fees, and on the other we have Nick Clegg, who said yesterday that there is,

“no need for a further increase”.—[Official Report, Commons, 25/3/14; col. 142.]

We understand that this may be yet another example of the coalition’s conscious uncoupling but will the Minister, for whom we have great respect, take the bull by the horns and make it absolutely clear that the Government rule out any further increase in university fees?

[Lord Ahmad of Wimbledon]

The noble Lord always adds colour to Question Time. The principle behind our reforms, as I have said already, was to put higher education on a sustainable footing for the long term, coupled with a rebalancing. This was of course, as the noble Lord will know, in response to and following the recommendations made by the noble Lord, Lord Browne. I believe it was the noble Lord, Lord Mandelson, who set up that particular review. As for his question on decoupling and coalition, in coalition, sometimes you agree, sometimes you disagree and sometimes you agree to disagree. That is called healthy coalition government.

[Baroness Perry of Southwark (Con)]

My Lords, does my noble friend agree with me that, in the days when universities were funded through grant and not student loans, the Government could recoup none of the money that was given in grant? Even if we do not now recoup the whole 100%, we and the universities are still much better off all the time.

[Lord Ahmad of Wimbledon]

As ever, my noble friend speaks with great experience in this area, and she is of course correct. If we look at the previous quarter, in which the overall university funding pot for this year has now risen to more than £29 billion, and compare it to just a few years ago, when the funding was £12 billion, that shows once again, as I have said already, that our universities can now benefit from sustainable long-term funding.

[Lord Morgan (Lab)]

My Lords, is not the Government’s policy on university finance a total shambles? First, it costs taxpayers more than the system that preceded it. It also imposes extreme burdens on young students, does not guarantee—contrary to what has been said—a stable level of funding for universities and offends against both social justice and managerial efficiency. Should not the Government, including their unhappy Liberal Democrat component, think again?

[Lord Ahmad of Wimbledon]

First, I assure the noble Lord that we are all happy here on the Front Bench. I disagree with the noble Lord and he is, in fact, incorrect. The reforms we have brought forward are not returning less, as he suggests, than had we not made them. He should check his facts there. They say that the proof is in the pudding; let me share some facts here. According to the Association of Graduate Recruiters, in February 2014, graduate jobs were up by 10%. BT, for example, announced 1,000 new apprenticeships, including graduate jobs. Employment rates for young people holding first degrees are now at their highest level since the second quarter of 2008. That is a success story.

[The Lord Bishop of Chester]

My Lords, I share the Government’s view that the higher education sector is in remarkably good health given the recession. However, does not setting fees at £9,000, which is far higher than fees in any other European country, imply a loans system that has its own element of generosity, including a repayment starting point of £21,000, rather than the original £16,000?

[Lord Ahmad of Wimbledon]

The right reverend Prelate raises an important point. I am sure he is aware that the Government have ensured that those universities that have chosen to raise their fees to the £9,000 limit have suitable access agreements so that those who come from disadvantaged backgrounds are given the opportunity to go to university. The Government’s policy remains that access to a university education should be based not on someone’s ability to pay but on their ability.

[Baroness Brinton (LD)]

My Lords, will my noble friend the Minister please confirm that no current student has to pay anything under the present scheme and that repayment starts only after they start to earn £21,000 a year? If there is concern about the repayment rates, would it not be more sensible to review these after three years of the scheme running, in 2016, rather than after just one?

[Lord Ahmad of Wimbledon]

My noble friend is spot on. She mentioned the threshold figure of £21,000. To reiterate, no graduate who earns less than £21,000 is required to repay their loan. She also makes a very sensible suggestion about allowing this new scheme to bed in to allow for a suitable review. This is about people’s futures. I have looked at some of the policies of the party opposite and, at the moment, there seems to be a real vacuum there.

[Lord Barnett (Lab)]

My Lords, are the Government planning to sell off the debts? If so, what terms are they looking for? Would the amounts be much higher than those written off at the moment, and would there be any weakening or strengthening of the terms?

[Lord Ahmad of Wimbledon]

As the noble Lord may well know, in terms of the student loan book, we previously had mortgage-style loans, and they were sold off for £160 million. It will, again, be ensured that any future sell-offs always provide value for money for the taxpayer.

[Lord Stevenson of Balmacara (Lab)]

HEFCE informed institutions last week that it was reducing its grants by almost 6% next year. Will the Minister confirm that, as a result of new Treasury guidance, BIS will have to provide some £50 million a year as a hedge against the currently inflated RAB charge going forward?

[Lord Ahmad of Wimbledon]

In terms of specific support for research, the noble Lord will recall from the latest Autumn Statement an additional ring-fencing until 2016. This is supported through an extra capital spend of £200 million. Taken together, over four years, we are looking at £1.6 billion in the science and research sector. Once again, I emphasise that the model that was questioned by several noble Lords on the Benches opposite would have been the same had we retained the £6,000 fee, and universities would have been in a far worse place than they are.

Immigration and Nationality (Fees) Regulations 2014

Wednesday 26th March 2014 Lords Chamber

Immigration (Employment of Adults Subject to Immigration Control) (Maximum Penalty) (Amendment) Order 2014

Motion to Approve

15:37

Moved by

[Lord Taylor of Holbeach]

That the draft order and regulations laid before the House on 24 February be approved.

Relevant document: 22nd Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 24 March

Motion agreed.

Local Authorities (Contracting Out of Tax Billing, Collection and Enforcement Functions) (Amendment) (Wales) Order 2014

Wednesday 26th March 2014 Lords Chamber

Motion to Approve

15:38

Moved by

[Baroness Randerson]

That the draft order laid before the House on 24 February be approved.

Relevant document: 22nd Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 24 March

Motion agreed.

European Council and Nuclear Security Summit

Wednesday 26th March 2014 Lords Chamber

Statement

15:38

[The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford) (Con)]

My Lords, with the leave of the House, I will now repeat a Statement made by my right honourable friend the Prime Minister in another place. The Statement is as follows:

“With permission, Mr Speaker, I should like to make a Statement on last week’s European Council and this week’s summit in The Hague, which included the first meeting of G7 leaders—without Russia—in almost two decades.

Before I turn to Ukraine, let me briefly update the House on discussions on the economy, on energy and climate change, on the situation in Sri Lanka and on efforts to combat nuclear terrorism.

Our long-term economic plan is supporting the growth of a new trend, reshoring, in which jobs are starting to come back to the UK. A recent report from the EEF, the manufacturers’ organisation, found that one in six firms had brought all or part of their production to UK suppliers over the past three years. That reshoring of jobs is vital because it means that more of the benefits of globalisation can be felt by the British people, so, with the support of the CBI and Business Europe, I argued at the European Council that we could do more to develop reshoring in Britain and across Europe. The Council agreed to encourage that by doing more to cut red tape, attract investment, stimulate innovation and pioneer more work on reducing energy costs, including shale gas.

Secondly, businesses need affordable energy prices to keep pace with their competitors, so we agreed to accelerate efforts to complete the internal energy market and we agreed to improve the energy flow across the continent with more interconnections. On climate change, we want the EU to play a strong leadership role in efforts to secure a global climate deal next year in Paris. That means swift agreement on a target for reducing greenhouse gas emissions in the European Union, and I fully support the 40% target proposed. At the European Council meeting we did not reach full agreement in the EU and further attempts will be made on that later in the year.

Thirdly, on reconciliation in Sri Lanka, President Rajapaksa has failed to address the issue of the past properly, so in the coming hours the United Nations will vote on a UK-sponsored resolution for an international and independent investigation into alleged war crimes. At the Council, I secured the full backing of all EU member states for this approach and it is reflected in the conclusions of the Council. At The Hague I urged leaders from countries as diverse as South Korea, Kazakhstan, Gabon and Japan to support this crucial resolution.

On combating nuclear terrorism, which was the subject of The Hague summit, the meeting reaffirmed our determination to push through reforms of global security systems to ensure that vulnerable nuclear material does not fall into the wrong hands. This initiative, launched by President Obama back in 2010, has led to a remarkable amount of nuclear material being secured and reduced across the world, which should be commended.

On Russia’s actions in Ukraine, I had four clear objectives at these meetings: to secure an increase in the number of people subject to travel bans and asset freezes; to agree specific measures in response to what has happened in Crimea; to develop more clarity on what would happen if Russia were to take further steps to destabilise the situation in Ukraine; and to join efforts to build support for a democratic, successful and independent Ukraine. I want to say a word about each.

As I made clear in this House two weeks ago, if Russia did not engage in dialogue with the Ukrainian Government, or if those talks did not start producing results, there must be clear consequences. As a result, travel bans and asset freezes have been imposed, and last week the European Council agreed to extend these measures to another 12 individuals, bringing the total to 33—broadly the same number as has been imposed in the United States. We have cancelled the EU-Russia summit, agreed not to hold bilateral summits, and decided to block Russian membership of the OECD and the International Energy Agency. In The Hague, G7 leaders agreed that there would be no G8 summit in Sochi and no further participation in any G8 activities until Russia changed course. We agreed that there would instead be a G7 meeting in Brussels in place of the Sochi summit on the same day.

I also pushed hard on the need to reduce Europe’s dependency on energy from Russia. The G7 agreed that Energy Ministers would meet ahead of the Brussels summit, and the European Council tasked the Commission to produce a comprehensive plan for reducing Europe’s dependency on Russia by June. This work is long-term but vital. It requires new gas pipelines, new LNG terminals, more shale gas, more sources from outside Russia and greater connectivity. Above all, it requires political will and I am determined that, although the UK has almost no reliance on Russian gas, we should play our part in this important work.

Secondly, it was important to take specific measures in response to what has happened in Crimea. This was a sham and illegal referendum conducted at the barrel of a Kalashnikov. Both the European Council and the G7 leaders made very strong statements condemning the illegal referendum and condemning Russia’s illegal attempt to annex Crimea in contravention of international law and specific international obligations. Both meetings were clear: the international community will not recognise either. The European Council also agreed rapidly to implement economic, trade and financial restrictions on occupied Crimea, accepting Crimean goods only if they came from Ukraine, not Russia.

Thirdly, both the G7 and the European Council sent a very clear message to President Putin that it would be totally unacceptable to go further into Ukraine. The international community remains ready to intensify sanctions if Russia continues to escalate this situation, and I pushed hard at both meetings to secure greater clarity on what this should mean. The G7 agreed that this could include co-ordinated sectoral sanctions that would have an increasingly significant impact on the Russian economy; and for the first time, the EU Council tasked the European Commission to prepare measures that would have far-reaching economic consequences. Russia has a clear choice to make. It does not have to continue on this path. Diplomatic avenues remain open, and we encourage the Russian Government to take them.

Finally, both meetings reaffirmed the strength and breadth of international support for the Ukrainian Government and their people. It is clear what needs to happen. We need a broad and generous International Monetary Fund package of financial assistance to help the Ukrainian Government stabilise and repair their economy. We need a Ukrainian Government who reach out to the regions and respect the rights of Russian-speaking minorities. We need an association agreement between the EU and Ukraine; that is now signed, but it needs to be backed by reduced tariffs on Ukrainian goods. We need international support for free elections, which enable all Ukrainians to choose their leaders fairly. Britain will support all of these things.

Russia’s violation of international law is a challenge to the rule of law around the world and should be a concern for all nations. We have to be clear how unacceptable it is and to see through these economic sanctions and consequences. Otherwise, we will face similar situations in similar countries with a similar sort of unacceptable behaviour. Britain must continue to play its part in standing up to Russia’s actions, pressing for Russia to change course and helping the Ukrainian people in their hour of need. I commend this Statement to the House”.

15:47

[Baroness Royall of Blaisdon (Lab)]

My Lords, I am grateful to the noble Lord the Leader of the House for repeating the Statement made in the House of Commons by the Prime Minister. In relation to the formal substance of the EU summit and conclusions, I welcome the steps that were agreed on efforts to complete the internal energy market, to improve the energy flow across the continent and to strengthen EU tax rules on the exchange of information.

On climate change, I further urge the Government, given their previous leadership on the issue, to push the EU to set out its climate priorities before the UN Climate Summit in September.

On discussions regarding the vote of the UN Human Rights Council on Sri Lanka today, could the noble Lord set out what action the Government have taken in recent weeks—and, indeed, in these final days and hours—to secure the support of other states’ council members for this resolution? This matter requires urgency. I would be grateful if the noble Lord gave some idea of the timescale for the international and independent investigation into alleged war crimes.

The main substance of the Statement is on Ukraine. This House is united in outrage at Russia’s annexation of Crimea, an action in direct violation of Ukraine’s territorial integrity and a breach of international law. Russia’s actions have created the most significant security threat on the European continent in decades. This fear has been fuelled by the ever more aggressive rhetoric of Russia in the past few weeks. Like my right honourable friend the leader of the Opposition, I praise the measured response shown so far by the Ukrainian authorities to this act of aggression. I also want to express support for the shared goals set out at last week’s EU Council meeting of isolating Russia for its actions and reassuring our allies and partners in that region.

I shall take the specific outcomes in turn: first, I welcome the signing of the political chapters of the association agreement between the EU and the Ukrainian Government. It was this strengthening of co-operation with the EU, spurned by former President Victor Yanukovych in November, which sparked the current crisis. So it is of course right that the EU should continue to make clear that these agreements are not a zero-sum game between the EU and Russia. It is essential that this agreement, which potentially opens up nearly €500 million-worth of trade benefits to Ukraine, is taken forward. It is also right that the EU now pushes ahead with similar pacts for Moldova and Georgia.

Secondly, it is vital that the international community imposes real costs on President Putin and his key supporters. For this reason, we welcome the agreement at the EU summit on extending the list of individuals targeted by visa bans and asset freezes. Yet, unlike Washington, the EU list avoided sanctions being placed on senior Kremlin figures. Can I therefore ask the Leader to explain the reasons behind this and whether the names of any senior Kremlin figures were put forward for consideration before the final agreement and publication of the EU list?

Thirdly, given that the United States has added sanctions on the bank Rossiya and indicated the economic sectors that may be targeted as part of its stage 3 approach, can the Leader provide details of what any EU measures could involve and to which sectors they would apply?

On the meeting of the G7 and the EU, Labour urged stronger action by the G8. These Benches therefore welcome the decision taken by members of the G7 to suspend their 16-year collaboration with Russia in the G8 group and the decision not to attend the planned G8 summit in Sochi in June. It is also welcome that, this week, the Russian Foreign Minister held talks with his Ukrainian counterpart for the first time since Russia’s move into Crimea. What steps are being taken to ensure that such dialogue continues between Ukraine and Russia in the weeks ahead?

Finally, given that the Prime Minister said this week that Britain and its NATO allies would help bolster the defences of the alliance’s Baltic members which have Russian minorities, can the Leader tell the House what the nature of any such UK contribution would be?

The actions of the whole international community should be designed to strengthen Ukraine’s sovereignty and democratic transition, to impose real costs on the Government of President Vladimir Putin, and to bring all sides together in a meaningful dialogue to de-escalate the situation and find a political solution. As we have said throughout this crisis, in taking this action the Government will have our full support.

15:52

[Lord Hill of Oareford]

My Lords, I am very grateful for the overall tone of the comments made by the noble Baroness the Leader of the Opposition and for the substantive support that she offered. I think that it is important that the Government and the Opposition are completely aligned in our response to this crisis.

I am glad that the noble Baroness mentioned in passing work done on tax transparency. Although the Statement glossed over it, it is in the conclusions of the European Council meeting. There were some concrete steps taken at the Council by Luxembourg and Austria. It is a long-term grind to make further progress, but work is being taken forward in the Council and in the OECD. The European Council represented further substantial progress on that.

On the steps taken by the Government in respect of Sri Lanka, I know that my right honourable friend the Prime Minister has worked extremely hard with a whole range of countries, both at the European Council meeting and at the summit in The Hague, to build support for Britain’s position and backing for the UN resolution. That vote is due to be held shortly and, if it is carried, as we very much hope, it is mandatory that the review to which the noble Baroness referred goes ahead. I do not have the precise timetable yet, but I am sure that it will become clear after the UN Security Council has met. I agree with what the noble Baroness said about the restraint shown by the Ukrainian Government and about the importance of pressing ahead with signing association agreements with Moldova and Georgia. Alongside the work we are doing with Ukraine on this, it is important to do the same with Moldova and Georgia and on an accelerated timescale.

The difference between the names on the EU and the US lists of travel bans and asset freezes boils down to the EU approach, which is that the individual named on the list has to have a direct, demonstrable link with the action taken in Crimea. The EU has to act under that legal process and that is why we have specifically targeted Russian politicians and those with a direct role in Crimea. The noble Baroness asked about the reference to EU sectoral sanctions and what kinds of sectors are being looked at as part of the EU discussions. The EU Council statement talks about there being a wide range of sectors, but the Prime Minister made it clear earlier that these would have to include energy, financial services, trade and arms. The important point is that the Council agreed that the Commission should start work on it straightaway, which was a good step forward. I note and agree with her welcome for the suspension of Russia from the G8.

On her final question, we also welcome, as a positive step, the recent meeting between the Ukrainian and Russian Foreign Ministers. When the Prime Minister met Ban Ki-moon yesterday he urged that further such contacts be encouraged and that the UN should do whatever it can to bring Russian and Ukrainian Ministers together.

Britain is increasing its help to the Baltic states. We are making aircraft available to them for air policing. More generally, we are striving to reassure our partners in Latvia, Lithuania, Estonia and Poland that Britain, like other countries, believes in their membership of NATO and the guarantees we have given them as part of that. We will work with them to secure the future of Europe, as we have done in the past.

15:57

[Baroness Falkner of Margravine (LD)]

My Lords, does my noble friend share my concern about the new Russian nationality law that will give Russian citizenship to all ethnic Russians everywhere in the world? This will have profound implications for not only the Baltic states, which he has mentioned, but the central Asian republics. Although he has touched on the role of NATO, will he assure the House that the Government will now look at very concrete measures to reinforce NATO’s operational and military capabilities across the board?

[Lord Hill of Oareford]

I take the first point that my noble friend made. I can certainly say that, as part of the whole range of conversations that we are having and the pressure that we are seeking to apply through our involvement in NATO, we will certainly work to keep that pressure up and build as strong an alliance as we can to send the Russians the kind of message that my noble friend refers to.

[Lord Stirrup (CB)]

My Lords, is it not clear that the worst outcome for Russia would be for it to realise, as the years progress, that it has gained Crimea by losing Ukraine? However, the development of a viable and vibrant Ukraine will be a massive challenge going well beyond issues of funding, important though they are. Did any discussions take place in the EU Council about the development of potential mechanisms to help Ukraine address issues such as corruption, constitutional development and economic development? Have Her Majesty’s Government given any thought to such mechanisms?

[Lord Hill of Oareford]

The noble Lord made two extremely important points. The first, on the short-term gain of Crimea and the long-term loss of Ukraine and what that means, is what lies behind a lot of Russia’s reaction.

On tackling corruption and the support one can give Ukraine to help it build a more viable future, it is absolutely right that at the European Council and in other meetings the importance of tackling corruption and giving practical help to the Ukrainians to address that problem has been towards of the top of the list of priorities. There is also the question of financial help. We have agreed to the immediate unilateral lifting of tariffs, which should lead to €500 million-worth of trade benefit flowing into Ukraine. Those concrete trade and anti-corruption measures are very much part of our overall response.

[Lord Howell of Guildford (Con)]

Turning to energy issues, does my noble friend accept that while it makes obvious good sense to build a better infrastructure for energy connectors throughout Europe so that oil and gas can flow and markets can work, we need to be rather careful about allowing too much centralisation and dictation of energy policy at national level by the EU? Is he aware that the net effect of EU policy at the moment is vastly to increase coal burning throughout Europe—including a lot of lignite, which is the dirtiest coal of all—and to raise energy costs for industry to levels that are seriously impacting on jobs and investment? Should we not distinguish between the areas where we need more Europe for physical infrastructure and those where we need rather less Europe to manage a flexible energy policy that does not crucify our industries and create more fuel poverty?

[Lord Hill of Oareford]

I agree very strongly with my noble friend on that and with the distinction he draws. It is one of the reasons that, when the European Council was looking towards targets for 2030, Britain made very clear its case that any such target does not bind the behaviour of individual member states or constrain their flexibility in how they go about doing so.

The other point that emerged from the discussions, of which I hope my noble friend will approve, is the emphasis on seeking to develop other sources of energy—whether that is shale gas or other developments—which will reduce our dependency, and the EU’s dependency, on Russia, which is clearly very much to be desired.

[Lord Soley (Lab)]

Can we remind the Russians that they have a duty to protect the rights of those people in Crimea who do not want to accept Russian citizenship, particularly those in the former Ukrainian forces who have been forced either to leave Crimea or to accept Russian citizenship, and also to offer compensation if they are going to make them move? It is an important right which the Russians have accepted in other areas. Can we also remind some members of the UN, particularly China, that no other country will sign up to give up its nuclear weapons if there is a breach of the 1994 agreement that the territory of Ukraine would be respected if it gave up its nuclear weapons?

[Lord Hill of Oareford]

The noble Lord makes two very important points. The consequence of Russia’s actions is that, in any international relationship of that sort, why would anyone believe its word, given that in 1994 it freely entered into the negotiations that the noble Lord mentioned, which guaranteed the integrity of Ukraine and the future of its nuclear weapons?

[Lord Lawson of Blaby (Con)]

My Lords, I welcome the Prime Minister’s recognition that it is necessary and desirable to press ahead as fast as possible with the development of the UK’s indigenous shale gas resources, not merely because it will be good for the economy, but on geopolitical grounds because it will lessen the West’s reliance on Russian gas. However, is it not shameful that so far there has been only one exploratory well drilled in this country and that the industry is clear that the reason for the snail’s pace of progress is the mind-boggling bureaucratic complexity of the regulatory system in this country? Is it not time that the Government put their money where their mouth is and sorted this out?

[Lord Hill of Oareford]

I agree with my noble friend’s point on the contribution that shale gas can make to the geopolitical balance of power and to increasing our collective independence, which I think is absolutely right. I also agree with him about the other benefits that it could bring to the economy, and the sooner we can crack on with it, the better.

[Lord McConnell of Glenscorrodale (Lab)]

In addition to the issues of government capacity mentioned earlier, there are also long-standing issues here about the relationship between the majority and the minority in Ukraine that were not resolved and are at least partly behind what has happened over recent weeks. Those issues exist also in Moldova and a number of other places in that part of the world. I wonder what the Government are doing in the EU, and perhaps through the OSCE as well, to try and get more urgency into discussions about those conflicts that are in abeyance but are still there under the surface, in order to avoid a similar situation happening elsewhere.

[Lord Hill of Oareford]

I accept the force of what the noble Lord says, and as I said in my reply to the noble Baroness, Lady Royall, so far as Georgia and Moldova are concerned, one of the ways in which we are seeking to take that forward and accelerate it is by bringing forward the signing of the accession agreements. I very much take the noble Lord’s point and we need to address that in every way we can.

[Baroness Williams of Crosby (LD)]

May I ask the Minister two quick questions? First, with regard to the Nuclear Security Summit, can he say whether there is any movement forward whatever in the negotiations on the Fissile Material Cut-off Treaty? Clearly that is a crucial part of controlling nuclear materials—where they go and so forth. Secondly, on the issue of the rather more generous procedure that we have adopted towards giving visas—particularly for people who are interested in doing business in this country—will the Home Office take a very careful look at those visas if they are being offered to Russians, to make sure that they are not Russians who have supported the things that the Russian Government have recently done?

[Lord Hill of Oareford]

On the second point, I am sure I can give that undertaking in the sense that clearly the Government want to make sure that whoever ends up being on their list of those proscribed under the travel bans or has their visa turned down, that is an appropriate list and we will consider all the people who might potentially be on it. I do not think that the last word on this subject has yet been spoken, so I take that point.

On my noble friend’s first point about the detail and progress the Bill has made in the Hague on nuclear matters, I will need to talk to brainier people than me to find out whether the specific point she raised was indeed covered and whether any progress was made there. As I understand it, the main focus of the discussions was on seeking to take further steps in tackling potential terrorism threats. I will follow up that point and perhaps we can have a word once I have written to the noble Baroness.

[Lord Elton (Con)]

My Lords, the summit has rightly concentrated on containment at this stage, but clearly prevention would have been very much better. Should we not learn very quickly the lessons that have brought this to pass before Russia exploits the protection of new-citizen ethnic minorities in other neighbouring states? Can my noble friend therefore tell me and the House when Her Majesty’s Government were first aware of the threat that this takeover was going to take place? Secondly, what steps did Europe and this country take during the vigorous courtship of the Ukraine in trade and economic terms to discuss the terms of this with the Russians and reassure them as to the extent of our intentions? Finally, the whole of history shows that the only way to prevent the use of military force by an aggressor is to have an equivalent or nearly equivalent force oneself and to be seen to be ready to use it. The way to prevent a war—to not have to fight a war—is to be evidently ready to do so. Are these lessons being taken on board?

[Lord Hill of Oareford]

I can tell my noble friend that those lessons are being taken on board, which is why the range of measures that has been taken has been taken. The Government have sought a balanced and phased response to the situation as it has developed, ratcheting up the pressure over time as necessary. On the build-up to the current situation—what happened at which point—the truth is that it developed extremely quickly, and the EU and others have had to respond equally quickly as it has developed. However, I understand the burden of my noble friend’s points; that is why NATO and the security that it can offer are so important in this context.

[Lord Pearson of Rannoch (UKIP)]

My Lords, further to the answer that the noble Lord has just given, is it not true that Russia had made clear for years that it could not and would not tolerate Crimea coming under the sphere of influence of the European Union? Was Brussels therefore wise to offer Ukraine an eastern association agreement, complete with defence aspects? Surely the EU has thus caused the present crisis, and not Russia.

[Lord Hill of Oareford]

I know that the noble Lord is often ready to blame the EU for a whole range of matters. However, it is hard to argue in this case that the situation that has developed, with the aggression shown by Russia and its breaking of international treaties freely entered into in the past, can be laid at the door of the EU.

[Baroness Royall of Blaisdon]

My Lords, the noble Lord, Lord Pearson, was not in the Chamber for the Statement that was given by the Minister at the beginning. It is therefore a bit rich that he should come in.

[Lord Pearson of Rannoch (UKIP)]

I apologise, but I have read it.

[Lord Jopling (Con)]

My Lords, on the importance of making available non-Russian sources of hydrocarbons, what thought was given to and what proposals made about the importance of Georgia? If we wish Kazakh, Azeri or Caspian hydrocarbons to be available to Europe, it is essential, bearing in mind the impasse between Azerbaijan and Armenia, that new pipelines through Georgia are made available so that those hydrocarbons can flow without going through Russian territory.

[Lord Hill of Oareford]

My Lords, there were certainly a lot of discussions about how to address the kind of issue to which my noble friend refers—how to improve the flow and tackle some of the problems by increasing interconnections. On the specific examples that my noble friend gave, I would be very keen to talk to him. Perhaps we can discuss that further.

[Lord Goodhart (LD)]

My Lords, as I said to Members of your Lordships’ House some days ago, Russia should be allowed to support Crimea. Crimea is a body that has been separate from Ukraine for more than 200 years, and Ukraine has dealt with it in a careless and unsatisfactory way as a part of that country. Ukraine took over patronage of Crimea from Russia only in the 1950s. In all reality, Crimea has been entitled to take part in what has happened in the past few days, and it should be allowed to continue to do that.

[Lord Hill of Oareford]

I have to say to my noble friend that that is not the view of Her Majesty’s Government or of most people in this House. Whatever the history—and I accept my noble friend’s point about the history of the region—the fact is that agreements entered into freely under international law have been flouted. The basis for the so-called referendum was illegal and illegitimate, so I am afraid I cannot accept the point that we can allow these things to stand.

[Lord Stoddart of Swindon (Ind Lab)]

My Lords, instead of expelling Russia by calling a special meeting of the G7, would it not have been wiser to call a special meeting of the G8 and allow the Russian President, Mr Putin, to give his point of view and be challenged on it? Secondly, was it wise for the European Union to intervene in the uprising or demonstration—call it what you will—handing out goodies and European flags? Was that not likely to frighten the Russians, who believe that the European Union has expansionist policies to the east? Finally, will the EU prevail on its friends in Ukraine not to threaten to reactivate its nuclear weapons and ask Ms Tymoshenko not to threaten to obliterate Russia?

[Lord Hill of Oareford]

The Ukrainian Government have generally behaved with remarkable restraint during the situation and I think the boot is on the other foot. On the noble Lord’s point about the G8—or the G7—inviting Mr Putin along, asking him to give us the benefit of his views and trying to talk him out of them, would not have been a very productive exercise. It is not the case that the EU and the US bilaterally, and countries individually, have not been seeking discussions with the Russians. Throughout this process, while seeking to apply pressure, we have also sought to provide as many routes as possible towards de-escalation, which is why we have been very keen that talks should take place. However, given what has happened, the idea that the way forward is to send out messages that we consider the behaviour of President Putin and Russia acceptable, and will sit down and talk to him as though nothing has happened, is not a realistic option.

Defence Reform Bill

Wednesday 26th March 2014 Lords Chamber

Report (2nd Day)

16:17

Amendment 7 had been withdrawn from the Marshalled List.

Amendment 8

Moved by

[Lord Rosser]

8: After Clause 48, insert the following new Clause—
“Annual report to Parliament on Army’s fighting power
(1) The Secretary of State shall lay before Parliament on an annual basis a detailed report on the Army’s fighting power and shall include an assessment of progress made and any setbacks incurred in implementation of the Army 2020 plan.
(2) The first of such reports shall be laid before Parliament in January 2015, no later than 31 January 2015.”

[Lord Rosser (Lab)]

My Lords, the parents of this amendment are the members of the House of Commons Defence Committee, the majority of whom are government MPs. At the beginning of this month the Defence Committee published a report, Future Army 2020, and its conclusions were hardly a ringing endorsement of either government policy or government competence on this issue. Referring to the Government’s Army 2020 plan, the report pointed out quite fairly that it departed significantly from the announcements made in the 2010 strategic defence and security review. It went on to say that the Defence Committee had,

“considerable doubts about how the plan was developed and tested, and whether it will meet the needs of the UK’s national security”.

It expressed surprise that such a radical change to the Army’s structure, reflecting a reduction of 12,000 personnel from that announced in the 2010 SDSR, had not been discussed at the National Security Council and added:

“Even if the overall strategic vision had not changed, as the Government claims, the military ways and means of that strategy were considerably altered under Army 2020”.

The committee said that its principal concerns were twofold. The first was that the Ministry of Defence,

“has failed to communicate the rationale and strategy behind the plan to the Army, the wider Armed Forces, Parliament or the public”.

The second concern was that,

“the financially driven reduction in the numbers of Regulars has the potential to leave the Army short of personnel particularly in key supporting capabilities until sufficient additional Reserves are recruited and trained”.

The committee pointed out in its report that the Secretary of State for Defence accepted that,

“Army 2020 was designed to fit a financial envelope”,

and expressed its concern,

“that this consideration took primacy over the country’s abilities to respond to the threats, risks and uncertainties contained in the National Security Strategy”.

It expressed concern, too, at being told that it was the,

“Ministry of Defence’s Permanent Secretary who told the Chief of the General Staff the future size of the Army under the Army 2020 plan”,

and called for an explanation of the,

“apparent lack of consultation and involvement of the Chief of the General Staff in the decision-making process that has affected his Service so fundamentally”.

Such was the committee’s concern, including over lack of,

“evidence of an active experimentation programme in the development and implementation of Army 2020”,

that it has called for the Ministry of Defence to provide,

“an assessment of how the Army 2020 plans will affect the ‘Fighting Power’ of the Army providing comparable assessments of both current fighting power and projected fighting power following the completion of the Army 2020 plans”.

On top of that, the committee came out with this conclusion:

“We remain to be convinced that the Army 2020 plan represents a fully thought-through and tested concept which will allow the Army to counter emerging and uncertain threats and develop a contingent capability to deal with unforeseen circumstances. The MoD needs to justify how the conclusion was reached that the Army 2020 plan of 82,000 Regulars and 30,000 Reserves represented the best way of countering these threats”.

The Defence Committee has said other things, also stating in its report that it remains,

“to be convinced by, the Secretary of State’s explanation as to why the reduction in the Regular Army should not be dependent on the recruitment of the necessary number of Reservists. The financially driven reduction in the number of Regulars has the potential to leave the Army short of personnel in key supporting capabilities until sufficient Reserves are recruited and trained”.

That concern is borne out by the trained strength and recruitment targets for the reserves contained in the report.

Continuing, the committee expressed concern,

“that the Army 2020 plan would unravel in the face of any further MoD budget reductions or further reductions in Army personnel”,

and concern that,

“the Defence Planning Assumptions are adequate to ensure the UK’s national security”.

It went on to express,

“little confidence in the Government’s capacity to rapidly expand Army numbers should the need arise”.

Since the Government said that Army 2020 had to work and that there was no plan B, the committee continued by saying that the Government,

“owe it to the Army to ensure it does work, but, crucially, if the situation changes, then the Government must be prepared to respond decisively by providing additional resources in order to guarantee the nation’s security”.

The committee was still not finished, but went on to comment on the Government’s amendment taken in Committee in this House:

“While we welcome the Government’s commitment to publish more data on the Reserves and to put into statute a requirement on the Reserves Forces and Cadets Association to produce an annual report on the state of the Reserve Forces, we believe the Government should go further and give a commitment to provide regular updates to Parliament on progress on all aspects of the Army 2020 plan. Oral and written statements while helpful are not sufficient; a detailed annual report on the Army’s Fighting Power should be laid before Parliament setting out progress and setbacks in implementing the Army 2020 plan. The first of these reports should be laid before Parliament in January 2015 … before the 2015 General Election and to inform the 2015 SDSR”.

The purpose of this amendment is to give effect to this conclusion reached by the House of Commons Defence Committee.

There can be no doubt about the magnitude of the changes under the Army 2020 plan. The Army 2020 document itself described the Army 2020 construct as representing,

“a fundamental and imaginative break from the way in which the British Army is currently structured”,

and said that the change was,

“as significant as any seen over the last fifty years”.

Neither did General Wall, Chief of the General Staff, dispute that the plans were radical: indeed, he agreed that they were when he appeared before the Defence Committee.

The government amendment which was introduced in Committee is now Clause 47 of this Bill. The Government had no problems agreeing to annual reports by each reserves force and cadets association on the capabilities of the volunteer Reserve Forces in relation to the enhanced duties that are being placed on the members of those forces being prepared and sent to the Secretary of State and for the Secretary of State to be required by law to place a copy of each report before Parliament.

Therefore, there ought to be no reason why the Government, as now called for by the Defence Select Committee following careful scrutiny of the future Army 2020 plan, should not also agree to provide Parliament with a similar annual report on progress on all aspects of the Army 2020 plan, with its significant changes in the future role and structure of the British Army. The report, of course, would be about the Regular Army as well as the integration of the Reserves with the Regular Army. It seems rather odd that Parliament should be provided with annual reports about the Reserve Forces and their capabilities but not receive an annual report covering the position and progress of the Regular Army which, under Army 2020, is undergoing significant change, about which the Defence Select Committee has expressed real concerns and doubts in respect both of its implementation and its implications. I beg to move.

[Lord King of Bridgwater (Con)]

I have some sympathy with the amendment moved by the noble Lord. I think it is very important indeed. We know that the recruitment of reservists did not get off to a magnificent start and we hope that further steps are going to be more effective. We have to watch it extremely carefully. I noticed that one proposal is to encourage those leaving the Armed Forces—the regulars—to become reservists in this case. There are some difficulties for regular serving people moving into civilian street and trying to get jobs if they say, “I am liable to go away for six months at any time”. It is not the best way to encourage a prospective new employer to offer you an opportunity. The Government have in a sense created their own problem. If the economy is improving, as we hope it is, and if employment opportunities are improving, as we hope they are, that might not make it easier to attract more reservists or to recruit people for the Armed Forces on a regular basis. Therefore, whatever one may have thought about this, recent developments in eastern Europe do not encourage one to think that this is the time to slim down on defences any further than we have done. I support the idea that we should keep a close eye on the matter and I think that the points made by the noble Lord were fair. We should pay attention to what may have been a valedictory dispatch from James Arbuthnot as chairman of the Defence Committee. I may be wrong, but I think he is proposing to stand down from that position. He has done excellent work and this may be his last report.

16:29

[Lord Palmer of Childs Hill (LD)]

My Lords, the amendment moved by the noble Lord, Lord Rosser, raises an important point. Despite a lengthy explanation, the point is whether an annual 2020 plan would help. I have some questions for my noble friend the Minister. What sort of manpower on an annual basis would be needed to prepare such an annual report and would that have any effect on the use of our fighting manpower? Will he also comment on how much information is already in the public domain? That point was mentioned by the noble Lord, Lord Rosser, who said that the information is available but not in a complete format. Perhaps my noble friend can say whether such an annual report, if it showed deficiencies, would aid our enemies rather than the country. I am all for transparency but we are talking about the defence of the realm.

[Lord Craig of Radley (CB)]

My Lords, I have one very small comment. It would seem to be quite wrong to restrict such an annual report to the Army. It would be necessary, if such an approach were to be adopted, for the report to cover all three services in full.

[Lord Ramsbotham (CB)]

I absolutely agree with my noble and gallant friend Lord Craig on that point. On reading the Defence Committee report, Future Army 2020, I was concerned to note two statements:

“We are surprised that such a radical change to the Army’s structure … was not discussed at the National Security Council”,

and,

“We note that the Secretary of State for Defence accepts that Army 2020 was designed to fit a financial envelope”.

The financial envelope includes not just the Army but the other two services. If we look at history, an annual debate was held in both Houses on the estimates for the Navy and the Army. We are therefore putting back history, as it were, if we have an annual estimate. Particularly in this case, I note the suggestion that the first discussion should be in January 2015 because, of course, when the strategic defence review 2010 was introduced it was clear that its achievement was dependent on the money that would be available in 2015. Looking around, it seems pretty obvious that that amount of money may not be available—in which case, all three services will have to face a review of the current plans.

[Lord Hamilton of Epsom (Con)]

My Lords, I very much echo the sentiments of my noble friend Lord King. I think there is a general feeling that in the latest cutbacks in the forces the Army seems to have taken a rather greater cut than the other two services. Considering that the Army has been deployed almost continuously since the Troubles began in Northern Ireland in 1969, one has slightly to question the wisdom of the Army seemingly taking rather more punishment than the other two services.

However, I do think that the Opposition have a bit of nerve in tabling this amendment, which somewhat echoes the amendment withdrawn by the noble Lord, Lord Dannatt, because, at the end of the day, we are paying now for the legacy that this Government inherited when they took power at the beginning of this Parliament. If you have £40 billion of procurement that has not been funded, you obviously at that stage have a serious problem. Something went badly wrong. When the aircraft carriers were ordered by the previous Government the roof had fallen in on the economy and there was clearly no money to pay for them. It does not matter whether they were a good idea, the money was not there and the Defence Council went ahead and ordered them. For some extraordinary reason, there was no ministerial override from the Permanent Secretary saying that the money was not there. That strikes me as a very serious shortcoming in the way in which our affairs are being run. Let us face it, there is always a temptation for politicians to order things that they cannot afford. On the other hand, we look to our civil servants to preserve the integrity of the finances of the department, and that did not seem to happen. I consider that the Army is suffering from some very bad decisions that were taken in the previous Parliament and the legacy of an overhang of unfunded procurement. Savings had to be found somewhere; and it is the Army. It is extremely regrettable that the Army has to take the punishment in this way.

[Lord Davies of Stamford (Lab)]

My Lords, I was not intending to intervene in this debate but feel that I must, in order to correct some of the myths—which is a polite way of putting it—just purveyed by the noble Lord, Lord Hamilton. I was of course the Minister responsible for defence reform in the last three years of the last Government and, indeed, possibly the Minister to whom the noble Lord was referring when he talked about ministerial responsibility. I must tell him that during that time we always stayed within our annual cash limits. So far as the longer-term financing programme was concerned, we were fully and adequately funded on the basis of a 1.5% real terms increase in the defence budget, which was our policy at the time. It was a correct policy and I wish that it had been continued. It was very regrettable that this Government came in and made excessive cuts in public spending, which drove the economy down. The economy was reviving before we left office. The House will recall that in the first half of 2010 the economy grew, at first, by 0.3% and then by 0.7%. When this Government came in with their excessive spending cuts, the growth fell away again. The economy has been in the doldrums, more or less, ever since. That was a mistake made entirely by this Government.

In my view, the decisions of the previous Government on defence procurement were thoroughly responsible. It was very necessary to provide for two carriers; it is an essential arm in our ability to intervene around the world, irrespective of whether we have friendly powers that are willing to provide us with airfields a suitably close distance to where our troops might be deployed or where we need to bring influence or physical power—kinetic power, if necessary—to bear. That was a right decision.

It was a crazy decision to cancel those aircraft carriers—or, at least, to cancel the carrier strike capability of the nation for 10 years. Of course we need two aircraft carriers, because otherwise we cannot be absolutely certain that when we need an aircraft carrier it will be available and will not be in refit. The decisions of the last Government on defence procurement were thoroughly responsible. They were certainly funded. I am sorry to see that, after all the denials that have been made over the last few years by everybody who actually knows the facts, the noble Lord, Lord Hamilton, should still be purveying a completely untrue account of events.

[Lord Stirrup (CB)]

My Lords, let me add very briefly my weight to the comments of my noble friend Lord Ramsbotham and my noble and gallant friend Lord Craig, with whom I agree. It may be worth the House reflecting, first, on the fact that the current Chief of the Defence Staff has given his view that his top concern in terms of personnel pressures actually lies with the Navy. Secondly, a few moments ago we were debating the consequences of Russia’s action in Ukraine and the importance of NATO preparedness in the face of that. NATO’s greatest weakness—and, indeed, our own—and Russia’s most likely avenue of attack, should anything go awry, is likely to be in cyberspace. Noble Lords might like to reflect on whether this country is investing enough in that area.

It is clear that this country was previously not investing enough in the defence of the realm and that, in the light of the current situation, it is not investing enough now. As my noble friend Lord Ramsbotham has said, if the Government—whoever forms the Government in 2015 and beyond—do not live up to the requirement to increase defence expenditure in real terms in that year and in each year beyond, our situation will only get worse.

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

My Lords, Part 3 of the Bill makes important changes that have been broadly welcomed by noble Lords. They will help revitalise our Reserve Forces and, along with the other measures in the White Paper, make them feel valued and valuable and, crucially, more usable.

The changes we are making to our Reserve Forces are part of what is known as Future Force 2020, which will provide military capability in a different way from the past to deliver the range and scale of military forces and skills required. The whole of the Armed Forces, not just the Army, is being transformed to meet the likely future demands on defence. There is often a narrow focus on numbers when concerning changes to the Armed Forces. I am therefore pleased that this amendment focuses more on capability.

The changes we are making to our Armed Forces are guided by the defence planning assumptions, the unclassified version of which is published in the SDSR. Detailed assessments of our force structure’s capabilities are undertaken against a range of scenarios, but they are not put into the public domain for very good reasons of national security. In capability terms, the unclassified defence planning assumptions outline that Future Force 2020 will still enable us to conduct an enduring stabilisation operation of up to 6,500 personnel, one non-enduring complex intervention of up to 2,000 personnel, and one non-enduring simple intervention of up to 1,000 personnel at the same time.

The Army will be structured around the reaction force and the adaptable force. The former are high readiness forces that will provide the Army’s conventional deterrence for defence and will be trained and equipped to undertake the full spectrum of intervention tasks. The latter will be geared more towards defence engagement and homeland resilience, but with the ability to conduct combat operations, particularly enduring stabilisation operations. So we have designed a flexible, adaptable and capable force structure that enables the Army to meet likely future threats.

Noble Lords will recognise that there has been considerable debate about Future Force 2020. To focus narrowly on the Army is, I believe, not helpful and misleading, as the noble and gallant Lord, Lord Craig, said. The other two services are vital to the UK’s defence capability. The Army cannot and does not operate in isolation, even in landlocked countries such as Afghanistan. If we are to consider the capability of our Armed Forces, we must do so in the round, collectively. The noble and gallant Lord, Lord Stirrup, made the point very well about the recent comments of the Chief of the Defence Staff and the Royal Navy. We expect the changes we are making under Future Force 2020 to take effect by 2020. We have acknowledged that between coming out of Afghanistan and fully implementing the Future Force 2020 changes, there is some risk attached, but asking for an annual report on the capability of the Army now would be premature and rather misleading. It is only fair to judge the effectiveness of Future Force 2020 from that year onwards.

Recognising the importance of routinely assessing the capabilities of our Armed Forces against the threats and challenges they may face, this Government instigated the five-yearly strategic defence and security review process. It allows for detailed consideration of changes in the strategic environment and the force structure required to counter the threats and issues identified. If we were to increase the frequency of those reviews to a yearly report on the Army’s fighting power, as this amendment suggests, we could reduce defence to a series of knee-jerk reactions, concentrating on only a small timescale and not allowing any kind of strategic decision-making and long-term planning.

The second reason for rejecting this amendment is that while one crucial role for the Armed Forces will be conventional deterrence, including intervention tasks should they be required, the range of tasks we ask of our Armed Forces is much broader. The armed services make a unique and valuable contribution to the security of the UK, her citizens and those around the world, through activities contributing to conflict prevention, defence engagement, involvement in international defence diplomacy and defence alliances, as well as contributing to peacekeeping, security operations such as counterpiracy off the coast of Somalia, and homeland resilience such as assisting with the recent UK flood relief work. The future force has been designed to be able to respond effectively to these international commitments and align them with national priorities. It therefore seems unhelpful to focus a report on the narrow concept of fighting power. A report focused solely on fighting power would not best reflect the development of the whole range of these capabilities.

Also, as the British Defence Doctrine points out, fighting power will always be considered relative to that of other parties. The notion of effectiveness itself will also change over time, as the strategic context and our national objectives change, making comparisons challenging. An assessment of fighting power would also represent a statement of the relative strengths of defence and could play into the hands of those who wish to reduce the security and relevance of the Armed Forces. We would therefore be unwilling to release a public assessment.

16:45

It is important to remember that we already provide considerable information to Parliament about the current changes to the Armed Forces through reports, Questions and debates. The engagement we have had with the House of Commons Defence Committee in producing its report is testament to that, with the Secretary of State, the Chief of the General Staff and a number of others appearing in front of the committee. Furthermore, the MoD releases a variety of unclassified documents that outline the department’s progress or position on a number of areas. For example, the MoD’s annual report and accounts provide an assessment of the activity, concurrency and readiness of the Armed Forces—in sum, an unclassified view of our Armed Forces’ capabilities, which is what this amendment seeks. Also in July 2013 the Army released a comprehensive update on Army 2020, taking stock of what has been achieved so far in the first year since the Army 2020 announcement and the onwards direction of travel.

As I said earlier, while we hold more detailed assessments of our force structure’s capabilities against a range of scenarios, they are not in the public domain for very good reasons of national security, so even if this amendment were accepted we would be limited in what we could report. I believe we are being as open and honest as we can be in terms of the information we release in existing documents or provide during other forms of parliamentary scrutiny.

[Lord Lee of Trafford (LD)]

In terms of being open and honest, how is reserve recruitment going at present?

[Lord Astor of Hever]

I was coming on to that point in response to the point that my noble friend Lord King made.

The final issue that I need to address is the point that was raised by the noble Lord, Lord Rosser: if we are having an annual report on the reserves, why should we not have such a report on the Regular Army? The reserves are a unique set-up: part-time volunteers who juggle work, family and military commitments. In recognising the importance of the reserves and in seeking to revitalise them through the Future Reserves 2020 programme, it was considered important to have an external independent view of how we were doing because the changes impact on reservists, employers, families and communities.

The reserve associations are community-facing organisations which provide an essential bridge between our Armed Forces and the civilian population. An association exists for each of 13 administrative areas of the United Kingdom. They provide advice and support on behalf of our volunteer reserve forces and cadets, work with the chains of command of the Royal Navy, the Army and the Royal Air Force and establish and maintain links with the community. They therefore have the knowledge, skills and experience to report effectively and independently on the Future Reserves 2020 programme. Clause 47 puts that into statute. The reserve associations would not be able to fulfil that same role for the Regular Army, as that is not where their expertise lies.

My noble friend Lord King mentioned the reserves, and that recruiting got off to a bad start. My noble friend Lord Lee also asked about this. In the Ministry of Defence, we have given a lot of time to this issue. We are working hard on it. We have recently increased the bounty to encourage regulars to join the reserves, which was a point which my noble friend also made. Over the past three or four weekends, I have been out to see reserves training in Scotland and different parts of England. I can report that morale is high. The senior officers to whom I have spoken are optimistic that we shall reach the numbers that we have set out, so I am confident. I had organised for the noble Lord, Lord Rosser, and two or three other Peers to visit the recruiting centre in Upavon. We had to cancel that because we had a Statement in the House, but I think that it is in the grid to have another visit there.

My noble friend Lord Palmer asked what manpower would be needed to prepare the report. The answer is a small number. My noble friend also asked what information is already in the public domain. The answer is plenty—the annual report and accounts and the Army 2020 update both cover progress in detail. He asked whether revealing deficiencies might help our enemies. We would not wish to reveal any weakness that may help our enemies, which will and does limit what we can release.

The noble Lord, Lord Ramsbotham, referred to “radical change” that had not been discussed by the National Security Council. I had better write to the noble Lord as I have quite a lot of information here that I am not going to be able to read out.

The noble and gallant Lord, Lord Stirrup, asked whether we were spending enough on cyber. The Government have recognised the importance of addressing the cyber threat to the UK and we have established a joint cyber unit of regulars and reserves.

I hope that I have answered most of the questions, but if I have not I will certainly write. I have set out why I do not believe the amendment should be accepted and I ask the noble Lord to withdraw it.

[Lord Rosser]

My Lords, first, I thank the Minister for his reply and all noble Lords who have participated in this debate. I am grateful to my noble friend Lord Davies of Stamford for responding to the point made by the noble Lord, Lord Hamilton of Epsom, and do not intend to pursue it any further in the light of the response that my noble friend gave on that point.

A number of concerns have been raised. One is about the potential security implications of producing the report called for in the amendment and, indeed, the report called for by the Defence Select Committee. Since the report would be prepared by the Government and by the Secretary of State for Defence, one would assume that that in itself was a safeguard against anything being revealed that would put at risk our national security.

The issue was also raised that the report refers only to the Army and not to the other services. Obviously, that was in the light of the fact that this has come from a Defence Committee report which was geared to looking at the Army and Army 2020. Of course, if that is felt to be a major stumbling block, there is no reason at all why the Government—if that is their objection—could not come back at Third Reading with an amendment that included the other two forces. The alternative, of seeing this amendment not go through because it does not refer to the other forces, would simply mean that we end up with no report at all.

It is also worth stressing that the key element of the Defence Select Committee’s concerns was actually on the progress being made on the implementation of the Army 2020 plan. I went through the comments that it had to make at some length, because the comments were geared to real concerns about whether the plan would or could be implemented as intended and what the implications would be if it were. It was in that context in particular that the committee called for reports on the progress of all aspects of the Army 2020 plan.

I feel that I have addressed some of the concerns that have been raised. There can be no security implications when the report will be produced by the Government and the Secretary of State for Defence—they are not going to start revealing things that will be of use to those who are hostile to us. The concerns that have been expressed over the implementation of the Army 2020 plan are over how it is going to be implemented, whether it will be implemented as intended and what the implications will be. Primarily what is being sought are reports updating us on the progress that is being made and, as the Defence Select Committee said, detailing any setbacks there have been.

There are reports about what is happening with the reserves. I do not accept the Government’s argument that that is totally different from what is being asked in respect of the Army 2020 plan. They are both reports on progress being made towards implementing objectives set out for our future Army strength. In view of that, I wish to test the opinion of the House.

16:55

Division 1

Ayes: 179

---

Labour: 155
Crossbench: 12
Independent: 4
Democratic Unionist Party: 2
Plaid Cymru: 1

Noes: 281

---

Conservative: 161
Liberal Democrat: 68
Crossbench: 41
Bishops: 2
Ulster Unionist Party: 1
Independent: 1

17:09

Clause 50: Commencement

Amendment 9

Moved by

[Lord Craig of Radley]

9: Clause 50, page 33, line 2, at end insert—
“( ) An order under subsection (1) to commence Part 1 may not be made before the Secretary of State has published a White Paper and an impact statement on any proposed Government-owned contractor-operated options compared with DE&S as modified by the Secretary of State commencing in 2014.”

[Lord Craig of Radley]

My Lords, the amendment relates to the commencement of Part 1. During earlier consideration of the Bill, both at Second Reading and in Committee, I and other noble Lords questioned why Part 1 should be enacted now. The Government had made it clear just before Second Reading that they did not intend to proceed with the GOCO model; instead, they would seek to strengthen DE&S—described as DE&S-plus—for the next three years, and maybe more, before reconsidering a GOCO solution.

It was explained that getting parliamentary time for a GOCO Bill at a later date might be difficult. The option of using the quinquennial Armed Forces legislation, due not later than November 2016, as a vehicle for Part 1 of the Bill might be adopted, but it could well be too early. Moreover, few would claim that a GOCO part would be a particularly comfortable companion to the Armed Forces Bill. This must be enacted before the five-year life of its 2011 predecessor runs out. Any delays in its progress through Parliament because of differences over the GOCO part would be best avoided. For these reasons, I now accept that the Armed Forces Bill would not be a suitable vehicle and that the inclusion of Part 1 in this Defence Reform Bill should stand.

However, because a GOCO model would be such a major step change in defence procurement arrangements and the timing of its introduction so undetermined, the Government agreed that both Houses should be given a legislative opportunity to reconsider Part 1 prior to its commencement. The Minister therefore added in Grand Committee the amendment that now forms Clause 50(3). This is a step in the right direction, but it does not go far enough.

Part 1 sets out a range of issues covering the arrangements and responsibilities of a GOCO. It contains a considerable amount of important detail; for example, on transfer of employees, financial provisions and protection of intellectual property rights. These and the rest of Part 1 are clearly essential information for any consortia that might wish to formulate a bid for a GOCO contract. In short, Part 1 is about process; it is not about principle. The principle is whether to replace DE&S-plus—not the current DE&S—with a GOCO. An affirmative resolution, the Government’s present position in the Bill, approves only Part 1 commencement and agrees the technical and administrative processes to be followed by a GOCO. This is surely not sufficient.

Ahead of passing the affirmative resolution, Parliament needs to consider as well the relative merits and risks of proceeding with a GOCO compared to those of what will be an up-and-functioning DE&S-plus. This is sometimes strangely characterised as being match fit. Would that equate to how prepared Chelsea were before thrashing Arsenal 6-0 last week, or to a joiner’s well crafted dovetail joint in a carpenter’s shop? It is not clear to me quite how MoD interprets such a vague phrase.

I turn to the amendment. The Government have acknowledged, in particular in a letter dated 19 March 2014 circulated last week among many of your Lordships by Mr Philip Dunne, Minister for Defence Equipment, Support and Technology, the need for a White Paper and an impact assessment prior to the statutory instrument. Mr Dunne says that the Government recognise that comparison between a putative GOCO and the contemporary performance of DE&S-plus is an essential prerequisite before formally approving commencement of Part 1. However, the Secretary of State has the power to set up a GOCO without the formalities of enabling legislation.

17:15

An example of this has been trailed only in the past few days. According to the Written Ministerial Statement of 10 March, a new strategic business partner for the defence infrastructure organisation,

“will help the DIO prepare to move to an Incorporated model, currently assumed to occur in 2016, which will entail the creation of a Government Company … to manage Defence infrastructure”.—[Official Report, 10/3/14; col. WS 158.]

No White Paper; no impact assessment; no comparison for Parliament to scrutinise; and, not unusually for such a low-key approach, no great unease has been voiced nor interest aroused in this apparent new GOCO other than, perhaps, incredulity that the Government should be about to grant a 10-year strategic partner contract to Capita, the company that has made such a recent mess of Army recruiting.

Might this example not be a precedent for a future Government to rely on a minimalist approach of just the affirmative resolution for commencement of a procurement GOCO? Procurement and infrastructure are not directly comparable, though both deal in high-value assets. However, the policy and arrangements for procurement are of such overriding importance to equipping and supporting our Armed Forces and to their operational capabilities that it is surely right to strengthen the Bill when it comes to considering the principle of adopting a GOCO.

The amendment is straightforward: it does not seek to do more than introduce into the Bill undertakings given by the Minister, Mr Dunne. It will be some considerable time before the issue of a GOCO commencement might become active. With the passage of years and changes in personalities—even in Governments—assurances in a ministerial letter, or even in today’s Hansard, would seem to be less than definitively robust enough to ensure that the principle of adopting such a novel and radical change in defence procurement is thoroughly considered by Parliament at the time. I urge the Minister not to resist, but to take this away and think again before Third Reading about the importance of including the undertakings proposed by my amendment—already voiced in Mr Dunne’s letter. Parliament and the Armed Forces should have confidence that a procurement GOCO will not be adopted —if ever—without full and detailed consideration at the time. Parliament should first have to hand, by means of a White Paper and impact assessment, the fullest exposition and consideration of any GOCO’s merits and risks, compared with DE&S-plus. The amendment guarantees that security, whatever changes in personalities or Governments may happen.

[Lord Astor of Hever]

My Lords, before the noble and gallant Lord sits down, it may assist him and other noble Lords to know that the Government are prepared to support the amendment in principle and that we intend to bring forward a government amendment, achieving these aims, at Third Reading. I will, of course, respond fully to the issues raised at the end of the debate, in the usual way, but I want to make our intentions clear now.

[Lord Craig of Radley]

My Lords, that is obviously most welcome news and I thank the Minister and the Government for making it clear at this stage. On that basis, I will be prepared to withdraw my amendment. However, for the purposes of the debate, I beg to move.

[Lord Rosser]

My Lords, I speak to Amendments 10 and 11. In Committee, we argued that Part 1 of the Bill should be withdrawn, following the Government’s decision not to proceed with their proposal for handing over defence procurement to a company under contract to the Secretary of State. That decision was made following a lack of bidders. Instead, the Government announced their intention to go down the road of further developing the DE&S organisation in the Ministry of Defence by setting it up as a bespoke central government trading entity with effect from next month.

[Lord Trefgarne (Con)]

I hesitate to interrupt the noble Lord, but I was expecting there to be a separate debate on Amendment 11 in his name. I am a little confused by the procedure that he is now proposing.

[Lord Rosser]

I understand that I am in order in speaking to the amendments in the group. The two amendments in my name are Amendments 10 and 11, but I will refer later to Amendment 9, which has already been moved. I have been advised that I am not out of order in making the contribution I am making, so I intend to continue.

[Lord Trefgarne]

In fact, it is open to any noble Lord to ask to have a particular amendment debated separately. I do not propose to do so on this occasion, but it is open to any noble Lord to do so if he wants.

[Lord Rosser]

I was talking about our view that Part 1 should be withdrawn and about what happened in Committee. The Government declined to withdraw Part 1. We felt, and still feel, that it should be deleted because it provides for an untested and untried major change in defence procurement which the Government do not now intend to introduce and for which they cannot and will not be able to produce any evidence that it will provide a better alternative at some time in the future than either the existing arrangements or, significantly, the further developed DE&S model, which is not even yet up and running. That will now be a matter for a future Government, if that future Government decide to proceed with the GOCO option.

In Committee, we also moved an amendment, which we regarded as very much second-best behind the withdrawal of Part 1, for a super-affirmative order which would be required to be passed by both Houses before Part 1 could be brought into force. We have included a similar amendment in the group that we are discussing. I do not intend to go through in detail the arguments that we put forward in Committee in support of the super-affirmative. They are recorded in the Hansard of the Committee stage. They set out in detail what the super-affirmative would provide for as set out in these amendments.

The super-affirmative order is not something novel. It has been used by this Government. They added the super-affirmative procedure to the recent Crime and Courts Act in respect of any future order made by the relevant Secretary of State to modify the functions of the National Crime Agency. That super-affirmative provision in the Crime and Courts Act requires the Secretary of State to consult the persons who would be affected by an order to modify the functions of the National Crime Agency and lays down minimum periods for consultation and subsequent scrutiny. It also requires the Secretary of State to have regard to any recommendations or representations made by Parliament during the scrutiny period with the subsequent option of laying a revised draft order. I again simply make the point that we are not talking about a minor change that might be made in the future on the basis of affirmative orders but about an untested and untried major change in defence procurement involving more than £10 billion of taxpayer expenditure each year.

The amendment that has been moved by the noble and gallant Lord, Lord Craig of Radley, is an improvement on the current provision in the Bill, and we heard from the Minister—if I understood him correctly—that he will come back with an amendment at Third Reading which will be in line with that moved by the noble and gallant Lord. However, while that amendment provides for a White Paper and an impact assessment, it does not provide for an independent assessment or the involvement of the Defence Select Committee prior to an affirmative order being considered. It thus appears not to provide any minimum timescale between the production of the White Paper and the impact statement for consultation and scrutiny before any vote in Parliament.

It is worth pointing out that government departments do not always produce adequate and appropriate information to support orders they place before Parliament. We had yet another example of this only last night in this Chamber in respect of a Home Office order. Your Lordships’ Secondary Legislation Scrutiny Committee had criticised the poor quality of documentation produced by the Home Office accompanying the order and had written to the Minister of State concerned to voice its detailed concerns. When the committee received the Minister of State’s reply, it found that letter equally disappointing and wrote in its report on the order being considered last night that,

“we found the letter to be no more convincing on the merits of the policy than the Explanatory Memorandum”.

Our super-affirmative would address those potential concerns about the quality of documentation as there is provision for independent assessment and the involvement of the Defence Select Committee.

I take note of the intervention by the Minister to indicate—if I can use the expression—the Government’s acceptance of the amendment in the sense that the Minister intends to come back with a government amendment which, as I understand it, will say either the same thing or much the same thing as the amendment tabled by the noble and gallant Lord, Lord Craig of Radley. Obviously we will want to look at the amendment that the Government table at Third Reading and determine whether to support it or whether to seek to amend it.

[Lord Roper (LD)]

My Lords, in view of the remarks made by my noble friend the Minister in his intervention in the speech of the noble and gallant Lord, Lord Craig, saying that he intends to accept the principle of Amendment 9, I can be a good deal briefer than I would otherwise have been. Broadly, I felt after the discussion in Committee and subsequent consideration—particularly after the discussions with Mr Dunne—that it would be very important to get in the Bill the assurances about the material that the Government would produce before a decision was made on the affirmative order. That, of course, was a government amendment that was introduced in Committee after representation from a number of us that a decision should be made by affirmative order and that one could not just use Part 1 of the Bill without any further parliamentary consideration.

I believe that the situation here is the right way for us to proceed. The super-affirmative procedure to which the noble Lord, Lord Rosser, has just referred was discussed in some detail in Committee, and I initially saw some advantage in having a mechanism whereby one could look at this more carefully. On further examination, I took to heart the Minister’s view that this was rather a heavy way of tackling the problem, and that it would be possible for Parliament to be properly informed so that the debate on the affirmative order could be effective and efficient with the sort of procedures that are in Amendment 9. I therefore believe that Amendments 10 and 11 are too elaborate and that the lighter proposal in Amendment 9 is the one that the House, in principle, ought to accept, although of course we will be doing that at Third Reading rather than today.

[Lord Stirrup]

My Lords, I, too, have my name attached to Amendment 9. I do not wish to make the mistake of failing to accept yes for an answer, so I will merely say that I am extremely grateful to the Minister for agreeing to take this away. I look forward to seeing the amendment as drafted by my noble and gallant friend Lord Craig at Third Reading.

[Lord Trefgarne]

My Lords, like other noble Lords I have had some reservations about the GOCO proposal but I am bound to say that my noble friend the Minister has gone a long way to meet those concerns. His observations this afternoon and his acceptance in principle of the amendment proposed by the noble and gallant Lord, Lord Craig, has further assisted me in this matter. That said, Amendment 11—I understand that the noble Lord, Lord Rosser, was anxious that we should discuss it at the same time—goes much too far. The GOCO proposal, which we have already discussed, is adequately protected by the steps which my noble friend has made. Therefore, the call from the noble Lord, Lord Rosser, for a super-affirmative resolution is very much over the top in this particular circumstance and I hope he will not press it. The amendment will achieve nothing, save a further significant delay to a measure which all sides of the House agree has considerable merit and the potential to save the taxpayer a considerable sum in the future. I believe this super-affirmative resolution amendment was tabled only last night and I suggest that it therefore bears all the hallmarks of rather hurried drafting.

17:30

[Lord Astor of Hever]

My Lords, the amendments in this group deal with the issue of parliamentary oversight and scrutiny of a future decision to proceed with a GOCO. The question of what information should be available to Parliament has been discussed extensively during the passage of the Bill, and that debate has been carried on this afternoon. As I have already indicated, the Government support Amendment 9 in principle and intend to bring forward a government amendment at Third Reading. We think that Amendment 9 strikes the right balance between ensuring Parliament has sufficient information to consider a GOCO proposal and not setting undue constraints on a future Government, the Defence Select Committee or the commercial process.

Amendment 9 requires the Government to publish an impact statement and White Paper before proceeding with a GOCO. The Government have always been clear that Parliament should be able to debate and consider in detail a decision to proceed with a GOCO in future. We agree that that would be a major decision and that it is right that Parliament should have the opportunity to hold the Government of the day to account for such a decision, should they decide to proceed with Part 1 of the Bill. We have also been clear that we expect any future Government to publish an impact assessment on the options before proceeding with a GOCO and to issue a White Paper setting out those options in detail.

We have discussed the issue of parliamentary oversight and scrutiny of a future decision to proceed with a GOCO in great detail, both in Committee and with interested colleagues, and I am grateful to all noble Lords for their contributions to that debate.

The requirements set by Amendment 9 seem reasonable, as they would impose two statutory requirements on the Secretary of State before an affirmative order to commence Part 1 could be laid before both Houses of Parliament. That would ensure that Parliament had sufficient information to properly debate the GOCO proposal under consideration before Part 1 could be brought into force.

We acknowledge the merit of some form of statutory requirement to provide detailed information on the GOCO proposals in future and that it is reasonable to put such a requirement into the Bill. We did not initially think that a statutory requirement was necessary, but we have been convinced otherwise by noble Lords from all sides of the House. That is an example of what the Members of this House do best—ensuring that legislation is properly scrutinised, and amended where necessary. We will therefore bring forward a government amendment at Third Reading that will make it a legal requirement for a future Government to publish appropriate information on the GOCO options before the order commencing Part 1 is brought forward.

We think that Amendments 10 and 11 go too far. They would do two things. First, they would place in statute the need for a future Government to publish a number of documents before proceeding with a GOCO. Secondly, they would make the affirmative commencement order that brings Part 1 into force subject to the super-affirmative procedure.

I will deal with those two things separately. On the publication of documents, the requirement would be for an impact assessment that covers specific options. This in itself does not present any difficulties; as I said earlier, we are prepared to accept a statutory requirement to produce an impact assessment.

However, proposed subsection (2B)(a)(iii) in Amendment 10 goes too far in that it requires the impact assessment to include any options that may be recommended following consultation with the Defence Select Committee. That is a very unusual provision. It effectively sets a statutory requirement for a future Government to consult the Defence Select Committee on the way forward. Although the Ministry of Defence would, of course, welcome any report that the Select Committee produced on the department’s proposals, we need to be very careful in this House about setting out statutory requirements on a House of Commons Select Committee. The Defence Select Committee already has the power—if it wishes—to look at any aspect of MoD business and I do not think it would be right for us to tell it what it must do. It is for the committee, not us, to decide what its programme of work should be.

On the other parts of Amendment 10—which would require an independent report on the options and the Defence Select Committee to review and report on that report—again I think this is too much. I really do not see what an independent report would add to the impact assessment set out earlier in the amendment, which would already set out the issues and analysis objectively. I do not think it is right to make it a legal requirement for the Defence Select Committee to review such a report. This raises fundamental questions about fettering the ability of a Select Committee to decide its own programme of work and it would be wrong for this House to direct what a Commons Select Committee must do.

Amendment 11 would also make the commencement order for Part 1 subject to the super-affirmative procedure. This would require the Secretary of State to consult on the order, including with anybody recommended by the Defence Select Committee. This would seem completely unnecessary given the requirement to publish an impact assessment and totally inappropriate in relation to a commencement order. Super-affirmative procedures may be appropriate where secondary legislation covers significant policy matters but not in relation to commencement orders. It is not clear what we would consult on given that the order will simply say when the provisions should come into force. Amendment 11 confuses the issues. I accept that there is a need for Parliament to consider any GOCO proposals but I fail to see what would be achieved by the requirements in Amendment 11. It would not provide the House with any more scrutiny of the proposals in question and introduces an unnecessary and overly complex procedure where none is required. I must therefore strongly resist Amendment 11, which I think is both unprecedented and wholly inappropriate.

The noble Lord, Lord Rosser, said that the super-affirmative procedure would be unprecedented for a commencement order. The other circumstances in which super-affirmative procedures are used are very different. There is no precedent for using a super-affirmative procedure for a commencement order. A super-affirmative procedure is relevant only where an order covers significant changes in policy or has significant legal effect. A commencement order does neither.

I thank my noble friend Lord Roper for his support and wise advice during the passage of the Bill. I also thank my noble friend Lord Trefgarne for his support. Given that the Government have made it clear that they support Amendment 9 in principle and that we intend to bring forward a government amendment at Third Reading, I ask the noble and gallant Lord and other noble Lords not to press their amendments in this group.

[Lord Craig of Radley]

My Lords, I thank the Government and the Minister once again for deciding to take away Amendment 9. I also thank very much the noble Lord, Lord Roper, the noble and gallant Lord, Lord Stirrup, and the noble Lord, Lord Levene—who regrettably was not able to be present—for their support and I beg leave to withdraw my amendment.

Amendment 9 withdrawn.

Amendments 10 and 11 not moved.

Apprenticeships

Wednesday 26th March 2014 Lords Chamber

Question for Short Debate

17:38

Asked by

[Lord Young of Norwood Green]

To ask Her Majesty’s Government what action they are taking to increase the number and quality of apprenticeships for 16 to 18 year-olds.

[Lord Tunnicliffe (Lab)]

My Lords, by our normal conventions, we would start the QSD but there was wide expectation in the House that there would be a vote now and at least half of our speakers are not present. Perhaps I may put it to the government Whip that she adjourns the House during pleasure for 10 minutes so we can all assemble for the next debate.

[Baroness Jolly (LD)]

I beg to move that the House do now adjourn until 5.49 pm.

17:39

Sitting suspended.

[Lord Bates (Con)]

I beg to move that the House do now adjourn for a further five minutes.

17:49

Sitting suspended.

17:55

[Lord Young of Norwood Green (Lab)]

My Lords, now that we are all sitting comfortably, we can begin. In a recent debate about apprenticeships I was accused of being churlish, so I will endeavour today to keep my criticism constructive and reasonably positive.

The beginning of March was National Apprenticeship Week. Should we be celebrating? I will give the Government one cheer. They definitely recognise the importance of apprenticeships and vocational training. There is more investment in training and I was pleased to see the announcement in the Budget. However, announcing expenditure is one thing; driving up the number of apprenticeships is the real task that we face. Surely, the major question that we need to address is the nearly 1 million NEETs in the 16 to 24 age category—those who are not in employment, education or training. I took those statistics from the Library briefing.

We can muck around with statistics, but at the end of the day that is the problem we face. Even if we look at different groups, eventually we will be faced with people looking for jobs and apprenticeships. Of course, the situation with graduate recruitment is not particularly rosy, either. However, I want to focus on the 16 to 18 year-olds because they are the most important group. If we do not find a way of motivating and incentivising them, we know their capacity to lose hope in ever gaining meaningful employment and all the bad things that can flow from that.

When the Government quote figures on apprenticeships, I have complained time and time again because they always include the over-25s. I have said that I am not going to be churlish and so I hesitate to use the word “disingenuous”. However, the figures are certainly misleading. My fear is that it could lead to complacency. Although the government statistics have shown significant growth in the number of apprenticeship starts between 2008 and 2012-13, the recent trend for numbers of apprenticeship starts for 16 to 19 year-olds has actually shown a decline in both 2011-12 and an alarming 12% decline in 2012-13 from the previous year. Those are figures from the Skills Funding Agency. In the period reported, apprenticeship starts as a whole increased by 113%, which makes you think, “Good”, until you disaggregate it. The growth in apprenticeships for the 16 to 19 year-old age group during the period was only 12%, while apprenticeships for those aged 24-plus grew by an astonishing 293%. I will come back to the question of apprenticeships for those aged 25 and over.

One of the good results of calling a debate—I am grateful to all noble Lords who have agreed to participate in it—is the briefing you are sent. I received a really interesting briefing from the City & Guilds Group. It points out that apprenticeships are still seen as being “just for the boys”. For instance, the difference between the advice received by men and women is particularly notable in the construction industry, where only 0.6% of women are encouraged to make it their career compared with 12% of men. The same worrying statistics can be seen throughout apprenticeships in relation to the advice that young women are given as opposed to that given to young men. We need to work a lot harder if we are going to encourage more young women to take up apprenticeships.

The area I want to focus on now is the construction industry. I recently received a letter from the noble Viscount, Lord Younger of Leckie, giving a breakdown of construction apprenticeships. The figures set out in his letter suggest that things are looking reasonably rosy. However, perhaps I may suggest to the Minister that he looks at a report on construction apprenticeships issued just yesterday by a cross-party group of parliamentarians. It states that some 182,000 construction jobs will need to be filled by 2018, but last year only 7,280 construction apprenticeships were completed. The report includes some recommendations that were made in the 2011 review by Doug Richard:

“Apprenticeships should be redefined. They should be clearly targeted at those who are new to a job or role that requires sustained and substantial training … There should be recognised industry standards at the heart of every apprenticeship”,

which should be linked to professional registration. The report also recommends that all apprentices should achieve NVQ level 2 in English and maths. Doug Richard thinks that apprentices aged over 25 should not actually be called apprentices. I would be interested to hear the Minister’s response to those recommendations. The Chartered Institute of Building has talked about a 33% decline in apprenticeship starts in construction. Surely that is another worrying statistic.

The Minister should take a look at the briefing provided by the Local Government Association. I shall start with the positive. It states:

“We welcome the measure in the Budget 2014 to extend subsidies to create youth apprenticeships. However, it will not resolve the structural issue facing young people. This requires ambitious reform, bringing skills and employment services together around local labour markets”.

The briefing says that the current system is not working for 16 to 19 year-olds. The number of under-19 apprenticeship starts rose for a bit, but then declined over the past couple of years. It goes on to say that the increase in apprenticeships can largely be seen in only a small number of sectors that are generally associated with low skills. It also talks about instances of large employers using apprenticeship funding to subsidise training for existing employees, and issues with leading apprenticeship contractors effectively exploiting their workforce.

The Government are seeking to improve the qualifications and the skills requirement for apprenticeships. I am not arguing about that, but where I think that the Government do need to be careful is with regard to the new GCSE requirements in both English and maths. These are demanding requirements. It is interesting to look at the briefing from the Oxford Cambridge and RSA organisation, which says that the really important thing about getting qualifications for young people and improving their ability in English and maths, which we know is an employer requirement, is to ensure that learning is contextualised. We can see that feedback coming. The noble Lord, Lord Baker, is not present today but if you look at the success in university technical colleges, you know that that is good advice.

As I have said before, the quality of careers advice in most schools is still appalling, with very few examples of young people being encouraged to go for apprenticeships. The drive is still to push people towards A-levels even though we know that there is real need and demand for apprenticeships. What more could the Government do? Time and time again I have made the point that if the Government really want to send a positive signal to employers—boy do we need to do that as the best statistic I have found on how many employers recruit apprentices is 13%—surely it is time that they made it clear that bidders for public procurement contracts will be required to indicate the number of apprentices they are going to employ. To drive up the number of apprenticeships, as we should be doing, and to win the battle against youth unemployment, we ought in a way to be putting the country on a war footing. We ought to be determined not to have another lost generation of young people.

In the Local Government Association briefing there are some good examples of authorities such as Lincoln which has appointed apprenticeship champions and driven up the numbers of apprenticeships for those aged 16 to 18. We need to ensure that all schools, colleges and universities are themselves recruiting apprentices. We ought to drive up the number of group training associations and apprenticeship training agencies. I look forward to the Minister’s response and I thank those who are going to participate in the debate.

18:09

[Lord Monks (Lab)]

I thank my noble friend Lord Young for initiating this important debate. Unlike him and certain others here, I was never an apprentice but I went to a boys’ technical school and most of my contemporaries went into apprenticeships in manufacturing or in construction. A decade later I was working on the training brief in the TUC in early 1970s, and the apprenticeship system started to collapse—I do not think that there was any direct relationship between my presence in the TUC and what was happening in the country. The apprenticeship system had covered 44% of boys leaving school at the minimum age and about 4% to 5% of girls, but those numbers plummeted, particularly for boys.

Why was that? First, there was a feeling among employers that those who were doing the training were losing staff to those who were not—that poaching was rife—and the lack of a collective approach was a factor. Industrial training boards, instead of being strengthened, were weakened. I must acknowledge too that there was a growth of a youth culture of having money. If you could earn more money at the age of 16 in a labouring job than you could in an apprenticeship, the lure of the youth culture was a major factor that turned many young people away from apprenticeships. Later, other factors clicked in as universities expanded. The attractions of higher education—“uni”, as became the common phrase—became overwhelming to many young people, and was supported by parents. The privatisation of a lot of the utilities in particular, which trained more people than they needed themselves, contributed to this collapse in apprenticeships outside of some blue-chip companies and one or two exceptional industries.

We have come a long way from the apprenticeship model which has survived, albeit not without problems and pressures, on the other side of the North Sea and of the channel. I well remember a visit I made to an apprentice school for motor mechanics in Vienna, where I took part in a discussion in English with the students. I told them their English was excellent and they said, “All our drawings are in English; we have to work in English”. Their apprenticeships were done in a foreign language, which was extremely impressive and showed the high quality of the apprenticeships and the veneration of the concept which existed there. Where we have 11 apprentices for every 1,000 employees, Germany, Switzerland and, I think, Austria—as well as, interestingly, Australia, which is a different culture and more like ours in some ways—have round about 40 per 1,000 workers. Switzerland has a lot of apprentices and not so many young people going into higher education. The university route there has not got the same cachet as it seems to have here. However, we know that even in those countries apprenticeships are under pressure: a lot of young people are aiming for higher education and some employers are looking to substitute much cheaper and shorter training courses, linked to specific jobs, for more expensive ones. It is not a paradise over there, but we succumbed to these pressures to a greater degree and earlier than others.

I am also in the camp welcoming the resurrection of apprenticeships which was started under the previous Government and has been continued under this one. There is a lot to be proud of. There is a lot of agreement in this area, although from our side, as my noble friend indicated in his opening speech, we would like things to go more quickly and more purposefully on this issue. The point he made about procurement was very important—we should know what employers are doing. Looking at what training is going on and the apprenticeship model in particular should be part of the purchasing process of public authorities. Investors in People may be a very useful initiative for this purpose.

I know the Government have started to think about this, but we need to do more to make sure that the minimum wage is properly paid. At the moment, the estimate from the latest apprentice pay survey is that 30% are being paid illegally, which is a very high figure: three out of 10 kids, and in some cases adults, are not getting what they are entitled to. We also know that the whole scheme in most sectors is still geared towards white boys—if I can put it like that—rather than girls or ethnic minorities, who do not feature too strongly in quite a lot of sectors.

The other point to make is about the importance of employer and union co-operation in this area. I was very proud when I was at the TUC of being one of the instigators of Unionlearn, and of the idea that unions could use their influence to get people to have a go at learning who did not have the experience of getting glittering prizes at school and for whom learning was frightening. We could reach parts that employers on their own could not, and that relationship was very important. Although welcoming the Government’s commitment to supporting Unionlearn, I ask the Minister whether they intend to continue that commitment into the future and to give that very worthwhile and big-scale scheme the support it really deserves.

18:14

[Lord Addington (LD)]

My Lords, my involvement with apprenticeships started with the noble Lord, Lord Young, a good few years ago when the Bill went through. At that time it was pointed out to me that everybody had to pass an English and maths test, and the language was, “Give the employers what they want. They want good English and maths”. I stood up and said, “What about dyslexics?”. Noble Lords said, “Of course, we do not want to remove anybody from employment here”, and I went away. I made a huge mistake that day because initially the Act stated that everybody needed English and maths, and that was seen to be the priority. It was decided that this overrode the Equality Act—wrongly and illegally—and we got ourselves into a horrible mess, which was resolved only three and a half years later during the course of a Bill. I just point out that anything, no matter how well intentioned, can go wrong, and apprenticeships are right there with everything else. Nobody intended it to happen, but then officials decided, “This is what we had said and we defended it”. Most politicians saw the mistake and said, “That cannot be right”, and then we had to fight our way—more or less machete our way—through the levels of resistance. I take a big slice of the blame pie for not coming back to the noble Lord, Lord Young, at a later stage in that Bill to demand an explanation of what should happen, but I could not quite believe that anybody would do anything that dumb. My naivety, after nearly three decades here, still surprises me.

Where are we now? We have the apprenticeship system, which takes over most of the further education training in this country. Everything is being drawn towards the apprenticeship system. Yet how are hidden disabilities and disabilities generally being dealt with in this system? People with dyslexia are the biggest group; I do not think anyone has argued about that. It is reckoned to be about 10% to 20% in certain parts of the state, but we use 10%. We still have a problem in that we have only just got the examination system to take on board that reasonable adjustments should be made to the online test to use technology that is well established in higher education. We have only just got that in. There are increasingly worrying signs that the trainers and providers within the colleges do not know what they are doing with the dyslexic in the classroom. Therefore, neither do colleges and their support work. Can my noble friend give me some idea of how this has developed over time and what pressure will be exerted to make sure that colleges, employers and trainers all understand this vast array of difficulties that they will encounter?

Why is it important here? It is because dyslexics should be overrepresented in something that uses practical skills. At the moment, in higher education you are fine; we have a very well established system there with the DSA. I declare an interest in that from one of my outside activities. However, in the further education sector we do not have that culture. It is there to an extent in schools but it is still hit and miss. If you are to get into that tough-to-reach 20%—the 20% who were not getting five GCSEs—you must be prepared to deal with these groups. You must have a very well established SEN structure that knows how to deal with young adults. If we are talking particularly about the young, we are talking about somebody who has already failed within the classroom and for whom this is a bad experience and a bad place to be. If you do more of the same, you will fail again.

What are we going to do about this? We have to try to get in here. I never wanted to become the person who has to stand up and make the same speech, or a variation on the same speech, every time we talk about apprenticeships. I am sure I could bore your Lordships’ House on other subjects with equal vigour. But we need a structure here that goes on. We have established for colleges, trainers and employers an incentive to go on, because they can get them, finally, through the exam. I deliberately concentrate on that because that was the model we went through in schools for getting through O-levels when they started and now for GCSEs, A-levels and degrees. If you have a reason to get the person through and they can pass, or stand a realistic chance of passing, suddenly everybody can buy in. That process will be quicker and easier if we insist on having decent training in that process.

We are starting on a process. The entrance-level qualifications are probably very important to this group I am talking about, so I think that level 2 has a place for getting people at least involved in their training. However, unless you can ensure that the experience of receiving training is there, you will not maximise it and get the people involved. I look forward to hearing what progress will be made, because we cannot ignore this, and dyslexics are only one group within a very large group.

18:19

[Lord Martin of Springburn (CB)]

My Lords, I congratulate the noble Lord, Lord Young, on obtaining this debate. I was gently reminded by the noble Lord, Lord Macdonald of Tradeston, that three of us taking part in this debate were all born within a mile and a half of one another: himself, the noble Lord, Lord Haughey, and I was on the north side of the river. Glasgow is also well represented by the noble Lord, Lord Macfarlane, who is a good friend and was an employer in my constituency through Diageo and employed many good apprentices.

When I had the privilege of being Speaker, I was shocked that this Palace of Westminster did not employ any apprentices. I called together the heads of the craft departments, including catering and banqueting, and asked them if they would co-operate in an apprenticeship scheme. All of them agreed to do so. The apprenticeship scheme has been very successful. I was stopped by a young person recently who told me he had applied for the Speaker’s apprenticeship scheme and had now qualified as an electrician. I asked him whether his mum and dad were proud. He said, “They were so proud on the day that I completed my apprenticeship”.

That is the important thing about an apprenticeship: it not only gives dignity to the young person, it gives dignity to parents and grandparents—everyone in the family. When you look round this very Chamber, Pugin himself was an apprentice. It was not through university that he did the marvellous things that he did here, but was because he was an apprentice. We have upholstery, carpet-laying, the beautiful Throne with the gilt decoration, the ornate brasswork—all of that can be passed on to apprentices. If they are not able to continue their employment in the Palace of Westminster, we have given them a skill that they can go anywhere in the world with, and they are able to use their hands.

I congratulate the Government on ensuring that the £1,500 can go not only to those aged between 16 and 18 but those aged up to 24. It should be remembered that some young men and women, because of circumstances—perhaps because they were not paying attention or because they could not get employment in the area they were living in—have to come into apprenticeships late. It is good that the Government have made a facility to give grants to employers that are willing to give adults apprenticeships. Why should it be only school leavers who get training in apprenticeships? It should be the case that anyone who wants to learn is never refused.

As we know, the £1,500 gives protective clothing to the young person who is employed. It is not about an employer getting something extra. Whenever they get that £1,500, it is handed over to the apprentice by giving them tools and protective clothing. I say to the Minister: I hope that the good work has continued. I hope that the House authorities remember that it would be a sad day if we were encouraging private employers to take up apprenticeships but did not do so within the confines of our own building.

I have mentioned before in supplementary questions that there are areas—in Scotland, Ireland and parts of England, such as the north-east—which are remote and rural. They may be lovely places to spend your childhood but, when it comes to getting an apprenticeship, there are not many employers around. If a trainee goes to university, there is a hall of residence. If, however, a youngster wants to get into, say, the aero-engine division of the aircraft industry, it may be that there is no accommodation for them. They may have to go perhaps 30, 40 or 100 miles away from home with no relative to put them up. I hope that we will be able to accommodate our apprenticeships and our craft apprentices the same as we do students. I do not see any reason we cannot do that. In fact, it would be a sad day if we could not.

I know that the Government and employers have a lot on their plate. In the old days, however, when you had big employers—the shipyards and Rolls-Royce, which I worked in—no one gave a great deal of thought to being self-employed because you went from one big employer to another. Nowadays, young craftsmen have to think in terms of being self-employed. I hope that, in an apprenticeship, there is some education given to youngsters to say, “Look, don’t be frightened of becoming self-employed”.

18:26

[Baroness Prosser (Lab)]

My Lords, I, too, would like to thank my noble friend Lord Young for securing this debate. In last week’s debate in this Chamber on the future of employment, among others the noble Lord, Lord Giddens, addressed your Lordships’ House and suggested a slightly scary scenario relating to the growth in the influence of technology and the use of robots. He set out what this would mean for the future job prospects of today’s and tomorrow’s youth. I am not going to concentrate on that particular dilemma, although I hope someone in Government or in a think tank is doing so. Suffice it to say the world of work has already been turned upside down with the help of technological innovation and the influence of globalisation. Without looking at the changes yet to come, we know that the range of skills and the areas of knowledge required by today’s labour market are very different from those needed 20 or 25 years ago. The question of how we increase the number and quality of apprenticeships is, therefore, welcome indeed.

First, let us consider how we think young people are being prepared to take up an apprenticeship. We need trained and able people in various sectors of the economy, but none more so than in science and engineering. It is agreed and understood that the country has a severe shortage of people qualified in these fields and that, of those who are, too many are concentrated within the older age range. If this problem is to be dealt with by the new, young blood, why are we paying so little attention to the importance of good-quality careers advice? We are the only country in the developed world which spends more on careers advice for older people than it does for the young. The Department for Education spends just 0.04 % of its budget in this area.

Why is not more effort being made to encourage, enable and reward schools and colleges for engaging with employers and for widening their horizons to get more girls into the traditional STEM areas of study? This is not beyond the wit of man—or, for that matter, woman. For example, girls could be taught in separate classes for maths, science and computer studies, allowing concepts to be presented in ways more appealing to girls. This does not have to be a permanent arrangement but a “separate to integrate” approach. Work recently done by the TUC shows very serious stereotyping within the take-up of apprenticeships. The statistics read as though it were 1914 rather than 2014: health and social care—83% female; vehicle maintenance and repair—98% male; children’s and young people’s workforce—93% female; electrotechnical—98% male. The salary returns for these particular choices also tell us why the gender pay gap is so alive and well. I know that many of the better employers are trying hard to break down these stereotypical barriers, but government can play a part as well. How about fiscal incentives for companies to give girls more taster days and more opportunities for work experience?

Secondly, what are the Government and the public sector in general doing to play their part in improving the number of opportunities for apprenticeships? Greater participation by government departments would send a very important message. In addition, the leverage of procurement is a powerful tool, as has already been mentioned. Government and public contracts over a certain value should carry with them the absolute requirement for the contractor to engage with the apprenticeship programme, and to ensure that opportunities are available in equal measure to both male and female applicants and to applicants from the black and minority ethnic community.

I have just a couple of final thoughts. In 2011-12, almost 84% of the growth in the number of apprenticeships was in just 10 sectors of the economy, and those mostly in low-paying areas. We are not keeping pace in engineering and construction, where we need to up the game. We also need to keep a watchful eye on standards within apprenticeships. A one-year training course is not an apprenticeship. Ensuring that the skill level reaches level 3 and above will be important to support and monitor. The role of sector skills councils is important here. They can help employers find their way around funding options and can help to ensure that training programmes are bought into and understood by the workforce as a whole.

I hope that the Minister will bring this debate to the attention of his counterparts in the Department for Education, because this is an interdepartmental responsibility and the policy will be successful only if there is an interdepartmental response.

18:32

[Baroness Sharp of Guildford (LD)]

My Lords, I join others in thanking the noble Lord, Lord Young, for bringing this important debate to the House. It is about the number and the quality of apprenticeships that government has been able to establish. Like the noble Lord, I started by looking at the statistics. As he pointed out, starts in apprenticeships are up. Between 2009-10 and 2012-13, they increased from 270,000 to 495,000. I pay tribute to the previous Labour Government for laying the foundations for this increase. Equally, the coalition Government have done much to build on the foundations that were laid then and we see it in this figure of 495,000, which is almost the half a million that has been cited.

However, like the noble Lord, Lord Young, I noticed that the increase was not evenly distributed. The numbers for the 16 to 18 year-old group were down by 4%. The number of 19 to 24 year-old apprenticeships was up by 42%, but the big increase, as the noble Lord pointed out, was in the over-25 group, which saw a rise of 350%. In terms of numbers, therefore, there is undoubtedly an increase. The noble Lord, Lord Monks, mentioned that the nadir point for recruiting apprentices was in the early 1990s, when the number of apprentice starts was below 100,000. It has been building up since then.

On quality, the noble Baroness, Lady Prosser, talked about looking at where the increases in the number of apprenticeships have taken place. In health and social care, they were up by 197% between 2009-10 and 2012-13; in business, administration and law, they were up by 84%; and in retail and commercial enterprise, they were up by 64%. This compares with construction, planning and built environment, in which they are down by 7%. In engineering and manufacturing technology—vital to rebalancing the economy—they are up 24%, which is still well below some other areas. In information and communications technology, they are up by 2%. Looking at those figures, I reflected on the fact that we frequently praise the German system of apprenticeship but we should recognise that this applies to 15 to 19 year-olds and provides them with a foundation of skills for life. This compares with the United Kingdom where our young people are not going into apprenticeships, in spite of the fact that the Government pay all the costs for 16 to 19 year-olds. It is rumoured that the Government may well ask employers to contribute rather more than they do at the moment. I fear that, if that happens, it will kill apprenticeships for 16 to 19 year-olds although they are a vital part of our raising of participation.

What is holding it up? First, I agree with the noble Baroness, Lady Prosser, and others that careers education has a major influence. There are still far too many schools where apprenticeships and vocational training are seen as second best to university. Most teachers know very little indeed about vocational routes to work. We need to make sure that schools are getting proper careers advice from properly trained and experienced careers advisers and that young people get the face-to-face advice that many of them need.

Secondly, the Government are putting a great deal of emphasis on employer ownership of apprentice training. I confess to some reservations about this because there remains a huge dearth of apprenticeships. My figures show that 9% of UK firms take on apprentices, though the noble Lord, Lord Young, mentioned 13%. This is a very small proportion. There are a huge number of applications to Rolls-Royce and BAE Systems, whose apprenticeships are the cream. However, the average apprenticeship advertised by the National Apprenticeship Service gets six applications. We do not have enough of them and we must encourage firms to provide more. The answer probably lies in encouraging our small and medium-sized businesses to take them on. The £1,500 per apprentice that came in the Budget already applies to small and medium-sized businesses. Many of these SMEs are put off by the bureaucracy attached to apprenticeships and we need to encourage the expansion of group training systems and apprentice training agencies who take on the organisation of apprenticeships.

In a report published in 2007, your Lordships’ Committee on Economic Affairs concluded that apprenticeships were the most satisfactory route to skills below the graduate level and should be the standard method for providing education and training for young people in the 16 to 18 age group not going to university. We are still a very long way away from that.

18:38

[Lord Best (CB)]

My Lords, I am grateful to the noble Lord, Lord Young of Norwood Green, for instigating this debate and for stealing half my thunder by drawing attention to a report on construction industry apprenticeships which was released recently from a cross-party group of parliamentarians from both Houses, chaired jointly by the right honourable Nick Raynsford and myself. It was entitled No More Lost Generations: Creating Construction Jobs for Young People. If I only manage to impart one suggestion tonight to this House and to those outside who are following our debate, it is that everyone with an interest in the subject of apprenticeships should google “no more lost generations” and look at our report. It was written by Denise Chevin, supported by the Chartered Institute of Building and the Construction Industry Training Board, with input from the excellent charities doing great work—albeit on a small scale—to get young people into fulfilling construction jobs.

Our report highlights three stark facts. First, there are still well over 950,000 NEETs—young people between 16 and 24 years old not in employment, education or training. That figure was quoted by the noble Lord, Lord Young. Secondly, the construction industry is now expanding once again and will be creating 182,000 extra jobs alongside the need to recruit 400,000 building workers to replace those retiring over the next four years. Thirdly, despite these big numbers, there were only 7,280 completed apprenticeships in the sector last year, which was half the number of the year before. So we have 7,000 apprentices for a £100 billion-a-year industry that needs to draw in nearly 600,000 new workers by 2018.

In the absence of sufficient numbers of home-grown employees, the contractors—as they did for the construction of so many of the Olympic Games facilities—will import their labour from other countries, particularly from eastern Europe. I bow to no one in my admiration of building workers from Poland and the other A8 countries—the globalised labour market of the 21st century means that the skills of overseas workers can provide the construction industry with a labour force that provides quality at relatively low cost—but turning our backs on our own young people has huge financial and social costs. At the launch of our report, the deputy chair of the Construction Industry Training Board, Judy Lowe, quoted the extra cost to society of a NEET who never obtains a qualification or acquires the skills to hold down a proper job: £165,000. For young people who need the self-respect and sense of purpose that comes from being in employment, failure to acquire the necessary skills can lead to pretty miserable lives.

With the economy now recovering and the nation investing in construction in infrastructure—for example, Crossrail, HS2, power stations and, most labour-intensive of all, housing—we can get a double benefit by also creating the jobs that the young of this country need. Government support is vital. Training objectives need to be incorporated into public contracts. Moreover, the Chancellor has extended government support for housebuilding through the Help to Buy scheme, resulting in big jumps since the Budget of the share price of Persimmon, Bovis Homes, Taylor Wimpey and others. Perhaps the tit-for-tat should be a commitment from the housebuilders to skills training for home-grown talent.

Local authorities and housing associations can insist that companies bidding for their work must employ more apprentices. The use of planning requirements can support this. Local authorities also have the local contacts and local knowledge, crossing boundaries through the local enterprise partnerships, to be a focal point for initiatives that are tailored to the particular employers’ requirements in their locality.

To bring all this together and take forward the recommendations from the No More Lost Generations report, we called for a summit of construction leaders, convened by the Construction Industry Training Board and the Department for Business, Innovation and Skills. This could do for training what the 2001 construction summit did for safety. That summit led to a sea-change in attitudes to accidents and fatalities on building sites, to very great effect. A construction training summit would agree a new apprenticeship strategy, bringing together industry leaders, specialist contractors, housebuilders, local authorities, social landlords and central government. The response Nick Raynsford and I have received from the Construction Industry Training Board’s chairman, James Wates, has been very positive. The CITB is setting up an apprenticeship commission to take forward this plan and report to a construction training summit.

We have also had a positive response from BIS Secretary of State Vince Cable. His sympathy for these aims is well known and I hope he will agree to jointly sponsor the construction leaders summit later this year. What is certain is that it would be the height of folly not to use the revival of construction in the UK to provide fulfilling careers for tens of thousands of our young people who must not be another “lost generation”.

18:45

[Lord Lucas (Con)]

My Lords, I must declare an interest because I am running a social enterprise in this patch, the Good Careers Guide, which you can bing if you do not want to google. We have been having a wonderful time with companies. There is such a spirit of collaboration abroad—with them, with their organisations and with schools organisations, too—and there is a real determination to get together and solve the problems of how kids comprehend careers, of how businesses get on with schools and of how apprenticeships become valued as a decent alternative to academic education. I say to the noble Lord, Lord Best, that the construction industry is as enthusiastic as any other, and I shall look forward to his conference and hope that we may end up as part of it.

To return to the subject in hand, which is on how to increase the number and quality of apprenticeships for 16 to 18 year-olds, I think the answers are about information, appreciation and support. It is very hard within the context of a school to find that out what 16-to-18 apprenticeships are out there. We need a place where people can go to find out—but not, as the Deputy Prime Minister said, a UCAS, which is a horrible, inward-facing and unco-operative organisation. What we need is something that is facing outward and that sees its business as running an API, not a fortress, so that all sorts of institutions that have contacts with young people can easily get at the information on apprenticeships which they need to advise them. I think that would be a great way forward and I very much hope, if Mr Clegg has anything to do with it, that is the direction that he eventually takes.

Second is appreciation. There is a general feeling that apprenticeships are of mixed quality. That is not good. That is how we came into the business of the Good Careers Guide, taking the genetics of the Good Schools Guide and seeing what we could do for apprenticeships. It is proving immensely popular with companies, I am delighted to say. They really see the need to be seen as quality providers. It is important to parents particularly, and to others who are advising young people, that they understand where an apprenticeship leads to. How will it be rated by other employers once it is completed? Where will it lead to in terms of a career? The progression is immensely important, as the noble Lord, Lord Young, commented.

In that context, it is important to say to the Government that they are on the wrong track when they say that,

“once the reformed GCSEs are implemented, all apprentices will use GCSEs … to meet the English and maths requirements”.

What is important is context. If you are in an apprenticeship, what is motivating you is the context. The mathematics and English you use must fit in with that context. English and maths GCSEs are designed to move people on to A-levels; they are not designed for the whole variety of employments and apprenticeships that are out there. What is important is that the English and maths that one learns in an apprenticeship is part of a progression which leads—as, again, the noble Lord, Lord Young, said—to recognised professional qualifications. The English and maths should be sufficient for that, but there should be no barriers on the progression of apprentices. They should be able to move on to degrees and what they have achieved as an apprentice should be recognised as sufficient for that. I hope that the NHS will wake up to the idea that you can start as an apprentice and end up as a nurse, which does not seem too hard to ask when you can start with Barclays as a NEET who has just come from jail and end up as a bank manager. There are companies out there which take progression seriously, and it is time that our public sector did so, too. We must pay apprentices properly; they should not be seen as a source of cheap labour but should receive proper remuneration.

We should also concentrate on support. Most of our employment comes from small and medium-sized enterprises, but it is difficult for them to take on the bureaucracy and the responsibility of an apprenticeship. The big companies can manage it—they have big HR departments, which can do what is required. We need to build up for smaller companies a structure of training providers which not only provide the training but do the pastoral care, too, looking after every aspect of the apprentice’s needs. The SME will then be able to concentrate on giving them a job and will not be asked to do things which go beyond its capacity. That is happening: PricewaterhouseCoopers organises it for the smaller companies and the financial industry; several of the sector skills councils have similar schemes; and QA, which is one of the training providers, is in that business. We are beginning to see that happening, and it needs to happen much more widely.

To quote one of the senior executives of a company whose training provision we were reviewing: “Apprentices are a total delight. They are quickly very productive, excited, eager, and bring new life to the business”. If tired old people like us can be cheered up by taking on apprentices, let us do more of that.

18:51

[Lord Macdonald of Tradeston (Lab)]

My Lords, in his Budget Statement the Chancellor said,

“we have doubled the number of apprenticeships, and I will extend the grants for smaller businesses to support over 100,000 more”.—[Official Report, Commons, 19/4/14; col. 789.]

That is, of course, welcome news. It builds on the progress made by previous Labour Governments and strengthens the cross-party consensus on the importance of vocational training.

As other noble Lords have already argued, more needs to be done, but we have surely come a long way since the 1990s, when apprenticeships were in danger of dying of neglect. By the time Labour left office in 2010, apprenticeships had increased significantly to almost 500,000. The forecast for this year is 931,000, for apprentices of all ages. While respecting the caveats of my noble friend Lord Young regarding the statistics, under Labour and now the coalition, apprenticeships are again being given the priority that they deserve.

I thank my noble friend and fellow engineer Lord Young for initiating this debate. I speak on the subject fondly, having served a five-year engineering apprenticeship after leaving school at 15. It is a rare pleasure, as my noble friend Lord Martin said, to speak in the company of two other time-served Glasgow craftsmen.

The focus tonight is on 16 to 18 year-olds and how best to improve the number and quality of the apprenticeship opportunities on offer. That concern is understandable. While those of my generation started their apprenticeships at 16, most of our recent successes have been in placements for those aged 19 and over. Remarkably, as has been mentioned, many of the new apprentices are over the age of 24, as my noble friend Lord Young highlighted.

The time served has gone down from five years to perhaps just one year, a minimum length introduced in 2012 to strengthen the quality and standard of training. On the positive side, while apprenticeships were once largely in manufacturing and almost exclusively male, today I am told that half the new apprenticeships are won by women. I say “won” because I read that the demand for places is 12 times the number of jobs on offer.

Other major changes are in the range of the jobs on offer. The top sector now for new apprentices is business, administration and law, which makes up 31% of the total. Next comes the health, public services and care sector with 24%, then retail and commercial enterprise with 20%. The traditional apprenticeship sector, engineering and manufacturing technologies, is in fourth place with 13%. However, that equates to 66,000 new apprentices, which is not negligible.

The breadth of these sectors, across both public services and private companies, offers job opportunities to applicants from very diverse backgrounds and with different attributes and educational qualifications. In our rapidly changing economy, this change in the nature of apprenticeships is both inevitable and largely positive. However, the particular problems of 16 to 18 year-olds remain a concern. In 2012-13 the number of apprentices from this age group was marginally lower than it was back in 2009-10. This may be explained in part by the requirement introduced last year for young people to be in education or training until they are 17—that age will be raised to 18 next year. On the plus side, the youth contract for 16 to 17 year-olds, launched in 2012, offers employers an enhanced grant of £2,200 per annum per head for each new recruit not in education, employment or training—the NEETs. The Government also forecast a boost in apprenticeships for 16 to 18 year-olds this year, up from 179,000 to 257,000. That is quite a jump so I hope that they hit that target.

Your Lordships will be aware that many 16 to 18 year-olds would like nothing more than a job in our creative industries, where talent, drive and creativity often trump academic qualifications. The appeal is even greater when the commercial creative industries have a growth rate much higher than the rest of the UK economy. These creative industries are now estimated to make up almost 5% of all UK employment. The subset of arts and culture inside the creative industries employs more than 100,000 people directly and another 150,000 indirectly. However, at a meeting of the Performers’ Alliance here in Parliament yesterday, actors, musicians and writers complained that the recent changes to the curriculum in English schools meant that the teaching of arts and cultural subjects was suffering from the Department for Education’s emphasis on science, technology and engineering—the so-called STEM subjects. In a debate in your Lordships’ House last week, the accusation was made that music and drama classes were being cut back severely and that the number taking art GCSE had fallen by 14% between 2010 and 2013.

The fear is that pupils who might not aspire to university could be denied the creative input that might help them into an arts-related job on leaving school. Looking at the figures produced by the Government, apprenticeships for arts and culture jobs seem surprisingly limited—just 1,000 out of a total of 500,000. I know that there are many excellent skills programmes in the creative sector but they are often skewed towards highly qualified graduates and well connected interns. The initiatives of the Arts Council, UK Music and the BBC to offer more accessible apprenticeships are welcome but still number only in the hundreds. Does the Minister think there is a particular problem with availability of apprenticeships in the creative industries, and what measures might be taken to ensure that they increase in number and are made more accessible to those from less privileged backgrounds, especially for 16 to 19 year-olds?

18:58

[Lord Stoneham of Droxford (LD)]

My Lords, I declare my interest as chair of Housing 21, which benefits from funds for apprenticeship training in care and housing management services. I ought to begin by apologising for being churlish in calling the noble Lord, Lord Young, churlish the last time we had a debate on this subject. I think it was an initial reaction but it was also disrespectful given his deep commitment to this subject and, indeed, what he said today.

Maybe I should go on to say that the doubling of apprenticeships by this Government is one of their major achievements but it was built on the foundations laid by the previous Labour Government. All of us—such as the noble Lord, Lord Macdonald, and I—who were in the newspaper industry will remember, as the noble Lord, Lord Monks, told us, the devastation of apprenticeships in the 1980s and 1990s. One of the great achievements of the past five years is that we have recovered from that devastation. This is against the background of a 7% fall in output; in many previous recessions, we would have seen a doubling of unemployment. Youth employment was high at the time of the recession, but it could have grown even more. Undoubtedly, the growth of apprenticeships has helped in the greater flexibility of the labour market in countering some of those trends. As a country, however, we still have a lot to understand as to why that flexibility has been so successful in countering the employment trends of the recession.

Getting the number of apprenticeships up has been a major achievement for the Government, but they have also been trying to address quality issues and to ensure that we are improving the quality of the training on the ground. We have heard today in the debate about the various efforts of the Government to improve the qualification standards, the Richard committee and the initiative to drive aspirations by including a route to university standards through the apprenticeship system. It is a remarkably popular initiative, and the problem for us is that supply is still not meeting demand.

Productivity and competitiveness in the economy can be addressed only through greater skills development and business development. As we go forward, the debate has shown us today that there cannot be any complacency in the sector. It is so important to us, as the economy starts to recover; we are already aware of significant skills shortages, which often take five to six years even to address, let alone to overcome.

What areas should our debate conclude need most attention? Many have been raised already. First, there is a continuing initiative to improve the standards of qualifications and training. We have to be careful that we do not get involved in excessive regulation, but we also have to make sure that, when we allow employers to have a greater say in the training requirements, they also make sure that those requirements are wide enough to deal with the wider needs of industry and not just their own companies.

This debate is meant to concentrate on the 16 to 18 year-olds, where we have heard that there is still disappointment on the training figures. The Government have estimates of what they expect to do this year. Perhaps the Minister could tell us whether we will see an improvement. That shift is important because the major beneficiaries of the expansion have been the over-25s, which may not be a bad thing. It may be that we have not dealt with that age group well before due to the problems that I mentioned earlier, such as the destruction of that sort of training in the 1990s. However, we must certainly address the 16 to 18 year-olds.

We have heard that the figures are still very disappointing in construction and engineering. I shall read the report of the noble Lord, Lord Best—I am glad for that prompt—but, although construction is a cyclical industry, we know that there are huge skills shortages that need to be addressed.

I welcome the suggestion in the Budget that there is to be further help for small employers. However, as the noble Lord, Lord Young, told us, there is huge capacity there; with the small number of firms taking up this initiative, there is a great potential to publicise and extend what we are doing.

Finally, we have heard about the importance of raising aspirations in our schools and the standing of apprenticeships. The noble Baroness, Lady Prosser, said that we need to give more attention to careers guidance. I hope that the progression to university-level qualifications through the apprenticeship system will provide an alternative route to self-improvement and career progression. The Government have made major inroads, but they must keep up the pressure to do much more.

19:03

[Lord Haughey (Lab)]

I begin by thanking my noble friend Lord Young for posing this Question today. The key word in the Question is “quality”. Some of the statistics that have been mentioned tonight may not relate to apprenticeships as we know them. My noble friend said earlier that some of these courses may be for only one year, and judging by some of the things that I have read in the past few weeks, some of the courses are for only six or 12 weeks, so I do not know how they can be billed as apprenticeships. A lot of people think that many apprenticeships have been watered down.

As someone who benefited from an engineering apprenticeship and is very proud to speak as the third member of the Glasgow apprenticeship union, the achievement of which I am most proud is that, over the past 20 years, I have managed through my own business to create 350 apprenticeship placements. Most of these people still work in the business today.

Some of these short-term training programmes presented as apprenticeships are very misleading. We will probably find that the 480,000 apprenticeships created over the past five years will not reflect the quality of the 480,000 or 500,000 in the previous five years. It is nothing short of tragic that 900,000 young people find themselves unemployed today. We have to create hope for these young people. It is due to the lack of opportunities that so many still find themselves out of work.

The biggest concern for me has already been mentioned: the decline in apprenticeships in the construction industry. The building of houses used to be a barometer of how the economy was doing—as my noble friend Lord Best mentioned. I read with interest in the last few days of the huge increase in the profits of builders and developers due to the Government’s guarantee scheme. Surely, we must be able to use this as a lever to guarantee apprenticeships in that industry.

Today, I sat through a debate on the Green Deal. I have to declare an interest here: I am involved in that sector. This initiative should absolutely have guaranteed thousands of new jobs in the central heating and cavity wall insulation industries. Unfortunately, that scheme is falling apart; day by day, it is becoming unworkable. I urge the Minister to revisit and have a look at what the Green Deal and the ECO deal were supposed to do in relation to apprenticeships.

Rather than having a go at the Minister, I would like to propose a suggestion to him. The Green Deal and the ECO deal have not worked, and there are more than 200,000 buildings in the UK that are more than 50,000 square feet. We have carried out a scientific test in our own building in Glasgow. If we created a position for a young apprentice energy champion in every building throughout the UK, the Government could award carbon credits or tax credits to the companies and we could create hundreds of thousands of jobs overnight—cost neutral. We have had a young energy champion in place in our building in Glasgow for the past nine months, working with Strathclyde University. We have done tests and we are saving between £8,000 and £12,000 a year. We pay the young person £15,000 a year. This is only by going about, turning off computers and switching off switches. He has also done something absolutely amazing: there are 900 people in my building who now think about energy efficiency every day. I urge the Government to have a look at this. This is a way in which we can generate jobs and give hope to 900,000 young people.

The great thing about this scheme is that it is an equal opportunities scheme. We have heard today about the lack of girls taking up apprenticeships. This scheme also could lead, through training, to that young person progressing from an energy champion to a fully qualified facilities manager earning perhaps £25,000 a year.

19:07

[Lord Layard (Lab)]

My Lords, I apologise for having missed the deadline, but I would like to ask one simple question. In 2009, the previous Government’s apprenticeship Act guaranteed that, by 2015, there would be an apprenticeship for almost every 16 to 18 year-old who wanted one. That was a clear statement of priorities and a marching order to the National Apprenticeship Service. Unfortunately, the present Government repealed the guarantee and focused the biggest development in apprenticeships, as many noble Lords have said, on the older age group. Was that not a massive error and will the Government now revert to the priority for 16 to 18 year-olds that was embodied in the previous strategy?

There are many Cassandras, probably on both sides, who say that we will not get employers to be interested in young people under 19. Suppose we accepted that argument: what would follow? It would be catastrophic because there would be permanently high youth unemployment and millions of people who would probably never get a real skill. The top priority has to be getting people off to a good start at the very beginning of their working lives. The best evidence for that was mentioned by the noble Baroness, Lady Sharp: a number of OECD studies show that the countries with the lowest youth unemployment and the best level of skills in the lower-skilled parts of the workforce are those countries with the largest number of apprenticeships for school leavers.

What is the problem? In spite of some things that have been said this evening, the problem is not mainly with the aspirations of young people; it is with our employers and the way in which they are approached by the apprenticeship service. More than half of all large employers still have no apprentices. By contrast, in 2012-13, 800,000 young people aged between 16 and 18 registered as applicants for apprenticeships. How many got an apprenticeship? It was one in seven. That is the problem—the supply of apprenticeships is not there and that is a terrible reflection on the record of the National Apprenticeship Service as a generator of apprenticeships. It has simply failed, I suspect partly because it has not been told that that is what the service is meant to be doing for that age group.

What is the Government’s priority? Is it 16 to 18 years-olds or not? If it is, will the Government tell the National Apprenticeship Service very clearly that that is the top priority?

19:12

[Lord Popat (Con)]

My Lords, I welcome the opportunity to set out what the Government are doing to increase the quality and availability of apprenticeships for 16 to 18 year-olds. I am grateful to the noble Lord, Lord Young of Norwood Green, for tabling this important and timely debate on a topic that, given his apprenticeship background, is obviously dear to him.

It was a pleasure to listen to the informative contributions of so many Peers. I refer, in particular, to the noble Lord, Lord Haughey, who has come a long way from being an air conditioning and refrigeration apprentice engineer. His success in now running a company with 11,000 employees worldwide shows what an apprentice can do. I hope that his story inspires a new generation of apprentices. We appreciate the number of jobs that the noble Lord’s group creates for young people, who are often given number one priority.

This topic is close to my heart. I had no formal education before joining a company as a trainee accountant. That opportunity to learn on the job enabled me to qualify as an accountant. Life is all about learning, irrespective of age. Now I am doing a new apprenticeship at the Dispatch Box.

I commend my honourable friend the Skills Minister, Matthew Hancock, for his tireless enthusiasm and energy. He has delivered real improvements on apprenticeships and helped to give better life choices to countless numbers of young people across the country. From listening to the debate, it seems that we are on the right path but there is a lot more to do. As the noble Lord, Lord Young, said earlier, we should not get complacent about what we are doing with apprenticeships.

Apprenticeships benefit employers, apprentices and the economy. We need to ensure that world-class apprenticeships are in place for years to come. We have seen a record 1.6 million people start an apprenticeship since 2010. Yes, we have made enormous progress, and apprenticeships are very important to the futures of our young people, but there is so much more that we need to do. We are not complacent about what apprenticeships deliver, or how accessible they are to different people. We have made a commitment to deliver 2 million apprenticeship starts in this Parliament.

Apprenticeships have always been about quality, as the noble Lord, Lord Lucas, said earlier. We have removed poor training provision and introduced a rule that every apprenticeship has to be for a minimum of one year. Over the past two years we have removed more than 54,000 short duration apprenticeships. Despite that, the number of apprenticeships for those aged 16 to 19 lasting a year or more went up by 30% between 2011-12 and 2012-13. Our aim is to raise the bar even further.

Apprenticeships are open to all. Because they are real jobs that lead to nationally recognised qualifications, recruitment decisions must rest with employers for apprenticeships as much as for other jobs. Our priority is to work with employers to increase the number of apprenticeship jobs for our young people. Apprenticeships must be high-quality, rigorous and focused on what employers need. We are using the apprenticeship reforms to address some of the barriers that employers say they face in recruiting apprentices. The reforms we are making will put employers in the driving seat of developing high-quality apprenticeship standards that deliver exactly the skills they need. Routing funding to employers will put them in charge of securing the most appropriate quality training and making providers more responsive to their needs.

Trailblazers led by employers and professional bodies are leading the way by collaborating and designing world-class standards for their sector. In the past, apprenticeships have been based on frameworks that run into hundreds of pages, often written in complex and technical language. The new standards are short, concise and written in a language that employers really understand. That will make apprenticeships very attractive to a large number of 16 to 18 year-olds.

We have already made great progress. The first 11 new apprenticeship standards have been published in occupations from aircraft fitter to software engineer. Phase 2 Trailblazers are already under way, covering an impressive 29 sectors and involving more than 340 leading employers.

In the future every apprentice will train towards the achievement of an employer-designed standard. The demand for higher standards will also stretch apprentices by setting higher expectations for achievement in English and maths and the introduction of a grading system will ensure that excellence is seen and widely recognised.

My noble friend Lady Sharp and the noble Baroness, Lady Prosser, mentioned the duty of schools to secure access to independent careers guidance for all pupils in years 8 to 13. That is exactly what we are doing. The guidance also will include information on apprenticeships.

We want it to become the norm for our young people to go into an apprenticeship or to university—or both, in the case of some higher apprenticeships. We are striving for apprenticeships to be held in the same high regard as university degrees. Giving young people the choice of routes to the skills and knowledge they need by providing careers advice and guidance at the right time has never been so important.

We want our schools, colleges and universities, together with the National Careers Service, to engage, inspire and help young people to make the right choices. The noble Lord, Lord Young, and the noble Baroness, Lady Prosser, pointed that out. Apprenticeships deliver and offer the ideal opportunity for ambitious young people to learn while earning a wage and also, of course, for employers to recruit the brightest and the best.

Higher apprenticeships are the key to providing able young people with the opportunity to undertake apprenticeship training at a level equivalent to a degree. The Budget announced £10 million in each of the next two years to support employer investment in apprenticeships up to postgraduate level. This will complement the additional £40 million announced in the autumn Statement for a further 20,000 higher apprenticeships, more than doubling current volumes.

We know that some people have the potential to benefit from an apprenticeship but cannot secure a place with an employer immediately. Our traineeships programme is helping 16 to 23 year-olds to develop the skills and experience they need for apprenticeships and other sustainable employment. We recognise that some of our younger apprentices require a greater level of supervision, guidance, education and introduction to the workplace. To address this under the new funding system, a simple one-off additional payment will be made to the employer once any 16 or 17 year-old is settled in their learning and workplace, having completed the first three months of their training.

A number of noble Lords mentioned the position of small and medium-sized enterprises. We are offering the apprenticeship grant for employers, which is a payment of £1,500 to smaller businesses offering a young person an apprenticeship. To date, the scheme has already helped 49,300 new apprenticeship starts. The additional £170 million over the next two years that was announced in the Budget will enable us to support the current very high demand for the grant by funding 100,000 additional incentive payments to employers. That represents a major boost to the job prospects of young people, in particular those aged between 16 and 18. However, this is just part of the success story of today’s apprenticeship programme. Figures show that 181,300 people aged 16 to 18 participated in an apprenticeship in the 2012-13 academic year, with an impressive total of 868,700 people overall participating in that academic year. That is a record number.

Apprenticeship starts for those aged 16 to 18 have broadly remained stable despite youth employment rates dropping by 39% over the past 10 years. This is the subject of today’s debate. It is a concern for us and for the department, and I am glad that the noble Lord, Lord Young, has raised the subject. I will ensure that I take it back to the department to make sure that progress continues to be made at all times.

Despite all this success, too many small businesses are still not engaged with apprenticeships. We are working with the Federation of Small Businesses and other stakeholders to ensure that our reforms are small- business and micro-business friendly. That is why all new apprenticeship standards will be approved only where they meet the needs of small businesses across the sectors.

I am grateful to the noble Lord, Lord Best, for sending me a copy of the report of the parliamentary inquiry entitled No More Lost Generations, also mentioned by the noble Lord, Lord Young. It headlines that we have 1 million NEETs aged 16 to 24. We are looking at a forecast of around 182,000 new construction jobs by 2018, but so far only just over 7,000 young people have completed an apprenticeship in the industry. We have to do better than that. The report arrived only this afternoon so I have taken just a brief look at it. However, the noble Lord can be assured that I will go through it and take it up with the department. It is interesting because it points out that one way of creating jobs for young people and giving them the skills they need is by training them for the construction industry. It is a sector that is going to grow further. If we do not do that, I am afraid that we will end up importing construction workers from the European Union, and that is something we want to avoid.

Several noble Lords, including the noble Lords, Lord Young and Lord Macdonald, talked about support for 16 to 18 year-olds. On 4 March, we announced the second phase of the Trailblazer apprenticeship standards in 29 industry sectors, including the STEM professions, services and others. Apprenticeship training for 16 to 18 year-olds is fully funded by the Government to provide incentives to employers. The National Apprenticeship Service has been tasked with redoubling its efforts to support more 16 to 18 year-olds into apprenticeships.

The noble Lords, Lord Stoneham, Lord Monks and Lord Young, all mentioned the role of public procurement in terms of the use of government procurement to grow apprenticeships. Public procurement is a key means of upskilling local workforces and reducing youth unemployment. Including a requirement to take on apprentices can play a valuable part. The Government support the appropriate use of apprenticeships in procurement, as they can contribute to encouraging growth in the economy.

The noble Lord, Lord Monks, raised the issue of how apprenticeships can be seen as being “just for the boys”. Girls are being encouraged into apprenticeships as part of the broader push on the STEM subjects, but the noble Lord was correct when he said that the percentage of girls taking up apprenticeships is low. We need to encourage more young women to come forward. He also mentioned the minimum wage. From the information I have, an apprentice earns on average around £200 a week, although the minimum wage is only £2.68, which is due to rise to £2.73 in October.

My noble friend Lord Addington referred to the difficulties that those suffering with dyslexia have in undertaking apprenticeships. As a vice-president of the British Dyslexia Association, he speaks from great experience. Final data from 2011-12 show that 21,110 dyslexic learners participated in an apprenticeship programme. Dyslexia should not present a barrier. We shall continue to monitor this and to do more about it.

My noble friend Lady Sharp touched on a number of issues that I know she has championed. She is right to highlight the historical emphasis on pursuing academic routes over vocational routes. This Government have taken considerable steps to even this playing field and have given every young person a choice, but we continue to look for other ways of furthering this agenda.

I have not covered all the areas that noble Lords have raised this evening but I promise to write to them. I shall follow up with the department as well to ensure that it takes action. A lot is happening, but we need to do a lot more. I thank the noble Lord, Lord Young, for initiating this important and timely debate.

House adjourned at 7.26 pm.